"Because there are investors and entrepreneurs here, this matter is very important for entrepreneurs, but it is not so friendly for investors. Because in the early days of Internet entrepreneurship, if you find a profit model that suits you and run through this model, then You can have more autonomy to negotiate terms with investors.
In the early days of Yahoo's business, the number of users continued to grow, and we did not find a good profit model. Unlike today, when a large number of traditional industry companies and Internet companies advertise on Yahoo, no one saw the value of Internet advertising at that time.
Faced with the continuous growth of the number of users, only external financing can maintain the company's high-speed operation. Once external financing is accepted, the equity and voting rights will be diluted. We want to ensure that our control rights are still there after the equity is diluted through the structure of same shares with different rights. It is a difficult thing to do in your own hands.
Nowadays, most investors cannot accept different rights for the same shares. So far, I have heard that only Newman’s NewPay adopts the different rights model for the same shares. After reaching the listing stage, even as a founder, your equity is only a small part, and every decision you make will be constrained by other shareholder representatives. "
Angel investors had to wait until Facebook appeared to accept the investment model of different rights for the same shares on a large scale.
"The company is still the same company, and there are fewer and fewer things you can control, which is an unpleasant thing." Jerry Yang said very straightforwardly, "If you have a stable profit model from the beginning, , and if it can make a profit.
First, it allows companies to accept external investment more slowly. The less money you need to raise, the more voting rights you have, and you also have more confidence in the negotiation process.
You may think that it is impossible to find a profit model at the beginning. So many Internet companies in Silicon Valley have not found a profit model. This 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. Generally, three to four rounds are the norm. The sooner you find a profit model, the sooner you can take the initiative, whether it is accepting the next round of financing or Going public has more initiative.
Let’s take Newman as an example. Newman is the Internet entrepreneur I admire most in the past ten years. I have learned a lot from several successful companies he started. Not only do I absorb valuable nutrition from Newman, I believe that other Silicon Valley entrepreneurs The same is true for entrepreneurs. Because in addition to being the founder of Yahoo, I also make some investments myself. When talking to entrepreneurs in Silicon Valley, I found that when I talked to them before, they would say that the person they studied and admired was Gates. It's Ellison, it's Bezos, it's me.
I'm not humble either. As one of the founders of Yahoo, my name is often mentioned. But since Newman appeared last year, the name Newman has gradually appeared in everyone's answers, and the proportion is getting higher and higher. By the second half of this year, it will be even more What's more, almost no one mentions anyone else, it's all Newman.
Newman's first company, Riot Games, went public after only receiving one round of financing from Gates. Gates purchased shares and then injected capital, which is no different from financing.
Until now, Newman has held close to 40% of Riot Games’ shares, and with the aura of founder, he can firmly grasp the actual control of Riot Games. This is consistent with Riot Games’ desire to become an electronic company from the very beginning. Online game distribution channels are inseparable from the reliance on commission to make profits.
Including NewPay’s later adoption of a financing model with different rights for the same shares, a large number of investment institutions were willing to participate, which is also clearly related to NewPay’s profit model.
Therefore, my advice to Chinese Internet entrepreneurs is that the sooner you find the profit model of your company, the better. "After Yang Zhiyuan finished speaking, he placed the microphone on the dark sofa, and the audience burst into warm applause.
Angel investment has been in China for some time. From its establishment to China.com becoming the first Internet stock in China to be listed on NASDAQ, Goldman Sachs and Lehman Brothers behind them played a key role.
Established in May and listed in November, Americen Capital’s sophisticated method of cutting leeks has opened the eyes of entrepreneurs like Huaguo Internet who have never seen the market. They all strive to obtain overseas investment. Target.
Obviously, I haven't been educated by investors, and I think that in angel investment, investors are really angels, they only pay money and don't do any work.
What Yang Zhiyuan said is slightly ahead of its time. The interdependent and mutually exclusive relationship between investors and entrepreneurs is not directly felt by current Chinese entrepreneurs. It is even further away that we can have more initiative in finding a profit model.
But the audience in the audience still applauded in a dignified manner. Everyone was an elite. Although they didn't intuitively feel it, they knew that Yang Zhiyuan was talking about dry stuff, which pierced the investor's tender side.
As a former investment manager, Tsai Chongxin, who was impressed by Jack Ma's personal charm, was deeply touched by these words. He worked as a lawyer in New York and then worked in private equity investment in Hong Kong for almost five years. Jerry Yang's words really spoke to him. In my heart.
"Jack, Jerry's words are very practical. For Ali, we also need to find a profit model as soon as possible. If we don't want investors to take away control of the company in the future, finding a profit model is crucial." Tsai Chongxin told Jack Ma.
Jack Ma replied: "I know, is it possible that Ahri's next round of financing will adopt the model of different rights for the same shares?"
He is obviously more interested in the model of different rights for the same shares mentioned by Jerry Yang, because Ali is currently engaged in B2B business, and this business model determines that they need a lot of capital to be successful.
A large amount of funds means that multiple rounds of financing are needed. China is a huge market. Only with multiple rounds of financing can we take the initiative and even obtain the majority of the market share in the B2B e-commerce market.
Therefore, Jackma knows that even if they find a profit model, he will not be able to avoid the continuous dilution of the founder team’s shares. Therefore, the structure of different rights for the same shares is the best solution to avoid similar incidents.
Tsai Chongxin thought for a moment: "It's possible, but we still have to find a profit model as soon as possible. Only when we are more valuable will investors take our demands seriously when negotiating with them.
