Cool News Stray reflection: Tens of millions of dollars in 3 years did not find the real market

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It took tens of millions of dollars in venture capital in just a few months, but it took three years to find a real market for a soft landing. A "hot money era" Darling's degenerate trajectory.

"Now, ' wishy-washy ' is useless. "In the face of global entrepreneurship," said Haijun, a cool news network CEO, without any disguise, "we solved the problem of ' doing the right thing ' the previous two years, and our mistake last year was not ' doing things right '." So since the beginning of the year, the company has begun to change everything: abolishing unsuitable managers, slashing redundancies, and focusing on operations ...

Usually, when a start-up company CEO so sincere bare Company's mistake, he will easily get enough tolerance and patience: after all, entrepreneurship itself is a constant with all kinds of trouble, the wrong "to" the process.

But at the moment, few people seem willing to listen to Zhang's words. On the network, a large number of articles in the "six months two high-level adjustment", "The Rise of civil strife" and other topics describe the rapid changes in cool News-from July 2008 to April 2009, its two founders and the second chief executive who had a business background were dismissed, and the Shanghai branch was disbanded-even if the ensuing sound eventually subsided, But it's too much of a numbness to be sure that a company is not behind. This makes the Haijun, who has just become the third-most-owned company of only 3.5, quite lonely.

If the memory is clear, it should be easy to recall how cool news was celebrated three years ago. During the Spring Festival of 2006, relying on train tickets to search this fairly localized application, it became famous overnight. At that time, the entire Chinese Internet industry also immersed in a few months ago Baidu Hot listing and bring the dizzy feeling, cool news of the localization of the "Life search" is born every time: sound, it is not only in line with the trend of the times, but also with Baidu, Google, the two heavyweight players have differences As a result, at the start of only nine months, it completed two rounds of a total of 12 million U.S. dollars in financing, one of its founders even openly expressed the expectation of 2008 listing.

The team, products, markets, funds in less than a year to be implemented, can be called all entrepreneurs dream of the start. But the air was blown by the rain: Soon, cool News found on the start of the train ticket search business is not valuable, and its left-right sudden entry into the tourism, real estate search is fortified, it is difficult to take effect-for the rapid growth of the hands of the capital of the company, slow to start the accumulation of new learning curve is not impossible, But the gap with expectations is too great.

Cool News of the rapid rise and fall of China's last round of entrepreneurial tide is a microcosm: August 2005 Baidu listing let a lot of people believe that search engine is still a worthy of the opportunity to chase, Zhou founded the Qihoo won the Chinese Sequoia Capital and other overseas venture investment institutions, and NetEase, Tencent, the two domestic heavyweight network companies, has also expressed keen interest in this field. Among the many participants in this trend, the cool news is one of the fastest-blooming.

But it has also fallen into the "Mirage" of an exclusive entrepreneur: those markets that appear to be at hand are likely to require lengthy trial and error, or even a struggle to reach the brink of life and death. Especially in the upsurge of entrepreneurship, it seems that every entrepreneur hopes to complete the sprint from entrepreneurship to success in a short period of time, but often forgets some simple history: the 1998 venture Google did not see a viable business model from its peers overture in 2001, Amazon, founded in 1994, took 7 years to make its first annual profit, and those who were too early to declare victory, whether early Netscape or recent years of Friendster, tend to be mired in endless trouble.

After leaving, Cool News founder Chen and Wu Shichung are all to the outside tight-lipped. This newspaper has not been able to call its investors Feng Po. This is certainly not a memorable experience, but its experience and lessons are worth sharing.

The 惘 of expansion

2006 rely on train ticket search in a short span of one months to jump into the Alexa ranked the top 2000 cool news, looks like the prospect is gratifying.

This is attributed to its two founders, Chen and Wu Shichung. They are a handful of domestic search engine master, Chen participated in the development of the North Skynet, and Wu Shichung is one of the earliest employees of Baidu. Their long-term research on search technology has kept the company from starting low.

And the "Life search engine" it advocates seems to be the next link in search engine evolution: When people can find rich content information through search engines, they will naturally need to have information about airfare, real estate, work, and shopping. Thus, Wu Shichung and Chen more than once to the media, life search is "let Search service in life", it and Baidu and other common search is the difference in its subdivision area of information processing.

It sounds a shrewd choice, but the devil is in the details.

"Life search is too big a concept, what content is not included in life search." A former cool News employee told The Economist. For this reason, the breakdown of cool news channels, including train tickets, real estate, work, second-hand cars, catering and so on, and even friends.

