The capital lesson of an entrepreneur: Cao Kai, founder of Seventh Avenue

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Cao Kai, a new company in Shenzhen, where the Network Co., Ltd. opened in Nanshan, Shenzhen, the Yan Xiang Mansion, the Seventh Avenue Office built here is only 330 meters away, but now Seventh Avenue is already a wholly owned subsidiary of Sohu, because before the second time in early May this year Seventh Avenue submitted materials to Nasdaq, The founder chose to sell his shares and leave.

It is not uncommon for founders to opt out of the temptation to knock on the Nasdaq. For this case happened 7 months ago, the game industry, there is news that Cao Kai leave is because unable to complete with the performance of the trip to gamble; there are also claims that the Seventh Avenue management involved too much, Cao angrily away; There are also rumors that the infighting between the founders of the Seventh Avenue was the reason for their eventual departure.

But Cao Kai's own summary is simple: One mistakenly thinks that swimming is like any other investor, will be on the market after the profit exit, but not the idea of swimming, do not want to be a company without management rights, and the second is found that content production companies listed, it is difficult to use the energy to do games, and become capital operation as the core, Contrary to their original intention.

Although the phrase "mistakenly thinks that a swim will quit" sounds counterintuitive, but Cao Kai in the Seventh Avenue was acquired during the period of work does not look like a laborer, almost every day to stay up to the wee hours, and finally broke the majority of game developers can not continue to develop two successful games of the Magic Spell, in the "Pinball Hall", Also developed the water extremely high "the Divine Comedy".

It is a bitter lesson for entrepreneurs to be forced to leave the company they created, even though Cao Kai says "I feel like a harvest so far, I never take this as a lesson", but he admits he "heartache but not regret, because there is no regret medicine to eat."

Now he is back to the beginning of the early hours of the working state, the new company, where the business direction of the network is still a web game, after the news that he decided to start a business, a large number of investors to seek cooperation, but he rejected all the investors, although he did not rule out the future introduction of new investors, But his management of the company will never let go.

In addition, he decided to invest in a number of reliable game teams, in addition to the regular game development and operation, he is willing to give these teams to share the experience of the capital game.

Page Tour Myth commitment to swim

At the beginning of 2008, Seventh Avenue was set up in a 90-flat dwelling near the south of Shenzhen 5 small team after a short period of confusion after the selection of web games as their own development direction, when the Chinese web game on the rise, since 2006 everyone rely on "cat travels" open the page tour market, The market is full of simple and low-quality games.

March 2009, Seventh Avenue, "Pinball Hall" appeared, quickly became the market's most popular web games, only online less than one months, Seventh Avenue will be "Pinball Hall" of the Vietnam region exclusive agent operating rights sold to the VinaGame, began to enter the crazy growth period.

With Seventh Avenue moving speed can imagine the speed of development, "Pinball Hall" on the line 2 months later, the company from the residential and moved to the Nanshan Digital Industrial Park, a few months later due to the business development too fast, the staff increased too much, and moved to the research Cheung Mansion; and after a few months, Seventh Avenue finally in Pine Day Peak building three floors to solve the problem of lack of work station.

by April 2011 Sohu Cruise announced the acquisition of 68.258% of the Seventh Avenue of Equity, Seventh Avenue is already the first page tour industry revenue, real-time online number of average more than 200,000, monthly income reached tens of millions of yuan level, there are more than 40 technical staff and more than 50 operators.

Cao Kai that the deal is of little value to the cash-flow Seventh Avenue, which is not enough to give Seventh Avenue at the market level, because it addresses the needs of other early investors and satisfies Cao Kai's dream of building a public company. Obviously, the team that operates Sohu and swims two listed companies is more attractive.

In this way, Seventh Avenue set up a holding subsidiary of Sohu Tour.

On the eve of listing

When it comes to the initial feeling of being swum, Cao Kai truthfully admits that the state is good, swim did not interfere with the normal operation of the Seventh Avenue, but gave the seventh avenue enough space, in that period of time, Cao Kai and the company's main players in a state of excitement, in languish countless nights later, Seventh Avenue, the second page Tour "the Divine Comedy" market.

This is a slow-heat game, in the operation of the six months before the outbreak, and "Pinball Hall" is different, the game in Europe and the United States and other overseas markets have also been successful, "the Divine Comedy" began in 2012 all over the world on the line, so far overseas at the same time online number of more than 200,000 people. The overseas monthly recharge income that began in 2013 reached more than 15 million dollars.

Cao Kai concluded that most of the merged companies were not particularly successful, the reason is that everyone lost the original sense of ownership, but the Seventh Avenue staff still regard the company as their own company, as their own team, as their lifelong career in doing, so they in "pinball Hall" after the creation of a first.

