Investment opportunities in the enterprise service sector.
Editor’s note: This article is from WeChat public account “Titanium Capital” (ID: tmtcapital), author of the Titanium Capital Institute.
Since the first year of enterprise service “first year”, the domestic venture capital circle has experienced a roller coaster-style shock. By the end of 2019, after several iterations, the entire chain of corporate services from demand to entrepreneurship to investment was more rational and returned to commercial nature.
Since the beginning of its establishment in 2015, Titanium Capital has been paying attention to China’s corporate service and entrepreneurship and investment groups. It has always called for the venture capital industry to treat the technology, products, business models and estimates of the invested companies more pragmatically. Values and exit paths emphasize the need to participate in the Chinese corporate service venture capital market with a more patient attitude. Titan Capital believes that by 2025, it is difficult for China to appear in the 100 billion market enterprise service company (not counting AT). In the 30th issue of Titanium Capital “Technology and Enterprise Services Investor Research Institute”, share the guest service company that Chen Liwei believes is expected to run out of market value of 10 billion.
Cheng Liwei, a partner of Oriental Fuhai, led the team. Since 2012, he has been cutting into the field of corporate services. For the past seven years, he has repeatedly looked at the project, adjusted the enterprise, and researched the subdivision field with the pragmatic attitude of “Day Gong’s death”. the process of. Looking back, these seven years are very valuable, because the investment in business services just started in 2012 and ushered in the first year in 2015. In the 30th issue of Titanium Capital “Technology and Enterprise Services Investors”, Chen Liwei shared his experience of leading the team from 2012 to the present.
First, the practice of domestic new generation enterprise service investment from the time dimension
UF and Kingdee are the earliest enterprise-level service companies in China, with enterprise software as their main business. By 2019, UF has gone through 30 years of history, and it is still the most important and strongest force in domestic enterprise service. However, from the perspective of current investors, ERP traditional software companies represented by UF and Kingdee are not treated as a new generation of enterprise-level service companies. Because these companies are listed earlier, investors do not have the opportunity to invest heavily.
From an investment perspective, a new generation of enterprise-class services was born in the context of the cloud computing era. In 2006, the first year of cloud computing, Google first proposed the “cloud computing” concept, and Amazon also launched AWS. But in fact, the cloud computing products are shaped and initially developed. It should be 2008, Microsoft released Azure, Go.Ogle launched App Engine and Alibaba Cloud started. In 2011, the National Institute of Standards and Technology of the United States officially gave the definition of three layers of IaaS, PAAS, and SaaS.
From 2004 to 2011, it should be the initial stage of the new generation of enterprise-level services in China. The pioneering manufacturers of domestic SaaS (800CRM, later changed to 800APP), xTools, and current targets have been established. Opened the curtain of domestic software innovation development. Many vendors began to enter the so-called “online software market” during this period. If you know more about the enterprise service track, you will know that Babai is the first SaaS software to localize Salesforce’s product features.
2011 to 2014 is the stage of capital entry, especially as VC Capital begins to enter the next generation of enterprise-level services. Why is 2011 more important? First, the most important circuits for enterprise-level services, namely CRM track and HR track, have begun to emerge from start-up companies, including the domestic CRM Big Three red circle marketing, share sales, sales and other conveniences; second, The mainstream VC organizations began to try to invest in a new generation of enterprise-level software with a large amount of capital; third, from 2011, CRM, HR, customer service, office collaboration, BI, transactional B2B and other large-scale general-purpose enterprise services The track began to receive capital-intensive attention.
Orient Fuhai began investing in red circle marketing at the end of 2011 and entered the enterprise-level service sector. At that time, the Oriental Fuhai team was still doing direct investment by brokers, from a purely financial and financial perspective. The advantage of the brokerage is that the research ability is strong. At that time, the development history of the enterprise service in the United States was studied through the brokerage resources. It was found that this is a long-cycle, high-capacity, and constantly rising track, so it has been in the corporate service competition since the end of 2011. Road investment, up to now seven years or so.
