Kai-fu Lee: China's four wave of entrepreneurial wave coming

Speaker: Kai-fu Lee

Time: September 26

Venue: Autumn Forest Report Hall, Peking University

Kai-Fu Lee (December 3, 1961) is an information industry executive and computer science researcher. 1998, Kai-Fu Lee joined the Microsoft Company, and then founded the Microsoft China Research Institute (now Microsoft). July 20, 2005 joined the Google Company, and as Google's global vice president and China regional president of the post. September 4, 2009, announced the departure and founder of the Innovation workshop as chairman.

The four wave of entrepreneurship in China

The first wave of the main entrepreneurs are the social relatively marginal people, the second wave is from the system "sea" people, the third wave of entrepreneurs in the grassroots;

Today, I learned a word, called "flips", Fall "pour", Grandpa and Grandma's "Ye".

"Flips" is the people who make money from the local difference, they buy from one city to another city, and sell at a low price.

Since the beginning of reform and opening up, China's entrepreneurial wave after wave after wave. "Flips" is the first wave of entrepreneurs after China's reform and opening-up. These "flips" can be said to have led the current Chinese entrepreneurial wave. It sounds exciting today. But at the time, they were some marginal people of society. At that time, most of the people were civil servants or employed in state-owned enterprises, and only those who could not find a job, even those who had nowhere to live, considered "flips" as their profession. In this batch of "flips", only a few people have been successful, slowly become entrepreneurs, such as Liu, Zhang ... In the 80 's, they may have given up a generous opportunity, perhaps because they could not find a better opportunity to struggle on the fringes of society until today they are respected by society. This is the entrepreneurial situation in China at that time, "flips" play the role of pioneers.

10 years later, the second wave of entrepreneurship took place in the 90 's.

At that time, China, the whole nation "went overboard". It is said that there are 100,000 workers in state-owned enterprises or government agencies, see the success of the business, they gave up the original work, choose to "go into the sea" entrepreneurial. The quality of these personnel and the education level are relatively high, they start business business scope is very wide. The idea of entrepreneurship at the time was not clear. Ultimately, they have a huge interest in the real estate and foreign trade sectors. Representative of the people is Pan Shiyi, Shi Yuzhu ... This group of entrepreneurs received a lot of value in return, because they are different from the first batch of entrepreneurs, they have a higher level of education and knowledge level, and they gradually began to learn the Western Advanced Enterprise management model.

The third group of Chinese entrepreneurs chose the Internet.

At that time, the United States verified that the Internet has great potential value in the future. But, how big, who is not clear. This is a huge opportunity for Chinese entrepreneurs to see this opportunity, they think: Americans can do, we Chinese can do. The best of them, the rapid accumulation of huge wealth. Of these, four companies add up to nearly $150 billion trillion in market capitalisation. Third-wave entrepreneurs are far more successful than the second and first waves if they are only evaluated for a fixed period of time, with the same capital creating the greatest value. For example, Tencent's Ma Teng created the value and cost of investment, compared with Pan Shiyi, Ma Teng has been a greater return.

The third wave of entrepreneurship, so that people become inseparable from the Internet. It through venture capital and stock equity can allow the whole company to participate in the entrepreneurial process, the company once listed, the first 100 people involved in the company's entrepreneurship, even the first 1000 people can become rich. The listing is backed by venture capital, and entrepreneurs have huge stakes. This makes many people become millions, billionaires, the first 100 employees can become tens of millions of millions of millionaires, the first 10 employees get the value is not to mention.

This entrepreneurial model is funded by venture capital and equity incentives, plus the entrepreneur's own different capital, and has a significant stake. This model is very different from the early stage of entrepreneurship. The former traditional enterprise is capital operation, take 1 million, 10 million borrow money to buy land, hope build house earns more money, may spend 20 million, 50 million or even 80 million, earn 100 million. However, the Internet industry is different, whether it is Baidu or Tencent, the initial input may be only million or tens of millions of dollars, and today's value is 100 billion dollars! Less investment, more return, venture capital gradually involved, entrepreneurs and his partners have a large number of stakes, and equity incentives, this is the third round of entrepreneurial mode.

My main talk is the fourth wave of entrepreneurship.

If anyone doubts the arrival of the wave of entrepreneurship, take a look at the companies that are going to be listed recently, as well as the trends in mobile internet investment. I personally in China is clearly seen in the third wave and the fourth wave of entrepreneurial wave.

