Discussion on whether to make a big flow first or to explore the profit model first

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This is a moonless night, Senth Network Technology Co., Ltd. founder Zhangxiaojin stood in front of the office window, quietly thinking about the day of the meeting, the company's two right-hand man on the technology department of a new development of a web game to the end user charges debate.

In fact, Zhangxiaojin understand that both the charges and the free, the reasons are very good, the use of free mode can quickly expand the user base, the adoption of a charging model can supplement Senth current very meagre income. And in the final analysis, for their own this no VCS can provide fuel to burn the money of the site, is the first wholeheartedly big flow, or edge to do the flow of profit model of the exploration, itself is a particularly difficult choice.

Almost all new venture sites believe that big traffic is the most important guarantee that the site will eventually have a better profit outlook. But for the different resources and capabilities of the various sites, Rome, although only one, the road to Rome, but there are more than one, the choice of the road, often determines the ultimate fate of the enterprise: Someone in the end of the road has not seen the death on the way, someone finally reached the ideal city. And Zhangxiaojin is now facing the dilemma is: is the heart without distractions to the ideal city, or the edge of a stone to touch the river? Zhangxiaojin difficult to make up his mind, because in these two roads, he had the unforgettable lesson of failure.

The first lesson of the Internet

Before undertaking, Zhangxiaojin originally is a market research company's senior project manager, he chooses to resign to start a business, in addition to the heart of the entrepreneurial dream, but also stems from his heart because of the rise of the Internet to the traditional market research industry impact of the deep concern.

Traditional market research usually obtains questionnaires by means of street visits, household visits and telephone interviews, which require a large amount of human, print, input and communication costs, and people are more and more popular in refusing to visit. The rise of the internet has brought new opportunities to the traditional market research industry. On-line survey can greatly reduce the cost of sample acquisition, but also through technical means to maximize control of the authenticity of samples. It is the opportunity to see this, Zhangxiaojin decisively resigned the founder of My network, this is a web-based survey platform site.

From the traditional industry into the Internet Zhangxiaojin, the first face is the technical threshold. So from the beginning, Zhangxiaojin with a learning mentality to understand the network investigation needs of all the technology, and technical staff of the repeated running-in, so he almost wasted a year of time in technology, until later he hired a high salary technical project manager, technical problems can be completely solved.

Based on the traditional industry of the thinking habit of living within the income, in the beginning of My network, Zhangxiaojin made a detailed profit planning. Zhangxiaojin's idea of casting my net is: After the network survey platform technology develops consummates, according to the Enterprise Request investigation sample base, collects the member enterprise the certain expense; At the same time, the openness and the storage of the network also make the investigation process itself become an effective advertisement display for the enterprise, which can get an advertisement value-added service revenue Finally, the survey data collection is the survey data mining of various industries, and ultimately form industry reports, so that the sale of database resources may become the site development to the latter part of the profit source.

In order to achieve these ideas, despite the extremely limited funding (the site's start-up funds from Zhangxiaojin and friends of personal savings), Zhangxiaojin still in the marketing team recruitment and training to do a lot of input. After the technical problems have been solved, the survey platform finally can be officially online.

However, at this time the cast of My network is only a sample library of "empty shell." Based on the survey of the sample library, Zhangxiaojin has given priority to the development of individual members. And just as he racked his brains to build a personal membership database, the online market research model has aroused concern among others. Cast my net spent more than a year to build up the site in half a month to appear several clones, and Zhangxiaojin oneself also have to admit, and cast my net compared to these sites in the function and interface have improved. More importantly, these later competitors use the survey points to give gifts and other promotional means, all of a sudden set up a much larger than my network database.

At this point, Zhangxiaojin funds have begun to be stretched, although their relatively sound marketing team construction than other competitors still have advantages, but the next six months more, Zhangxiaojin found that the marketing team to persuade the bill to pay a few business members, And then several rivals, with soaring popularity and database resources, gained more revenue. Although Zhangxiaojin still has a lot of ideas to try to change the marketing approach, he knows that his site has fallen behind the market. Due to the failure to establish brand image, to seize valuable customer resources, once as a pioneer in the market to cast my network, now it is like a copycat.

Serious income will cast my net finally cornered, finally, Zhangxiaojin had to cast my net sold to their original market research company. The company is also looking at new forms of online surveys and has dug up specialized personnel from other Internet companies to expand its online survey business. The old club to cast my net out of the price is quite cheap, Zhangxiaojin wry said, the equivalent of their pay salary led an outsourcing team to help the company develop the site. However, he did not have a better choice, and he had to accept the terms of the purchase agreement: "Not to be involved in the online investigation industry for five years."

