Rongchang Laundry Glory: Thinking of the transformation of traditional enterprises

"Is it their own revolution or are they beheaded?" Self-revolution, at least to leave a decent, by others revolution is very embarrassing. "The person who said this is Rongchang Laundry founder Zhang Rongyao, the forums uncle in 1990 from Beijing Light Industry Institute (now Beijing Industrial and Commercial University) after graduating from school to teach, claiming to" solve the family employment problem ", the initiation of entrepreneurial ideas, 1990 founded Rongchang Laundry.

At present, e-bag washing in the micro-letter has more than 200,000 users, app end 100,000 users, cumulative 300,000 users, daily orders in 4000 or so, customer price deduction voucher in 60 yuan. And although the traditional enterprise, e-bag-washing entrepreneurial team is 85 after the internet First Nations.

Most traditional enterprises, has been over the Internet dividend period, facing a new wave of mobile interconnection time window, worried, do not know how to from the place, very anxious.

Zhang Rongyao that the failure rate of the traditional enterprises ' Internet transformation is very high, which is related to the restraint of system and interests. In addition, many traditional enterprises in their values and models that is very suspicious, many enterprises want to close with the government, the letter dignitaries and not believe in the market economy, so long-term to heavy assets and "light" (away from) user mode of operation, so that the current transformation load unbearable, a few for impossible.

The real laundry industry is riddled with holes

Problem One: Brand dealers sell equipment, not brands; buy real estate.

The laundry industry is based on washing equipment. Brands rely on each store to sell dry cleaning machine to make money, joining the business has become the sale of equipment, and equipment is a one-time business.

McDonald's a shop annual income of 8 million, may have 5 million or 6 million are management fees, if take off the name of McDonald's, McDonald's shop decoration is hundreds of thousands of, there are no other, there is no equipment. See how bad their brand premium is. Although I can also accept 1 million of the franchisee, but in fact, this 1 million is not from the brand fees, brand fees only tens of thousands of, most of the money is to sell equipment income, this one-off income, let me feel very uneasy.

This is why a laundry may have several homes in a neighborhood. Is it the customer's need for such a dense laundry? No, it is the brand business to rely on the continuous development of franchisees, selling equipment to make money. And a lot of stores to play is real estate, investment shops, waiting for appreciation.

Not just the laundry industry, all industries, in the last 15 years, how many entrepreneurs are thinking about business models, and are thinking of customer satisfaction? They think of the "2080 rule", is to use 20% of customers to make 80% profit; Even later, the real estate (such industry) are not done, directly buy second-hand housing-and so you finish the floor I bought together, waiting for 5 years after 10 times times.

If they do, I take three stores (1 million) of gross margin to pay a house down payment and wait for the house to 10 million, I earn millions of. But I didn't do it, I wanted to change, because I thought it would bring about sustainable development. I was really too difficult and lonely, even my driver said to me, "Zhang Ah ...", as if I do not feel very good money, but also teach me how to make money.

Problem two: No access to users, no cash flow control capabilities

Another problem with the franchise model is that a customer is not exposed to it and has no contact with the user. If the laundry is not good, customers call us directly to deal with, we can only go through the franchisee to deal with, and franchisees do not deal with us also have no way, because the cash flow is not here.

Before Quanzhou and Beijing each have a franchise shop, overnight. Although the legal responsibility of this matter is not my commitment, but in view of the brand exposure problem, in the end I have to bear.

If you do join mode, I think I can open 2000 stores all over China, 3 years have run out, after the opening? .

All over China I think I can open 2000 stores, this 3 years have run out. On the surface I am a chain company, in fact I became a management consulting company, collect the advisory fee. This is not the same as McDonald's KFC, because McDonald's KFC can use supplies-fries, hamburgers, meat to control product consistency. Through this consistency, the problem of cash flow is solved. So the annual sales of their franchise is about 30%-40% from the search for headquarters procurement, and this revenue per year accounted for Rongchang laundry even 1%.

At the end of 2000, it was when I was puzzled that Goldman Sachs came to me to talk about investment, saying that if it were so bad, it would be possible to adopt a direct-battalion model. I can't do that. A shop is 1 million, and there's so much money? After the vote, we have to find a house, to find a shop, to find employees, these are too troublesome ...