2015 to 2017 is the stage of barbaric growth.
View the characteristics of this stage from several dimensions:
First, the market demand is exploding rapidly, and the performance of each segment of the track has shown a rapid outbreak, but in retrospect it is extensive growth; Second, the personnel scale has increased rapidly, and the scale of the leading companies in each track has increased. The fastest period is from 2015 to 2017. CRM was a very hot track at that time. The size of the head company was from 100 to 1,000 or even thousands in just two or three years, which laid a big hidden danger for subsequent development;
Three, capital’s massive entry, the large-scale capital investment of the US dollar fund into enterprise-level services, that is, from 2015 to 2017, for example, the three companies of CRM track have a total of 2 billion yuan of funds, which is quite equivalent to ToB. Large financing amount,The entire market prophetic organization also began to enter the enterprise service track on a large scale from 2015 to 2017;
Four, the valuation has risen sharply. At this stage, the valuation growth is higher than the performance growth. Although it is based on foreign PS valuation, the industry head company’s general cash income PS is 10%. 20 times, even with a relatively faster growth rate to get a higher PS;
Five, the loss continued to increase, because of the rapid influx of funds and the rapid growth of sales revenue. The founder of the head company in the track was very confident and even confident, so that it is very optimistic about future expectations and bears tolerance for business operations. The degree is very high, and it has laid a very big foreshadowing for the next few years of adjustment.
From 2018 to the present is the stage of returning to the essence of business. The most obvious features are several:
First, the perception of capital efficiency. In 2015 to 2017, hot money is relatively easy, entrepreneurs are not clear about capital efficiency, and with a good macro environment, companies spend more. But in 2018, the key word of enterprise-level service is to return to the essence of business. The most important feature is the high attention to capital efficiency. Some time ago, Datadog, an application performance monitoring enterprise service company listed in the US, had a very amazing number in the prospectus, that is, the capital efficiency reached nearly 10 times, that is, the capital of 100 million US dollars generated at least one billion dollars. This is very high capital efficiency. ToC’s capital efficiency is relatively low. For Wework, which recently suspended its listing, from the $65 billion listing forecast to $15 billion now, Wework financing is close to $10 billion, so the current ToC capital efficiency is Investors are a big puzzle and worry.
Second, from 2018 to the present, head entrepreneurs have maintained a high degree of restraint against ineffective growth, moving from a simple single sales drive to a business value drive. Although the income growth rate is fast from 2015 to 2017, we can’t wait for 200% and 300% growth. However, the renewal rate and renewal rate of many startups are very low. The problem behind this is that low-value customers should not waste sales power or In terms of sales resources, these customers will not bring in additional purchases or repurchase in the future. The investment is basically an increase in education costs and silent costs. Maintaining a high degree of restraint against ineffective growth, one of the best companies in the industry is Zoho, a SaaS company in India, and a very important figure in its financial report is Zoho’s sales expense ratio. The sales rate of enterprise-level services or SaaS companies is very high, generally higher than 40% or higher, and is based on large-scale sales investment to promote sales growth of front-end sales, but Zoho’s sales expense ratio Keep it within 20% for a long time. The possible reasons are as follows: First, the Indian capital market is not veryDa, the financing environment is not very good, the founder of Zoho company is not very smooth at the beginning, relying on its own accumulation to promote growth; Second, the founder’s business philosophy, not to waste sales resources on invalid customers. Therefore, for the founder, when the financing environment is good, the experience may not be deep, but once the financing environment fluctuates, the effectiveness of growth will be very concerned.
Third, from the imitation of product functions to the deepening of business value. The so-called domestic new-generation enterprise-level service company, at the beginning of its birth, is labeled Chinese version of Salesforce, Workday and so on. In the function research and development of products, the functional imitation is based on foreign products. For enterprise-level service companies, one of the most important requirements of a product is to satisfy the customer’s business development, that is to say, it has actual value for the customer’s business. Therefore, when entering the medium-sized and above customers after a short-term fast sprint, it is found that the product capability is insufficient or The product value point is not deep enough, resulting in a bottleneck in sales growth.
