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The distant truth.

Editor’s note: This article is from WeChat public No. “old lining” (ID: fengqitalk), the author of the old lining.

Before 3G, the Internet was still dominated by PCs. At that time, the three giants of BAT were invincible.

The launch of 3G is revolutionary. First, telecom operators lost their sense of existence. It didn’t take long for 4G to further consolidate the results. Mobile Internet began to restructure the industry. Baidu gradually fell to the altar and gave birth to a number of emerging business forms. The new unicorn company headed by the group and the byte jumped on the stage and began to lead the Internet trend.

The upcoming 5G is coming, the mobile Internet is coming to an end, the total size of users has been negatively increased, and the data of all major products have declined to some extent. The consumer Internet has entered the whole winter, except for the short video field, which is still in the final competition. The aspects are already lacking.

It is destined to be a revolutionary generation. People and people, things and things will be connected in the 5G era. The Internet model will sweep across the entire industry, and the future opportunities will come from the Internet.

Wi-Fi’s “5G (Hz)” is an old technology, representing a frequency band: 5 GHz, which is supported by most routes on the market. Because the channel capacity in the 2.4 GHz band is limited, the congestion of the device will cause the network speed to slow down. 5GHz Wi-Fi can run at a faster speed, with the disadvantage of a smaller coverage area.

Compared with Wi-Fi’s 5GHz, the “G” of mobile communication represents the “generation”. 1G is mobile communication, 2G is SMS communication, 3G is open Internet communication, 4G is 3G upgraded version, 5G is IoT communication, and the influence will affect the major industries.

The mobile Internet is in decline, and the downward pressure on the economy is high. The macro factors cause the market to urgently need revolutionary technology promotion. Therefore, the meaning of 5G will be more different than that of 3G. On June 6 this year, the Ministry of Industry and Information Technology issued a 5G commercial license. Unlike the delay of the previous 3G license, the speed increase has risen to the national strategy.

5G further extends the boundaries of the network, and Internet penetration will be more thorough.

The three main advantages of 5G network: First, the speed is faster, can reach 20 Gbit/s, 100-250 times faster than 4G; Second, the delay is lower, 4G delay is about 30-70 milliseconds, 5G The response delay is less than 1 millisecond, the interaction is almost real-time; third, the capacity is larger, 5G can process and connect more devices at the same time, and the Internet of Everything has basic guarantee.

Based on China Mobile’s 5G bodyIn the test package, the current 5G network is a hybrid network of NSA/SA. Only the NSA single-mode mobile phone is supported. In the network environment with only SA, the 5G network cannot be connected. This indicates that the 5G device still needs 4G for initial connection, and then enters 5G. Network, SA is an independent networking mode, which will completely abandon 4G coverage. It may take some time to reach this step.

The core of the mobile Internet is mainly social. The connection between mobile phones and people breaks the limitation of time and space. It is led by WeChat, plus the social ecology of live broadcast, short video, micro-business, self-media, etc. A huge impact. In the 5G era, mobile phones are still important devices, and the war on the mobile Internet will not stop, but the form of the app will change, and the visual interaction will be more diverse.

In addition to mobile phones, all kinds of devices in the 5G era will have the ability to connect and connect to each other, and the amount of data will have a huge leap. Therefore, the demand for cloud computing has soared, and Microsoft has re-emerged as the world’s largest in market value. The giants are also rushing to grab the share of cloud computing.

For major industries, 5G will start to change from the automation of the production side. After the smart phone, the smart device of sensor + cloud computing will become the main way of living and working in the future. Mobile Internet has changed the front-end sales model; 5G Internet, from production to sales, will undergo a holistic change.

The only constant in the world is the change itself. Unknown brings not only fear but also surprises.

5G is basically a technological change. Smart devices no longer stay on mobile phones. Bits and atoms will be deeply integrated. Those traditional enterprises that have been “defined” and “disappeared” for many years may actually be eliminated or Reborn, the Internet will penetrate all industries.