In the end, Goldman Sachs did not vote for us, they asked me to suggest which companies can be voted, I said at least the investment can deal with customers, can engage in cash flow concentration.

Two transitions of Rongchang

How does a Rongchang turn?

Aware of the problem, I have since 2000, when the portal just started to consider the transformation, today, 14, two times transformation.

The first transformation: from the establishment of Chinese laundry network to sell "network card", O2O embryonic

In 1998, I worked with several doctoral students of Tsinghua University to do their own website Chinese washing net. The original location is a portal site, and then realized that it is too difficult to transfer to service.

September 2000, we do online laundry with Sina. Sina was not clear at that time is to walk the portal or go to the electric business, so did a power supplier to find business cooperation to find us.

With Sina's cooperation made me understand, the plight of Rongchang is essentially, I one-time, the equipment sold to others is over, the Commission is not so good collection. With Sina to make me understand to connect with the customer, I this industry really most valuable place, is my customer value. Because the Internet speaks the customer value, speaks the Netizen number. When I think of this, I feel a blue ocean. I found hope, though I didn't know exactly how to do it, but I knew I had found the blue sea in my industry.

Working with Sina also made me realize that specialization must revolve around your core competencies, not specialization. I used to think I was in the laundry industry, so I want to specialize in the laundry industry. Later found wrong, my core competitiveness is my customers, is my huge number of users, then I should be around my number of users to specialization, rather than around the laundry industry specialization.

How to specialize around customers? I have to put all my human and financial resources into my ultimate customer. So I started thinking about a "four" networking card when I didn't graduate in 2003. At that time, you can buy the Rongchang network card online, on-line, telephone, Beijing has sold more than 700,000 Zhang. And before 5.5, I had the concept of O2O, in my company has a 12-metre-long banner: Rongchang services, based on data and terminals of the Home service O2O.

For the first time, Rongchang became a company with a light asset selling network card, I don't own a laundromat, I don't own a laundry employee, I sell a card. With this card I only three things: first, customer satisfaction, the second is the Franchisee laundry quality ranking table, third, employee satisfaction. Specifically, we are in the franchisee to mark the laundry, according to their delivery time, customer satisfaction, return washing rate, complaints, compensation rate, every week is a dynamic rating, every week there are franchisee laundry quality ranking table.

That is why I have made it possible for me to transform into a mobile internet.

Second transition e-bag washing: A complete transition from product to management

Mobile Internet is coming. I think the network card this product is based on PC Internet and telecommunications, not based on mobile internet. So I'm going to turn it into a mobile internet based product. What about it? I think there are three mobile Internet products: cheap and free, convenient and convenient, entertaining and fun, so that customers have a sense of participation. This is the e-bag wash. The idea of e-bag washing is actually from Hong Kong, we have companies in Hong Kong, we also wash clothes in Hong Kong, washing clothes in Hong Kong by pound. Then we thought that we would have to do it by weight, or by volume, which is now the bag.

November 2013, e-bag was washed out. E-Bag Wash is a self revolution, the network card for the prosperity of all leather. The reason to do this is because the laundry O2O meets these six conditions:

The first is the huge number of users with gold content, which is important in mobile internet.

The second one is that there are particularly high frequencies, which I have deliberately emphasized.

The third one is to have high gross margin.

Fourth, is the customer unit price, is relatively high.

Fifth, the integration is less difficult.

Sixth, is the user's optional small.

(a) Choose to be able to understand their own investors

Jing Dong and suning two Pk, is actually the shareholder's PK, one is short cast, one is long cast. In short, suning Jindong are looking for the traditional shareholders, or PE; Daiju East looking for VC, is not the same. To my inspiration is that I have to find VC, I must look for the wind cast. (laundry O2O) It is necessary to burn the money, wool out of the pig, but often most enterprises have not found the pig on the transformation turned dead. You have to find a pig, and the pig is big.

