How much does it cost to feed a app? Does it mean failure?

duang! Another app brush explosion friend Circle. Large-style movie screenshots, meaningful classic dialogues are derived from a "full memory" app.

The foot group just completed the Angel phase financing last August, with the investment in the light and the VC, and is now preparing for a round of financing. And the number of users nearly a week after the explosion, the total number of users have exceeded the million mark. It seems not too hard to build a successful app.

2014 China app sector financing is very active, social communication, local life services, games, automotive transportation and other vertical applications all get millions of, tens of millions of dollars in financing. As capital and Giants accelerate admission, the O2O model burns more money and promotes higher costs, making apps into the tide of waves.

How much does it cost to feed an app in the present? Does "flash" mean failure?

Financing more in the early

Data show that 2014 China app field, Angel period and a round of cumulative financing ratio reached two-thirds.

Since last year, there has been a growing phenomenon-class app. Hit, including the demon diffuse camera, face Meng, surround the cat and the foot of the memory, not only excellent reputation, but also provoked the investment people to squeeze the threshold.

Most of them come from grass-roots teams, so they inspire the entrepreneurial zeal of the app.

Data show that the App Store in July 2008, the beginning of the launch, the number of apps only more than 500, the same year in October Google online Android Harsh (now Google Play) only more than 40; As of January 2015, the former app number reached 1.21 million, The latter has broken through 1.43 million.

The news of blockbuster financing is endless.

Drop a taxi, quick taxi, registration nets, peas pods, today's headlines, clove garden, digging money nets and other apps in 2014, the Sequoia, SoftBank, Temasek, IDG Capital and other well-known investment institutions, and the scale of financing in tens of millions of dollars, ranked in front.

In 2014, social-networking apps have the largest number of cases, with 95 cases, and local life services followed by 53, but in terms of average funding, the investment in these two areas is high, while the volume is small (financing amounts are 750 million US dollars and 221 million dollars).

In stark contrast, is the car traffic field, fast, drop in 2014 of burning money still received the capital market support. Drop in Temasek, digital Sky Technology, Tencent and other investment 700 million U.S. dollars, fast access to soft silver China, Alibaba, tiger funds, such as investment in 600 million U.S. dollars, driving car traffic in the total amount of capital to 1.774 billion U.S. dollars.

But after the influx of hot money, app is far from a towering tree. According to the analysis of VC/PE financing round distribution, it is found that most of the cases in China's app field in the 2014 were concentrated in the early stage, and the cumulative financing ratio of the angel period and the A cycle reached two-thirds.

"Flash in the pan" is not a problem in the context of the big app explosion.

"If a app can fire quickly in a short time and find a profit model that makes quick money, even if it doesn't last long, it may not be a bad thing for market-oriented investors," he said. Analyst Wang Ziwei said. Wang Ziwei says many of the projects are invested in angels or early stages, and more often as a strategic reserve for VC and strategic investors, with a handful of quality projects likely to be IPOs and more to be withdrawn through acquisitions, such as those that sell to big players with a strong desire to layout.

The oligopoly of competition

"Mobile end IM basically controlled by the Giants, other more active entrance, such as music, video and so on, and basically become a scramble between oligarchs." ”

The development of the app industry in China began in 2010, followed by a burst of growth. The Institute believes that it can be divided into four phases:

In the first phase, the PC-Internet-born enterprise transplanted its PC-side business parallel to the mobile end; in the second phase, with the growth of smartphone users, most traditional industries have developed apps to conform to the trend; The third stage, the lower entry threshold, has plunged the app venture into madness, At the same time, the rise of O2O mode makes the mobile properties of app play to the extreme.

At present, the app business is in phase IV: Capital and Giant acceleration admission, app promotion cost increase, O2O mode burning money phenomenon is serious, business model needs capital support, into the tide of sand era.

In the 2014 app industry, the trend of investment and mergers, bat in the overall in-depth layout of mobile Internet enclosure activities.

According to statistics, in 2014 China app field VC/PE financing case amount Top 20, Tencent, Alibaba investment target enterprises are four respectively. In the vertical subdivision of the field for example, bat in the car traffic investment companies are Uber, fast, drip, in education Baidu, Tencent invested in the net, cross examination education.

"Data show that the market pattern of mainstream app was formed as early as 2012." Wang Ziwei to Beijing News reporter said.

He said that the traditional Internet companies to enter the earliest, and use its many years of accumulation of imports and user advantages relatively easy to occupy the market. The threshold for new entrants is getting higher. Mobile End IM basically controlled by the Giants. Other more active portals, such as music, video, maps, news, payments, and so on, are also basically competing among oligarchs.

