Mobile Internet does not make money logic

The Internet is the easiest race to sprint, and in fact the winners are runners. --Kui, a partner of Sequoia Capital

Sinorama reporter Hu Jieching/wen

Summer is leaving us, temperatures are starting to fall, and the global economic environment is still not showing signs of warming. The internet era is over, and the end of the IT revolution is probably going to fall on the mobile internet. 2012, mobile internet users will be larger than 500 million people, next year will surpass the Internet users. This year, the entire industrial scale can exceed more than 130 billion of the output value of revenue. But just such a recognized sunrise industry in the actual development of difficulties.

Just make a yell

Mobile internet has been from the SP, WP era transition to the current era of the app. SP era of the company basically out of the stage, WP era of the majority of the company also overwhelmed. Most mobile internet companies do not have more than B-round financing, the industry is brutal, and has been shuffling. From 2000 to now, mobile internet-funded companies, 60, 70% either disappeared, or half dead. And the majority of those who survived are not the same products as before.

Although the mobile internet can be said to be a blossoming, but far from the fruitful moment, because the mobile Internet profit model is still not clear enough. What is the most popular application in the past few years? The answer may be social, video, games ... Even those strange gadgets, but what's the most lucrative thing to ask? The answer must be a mobile game. In addition to mobile games, although many mobile internet companies are popular, the number of users is huge, but did not earn a penny. IDG Capital partner Zhang in September Chingko the second mobile internet forum, said: "What is the basic ability of entrepreneurs?" is the ability to make money. Today you can not rush to make money, but when the market matures, or in product design, you should have a future business model to do foreshadowing. The U.S. capital market good and bad with you actually have nothing to do, your life continues, your company's development still continue, to go their own way. ”

The internet companies that used to be listed are very profitable and fast-growing, whether it's Google or Baidu or some game companies that are doing well. And now companies in order to make a lot of time to rely on volume and size, such as Jingdong, where the guests. The key is whether this scale of growth is sustainable and is a mishap for many companies. Such companies will not have a high market value, even if they are profitable, and the net interest rate is too low. There is little likelihood that such companies will be widely sought after, unless the world economy rebounds, and everyone has a good appetite to digest these amounts.

Platform and Vertical integration

In early September, Baidu announced its own cloud platform, plans to set up a virtual environment, developers to develop applications, and Baidu will be their data, maps and other information to the public. In fact, the current mobile phone functional differences are not the main, because many functions can be implemented in the cloud system.

Baidu released Cloud platform, more ambition is the contention of big data. Who is the data, who is the user, this is the most fundamental. From this perspective, the cost of innovative companies to do the platform is relatively large, big companies to talk about the platform, small companies can only focus on the application, or around the big Data technology breakthrough, so that will be more targeted.

The first is to see whether the market is big enough, mobile internet can be from the platform to build products, but it is more difficult, to think clearly, your characteristics with Tencent, Baidu, Ali these have more mature companies to compete.

In addition, platform companies need to consider a big variable, is the future development of the mobile phone industry is a closed, or open market. If this market is the warlords and up, there are standardized Android, ISO, Millet, the platform company will certainly have room for survival, such as Taobao, 360 and other platforms are likely in the Android Market unified. But if future development is closed, chances are slim. On the Apple, even 360 and Taobao I am afraid there is not too many opportunities.

At the other end of the platform, we see another angle, which is to vertically integrate the market. There are many opportunities in the vertical market, the problem is that large enough market, there are many companies in competition, to survive must have characteristics. The future of wireless internet is likely to be a period of vertical integration, the Amazon, Google, Facebook, these big guys may become a vertical integration platform, they are likely to have a payment system, there will be a control of the App Store.

Investment strategy

The investment in mobile internet has broken the record this year. In this year's China, the number of investment areas is not falling only mobile internet, health care and energy conservation and other areas of environmental protection. The first half of this year's VC and PE investment fell 60%, but the mobile internet has not declined, and this area has become a VC very concerned about the field.

