CEO Chen: Entrepreneurship to do the right thing and have enough money

Editor's note: In 2011, the judges voted "China's annual entrepreneurial figure" to Chen a boat. Someone summed him up: he was a typical entrepreneur, highly sensitive to emerging market opportunities. But more than the average entrepreneur has a keen sense of business, familiar with the capital market, at the same time after the merger of the business of rapid integration and self-regulation is the key to his success.

As the "veteran" of the Chinese Internet field, the continuous entrepreneur Chen is a boat that grew up with the industry in China, other people experienced, he basically experienced (bubble, glossy financing record), and other people did not experience, he also "try": Sell his company, buy another company, and big and small "failure" : Thousand Oak is born soon to meet SP's winter, then came the winter of Web2.0, even after the first two weeks of the Chinese concept stocks ' overseas listing window closed, the days after the IPO were not easy, the cold winter share price slide, and the Internet's first successful Tencent and Sina Weibo.

He knows how to keep his head in a frenzy when he's in the cold, and how he adjusts himself when he's wrong, and more importantly, he uses his capital to build a few of China's second-generation Internet companies to take shape and have a relatively complete strategic layout. It is especially important to count his experiences in winter.

All along, Chen a boat has been regarded as a "good capital operation and integration of resources" entrepreneurs. He has created a financial record for Chinese internet companies, he has bought a lot of startups and projects, he has sent everyone to Wall Street this year, and in just a few months he has spent another more than 80 million dollars on 56 nets. November, the company sold 72.4 million U.S. dollars in the holding of Art Dragon shares, Chen a boat three years to earn 51 million dollars. At the same time, like many Chinese concept stocks, Renren has gone through the ups and downs of share prices. In fact, in the absence of money when the large financing behind, one of the reasons is rooted in a continuous entrepreneur deep sense of crisis, the second is the capital market for a continuous Internet entrepreneurs trust.

"The objective rule of Internet development is that you have to have enough money to enclosure first." No land, no house, how to collect the rent? This is the Chen summary of entrepreneurial experience. He said that after the listing of everyone, all products and projects should be based on Renren platform as the core. "Before 2006, we were looking for seeds everywhere, casting nets, and then being hit, so we made an effort to focus on Renren." ”

It is said that when Chen a boat and Zhou Yun sail, Ning in the United States to prepare for business, three people think of three projects: Learn Amazon do E-commerce, but feel too burning money, give up, learn asiainfo do communication, and feel far away from the Internet. Finally decided to do Chinaren. "Because there was a website called Geocities in the United States, doing alumni and developing well, we decided to do it." ”

To this end, Chen also returned to see his college classmate Lei. "We are both reading Wuhan University, I was in the physics department, and later transferred to the computer department, and Lei became a classmate." "Chen said. Two people were arguing in Lei's car for an afternoon. Lei says your project is too far away from the money, and Chen says it has a future. Soon, Lei made a network of excellence, Chen a boat did Chinaren.

However, Chinaren never survived the "winter". In Chen's view, it was not too early, but "too little money". The lesson of this experience is that if you want to start a business, you must have enough ammunition in your hands.

In the second half of last year, Chen a boat found that Wall Street may be ushered in a new round of the IPO "window period." "One of our judgments at the time was that the active period of each listing was at most one year, usually six months." If your company is doing well, be prepared to do so as soon as the time is right. "It is from the second half of last year, Chen a boat began to split the various business, all for the listing to prepare."

"It turned out that the Wall Street stock index began to slide, starting two weeks before everyone went public, and it really didn't have any relationship with us," he said. "Chen said.

"Mad at your clients."

"Entrepreneurial State": What is your current entrepreneurial status?

Chen: Because the social network is a very big thing, before everyone net, very anxious to look everywhere. Now like Texas Poker, the market has sent you a good card, why go for a new card? This card has been very good, how many people are looking at envious, why to envy others? Even if the internet industry has a more popular or seemingly brighter business model than social networking in the future, we will not blindly pursue it.

I recently signed the Mail has been changed, the original is "10,000 years too long, seize the time." I have recently changed it to two sentences: one is "Crazy for your Clients", the user as God, other things do not think. The second sentence is, "invention" (invent), the two things do well, the other things like earning power, business value, employee satisfaction and so are naturally good, but only a matter of time.