70% of the technology value is driven by the network effect, and the 5G technology is the same. The biggest difference between the Internet and the traditional enterprise may be the speed of development, and the Internet companies such as the multi-purpose, fun headlines, and Ruixing coffee are from start-up to market. The time required is getting shorter and shorter, and the core value of the support is the network effect.

1. Network effect simplification definition: The company’s products or services, the number of users grows, the product value will increase exponentially. From another perspective, the single-user value of network effect products depends on the total users. the amount. For example, for social products, every new user will have new social opportunities.

The network effect also has a winner-to-eat feature. The market eventually presents a monopoly or duopoly pattern, which has become commonplace on the Internet. On the industrial side, only network-effect products such as mobile phones and computers have similar phenomena. 5G is coming, more products in the industry will have network effects, and Internet companies are popular in burning money.It can happen in more industries, new retail, new car power, Internet TV, smart watches have begun.

2, direct network effect: WeChat, mobile phone, computer and future smart devices, no one will talk to themselves, so each additional device (user) will at least correspond to another device ( User), the beginning is a multiple relationship. As the user increases, the smart device and the user (user) will have a square relationship. This is the famous Metcalfe law. The product value of the network effect is the square of the total user. .

After some people suggested that the user square relationship can only represent the value of a single user group, and in some large network products, such as WeChat, usually have multiple types of user groups, and groups and groups will The new Metcalfe law is formed, so the total amount of users will actually increase the value of the product exponentially, not just the square value. This is the later Reed law, and it also lays a theoretical foundation for the Internet to burn money.

Unlike the PC era, everyone on the mobile Internet has at least one mobile phone, so it can maximize the direct network effect. The most representative is WeChat, which almost devours all users on the mobile end, Tencent’s games and instant messaging. Both belong to the direct network effect and belong to product-driven companies.

The status of mobile phones in the 5G era will decline. Because people have multiple smart devices, mobile phones will no longer resemble human organs as they are now. At that time, they may compete with user time more like the current app, and the app will be released in more. Multiple smart device channels, each of which will be a new AppStore.

3. Bilateral network effects: Users with two or more different relationships, mainly platform products, such as Taobao supply and demand, Didiji, offline professional market, industrial distribution center, shopping At the center, etc., the number of supply-side users increases, and the value of the demand-side users will increase exponentially, and vice versa.

The bilateral network effect platform, at least one side of the user is a competitive relationship, and the indirect benefits generated by the ipsilateral users will exceed the direct benefits of the uncollected. For example, in the offline professional market, all the sellers in the region operate the same category of goods, and the competition between them is fierce. However, because of the collection of similar sellers, a large number of accurate consumers are brought together, and the consumption conversion is close to 100%, compared with the scattered market. This is an impossible effect.

At least one user is a competitive relationship, so maintaining the network effect requires more cost to protect the size of the user on the competition side. Moreover, users on the competition side have no loyalty and will escape if they encounter alternatives. Therefore, the bilateral network effect Most of the platforms are operation-driven companies.

For example, the users on the same side are competing. Not only do drivers compete with passengers, but passengers in the same position also compete with drivers, especially during the peak of taxis. This leads to limited interaction between the same users. Difficult to haveThe user is sticky, so it is impossible to prevent security risks. There have been many windmill accidents, and the Drip-related business is still shut down.

In the 5G era, the bilateral network effect, the first to be determined is cloud computing.

The speed of the network, the number of devices, and the 5G feature without delay. The app on the smart device may not be downloaded at that time. It is built directly in the cloud, similar to the current small program, and it will be shared across platforms and devices. Currently, Google, Companies such as Tencent have implemented relevant internal testing of cloud games, and cloud computing has become a must for 5G.

4, Network effect critical quality: Regardless of the square or exponential value increase, the user value of different products will certainly be different. Many Internet companies estimate the user value too high, so “cemetery” “Here in sight.” The single-user value of network effect increases with the increase of total users. The value of early users will definitely be lower than the cost of customers. As the total number of users increases, the value of single users exceeds the cost of obtaining customers, which represents the critical mass.

The critical mass of user value/acquisition cost may or may not come at all. The total user volume is close to capping, and there are many products whose user value is still lower than the cost of the customer. OFO, Fun Headline, Ruixun Coffee, and Weilai Auto are typical. The growth of user volume has slowed down, and enterprises are still suffering huge losses. These enterprises are more playing capital games.