Fourth, since 2018, the mentality of many invested companies or investment companies has generally been adjusted to the frequency of ToB enterprise development in terms of long-termism. The most radical founders of some segmental tracks have passed 2015-2018. The big ups and downs also have a high degree of consistency in the long-term nature of ToB. Objectively speaking, everyone realizes that this track is a bit like a tortoise and a rabbit race. It is difficult to have a final good result when running and stopping. The best way is to step by step and look at the entrepreneurship of enterprise-level services with a marathon mentality. You can’t look at this track with the mentality of a hundred meters competition.
Five, the squeeze of the valuation bubble. From 2018 to the present, although the funds of the enterprise-level service track are still in large-scale influx, the level of the founder’s mentality and the level of corporate valuation are increasingly returning to a reasonable level. A simple indicator is that the current PS valuation base has returned from the original cash income to the financial recognition income.
After 2019, looking forward to 3 to 5 years is the golden age. The ten-fold growth of US enterprise services for ten years is an enviable environment and development result. When will China’s enterprise-level services usher in a real golden age? In the past few years, China’s enterprise service industry has been relatively tepid, but from the perspective of heads in various fields, the golden age of China’s enterprise services will indeed be ushered in the next three to five years. The definition of the golden age can be expected from several aspects:
First, in the next three to five years, a group of listed companies with a new generation of enterprise-level services will be born. The ARR is over RMB 1 billion and the market value is over RMB 10 billion. Now, only a limited number of new-generation enterprise-level service companies such as Weimeng and Youzan are listed, but there will be more than 10 listed companies in the next three to five years. This has an intuitive impact on this game. The big capital of interest can really see the money-making effect, and thenThe sustainable investment of the growth line funds will form a positive cycle, which is also the problem of the profit effect currently lacking in China’s enterprise services.
Second, in the next three to five years, we will see the prosperity and development of the enterprise-level service ecosystem promoted by the Internet giant represented by BAT. The ecology of the enterprise-level service sector in the United States is very good. It is not only supported by a very open capital market, but also a group of enterprise-level service giants provide investment and mergers and acquisitions of the “base”, and a group of enterprise-level service startups can complete The initial accumulation of capital, talent and technology supported the second, third and fourth ventures. In the past, China’s enterprise-level services did not have an ecological “base”. However, UF and Kingdee, which had high hopes, had not taken on the “base” of China’s enterprise-level service ecology because of their relatively low market capitalization and the relatively traditional investment M&A philosophy. Heavy duty. However, since 2018, Internet giants such as BAT, headlines, Xiaomi, and Jingdong have all taken ToB and enterprise-level services as important strategic directions, which will definitely support China’s enterprise-level service ecological prosperity in the future.
Third, the next three to five years will be a key period or a period of speed for the digital transformation of Chinese companies. The digital transformation of Chinese enterprises will provide a very important industrial environment for the outbreak of market demand for Chinese enterprise service companies. Why are you optimistic about the enterprise service track? The core point is that the customer companies facing enterprise-level services will face the background of the accelerated period of digital transformation. The digital transformation index of Chinese enterprises can be compared to the China Urbanization Rate Index. One of the most important drivers of economic growth in China’s reform and opening up is the urbanization rate, and the increase in urbanization rate is one of the core factors driving China’s GDP growth. Similarly, the digital transformation index of Chinese enterprises is also the vane of China’s enterprise-level service competition. In the sample statistics reported by Accenture last year, about 37% of China’s enterprises started digital transformation, and 7% of enterprises achieved digital transformation. This is reflected in the fact that technology-driven new business sales revenue growth and sales revenue accounted for more than 50%. In this year’s Accenture report, the index is rising again. The penetration of digital transformation of Chinese enterprises has reached 45%. The head company that relies on the digital transformation of enterprises to generate real value has increased from 7% last year to 9%. It can be said that Chinese enterprises are digitized. Transformation is a big trend. In the next three to five years, it will surely enter the acceleration phase. China’s enterprise-level services will greatly increase the willingness to pay and the ability to pay for customers.
