This is the best team: from Ctrip to Home Inns, Hanting I

Chapter 6 Venture Financing (1)
Positioning of the site

01 Views of Fan Min and Shen Nanpeng

Now that the direction has been determined long ago and people have been found, the four of them decided to start operating the website in May 4.

Speaking of it, everyone may not believe it. When they started their business, the conditions were very simple.On the 17th floor of the Meteorological Building on the south side of the Xujiahui Church, they only rented half a floor, a total of 200 square meters, and shared it with Xiecheng. Fan Min and Liang Jianzhang didn't even have a broken desk.

Although it is a small company with only more than 30 people just established, they have high expectations for this company, and it is funny to see their positions.Chairman and CFO: Shen Nanpeng (he invested the most money); CEO: Liang Jianzhang; President: Ji Qi; Executive Vice President: Fan Min.It is really "although the sparrow is small, it has all internal organs".

So how should you position your own website and plan for the future of the company in the next step?In Ji Qi's office, they each express their views.

Fan Min was the first to speak - intuitively, the tourism market should be bigger than we imagined. In 1998, the scale of China's tourism industry reached 2391 billion yuan. Tourism is already the second largest expenditure of ordinary people, even higher than that of cars.In such a big market, not to mention "eating chicken legs", even eating "chicken offal" and drinking "soup" is already exhausting.

But the current situation is that it is difficult for travel agencies to meet the growing market demand of the tourism industry, and at the same time, the services provided by travel agencies are not in place.Therefore, travel information plus e-commerce is the only way out, and it is also our wisest choice.

Shen Nanpeng continued to express his own views - in fact, China's e-commerce was born in the summer of 1997.At that time, a man named Wang Juntao established a software sales experiment site "Software Port" on the Internet.Later, they split off the company's e-commerce department and established Everest E-commerce Network Service Company (ie 8848). At the beginning of 8848's establishment, it just happened to encounter the "72-hour network survival" experiment. Its corporate image advertisements appeared in the prime time of CCTV2 for several days in a row.As a result, 8848 became an instant hit and began to dominate the Chinese e-commerce market.

In 1999, 8848 sold innovative company's MP3s online.Half a year later, 8848 became the sales champion among all agents of this MP3, and its sales volume far exceeded that of traditional offline agents, which is enough to prove that the prospects of e-commerce are immeasurable.

When it comes to applying e-commerce to the tourism industry, this is not a genius initiative. There are already many such Internet companies in the United States, and several of them have also gone public.But when it comes to China’s specific environment, whether to do B2C or B2B, whether to serve travel agencies that mainly receive individual tourists, or enterprises that are oriented to business travel that is increasingly frequent, whether to focus on profit points that are less flexible in booking tickets, or It is up to us to explore slowly for hotel reservations with a wider space.

It has been 10 years since the rise of the Internet in China.Back then, when Zhang Chaoyang returned to China, he was so poor that he had no money to take a plane, so he had to come back by a broken ship.However, with the idea of ​​a portal website, Zhang Chaoyang actually managed to get investment from venture capital, which shows that the Internet is still a fertile ground for wealth creation.However, the era when heroes such as Zhang Chaoyang and Wang Zhidong created the current situation has passed, and the fierce competition environment requires enterprises to have a strong management team.I think our strength is our team.Even if it goes to the public market, a combination like ours can withstand the test of investors' scrutiny without packaging.

02 The result is that Liang Jianzhang has the final say

Liang Jianzhang also published his grand speech - since everyone recognizes the model of e-commerce, let's take a look at the three models that have been successful in the United States:
The first category is represented by priceline.com.It is a bidding website. After the user puts forward the demand, price and time limit on it, the first responder is the successful bidder.For example: A travel enthusiast wants to go to Seattle, and then specify a price, $50/day, and a three-star hotel.Priceline.com then automatically searches the local area for hotels willing to accept that price.After finding the hotel, the transaction can be made immediately without confirmation from the customer.

The second category is represented by lonelyplanet.com.It is the world's largest independent travel publisher, offering travel guides and city guides around the world.There are free self-service travel information on it, and users can check information from all over the world.