Today, many of you here are the elite of Beijing University, here I would like to mention a point: as a Chinese elite, whether there is a chance to play an important role in the wave of entrepreneurship?

To sum up, the first wave of the main entrepreneurs are relatively marginal social people; The second wave is the "sea" of people from the system, the third wave of entrepreneurs in the grassroots, and today's fourth wave, more typical of the Xu Chang, he was in the innovation workshop to invest, is the founder of Dot Net, and a great success.

Look at the Internet, nearly three years of pioneering the top-level companies, of which three-fourths are from the prestigious computer or related disciplines of students, they are from a product and technical point of view to start a business.

The first batch of entrepreneurs basically did not have any technology, the second batch also did not have any technology, the third batch of technology content is more, the fourth batch not only has the technology, moreover is often it elite. I believe that many of you are also the IT elite, the fourth wave of entrepreneurial wave came, is the IT elite here to jump into the entrepreneurial wave of the best opportunity.

Every wave is full of challenges and hardships, and will become the legend of tomorrow. If in another 10 years, perhaps some of you will become a great founder of the company, on a certain stock market to get a huge success, to help millions of netizens ... It all sounds a bit wild, but if he had asked Ma 15 years ago, he wouldn't have known he would be so successful today.

In 2005-2007 years, we suddenly discovered that Moore's law was useless. Because, product development is basically saturated, people like and enjoy the application has been invented almost, basically in the PC can do, we have done. However, at this time, Apple told us: today can have a lot of platforms, we have more opportunities in the future. In other words, Moore's law is no longer a word on the PC, and it can generate significant profits on mobile internet and mobile phones. This is a huge change. We also found that the first wave of apps on the iphone, entertainment, reading, games, including social and micro blogs, is not just a great platform, it's getting better.

The iphone is a very good hardware platform with a good entertainment experience and allows you to shop around the Internet. Some people worry that the internet is free, but the iphone and ipad can open shops to sell electronic goods to make money, slowly, the phone can become a paid product, no swipe, telephone can pay. These basic skills can connect the development of mobile phone and business development.

I think the creation of Apple's iphone, for several reasons, has resulted in a huge success that has led users to fall in love with Apple and allow developers to gain revenue from Apple stores.

Only last year, the iphone gave developers 2.5 billion of dollars in profits. Such a huge profit in the past does not exist. Hard to squeeze 2.5 billion of dollars, selling software, ignited the enthusiasm of the developer.

Students here, if it is to learn computer, 20 years ago, your seniors participated in Jinshan, Han Wang's competition. These companies are also developing well today, but not much profit because software companies are not developing well. Ten years ago, people who joined Baidu and Tencent were developing well because their profit points were based on information-sharing entertainment and advertising.

Today, with the formation and development of the iphone, any one of the students in this room can not think about what kind of company they are joining. Because, everyone can be a good software developer, with 32 of people together to develop an interesting software, and then sold to Apple. Apple pays 2.5 billion dollars a year to the software business. Therefore, everyone can join the innovation Workshop or entrepreneurial opportunities, as long as you can make a good Android or Apple software, you will get a good profit, which is five years ago impossible to do.

In the United States, in addition to using the Apple system, is the Android system. Android has now surpassed Apple users. How big is the Android market? After five or ten years, Apple will occupy 20% of the global market, and the rest of the market may be occupied by Android. Two platforms can make a lot of money. But if your software is added to Apple, Apple will be greedy to split it up with you, and if you join Android, your research and development products will face piracy and be challenged by more companies. Of course, you can also choose to join some companies such as Nokia. Today's mobile internet market, it seems a bit messy, but if you choose to start a business in this field, five years after the successful business, the market environment will be more clean.

What kind of karma can we create? I think, to grasp the direction of development. In the United States, for example, in the past four years, the United States has developed a social platform for software, or a business platform. Apple has about 130 million users, Android now has more than 100 million users, Facebook has 700 million users, Twitter-specific 300 million users, if you can build a good application in one or two of these platforms, you can achieve very rapid and great success. Although on the face of it, their success is the result of mobile interconnection, but in fact it is the entrepreneurial opportunities brought about by social networking.

There are a lot of companies in the United States that are purely social, with millions and billions of users in a very fast time, taking advantage of the features of mobile devices anytime and anywhere.

In the 2007, the United States changed, China a little late, in the past two years has been developed. Innovative workshop to cultivate the point of software research and development for half a year, has reached 3 million users, the development is very fast, even with Sina Weibo just opened when the same speed of development.