According to the data show, mobile internet-related investment growth is the first mobile games, 23% growth, the second is wireless value-added services, 20% growth; third, mobile e-commerce, growth of 17%; the fourth one is mobile application development; five is advertising; The sixth is mobile reading; The eighth is wireless search (Figure 1).

Recent investment trends are mainly in three directions, one for entertainment applications, the other for business applications, and three for tool applications, including Life Information services (table 1, table 2). Entertainment applications are fun, such as games, reading, socializing, video. Business can be understood as the application of shopping related fields. Tools such as mobile phone browser, life Information Service category.

Mobile phone applications in line with the characteristics of fast-selling products, many applications rise fast, go down quickly, the cycle is very short. A user replaced the phone, and probably no longer installed the application. A lot of value will be concentrated in the mobile phone home of these 10-20 applications. Because on the home page of the mobile phone, it is the user use frequency is relatively high. If you use it every other quarter, you may be on the third or fourth page, or forget to use it after downloading. This is a bad news for investment and entrepreneurship, the application of the first screen of mobile phone will probably have some more powerful large companies to occupy, its roots will be built on this above some more vertical applications, he will do a platform, put a lot of other applications all put in.

Mobile game "dual Engine"

The mobile gaming market is still growing very strong, but investment has become more cautious. After market verification, the success of mobile phone game elements, planning and operational capacity is very important, but the luck is also necessary. Mobile games have a rapid development trend, but the success of the product has a certain contingency. The first game was successful, and the second one was not easy. Like movies and other cultural industry investment problems, the last film is very successful, the next film to success is very difficult. In addition, each product also has a certain life cycle.

If a product after the success of the continuous release of the sequel, so that the profits are guaranteed to be very stable. In Japan and Europe and the United States, game companies, well-known game producers do not make a lot of games, but in their own products in the production of sequels, to maintain the user's welcome, and thus grow, the game brand retained, the producer's brand also appeared. Such products can be a group of users firmly glued out 10 years and 20 years, slowly become a normal.

QI, founder of micro-Cloud, said, "many football players have been playing since they were young, and he has played for 50 years, watch the ball for 50 years, like the theme of Interstellar, I watch video also see quite a lot of, I am not a player, I am a good audience, a good fan, we put the fun of the game from the audience's perspective, like football, Some people only play for 10 years, but may watch a lifetime of the ball. "This could be a way to make another shortcut in the game area, and if you can't keep changing the product, it will maximize your benefits," he said.

Quoted Sequoia Capital Partner Kui: "The Internet is easiest to start a sprint race, in fact, the winners are long-distance runners." ”

O2O remarried Mobile internet

O2O that online to Offline, the offline business opportunities and the Internet together, let the Internet become the front line transactions, through the Internet aggregation line (especially local merchants) idle resources, consumers online screening and to pay, and then offline consumption.

O2O has two main models, one is through the traditional coupons, the flow to the line to encourage you to advance about, plus coupons, brought to the line down consumption. This type of focus is on the marketing interface, and the other is to provide a new service form through the new properties of mobile Internet, fast enough and flexible new service form, which is not in the traditional PC-side.

O2O has many natural advantages over mobile internet:

First, the use of lbs, achievement of the position of mobile demand more closely related to the business. For example, public comments, car rental and other life service applications, mobile phone must surpass the PC to become its first entrance.

Second, mobile apps can be involved in the entire consumer process, which is not available to the PC, and you can take part in and complete the entire process of browsing, making, paying, consuming, and ultimately sharing. This resource intervention has a significant impact on subsequent operations. Products can track where users go to spend, what frequency consumption, what areas.

In fact, O2O has been subtly changing people's living habits, so that everyone more convenient, but also become more lazy. But this convenience itself has increased the randomness of customer consumption. Because I can make a decision later, I can use my phone to make a decision without having to plan ahead on my PC. This immediacy changes our spending habits. People can buy air tickets on the way to the airport on Ctrip, and decide which hotel to go around at the meal point, and how to get the discount ... But there is a need to remind, because arbitrary properties, the consumer side of the price should not be too high. Zhou Ai, founder and president of the easy to use vehicle network, said: "The demand on the mobile side is not a very planned requirement, said I planned it before, the plan can be done in the office, at hand is based on the scene triggered the demand, both, the client price is not too high cost. ”

At the same time, mobile Internet also has a feature, is the reverse data mining and precision push. For example, from the hotel or from coupons, more data mining, can bring users to reduce the cost of access to the Internet companies, it is expected to be. But because of the need to have both online and offline capabilities, especially offline operation of the business experience of the ability, so the threshold for entrepreneurs will be relatively high.