"Entrepreneurial State": Are you worried about Weibo?

Chen: First I think the two are different things, anything grow to a certain degree, it is not too easy to grow so fast, can not be unlimited, including micro-blog. Everyone's net is not so fast, but we are always in the long. At present, Renren has more than 137 million active users, the number of active users from the beginning of more than 20 million, up to now 37 million. I think this is more healthy. We do not pay attention to other companies how to do, only concerned about our real-name SNS this mu three-acre. We believe that this land will grow larger and bigger, and that this is the trend of the future.

"Entrepreneurial State": Where does your confidence come from?

Chen: We believe that now every generation of young people are getting higher education, and then they are more receptive to the real-name. On the contrary, the older Internet users, the use of real-name is not used.

So, we bet two things: first, China's netizens, to receive college, undergraduate education level of the user base more and more; second, Chinese netizens, or the whole of China's average income is getting higher, everyone's time is worth.

When the user's time becomes more valuable, we can let the user in a very short time, for example, spend 20 or 30 minutes a day, very efficient to complete with hundreds of friends to maintain social relations, more efficient than other communication tools. In other words, we create the greatest value for users is to help users save time, so that users in the shortest possible time to do what he wants to do. The greater the value we create for him, the greater the market value.

"Entrepreneurial State": in the face of other people's big opportunity, how to keep calm?

Chen: Personally, I think Weibo is more about people's need for information, and it's actually more stressful for search engines, especially at mobile terminals.

In Renren, there is a need to share all kinds of information, so we are actually competing for information in disguise. But in addition, Renren's best friends share some personal photos and status. This kind of thing is inherently not suitable for running on an open network, otherwise users ' privacy and even information security can be problematic. Renren, for example, now has nearly 1 million location-based location information, but it's hard to run on Weibo because celebrities are reluctant to expose their addresses.

So every product has its advantages. Weibo's advantages are obvious, easy to use, real-time updates, including the ability to provide subscription services, he even robbed the search engine business. But he is not all things can be done, we are the same, so we can only go to do things to do very good, some should not do things, you can only look at people envious, we have never thought to do.

"Entrepreneurial State": Your acquisition strategy is to buy people or buy projects?

Chen: I don't feel that this kind of frequent capital move will create the most value for the company, and the company's greatest value is in its operations and innovation. Everyone's company did not go public when the acquisition, so we are not unfamiliar with the use of capital. But essentially, we do not think that a purely mergers and acquisitions can be made into a particularly successful company, which is always an adjunct.

Therefore, the acquisition is still relatively mobile and flexible, now the company's good seed has been quite a lot, if the hands of the seeds are fully successful hatching, I am very happy. Of course, if in the next few years, there is any good seed will enter our discernment, it is possible to get it in.

Then the first day of acquisition to think clearly, in the end is to buy people or buy an asset, buy the net when we are very clear, mainly to buy assets, followed by buyers. The founders can't keep them. If you buy a company or technology for this team, there must be a binding treaty when you design the terms of the purchase, and make sure that he stays at least 3〜4 years. He has a place to make more money and has a sense of achievement.

"Entrepreneurial State": What was the logic before?

Chen: The acquisition of the school in October 2006 was very clear, it was not clear before. When the mop turns the door, it may seem a bit problematic. Because the portal is an old business model, we do not seem to have a unique advantage. After smashing a lot of money, see this direction is not completely right, then turn mop back to do community. And then think, what's a bigger business model than this community and it's better for us?

Later, when the real-name social network appeared, we looked at it all at once and thought that the model would surely succeed. Because 1999 is the time to do Chinaren is to rely on this success, now there is no reason not to succeed. YouTube is a company that became famous earlier than Facebook, and it was sold early, so it has aroused the interest and popularity of Chinese entrepreneurs. I remember very well that after YouTube, 300 companies in China have made video sites that have attracted a lot of entrepreneurial teams and investments. Facebook has no funding and no reports, so people don't know. And we just know this stuff, so we just come in when there's not a lot of competition and not too much money to do it. The video boom has sucked a lot of entrepreneurial teams in, giving us some respite.

So since 2006, we have been expanding rapidly in this area, and other things are shrinking. Including now, although it seems that our business is very complex, in fact, all around the net-glutinous rice network is a social E-commerce, the game is a tool to become a cash.