We invest in internet advertising and developer tools, 1.5 covers 50 million terminals, one gaming platform, covering 50 million users, "Pea pod" installed 50 million times in a year, the whole movement is growing fast, social is also growing rapidly. If you can hold the user's needs or applications today, there will be a huge opportunity.

What kind of company can make both mobile devices and social platforms? The best example of this is Sina Weibo and Tencent's micro-letters, which are very successful products. Sina Weibo near 200 million users, two years to create 4 billion yuan, such success is almost a miracle. Tencent micro-letter week growth rate is 20%, in order to calculate, its users quickly developed to a few billion.

China and the United States, a part of the forerunner of the United States has brought us inspiration. But China has a huge market. For example, it took four years for American companies to reach the tens other users. However, in China some companies only need two years to reach the Tens users. Why? This is because the base of Chinese users is very large. China's internet users have reached 400 million, China's mobile users are 300 million, the number of users in the United States more than twice times.

We are very fortunate to have the opportunity to start a business in China. Now we've seen the tremendous power of initial mobility and social interaction.

Four opportunities for entrepreneurship in China

If you really have a good idea and a team, don't be too hesitant, because too much thinking may lose your chance.

First, China Mobile's internet is growing very fast.

Chinese Internet users are 400 million, while mobile internet users may be 14 times times the size of the Internet. Potential mobile internet users may be 8.9 billion. Internet users average online time is two or three hours, and mobile users to reach more than 10 hours.

Obviously, the profit of mobile internet will grow 14 times times in the next 5-7 years. Specifically, classmate A in the mobile internet entrepreneurship, classmate B in the field of online entrepreneurship, classmate A in the upcoming growth of 14 times times in the field of entrepreneurship, and classmate B in the field does not grow or decline to venture. If the other conditions are the same, we will definitely choose to invest in student a because you have 14 times times the chance to succeed in business.

One of the most important conditions for starting a business is to seize the opportunity of explosive growth and invest in the field of explosive growth. In China, mobile internet start-ups are better than the US, according to a data from the investment "union".

Second, a solomo opportunity, namely social (social), local (location), Mobile (mobile).

In addition to mobile based on social information, plus service information, if there is a mobile terminal, you can play PC games, you can also invite 10 friends to play together, everyone invited 10 friends to participate, this is the spread of the virus. At the same time, everyone knows the location of everything you do. This is not possible on the PC, because most PCs are fixed, but the phone is different, know the location of the mobile phone, know your location, which in the game, friends, business has great value. For example, you want to ask friends to go to dinner, your mobile phone address book has 200 friends, if there is Solomo function, as long as open a software, you will know which friends from you recently, you can eat together, this model can enhance friendship between friends. If everyone's information is open, users can also see how many recent friends from the hometown or how many are heterosexual, and then can know, age group or graduate school, find their alumni, fellow countrymen and so on. If there is a Solomo, users can have a huge social choice, whether it's with acquaintances or strangers. Playing the same game, if you play the same game with the people around you, a lot of the past is impossible will become possible.

E-commerce is another great opportunity, can imagine, if you go to a certain mall, suddenly have an advertisement appears in the mobile phone, your first reaction must be the advertisement is annoying, but each advertisement is targeted, if the advertising information is what you need, not only not be annoying, but also very happy. Why is it that very few people on Google report Google ads annoying, which is its ads based on the search terms match, the same, if using Solomo, can be based on geographical location and personal habits to match ads. The ads that pop up on the phone can be highly correlated with personal information. For example, my mobile phone pop-up such an advertisement: "Lee Kai-fu, you are not forgotten that the wedding anniversary is tomorrow?" Jewelry store discount, 85 percent, one hour expiration. "or" The necklace you bought for your wife last year, we have a pair of matching earrings, 88 percent. "I'm sure I'll be happy with this ad," he said.

This kind of advertisement is based on your geographical choice. Such e-commerce, now has a prototype, ordering catering, hotels, buy air tickets, clothing, can be used to search the mobile network, according to your geographical location to provide more relevant merchandise to you.

