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Alibaba former senior executive, drop a taxi angel investor Wang Gang recently received the "Forbes" exclusive interview in Hangzhou, told the collection of "Ali's people, Baidu's technology, Tencent's money" drip how to start from 800,000 funds, in three years to grow into tens of billions of dollars mobile internet companies. Drop founder Cheng Wei has previously likened the entrepreneurial process to "the rich Korean drama", Wang Gang in the interview also put the drop of the story described as "ups and downs, every day is the climax", he described the eyes of the Cheng Wei and Liu, and share the bat power of the drip process, the company sniper opponents, Strategic considerations for key nodes, such as subsidy wars, and behind-the-scenes stories of two of quick merger talks. As Ali veteran, Wang Gang also revealed himself and Cheng Wei in the acceptance of Tencent to vote B round of entanglements and old club Ali to improve relations and rebuild trust process.
In the droplet and quick merger, he revealed that two companies in 2013 to bid for another taxi software company Bumblebee, himself and Cheng Wei had the initiative to contact Ali and express the intention of merging. The two sides subsequently initiated negotiations, but were shelved because of differences in the proportion of mergers and the division of Management. Last year, after getting a $100 million trillion in DST's D-round investment, DST founder Yuri, who has invested in companies such as Facebook and Twitter, cautioned Cheng Wei: "It must be a quick merger to survive, or it will be killed by Uber." "As shareholders and strategic investors have the will, the management team to achieve tacit understanding, the final drop and fast to merge."
Wang Gang has served in Alibaba for more than 10 years, has been in charge of business-to-business Beijing, Alipay Merchants Division and the group's organizational development, nickname "Old Dan." The drop was his first project to hatch after leaving Alibaba in 2012, and the project gave him thousands of times times the benefit. In addition to dripping, Wang Gang also hatched, invested more than 40 Chinese start-ups and more than 10 American startups, helped entrepreneurs with unique vision and deep business logic, and successfully hatched multiple entrepreneurial projects that valued billions of dollars. He also launched and set up a "winner Alliance" club for the CEO collision Ideas, resource benefits to share and mutual growth.
The investor, who was low-key and rarely appeared in public, was the first to receive an interview from an investor's perspective on the story behind the drip development. The following is according to the interview organized by Wang Gang dictation:
Drop founder Cheng Wei and I worked together for many years during Alibaba's Business-to-business and Alipay business division. 2012 We have left Ali, ready to start a business. At first we were naïve and wanted to be a group company together. Because of the difficulty of operation and financing, I changed my mind and decided to support every brother I had ever taken as CEO because they were not complementary and we could bet on more business opportunities. I paid them to come up with ideas and polish business models, face all the difficulties and the future, and from day one I retired to the position of the second partner, doing 1 of N.
Drop belongs to the first project that we hatch, the idea that makes a taxi software is also I and Cheng Wei collide and decide. There are three reasons why it is difficult to catch a taxi in China, this is the rigid demand of the mainstream of the public; there are similar models abroad, the British taxi application Hailo just got the financing, the direction seems feasible, but not full copy; The arrival of mobile internet, mobile phone location distance of the attributes become increasingly important
Finally decided to start a business after I funded 700,000, Cheng Wei 100,000, he returned to Beijing from Hangzhou, in May 2012 to start a business. We have no entrepreneurial experience, just made a demo and barely online products, I and he went together to finance, to melt 5 million of dollars. Mainstream VC have looked all over, but have no result. This can not blame investors have no vision, mainly our lack of financing experience, the price and the company phase does not match. After that, although Cheng Wei racked his brains to compress costs, or spent the money we had at the time. I remember him calling me on a phone, asking for money, and my response was firm: "This is the first project we hatch, and we'd rather not be in the back and carry it." Then I borrowed the company hundreds of thousands of.
Until a few months later, we did not know the Jinsha venture partner Zhu Yuhu through the micro-letter to come to the door, hit, almost agreed to all our conditions, drop this to complete a round of financing. This should be the most valuable item in the history of Zhu Yuhu investment, and since then, Zhu Yuhu has been dropping a lot of valuable reminders and suggestions along the way. If it is a sharp opinion, he will also pass me, side remind Cheng Wei. He is indeed one of the best VC partners I have ever met Cheng Wei.
