This article is one of “Whale Hunting”.

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This column was created by Huxun and its partners. The partner of this issue is Jingwei China.

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In 2020, China’s SaaS is facing a new turning point.

On the one hand, SaaS in the traditional field has begun to show its head effect, and early investors have gradually entered the harvest season, and the leading companies have begun to face new problems. On the other hand, the emerging SaaS market is surging. Who can gain the first-mover advantage? The ability to bet on success is still a magical unknown.

This time, Tiger Sniff talks with Jingwei China partner Xiong Fei, trying to describe the current situation of China’s corporate service market from the perspective of Jingwei China, and explore the new battlefield of the Nuggets in the future. This time, we will focus on the following topics:

  • The Matthew effect has appeared in popular tracks

  • The head enterprise service company has entered a new stage and began to face new problems

  • New track for the Nuggets in the future

The Matthew effect has appeared on the popular track

“The impact of the epidemic on the entire domestic SaaS industry cannot be considered positive.” But from Xiong Fei’s current observations, it is not entirely negative.

It’s not a good thing. It means that the company’s operation must first ensure production, and secondly, the speed of internal approval and decision-making may be slower than before.

It’s not bad, because the industry’s initial fear of the cliff-like decline has not appeared, and the basic business of the company is fine. Some SaaS companies have grasped the “opportunities” in the “crisis” and achieved survival and growth.

In fact, many SaaS companies invested by Jingwei have reached the harvest season-these companies have revenues in the order of 100 million yuan or hundreds of millions, and they have maintained rapid growth.

“In many popular fields such as cloud communications, CRM, and HRM, the Matthew effect has become more obvious. Jingwei invested in Beisenyun, Gaiya Workshop, and Sales Yi are all leading companies in their respective tracks. These companies have fully verified In addition to the economic model, because the initial investment of SaaS is high, but with the steady increase in the renewal rate, the revenue of these companies can now fully cover the investment in research and development and customer acquisition.

In the past, Jingwei preferred to invest in general SaaS. Xiong Fei believes that most of the enterprise service companies invested by Jingwei mainly serve large and medium-sized customers. Even in the case of the epidemic, the customers of these companies did not reduce their software budgets, and the company renewed their fees. The rates are pretty good.

This is the case, these companies can resist the instability brought by the economic environment and the market.

As for the customization problems brought about by being a medium and large customer, Xiong Fei said jokingly that Messi has not been the main player in Barcelona since he was 12 years old, and enterprises also need a little progress to be a medium and large customer.

For example, in the first year of a SaaS company, it has a customer with a scale of 1,000 people, and the proportion of customization is small or non-existent. On this basis, it may be a customer with a scale of 2,000 in the second year. When the customer with a scale of 5,000 people a year becomes a customer with a scale of 10,000 in the fourth year, there may be a little more customization requirements, but the user scale is made little by little. In this way, customization The chemical ratio can always be kept relatively small, and gradually all the experience can be deposited into a product.

In the vertical SaaS field that focuses on a certain industry, Jingwei also has a layout, such as Taimei and Jiage. For vertical SaaS vendors, Jingwei pays more attention to the industry practice of the enterprise and the background of the founder. Take Taimei Medical as an example. It has served many domestic first-line pharmaceutical factories. The founder Zhao Lu graduated from Fudan MedicineThe institute has many years of experience in pharmaceutical companies and has been an industry expert since the beginning of his business.

To sum up, there are three points in the logic of Jingwei Investment To B: The first premise is the big market, such as CRM, HRM, electronic signatures, etc., and the second is the product-oriented founder, that is, through Communicate with the founder to understand whether their products are symptomatic of the pain points of the industry. The third is to invest in experienced and efficient companies, which requires the invested company to have a clear and complete pricing and sales system.