There has been no change from 2006 to the present, and the next 5 years will certainly be unchanged. Because I don't really see the business model that suits us better than Renren and the real-name social network. It might happen, the odds are slim, and whether we can hold it is another condition. Both conditions are consistent with the business model that I have not seen.

No money.

"Entrepreneurial State": How do you see success and failure in combination with your own entrepreneurial experience?

Chen: 1999 pioneering, Ning thought a domain name, called Chinaren, use this domain name. We first set the domain name re-set business model, is to do the community. At that time, Yahoo bought geocities--was a big company, in fact it is the first wave of the internet to do community companies, I am very optimistic about the community. The advantage is that it covers communication and information;

When I first returned home in 1999, I argued with Lei once, arguing in the car for two or three hours. He said, this thing is too far away from the money, how do you make money? At that time I did not understand him, now I can understand. At that time we are students to open the company, simply think, this demand is there, how to let users like this thing? later lei to do excellence, we continue to do chinaren, I think this thing interesting. It gives users a lot of value, especially after alumni, many users are using our things.

I said, it must be a good thing. But to say how to make money, I do not know, at that time can not think of a way to make money. At that time, there was no first accumulation of this popular concept of users. Now, if you look closely at the Internet entrepreneurs since 1999, there are two kinds of people who are easy to succeed:

The first typical success story is Ding Lei, who started off with a lucrative thing--the mailbox. Mailbox at that time is really making money, and then use the money to raise the portal, after the listing also made a lot of money, but a look at the portal does not make money, and to engage in SP, games. In short, he is concerned about the benefits, the company can stand up on the first day. So, now NetEase very successful, Ding lei individual shares still have 60%, not be diluted.

There is also a class of enterprises is Alibaba, Tencent, Baidu such as, they started to do a particularly useful things, can not make money do not know. Finally stick to it, it succeeded.

The most fear is that Chinaren did a useful thing for everyone, but did not melt enough money, the end can only sell. But if you get a lot of money and don't do the right thing, you're dead. There is enough money and doing the right thing, both conditions are needed.

"Entrepreneurial State": now want to come, will you think Chinaren or do it early?

Chen: Not early, the only problem is that there is less money. If we could get 50 million dollars at that time, it would be a lot bigger than it is now. This is the problem of luck, catch that wave. So you have to have enough money to survive. The objective rule of Internet development is to enclosure first, then you have to have enough money. The land is not, the house is not covered, how to collect the rent?

At the same time, we must focus on, can not change the old idea. Like we from 1999 to now, can say to change a lot, actually also did not change. For a while, you want to be a community, do your own community and buy a community, then burn a lot of money to do video. Finally found, or better to do their own most familiar things. We have always known that community-type things are valuable, our interests are here, never changed, and then caught a suitable one.

Maybe before 2006, we were trying something new because we knew that to create a larger company, it was not enough to rely on the community alone.

"Entrepreneurial State": Do you think your business judgment has changed?

Chen: I'm still the same person, no change, my business judgment is not much stronger than before. When you have no money, there are a lot of things you can't hold on to, and you'll leave behind a lot of digging holes, each one proving you can't, and when you're rich, each one is an oil-pumping well, and maybe you're judged to be doing something. In fact, it is the logic of hindsight.

At that time we thought that a lot of things are good, but it seems to be no doubt, such as video. Video We actually eat well, we know it's good, but we don't have enough money to do it. At that time we did not have any money, see good things dare not dig, so every place dare not dig too deep. Every business model needs to be done well, to make money, and it has to be dug deep.

"Entrepreneurial State": In other words, you still look at the business model in the long run, it will take a certain amount of time to break out of it, which requires a lot of input, you go this way?

Chen: So to speak, because there is almost no business that can make money quickly on the internet and do a lot. Except the game, but also early to do the game, not now. Because this kind of thing is too good, who will do first, but this kind of thing obviously is not too much. So forcing you to do something that requires long-term commitment, only this kind of thing is tough enough, there are enough competitors, and finally there are enough opponents, you can make money.

"Entrepreneurial State": What is the lesson of capital to you?

Chen: There are certain lessons, "bitten, shy for ten years." Later, we were particularly afraid of the company's capital chain to collapse, when I made an oath, no longer because the company's funds are not enough to lead to the completion of the target.

