The Millennium Semiconductor Survival Guide.

Chapter 157 Suggestions to Huaguo Internet People (4k)

"Because there are investors and entrepreneurs here, this matter is very important to entrepreneurs, but it is not so friendly to investors. Because in the early stage of Internet entrepreneurship, you can find a profit model that suits you and run through this model. You can have more autonomy to negotiate terms with investors.

In the early days of Yahoo’s startup, the number of users continued to grow, and we did not find a good profit model. Unlike a large number of companies in traditional industries and Internet companies advertising on Yahoo, no one saw the value of Internet advertising at that time.

Facing the continuous growth of the number of users, only external financing can maintain the high-speed operation of the company. Once external financing is accepted, the equity and voting rights will be diluted. I want to use the structure of the same share with different rights to ensure that the control right remains after the dilution of the equity. It's a difficult thing to do in your own hands.

At present, the vast majority of investors cannot accept different rights for the same share. At present, I have heard that only Newman’s NewPay adopts the model of different rights for the same share.After going to the listing stage, even as a founder, the equity in your hand is still very small, and every decision you make will be constrained by other shareholder representatives. "

The large-scale acceptance of the investment model of different rights for the same share in angel investment will have to wait until the emergence of Facebook.

"The company is still the same company. There are fewer and fewer things you can control. This is an unpleasant thing." Yang Zhiyuan said very straightforwardly, "If you have a stable profit model from the beginning , and can make a profit.

One is to slow down the speed at which companies accept external investment. The less money you need to raise, the more voting rights you have. In addition, you have more confidence in the negotiation process.

You will think how it is possible to find a profit model at the beginning. So many Internet companies in Silicon Valley have not found a profit model, which is too difficult for me.Yes, it is difficult for Internet companies to find a profit model, but the sooner you do this, the sooner you as a founder can take the initiative.

An Internet company that can finally reach the listing stage needs to go through several rounds of financing in the middle. Generally, three to four rounds are the norm. The sooner you find a profit model, the sooner you can have the initiative, whether it is accepting the next round of financing or Listing has more initiative.

Let’s still take Newman as an example. Newman is the Internet entrepreneur I admire the most in the past ten years. I have learned a lot from several successful companies he started. So are entrepreneurs.Because besides the founder of Yahoo, I also make some investments myself. When I chatted with entrepreneurs in Silicon Valley, I found that when I talked to them before, they would say that the object of their study and admiration is Gates. It's Ellison, it's Bezos, it's me.

I am not humble either. As one of the founders of Yahoo, my name is often mentioned, but after the appearance of Newman last year, the name of Newman has gradually appeared in everyone’s answers, and the proportion is getting higher and higher. What's more, almost no one mentioned anyone else, all of them were Newman.

Newman’s first startup company, Riot Games, went public after only receiving a round of financing from Gates. Gates bought shares and then injected funds, which is no different from financing.

Up to now, Newman has held close to 40.00% of the shares of Riot Games. With the halo of the founder, he can firmly grasp the actual control of Riot Games. This is the same as Riot Games from the beginning. The distribution channel is inseparable from the profit made by taking a commission.

Including NewPay’s adoption of the financing model of different rights for the same share, and a large number of investment institutions are willing to participate, which is also clearly related to NewPay’s profit model.

Therefore, my suggestion to Internet entrepreneurs in Huaguo is that the sooner they find their own profit model, the better. After Yang Zhiyuan finished speaking, he put the microphone on the dark sofa, and there was warm applause from the audience.

Angel investment has been in Huaguo for some time. From its establishment to becoming the first Huaguo Internet stock to be listed on NASDAQ, Goldman Sachs and Lehman Brothers behind them played a key role.

Established in May and listed in November, American Capital’s proficient method of cutting leeks has opened the eyes of entrepreneurs like Huaguo Internet who have never seen the market before, and they all strive to get overseas investment Target.

Obviously, they have not been educated by investors, thinking that angel investment, investors are really angels, and they only pay money and don't work.

