The source of the source material of this article, Jiyuan Capital, is reproduced from an investor's opinion. For Mr. Lei Jun to look back on the past and look forward to the future, the story of his original concerns, judgments, explorations, encounters, and sentiments naturally emerged.
Ten years ago, a sentimentWhen I was 10 years ago, I actually felt a lot of pressure.
Since at that time the most powerful Chinese market was the three major portals, the BAT format had not yet been formed. We feel that there are so many powerful portals that are overwhelming. They seem to be doing everything. China's Internet entrepreneurship seems to have no chance. But at the time, I tried hard to think about what kind of scenery the market would have in 10 years and how the Internet would break the monopoly of the three major portals in the next 10 years.
But I really did not foresee that BAT can be so fast, and it has formed a pattern that is ten times bigger than the three major portals.
I will share with you in detail below some of the thoughts I have been doing for the past 10 years.
judgment10 years ago I thought, if we choose a new business opportunity should choose?
Because I was a mobile phone enthusiast this year, I think mobile Internet is the future trend, so I lock in an opportunity. I think the next 10 years are the world of mobile internet. It was a judgment that I formed 10 years ago. With this judgment I was thinking, what should we do?
10 years ago when the environment used 2G network, so slow bandwidth, the phone was Nokia, the Internet is very difficult, lose a URL is difficult to go to the sky, I own their own Nokia mobile Internet really miserable, but I firmly believe This is the future.
What was my strategy at that time?
I think if we don't even use mobile phones to access the Internet, it is very difficult for us to do mobile internet. So I thought at the time that I must first go to the market to see if anyone has done mobile internet. So I took a big bag of cash to find a mobile internet company who was doing it. Today it was ridiculous to say. The first company I was looking for was a 3G portal. Later, the 3G portal selected IDG did not elect me.
So I went to the second and third homes, and finally I found a small company in Shenzhen, Lexun, and invested 2 million in cash. I talked to them about how I came to study. I'm willing to pay 2 million tuition fees. It is clear who is using the mobile Internet. Did anyone use a mobile phone to access the Internet 10 years ago? I think the numbers are doing very well. I wondered who used such a hard-to-use mobile phone and so slow bandwidth to access the Internet. I found out after the results were over.
I didn't do the DD (Due Diligence, due diligence) at that time and I paid RMB 2 million in tuition directly. I wanted to find out what is the mobile interactive network. Who is using the result? They told me that I was a student, a soldier, a migrant worker, and I said why these people use the mobile Internet?
They said that the military does not allow computers, the military can only use mobile phones, and some naughty students use mobile phones to access the Internet during classes, and some workers in the factories also use mobile phones. Therefore, after I finished the investment, I discovered that the mobile Internet is different from the previous Internet. The previous Internet was driven by elites. However, today's mobile Internet is the so-called "three-lower crowd", which is grassroots-driven.
At the end of 2006, I thought that if there was a tool for making mobile phones better, it would promote the whole process of mobile internet. So I saw a tool called UCweb. At the time of financing, the company had seen 20 or 30 VCs. No one thought this was valuable. I was very surprised at that time.
I ran over to tell UCweb's people, or I'll help you find a chat with the VC, perhaps everyone's judgment on this trend is not accurate. As a result, the founder of the company asked me if you would like to invest or not. I said if you are willing to invest in me, that would be great.
I did not hesitate to vote, because I have already voted several mobile Internet companies, and the price is very cheap, about how much money? 500,000 U.S. dollars accounted for 20%. The price seems incredible today. Today it has risen to more than 10 times. I invested 500,000 U.S. dollars for 20%. At that time, the company was small and small, but the company has shown a good future.
When we voted for UCweb, we feel a tremendous step-by-step increase, so the more we do this, the more we believe it. Of course, China's mobile Internet market was really shaken in 2010. Smartphones are gradually being popularized in China, and then the mobile Internet has been bursting overnight.