The drip didn't go well at the start. The original product is spent 80,000 yuan to outsource development, but the total is not up to the online standard, the launch time dragged on. After the on-line product problem is very serious, the data packet is too big, the bug has more than 30, not only consumes electricity, also consumes the massive flow. Taxi drivers use our products are very angry, and even suspect us: "No wonder you do not collect money, you and operators are a group of professionals to cheat traffic." ”
In the product has taken a detour, but also with the early selection of technical partners not careful enough. Because I and Cheng Wei do not understand technology, so pulled a technology to start a business. Four months later, Cheng Wei decisively let the technical partner out of the company, in the company's account is not much cash, we pay a price of millions of yuan. Of course, today I am still very grateful to this partner, if he did not join us will not start the project, he has a historical value of drip.
The team did not understand the technology of people, we suffered for a long time, until the end of 2012, Cheng Wei please Baidu's research and development manager Zhang, only to complete the technical short board. At that time Cheng Wei had three CTO candidates, Zhang is characterized by taste and we are very similar, simple, honest, willing to pay the price, good communication, and other candidates than the experience is not particularly senior, but the drop is very match. It turns out that choosing Zhang is a very sensible and correct choice, and in Cheng Wei's words, "Zhang is God's best gift to drop."
When the technology partners are in place, the first battle is to win the Beijing market. Here we are not the first to start, when a direct competitor to shake the car. Instead of simply copying them, we are thinking about our business model independently. Drop has Ali gene, how to do a platform we are some experience. Against the opponents, in the early days we insist on four do not do: Do not do the black cars, do not increase, do not make accounts, do not hardware.
"Four do not do" out of these considerations:
Do not make black taxis. There is no doubt that we cannot do things that are too risky for policy.
No fare increase. Because do not want to let the product become too complex, so let the opponent first, test water market acceptance, we only consider whether to follow up. In addition, the increase will be considered as a disguised change in the price system, there was strong opposition, we worry that the policy risk is too big. There have been investors suggested to do bidding, but the platform is the most taboo product design too complex, drivers, passengers do not understand, this is not conducive to large-scale expansion.
Do not account. For passengers, pay is not a pain point, a taxi is a pain point, tied card is very complex, in the early days if we give drivers not enough income, they will not have the will to cooperate, so in order not to affect the speed of expansion, we do not have to do accounts.
Do not make hardware. There was also a start-up company to send the ipad to the driver, my view is that platform companies can not use hardware barriers, scale is the only barrier to the platform. The ability to bring quality orders to drivers is the core, hardware is not the core-if there is no order, the driver will install someone else's app grab on your device, and if you have an order, the driver will buy the best equipment to install your app grab list.
Early in the venture to resist many of the nature of the temptation to do business, do a lot of subtraction, the goal is only one: Run the fastest. We know that the regional taxi software simply does not survive, running to the country's first coverage is the most important, compared to coverage, the core priority of the city higher.
Drop the first day on the choice of entrepreneurship in Beijing, but also lucky, although the larger the city, the greater the difficulty of matching, but the first occupation of this strategic location for us has serious value. Of course, the first thing to face is to shake the car with the positive competition.
The company's products were launched earlier than ours and the financing was smoother than ours. It is the same as our early goal, is to let more taxi drivers install their own software, so push the team all set a table, at the train station, airport and other taxi gathering points to promote the product. After we started, we quickly occupied all the important positions except the T3 terminal of the capital airport, and shook a contract with an airport third party company to control terminal third. T3 This location is very special, the daily taxi throughput of more than 20,000, equivalent to the number of other gathering points in Beijing combined with the amount of vehicles. This is a vital position, not occupied here is the most let Cheng Wei sleep.
We discussed it again and again, and did not use the same way to find third-party cooperation, because of the fear of such cooperation is uncertain risk. Later, the airport management received a complaint, shaking the promotion point was canceled. When it went frantically looking for another entrance, we kept our position. After the data in Beijing, we gradually surpassed the shaking. Taking advantage of this opportunity, we started the B-round financing and made our most tangled financing decision-to accept Tencent's investment.