But until the IPO, he knew he had some wishful thinking. Cao Kai's judgment from the past experience, since the "Pinball Hall" on the line, all kinds of investors have entered the peak period of 10 people, but the early angel, the back of the VC also left, so he thought the swim will also sooner or later leave. In addition, he spends a lot of energy on game research and development, with little or no understanding of capital or investors.

He really understands that swimming doesn't quit. When the second time to the Nasdaq submission of material, with the performance and potential of Seventh Avenue, landing on the Nasdaq has only left a procedural problem. At this point, he began to try to communicate with the return of the control of the problem, but swim to this attitude resolutely, at this time Cao Kai understand oneself actually already lost Seventh Avenue, in his own words, is "suddenly wake up."

Departure and reflection

Until the merger of two years later, Cao Kai really net down to think of their own in the Seventh Avenue or Sohu swim in the future. At this point he found that once the company listed, he as one of the shareholders can not easily let go, is likely to be locked in the company for a long time, but he has no Seventh Avenue control, equivalent to the interests of Sohu swim long-term struggle.

In addition, because of the long stay of the seventh Avenue of the hands-off, so that he ignored the difference of two companies, he did not agree with the game concept of swimming, even said the gap is very large: swimming is a professional management personnel responsible for management, and his own in the Seventh Avenue is to insert into the game development, the two management model is completely different, it is difficult to mutually compatible.

More important, his enthusiasm for listing itself began to slow, finally come to the network game research and development company is not suitable for the listing of the conclusion, the game company does not lack cash flow, the significance of financing is small, and after the city, the capital market instead of research and development companies have requirements, will require the company to stabilize in an interval to grow. But this research and development company has the development cycle, the final conclusion is to mention ARPU value, engage in activities, that is, to hurt the player.

After thinking about the above issues, Cao Kai's departure became inevitable, the two sides finally broke up peacefully, May 1 this year, a cruise to some 78 million U.S. dollars fixed cash total to buy Cao Kai held 28.074% Seventh Avenue Stakes. At the end of the acquisition, Seventh Avenue finally became a wholly owned subsidiary of the tour.

A former Seventh Avenue executive told Tencent technology that the cash on the Seventh Avenue account when Cao Kai left was well above $78 million trillion, and that the equivalent of a trip to the Seventh Avenue of his own money to buy the Seventh Avenue.

Re-entrepreneurship and the page tour

Less than a week after leaving, Cao Kai of the network opened, the direction of the new company is still a web game, the office is located in the building, and Seventh Avenue in the Pine Day Peak building straight distance of only 330 meters, subject to the treaty with the tour, the new company does not have a member from Seventh Avenue.

Distance Cao Kai The establishment of the Seventh Avenue has been 5 years, today's market environment has changed, in Cao Kai left Seventh Avenue, roaming holdings as ice-breaking landed in Hong Kong, Shanghai Tour and 37wan true and false backdoor landed a domestic a-share market, the entire page tour growth rate is slowing.

In this respect, Cao Kai said the impact is small, first page tour industry participants in the less, some companies do not keep up with the industry in the development of the company disappeared, the Forces nouvelles are concentrated in the hands of the industry, the success rate of the product is relatively high probability; second, his personal experience in the page, resources, and accumulated reputation, reputation, contacts are in the field of page tour, So the success rate of page tour is the highest.

For all the development direction of the network, Cao Kai has no longer listed as the target, he is expected in three years at least to do and Seventh Avenue of the same scale, to research and development of high-quality products for the vision, the goal to become China's first, world-renowned global gaming company.

According to Cao Kai, now the new team has been running for four months, all staff only 40 people, the latest product listing time in the first quarter of next year and the second quarter between the end.

Be an angel and talk about experience

Angel Investor is also one of Cao Kai's new identities, he said, as a standard grassroots entrepreneur, to a certain extent, to return the industry. At the same time, he revealed that he can give more than a lot of VC, not only to give money, but to give ideas, experience.

At the same time, he is also very high requirements of the team: technology to mature, to play a love, must have a love, the best demo, the team to be sound. But the direction is not limited to the page swims, the hand swims. But the end of the tour will not be considered. But in addition to the regular game development and operation, he is willing to give these teams to share the experience of the capital game.

For the entrepreneur group, Cao Kai also has his own experience to share, he believes that the dream is not to spend money to buy, sell is not a dream. I was a loser, "You have to ask me now sell Seventh Avenue heart not distressed, I tell you dearly, very distressed." You ask me not regret, I tell you, I do not regret, because there is no regret medicine to eat.

Obviously, for Cao Kai, leaving the Seventh Avenue created was a bitter lesson.