The above factors are supporting the next three to five years. The Chinese enterprise service track will be the foundation of the golden age, which can be foreseen from the income level and listing.
Second, How to cultivate investment ability in the enterprise-level service field?
To be good at investing in enterprise-level services, the first and most crucial thing is to have the mentality of a day. It is said that the word hanging by the founder of Di Di’s founder, Cheng Wei, is “the day of the arch,” which is also the most important support for his business philosophy when he burns the most flustered.
For investors, the tempering of investment ability in the enterprise-level service field must have the mentality of a day, how to understand? Is it possible to see at least one enterprise-level service BP every day, at least one enterprise-level service company every week, at least one monthly research on a business-level service segment, at least each year An insight into the enterprise service industry. There will be results from the beginning and the end of the decade. Chen Liwei also asked the team of Oriental Fuhai to look at the tempering of investment ability in the dimensions of daily, weekly, monthly, annual and ten-year. Because the business service is not in a hurry, the mentality is very important, for entrepreneurs, and for investors.
The enterprise service track is relatively slow, but from a long-term perspective, the capital efficiency is still high enough, and the future investment in this track will definitely produce a very good rate of return. The yield of the ToB track, which is calculated from the yields of thousands of VCs and PE funds in the United States, is significantly higher than that of the ToC track, so the value of compound interest may be more apparent on the ToB track. Considering this clearly, it will not be slow to invest in the mentality of a day.
Second, you need to have a degree of interest from technology to industry. Many industry friends will exchange which track or focus on which industries are concerned. Investors will have their own differentiation or segmentation method on the track, but the track spans from the bottom technology to the upper level. Industry solutions are actually quite large. This is a big challenge for investors in enterprise-level services. It depends on the underlying technological changes and replacements, but also has upper-level industry experience and can identify better industry solutions. The industry solutions and the underlying technologies are generally two-pronged. For investment, if you want to get through such a large span of technology to industry solutions, you must maintain a very high level of interest, both technically interested and at the same time Interested in industry solutions. The Oriental Fuhai team is not a technical background, but it must have a large span in this track. Therefore, starting from the beginning of 2018, Oriental Fuhai requires the team to be more integrated into the technical circle, including communication with the CTO of the invested company, and entering the technology. Listen to and learn more in the forum, make up for the technical shortcomings as much as possible, and the most important thing behind this is the interest.
Again, it is a meticulous actuarial analysis ability. The development of enterprise-level service companies is a step-by-step operation. You can do simulations behind them, or predict the development trend and development of the company in the next one or two or three years from more detailed indicators. This may be enterprise-level. A very big difference between service companies and ToC companies. At the corporate service trackInvesting, to a certain extent, may have the ability to be similar to an actuary, such as the company’s customer cost, per capita into a single cycle, sales staff into a single distribution, customer structure, customer value, LTV value, etc. The company’s sales efficiency analysis, including analysis of operational efficiency, operation and maintenance rates and other indicators, while looking ahead to the future. From the perspective of business operations, the analysis of refined historical indicators and the calculation of future indicators for different business modules is the ability to make investments in this circuit.
In the end, after investing, the investment can be done lightly. People’s nature is to hope to be able to do relatively simple things, to do the same investment, and hope to simplify and simplify, not too complicated and too heavy. So how can we make the investment lighter? By summing up and thinking: If you want to be light on investment, it must be done very seriously. It has been said that it is necessary to strengthen post-investment services. After the investment in enterprise-level services, in addition to the general exchange of experience in investment companies, it is also necessary to promote customer sharing and even product integration, and finally promote mutual ecology. Pulling out these jobs is about finding people, finding money, finding customers, and finding strategies. If these aspects are relatively heavy, they will play a very important role and value in the tempering of investment capabilities. They will have different understandings of sales, operations, operation and maintenance, internal management, product development, etc. More will look at the entrepreneurial perspective and understand how to invest in the end. If you want to make quick decisions and judgments on the front-end investment as soon as possible and get a relatively high probability of success, then in addition to spending time on investment, it is also necessary to invest time and energy in post-investment management.