At this time drop by a lot of VC pursuit, of course, including Tencent. Because we don't want to be in the second round of the time, so we did not think at the beginning of the money to get Tencent. Tencent vice president, Tencent industry to win the fund's managing director Peng Zhijian efforts and matchmaking, Cheng Wei and I have a chance to interview with Ma Hua. Before entering the door we reached a tacit understanding, is not to give Tencent the opportunity to take a vote. At the scene we analyzed the various possible development of mobile travel, drop for Tencent value, and the other is that we care about the company's control. Ma Teng atmosphere basically promised us all the conditions, including non-interference in the company's business independent development and do not seek control, only one, he hopes to occupy more shares.
Through several times to deal with Tencent's people, they gave Cheng Wei and I left an honest, simple and friendly impression, so we do not exclude and their cooperation. But for those of us who have left from Ali, we have to be in the heart of this. If you do not take Tencent's money, our biggest worry is that the fast has taken Ali's investment, if Tencent can't wait, turned to invest in the shaking, drip will be very passive. In addition to our advantages online, if the powerful entrance of the zenith of the micro-letter is not for our use, the drop will lose a best strategic resources; At the same time, the company also needs a strong partner to face the uncertainty of the policy, to live is the most important.
Cheng Wei and I had a final discussion in a foot bath, and I was inclined to Tencent to vote, and he was inclined to Tencent. The result is that I have compromised. Because he is the CEO, I am the investor, I must stand in his angle to support him, can win. But I also told him that we had to pay for this decision, and we had to carry it.
Just finished financing decision, the next day is Sunday, Cheng Wei led his core backbone to Shanghai, because the fast has entered Shanghai for two weeks. I returned from Beijing to Hangzhou, the mood is disturbed. The financing decision feedback to Ali, after several setbacks, got the default, I also relieved. But the business of two companies can only be seen on the market.
Fast headquarters in Hangzhou, almost and drop the same period of creation, is the Yangtze River Delta was the largest taxi company. Fast into Shanghai, we judge, if the formation of linkage between Shanghai and Hangzhou, drip will be very passive, so for this strategic location, we must at all costs to win. Cheng Wei and team goals are simple: trading volume does not catch up quickly, will not return to Beijing.
In Shanghai, the drop and the quick start a head-on confrontation. When the team used a variety of methods, in Shanghai after the rapid pace, we quickly entered the fast stronghold of Hangzhou. The Shanghai market has sprung up in the first half of 2013, with the exception of drops and fast, the Hornets, as resources tilt to Hangzhou to make the data look good.
We are very concerned about the company, with a team of 100 people, specializing in a city in Shanghai, we have a team of more than 100 people, at the same time to enter five to six core cities. The hornet's single point of breakthrough is a great success. I once went to Shanghai, the driver said: "You see, this is not a drop of contact point?" I looked carefully, the hornet's contact point is the same as dripping, but the other side of the staff than my team more dedicated and serious. At the scene I took a photo sent to Cheng Wei, said to him: "Shanghai you may have to lose, the city once lost, you gave the opponent a good reason for financing, they will tell investors: as long as the money, I can reverse the drop." This will be endless. Cheng Wei replied: "You give me a week, I will come to Shanghai immediately." ”
The Hornets ' play is a bit of a headache, because we're playing a line, and it's just a point, easier than us. On the other hand, fast in the struggle to lengthen the front, a massive march into second-tier cities. In the face of the crossfire, our strategy is very clear: to the core of the city to grasp the key to the hand; Resources are limited, because we have more capital reserves than each other, drip took a piece of magic cloth strategy, that is, Bumblebee hit where I am strong, it does not hit the place I do not play.
In order to kill Bumblebee, the company made a separate budget for the Shanghai market, such as the Beijing market put 500,000 U.S. dollars, the Shanghai market may be up to 3 million U.S. dollars. What is strategy? This is strategy, not average force, focus, single contradiction, single solution. After the strength of the rally to Shanghai, we gradually chase the bumblebee, this time drop, fast, Bumblebee three company share a small difference.
Just at this moment, we heard that Bumblebee is looking for Baidu financing. At that time, fast already got Ali's investment, if Baidu again into the Hornet, the taxi software market will become a bat three each cast a home, this will be Cheng Wei and I most do not want to see the situation. We took the initiative to meet Baidu Strategic Investment Department of the head, Cheng Wei asked him: "You are going to vote for the third place to kill, or to vote first?" Our angel can old the stock for you to come in. "The drop goal is clear: just get one months of negotiation time." As long as we in one months time, the bumblebee in Shanghai's data down, Baidu will not vote it.