"Start-up companies are difficult to find a good entry point, most of the selling ideas, grasp the pain point is also long tail." There is a period of demand, after a period of time has not. It was unloaded in a few days. "Wang Ziwei said.

The loser under the bubble

In the O2O domain app competition, the first to find the industry pain point, often not the final winner.

Into the public eye is the capital and the Giants in the phase of the lucky, there are more app start-up team fell before dawn.

"The concept of O2O is starting in the second half of 2013. Everyone in the front is not clear how to play, the value of where, only know more opportunities. "Home Economics O2O Platform Cloud Home Economics CEO Xueshuai to Beijing News reporter said, inside bubble water is too big, some are not the user just need, even false demand."

"Have you ever heard of it?" and the app! of the door scrub. " Xueshuai told reporters that the company now has access to capital, but he is not optimistic about this.

"Many have no demand at all, are in the speculation concept, has been washed out a batch." Xueshuai, for example, a app that specialises in breakfast delivery has fallen recently, the founder issued a long article summed up the lesson, logistics system, supply chain has a lot of problems, "only make breakfast too narrow, this piece can be the United States Regiment, hungry, etc. provide early afternoon three meals distribution platform integration." ”

In the O2O domain app competition, the first to find the industry pain point, often not the final winner.

2013, a taxi software pioneer shook the car in drops, fast on both sides of the strong subsidy offensive quietly withdrew, forced transformation; 2014, the originator of the domestic meal service network into bankruptcy storm, the company was a popular comment on the strong competitors; late last year, the hair O2O's representative company Fashion Cat closed.

Home hairdressing O2O Enterprise fashionable cat was founded in July 2013 in Beijing, the October app online, according to media reports, fashion Cat before the fall has been quickly received two rounds of financing. Operating numbers have grown at a high rate.

One American industry personage explains that the fashion cat does not go down because of "burning money." "Matthew effect in the United States O2O industry is particularly obvious, the size and brand is not big enough, not enough financing and resources, it is difficult to obtain capital favor." ”

"The United States O2O market stock, hair stylist resources are limited, unless have an absolute first hair advantage, in order to lower the cost of horizontal expansion, access to customer and operation promotion." The person said.

When's the "Burn Money" game?

Xueshuai believes that the O2O competition has just begun, the tide of sand left is the real players.

The O2O Beaver, who is thought to be "alive and well", has been raising money for three times a year. After a recent C-round financing, the company gained 50 million dollars and valued 300 million dollars.

The founder of the Beaver Family in the media interview has said, "one months burned over 15 million", a city to start very much money, issued 100 pieces of nail coupons, "This is dry compensation."

There is the active support of the venture, the Beaver Home has no profit planning, first consider the market bigger.

Many O2O entrepreneurs are not as fortunate as the Beavers ' home. Wang Ziwei told reporters that the 2014 app investment case, although a lot of heat compared to 2012, 2013, the obvious cooling, the attitude of the VCs tend to cautious, "app venture gold growth period has passed." ”

"The subdivisions have been finely divided, and the sheer development of the app doesn't have a lot of good patterns to burn. Add app without barriers, easy to be copied, bat made a lot of entrance erosion. Can catch people's psychological needs of products are, like face Meng, demon diffuse, but the life cycle is not very long. "Wang Ziwei said.

However, Xueshuai that the O2O competition has just begun, the big wave to leave the real players. He said that starting a business in the O2O area must be a burning of money.

He said that the pure online app entrepreneurship is relatively simple, to engage in a software, games, or electric business projects, the money online to find users to pull traffic on it; O2O entrepreneurship changes the cost rule--the bulk of the money is online.

"O2O Local service means that there is no way national standard and needs to be covered individually." Financing 10 million, more than 50% flowers online. In addition to expanding users, cloth points, advertising these, but also to explore the logistics system, building factories and so on. "Xueshuai said.

When can we reach the profit point? Xueshuai said, a subdivision of the industry under the line of resources to form a relatively large monopoly, began to appear dawn. Before this, the general will have a brutal "price war", domestic O2O is no exception.

"When the resources under the line are robbed, they are either profitable or have the value of being acquired." Of course, you can also choose not to profit, continue to expand the size of the opponent until a single big, like the United States to do today. ”

In fact, in the drip, fast two of taxi app after the subsidy war, the United States, the public comments, Hungry Mody, Beaver Home and so on in their respective fields of war, has washed away a number of competitors. "O2O is so cruel. "Xueshuai said.