The defeat of the war

Although cast my net finally is to Zhangxiaojin the complete exit to end, but this experience also enables him to harvest the rich Internet experience, and prepares the start-up fund for the next venture. Before the second venture, Zhangxiaojin always think of the negotiations with the old club when the other party said to him: "The site structure is not valuable, the value of your customer resources, flow and brand, we give you the price is not high, because this price is purely for this site." Now everyone knows to do an instant communication software to the user firmly attracted, but who can repeat Tencent's QQ?

From the failure to cast my net, Zhangxiaojin summed up the lesson is: in the absence of sufficient web site traffic support, to seek profits like a needle in a haystack, relying on marketing team to promote the human cost and communication costs, and the market is not ripe, enterprise customers and individual members need time to cultivate, And this is Zhangxiaojin not enough capital to support. So in the second venture, Zhangxiaojin decided, first of all, to be able to gather popularity of the site.

What kind of website can gather popularity? The classified Life Information network which is closely related to people's life becomes the next Zhangxiaojin goal. After investigating the competition pattern of the classified information website, Zhangxiaojin decided to set up a regional classification information website in his city: The Guang Hai Life Classification Information Network, which is a classified information website which takes the life information of the Guang Hai City as the main content, lets the local netizen free to release the life information.

In an effort to quickly gather popularity, Zhangxiaojin and several of his network editors have traveled the city's streets, distributing tens of thousands of leaflets and collecting a wide variety of valuable life information posted to the broad-Life classification information network. Kung Fu is not negative, a large number of netizens began to publish their own life in the Guang Hai online demand and supply information, the site's traffic in a short period of time has been rapidly rising. As a result of the classification of information web site has the characteristics of self-development, in attracting a certain amount of traffic, Zhangxiaojin also do not need to go to find information and distribution leaflets, a year is not, the information network of the Hai Life classification has been small local reputation, which is exactly what Zhangxiaojin originally expected.

However, at this time the Zhangxiaojin began to face the problem of profitability. Free distribution of information and access to information are key to attracting and retaining popularity in the Hai ' An classification information network, but popularity alone does not support the normal operation of the site. Because of the huge traffic, the vast water needs to be costly in technology, both need a large technical staff, the server requirements are extremely high. In the year since the start of the business, although Zhangxiaojin also got some local businesses advertising and Alliance ads, but this meager income is far from supporting the technical staff's wages and server costs. In the end, without thinking

Folklore?

In October 2007, Zhangxiaojin renewed his entrepreneurial passion: Microsoft announced that it would inject 240 million dollars to buy a 1.6% per cent stake in the US interactive social networking site, raising the value of Facebook to $15 billion. This news highlights the demand of the interactive dating market, the Zhangxiaojin in the market survey after extensive investigation of the domestic SNS website, that go vertical professional SNS is its own feasible development route.

In fact, such a site in the country has been very much, and have taken shape, the difference is the user positioning. such as positioning the student family network, positioning white-collar family of happy net, and so on, do the same site is undoubtedly Ishing, but there is a vertical segment of the market Zhangxiaojin think or blank field, that is to love and marriage for the purpose of interactive dating network. There are some dating network in China, such as the century Jiayuan, marry my nets and lily nets, and so on, they have a considerable scale, and have been some of the wind investment in the pursuit. But Zhangxiaojin believes that closed dating relationships and the short-lived life cycle of users are the short boards of these sites, and if SNS can be incorporated into dating networks, it is possible to find a niche in the marketplace.

In the creation of Senth marriage Dating Network, Zhangxiaojin wrote: "China's love and marriage service market demand is huge, the domestic traditional dating network, although take shape, but less than 10% of the matching success rate, which proves that the traditional marriage network has to improve the operation of the necessary way." At the same time, because there is a relatively clear profit model, based on the responsibility of the great wind investment, in order to avoid the risk, these traditional networks are afraid to open marriage and love friends, so as to explore possible new profit model. The starting point of the Senth Dating network is to provide a more open marriage and dating community so that there may be more exchanges and more choices between the two sides of a possible marriage relationship. We will explore the profit model on the basis of providing better and unique services before marriage, marriage and all stages of marriage, and we have reason to believe that it is the right thing to do ...

Zhangxiaojin seriously analyzed the profit model of Senth: The first is advertising revenue, which runs through marriage and marriage services, premarital, married and all stages of marriage; the second is interactive game income, the website in the development of a certain number of members after the introduction of mating games, mating game income and the possible existence of game value-added services revenue; third, e-commerce revenue, In the major cities in the country with the local wedding crowd for the main target consumer group furniture store, wedding etiquette planning company and hotel cooperation, to give Senth member prices to buy wedding furniture, wedding planning and booking wedding banquet of one-stop service, and Senth to get the commission income, This requires Senth to be the main first-tier cities as the focus of market layout.

