Your time is limited, your team time is limited, the market gives you more limited time, don’t do things that challenge the laws of physics!
Editor’s note: This article is from WeChat public account “Basic Capital< span> “ (ID: conswall_cap ) , author: Long Wei Nute East country, Editor: Chang Lei Capital von [Span> . The original title “Ten 30 To B Ventures (30) written by 30 million”
The college entrance examination passed in 2019, and the students who passed the exam went to a new stage in their lives.
Entrepreneurship and college entrance examinations are very similar: students who are not partial and have good classes can often enter the ivory tower in a stable manner. However, the most feared is the kind of partiality.
Because of the short leg, I don’t know if there are more subjects in other subjects to fill this pit.
The pit of entrepreneurship, fell into the frustration, climbed out and called growth! A little careless, a pit can not come out.
Successful entrepreneurs are stepping on the pit as early as possible and at a small cost. They quickly climb out to adjust, master the experience, and avoid more pits in the future.
Follow me, let me talk about the six-year story of my business…
Don’t know what to do?
Six years ago, when I was officially resigned from the chrysanthemum, I was a little bit excited, a little bit excited, and a little bit uneasy, and started my entrepreneurial journey.
In fact, there have been two failed experiences before the establishment of Winut.
One time was a business failure seven years ago, and one was six years ago. (Experience, sometimes bought with time and money; also thank the family again and again, support me so much to toss)
The former leader began to slap the “minenel personnel positioning”, and ended up in the “smart router” development. This was the same hot direction as the current “artificial intelligence” and “RPA” six years ago.
It turns out that smart routers have not become a new market for startup teams, and star projects and routes have fallen in the past two years.
Intelligent routing projects, before they had time to make prototypes, the former leaders began to empathize, and I was forced to give up.
So, what? It became the most urgent problem to be solved before my eyes.
I was at Huawei for seven years and has been doing research and development of information security products.
The division of labor in the big factory is very fine. Everyone has a big field of vision in front of the chimney. It takes a long time, and the outside world does not know what it is.
Do it technically, and only know a small piece.
Doing sales, the genes that were not promoted at the time.
What should I do? Where is the future way out? I don’t know.
Fortunately, the colleague of the previous unit introduced me to the current CTO. He left the company with me before and after, and he was just a team to make a new direction – industrial information security.
This team has a background in studying abroad. When I first heard about this direction, I immediately thought of the industrial network security problems I encountered when I was on a business trip at the old club.
A PLC (programmable controller) used for valve control of urban water pipelines. When connected to the Internet through a network, when the network attack is not working properly, the connection is intermittent, and the valves under control are not controlled. ;
I thought at the time that these industrial equipments would be connected in the future. If they were attacked by cyber attacks, wouldn’t the entire city’s water pipeline be out of control?
As well as all facilities involved in the network, all infrastructure such as power grids, power plants, and rail transit will also be attacked.
Typical industrial security incidents
So, when I heard that there are already startup companies in the United States doing industrial information security (then not called industrial network security at that time), this new direction, I think this is a good direction.
The first reason is that no one in the country has done it. There are related technologies in foreign countries. After 30 years of industrialization, China’s industrial scale is so large. In the present words, it is: forward-looking areas, high technical thresholds, and a blue ocean market!
The second reason is that this field is quite consistent with my work background. My major is industrial automation. I have been doing industrial automation related research and development for the first three years after graduation. After going to the chrysanthemum factory, I have done it for another 7 years. information security.
This also coincides with the need for composite technical talents in the direction of industrial control network security.
The most important point is that I have always been influenced by the classic line in Hong Kong film, “It’s better to be cooked than cooked.” “Industrial information security” is my most basic, so start with the best.
The friends who are entrepreneurs around me, except for a very small number, most people will choose to expand after getting financing!
With a friend, Angel Wheel took 20 million, immediately recruited and bought horses, began to expand enrollment, and each month’s salary was nearly 2 million.