For example, for the understanding of sales, the general investment may look more at sales revenue or customer structure. If you do it after the investment, you will understand the different sales models of the company. Simply look at the sales of enterprise-level service companies. -Electronic sales, online sales, store sales, sales, offline direct sales. Each sales model has different applicability and different models. If investors understand more deeply, they will definitely help and help the front-end investment.
In addition, summing up failures may be more meaningful than learning success. In the process of starting a business, you will surely encounter all kinds of pits. Many pits can’t be avoided. It’s better to change your mindset. Don’t let the pits fall, you can know what is right or wrong in the past. Only know which road is likely to be right. However, in the process of passing the pit, whether it can get out of the pit and the speed of coming out will make different entrepreneurs in the same track produce different results. Therefore, enterprise-level services are difficult to make an enemy, and it is difficult to seal a throat with a sword. The final competition is the speed of continuous pit and pit. In the post-investment or daily resumption of the game, Oriental Fuhai attaches great importance to the failed strategy and tactics of the invested company or a company, which may be more meaningful than the success of the study.
III.How do you think about the core competencies of enterprise service quality projects?
How do you view the core competencies of an enterprise-level service quality project? That is how to look at the project, what project is a good enterprise-level service project?
First, the founder or founding team of the company should attach great importance to PMF (Product-Market Fit) and MVP (Minimal Viable Product) Sex products). Not all founders understand and pay attention to the actual implementation of these two concepts, many companies are not doing well in these two aspects. The first is the PMF issue. Foreign teams may polish a product for three years, including understanding where the core customer is, what the core customer’s core needs are, and developing a core product with outstanding product features. Many companies have encountered ceilings after a period of development, and they have encountered bottlenecks in growth. One important issue is that they did not find the target customer group at the beginning, nor did they dig deep into the core needs of the target customer group, so product function and customer value. Large deviations are expected to occur.
The other is the MVP issue. Many startup companies that have problems, the last regret is that they spend a lot of resources on a wrong product, direction or tactics, and turn around too slowly, which means they are not doing well enough on MVP, any Whether the implementation of the product adjustment or operation strategy implements the minimum feasibility verification as a red line. For example, in the past few years, there is more discussion about whether you can use ToC to do ToB, that is, you can do ToB by buying traffic and advertising. In fact, these discussions are very good, not necessarily one will be put A universally-available answer can be tried. Maybe different product features can be used in the ToC way, but some companies in the industry have failed in the trial process. The main reason is that they are in a direction that is not fully recognized and verified. In the way, a lot of money and resources were invested, which led to no room for returning after the error was verified. PMF and MVP are very important management concepts that an excellent enterprise-level service founding team must have.
Second, the success formula for enterprise software. MaryMeeker specifically summarized the success formula of enterprise-level service software in the 2018 Internet report:
“Create outstanding consumer-level products, and develop individual users through marketing, use the good experience and reputation of individual users to promote users’ personal life and work trial products, and build enterprise-level cloud platforms and ecosystems. , building a low-cost, product-driven, consumer-friendly approach and a strong business model.”
These hundred words contain these layers of meaning:
First of all, the ultimate product experience for the C-end. In the summary of MaryMeeker’s few words, there have been five “personal” and “consumer”, so although it is summing up the enterprise-level software success formula, the most talked about is the enterprise-level software from the perspective of individuals and consumers. Product capabilities, the ultimate product experience should also be the concept of the outstanding founders of China’s enterprise services;
Secondly, the report mentions “low cost” and “product-driven”. In order to achieve low-cost development, there must be a strong product-driven capability, relying on product reputation to generate customer referrals, thereby reducing the front-end gains. Customer cost, to improve LTV in the way of repurchase and purchase;
That again, the consumer model of business model innovation, because in the enterprise-level software or the profit model of enterprise-level software represented by SaaS, it is mainly divided into three front-end customers, intermediate products and back-end operation and maintenance renewals. In terms of the pursuit, the pursuit of the front-end customer costs, as much as possible to improve product capabilities and back-end operation and maintenance renewal fees and purchase capacity. The sexiest aspect of enterprise-class SaaS is the purchase and renewal, re-purchase, and it’s really good to be able to lie down and make money. Like two very famous companies this year, Slack and Zoom are listed on the list of four or fifty times PS. Companies have a consumer model of business innovation.