Only strong opponents will be respected. "
Tai Zhou Xin had already begun to speak. Jack Ma only nodded and said nothing to express that he understood. What he didn't know was that according to the original historical trajectory, Jerry Yang would transfer all the assets of Yahoo China to Ali in five years. , and invested US$1 billion in Ali.
The threads of fate intersected in advance at this moment, and Yang Zhiyuan also didn't know that the investment target of the most successful investment in his life was sitting in the audience.
When Ali went public, Yahoo held 16% of Alibaba shares, valued at US$36 billion.
Zhou Xin joked: "Jerry, what you said is too straightforward. You called investors a scourge. Your words will be criticized by Wall Street."
Jerry Yang said: "No, no, no, those on Wall Street would only be happy to see Internet companies have a profit model, instead of relying on the number of users to make them invest. 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, Wall Street investors can quickly judge the true value of the company. I am helping them.
I thought of a not-so-appropriate metaphor. We are the kite and the investors are the string. When the kite takes off, it needs the string to give it traction. After the kite flies into the sky, this string will control the direction of the kite and even become the continuation of the kite. Resistance to flying upward. "
This metaphor can really metaphor the future of Yahoo to some extent. Before Jerry Yang left the Yahoo board of directors, the Yahoo board of directors decided to sell 523 million shares of Ali at a price of US$13 per share.
These shares were worth US$90 per share after Ahri went public. If not for the sale of these 523 million Ahri shares, Yahoo would have held a 30% stake in Ahri.
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 this transaction.
So after Ali went public, Yahoo was just an intermediary channel for investors to invest in Ali.
"Aren't you asking us to give some advice to entrepreneurs in China? What I said are my true personal feelings."
Zhou Xin chose to throw the words to Bill: "Bill, what about you?"
Bill thought for a while and then said: "My suggestion is to get there early. When you have a promising direction, you need to judge whether the field is in its early stages or has matured.
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 will be difficult for you to compete for users with very mature online forums.
It was equally good to build a portal five years ago, but if you build a portal today, MSN, Yahoo, AOL, etc., these are competitors that you can hardly defeat.
The invincibility here does not mean that you cannot produce better products than these portals, but that users have developed usage habits and investors will not invest money in such projects.
Just like who wants to do a quiz community now, no one on Wall Street or Silicon Valley will invest in portals.
In the first six months since Quora came out, there were at least 20 trivia communities, large and small, in Silicon Valley. Almost a year has passed, and now only Quora survives as a trivia community. Yahoo Q&A is still struggling to support itself, thanks to Yahoo. .
This field is already very mature. If you want to enter it at this point in time, in Chinese terms, you will get twice the result with half the effort. "
Bill is a China expert and has been to China many times. He got twice the result with half the effort and even said it directly in broken Chinese.
He continued: "Of course it would be best if you can innovate. Innovation means that you will have no rivals in a short period of time, and you will have a certain first-mover advantage.
Try to accumulate user loyalty during the first-mover advantage period. "
Compared with Jerry Yang, Bill Gates talks about commonplace topics. 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: "Unlike the other three, although I am also an Internet practitioner, I am a professional manager, not an entrepreneur.
Therefore, I also talk about my feelings from the perspective of a professional manager, that is, we must be good at using the power of capital to help the growth of enterprises.
Time Warner's acquisition of Quora is the best case. Before Time Warner acquired Quora, its market value was only US$20 billion. After acquiring Quora, its market value reached US$150 billion.
Whether it is the recognition of the enterprise, the ability to raise funds, or the operational capabilities of the enterprise, there has been a qualitative leap.
Before the acquisition of Quora, Time Warner's corporate operations could not find growth points.
It’s scary to not be able to find a point of growth. You have people, money, and resources, but you can’t find a direction to invest in. After the acquisition of quora, quora is a very successful company, but due to its short establishment time, it is immature in many places.
Time Warner is a very mature company. We can replicate Time Warner’s experience on Quora, and at the same time invest a lot of Time Warner’s resources into Quora. Facts have also proved that the rate of return that Quora brings to Time Warner is far greater. Time Warner's original business.
We invested money in movies, and the comprehensive rate of return was less than 10%. We invested money in Quora, and Quora's rate of return exceeded 20%. After opening up the Asian and European markets, this number will be even more exaggerated.
Of course, quora also has a ceiling. After quora reaches the ceiling, its 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 or even rose.
This is the benefit brought by 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 become bigger.
Acquisitions can help you find new directions and help the company develop in a diversified way. If the acquired company and your original business can complement each other, it can also help the company's different business sectors develop collaboratively.
So make good use of the power of capital. "
After everyone expressed their suggestions for Internet practitioners in China from their own perspective, Zhou Xin finally concluded: “What everyone said is very good.
It's all based on experience.
Jerry expressed his experience and lessons, telling everyone that they need to be wary of investors and take the initiative by looking for profit models. Wright immediately told everyone that they need to use the power of capital to help enterprises develop.
Of course, what Bill talks about every time is innovation. The word I saw appearing most often with Bill on Chinese news websites is innovation.
Of course, innovation is very important. The Internet cannot be what it is 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. All four of us just said that there is a bubble in Nasdaq. "
I will update 4k first, and I will update 4k again tonight, which is 8k. Although this chapter is in the morning, it is still 2k more!
Please subscribe. I have a meeting on Saturday morning, and then I have to go to work tomorrow. I really can’t get up at six o’clock in the morning to code.
(End of chapter)