So in April 2010, I decided to start Xiaomi, because I think this is a rare opportunity. I'm so enthusiastic about the Internet. What kind of opportunity does it give us?
At that time, the iPhone was very powerful. I firmly believe that open source OS like Android will be popular in the market, and it must be a huge opportunity. So the best opportunity in the year was to make Android phones and use the new Internet thinking. I think this is a golden opportunity.
Of course, when I did this opportunity, I saw a second chance. I saw that QQ was difficult to use on mobile phones. Everyone needed a more advanced instant messaging software on the phone. Many people said that there was no chat on the phone. Chatting on a computer is easy. My view is just the opposite. Why?
Because I think the mobile phone is a communication tool, in theory, the mobile phone chat will be more comfortable than the computer. In order to practice the entire mobile Internet lifestyle, I have barely used a computer since 2007, and all my things are done on the mobile phone. .
I deeply realized how important this opportunity was, so we did a chat with Rice. Of course, the number of meters in the first half of the year was amazing. We soon bumped into BAT, and then we weakened the business. .
So in 2010, the entire Chinese mobile internet began to take off. In just five years, the entire mobile internet has become extremely popular in China. When Taobao, Tmall, and JD.com all said that the proportion of users on mobile phones had purchased more than 60%, today most people buy things through e-commerce through mobile phones. I think this is really horrible.
I remember four years ago, there was a talented entrepreneur who came to me and he called Wang Hao. He said that he did not know what to do. I said that you should do mobile e-commerce and do e-commerce on mobile phones. There was no e-commerce 4 years ago. How many people do, but I firmly believe that one day people will buy things on their mobile phones.
He made a pocket purchase under my proposal and later made a micro shop. Today, he is one of the most successful startups in the Chinese market. The technology of the entire mobile Internet today is very popular. No one thinks that the mobile Internet is a cool thing. It has become like the air water in China has become ubiquitous.
The birth and rapid growth of these giants I just talked about are closely related to the popularity of smart phones.
Today, when we are extremely frustrated, we will strive to look into the landscape for the next 10 years. Similarly, I think there are still many opportunities in the next 10 years.
But behind every opportunity you must be aware of what factors are driving the change in these opportunities. I think that the mobile Internet has no chance on the surface. The BAT and the small giants seem to be our entire sky. There is no chance for them to breathe. Actually, I really don't think so. I think the first phase of the revolution of the mobile Internet has just ended. The future stage has just begun.
The traditional inefficiency of traditional retailing in China may soon be replaced step by step by the IT system on smartphones. What is the greatest smart phone? It is very easy to operate the original extremely complex PC.
Regardless of whether it is children or the elderly, whether in urban or rural areas, everyone has the opportunity to start using IT technology with a smart phone, start surfing the Internet and start receiving more information. I think this will change the Chinese society from the bones. If your starting point is to think like this, you will see that there will be a broader world in the next 10 years.
Agricultural InternetI do not know if you did not understand China’s society. Chinese society has a population of 1.36 billion and 800 million farmers. Agriculture accounts for a very large proportion in China.
Smartphones have become cheaper and more popular in the past two years, and 4G networks have spread to most villages. Smartphones make most of the poorly educated farmers use smart phones and IT technology.
Therefore, we believe that the opportunities for the rural Internet will be more than double the size of the Internet opportunities that China sees today, because the population base is closely related to each of us.
Some people may be confused. Although China's rural base is very large, but the purchasing power is not as big as the city. Is there really such a big chance?
I think that looking at the rural Internet can't just look at the countryside itself. What is our view of this issue? We believe that the rural Internet is a huge concept. Let us first think about it. The entire flow of all agricultural products that we consume in the cities will make you feel as if you are in a hurry. One apple is 5 cents at the place of production. Our supermarkets and fruit stalls have already become 5 dollars when purchased, and there is a 10 times price gap.