What Jerry Yang talked about is a little ahead of the times. The relationship between investors and entrepreneurs is mutually dependent and mutually exclusive. Today's entrepreneurs in Huaguo feel that it is not very direct.It is even more distant to have more initiative in finding a profit model.

But the audience applauded respectfully. Everyone is an elite. Although they didn't have an intuitive feeling, they also knew that Yang Zhiyuan was talking about dry goods, which pierced the tender side of investors.

As a former investment manager, Cai Chongxin, who was impressed by Jack Ma's personal charm, was deeply moved by these words. He worked as a lawyer in New York and then worked in private equity investment in Xiangjiang for nearly five years. Yang Zhiyuan's words almost spoke of his heart.

"Jack, Jerry's words are very practical. For Ahri, we also need to find a profit model as soon as possible. If we don't want investors to take away the control of the company in the future, finding a profit model is very important." Cai Chongxin said to Jack Ma.

Jack Ma replied: "I know, is it possible for Ahri's next round of financing to adopt the model of different rights for the same shares?"

He is obviously more interested in the same-share-different-rights model mentioned by Jerry Yang, because Ari is now doing B2B business, and this business model determines that they need a lot of money to be successful.

A large amount of funds means that multiple rounds of financing are required. The entire Huaguo is a huge market, and multiple rounds of financing can take the initiative and even obtain the vast majority of market share in the B2B e-commerce market.

Therefore, Jack Ma knows that even if they find a profit model, he cannot avoid the continuous dilution of the shares of the founder team. Therefore, the structure of the same share with different rights is the best solution to avoid similar incidents.

Cai Chongxin thought for a while: "It is possible, but we still have to find a profit model as soon as possible. Only when we are more valuable, will they face up to our demands when negotiating with investors.

Only strong opponents will be respected. "

Zhou Xin on the stage had already started talking, Jack Ma just nodded and said nothing to show that he knew it. What he didn't know was that according to the original historical track, Jerry Yang would transfer all the assets of Yahoo Huaguo to Ahri in five years. , and invested 10 billion US dollars in Ali.

The lines of fate converged ahead of time at this moment, and Yang Zhiyuan also didn't know that the investment object of the most successful investment in his life was sitting in the audience.

Yahoo held a 16 percent stake in Alibaba worth $360 billion when Ahri went public.

Zhou Xin joked: "Jerry, what you said is too straightforward. You call investors a scourge, and your words will be criticized by Wall Street."

Jerry Yang said: "No, no, no, those people on Wall Street are only happy to see that Internet companies can have a profit model, rather than relying on the number of users to make them invest. The reality has proved that the number of users does not mean anything. There is no profit model. User, is just a number.

Once there is a profit model, revenue and profits can allow Wall Street investors to judge the true value of the company faster, and I am helping them.

I thought of a not-so-appropriate metaphor. We are the kite, and the investor is the string. The kite needs the string to give him a traction when it takes off. The resistance to flying upwards. "

This metaphor can really be used as a metaphor for the future of Yahoo to some extent. Before Yang Zhiyuan left the Yahoo board, the Yahoo board decided to sell 13 million shares of Ali at a price of $5.23 per share.

And these shares were worth $90 per share after Ahri went public. If it hadn’t been for the sale of the 5.23 million shares of Ahri, Yahoo would have held 30% of Ahri’s shares.

This is also known as one of the stupidest decisions in business history, comparable to Time Warner's acquisition of AOL, and Jerry Yang clearly voted against it in this transaction.

So much so that after Ahri went public, Yahoo was just an intermediary channel for investors to invest in Ahri.

"Didn't you ask us to give some advice to the entrepreneurs in Huaguo? What I'm talking about is my true feelings."

Zhou Xin chose to throw the words to Bill: "What about you, Bill?"

Bill thought for a while and then said: "My suggestion is to take it early, when you have a promising direction, you need to judge whether this field is in its early stage or mature.

It was a good choice to start an online forum ten years ago, because there were not many online forums at that time, but if you do it today, it is difficult for you to compete with very mature online forums for users.

It was equally good to be a portal website five years ago, but to do a portal website today, MSN, Yahoo, AOL, etc. are all competitors that you can hardly beat.