Therefore, the top SaaS business model is the free-use, value-added payment model, that is, the front-end sales are very light, even to the direct sales team without the ground, the intermediate products are very heavy, the product capabilities are very strong, the back-end services Very heavy, which leads to high repurchase and purchases.
Third, from the perspective of the operator, it is necessary to continuously improve the three capabilities and form a flywheel effect. For entrepreneurs, in order to achieve sustainable growth of the company’s sales revenue, we must find our own flywheel effect, and after the core capabilities of the company are refined, the loop will continue to invest in core capabilities.
For enterprise service companies, core competency primarily refers to three areas::
First, continue to reduce the cost of getting paid, try different ways to get customers, and find the lowest cost and channel of access;
Secondly, continuously increase the unit price, the main direction of all ToC company operations is to occupy the user time, as long as it can occupy the user time to generate business value, the most representative is the headArticles, there are numerous product lines, the main purpose is to retain user time. The main focus of ToB’s operation is to fully occupy the customer’s budget. Only the ability to occupy the customer’s budget can have the ability to continuously increase the customer’s unit price. Only by continuously increasing the customer’s unit price can we finally make money;
Finally, is an operation renewal fee. This is the biggest pit that has passed in the past few years. It is the resource investment for operation renewal or customer success, which has not been paid much attention from the previous period. Because from the top US-level enterprise-level service listed companies, the best company renewal rate can reach 150%. For example, the Stardog, which was just listed this year, has a renewal rate of 149%, that is, what to do at the beginning of the year. About 50% of the income has already been made this year, which is a very good business model. Therefore, the enterprise-level service startup company should continuously improve the ability of the front-end customers, the continuous improvement of the customer unit price, and the continuous improvement of the operation and maintenance renewal fee.
Fourth, build the ability to standardize and customize the spiral, and at the same time have the ability to grow bigger and smaller. It is the enterprise-level service that should be a big customer or a small customer. In the end, it is a small-customer enterprise service company. A truly excellent enterprise-level service company must have both the ability to standardize and the ability to customize, and the two capabilities are a spiraling process, that is, the ability to become a big customer, but also to be small. Customer’s ability. In fact, the United States is the best enterprise service company, whether it is Salesforce, Slack, Datadog, Zoom, etc., from the structure of the number of customers is 82, that is, small customers account for 80%, large customers account for 20%, However, from the composition of income is 28, these excellent enterprise-level service companies, the coverage of the product is still relatively high, product capabilities, adaptability is also relatively strong, so standardization and customization, large customers and small customers Not contradictory. Of course, there are also industry characteristics of individual industries that can only be used as big customers. For example, there are no small customers in the industries such as pharmaceutical CRM, and they can only be big customers. But the general-purpose industry is both large and small.
Fifth, the company’s PAAS capabilities and AI capabilities. PAAS stands for now, AI stands for the future. From the perspective of the enterprise service companies that are now being invested, a very important dimension is to look at PAAS capabilities and AI capabilities. The rapid growth of Salesforce’s real sales revenue is also after the launch of PAAS, which means that the revenue will grow rapidly after 2008. This also reflects the growing ability of companies to become big customers, and the ability to customize delivery is increasing. Strong. China’s enterprise-level services now also form a consensus that PAAS capabilities must be in place. In 2009, PAAS may be a very important core energy for enterprise services.Force or the most advanced productivity, but by 2019 AI’s ability may have become the ultimate product capability of a new generation of enterprise service companies. Microsoft Dynamics365 has become more and more competitive in CRM this year, including the ability to compete with companies such as Salesforce and Oracle. The main reason is the AI capability of the product. This is very important for Microsoft to acquire LinkedIn. Relationship, this is also the most regrettable point of Salesforce. There is no competition for Microsoft in the acquisition of LinkedIn, so Microsoft has more AI capabilities in the product iteration of ToB. Interested parties can study Microsoft Dynamics365.