Table 1: Introduction of some of the investment enterprises in the first half of 2012

Industry

Investors

The voted party

Investment Amount (US$M)

Area

Investment rounds

Mobile games

Qing Ke Chong Investment

Calvi

1.00

Sichuan

A

June Lian Capital

Dream World (Shenzhen Dream World Technology (600582, shares bar) Limited)

N/A

Shenzhen

b

Jardine Venture

Chinese Mobile Entertainment

N/A

Beijing

A

Angel Investment (Chenhao)

Cocos2d-x

N/A

Beijing

Angel Investment

Competition and investment, qiming venture capital, Pan Gu Chuang venture

When the music net

20.00

Beijing

b

Angel Investment

Fruit Box Network

0.16

Shanghai

Angel Investment

Amoeba Capital

Le (Yippee Arts)

N/A

Beijing

A

Mobile Reading

Morning Hing Chuang, lei, etc.

See more technology

10.00

Beijing

A

Angel Investor (Wang Lijie)

Time Flow (Shanghai Mai video Information Technology Co., Ltd.)

0.02

Shanghai

Angel Investment

Mobile video

China Cultural Industry Investment Fund

CIC Video

N/A

Beijing

b

Red Dot Investment

Easy Summer Video

N/A

Beijing

A

Mobile Electronics

Business-related Guangdong cultural industry Investment Management company

Flash purchase

1.59

Guangdong (except Shenzhen)

A

Angel Cove Venture

Blocks

0.03

Sichuan

Angel Investment

Angel Investment (Zheng Boren)

Pomelo Fashion (Beijing pomelo Fashion Technology Co., Ltd.)

N/A

Beijing

Angel Investment

Angel Investment

Fruit Bank (Beijing friends Create pro-Prudential Network Technology Co., Ltd.)

N/A

Beijing

Angel Investment

Sequoia and the Foundation

Shopping Assistant (Lu Ke Life (Beijing) Co., Ltd.)

N/A

Beijing

A

Shun to fund

Yay

N/A

Shanghai

b

Table 2: Introduction of part of the investment enterprises in 2012

Industry

Investors

The voted party

Investment Amount (US$M)

Area

Investment rounds

Mobile Apps

Development of related blue-chi venture

Spring Rain Palm Doctor

8.00

Beijing

b

Angel Cove Venture

Slimming War (Beijing Ming Yin Technology Co., Ltd.)

0.03

Beijing

Angel Investment

Angel Investment (Wang Lijie)

I Ride (Beijing Green Chang Technology Development Co., Ltd.)

0.02

Beijing

Angel Investment

Amoeba Capital

Gourmet Line (Hangzhou Rice Technology Co., Ltd.)

0.16

Zhejiang

A

Gobi

Come on, web.

N/A

Shanghai

A

LBS

Soft Silver

China billion Journey information

N/A

Guangdong (except Shenzhen)

b

Mobile search

Angel Cove Venture

Beauty Map

0.03

Zhejiang

Angel Investment

Wireless Advertising

TransLink capital, Pangu to create rich

Anwar Media (Beijing Palm Wide Mobile Media Technology Co., Ltd.)

12.00

Beijing

b

Red Dot Investment

Multi-Union

N/A

Beijing

C

Wireless value-added

Services related to the venture investment

Shanghai Communication Technology Co., Ltd.

0.32

Shanghai

A

June Shing Investment

Network Letter Linkage

3.97

Shenzhen

C

June Shing Investment

Century Hengtong

4.77

Guizhou

A

Deep Venture

Network Letter Linkage

159.00

Shenzhen

b