To avoid the mistakes of the first two startups, in the founder of Senth marriage Dating network, Zhangxiaojin set up a technical department, marketing Finance Department and Marketing Department, Technical department is responsible for research and development, marketing Finance Department is responsible for controlling costs and exploring the profit model, and marketing department's main responsibility is to promote the website and analysis of competitive websites.

After careful preparation, to open marriage and love friends for the purpose of fully integrated into the SNS interactive elements of the Senth dating network in six months after the official online. In order to stimulate the rapid development of Senth dating Network, Zhangxiaojin in addition to borrowing the previous two sites to promote the experience, but also a considerable part of the funds used in the network advertising on the promotion. The investment of the fund quickly brought the website traffic and the following member register quantity, the marketing finance department also quickly got some sponsorship advertisement, this let Zhangxiaojin is full of confidence to the profit. But a year down, the company's earnings data show that advertising revenue is much smaller than the cost of the Web site promotion, which means that the current company is out of income.

Zhangxiaojin know that the long-term imbalance of input and revenue will make subsequent funds completely broken, and eventually the site into a desperate situation, but if not spend money to promote traffic, the growth of the site will greatly slow down. Now the way out there are two: first, in order to reduce the cost of network promotion, to seek new ways to promote the second is to expand the profit model. Zhangxiaojin and his team in the hope of a match in a marriage of the web game, and in the game after the success of the test, in Finance manager Liu and marketing manager Wangjin between the charge of whether the end user dispute.

Liu said: "This web game from the public test of the situation is very popular, we can point card in the form of charging players to make up for the current site has been the loss of the situation." "Wangjin said:" Our site although in the past two years has a relatively rapid development, but still belong to the initial stage, compared with the industry, our website traffic and registered users are still small, because this web game is popular, we should be free to promote to attract more users, has the sentiment also worried no profit? If the fee is bound to block a significant number of potential users, once the latter adopt a free strategy, we will lose the opportunity. ”

It is not the first time that such an argument has been made. As finance manager, Liu is naturally more concerned about the current revenue and expenditure of the site. In order to increase the revenue of the website, Liu in addition to fight for some brand advertising, but also want to put some mandatory window ads, but is responsible for marketing the Wangjin is extremely disgusted with, he thought that such ads although can leave strong visual effects, but often let users very annoying, resulting in the site's user experience is very poor, resulting in user churn. And Zhangxiaojin understands that the essence of this series of arguments is: in this particular period of growth, is the pursuit of free and the best user experience in exchange for more traffic, or in charge and advertising for the rapid profitability of the exchange? (21st CBR Scenario case with the common management dilemma as the theme, according to the business scene fictional creation, the company and the characters are also virtual.) )

Reviews 1

Sanli, CEO of rice Marketing Network

Zhangxiaojin in three of startups encountered in fact is the same problem: the profit model. I had the same problems with him, but the cash flow was balanced when the net was 10 months old. And why?

In fact, it is very simple, when we started a business, in the pocket of 1 million, calculate to also live 1.5. What to do? The only way to do that is to charge--to determine the profit model, which is determined by the money in your pocket. If I had 100 million, I would never rush to charge. But I did not have to consider how to survive.

Whose money is it? Consumers, advertisers, enterprises? Of course, who most want to accept the consumer's money, but the site has not a few dare to consumers charge (except online games), we do not dare. Not only do not dare to accept, but also to the consumer sticker money (such as sending points, do activities, send gifts, compensation for losses, etc.), in order to pull more users. Zhangxiaojin is also the same, the sticker money to get users. He did well in the latter two companies. But our question is: whose money? Since they are afraid to accept the money of consumers, so the election is the main advertisers. Hope that people look at their own site of the large customer base, and then to cast ads. This formed the Zhangxiaojin after the two sites of the main direction of charge, is almost 80% of the site's charging methods.

Unfortunately, this road is not good, in the waiting for advertisers to understand the site and the effect of the judgment process, too many sites down. Rice network initially judged advertising revenue will not have a major breakthrough in the first three years, so chose the third way: to the restaurant charges, to the main service business charges are the biggest bet we survive. Zhangxiaojin's first website charges the right direction: He charges businesses that want to investigate. Of course, it is more regrettable to do this survey site in the early days of his technical problems spent too long: the production of a year before the launch of the site, loss of time on the first advantage. In addition, his marketing experience and financial preparation is seriously inadequate, but also caused the final loss of this opportunity.

When you decide who to collect the money, but also ask yourself: why do people give me money? Is it because the page is beautiful? is the traffic big or is the result remarkable? The rice net chooses the effect--order, how can make the order to do is the key. In Zhangxiaojin's first venture, the survey site how to set up a personal membership library is big enough good is the key. If there is a faster way to establish a strong real membership of the library, I believe that the market of enterprise investigation will be bigger.