The reason for the choice of Tencent, Jingwei Investment, one of them have a lot of money to cast a good business. In addition, PE, VC cast me, he also must understand me, must understand what wool is, what pig is, he must understand my business model.

(b) The group is predominantly indigenous to the Internet and fully decentralized in management

E-Bag-washing is now the entrepreneurial team more of the Internet Aborigines, the CEO is also a partner is a 85, originally in an internet company responsible for O2O business, and then ready to start their own businesses, want to pull me as a partner, the Rongchang integration into their life service providers, after a communication, I pulled him over to do e-bag wash.

Management, I first achieved the decentralization, the tube of things very few, only strategy, direction, financing. Then I want the CEO and all of the company's executive groups to be user-oriented. Fully authorized, fully flattened, in the way of dictatorship, we play a game together.

User thinking, from the political point of view is the mass line. That mobile Internet is a tool, that's nonsense. They say the United States does not have internet thinking, the United States does not have internet finance, I say that is because Americans are born of Internet thinking. People are born to vote. So it can't be that simple. The industrial age is so much more than it can be. Because the mobile Internet is the values, free and open and equal win, I may not have enough power in my enterprise, can not compare with the traditional enterprise, but my enterprise transparent, withstand the test, sustainable development.

The traditional enterprise transformation is very difficult, not only the business model, behind the whole company management culture and values of factors.

(c) E-bag washing play on the emphasis on fun

To make the products of Rongchang easy and fun and cheap, people use e-bag to wash. How about fun? For example: I put the day bag king, Zhou Bag King, the Year bag King is free of single. When the fire was taught, I sent a single fried chicken beer, then Liu in love when I send tea, each name with the word of the guest also exempt from single; then I used Tesla to send clothes to the various community activities.

E-Bag Wash the future's biggest competitor may be Jingdong, 58, Tencent Internet companies. Because I have nothing to do with laundry, I am the Home service O2O a mobile service portal. It's just that I take the laundry as a single product, cut the laundry, cut cleaning all the same. Like Jing Dong take digital products into.

E-Bag-washing, I don't have the ability to brag, I want to know who my competitor is, I often talk about opponents and frame of reference, do not put the opponents and reference frame is wrong, which determines your resources and play, you can be sure to fight this battle, if you put the opponent wrong, your playing is wrong. About e bag wash more business way can refer to "e Bag Wash CEO Lu Wenyong: How to wash clothes into internet products"

The transition is delayed, not optimistic about the majority of traditional enterprise transformation

The PC internet hit manufacturing and retailing, and I felt it in 2000. For as long as it is the business of the city market entrepreneurs will never see this. Obviously the whole process of the link removed.

Of course I didn't think the arrival of mobile internet took so long, from 2000 years to 10 spent 10 years. In addition, I did not think that the government's economic intervention would be a market economy. In fact, our country 08 financial crisis is the best time to transform, 4 trillion investment should not ah. Financial crisis business is not the end of no one blame the government, the result of the government 4 trillion, the resource factors all rise. At this point the enterprise began to blame the government. 10 enterprises, which enterprises can get money from the government, it does not need to transform, and the other 9 are all yellow. That's not fair. It should be the product who innovates who survives and should not be the one who gets subsidized who lives. What is behind the subsidy, is not bribery.

Therefore, the transformation of traditional enterprises can not be transferred, because of the twisted interest mechanism linked together. For example, a rise in the renminbi means that your resources are rising, and rising resources means rising power because resources are in the hands of power. The people continue to be civil servants and we can't recruit people. The distortion of resource factors has interfered in the market economy of all enterprises, manufacturing and retail industry, as well as intervention in the investment industry, many investors have also become to seek resources, run IPO eligibility, run the unspoken rules.

What are the elements of a mobile internet transformation? First, there must be a mobile Internet product. Second, a very important point, the interests of the chain, you need to reconcile. 3rd, straighten out the supply chain. These three aspects are particularly difficult.

I am very not optimistic about the transformation of most traditional enterprises.

I think some enterprises must learn to be smart, rather than do their own, to invest in Internet enterprises, you will soon burn money. Many companies are not saying that they will die immediately, but that your shareholders and the team realize that you will die in 3 years.