Xiong Fei also cited Gaia Workshop in the field of labor management as an example. Gaia Workshop was established in 2010. The founding team was the first batch of employees from Kronos (the world’s largest labor management software manufacturer) in China. In 2015, Jingwei invested in Gaia Factory. At that time, Gaia had many leading customers in the industry, but they were all on premises. Also in 2015, Gaia Factory CEO Zhang Xinbo noticed the market. Therefore, I immediately made a decision—to switch to SaaS. In fact, the transition to SaaS is a painful thing. Because on premises revenue is high, and SaaS charges a year, the company structure also changes.

However, it now appears that the decision of Gaia Workshop was correct. On the one hand, Kronos, which is doing local deployment, has already withdrawn from China this year; on the other hand, now 70 to 80% of Gaia’s revenue comes from SaaS. Xiong Fei believes that in five years’ time, almost 90% of Gaia’s revenue will be generated. From SaaS.

As for the biggest difference between the Chinese and American SaaS markets or the To B field, Xiong Fei believes that the same is greater than the difference.

“If you have to say that it is different, the main reason is that there are not so many Chinese players, and the concentration of top players will be higher. Because the US corporate service field is a bush, every vertical track has Small leaders, as a whole, most track companies can still get a share, but in the future in many areas in China will be a dominant situation.” Xiong Fei mentioned.

Based on the environment and trends of the domestic enterprise service market, Xiong Fei believes that becoming the head is the goal of all startups, so he has also constantly emphasized the importance of champion awareness. He once said in the internal training: “Championship is not only the quality of an excellent founder, but also a requirement for yourself, because the VC industry is a competitive stadium. Ultimately, it depends on the performance. Who is good or bad has a naked ranking. The difference between the first place and the tenth place is not a few places, it is exponential. In my investment field, I do not accept being the second or third place.”

Data source: Organize according to public information

Head enterprise service startups have entered a new stage and face new problems

In a relatively early stage, what companies need to do is to seize opportunities, think about strategies, and then take root in the industry. Of course, at this stage, companies will also face certain problems or take some detours.

From Xiong Fei’s experience, the early lack of attention to human efficiency is a very common problem. After companies have raised tens of millions or hundreds of millions of RMB, they will start to sell like crazy to maintain rapid growth. However, in fact, To B’s business fights for renewal and word of mouth. “Fudge someone else bought it, and the final follow-up rate is only 50 or 60%, which is meaningless.”

In addition, the detours that many companies have taken are driven by marketing, not by products.

Xiong Fei believes that product and marketing are a multiplier effect. For example, the product is 0-10, and the marketing is also 0-10. When the product is 3, many companies choose to fill up marketing. But I found that it couldn’t go up after it reached 30, because it was very slow to make products. So early marketing is done 2-4, and when the product reaches 7 or 8 o’clock, then the marketing is filled up. The effect is very obvious.

It is undeniable that the enterprise service companies entering the harvest season are also facing new problems.

Xiong Fei said that the most obvious one is the problem of organization. Before it was easy for a few founders to manage one or two hundred people, but as the company grew, many companies quickly grew to one or two thousand people. How to improve The executive power of an enterprise and the rapid transmission of its culture and values ​​are new problems that current managers need to face.

On this point, Ji Weiguo, CEO of Beisen, a company invested by Jingwei, has the same view and made his own statement. He talksHowever, as the company’s staff grows, organizational problems will inevitably arise. So this year, Beisen spent 9 months to make internal process organization changes, hoping to establish an end-to-end customer-centric process organization.

Looking at these growth companies as a whole, an unbreakable truth is that there is really no shortcut to SaaS, only solid products.

For example, there are two ways of signing electronic signatures. One is to install the version, the order amount is relatively large, and the income is relatively fast. The outside world seems to be a tricky way, and the other is to do SaaS, but SaaS Compared with the installed version, SaaS cannot be customized. Secondly, the main market for the signing is also selected for medium and large enterprises, which is also different from its competitors.