Therefore, for the current situation of Zhangxiaojin, it is important to turn to a full range of charges and cost control in exchange for the opportunities for the survival of enterprises. Can be balanced, to go down on the development issue.

Reviews 2

Liu Xingliang, President, Internet Lab

The problem with entrepreneurs in this scenario is that most startups in the Internet industry will encounter. The answer I gave to this startup is the latter one, which means that the path they should take is "exploring the profit model while doing the flow".

Why not choose "heart and soul to do a big flow"? The reason is that the founder in the big flow can not be "wholeheartedly", because the big flow of begotten is to burn money. However, the entrepreneur has no venture capital and burns his own money. I have always believed that it is not feasible for grassroots entrepreneurs to burn their own money, unless his brain burns first, or his money is too much to spend. The founders of the article are obviously not both.

Analyze his first two unsuccessful ventures. His first venture was a common problem with Internet entrepreneurship-a problem that was quickly replicated. In the early days of China's Internet development, in the era of venture capital like "Crazy money", "silly money", such as 1998 to 1999, in the café with a business plan for investors to tell the lively story of the rich, in a few weeks to millions of or even tens of millions of U.S. dollars is not impossible. But now, every VC will ask your competition barriers, is afraid of simple replication.

And in the second venture, he failed because of a simple blindly pursuit of large flow, and finally because of the broken capital chain, had to sell the company. So this time, the third entrepreneurial Zhangxiaojin to do is the left hand grasping flow, the right hand to grasp silver, both hands to catch.

As for the model of the Web game is free or charge, this is not a problem. Marriage SNS is his main model, the Web game is only a supplementary product. At any time, entrepreneurs should be divided into primary and secondary issues, in the main branches, entrepreneurs must adhere to their own ideas, adhere to their ideals, adhere to the best user experience. Even if there is no more money, such as financial manager Liu want to put some mandatory window ads will be carefully considered. and ancillary, secondary products do not exist this problem, you can boldly do all kinds of attempts, this is a web game is such a role, so you can boldly do some of the fees of the test, and can supplement the company's money bank. From another point of view, if the Web game is a great success, then transform into a game company.

For a start-up company, the first problem is to survive. Only if you live, you may have the day to eat bread and drink milk. In order to survive, "3G" Aspects (Game, Girl, gambling) Try not to dip, in order to survive, try to find some way to make a living. Of course, there is a way to make a business, for example, in this start-up company, the web game can be considered fees, mandatory windows can not be considered.

Reviews 3

Zhang Yanmin, Wanrui data Advisor

Zhangxiaojin's experience is very representative, and I don't think he has learned a lesson from the previous two failures. If he had been more thorough or longer, he would have known beforehand that the probability of Senth such a business model was far greater than 99%,sns how to solve the problem of profitability is a worldwide problem.

Put aside the principles, from a technical point of view. First of all, Zhangxiaojin's entrepreneurial team lacks scientific and effective management tools, followed by the Internet Robin period of extensive operation means. Although the threshold of Internet entry has led to the world is flat, but different operating methods will lead to different results. I have served in the country's largest Internet data research organization Wanrui data, Wanrui data for nearly all the largest web site to provide in-depth data research. Few of these successful websites have specialized departments that conduct in-depth analysis of user behavior within the site, to know which traffic is really effective flow, which flow is "waste water" (a well-known video website CEO language), these enterprises are in the data in-depth analysis on the basis of gradually build up a competitive barrier. In the data analysis for the site, I deeply understand that "you want to learn poetry, Kung fu in poetry."

In addition, I feel that Zhangxiaojin's team lacks the flexibility to run an Internet business, whether it's a matter of flow or income, but when you replace it with "survival or death," choosing which answer will only depend on your courage. From the case I feel that the current situation of the Senth company can still allow it to insist on the flow (otherwise there will be no debate and the pain of choice), until the answer to the question only need courage, the enterprise will glow new vitality. I know a well-known SNS site, now the policy is determined to flow do not income, the website CEO said "user experience is like my eyeball." But when you know it has hundreds of millions of dollars to back up, I think you will understand what is "why not meat".

From the Zhangxiaojin's entrepreneurial process, his own background and risk tolerance, his two-time venture by the first venture failed to mislead. For most entrepreneurs, it is absolutely right to remember some basic business principles. The failure of the first venture made him give up the business is the basic business principle of profitability. As with stocks, no matter how much money you make or how much you miss, you should never forget to put the risk in the first place.

If you are not the same as others, do not say "there is no profit?" Don't forget, Microsoft is a "walk other people's way, let others have no way to go" great enterprise. (Source: 21st Century Business Review July)