"Capitalization" of innovative workshops

Abstract: We are the absolute investment organization, and the traditional incubator is completely different. On the last day of October, the Innovation Factory announced a second dollar fund of 275 million U.S. dollars in financing, while Lee told reporters. Entrepreneurship incubator, which is outside of the innovation industry

"We are an absolute investment organization, completely different from the traditional incubator. "On the last day of October, the Innovation Factory announced that the second dollar Fund 275 million dollars in financing, while Lee told reporters."

Entrepreneurship incubator, which is a long-standing definition of innovation workshops. Even in the doorway to the Shanghai office of the Innovation Workshop, which was just completed on September 21, it still says, "It's not just a project that's hatched here." ”

However, in less than one months, Kai-Fu Lee published Weibo to explain, "I do not intend to criticize the incubator, I just clarified: Innovation Workshop from its inception, has never been a traditional incubator, has been investment + full-service model." ”

Innovation workshops are no longer focused on entrepreneurial incubation. Will investment be the main business of innovation workshops?

It seems that Kai-Fu Lee's answer is already affirmative.

Once the "model" incubator

August 2009, Kai-Fu Lee left Google to create innovative workshops. As the most influential personal brand of the Internet at that time, it is no exaggeration to say that Kai-fu Lee set up the innovation Workshop brought the upsurge of domestic entrepreneurship incubation.

What is Innovation Workshop?

"Innovation Workshop is a new combination of angel investment and innovative products," Lee wrote in his blog, "My new company, Innovation Workshop," in September 2009. ”

He made a few definitions for the new company, "Innovation Factory is the pioneer of the Huangpu Military Academy", "Innovation workshop to fill the Chinese angel investment vacancy." At the same time, he promised that innovative workshops would "provide a wealth of back-up, to our training enterprises to provide legal, financial, computer room and other services," to provide shared software platforms and modules, as well as search engine optimization services, "and" can recruit the best engineers, with complementary team, increased the probability of success, but also accelerated the development of products. " ”

At that time, Angel investment in the Internet, especially in the mobile Internet area is still only a small circle of things to do, and entrepreneurial incubator is not known as the term. Kai-Fu Lee and his team frequently appear in many media, in various occasions, highly recommended innovation workshop the brand, but also constantly tell people, compared with traditional investors, as the incubator of how different they are.

In 2010, the Beijing Office of Innovation Workshop expanded from 20 to more than 200 people. Dim sum, pea pods, friends of the first group of incubation team "workers" gathered together, collective entrepreneurship. "Beijing office is very lively, many people are going to sit down." "Innovation Workshop personnel manager Li Xuliang to the" first financial daily "said.

September 21 This year, the Shanghai Office of Innovation Workshop officially put into use. Considering the normality of the entrepreneur working overtime, the three-storey building of the Yangpu "China (Shanghai) entrepreneur's public training base" is available even in the shower room and sports room.

At the opening of the "2012 Business Week" event last week, innovative workshops were seen as the "incubation 2.0" entrepreneurial services. In the past few years, innovation workshops have indeed provided an entrepreneurial environment that distinguishes entrepreneurs from traditional PE/VC, as Lee has described. In fact, the outside world has also become accustomed to the creation of the workplace as the incubator, a strong personal brand incubator.

Fullness ideal and bone sense reality

However, just as many entrepreneurs are too idealistic at the beginning of their business, Kai-Fu Lee imagines that innovative workshops also need to withstand the test of the market.

Compared with Beijing, the Shanghai base of innovation factory still looks slightly deserted. Three floors of the scale of nearly 10,000 square meters of space, the first floor only snacks and pudding part of the staff, leaving nearly two-thirds of the seats are still empty, and the entire level of the second floor is idle.

"Of course, the companies and organizations we invest in are not all here, and for some B-round, C-round companies, innovative workshops will still provide services such as personnel, finance, technology and law, but they do not need office space here." Even so, Li Xuliang and his team still expect empty space to be filled as quickly as possible.

In June 2011, "Hotel talent" was invested in the innovation workshop and became a member of the family, Liu Changbo with his only 5-person team to move to the workshop in Beijing to hatch.

"The incubation platform is just a guarantee of early team survival, and later development depends largely on the team itself." Liu Changbo said that the incubation of innovation workshops, both in terms of technology and market operations, gave them guidance. Six months later, his team increased from the initial 5 to about 20 people.