Representatives of the third category are travelcity.com and expedia.com.The former is a comprehensive travel website, which cooperates with tens of thousands of travel agencies around the world. Customers can buy air tickets, book hotels and rent cars through its operating system; the latter is the world's largest online travel website, and its services cover Everything you need to travel, including air tickets, hotel reservations, car rentals and more.

According to the market environment in China, the priceline.com bidding model is not feasible in China. Whoever copies it will light up the lamp in the toilet-looking for death.The second and third modes can be considered to be transplanted.

Then choose the second or third mode?In my opinion, it is better to choose the third option.The reason is: Now people are frightened by this stuff after they come into contact with the Internet, and find that the Internet platform can provide them with almost unlimited information.Everyone is intoxicated by the infinite possibilities of the Internet, so our website should provide as much information as possible to netizens, so that users can find anything on our website.Moreover, all companies are currently exploring which business model is possible.Before everything is clear, we can only let our website cover as many kinds of content and applications as possible, so as not to lose market opportunities.

In short, I think so, first position the website as a travel portal, and tentatively name it "Youhu"

(later changed to Ctrip).

It was supposed to be Ji Qi's turn to speak. Suddenly, Liang Jianzhang changed the subject and said to Ji Qi: "I will be responsible for the technical aspects of the website. Otherwise, you should start the company first."

What? 4 people partnered to start a company. First, Ji Qi started the company alone, while the other 3 people enjoyed the success?Will Ji Qi agree to this unreasonable arrangement?Please see the breakdown next time.

first financing

01 Ji Qi opens the way first

"Okay! Let me lead the way first, anyway, I've been 'in the sea', and I have nothing to lose."

Ji Qi said: "I always feel that we are in a relay race. I am the first baton, responsible for market development; Liang Jianzhang is the second battalion, responsible for website technology; Fan Min is the third battalion, responsible for product management; Shen Nanpeng is the The fourth stick is responsible for listing and financing.”

Ji Qi was very straightforward and immediately agreed to the suggestion.

In this way, this entrepreneurial story is a little bit different.That is to say, when the website was started, the four of them did not spend the same amount of time and energy to incubate the company.In the early stage of entrepreneurship, Ji Qi was basically carrying it alone.The other three team members just used their spare time to discuss with Ji Qi, acting as part-time entrepreneurs.

Why didn't they resign on the spot and devote themselves to the entrepreneurship of Ctrip.com?

In fact, it’s not their fault. Everyone knows that the success of a start-up depends on many conditions.If there is a mistake in a certain link, it will immediately lead to the complete failure of a company. This is also what ordinary people say "one careless move, and the whole game is lost."When the Internet wave is coming, although their team is excellent, everyone has extraordinary experience, and the business model is also good, but before everything is clear, who can guarantee that this venture will be successful?
Therefore, they can only cross the river by feeling the stones.

Since it is a careful trial, the cost must be considered. They must choose a person with the lowest entrepreneurial cost to open the way.Needless to say, the right candidate is Ji Qi.

There are many advantages to choosing Ji Qi.Ji Qi possesses what the three of them lack: in China's less-regulated market, he is very familiar with the rules of the game in this market, knows how to survive, and understands that starting a business must be simple and what is in the basket , just cook whatever you want.Compared with the "sea turtles" of multinational corporations and the "whales" of state-owned enterprises, Ji Qi, a "turtle", can find the river leading to the sea more easily in the trickling streams.

Although it is said that Ji Qi will cost the least to open the way.However, a company has just been established and needs money for everything.As Ji Qi said: the car consumes a lot of fuel when it is just started. In less than 3 months, the initial investment of 4 million yuan (the registered capital of the business license reads: 100 million yuan) has almost been spent by the 200 people. If the venture capital cannot be found, the company will be "dead" .

This problem has long been expected by them, otherwise, when Liang Jianzhang and Ji Qi formed a team, they would not have recruited Shen Nanpeng to join the team.