Solomo itself offers a huge opportunity because it helps users find places closest to him, and helps service providers, hotels, restaurants and cinemas to find people who have time or need nearby. This is not the same as group buying, everyone on the net want to find a dozen 20 percent restaurants to eat, but there may be two consequences. First, the business is not happy, second, the consumer and buy the promise of different customers unhappy. This is the problem of group purchase today, did not provide to businesses and users good enough equal pay relationship. Businesses lose money selling to customers, but not sure how many repeat customers can attract, and there is no way to the future of a variety of information targeted to users. Therefore, today's group buying face various restrictions, each month may have hundreds of group buying collapse. The future Solomo do, may not be so big discount, but if the people in the vicinity of the restaurant is hungry, 80 percent is already a big discount, so it is natural to achieve a business interests and user interests balance.

Solomo is the ability to connect the needs of users with the needs of businesses, so that both benefit. If I were to say anything like Solomo, the closest possible is Google, which is a complementary relationship, based on your search information that spreads to your targeted ads to help businesses and consumers gain benefits.

I think Solomo is the best opportunity for entrepreneurs in the future, although the concept of Solomo is American, but most suitable for China. For example, in the American suburbs, a person with Tencent micro-letter, even if he has a lot of friends, but may be a 5 km away, a 15 km away, there is no chance to meet together. The same thing happened in Beijing, Shanghai or New York, a densely populated city that is completely different, so that Solomo is more suitable for China.

Third, the cost of starting a business has fallen to the lowest in history, and the return is part of the cost.

The second and third stage of the entrepreneurs need to have a certain cost, if it is a traditional industry, it needs to pay huge costs, such as factories, hardware, logistics need huge costs. While mobile internet, cloud services can reduce costs, cloud sales and channels so that we do not have to hire sales personnel, and so on, then these costs can reduce the cost of the channel.

In fact, the Internet start-up cost is very low, for investors is very simple, as long as 200,000 U.S. dollars, 300,000 dollars, any one investor, the next day can open the money to you. For you, you don't have to pay a lot of money to sell two hundred thousand or three hundred thousand dollars in 5% to 10%, so you have a 80% stake in your hand. When the second financing, can raise the price of the shares. For investors, it pays only two hundred thousand or three hundred thousand dollars. The cost of starting a business to a record low and lowest, both for investment and entrepreneurs is a huge opportunity.

Four, angel investment has become a very big new trend.

In the past, an angel fund needed millions of or tens of millions of dollars to invest in a project that required 1 million or 2 million dollars. But today's first investment in entrepreneurs is only one hundred thousand or two hundred thousand dollars. This allows Angel to invest more people, can do more entrepreneurial people, changed the entrepreneurial pattern.

Despite great opportunities, don't assume that you are the only entrepreneur to enter the mobile internet. Because you see the opportunity many people have seen, around a lot of entrepreneurs, your ideas may be dozens of, hundreds of people at the same time.

More importantly, you have to have a strong executive team, put your ideas into practice very well, when you do the same creative, you can be faster, everyone in the first version when you are already doing a second version. Dot dot Net is a good example, its winning is not a good idea, but good execution.

Students, if you really have a good idea and team, don't be too hesitant, because too much thinking may lose opportunities.

There is a good example, when everyone thought of using the Internet to do voice chat time, there are more than 10 companies to do this project, do a better, faster is the rice chat and Tencent micro-letter. Later, when you know that this project will be successful, others come in more difficult. If, one year ago, someone took this business plan and wanted us to invest, we might be interested, and there would be no interest today, which was changing over time. Once a lot of people jump in, and have the advantage of the first, you have almost no chance to do. Have a good team, good direction, good executive power, the time to do is now, six months may not be able to do.

At the same time, when you do a certain scale, the amount of money needed will change. Starting a business may only take 200,000 of dollars, but once you do it, there will be a lot of competitors. At this time, technology, products, executive power is very important, the promotion of funds more important. So, you can see, Youku needs 120 million dollars of financing, they use this money to want to get bigger market share, brand approval degree, and product base advantage.

Starting a business, you need very little money at first, and then you will need a lot of money. Students do not think that any success can be easily obtained.

My experience tells me that a typical successful start-up team, the first 10 people are technical, the team is not necessarily a genius, because the first competitive advantage is that the product can be better, people can get the idea out more quickly. Looking at the success of the United States, almost every team is probably an industry-cumulative team of 10 people. If the team is studying a particular industry for a long time, the chances of a successful venture are great. But need to know, success really Hard-won, Edison's era has passed, today, success is to use a very deep accumulation and hard work to exchange.

Today's entrepreneurial opportunities are many, but must be able to solve the above four problems.

Source: Guangming