Top of the Great Era

When things go wrong, there must be evil. For Nie Caijun, who happened to be engaged in financial audit work in the United States during the peak period of Yahoo, he can basically guess, "Because of financing."

Zhou Buqi nodded, "Yes, financing."

Guo Pengfei was stunned for a moment, "Cheating money?"

Zhou Buqi said with a smile: "It's not a matter of cheating money. It's actually a capital game. At that time, there were two major used car trading websites in the United States. The difference in user numbers was not too big, and they all had to raise funds. The Internet industry often wins. Those who take all, which means that the industry's first has an exponential advantage over the industry's second."

As soon as these words came out, everyone suddenly realized.

It's really evil!
For example, at the time of financing, the agency valued a registered user at US$1000, so with 100 million registered users, the venture capital agency can give a valuation of US$10 billion.

But here is the difference between the first in the industry, the second in the industry, and the third in the industry.

The number one in the industry will have an additional strengthening aura, the number three in the industry will have an additional weakening aura, and the number four in the industry will basically have to cry and beg for venture capital on their knees.

Zhou Buqi said: "This can be regarded as a very classic business case. When Lao Yang told me about it, he was very touched. At that time, the two used car websites in the United States were going to raise funds at the same time, and the one with the second largest market share originally That website found Yahoo and spent $1000 million. In fact, the website only had $1300 million in its account at the time, and it offered $1000 million to cooperate with Yahoo.”

Zhang Yiming said: "For a chance, the gamble is really big! This is the way of Wall Street!"

Zhou Buqi smiled, "I don't know if it's a former financial officer from Wall Street. In short, the effect is very good. The used car website that was originally the second in the market has a short period of time. Both the number of added users and the number of registered users have surpassed competitors, and it has become the number one in the market. Although the leading share is not high, the bargaining chip for negotiation has already been obtained.”

Nie Caijun raised his hand and added: "I was an intern in the United States at the time, and I know something about it. It was a crazy era, and all the funds were rushing to Silicon Valley, and there was no due diligence. Because Due diligence is too time-consuming, and if you miss the opportunity, you may be taken away by other venture capital institutions.”

Zhang Yiming sighed slightly, "In an overheated market, money is no longer considered money."

Guo Pengfei waved his hand and interrupted him, "What happened later? What was the result of the financing?"

Zhou Buqi said: "Later, this second-hand car website won the bet and raised 1.2 million US dollars in financing, while its competitors only got 6000 million US dollars. At first glance, it only cost 1000 million US dollars to buy 2 new cars. Users, it’s too expensive, too cost-effective, and a big loss! However, they used the leverage mechanism of the capital market to allow the company to get tens of millions of dollars in venture capital from the capital market. This transaction, Yahoo! $1000 million was credited, and it seemed to make a lot of money. The other party credited $1.2 million, and made even more.”

Nie Caijun nodded, not surprised, "Making money through financial digital games is the fastest way to make money. Compared with traditional industries, the Internet is a virtual economy that crushes the real economy. However, compared with Wall Street, Instead, the Internet is considered the real economy.”

Zhou Buqi has two major private equity funds, and they are also playing this kind of digital game of capital, so he understands it very well, and said: "Yes, this case is enough to illustrate the madness of the Internet market at that time. Under the enthusiasm of capital, Created a huge Internet bubble value, and Yahoo is the most critical bubble water in the bubble value.”

Guo Pengfei vaguely felt it, and Mao Sai suddenly said: "Yahoo's bubble water is the core value. This is the main reason why Yahoo became the world's largest Internet company at that time."

"That's right!"

Zhou Buqi felt that he had caught up with his train of thought.

Meng Houkun didn't quite understand, and frowned, "What's going on? Tell me in detail?"

Guo Pengfei said: "Internet companies looking for venture capital, there are only a few factors to judge, one is the entrepreneurial direction, the other is the team, and the other is the market performance after the product is launched. The entrepreneurial direction is actually easy to do, and Silicon Valley has never lacked creative..."

At this point, Nie Caijun raised his hand, and after getting permission, he inserted a sentence in the middle, "The Internet industry was not mature enough at that time, and many venture capital institutions did not understand the Internet. , was able to get financing at that time. I remember there was an idea for Sky Internet, and tens of billions of dollars were invested and then it was screwed up.”

Guo Pengfei smiled and said: "That's easier. The industry is immature, and any entrepreneurial project can get financing. Because the capital is hot, the due diligence is not detailed enough, and there is no team review. Then there is only one , is the market performance of the product. As long as the market performs well, a small project can easily become a large project and get tens of millions or even hundreds of millions of dollars in financing.”

Zhou Buqi was very satisfied and felt that this kid was very smart, "Yes, this is the idea. How can we get the best market effect when a new product is launched? The simplest and rude way is to advertise. At that time, Yahoo was the world's largest The website, the most popular traffic center, of course has become the brightest pearl in the entire Internet industry."