This is one of the most difficult mistakes that many entrepreneurs can make: they unconsciously lose their focus. Today, almost all entrepreneurial teams will talk about the value of "focus", but the implementation of specific actions and decisions, it seems an unavoidable temptation to include the things that seem to do, it is not the dominant "pluralism", but the damage is also huge.

In the case of cool news, this "no focus" led to a dilution of the company's resources. For catering, train tickets and other areas of information, the required data processing methods are very different, the project responsible for the knowledge structure requirements are also different. In this case, cool news in the financing once rapid expansion, a short period of less than 50 people to expand the ranks of more than 100 people, is because a variety of search content requires different technical and editorial team to deal with.

"Different channels, users look for information needs, information processing, and other aspects are not the same, this difference is far beyond our imagination, not simply to gather a product, users in the search box input a keyword, you can find results." After hindsight, Haijun admits.

This ultimately leads to cool news In fact there is no fixed development path.

For example, let cool news rise "train ticket search", and failed to become the backbone of cool news development. In China's market, the most frequent use of train ticket search, is a scalper, cool news can not get any income. Until 2008, Cool News has also tried to build a train ticket online sales of a new system, hoping to use this as a train ticket agent to build channels, the formation of railway ticket field of "Ctrip." After trying to co-operate with a Beijing ticketing website and launch a ticket for a train ticket, the experience was a good one, but it was forced to halt because of a regulatory ban.

Another almost "entrepreneur curse" is: When you are in the business of repeating a familiar job, there will always be unexpected things happen-after all, past success there are too many timing factors, it is doomed to be unable to copy, paste.

A simple example is that cool news earlier attempts to replicate Baidu's "Search + community" model. It launched in early 2007, "Cool WA", the position is essentially equivalent to Baidu bar. Users search for different keywords, they can enter different community exchanges. However, in the case of traffic still far away from Baidu, this product is very difficult to operate successfully-this is tantamount to a small amount of traffic scattered to the smaller areas. As with all vertical areas of the search for the tile, cool News also did not focus on the content of cool WA culture. You know, stick is a content-oriented product, if you do not invest a great deal of energy careful guidance, almost impossible to have any effect.

So, in two years time, cool news to their own diversification restrictions limited. The first 9 months of it melted to 12 million dollars, enough to allow the next 15 months to fully grow, it once owned hundreds staff, naturally have a huge amount of energy invested in too many things.

The difficulty of concentration

It was not until 2008 that the media had expressed expectations that the Chen of 2008 would be flash, and that the company's primary solution was to make money, not to mention listing.

"We are trying to make ends meet in 2008 years, and a company has developed for two years, and that pressure is necessary." "In an interview with The Economist in April 2008, Chen said. It is clear that his pressure comes partly from his investors: a lot of risky ventures have given him enough time to try and make mistakes, but they are also more eager to see returns than most.

June 2008, Cool News held a conference, officially announced to enter the tourism search, while taking into account real estate search. In other words, so far, cool news farewell to the "Life search" this big concept, into a more specific market segments. It is said that in order to clear the final focus, cool inside after lengthy discussions, until the beginning of the 2008 to form a consensus. "Cool News train ticket search attracts the original is the tourist crowd, so travel search is necessary to do." And the reason why also choose property, is because the current real estate flow is quite large, stick to it, income can also be done. The other side didn't think of a reason why to do it. "Chen said.

Efforts to cut the line of business have proved inadequate: soon after, property search was finally abandoned.

In the final analysis, property search is just a gorgeous bubble. Haijun said that in this booming market, the most lucrative part is in the new property. And the demand for new homes is not a search can be resolved: As a concern of the people, more concerned about the environment, supporting facilities, developers, appreciation potential, so need to search a room so that can provide a full range of information on the site. And the remaining second-hand housing and rental in the real estate market accounted for a small proportion. Most importantly, in the current market, the housing intermediary in order to attract users to call, the release of mostly good location and cheap false listings, which makes search engine value greatly reduced.

Although not without frustration, but at least, by the second half of 2008, Cool News finally found their own final, the only direction: air tickets, hotels, tourist routes based tourism search.

In a sense, at this time the cool news is aimed at, is no longer the world of Baidu and Google, but belong to Ctrip and SouFun of the site. And Ctrip, the difference is that it is not the provider of transaction information, but the use of their search ability to crawl the Internet information on various related, and ultimately help users find the cheapest and appropriate products.

This is a model that has proven effective in the United States: the kayak.com of tourism has received about $30 million trillion of rounds of financing in this mode, and this instant-refreshing web application of a category of product information has been named Meta search. If this model works, cool News can become the partner of relevant information suppliers: Whenever users click on this information in cool news, the information provider will pay the cool news once. This is a natural solution to its business model problem.