At this point, however, Liu Changbo made a decision to leave the headquarters of the Innovation Workshop in Beijing. Back in Chengdu, the hotel has become the "Innovation workshop in the southwest investment in the only project."

is the halo effect greater than the hatching itself? In Liu Changbo's view, innovative workshops are essentially commercial VC and, like other investment institutions, value the earnings and benefits of investment projects, and the focus of innovation workshops is not on hatching, but on investment returns, as compared to the recently emerging government-backed incubator investment institutions.

Another innovation factory, which declined to be named, said the app team says the brand effect of innovative workshops is greater than hatching.

Similar to the hotel's talent choice, the team entered the innovation workshop in May last year, and it was the personal brand of innovation workshops and Kai-fu Lee that attracted them. But after nearly a year of incubation, the team has still not found a clear profit model, which makes the team partners a bit distressed: if the incubation does not work, innovation workshop and other investment institutions, what is the difference?

September 2009 raised 15 million U.S. dollars, August 2011 raised the first dollar fund, the amount of 180 million U.S. dollars, February 2012 again to receive 300 million yuan fund. The 3-time financing, the 275 million-dollar financing infusion, has made the innovation workshop a total fund-raising amount of more than 500 million dollars since its inception.

From the point of view of fund-raising, even in the cold winter of investors, the achievements of innovation Factory is still commendable. However, when the attention to the investment projects, even though Lee Kai-fu never think of failure, but the voice of questioning is never interrupted.

"There are a lot of projects to invest in innovation workshops, but none of the products really generate an explosive user effect." Valuations are always paper numbers for Internet and mobile internet companies, and investors want to make money only when they exit. "A venture capitalist who is familiar with the internet has pointed out to this newspaper," as a company, the real solution to the innovation Workshop is how to make money. ”

Some speculate that innovative workshops may be another "capitalist" in the context of Internet entrepreneurship, seeking returns through capital investment. "On the contrary, the new fund gives us more capital to help early entrepreneurs," Lee said in a microblog response. Although we can also invest in larger projects, but more than 80% of our projects are from the start-up. ”

While more than half of the "time" and "energy" of the Innovation Workshop management team may have been in the early days of the team, most of the money is not in the early stages of investment. For the factory's allocation of funds, Kai-Fu Lee once said, "Suppose the factory melts 100 million dollars, probably only 20 million into the earliest, and another 70 million or 80 million put in a or b round." ”

"Innovation Workshop" investment Company

"Perhaps it is the misreading of us, the innovation Factory has always been an investment company, but we are in the process of investment will provide a lot of additional services to help the entrepreneurial team grow." "Li Xuliang in the Shanghai Office of Innovation Workshop said to this newspaper," our investment department colleagues are now under great pressure, as an investment company, investors certainly do not want the money to give us in the end but did not cast out. ”

In the second half of last year, in a television interview, Mr. Lee mentioned that at least one-third of the early incubation projects invested by innovation workshops would be at risk of failure. While this number is not high in the Internet and mobile Internet, it is also possible to see that the payback time for the incubation model is long and extremely uncertain.

In the 2012 Business Week activities, in addition to the innovation Workshop, also referred to the incubation 2.0 characteristics of the service agencies also have Lenovo star, entrepreneurial relay, Pegasus Brigade, Garage coffee and so on. It is not difficult to see, now the domestic business incubator is no more than several models: Angel Investment Enterprises, government support agencies, media gathering circle and garage coffee Exchange platform. Compared with the traditional PE/VC, simple investment is obviously more worry and simpler, as to which hatching mode more successful and more profitable, it seems that there is no conclusion.

Compared with domestic incubators, foreign countries are relatively calmer and there are not many successful cases.

Y Combinator The most successful incubator in the United States by Forbes magazine, with an average value of $45.2 million per company. Kai-Fu Lee has analyzed Y Combinator success reasons: 1. Open source software, electronic stores, cloud computing significantly reduce the cost of start-up, 20,000 ~3 million can let 2~3 individual to make a good service prototype. 2.VC no time to see small cases, and some VC do not understand the product. 3. Internet competition has become more intense, and many large companies are willing to pay higher prices to acquire technical teams, which provides more exit opportunities.

"Become China's y Combinator", is Kai-fu Lee once to innovation workshop positioning. At last year's TechCrunch Disrupt conference, Kai-Fu Lee has said that innovation workshops from the "big hatch, small investment" model, into the direction of investment leader. Perhaps, Kai-Fu Lee has realised that the three success factors that will replicate Y Combinator in China are not easy.

In Tuesday, the Chairman and CEO of Jia Yue Pavilion in Sina Weibo revealed that the investment of innovation Factory has been in place, officially become a new shareholder of the music network.

Obviously, "investment + omni-directional service", this kind of preferential investment new workshop mode, is what Kai-fu Lee is trying now.