Sixth, financing is awkward, but spending money is going to save. When the financing environment is good, it is necessary to raise as much financing as possible, but for entrepreneurs, the amount of money actually represents only the chance of making mistakes, and more money can make more mistakes than competitors. . But you must save money on money, and you must ensure that “every bullet can destroy an enemy.” When many enterprise-level service startups come back to summarizing, the most important point is that when the money is long, a large amount of money is invested in the expansion of the sales team or the introduction of high-end R&D talents, while the sales efficiency and R&D effectiveness are in the financing environment. If it is not good, it will cause a big problem for the company’s cash flow. Therefore, the founder of an excellent enterprise-level service must have a feature that is to raise funds and save money.
Seventh, rather than investing in old, cautiously investing less. It is true that enterprise-level service startups have to accumulate. From the perspective of business success, industry experience may be more important than product technology at some point. To have industry experience, it is true that there is time to accumulate in the industry. The founders of enterprise-level services, which are often older than the older ones, will make fewer mistakes or operate more steadily, with a higher success rate. This can be seen from the age of the founders of the best American enterprise service companies, generally around 40 to 60 years old. It’s not that young entrepreneurs at the enterprise service track have no chance, but from a high probability, it’s true that “Ginger is still old and spicy”. At the same time, because enterprise-level services are long-term competition, product technology and sales capabilities may not necessarily It plays a central role, and management capabilities often end up playing a key role. Management ability, unless it is very talented, is mostly based on practice, so a team with a certain age, industry accumulation and industry experience has a higher probability of success.
4.Investment Opportunities in Enterprise Services
This is a very long-term track in terms of the inherent objective laws of the development of the enterprise service track. In contrast to the United States, many of the enterprise service companies in the United States have a history of decades. A company as young as Salesforce has a history of nearly 20 years. So this track is unquestionable, KenIt will be a long-term track, and it will not return to the bland immediately after it heats up.
From 2022 to 2025, it may be an exit period for Chinese enterprises to invest in services, and it is also the peak year for listing. So what is the process of listing? Weimeng’s revenue structure is SaaS plus advertising marketing, and praise is SaaS plus transactions. It is not the same from the income composition and pure SaaS software revenue. So look forward to the next three to five years, may be the first to go public or Relatively speaking, the volume of income can reach the domestic and international listing requirements as soon as possible. It may be a company with relatively diversified business models. In other words, the first batch of listed companies, in the business model and income structure, may not be entirely based on SaaS software charges as the main income, and the proportion of transactions, advertisements, and data services may be relatively high. But after the first company, the next pure SaaS revenue company may be listed, because there are a number of companies with pure SaaS sales revenue of 200 million or more this year. . At the current rate of development, it is very possible to reach the domestic sales requirement of 100 million US dollars in the next three to five years.
East Fuhai has always adhered to the idea of consolidating the Chinese market and then going out to sea. From this perspective, 2025 is just a prelude. Domestic enterprise-level service companies have a lot of actions to go out of the sea. Of course, the domestic market may not have much effect before it is confirmed. In addition to headlines, it is directly pushed from overseas to China. General ToB startups will be the next three or five. The year is still more focused on the domestic market. After three or five years, markets such as Southeast Asia may be the main growth point.