Then we learned that Bumblebee had decided to sell the company and quickly found the Hornets talking about acquisitions. We do not want to give up the opportunity to see two or three of the market may merge and join the bid for Bumblebee. This time the drop of the situation is very embarrassing: C round financing because of VC panic, not so smooth as imagined; Uber is ready to enter the Chinese market; traditional taxi companies are hostile to taxi software; regional policy risks remain to be reckoned with. Bumblebee uses both sides of the competition situation, desperately to improve the acquisition conditions. This seriously touched our nerves. Once at the negotiating table, I suddenly remembered eight words, "dogs, Yuwengdeli".
Seeing that the purchase price is getting higher, I propose that the first or second place to compete for third place is not as good as the one or two merger and the new market structure. After talking with Cheng Wei and drop of other directors, I took the initiative to find Ali. Although the rebuilding of trust takes time, both sides have started negotiations because the emotional foundation and rational strategic interests are still there. The representative of the Jinsha River, Tencent's representative, the representative of Ali, drop and quick representatives have come forward.
Liu, who was still at Goldman Sachs, learned about Cheng Wei at this point. During the negotiations, she played the role of middleman because she could speak to the top of both sides. After several rounds of repeated communication, although both sides are willing to, but because of the share ratio and management rights and other issues are divided, has been unable to reach a consensus.
Eventually in the second half of 2013, the rapid acquisition of the Bumblebee. The drop of the C-round financing has also been a breakthrough, with the support of the CITIC Industry fund, so that the drip once again have the opportunity to develop independently, and the rapid negotiations have been shelved.
And the quick merger talks, to some extent, fixed our relationship with Ali. But after the talks have been shelved, it will be a contingency to start subsidizing the war.
At the beginning of 2014, after the letter to pay, Cheng Wei want to do a promotional promotion, he initially asked Tencent to millions of of the budget, Tencent replied: "Your budget is too small." Finally gave drip tens of millions of. As a result, subsidies have made the drop in volume soar, and the subsidy has been over billion in a week.
The data explosion gave the other side a little pressure, the day before we will stop subsidies, fast and Alipay also joined the war, began to subsidize passengers and drivers. At the same time, with the cancellation of our subsidy, the situation quickly reversed and the drop in trading data began to fall sharply.
The other side of the subsidy followed, one day, Cheng Wei told us on the board: "Two weeks from now, the fast data may start to overtake us." "It is the first time we hear that the drop will be overtaken by each other. When I was on vacation abroad, all the directors were stunned to hear the news. Once again, we are faced with a big choice: whether to follow up the subsidy immediately. All the investors, including me, instinctively reacted with great reluctance to burn the money, and no one wanted to see me just invest in you and soon the money would burn out. At this time, Cheng Wei is developing "red envelopes" products, more mature, more cost-effective, his idea is to one months after the new red envelope subsidy.
In the director's conference call, I and Zhu Yuhu, although it is our subsidy war, but must immediately vigorously counterattack, if wait one months after counterattack, market share may become 7:3, the initiative will be handed over to each other, drop may disappear in the market. We did a deduction: when we started the subsidy, if it was not six days, but one months later, the market data would be 7:3 or even 8:2. Once this situation occurs, the network effect will be generated, the passengers feel that the call did not answer the driver, the driver felt that the platform no passengers to use, will produce strong stronger, weak weaker results. At this point, the opponent at 10 times times the price, may not be able to catch up with us, its outcome is difficult to get financing and ultimately out. Versa。
Soon everyone agreed to let Tencent continue to participate in subsidies. Before the subsidy is all Tencent to pay the bill, we later reached the plan is Tencent and drop each take 50%. Tencent executives are quick to comment: whether it is one months after the subsidy or the next Monday subsidy, the CEO to make a decision. Cheng Wei is a decisive decision: Next Monday start subsidy!