Moreover, China's tourism market in recent years in the booming period, 2007, China's tourism revenue for the first time exceeded 1 trillion yuan, up to 1.09 trillion yuan. In 2008, China's online travel booking market reached 2.789 billion yuan, an increase of 22.7% per cent, and online travel subscribers reached 6 million, up 33.3% Year-on-year, according to Eric. The US online travel market is expected to grow to $91 billion trillion in 2009, which accounts for 33% of the overall tourism market, according to Jupiter Research, a market study firm.

On the other hand, in this market, although there are "where" the pioneer of tourism search, but because the market in the initial stage, the other party has not established an absolute leading position.

Mirage”

Must admit, the cool news enters the travel search market, needs the ego revolution courage and the effort.

Wu Shichung and Chen are both technical origins, plus Wu Shichung Baidu background, so, and that wave of entrepreneurial boom in most companies, like Cool News in the company copy Baidu's engineer culture, the establishment of product Committee, will be the core of the company as a technology and products, to cultivate operational capacity is not so seriously.

Accordingly, technology and products are also more adept at the two founders. According to familiar sources, Chen has developed Skynet FTP and campus network download tool Maze, which allows him to form the thinking inertia is: When a problem, the first thought is whether the program can do, rather than manual, and then can turn this thing into service.

But the premise is that most of the data already exists online, if not?

China's entire tourism market, although large, but immature. The chain is numerous and complex, including airlines, online travel websites, hotels, travel agencies, tourist offices, attractions and so on, only airlines due to the small number of relatively easy to grasp. Because of this, in the tourism market has been reaping the Ctrip and the Art dragon, not the pure meaning of internet companies, more rely on strong offline operating capacity.

This means that, unlike kayak, Chinese travel search engines are doomed to have a harder road.

For example, in the tourism search market, the direct competitor of Cool News-founded in 2005 "Go where", the main force focused on air ticket search for the core business. For a long time, it has not paid much attention to the hotel business and the tour line search, because these two domains are not normative. China's hotel business is too fragmented, and e-commerce is not widely used. Most hotels rely on traditional channels, such as cooperation with enterprises or tour groups, and Ctrip or art cooperation, holding meetings and other ways to obtain customers, rather than their own booking system network. Travel agencies are also less adept at using online channels in this way.

How do you get in touch with the customers in this complex chain? How do you guide them to transfer data to the Web? How to build cooperation with them? How can we maximize the interests of both parties? These numerous and finely fragmented problems are not the technical power to solve.

At the same time, cool news and "Where to go" need to re-establish transparency and brand trust for the industry. Chinese hotel prices are not transparent, on the surface of the group price, the company price, travel agency prices, such as multi-layer pricing system, but the background of the price system is much more complex, even in different travel agencies booked hotel prices are not the same. Travel routes are more irregular: the same route can be planned for many kinds of prices, during which different services are not transparent.

Even in the relative norms of the airline ticket, the degree of trust of consumers has become a problem: many small ticketing sites need to pay before the ticket, many people are afraid of being cheated would rather spend more money to carry Ctrip booking, in order to rest assured.

Of course, there is a part of the information has been standardized and reputable, that is, Ctrip and the establishment of the hotel, air tickets and tourist line information, but this happens to be cool news and go where it is difficult to convert to income parts-like ctrip such a strong upstream, not willing to pay for travel search engines. After all, they have their own brand awareness, and Ctrip, Art Dragon is not too much price advantage, tourism search engine to attract the expectations of low-cost consumers are not easy to transform,

This is the "layman" cool news gradually entered a real world. Even in the seemingly clear business model, it is inevitable to take some detours.

For example, in the air ticket search, the first cool news did not and these customers sit down face-to-face to talk about cooperation, but only the use of booking site published data interface for them to bring traffic, and then according to the flow to be divided. "Later found that this is very hard to do, it does not value you, it has a special interface to all people, like a network union, who brought it with the flow is the same." Chen said. Finally, in nearly a year of groping, by Baidu, Google and other keyword ads inspired, cool news began to explore keyword ads. That is, let the customer bid according to the keyword, and then arrange in order. Cool news to customers to ensure a certain effect, and a number of ads attached.

But this later proved to be not the right business model, after all, Baidu's customer volume is very large-any small and medium-sized enterprises can become Baidu customers. But in contrast, cool news customers are limited to the tourism industry, so that bidding will be difficult to achieve good results. Later, cool news using the same model as kayak-Cool news and the site most of the air tickets, hotels, holiday products, the information provider to cooperate, whenever the user clicks on the information on the cool news, the information provider will pay a fee to cool news. In holiday products, there is also a part of the cooperation is only the user ordered a holiday products and pay, the travel agent to provide the holiday information to the cool news, the cost is often much higher than the click Fee.

