Text: Mingdao CEO Ren Xianghui

This article is written for entrepreneurs.

Lei Jun said: "When the wind comes, even pigs can fly into the sky." We all believed it. In fact, he said this just because he is a very humble person and is good at laughing at himself.

The expression "Wind and Pigs" is very popular and easy to understand. It used to be one of the motivations for entrepreneurs to enter the market. However, the huge success of Xiaomi has made this self-deprecating phrase upgrade to investment. Judgment. Because of it, entrepreneurs’ financing plans and investors’ reasons for investing have become superficial. The analysis of industry trends is like a shady curtain shrouding the vivid corporate strategic analysis. Whether the industry will experience explosive growth in the future has become a prerequisite for fundraising for almost all entrepreneurial projects, making other discussions pale in comparison.

Why is there no need for us to be beguiled by the "wind and pig" theory? The brothers B2B and O2O may be able to give us some inspiration. They happen to be the two hot areas in the current Chinese Internet market. To say they are difficult does not mean that the prospects are bleak. On the contrary, looking at the industry as a whole, both have bright prospects and immeasurable futures. But today, these two markets have completely different situations, and there are huge uncertainties in business operations and investment and financing processes.

My own B2B field is recognized as an industry that has not heard of "winds". Although most people agree that the enterprise Internet is a huge market, most people also think that it is a huge market. In an industry that requires slow and careful work, it is far from being able to obtain huge profits in three to five years, let alone short-term explosive growth.

The two major dilemmas faced by B2B entrepreneurs are complex and slow offline sales, poor marketing channels and high customer acquisition costs. Operators and investors are worried about rapid diminishing marginal benefits in the process of sales expansion, which will quickly hit the ceiling of development and lead to slow growth but little growth.

Therefore, most Internet B2B service providers finally chose to start with services from large enterprises. Although they solved the early cash flow problem to a certain extent, it is usually difficult to get rid of traditional services. Large enterprises have always been They will use their bargaining power to exploit service providers' profits to zero. Not to mention, there are still a lot of capability traps and gray areas in the sales process to key accounts. Many of my software colleagues are still struggling to extricate themselves from the quagmire of customized services today.

Therefore, if an investor investigates common B2B projects, he will usually find two things: either the turnover is okay, but the customers are too concentrated, and he is not optimistic about the future, or the business model is good, but the orders are not good. Too small, customers are scattered, and revenue accumulation is too slow. The final conclusion is usually: maybe the time has not come yet.

Let’s take a look at Brother O2O. This field has a completely different industry logic than B2B. The problem of "wind" no longer exists, and if it blows hard enough, no investor will question the industry trend. However, from the famous Thousand Regiments War a few years ago to the proliferation of local services, taxi hailing, car rentals, food ordering, takeaways, tutoring, movies, and housekeeping, basically any place where O2O can be used is full of ambitious competitors, and There are also big-ticket entrants who are confidently investing in Angel and Series A rounds.

What O2O entrepreneurs are now eager to prove is that "not everyone can become a flying pig." Therefore, the only thing that competes with each other is execution strategy and resources. If you can't raise money, no matter how big the wind is, it has nothing to do with you. Projects that have received Series A are burning fast at all costs, rushing to get more users in the next round of financing. However, business operations are not a game, and there is never a guarantee that the funds invested can be directly proportional to the users acquired, no matter how fierce the wind blows outside.

In many fields of O2O, the Matthew Effect of the market will soon appear. The third place in the market will almost certainly be eliminated. BAT’s deep participation will only intensify this (taxi-hailing software market is a classic example).

Therefore, B2B and O2O, breeze and strong wind, different industry situations, different corporate worries.

Industry growth trends are of course a necessary condition for the success of entrepreneurial projects, but I think the more critical issue is to understand where the wind comes from and what are the drivers of trend changes, rather than just sitting here Watch to see if the wind blows.

Let me make Lei Jun’s analogy more objective. What entrepreneurs need to observe is not the "wind", but a deeper insight into the changes in "air pressure", which is the source of the wind. Just as the boom in the cheap smartphone market comes from the pressure gap created by Apple's success and Android, the boom in taxi-hailing software comes from the pressure gap created by the popularity of smartphones, improvements in the mobile network environment, and the inefficient taxi industry.

In fact, in various market segments of the Chinese economy, air pressure differences are a widespread phenomenon, which gives people an intuitive feeling that there are many entrepreneurial opportunities. But what entrepreneurs worry about is how to judge when the wind blows. Take the SaaS software market we work in as an example. There is a huge gap in the judgments of different people. Some people are very optimistic and think it will become a universal thing soon. Some people are so pessimistic that it will be at least five or ten years from now. things. Such disparate judgments must have completely different logic behind them.

In an environment where the air pressure difference is clearly felt, the main reason for being timid about investing is that the cost of educating the market is too high, or that the front wave will be beaten to death on the beach by the back wave. However, if we look back at the first 15 years of China's Internet market, the real explosions were accompanied by very specific corporate cases.

The most classic cases are Taobao and Alipay. If we travel back to 10 years ago, when Taobao was founded just one year ago, the so-called industry trends faced by Jack Ma are very similar to today's B2B market. Everyone knows that the future will be very good, but we are faced with very specific difficulties and the cruel reality hinders the brightness of the future. For Taobao in 2003, the online payment environment and consumer trust were a huge stone on the way forward. Few people are optimistic that Alibaba can solve this problem.

Everyone should remember the following story. It was Alipay that launched more than two years of difficult negotiations and implementation with the hard banking system. In the end, more than 100 banks and credit card institutions were connected to Alipay. In addition, Alipay Secured transactions (payment-delivery-settlement) are key measures to build consumer trust.

The stories of the other two companies in BAT are also similar. Wu Xiaobo recalled in "Tencent Biography" that Penguin's membership system actually broke out from two very specific attempts, QQ group chat and QQ show. The former greatly increased the usage time of QQ users, while the QQ show identified the right members. The tipping point of paid demand. Many people in the industry thought that China Mobile's Monternet was the style of Penguin. In fact, the success of QQ Show was an important weight for Tencent to get rid of its dependence on Monternet. As for the later developed Q coin distribution system and increasingly e-commerce recharge purchases, they are already amplifiers of this success.

Let’s talk about a recent case in the O2O field, taxi-hailing software. It’s hard to imagine that this market segment is actually less than two years old. Some people say that the outbreak of taxi-hailing software is definitely determined by the general trend of the industry. This is really a typical bullshit conclusion based on hindsight. In the cold winter of 2012, how many people would believe that those outdoor marketers squatting in the underground passages could achieve such a high market share in one or two years. In fact, it doesn’t matter whether you believe in the general trend or not. The most important thing is that some people believe that if you want to take advantage of this unclear general trend, you must do the most difficult things.

Therefore, for investors who diversify risks, it may be right to look at the general trend of the industry, but for entrepreneurs, it is not enough, and it is not even the focus. In fact, more than 90% of projects fail not because there is no general trend, but because they do not do the right thing; more than 90% of projects succeed at the moment they are launched, and there is no rumor at all, only doubts.

There is no market where there is no buzz but no one is investing.

For investment and entrepreneurship, the focus of the problem is not on the general trend at all, not because it is unimportant, but because it is not critical enough. Those who successfully take advantage of the general trend must have taken key actions and achieved key results at critical moments.

Instead of debating when an industry will explode, it is better to spend more time and ask again, if this industry is to explode, what key investments need to be completed, and are you willing to do it?

Title picture: Repin's oil painting "Volga River Trackers"