However, things are not as easy as originally thought.Shen Nanpeng's specialty could not be brought into play at this time.First, because he had little contact with venture capital institutions before.Second, he used to operate big projects, and some big investment banks didn't care about small business at all.In short, Shen Nanpeng's "giant-level" talent was stranded by the "harbour" of small businesses.

02 First meeting venture capitalist Zhang Suyang
So what to do?At this time, Ji Qi suddenly remembered a person, his name was Zhang Suyang, and he was a partner of IDG.

Here, let me briefly introduce the situation about the company IDG.Now, when one mentions China's Internet, one has to mention IDG. Anyone who knows China's Internet will know IDG, just like Washington is to the United States, and Napoleon is to France.However, when we looked back, we discovered that the reputation of IDG was also accumulated bit by bit.

IDG Group was founded in 1964 and is headquartered in Boston, USA.The parent company is good at data processing. It has subsidiaries and branches in 90 countries and regions around the world, has more than 1 senior research experts and editors, and publishes more than [-] market research reports and technology development forecasts every year. The report has a strong influence on public opinion in the world information industry.

In 1981, McGovern, the chairman of IDG Group, created the Pacific Venture Capital Fund, which was specially targeted at Asian countries, with Japan as the main battlefield. In 1993, IDG Technology Venture Capital Fund (IDGVC for short) was established. In Shanghai, China, Xiong Xiaoge was the first general manager.

How did Xiong Xiaoge know McGovern?
The situation at the time was like this: In 1986, Xiong Xiaoge went to Boston University to study for a doctorate.

In 1988, Xiaoge Xiong joined Reed, the world's largest professional publishing company, and was responsible for the editing of the Chinese version of "Electronic Herald". In August 1991, the company appointed Xiong Xiaoge to work in Hong Kong, and Xiong Xiaoge believed that the publication could only be run well if he returned to China, but the company rejected his plan.When he was distressed, Xiong Xiaoge suddenly remembered Mr. McGovern whom he met when he was an interpreter for Mr. Rong Yiren at a dinner party at Fletcher College in the fall of 8.So he immediately wrote a letter to McGovern.

After McGovern received Xiong Xiaoge's letter, he invited Xiong Xiaoge to join IDG by phone that night, and sent the letter of appointment to Xiong Xiaoge.In this way, in November 1991, Xiong Xiaoge officially joined IDG to work.

At the beginning, Xiong Xiaoge also worked as an e-magazine.Later, Xiong Xiaoge helped Pacific Bit Sports Equipment Company find some overseas orders, which made the company profitable.This company happened to be the first company McGovern invested in China.Seeing this situation, McGovern felt that China's venture capital business must also be vigorously developed, so Shanghai Pacific Technology Venture Capital Co., Ltd. was established.

In 1999, when the Internet was booming, Xiong Xiaoge regarded Shanghai Pacific Technology Venture Capital as a department within IDG and adopted a partnership system.Therefore, IDG has many partners in China, including Zhang Suyang and Zhou Quan.

After the establishment of Shanghai Pacific Technology Venture Capital Co., Ltd., IDG has little reputation and experience in the field of venture capital.Since there is no money, IDG has to choose a small investment in order to reduce the risk, just like pepper noodles, as long as it is an Internet project, it will invest.Because at this time, the Internet industry is very hot.

In addition, due to the large amount of funds required for late-stage projects, IDG could not afford to invest.Therefore, only early projects can be selected.Since the early projects are all fuzzy investments, no one can be sure, and the early projects can only look at the industry.Now that you have chosen an industry, it means that you have been up and down with the industry. For the good industries that have just emerged, basically you will not let go of any of them. "Every family invests, and every household sticks to their stocks."This is IDG's early investment philosophy.

In the two years from 1997 to 1999, IDG has successively invested in more than 3721 Internet companies such as Sohu, Dangdang Bookstore, eBay, 40 and Baidu Online in the Chinese Internet market.After these companies made money, IDG also became famous because of it.However, these are all things for later, now continue to read the story about Ji Qi’s search for venture capital.