The next situation everyone is very familiar with: the other side subsidy 10, we 11; We subsidize 11, the other side 12 of the situation. When the subsidy was raised to 12 yuan, MA, with years of experience in running the game, had another idea: each subsidy was random, 10 to 20. So that the other side is completely unable to follow up. Cheng Wei adopted the plan. Then the price war more and more fierce, simply can't stop. Until the end of February 2014, Ma Yun wrote the article, said that the taxi software so that the family can't hit the car. A positive response to the immediate timing of the drip made the subsidy war a temporary pause.
I would like to emphasize that drip has a strong CEO Cheng Wei, while there is a very united board of directors, drop a lot of important decisions are made collectively. Cheng Wei not only gave his VP a good boost, but he also mobilized the enthusiasm of his board members. It is no exaggeration to say that the drop of the team is not a day is calm, the drop of the board is not more than a week is calm-not a competitive situation, the policy is risky, is a price war, two or three years have not been quiet. Use our words to describe is "too late to gasp, every day is the climax". After the drip was set up we only had a formal board of directors, but in fact, meet every day, at any time may meet. The mobile Internet venture is treading on thin ice, requiring a faster response than I thought.
How to evaluate the taxi software industry This vigorous subsidy war? It must be admitted that the surge in taxi software penetration has been boosted by subsidies, with mobile payments by Tencent and Ali two companies benefiting greatly. Mobile payments have greatly optimized the efficiency of the taxi sector, with both drivers and passengers benefiting. Subsidies are absolutely valuable in guiding and educating the market, but it is irrational to continue to make huge subsidies after the market has been educated, often because of the prisoner's plight that makes it difficult to stop.
At the same time as the subsidy war, one day, Cheng Wei called to tell me that he wanted to dig Liu over. I was very surprised. For the last two or three years, I have said the most to my CEO who invested or hatched: "Be sure to keep looking for more cattle, at first you are bringing a gang of front-line personnel to fight, soon you will be the manager, director, vice president." The core of your leadership level is to see who you can lead and who you want to hang out with. "Although I also feel that Cheng Wei is not a limit to their CEO, but dare to dig Liu, or beyond my expectations, Cheng Wei too dare to think."
They have been in close contact for 10 days, as in love generally, not exaggeration to say that more than 16 hours a day in exchange, Liu and Cheng Wei's family, colleagues chat, the drip turned upside down. Cheng Wei told me that Liu Bet is not money, is the whole person into the gambling, she did a background survey absolutely more than all the investment agencies. Liu's decision must have surprised everyone, and all I know is that her family has a lot to do with her, the support of reason and respect, and the emotional heartache.
Liu decided to join me before a phone call, chatted once, I said: "You so many years of investment banking experience, like a hollow radish, because you have no practice experience; If you join drop, hollow radish will become solid radish." "In my opinion, when she and Cheng Wei to stand together, must be to build a tens of billions of-dollar company, otherwise I am sorry for their price."
To my evaluation, Liu and Cheng Wei in the business is a pair of perfect match. What is a perfect match? The same values, the ability to complement each other, is perfect, just like Ma Yun and Tsai is perfect match, horse and Lau is also perfect match. Cheng Wei, Liu Two people are extremely intelligent, have the upright, work hard. Cheng Wei Grassroots origin, from the bottom of the sale of a step-by-step growth, his sensitivity to the market, in-depth line of the implementation of the ability is required by Liu; Liu born in a family, have everyone demeanor, her network resources, international vision, in the capital market, the ability to power, but also Cheng Wei needs, So their combination soon saw the chemical reaction and superposition effect.
Liu for dropping a lot, I tell an example: her child used to be a boarding school and go home on weekends. But the company had a meeting at the weekend and no children, and she transferred her children from boarding school to a public school, and every night she could go home to see her children. But unexpectedly, drops every evening meeting also open late, often to 22 points. The drop team later unexpectedly thought out such a "abnormal" scheme: every night first let Liu Night nine o'clock, go back to coax the child to sleep, 11 o ' clock in her house downstairs to meet.
This is the level of the drop team, which is the reason for the drop to win. Not only her, but the whole team struggled. For example, when the subsidy war, because the server downtime, technical team had five days not downstairs, we describe the CTO Zhang State "The whole people are trance", there is an engineer family wife had no time to go to hospital escort.