Users in the 5G era have more smart devices and more cross-platform connections, so network effects will be further enhanced and user value will be higher. A cross-platform, multi-device business environment will also lead to fewer “big and full” opportunities, and “small and beautiful” products will increase. The next “WeChat” will be able to take all the intelligence even if it can eat all the users on the mobile phone. Equipment, so 5G will bring more entrepreneurial opportunities.

5. Reverse network effect: More users will not always bring more product value. After the user reaches the saturation stage, even if the total amount increases, not only users The value will not increase, and it is even possible to reverse the operation, greatly increasing management costs and reducing product value.

WeChat is very successful and is also typical of reverse network effects. The number of WeChat users has already been saturated. Most of the current accounts are marketing numbers. KOC and Weishang have become popular, and the marketing number has irreversible destructive effect on WeChat group and circle of friends. WeChat decentralized rules are designed. Did not find a suitable remedy, so it also formed a reverse network effect, the data of each column has been greatly reduced.

The so-called thousand-mile embankment collapses in the ant hole. For network effect products, the biggest value may not be the growth rate, but the product ceiling. The WeChat ceiling is all users of the mobile Internet, and has achieved the ultimate.

And in most niche markets, the product user limit is lower, the user volume will soon be saturated, and the low-quality user bad money drives out the good money, accelerating the consumption of the product life cycle, soThe user value trade-off of reverse network effects is crucial, not only for the screening mechanism of speculative groups, but also for possible conflict choices among multi-user groups.

Knowing early is a niche community with strong user identity, gathering a large number of elites, and later knowing to choose to lower the content threshold to increase the total number of users, resulting in a large number of elites, but the value of the product is constantly Ascending, the latest round of valuation reached 3.5 billion US dollars, far exceeding the foreign benchmark product Quora, knowing that this selective abandonment of the elite’s operation is a response to the reverse network effect, although it is difficult to cover Determinism.

The 5G wide-ranging Xiaomi company has started to make mobile phones from scratch. There is no technical reserve in the early stage. The R&D investment is not competitive with other competing products. It can meet the needs of users at the mid-to-low price, and more rely on the front-end innovation. The product sales method has a large number of loyal rice noodles, which was once invincible in the middle and low-grade, and the early days were more popular.

With the introduction of mid-to-high-end price phones, Xiaomi’s basic performance requirements for mobile phones are higher due to the user’s use of this consumer layer, thus exposing multiple performance quality problems of insufficient technical capabilities of Xiaomi. Of course, Xiaomi is good at network washing, and sales reputation is not affected, but it is difficult to maintain the repurchase of old users. It is a typical case of blindly expanding the scale of users and attracting reverse network effects. Although the financial report after listing is good-looking, the stock price has been smashed to this day.

Regardless of how 5G changes, building the future around “unchanged” is the best business logic.

The network effect has mixed advantages and disadvantages. It is not a long-term strategy. After the user is saturated, it is even more troublesome. The overall number of mobile Internet users has been negative, Tencent has started To B, and those companies that have network effects as the core are welcoming the cold winter. The company that operates the direct network effect has become the “App factory”; The effect of the company is to further gain cost advantages.

Tencent, bytebeat, Baidu These companies are typical “app factories”, relying on the advantages of star products, the business involves all aspects, the kaleidoscope (grass lottery)-style strategic layout, expecting luck to come again, re-create A star product. Tencent gave birth to WeChat after QQ. The bytebeat was born after the headline today. Baidu was Baidu after Baidu.

Alibaba, Mei Tuan, Xiaomi are typical “cost advantages”, also called economies of scale. They use large-scale management and control capabilities to reduce supply chain costs and product pricing, which makes competitors lose profit margins.

Millet is the main price/performance ratio. Lei Jun promises that the net profit of mobile phones will never exceed 5%. Regardless of the actual situation, at least the business philosophy of Xiaomi is economies of scale. The US group’s take-out list involves 3 types of users, and the user chooses and pays.