Speaking of Ji Qi’s acquaintance with Zhang Suyang, it was because Ji Qi wanted to acquire the Shanghai office of Sinochem Yinghua.Since there is an advance payment for integrated wiring, if someone invests some more money, they can buy the company.Therefore, Ji Qi found two investors of IDG and introduced the situation of the Shanghai office.Zhang Suyang said: "If this company is really as good as you said, IDG can consider investing some money in it." Hearing what Zhang Suyang said, Ji Qi immediately went to Beijing to discuss the acquisition.Although he didn't succeed in the end, he became acquainted with Zhang Suyang through this matter.

Later, IDG invested in a company in Nanjing called Sino-US Joint Venture Nanjing Top Information Network Co., Ltd.Not long after, something happened to the company, the general manager ran away holding the safe, and the company was facing bankruptcy.

The company's main business is also system integration, which is an area Ji Qi is familiar with.So Zhang Suyang approached Ji Qi and gave him the title of executive director, hoping that he could stabilize the company.

It took Ji Qi a while, and finally pulled the company back from the cliff.After the company stabilized, Ji Qi left Nanjing Top.

After this incident, Ji Qi didn't have much contact with Zhang Suyang because of no business needs.However, now that Ctrip's money is almost spent, Ji Qi thought to himself that he must go to Zhang Suyang to have a talk.

In late September 1999, Zhang Suyang was invited to Ji Qi's office.

When Zhang Suyang heard that it was an Internet company, Zhang Suyang was very interested.

Zhang Suyang asked with a smile: "Are you also working on the Internet now?"

Ji Qi also smiled and replied: "Yes! People all over the world are starting Internet companies, why can't we?"

"You chose a travel website?"

"Yes. We think this industry has the most promise."

"Can you tell me the specific reason?" Zhang Suyang continued to ask.

Ji Qi said confidently: "We have been discussing for more than half a year, and we have analyzed each industry. We have also considered online bookstores, online recruitment, online home decoration, etc., but found that these will be affected by certain factors. Due to the limitations of these conditions, I chose to travel online."

"Did you bring it up first?"

"No, it was suggested by our CEO Liang Jianzhang. Because he lost his way on a trip with his girlfriend and couldn't get out for a long time, so he thought of setting up a travel website, which not only facilitates himself, but also helps others."

"Hehe! It's very interesting, how many people are there in your team?" Zhang Suyang asked with a smile.

"There are four in total. The other three are Liang Jianzhang, Oracle's technical director in China, who has been a child prodigy since he was a child, and is very expert in network technology; He "worked" on the bridge project; and Fan Min, the general manager of Shanghai Continental Hotel, has been working in the tourism industry." Ji Qi said.

Among the three entrepreneurial partners introduced by Ji Qi, Zhang Suyang already knew two of them.Once when Ji Qi invited Zhang Suyang to dinner, Liang Jianzhang was also present; once when several investment colleagues were having dinner at Jing'an Hotel, Shen Nanpeng happened to be in the table.

After listening to Ji Qi's introduction, Zhang Suyang said: "Let me think about it first!" After speaking, he got up and prepared to leave.

Hearing Zhang Suyang said that he would go back and think about it, Ji Qi secretly thought that IDG might not want to invest anymore.At that time, portal websites were the most popular on the Internet. The performance of Sina, Sohu, NetEase and CDC after their listing on Nasdaq stimulated all Internet practitioners and investors. Many people believed that this was the best choice.Not many people are optimistic about the prospects of travel websites.

Therefore, Ji Qi hurriedly grabbed Zhang Suyang and said: "Su Yang, you have a lot of connections in this industry, can you introduce me to some venture capitalists?" Zhang Suyang said: "No problem!" He left as soon as he finished speaking And once he left, there was no news after that.

Ji Qi thought to himself: This game is over, there is no more play.He desperately urged Shen Nanpeng: "Nanpeng, hurry up and find someone. If we don't raise funds, we will die. It must be an ugly death."

Shen Nanpeng still didn't get financing and Ctrip didn't die, why?Explain next time.

(End of this chapter)