Of course, not all of the data is paid--to provide more options to accommodate the user experience, Cool News does not undo the data that is not paid. But in a variety of ways to persuade them to cooperate with cool news.

"Every business model is a kind of pressure for everyone, you start by saying that, and then change that way, the impact on the team, the customer is still very large." "Chen said.

Even if you find a stable business model, but the problem also occurs, cool news at first rely on the flow of the Alliance to guide some of their own traffic, but not targeted, brought over the flow is often not really a tourist demand. However, the impression left to the partners is that the conversion rate from traffic to real transactions is not high, and the partners need to waste a lot of clicks. This is bound to arouse the dissatisfaction of the cooperative customers.

According to industry sources, the conversion rate of cool news is lower than "where", and even "where", in this immature market, the scale is relatively limited. A former employee told The economist that its 2007-year income was tens of millions of yuan, and that the growth in the past two years was not steep.

From the beginning.

In any case, the change has been too slow in the eyes of investors who have invested heavily. July 2008, in charge of Operation COO Wu Shichung first leave. According to Feng Po, general manager of the joint venture sources, in addition to Feng Po's performance is not satisfied with the cool, Feng Po for Wu Shichung character negative judgment is also leading to the cause of Wu left. Four months later, Chen was also out for similar reasons. Ironically, Wu Shichung once told The economist that the Internet's financing was about to enter the freezing point, so rapid financing was a good preparation for winter food.

As for Chen's replacement, Cao Jianli, a number of people have confirmed to the Economist that he was not previously a joint venture fund manager in the media, he has been the president of Netcom Daily Online, and served as a vice president of the United States, the network and other companies. Although he was recommended by the Chen, he also passed the nod. At that time, Chen excitedly to the Economist, said that immediately there will be a senior sales person to join the company as President of the post, refers to Cao.

Unfortunately, there was no real change in the situation after Cao's succession. Some people close to him said that Cao is not familiar with the Internet business, in the founder's departure, the period of wavering, he not only failed to solve the original problem of cool, but because of the lack of understanding of the business level so that people can not convinced.

In the end, the goal of achieving fiscal balance in 2008 has not been completed. By the beginning of 2009, his departure had not been questioned.

"In fact, the decision was made at the beginning of the year, and then I communicated with most of the employees in the company," he said. "Haijun, who took over as CEO, told global entrepreneur." Zhang in 2007 to join the Cool news, has served as vice president of products and COO, in the promotion of cool news from life search to tourism search in the transformation process plays an important role. Before, Zhang has been in the life of the search field for many years, has done a mobile phone life inquiry services, such as queer.

Can previous experience help Haijun? It's not clear. At the moment of taking over, on the one hand he has to carefully regain the confidence of everyone, for this reason, he and almost everyone in the company have a face-to-face communication, "confident left, no confidence to leave." Zhang said. On the other hand, he will lead the company to a radical change. At the heart of the shift is turning the technology company into a culture of operation. "Not to focus on product technology, but not the product technology myth to as long as the product technology to do the other good."

While it sounds like this change has left an Internet startup with a bit of strength, even some of the network industry veterans believe that cool news should be more balanced between technology, product and business. "Wu Shichung They all see Li's technical background, but ignore it, Li is a born businessman," a senior executive at Baidu told the global entrepreneur. ”

In these months, Zhang also non-stop to see important partners. "It was just a contract with them, give them diversion volume, it's over." Never know what they're going to do, what problems they're having. "Zhang to reflect on, before the cool of the understanding of the cooperation is biased, that will only click to bring customers can be, and did not pay much attention to the actual volume of transactions." Now, Zhang led the team every few weeks and major customers to collision exchanges, in the hope of different customers in different periods of demand, customized different ways of cooperation. In this way, the contact with the big customers more closely, can also be the first time to understand the consumer changes in the purchase of products.

In response to the question of how to build a user's trust, Haijun says, vertical search cannot simply be done only by searching. Like Taobao, it constructs a third party integrity dimension, so so many people flock to. And cool News will also take a way to help users to select and identify information. For example, third party evaluation companies do credit evaluation, or through the consumer scoring automatic selection and so on.

At the same time, Zhang also hopes to be cool news "before travel-travel-after" one-stop service, to help users solve the various needs of tourism, or even to solve the desire to travel, that is, "where to play" problem. To this end, by mid-June, the new version of Cool News community will be launched.

While it may seem that the determination and effort of all changes is not immediate, the business of an internet start-up has finally begun. The good news is that, after staffing, Haijun said the company "has now basically reached a break-even." ”