Eric column

From 1998, known as the first year of Internet in China, to 2020, the Internet has quietly developed in China business circles for more than 20 years. "This is the best time and the worst time. This is an era of wisdom and a stupid era. " Many far-sighted enterprises have already actively laid out the Internet, explored e-commerce, new media marketing, developed online brands and fan communities, and made a lot of money on the Internet. At the same time, many traditional small and medium-sized enterprises are still complacent and struggling to survive.

I often hear bosses of small and medium-sized traditional industries lament their development difficulties:

It is really difficult for people to earn money beyond the cognitive structure. The only certainty in this world is uncertainty. Starting from instinct, it is easy to think with linear thinking. An obvious subjective assumption is that development will get better and better over time. But this is never the case. If the department stores are always getting better and better, they will all become Wal-Mart later. Small restaurants, if they get better and better, will become McDonald's later. But the fact is that Nokia can also go bankrupt and Huawei will be suppressed by the United States. Being good now does not mean being good in the future. With the change of business environment, consumption habits and trends have changed obviously, and the profit model of enterprises should also be optimized and adjusted with the times. People who don't know the internet in the future may even have difficulty surviving, let alone making money in business.

Internet has become one of the infrastructures for building a future business society, and future enterprises will no longer distinguish between traditional enterprises and Internet enterprises. Enterprises that can fully understand the internet thinking and make good use of internet tools to optimize the enterprise value creation chain can win cruel commercial competition and be eliminated in any case.

Digital survival is a social form brought by the development of technology and will become a part of the main lifestyle in the future. Internet thinking is naturally one of the most effective ways to make money. Internet thinking first brings about a re-examination of traditional enterprise value creation links, which is reflected in the development strategy, business model, operation strategy and organizational structure, and transforms the "value chain" of traditional business links into an innovative "value ring" that adapts to the structure of the Internet era. The meaning of the word "Internet thinking" is getting wider and wider, such as "user first, fan economy, experience is king, single-point focus, subversive innovation, quick trial and error, lowest cost, smallest scale, extreme focus" and so on. What is the real driving force of "Internet thinking" for business?

The ultimate goal of all business activities is to make a profit. No matter what kind of company it is, an enterprise that can't ultimately make a profit will not have long-term vitality. What does the profit model mean to make money? Selling products, services, buying business opportunities to make money (investment), selling equity, etc. They are all profitable ways. In the past years of development, traditional enterprises are more accustomed to straightforward profit methods. Behind the seemingly mindless burning of money by internet companies, there is also great rationality. The core essence of business competition has always been eternal, grabbing customers, driving away competitors, building competition barriers to form a moat, controlling pricing power and making profits.

Internet technology helps enterprises break through the geographical boundaries of development and directly pull business wars into a borderless competitive situation. Therefore, the mode of integrating Internet genes has experienced explosive growth in the implementation process. In the early stage of development, in order to pursue the ultimate land grab, grab users, build traffic pools, and quickly form an ecological network, Internet companies give people the feeling of "barbaric play". Traditional enterprises often shrink back when they don't have enough time to adapt step by step. Market competition is like sailing against the current. If you don't advance, you will retreat. If you meet competitors in the local market, you must have the comparative advantage of resource investment in order to win.

Internet companies want to survive in the market for a long time, and there are only two choices: to build a business ecosystem with huge future value space, or to join this business ecosystem and make their own contributions. Internet giants such as Ali, Tencent, Xiaomi and Meituan are all doing ecology. The survival of small and medium-sized enterprises depends on the development of the situation, building their own core competitiveness, joining an ecological circle and playing an indispensable role in that ecology. Or divide a certain subdivision field, which is not only attached to the big platform, but also maintains relative independence, and makes full use of the rules of the big platform to improve its operational efficiency.

In the process of business model design, Internet companies often need to build a two-wheel drive of product market and capital market. In the product market, it is recognized by users; In the capital market, it is sought after by investors. The new business model of future enterprises needs to win two wars at the same time. In the process of rebuilding the Internet business model of Qin Hai Industrial Accelerator, we found that many traditional business owners are relatively familiar with debt financing, but not familiar with new ways to improve the capital and cash flow structure, such as equity financing, ABS, financial leasing, factoring, crowdfunding and supply chain finance. Financing is not only financing money, but also financing resources. More ecological aggregation after collaborative aggregation will help conquer the world, reduce the cost of internal transaction structure and enhance the overall competitiveness of the upstream and downstream of the industrial chain. I am very familiar with the optimization of product manufacturing process, but I don't have enough control over the overall situation and implementation details for brand building of new media channels, marketing communication strategy of enterprise owners' personal IP empowerment brand IP, and collaborative transformation of public domain traffic platform to private domain traffic operation. I am used to staying in the psychological comfort zone, taking the old road and desperately drilling into a dead end, but I am not used to opening my mind and will, looking at the changes in the trend of sexual consumption objectively and rationally, and filling the bottleneck of development with external forces.

After all, doing business is to implement traffic, and the Internet is no exception. Whether it is big data, cloud computing, Internet of Things, AI, virtual reality, 3D printing or content innovation, traffic is the foundation, and it is possible to achieve profitability with traffic. The most common core profit models of the Internet are e-commerce, online advertising and value-added services. In the process of platform development, the visible revenue models can be roughly classified into these three categories, and the hidden dark side behind it is the capital appreciation profit model. VC always invests in internet companies without profit, because they think the company will be profitable in the future, and it is profiteering. VC will become rational, burn money efficiently and form a network structure of competitive barriers. With the expansion of scale, transaction costs can be significantly reduced, thus obtaining more financing.