Chapter 7 We're the ones who make the most mistakes in this business

Review background: When the huge billboard "How far is the Chinese from the information superhighway - 1,500 meters to the north" appeared at the South Gate of Zhongguancun in Beijing in the early spring of 1996, not many people really realized how important this billboard was to the later Chinese Internet. The significance of the industry.This day was later considered a memorial day for China's Internet industry. The billboard was erected by Zhang Shuxin, who was once known as the "leader of China's Internet". Her "1,500 meters to the north" Beijing Yinghaiwei Information and Communication Company was called the first real Chinese Internet company by later generations.

As a new product of the year, Zhang Shuxin and her Ying Haiwei received investment from the China Xingfa Group under the State Economic and Trade Commission in September 1996 before the arrival of the Internet wave, thereby expanding the company's total share capital to 80 million shares. The shareholding of Zhang Shuxin and her husband Jiang Zuoxian has been reduced to 26%, with a share value of 21.2 million yuan. Zhang Shuxin has become a new generation of rich women worth tens of millions.At the same time, the company's employees have grown from the initial 3 people to more than 100 people, and the national media, large and small, are reporting Yinghaixian and its ideals every day. In January 1997, Ying Haiwei formed a strategic partnership with Microsoft, which was in full swing at the time.During the Spring Festival, Yinghaiwei's national network was opened, and the company's employees were excited. Within 3 months, sub-stations in 8 central cities including Shanghai and Guangzhou were opened, and their online user income reached 110 renminbi.The company bought 12 special-page advertisements in relevant local newspapers, announcing that the total investment will reach 500 million yuan in the next three years, and more than 60 nodes will be built.

However, by the end of 1997, the triumphant Ying Haiwei began to falter.In June of this year, the national post and telecommunications department invested 7 billion yuan to start the 169 national multimedia communication network, which was followed by a major adjustment of the nationwide network access price.By September, Ying Haiwei's monthly income had dropped to more than 300,000 yuan.Except for the Beijing site, which has more than 20,000 netizens, the total number of netizens of the other seven sites is less than 40,000. On June 22, 1998, Zhang Shuxin was suddenly forced to resign without warning.This became the headline news in the network industry that year.

Subsequent studies have proved that, in addition to major environmental changes such as the major adjustment of Internet access prices across the country, some mistakes made by Zhang Shuxin, who led the early fog of the Internet in China, are also worthy of reflection.For example, since the end of 1996, China's Internet market has begun to undergo new changes, but Zhang Shuxin did not lead Ying Haiwei to make corresponding strategic adjustments. He still blindly hyped and indulged in brand image promotion, while the technical structure of the website, The content of the service has not been substantially adjusted, so that the latecomers are given the opportunity to catch up when they should be rewarded.Even Zhang Shuxin himself, as the founder of the company, was once questioned by his subordinates, experts and the media for his lack of management in leading Ying Haiwei to run.However, this also failed to cause Zhang Shuxin himself to think too much.

After being forced to resign, Zhang Shuxin published a reflective article "We are the people who make the most mistakes in this industry".Today, many years later, Ying Haiwei, who was so popular at the time, has gradually faded away, leaving only a blurred back, but the thinking and reflection that Zhang Shuxin and her Ying Haiwei brought to people still have an extraordinary significance today. significance. We have been trained in a very cruel industry for more than 3 years, facing the pressure of survival every day, thinking a little more than others about many things.It can be said that we are the ones who make the most mistakes in this industry. Whether it is experience or lessons, they are precious wealth, and we hope to benefit our peers.

Looking back now, Ying Haiwei was unfortunately born too early.From the development history of the network industry in the United States, network service providers are highly segmented products of the information industry.Its telecommunications infrastructure is open, and there is no need for network service providers to "build houses" (infrastructure construction); nor to produce information content by themselves, as long as they organize "sources".In China, almost every Internet service provider has to invest huge sums of money in laying or renting lines, and also invests in the development of corresponding software... If a company has to do everything by itself, it is more like a workshop , and it is impossible to form an industry in a workshop, let alone an information industry.

my country's information service industry is almost at the same pace as foreign countries, but lacks the necessary ecological environment, so that network service providers do not focus more on internal operations, but instead appeal for telecommunications policies, legal system construction, and capital markets.Entrepreneurs in China are very tired. Not only do they have to manage the internal affairs of the company, but they also have to constantly affect the environment. In addition to external reasons, I think I have made mistakes in the three issues of enterprise resource combination, capital structure, and value chain design.

1.We do not have the relevant resources.Now we realize that certain resources must be mastered to engage in this industry, and Ying Haiwei was built out of thin air without any resources.For this, we paid a lot of hard work and a huge price.Now the Internet service providers who "live" more comfortably are based on the foundation of the original industry and extend their tentacles to the Internet industry. 2.It is a dead end for enterprises like ours to rely on bank loans.Because the entire industry is far from mature, the growth of income is slow, and it needs long-term support and cultivation of funds. However, it turns out that the total annual income is not enough to pay bank interest. How can it survive?

In the United States, network services are a typical product of venture capital support. If they rely on their own primitive accumulation, they will never be able to develop to the current scale.But China has no venture capital mechanism.In the long run, Ying Haiwei will not be short of money at all, but Ying Haiwei is short of cash right now, so he can only introduce venture capital. When we were absolutely controlled by money capital, I was doomed to "resign" today. 3.I made a mistake in the design of the enterprise value chain, overly optimistic about the maturity of this industry, and underestimated the cruelty of the environment.As a result, the company's business model was designed and the value of its operating income derived from the sole long-term goal of an excessively long return on investment.When it takes three to five years or even longer for your income from services to cover your profit and loss costs, can short-to-medium-term income make up for it?And when we noticed this problem, we were powerless to reverse it, and we couldn't adjust it.

First, the entire resource structure has been formed, and the cost is rigid and difficult to cancel; second, the financial structure has been formed, and the interest that needs to be paid for bank loans of more than 50 million yuan is placed there; third, when the value chain is redesigned , without any funds to start up.