He thought that there would be a lot of sales contracts and refunds soon, but he didn’t expect to have a very long business cycle. From one pre-existing exchange to bidding, and then to signing a contract, it was less than half a year, and more than one or two. year.
In just less than half a year after the completion of the fund, the cash flow began to tighten, and the second round of financing had to be carried out immediately, which was very passive.
Another friend, playing bigger!
Every time I get the financing, I spend the money at the fastest speed, including several times of recruiting, overwhelming marketing, etc., to spend money in accordance with the speed of all financing for 6 months. !
Of course, people are not stupid. The result is that the company’s market influence is rapidly increasing, it is favored by more investors, and it can also integrate more money at a higher price.
Then continue to spend money on all the financing methods of 6 months!
This way, when the market is booming, it is useful, it can quickly widen the gap with competitors, and stand out in the market.
But once the market fluctuates or financing difficulties, such a weak capital reserve will be rapidly expanded and collapsed.
My friend, after three consecutive successful financings, fell on the eve of the fourth financing. The reason is very simple, because the central bank’s new strict regulatory policy, LP’s money is not good, VC has changed. Be more cautious and the financing cycle is lengthened!
In the to B field, burning money can’t burn any good business model.
B-side purchasing decisions are different from C-side, especially for big B and big G.
Looking back at the size of our company in the past few years, 50 people at the end of 15 years, 80 people at the end of 16 years, 120 people at the end of 17 years, and 150 people in 18 years. There are also recruitment plans this year. That is to increase the number of dozens of people.
In the past few years, we have had a financing every year, and the amount of financing has almost doubled every year. It is the most capital-loving company in the entire track.
At the same time, our annual revenue is also more than 100% growth, and 19 years is expected to exceed the small target of 100 million.
The entire company uses software (fangxing) to manage all projects, contracts, reimbursement, etc.
So far, I have stayed at the Express Business Hotel on a business trip.
Overall, shouldIn the market situation of the year, the market is expected to grow by more than three times, and the speed of team expansion is accelerated.
As a result, until November of the year, our orders had a noticeable improvement. For the whole year, the increase in revenue, especially the return, was not as big as expected, which directly led to the tight cash flow.
The C-round financing was urgently started. Fortunately, the capital market was relatively good at that time, and the financing was successfully obtained, and the difficulties were overcome.
It must be financed in a smooth time, and life-saving money will not come from venture capitalists.
VC’s money is used to help.
As a person coming over, I have the following suggestions for the speed of development:
1. The first thing to get financing is how long it takes to calculate the money in the most conservative way. If this calculation is for twelve months, you should do subtraction on this basis. Who is after all? There are periods of chaotic consumption of dizziness.
2. It is recommended that startups adopt a strict budget system from the second year, and use the budget to constrain the desire to spend money. Once a department’s expenses exceed the budget, it needs to be warned.
3. Opening up a number of ways to engage in money, financing is the foundation. On this basis, it is necessary to fully exploit the various forms of lending by banks and other financial institutions. As long as the interest rate is not more than two digits, we must first say it. At the same time, employees can also be mobilized to purchase part of their employees’ equity. On the one hand, they can enhance team cohesion, and on the other hand, they can also reserve some winter reserves.
4. Personnel recruitment should be vigilant enough. Every business unit has its own original impulse to grow. The lack of people is just an illusion.
Decide if you can make a big contract.
It’s the cash flow that determines the company’s life and death.
First make a few big projects to create revenue and raise valuations?
At the beginning of the business, most of the founders (excluding the founders with a particularly strong technical complex) will have a strong desire for revenue, and they want to use the beautiful revenue data to gain recognition from the team, investors and the market.
Moreover, for the valuation of early companies, when the price-earnings ratio PE is not applicable, the PS calculation method is generally accepted by everyone. There is 10 million revenues. According to ten times PS, you can get 100 million. Valuation; with 20 million in revenue, you can get a valuation of 200 million.