The invincibility here does not mean that you cannot produce better products than these portals, but that users have already formed the habit of using them, and investors will not invest money in such projects.

It's like who says they want to be a knowledge quiz community now, no matter whether it's Wall Street or Silicon Valley, no one will invest in portal websites.

In the first six months after Quora came out, there were at least [-] Q&A communities in Silicon Valley, large and small. Almost a year has passed, and now only Quora has survived in the Q&A community, and Yahoo Q&A is still struggling with the backing of Yahoo! .

This field is already very mature, and if you want to enter it at this point in time, it will be twice the result with half the effort in Huaguo's words. "

Bill is an expert in Huaguo. He has been to Huaguo many times, and he even said it directly in broken Chinese.

He continued: "Of course, if you can innovate, that's the best. Innovation means that you have no opponents in a short period of time, and you will have a certain first-mover advantage.

Accumulate user loyalty as much as possible during the first-mover advantage period. "

Compared with Jerry Yang, Bill Gates talked about commonplace topics, and the topic he must talk about every time he comes to China is innovation.

Without waiting for Zhou Xin to hand over the words to Gerald, he began to speak himself: "Different from the other three, although I am also an Internet practitioner, I am a professional manager, not an entrepreneur.

Therefore, from the perspective of a professional manager, I will talk about my feelings, that is, to be good at using the power of capital to help the growth of the enterprise.

Time Warner's acquisition of Quora is the best case. Before Time Warner acquired Quora, the market value was only 200 billion U.S. dollars. After the acquisition of Quora, the market value came to 1500 billion U.S. dollars.

Whether it is the recognition of the enterprise, the ability to raise funds, or the operating ability of the enterprise, there has been a qualitative leap.

Before the acquisition of Quora, Time Warner's business operations could not find growth points.

It is a scary thing to not find a growth point. You have people, money, and resources in your hands, but you can’t find the direction to invest.After the acquisition of Quora, Quora is a very successful company, but because of its short establishment time, it is immature in many places.

Time Warner is also a very mature company. We can reproduce Time Warner’s experience on Quora and at the same time invest a large amount of Time Warner’s resources on Quora. Facts have also proved that the rate of return that Quora brings to Time Warner is far greater Beyond Time Warner's original business.

When we invest money in movies, the comprehensive rate of return is less than 10%. If we invest money in Quora, the rate of return on Quora exceeds 20%. After opening up the Asian and European markets, this figure will be even more exaggerated.

Of course, Quora also has a ceiling. After Quora reaches the ceiling, his return on investment cannot always maintain such a high trend.

Even though the Nasdaq fell more than 10%, Time Warner's stock price did not fall and even rose.

This is the benefit of capital mergers and acquisitions, and this is also an important reason why companies such as Microsoft, Yahoo, and Amazon are keen on acquisitions after they grow bigger.

Acquisition can help you find a new direction and help the company develop in a diversified way. If the acquired company and your original business can help each other, it can also help the business of different sectors of the company develop synergistically.

So make good use of the power of capital. "

After everyone expressed their suggestions to Huaguo Internet practitioners from their own perspective, Zhou Xin finally concluded: "Everyone's comments are very good.

It's all about experience.

Jerry expressed his experience and lessons, telling everyone that investors need to be vigilant and seize the initiative by finding a profit model. Wright immediately told everyone that it is necessary to use the power of capital to help enterprises develop.

Of course, the content of Bill's chats every time is innovation. I saw that the word that appeared most often with Bill on Huaguo's news website was innovation.

Of course, innovation is very important. The Internet cannot exist today without the innovation of countless practitioners. Innovation is the inexhaustible driving force for the development of the Internet.

What I want to give you is confidence. The four of us have just said that there is a bubble in Nasdaq. "

　4k will be updated first, and 4k will be updated tonight, which is 8k. Although this chapter is in the morning, it is still 2k more!

　　Ask for a subscription, mainly on Saturday morning and have a meeting, and then go to work tomorrow, and it is really impossible to get up at [-] o'clock in the morning to type.

　　
　
(End of this chapter)