Moreover, there is a huge information asymmetry in agricultural products. Today, there is an abundance of information, we can't sell it, and we can't sell it tomorrow. How can we make this information seamless? I think there is a huge opportunity.
How can the consumption of agricultural products in the cities help farmers produce? I think this is the first big opportunity; the second big opportunity is the consumption of farmers themselves. Today, I think China's rural and urban areas are 10 to 20 years apart.
Let me give you a simple example. You may already be accustomed to using Taobao. There are more than 10 million kinds of goods on Taobao, but most of the goods are not sent to the village. Then the e-commerce needs of rural areas are seen in the city. Things are not the same, they use different products, and they even use different products.
In fact, in the past few years, when we were doing rural market surveys, we saw that their commonly used APPs were slightly different from what we saw in cities. We saw that in a village, there was a small shop in the village, there was free wifi, there was a group of young people sitting there using smart phones, this is a typical scene, in this scenario, we found people with quick hands a lot of. So the fast hand has developed rapidly in the past year and a half.
Therefore, I think there are many opportunities for application in the rural market. Of course, like the popularity of Internet finance in rural areas, because financial products are far from popular in rural areas, I will not speak about it.
I have a basic view that not only Ali and Jingdong can speak about rural e-commerce. I think that in the next decade, there will be great opportunities for rural development. This is also an opportunity for all walks of life. In the past two years or so, I have been thinking and has been promoting the progress of the entire rural Internet. At this point, we have also seen that some companies have reached a huge scale.
This opportunity will last for more than 10 years in the Chinese Internet. There will be many opportunities for this wave. This trend has only just begun in the past two years.
Enterprise service marketJust now I talked about the opportunities of the rural Internet and shared an enterprise-class service market that I often think about.
In fact, in the Chinese enterprise market, there has been no real development. The companies that are currently doing large-scale enterprise applications, such as UF and Kingdee, are at least 100 times worse than the US giants. why?
Because Chinese business managers and bosses rarely use PCs before, they now use mobile phones. They want to see financial reports on mobile phones and see daily sales figures. Therefore, if the owner does not own IT systems, in fact, the IT system is difficult to implement within the enterprise, it is easy to make a display, so the popularity of smart phones makes it possible for business owners to manage the company.
Second, with the rapid increase in the cost of China's labor force, in the past we had very low labor costs and we hired more people. However, Beijing’s salary today is sometimes more expensive than Taipei and Tokyo.
At this point, our operating costs are under great pressure. At the same time, under this pressure, many new opportunities are born. I think that in the next decade, there will be great opportunities for doing business management software systems on the mobile Internet. Of course, there may be hundreds of companies still doing it today, but no one is really big.
At the same time, with the increase in labor costs, China has created a new opportunity, which is the Industrial Internet. Because China is a big manufacturing country in the world, under such a large manufacturing opportunity, the cost of labor in China is rising and the demand for environmental protection is increasing. This is what China must make progress.
The increase in labor costs in China means that we have increased the demand for mechanized and automated equipment to increase production capacity, so the opportunities for the Industrial Internet have begun in China.
Investment EnvironmentI think it may also be an opportunity for us to invest in innovative and disruptive products on a large scale, because innovation and disruptive products take time.
When the capital is overheated, the market will not give you time. Some financing capabilities will forcibly drown you with a large amount of money. Such good ideas will be stifled and your enthusiasm will be stifled. Now the market is rather sluggish. Create a better environment for entrepreneurs who really want to innovate .
In the past few years, when we discussed the project, we listed a very important one, called financing capability. I have been starting a business for more than 20 years, but I never used financing ability as a measure of the quality of a project. I later thought that if you were a To VC in a complex market, you would only be better than anyone who had the financing ability.
But in essence, investors still hope that entrepreneurs really face consumers, truly face customers, bring value to customers, not that we do some very beautiful data charts to VC.
I believe that with our ever-improving infrastructure, this short-term downturn is a great opportunity for entrepreneurship and a great opportunity for investment.