Liu joined, the company brought a direct change. Remember last year we received the D-round financing DST 100 million U.S. dollars, DST co-founder and President Milner (Yuri Milner) once came to drip, said three words: "First, Uber to destroy you; second, if there is to live, there is only one way, and the rapid merger; third, I can give you 1 billion dollars after the merger. "At the scene, I felt that this guy was a man of great wisdom, but at the same time we passed concerns because two companies tried to merge but failed, and no one at the company believed the merger was feasible." We feared he underestimated the difficulty of the merger, so he was prepared to continue the war and plan to melt a large sum of money.
The advantage of Liu through this financing fully play out. With Cheng Wei, she led the drop of the F-round of nearly 700 million dollars in financing, which is also one of China Mobile's biggest financing in the history of the Internet. Fast also not weakness, last year to melt with us the same amount of money.
After the financing, the situation has made some subtle changes. is to continue the rush, or shake hands and face the other competitors, the two sides began to seriously engage in more sincere communication. Ali and Tencent have also become more open-minded, and despite the different strategic demands, the openness and mentality that make mergers possible. Both sides of the management team has a more tacit understanding of the Division of labor, financial investors are certainly happy to see it. All of us have chosen the best "matchmaker" of China's internet industry, founder of Huaxing Capital Baofan as the middleman, and began the non-stop formal negotiations.
In a basic framework, strategic shareholder coordination is certainly the most difficult, there have been several times in the middle, Liu undertook a very important mediating role, two CEOs also drank a lot of wine. It is conceivable that almost everyone has made concessions to the outcome of today's negotiations. As for the board seat, because the financial investment of the shares also accounted for a very large proportion of the financial investors of the board of Directors who are only representative of their own, should be representative of all financial shareholders. Drip and fast merged company, is a more independent development of the company, all shareholders, including strategic shareholders also have high expectations and blessings on the new company.
Market competition is far from over, we come together because of the common enemy, Uber, easy to still active competitors, the new traditional car rental giants will be squeezed into this field, mobile travel is a very broad field, "Good trip" the journey has just begun.
For more consolidation details and future business grooming, etc., I know not much information, but also inconvenient to disclose, but one thing is certain: transportation is a big market, there are many innovations and opportunities, drip and fast merged new company will be one of the most important players in this market.
As for the drop and Cheng Wei can have today, I think the most fundamental is the benefit of his learning ability, progress fast. Your idea tells him that next time he can speak better and more thoroughly. Gao Capital Management partner Zhang Lei once such side evaluation of Cheng Wei: "Every quarter to see him, his progress are very big, such people, you say not to do, you have to vote ah." ”
As the company grows, the division of our roles has changed a little. If the drip is a car, I used to sit in the copilot position with the other executive directors and now give the position to Liu, but we are still in the backseat. The company continues to have new directors to come in and give Cheng Wei help, with more and more cattle including highly prestigious people joining the board, which is the biggest good thing for dripping. In the early days, the Zhu Yuhu of Jinsha River, the Peng Zhijian of Tencent Industry Fund and the Wu Jingyang of CITIC Industrial Fund have made great contributions to the company, and have been advising as usual until today. Since then Liu came, Cheng Wei's co-pilot more than one can live in real-time dialogue of people, more efficient. Today's board, with the exception of Dexter (Fast CEO Lu Zhunwei) and David Su (David David), Pengley and Lau, will undoubtedly help to elevate the company's operations and management to unprecedented heights.
But the driver of the car is always Cheng Wei and Dexter, and the final direction is still in their hands. All we can do is to remind ourselves that we are in danger and that our voices will be louder. They are willing to listen and naturally adjust. If we shout louder, but they don't listen, that's just the way it is, because that's the rule of the game.
"Sit in the back seat", what is my mood? This is what an angel investor has to face. Early investors will face the fact that the company's influence at first has been great, and the value of the company has gradually declined. Angel investment is like flying kites, you once held tightly to the hands of the line, and gradually flying high, so that you can not understand more and more. This is a good thing, if it has been in front of you, even under the feet, but it is a failure, indicating that the company did not grow, the CEO grew too slow.
I would like to describe and drop the way the process is to rely on each other, mutual fulfillment. Three years ago the outsider would have judged that Cheng Wei met me with his luck, but today I must confess that it is my good fortune to meet him.
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