Social network ecological chain

Absrtact: In early 2009, when Facebook was still burning money, only 2 of the institutions planned to participate in financing were left behind by the financial crisis, and the bids were flat. At this time, a Russian named Yuri Milner came to Silicon Valley to talk to Zuckerberg

In early 2009, when Facebook was still burning money, only 2 of the institutions planned to participate in financing were left behind by the financial crisis, and the bids were flat. At this time, a Russian named Yuri Milner came to Silicon Valley to talk to Zuckerberg about his views on social networking. Later, he managed the DST fund to invest 200 million of dollars in exchange for 1.96% of the shares of Facebook, the latter's value to 10 billion U.S. dollars, is Facebook in a few months ago a round of financing worth 2.5 times times.

DST became famous in the Internet investment community because of the Facebook case. Over the next 5 years, the public information can be traced to the number of non-Russian start-up companies that it invests in 32 (the CBI database records an investment of 52, in part a duplicate record of multiple rounds of investment of the same scale). Of these, 7 IPOs, including 2 hundred-dollar companies Facebook and Alibaba. This record, ding DST in the global VC circle in the river's status.

However, the controversial issue of DST is its maverick investment style. Guo Bei in the summary of the knowledge and Kai-fu Lee Teacher's supplement are described. For example: only to be able to become harsh leader and high-speed growth of the company, late investment, dare to pay high prices, but also do not board seats. But why are they doing this? How do you choose to make them invest so boldly?

Having collated the public investment records of DST, it was found that the investment logic of DST in the past 5 years was almost clearly visible:

It selected three moves, the first step of social networking, the second step of the Asian electricity business, the third step cloud services. Then let them collaborate at the right time, forming a hatchery system, but it is not hatched start-up, but the company of billions of dollars in market value.

Social network ecological chain

In 2009, when Mr Milner wanted to vote for Facebook, his bargaining chip with Zuckerberg was that he had more money and two "know You". It was not a glorious thing to know that Silicon Valley entrepreneurs took the Russians ' money. Mr Milner is said to have called Facebook's Gideon Yu, who is responsible for financing, to go to the airport after hanging up the phone and met him the next day at Palo Alto's star Bakrie. Mr Milner has shown deep insights into social networking in his exchange, and his views are very close to Zuckerberg's. So the day Gideon Yu arranged for him to meet with Zuckerberg. Four months later, they finished the deal.

When Silicon Valley investors were talking about DST's offer, Mr Milner believed he saw the future of social networking. Before investing in Facebook, he had already cast four social networks in Russia and Poland. He has also proposed a "Zuckerberg's Law" (Zuckerberg), which says people will double the information they share on the internet every 12-18 months. In the future, people will no longer pass search engines, but rely on social networks to get information and make decisions. His views were also evident in the early DST investment list in the United States.

All of the investment projects in the US, from the PRISMATIC,DST to the end of 2012, are directly related to social networks. Zynga is Facebook's social gaming production company and Facebook's biggest advertiser. Prismatic is a reading tool that realizes the recommendation of news content based on the mining of personal social information.

Airbnb, although not Facebook's native product, has just confirmed the news of DST's investments, and has opened the interface with Facebook, introducing a social-networking filter that allows renters to see how they relate to their landlord and other guests. So did the investment in Spotify, which, after DST became their shareholder, announced that it would connect Spotify to Facebook at the F8 developers ' conference.

In the meantime, DST has two other glaring investments, Twitter, which is a social media and a big social layout for DST. The other is Groupon. At the end of 2010, Groupon rejected Google's 6 billion dollar takeover, followed by CEO Charlie Rose, who in an interview attributed the rapid growth of the company's business to the social attributes of the product, especially the increase in business generated by Facebook and Twitter, The former is Groupon's biggest customer source.

These companies either own social networks or are derived from social networks, or are imported into the social ecosystem because of the potential social attributes being selected by DST. For three years, DST is not so much about investing in social networks as it is nurturing a huge social chain. But that's just the beginning.

Layout China and India

As America's social layout unfolds, Mr Milner is eyeing Asia's China and India. The rationale for this round of layouts is also simple.

First, the social map of China. Cultural differences and market segregation have made China's local social tools a way of development. So DST voted for the day and made a social news recommendation to use today's headline. The latter can be seen as the Chinese version of Prismatic. China's social networking does not revolve around Tencent, but DST's cooperation with Tencent is special, and it took Tencent 300 million dollars and became an investor. Perhaps this shows that DST's value is more than just financial returns.