After a pause, he continued: "To put it simply, if other Internet companies want to blow the bubble, make the bubble bigger, and push up the market value, they need to borrow bubble water from Yahoo. This core position makes Yahoo market capitalization of more than $1000 billion."

Nie Caijun said: "Yes, it should be such a logic. In order to blow the bubble, other entrepreneurial projects or Internet companies need to advertise on Yahoo. After the bubble blows and gets financing, it is possible to make products better. Big, so as to realize the real self-business model.”

"Huh?" Meng Houkun reacted for a moment, then opened his eyes wide, "Damn! Isn't this Ponzi? MLM structure!!"

Product A advertises on Yahoo, acquires users, gets financing, and develops its own product.After several rounds of financing, it is time to develop your own business model.

For the Internet, the most important business model is to sell advertisements, just like Yahoo.

Who is the ad sold to?
Product B sold to Internet companies.

Product B did not have so much money to advertise directly on Yahoo, so it went to advertise on A, and then gained traffic and users.After product B develops, it will no longer be able to rely on financing to live. If you want to make money for yourself, the way to make money is to sell advertisements.

Sold the ad to Product C.

After product C develops, it sells advertising to product D, and product D sells advertising to product E...and so on, this is a proper pyramid structure.

The general logic is that Yahoo is at the top, Yahoo collects money from downline A, A collects money from downline B, B collects money from downline C, C collects money from downline D, and D collects money from E money……

The whole industry is constantly seeking downwards, looking for successors step by step.

Once the upsurge in the industry falters and there is no last taker, the entire pyramid will collapse from the bottom to the bottom.

If D cannot collect money from E, D will die; if D dies, C will not be able to collect money, and will encounter a cash flow crisis, and may go bankrupt; if C goes bankrupt, B is also in danger; B is in danger Yes, A is also miserable; A is miserable, and Yahoo will inevitably encounter a big dive in market value.

The Great Depression of the entire industry came.

Under the bubble crisis, tens of thousands of Internet companies around the world went bankrupt, and the lower the bottom, the worse the death.

The bubble crisis in 2000 and the subprime mortgage crisis in 2008 are essentially the same thing—the receiver is gone.

And the pyramid structure under this kind of financial game, once the receiver can't be found in the end, it will encounter landslide accidents step by step, leading to the complete collapse of the entire industry.

Meng Houkun said that this is a Ponzi scheme, which is a bit exaggerated, but he is right to say that this is a pyramid scheme.

There are different opinions on whether pyramid schemes are illegal.

Because the modern economic structure is originally a pyramid scheme structure, and all walks of life are similar.The Apple system is based on Apple as the tip of the pyramid, and Apple's partners and supply chain systems are the middle and lower layers of the pyramid.Apple is like this, and so are Disney, Coca-Cola, Nike, and Haier.

This structure is dangerous, so we must vigorously anti-monopoly.

For example, in the mineral water industry, there should be 10 pyramids. Once one of the pyramids collapses, the middle and lower levels of this pyramid can at least take refuge in the other 1 pyramids, so as not to cause a large-scale industrial collapse.

If there is a high degree of monopoly and there is only one pyramid, it will be very troublesome and will cause huge hidden dangers to economic stability.

The Internet is too powerful and has gathered too many talents, not only at home or abroad, but the Internet giants are actually developing in the direction of a separate pyramid.

This is very troublesome, and there will be systemic risks.

The monopoly of state-owned enterprises is actually okay. If there is a crisis, because it is a state-owned enterprise, the state can save it at all costs, and the pyramid will not collapse.

But Internet giants are different. This thing is too big, with a scale of hundreds of billions of dollars, and it will be difficult for the whole country to save it.Moreover, there is a large amount of foreign capital in Internet companies. How can there be any reason to spend the state's finances and taxpayers' money to save foreign capital?

Therefore, from the perspective of social stability, it is necessary to properly deleverage.

The so-called deleveraging is to blow out the bubbles, and the long-term pain is worse than the short-term pain.Once the pyramid collapses, there may be endless disasters in the future.

Just like a real estate company, it is very painful to poke the bubble out when the debt is 2 trillion, but at least it is within the bearable range.If they are allowed to keep blowing bubbles and creating false appearances, and they will collapse on their own when they have debts of 10 trillion or 50 trillion in the future, it may be the US bubble crisis or a financial crisis at the level of the subprime mortgage crisis. Ten years of wealth may be wiped out overnight.

However, this topic is too big, and Zhou Buqi does not intend to discuss it at this time, but just gave a conclusion: "Yes, it is the pyramid structure. Capital is giving money, and it is constantly transfusing blood into this industry. The bubble that fuels the industry is getting bigger and bigger. As long as it is not the last taker, the bubble is also valuable and meaningful. And to maximize the value of the bubble is to stand at the top of the pyramid."