Chapter 74 Tencent's Way to Win The Critical Point of Marginal Benefits

In traditional economic phenomena, marginal benefits are generally diminishing.And in the Internet domain, the marginal benefit will be zero in a long region.Only when the "critical point" is reached, the marginal benefit will suddenly increase dramatically. Jiang Qiping, a senior Internet expert, believes that Tencent's QQ road is a Chinese-style Internet road that Ma Huateng walked alone.Tencent's platform is Wangfujing Street.Just imagine, when Tencent was first established, it was a virtual "Wangfujing Street". People who can walk on this street must have an "ID card", and this "ID card" is a QQ number.Their purpose is to meet new friends.Through network technology, Hainanese can smile and tell jokes with Jiamusi people; Shanghainese and Tibetans can discuss poetry and literature issues with each other... Just open the added directory, and all people can change from strangers to friends. The gods from all over the world talked about it.

The first wave of people brought the second wave of people, and the second wave of people brought more people... Such a cycle of expansion, so that this virtual "Wangfujing Street" became famous far and wide.And in this process, what role did Tencent play? Tencent has been doing infrastructure things, that is, building streets.When Ma Huateng first made the QQ software, he just thought it was fun.The initial cost is Ma Huateng's technology cost.If we continue to use Wangfujing Street as an analogy, it means that Ma Huateng had an idea. He wanted to build a street without any material cost before the construction started.But when Ma Huateng put this software on the Internet for people to download, there was a cost—the cost of the server.One day, when several founders of Tencent discovered that there were 100 people online at the same time on the QQ system, they were surprised and delighted.However, with the increase in the number of users, the cost that the company needs to invest in this system is also getting higher and higher.That is to say, the actual cost continues to increase, while the marginal benefit continues to be zero.

The first beta version of QQ had more than 200,000 registered users two months later, and the number of users has grown exponentially since then.After Ma Huateng launched the third version of OICQ, the number of registered users has reached hundreds of thousands within a month or two, and the growth momentum is getting stronger and stronger.The most direct result of the sharp increase in the number of users is the shortage of funds, from adding equipment to widening lines, from increasing developers to investing in management costs-everything is like a "bottomless pit" that can't get enough.And OICQ is a free service project, and it is impossible to get direct profits from the increase of users.

In fact, after 2000, the virtual "Wangfujing" has become famous. QQ has gradually become a lifestyle of urban youth in China.At this time, Ma Huateng's pressure is not the lack of users, but the crazy surge in the number of users.Based on the 800,000 new registered users every day, Tencent needs to invest in a server with dual CPUs and 1G memory every week. The cost of millions of dollars. By the middle of 2001, Tencent's new registrations reached more than 900,000 people per day, making Tencent overwhelmed.The problem facing Ma Huateng at this time is that he must find the best profit model, otherwise, hundreds of millions of users, the most precious asset, will become a huge burden on Tencent's development path.

In desperation, in July 2001, Tencent began to implement control over user registration.But daily new registered users are still as high as 390,000.At that stage, Tencent's monthly expenses were about 2 million yuan, and the cost of adding equipment alone accounted for three quarters of it. The situation was quite grim. For more than two years, Ma Huateng has been building a virtual "Wangfujing Street". The overwhelmed Ma Huateng decided to charge tickets for newcomers. This was a failed strategy, which resulted in few newcomers coming. Some of the people strolling on the street also left.

The characteristic of new economic enterprises is that they will experience a loss stage in the early stage. When the output reaches a critical point (positive feedback point), the positive feedback effect will be strengthened, and the enterprise can turn losses into profits, enter a period of high return on investment, and realize huge profits .The moment China Mobile launched "Monternet", it may not know that this innovative value chain will save a number of Internet companies.Tencent is at the forefront of this batch of lists.The speed at which Tencent makes money is the same as the crazy growth of its registered users. By July 2001, Tencent achieved positive cash flow. By the end of 2001, Tencent had achieved a net profit of 10.22 million yuan.Since then, the "Wangfujing Street" built by Tencent has been repaired.Since then, it has entered the growth stage of marginal benefits.

In the field of digital economy, the root of marginal benefit growth lies in: diminishing marginal cost and accumulative value-added.The value of Tencent's network is reflected in its huge user base and the company's profitability. The value-added service of SP, which cooperates with China Mobile, can be regarded as a bright spot in Tencent's business.