Second, the Asian market differentiation opportunities. China's offline market is highly fragmented, and there is no company like Wal-Mart's position in the United States, which provides an excellent space for the electric business. So, in March 2011, DST invested in Jingdong, invested in Alibaba in September, and later on the mobile-side pocket shopping. The logic of the Indian market is the same. The difference is that the logistics infrastructure in India lags behind, and the development of the electric business has been slower than that in China. So it was not until 2014 that DST invested the first home appliance merchant Flipkart in India, and then the vertical electric dealer ANI technologies and Locon FX.

Zuckerberg and Facebook have been unusually enthusiastic about China for the last two or three years, and he has been with his Chinese wife for nearly 12 years. Mr Milner is also standing behind this. Even under his strings, Little Mozart and Lei talked about investing in millet.

According to the logic of their past investment, millet seems to be an exception. Although the initial product is rice chat, it is hardly a social networking company. Later, the use of the Internet to sell hardware when opened the network mall, but it should not be attributed to the electrical business. But these two points are enough to draw Mr Milner's attention.

Milner and Lei first met should be hit, two people too alike. Do business when both the industry and the industry, as investors when both Angel and Management fund.

Pointing the way for Lei

In the Reuters article, Mr Milner said the future of DST's investments would focus on companies that could operate in global markets with valuations expected to be hundreds of billions of dollars.

The number of U.S. listed companies, the value of hundreds of billions of dollars means Bai annual income, 1 billion level of net profit, and global operating market space. How easy is it to mass production? There are a handful of companies like Facebook, Microsoft, Google and Alibaba.

But in the Far East, China and India, there are still opportunities. Like the next Apple, the next Alibaba.

"The first one to point out this mistake was Yuri Milner, who told me that Millet was a 100 billion dollar company. ”

Lei said that 4 years ago when he first started again, his goal was to be a company of tens of billions of dollars. Mr Milner's confidence comes from his resources and connections, and it's enough to have an amazing chemical reaction in the DST portfolio.

In the past few years, Millet has been growing at a high speed, the biggest worry for the market is how to continue such growth. Last December, when Forbes interviewed Lei, he told reporters that in order to maintain the high growth rate, the first thing millet to do is internationalization. In fact, Millet has tried Taiwan, Hong Kong and Singapore, but the market is too small. This time Lei chose India. The real version of the story is that Mr Milner first pointed his hand to India.

Millet in India to replicate its Internet phone mode, the biggest problem is the electricity and logistics. Flipkart, the electricity trader that DST invested in India, helped solve the problem. Millet sales rely on the Internet word-of-mouth, but to go to India from scratch to build station promotion is not easy. DST has helped him graft Facebook and Twitter resources.

Starting late last year, Lei began to frequently mention cloud services and large data. At the Millet Note's Conference, he pointed to the future of the "sandwich" cloud service System: Focus on the application layer of millet cloud, the provision of basic cloud services Jin Shanyun, as well as the provision of network infrastructure of the century interconnection. Millet and Jinshan for this hit 1 billion dollars, more than millet currently in the entire hardware industry investment total.

This, Lei and Yuri Milner have also reached a tacit understanding.

The Next Big Thing

When it comes to Facebook, Mr Milner values the data energy of social networks. It is said that when he discussed Facebook with Zuckerberg, the most talked about was the possibility of Facebook becoming artificial intelligence. This shows that the investment can become harsh leader cloud computing company is Mr Milner is very early on the matter. Only in Amazon, Google, Microsoft and IBM, he has no chance.

Not until 2013 did they cast box, Jin Shanyun and Memsql in cloud services and related fields. This is the third system in the DST investment list. In the cloud, I believe it will continue to plump this system. The synergy between cloud computing and DST's portfolio also has a lot of room for imagination.

In the past 2014, DST's portfolio has focused on China and India. But Yuri Milner says DST will invest more in American start-ups in the future.

In the United States, consumption and social networking are not the focus areas of investment. The distribution of investment from Google Ventures can be seen. Consumer spending dropped from 66% last year to 8%, while investment in enterprise-class applications and data services increased from 8% to 24%. Speaking at the World Internet Conference November 19, Shen also mentioned that in the past few years, the United States has taken over half of the development of the Internet in the use of cloud computing technology. That may be why DST is back in the United States.

The wind from Silicon Valley will blow to China sooner or later. On the same day that Millet announced the completion of its 45 billion dollar financing, the DST announcement set up the latest fund, "DST's EC XI", to raise $49.5 million trillion. Yuri Milner is once again ready.