Although this did not get a considerable one-time fee in the early stage, because electronic signatures often exist on both sides of the contract, after signing a company, if the SaaS company’s products are good enough, then the company’s customers and upstream and downstream companies Will also be pulled to the electronic signature platform. As large and medium-sized companies drive peripheral companies to use the platform, network effects will slowly form.

To be specific, early customized software companies may have good revenues and have the opportunity to impact the capital market. However, the challenge for this type of company is that it is not easy to scale up, and cannot form an absolute leader in the industry. Short-term revenue will be reduced, but long-term competition will become low-margin competition.

There is another option to increase income quickly in the early stage. For example, when a company’s product reaches 60 points, you can find a small and medium-sized enterprise that does not know how to do it, and you can sell it for 1 million, but it is very difficult to sell this product to a large company. Because based on experience, large companies are willing to buy a product when it scores 80 points or more, but even if it scores 80 points, large companies are only willing to spend 300,000.

Speaking of this, some people may have questions: Why is there so much money, and enterprises are willing to expand into the large enterprise market.

This is because, on the one hand, the early customers of the software company contributed income, but more precious is that the early large customers can help the company polish the products, that is, build a good foundation for the house. Therefore, even if you choose to sign up and give up profit, you must win over big customers so that you can enjoy the great freedom of products in the future.

This also proves why Jingwei pays more attention to product-based companies when investing.

After all, the precipitation of product-based companies in the underlying development and productization capabilities can support the company’s expansion from one product line to multiple product lines, from one fieldExpanding to multiple areas, the final market ceiling of such a company will be much higher than that of a non-product company.

New track for the Nuggets in the future

When the first batch of SaaS companies enter the harvest season, a number of new giants in new fields are also quietly growing. When it comes to the business service field that is promising in the future, Xiong Fei also shared his views.

The first thing mentioned is the developer ecology. In Jingwei’s view, this field is still in the ascendant stage. Jingwei has invested in PingCAP, graph database NebulaDB, etc. in this field.

If you further subdivide, in the field of developers, Jingwei pays special attention to the huge track of data. The amount of data is increasing at a rate of 3 to 5 times every year, which is an increase of 100 times in four years. The throughput, storage, and processing of huge amounts of data cannot be met by traditional databases and must be solved by a new generation of products. Therefore, distributed databases are a key area of ​​the latitude and longitude layout.

Secondly, low codes are also favored by Jingwei. With regard to low code, Xiong Fei holds his own view. He believes that low code is a technology, but any technology needs to be turned into a product and eventually a commodity. Therefore, a good low-code company must be a platform, not just technology.

It is worth mentioning that it is generally difficult to invest in open source projects, because there is basically only one winner per track, the head effect is very obvious, and the valuation of open source projects is higher than that of general software companies. Jingwei has been observing the underlying technology for five or six years, but the frequency of real shots is about one every two years.

In addition to general SaaS, there are also great opportunities for vertical SaaS. The industrial Internet, which is very popular this year, also belongs to vertical SaaS. It needs to be clear here that vertical SaaS does not revolve around a small function point, but to make an industry-specific solution for a certain pain point, and gradually connect the relevant parties of the entire industry.

In the SaaS field, it’s not that good technology can make customers succeed. The key is to solve the problem. Therefore, when investing in the vertical SaaS field, Jingwei tends to communicate with customers on the front line. “To B’s products are actually very clear. If there is value created, you can have an intuitive understanding by going to the frontline to communicate and do some customer interviews.” As a partner, Xiong Fei is still running on the front line. In his opinion, it is risky. In the arena of investment, the real differentiated cognition comes from the simplest face-to-face communication.

#看完别走# Tiger Sniff formed a Hushan Xing·industry exchange group, in which there are more high-quality exchanges and discussions in the field of enterprise services , Zhang Xue, the author of this article, is also in the group, want to join the discussion? You may wish to click on HereFill in the questionnaire and join us~The review is strict (for group friends), please fill it out carefully.