Wearable equipment can form a long enough industrial chain

"Wearable equipment can form a long enough industrial chain, such as glasses, watches and bracelets, and the hardware industry chain in the light is very large and can produce giant companies," said Dong, managing director of the 2013 China Investment Conference held in Shenzhen, August 23. These wearable devices, whether Bluetooth or other Internet technology connected to a mobile phone, connect things together ... Investors are very optimistic. ”

How do professional vcs view market prospects in wearable areas? What business models are more favored by investors when choosing a project? Based on this, interviewed the Innovation Workshop investment director Fang Yimin, Innovation Workshop investment manager Chen days and Lenovo Group Science and Technology Seed Fund investment manager encapsulates and other three professional VCs, to dispel doubts about the market.

How do you view the value of investment in wearable equipment?

Chen Days:

Within our company, the hardware has been individually taken up by a dedicated partner, and wearable equipment is an integral part of the hardware investment.

The main reason for concern about wearable equipment is that we look at wearable devices as a new entry point for future Internet services, similar to smartphones as portals to mobile Internet, and to the attention of new sources of data collection, hoping that these more dimensional data will produce special value.

We have chosen a number of hardware development strength, has been in the Internet services to establish their own brand of the team and products to invest, not too optimistic about pure hardware manufacturing team. Because the business model of independent hardware products is more difficult to build and sustainable, the latter will gradually reduce the gross margin, while software and Internet services overlay the hardware products, can effectively differentiate competition, and increase value-added service capabilities. Brands can reduce marketing and channel costs, which is critical to the success of pioneering start-ups in a burgeoning industry.

Fang Yimin:

Pure hardware projects are not easy to establish an effective market competition threshold, regardless of product differentiation and pricing. In this case it is easy for other manufacturers to imitate and beyond. This is the main reason why we value relying on our own brand hardware products, and on top of the hardware, running our own Internet software and cloud services, and even running an ecosystem of entrepreneurial teams.

Encapsulates：

At present we have not followed up the investment. Have seen some wearable hardware start-up team, these companies enter into the open mold, production, sales and other links after a lot of eco-chain problems, so we are on the industry for further wait and see. But I am sure I will keep an eye on this area.

What is the current status of technology, industrial chain development and business model exploration in wearable equipment industry in China?

Chen Days:

Domestic wearable equipment industry chain is mainly distributed in South China. Where the manufacturing industry chain is relatively perfect, the whole industry chain from raw materials, project design to manufacturing and processing are relatively complete and mature. This is similar to the logic behind the Shanzhai industry's focus on South China.

However, these wearable equipment entrepreneurs in South China, many manufacturers start from the hardware lack of internet thinking, do not understand how to use the Internet to carry out value-added development, also do not understand the value of building the data mining behind the device.

A large number of wearable startups are now starting to use Android to intelligently wear hardware, but ordinary Android needs a lot of customization to adapt to a variety of wearable devices. Android, for example, has a large power consumption, and ordinary Android phones are one day long, and it's not particularly appropriate to make wearable devices with smart-machine Android chips and system solutions. A similar problem is still to be solved.

In the construction of the business model, there are mainly the following: first, the direct sale of hardware to make gross profit; second, hardware products superimposed software and internet services to do value-added fees; third, through the collection of user's personal data, with cloud computing technology, to specific enterprises to sell cloud data.

Compared with foreign counterparts, the domestic wearable equipment industry in the field of development of the main areas to be perfected?

Fang Yimin:

The main gap is embodied in original design and innovation capabilities. At present, wearable hardware innovation, can open up new areas of the company is based on the U.S. entrepreneurial team as a representative of foreign companies, while the domestic entrepreneurial team is still more in the tracking and imitation, temporarily only in low-cost, localization and other aspects of the establishment of their own small differentiated competition strategy.

What are the similarities and differences between wearable hardware and internet entrepreneurship?

Chen Days:

1, the replacement speed of hardware entrepreneurship is not as fast as the Internet start-up, hardware products often need to open mode verification, iterative cost is high, product cycle is longer. The reason why, some no strength can wear entrepreneurial team even without funds to support the hardware to make, not to talk about the product out of the bargaining power with the channel; 2, after the product comes out, the hardware product sales and Internet products are not the same, often need direct sales and agent channels. Some of the internet's IT people in the wearable areas of entrepreneurship, do not even understand how to manage agents and how to lay down the channel, it will cause obstacles to their business; 3. The scale cost is much higher than the Internet entrepreneurship, which is why we are willing to choose strong and already have own brand companies to invest heavily in the reasons This will greatly reduce the late channel development and other costs, improve the success rate.

In the investment market, what kind of wearable entrepreneurial team is more likely to be popular?

Chen days: In general, teams with relevant data analysis backgrounds and ideas about the interaction between different smart hardware may be more likely to stand out in the marketplace. First of all, wearable computing produces data about user behavior data. The team that understands the data analysis, the later data model is easier to establish, the data analysis is more rule-based, correspondingly, the business model is also easier to build. Secondly, wearable hardware equipment, if it can be linked with other hardware, can form a larger network of things, the depth and breadth of the net is deeper and wider than the current internet, and the imaginary space of business opportunities is rising; it is recommended that, under the guidance of this larger network of things, entrepreneurs do more consumer-oriented, feminine-oriented things, At present, some wearable hardware products are too extreme passenger, resulting in the audience too small, and market opportunities were artificially compressed.

From an investor's perspective, can you provide some advice for wearable entrepreneurs?

Chen days: Entrepreneurial often is to seize a strong demand to do deep, do fine. The start-up company has limited human resources and should not be too distracted by too many things. Hardware of the various cycles than the internet long, entrepreneurial team easily submerged in specific transactional work and lost, so the proposed entrepreneur also from time to time to get a reason to rethink the path and implementation.

Hardware products are a good cash flow business, but the cost and development of production rhythm must be well controlled, or even higher gross margin will be consumed.

In addition, in the entrepreneurial process, we need to pay attention to the protection of user privacy. Entrepreneurs should be aware of the various types of data privacy sharing level, do not abuse, otherwise easy to build up the brand to bring harm. Protect the core users, use the Internet service channels and thinking to serve the users. Currently willing to try wearable computing equipment users are not the general public, the core user maintenance costs are low, but they will have a far-reaching impact on the small white user group.