Because we made two such mistakes. Chinaren is because young no entrepreneurial experience, also not too much work experience, three hothead out of the company, with cavity enthusiasm to do things, but also can forgive, and finally sold also count no failure.

The second mistake was that the 2006 expansion was too fast. The pursuit of short-term goals and interests more, of course, did not carry the pressure of investors, they want us to go public immediately. So spend a lot of money to buy the SP value-added business at that time, the result by July 2006, China Mobile policy changed, these businesses are worthless, can only be cut off. So, half of the 48 million dollars you get from an investor may buy some scrap, and the machine that burns the money expands by one fold, and the number of teams expands by one. So it was painful at that time, from 1400 to 700 people.

To be blunt, the money was too fast to carry the pressure. Investors are encouraging us to do so, and I am not very supportive, but I have no objection. So still blame me, because I want to oppose is can oppose, I did not carry. For investors, they are naturally short-sighted, the task is simple, is listed. But as entrepreneurs, we can't let investors dictate everything. What entrepreneurs have to do is let the company have a long-term development, five years, ten years later, can become a much larger than today, a very successful company.

After these two times, and then 2008 into the money, all let them lie on the account did not move, we do things. Including now, although in the glutinous rice network and a variety of business investment, most of the cost is made by Renren's money burden. So we now have almost a billion of of our cash reserves.

"Entrepreneurial State": With the previous lesson, how to bargain with VC how to get along, is not also have their own set of experience?

Chen: No lessons, no more than 5 times in this life, what lessons? But it will be better than once. There is a point, anyway, the more money is still better, even if you do not need, if someone sent money to come, you also go on, because when you need no one to you. If there is only one year left in the company's book, immediately to finance, do not wait until only six months of money. Because it may be difficult for the company in the short term, but it may pass if you get over it. But this simple decision is not done well, you don't have the money, you don't have a chance, you die. This kind of low-level mistake must do its best to avoid. Then the price is not too much, almost on the line, financial security is more important than the price of financing.

"Entrepreneurial State": All say winter is coming, what do you think of the recent capital market?

Chen: Whether it is winter or summer, anyway, we are ready to think, no matter what climate, can survive. We have prepared enough fodder, even to enlarge the size of our investment. In the rhythm of mastery, I have some experience, do not uttered, must be proactive, reduce the company's long-term risk. The biggest feature of the company is that there is no Chine this said, the enterprise folded on the fold, you want to get up in that place, not this opportunity. In order to be able to run continuously, financing of the financing, should slow down the pace of finishing up the pace.

I'm going to do 30 years. Once son told me that SoftBank had been open for 30 years and we had a 30-year plan. This is not very formal, but I give myself a psychological hint that I will continue to work for 30 years. Of course, in the end, 10 and 15 are not the CEO's role, but the role of a chairman. Once that is the case, many of the decisions will be based on changes and longer-term considerations for some new businesses. So this may be a very major growth direction after the company goes public.

"Entrepreneurial State": Last year you said that it was hard to catch the chance of moving the Internet.

Chen: It's still the same. Because it is obvious that this is a big company playing games, especially Apple, Google their games, we are all to their foil. China's big companies also have to play on their mobile phones, making others profit. PC business is the same, but China's three giants-Tencent, Alibaba, Baidu add up market capitalisation is quite high, and Microsoft seems to have a fight. But after 35 years, the ratio is not as high as the market value of China Mobile's largest internet company, combined with Google and Apple.

I've been thinking about it a couple of years ago, and it's not as optimistic as everyone thinks. To do imaging Baidu, Tencent such a large company is not easy. If from the perspective of the start-up company, a few people do some application to make some money, a little problem, it should be easier than PC Internet, but it is difficult to become a big company. In the wireless Internet era 5 years later, the industrial value chain will form two thick, middle fine: 80% of the market value will be to several international large companies, such as Google, Apple, Facebook and other high tilt; they do not have too many medium-sized companies below, total value of 10%, Then there is a large group of small companies that revolve around the growing and disappearing of large corporate ecosystems, accounting for about 10% of total value. This is a brutal wireless internet ecology, but we are prepared. The next few years will be our investment in the future years, we will not necessarily get the market understanding. But that's OK. Metaphor: As a child who is not "obedient" and wants to fly all day long, we seldom get parental preference, but this does not prevent us from pursuing our ideals.

The most promising child in a family is often the most maverick.