The specific investment opportunities in the segmentation area can be divided into several parts:
First, the field of IaaS layer bias technology. Eastern Fuhai is investing from the SaaS layer, then investing it layer by layer, investing in PaaS and then investing in the IaaS layer of partial technology, including this year also invested in SD-WAN, CDM and other partial technology The plate. Now the entire technology iteration or the new fusion technology iteration cycle is relatively fast, many companies are still in the early stage of income scale, they must look at these companies with an early investment approach. From the perspective of Oriental Fuhai, on the one hand, we will look at the leading edge of technology products. On the other hand, we must look at the core competencies of the company’s founding team. It is the ability of technology to reach the product, the ability to go from product to sales, from sales to delivery. The ability to see the power of these capabilities in the early company’s team genes. It may not be the strongest in these areas, but it must be available. The founding team of enterprise-level services, the ability to break through a single point is not necessarily the magic weapon to win, but there is no short-board may be the magic weapon to win.
Second, from SaaS toPaaS, still cut directly from PaaS. First of all, the so-called low-code and code-free development platform is a subdivision of the track, this track is still very investment opportunities. Secondly, the business model of this track is very important, can it adapt to the localized business opportunities, that is to say whether it is to generate income by means of products, or to use products as a service source as the main source of income. This may be an important business model for the landing of low-code and code-free tracks in China. After doing a SaaS application and going to PaaS, it may be more adaptive than cutting directly from PaaS.
In fact, many companies have been doing SaaS from the beginning to the beginning of PaaS, but the architecture does not follow the original SaaS architecture, that is, from a certain perspective, PaaS is regarded as the main camp and the former SaaS is the prelude, and then form A new set of architectural thinking is relatively more re-constructed.
Third, about this year’s hot RPA. Objectively speaking, the Eastern Fuhai is not a train of thoughts for the pursuit of the wind, so the RPA is not focused on follow-up. However, among the invested companies in the East Fuhai, especially the banking system integration and information technology companies, RPA has been listed as an important direction in the direction of business product development.
Orient Fuhai has always regarded ToB as a very important investment sector. The National SME Development Fund managed this year has been in operation for less than a year, and from the perspective of invested projects, ToB accounts for a relatively large proportion. The funds from the national team are endorsed by the invested companies, which is very important for some ToB companies, especially if the customers are government agencies, large enterprises, state-owned enterprises, and central enterprises. In addition, it will also help the docking of bank resources.
V.Titanium Capital Research Institute
In 2019, the biggest variable in the entire enterprise market was the international trade war, which not only led the United Nations to downgrade its expectations for the global economy in 2019, but the new president of the International Monetary Organization IMF also issued a serious warning in the near future. 90% of regional economic growth will slow down. Although China and the United States have reached a phased agreement on the trade war in the near future, the impact of the trade war will remain in people’s minds for a long time.
The international trade war is a historic opportunity for Chinese business service entrepreneurs. It is also the high pressure of the United States that allows China to take the initiative to recognize the importance of China’s independent innovation, which gives Chinese enterprises service entrepreneurs great market acceptance. If we still hesitate between China’s independent technology and international technology, I believe that many Chinese companies have given space for independent technology.
For Chinese business service entrepreneurs, the next thing to do is to stay on the ground and keep the business.Endurance and patience. Since the global cloud technology innovation started in 2006, it is nearing its end in 2019, and the new technology system has formed its own camp. Enterprise service entrepreneurs and companies only need to choose the right one according to the needs of users in the emerging new technology camp. The combination of technology components completes the delivery, which requires management and organizational capabilities and an upgrade of the entrepreneur’s mindset.
The next successful model for a business service company that goes to a market value of 10 billion will be:
PaaS-based, customized value-added services to create profitable space; Serving small and medium-sized enterprises to temper products, serving large enterprises to obtain profits; providing complete solutions for corporate customers, no obvious Short board is success;Comprehensively occupying customer budget, relying on diversified business to reach market value of tens of billions, relying on SaaS business to reach market value of 100 billion;Management ability and business ability are long-term wins Important capabilities; Data analysis such as AI will be an emerging scale requirement.
At the end of the day, China’s corporate service startups should pay attention to the physical and mental health of all employees. Just as one of the keys to Churchill’s successful reversal of the Second World War, it is to ensure adequate sleep every day. The corporate service is a long-distance running for ten or twenty years. Successful winners must be the best preservers and continuous refreshers of physical and mental strength.
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