Change the wheels while running, slow down and walk more steadily to go further.
Editor’s note: This article is from WeChat public account “ 燃 财 ” (ID: rancaijing ), Author Zhao Lei Zhou Yifan.
On the evening of March 18, the mobile content platform Qu Toutiao (NASDAQ: QTT) announced its financial results for the fourth quarter and the full year of 2019. Its growth and loss are the focus of market attention.
Finance reports show that Qu Toutiao achieved revenue of 1.658 billion yuan in the fourth quarter, an increase of 25% year-on-year. In 2019, annual revenue was 5.57 billion yuan, an increase of 85.3%. At the same time, Qu Toutiao’s losses continued, with a net loss of 551 million yuan in this quarter, a significant improvement from the previous quarter’s 888 million. The net loss rate fell from 63.1% to 33.2%, and strived to achieve a breakeven in the second half of this year.
At present, advertising marketing is still the core source of income for Qu Toutiao, accounting for more than 98%.
Qu Toutiao ’s revenue continues to grow, but the overall growth rate is slowing down. On the one hand, due to the macroeconomic conditions and the weak advertising market, Qu Toutiao ’s main business has been greatly affected. On the other hand, Qu Toutiao itself is also experiencing Transformation, seeking a more sustainable business development model, with a view to returning to a high-growth path in the future.
Four headlines in the past four quarters
As of now, Qu Toutiao ’s stock price is at a historically low level. It closed at $ 3.66 yesterday, lower than the issue price of $ 7. The latest market value is $ 932 million, but many analysts said that Qu Toutiao ’s share price in the next 12 months The stock price will rise to the range of 20-30 US dollars. Tan Siliang, founder and CEO of Qu Toutiao, has repeatedly stated that the capital market has underestimated Qu Toutiao.
Most of the reason why it is underestimated is that the past interesting headlines are too dazzling. It used to set a record of the shortest time from the establishment of the Chinese stocks to listing in 27 months. It also had a five-time trip on the first day of listing, and it once gained more than 190%. People can see the tremendous power of the Internet, blue ocean, opportunity,Change, these words were used to describe what this company did, and the market was once imaginative.
“Fast is not broken”, which forms the basis of imagination. Qu Toutiao comes with the mobile dividends emerging in China’s emerging markets, finds differentiation, quickly enters the market, quickly accumulates users, and quickly raises revenue. This model has been successfully replicated in multiple products under Qu Toutiao and will be fun in the shortest time Headlines are sent to the secondary market.
For Tan Siliang, “fast” is not only a capability, but also an option. In the cruelly competitive Chinese Internet world, you can run fast to survive, and quickly accumulate users to do more. However, it does not matter so much in the early days. But now, Qu Toutiao ’s monthly active users have reached 138 million and daily life has reached 45.7 million. It already has a place in emerging markets. The company ’s strategy is no longer to serve “to survive” but to serve “what kind of company will it become in the future?” s company”.
Change wheels while running
From “fast” to “slow”, there is a reason for such a strategic adjustment. After March 2019, Qu Toutiao began to enter a weak growth platform period. The problems accumulated during the rapid running in the early stage gradually appeared. Tan Siliang boiled down to several aspects. One was that the construction of the organizational system did not keep up, and the other was deep-seated. The accumulated homework needs to be supplemented, such as the construction of content and algorithms, including the construction of big data systems.
The arrival of the bottleneck means that the “blitzkrieg” of Qu Toutiao is about to come to an end, and the next step is “tackling the tough battles.” Every tackling the toughness will stalemate for a while. What the Qu Touting has to do is to try to complete the tackling in the least time. At the same time minimize losses, but the harsh reality is that losses cannot be avoided.
In September 2019, Qu Toutiao announced the second quarter fiscal year results, the growth rate dropped sharply, especially the key daily active user growth was too small, which will directly affect the capital market’s assessment of Qu Toutiao. At that time, the inside of Qu Toutiao was in the most difficult period of attacking toughness. The intensive personnel adjustment caused widespread speculation. Tan Siliang himself was not too surprised by people’s views. The attack of toughness is not a delay. If you want to break through quickly, you must be able to fight. In terms of people, those who are unwilling to fight or cannot fight are not suitable for this team.
The trade-offs not only strengthened Qu Toutiao ’s overall combat effectiveness, but also reshaped Qu Toutiao ’s organizational construction method and system. While maintaining recruitment efforts, it has strictly controlled the barriers and established values including general values and general qualities. Multi-dimensional evaluation system, training existing talents at the same time, quickly establishing synergy, and improving the efficiency of the entire organization.
But this is not enough. Fun headlines need to improve the combat ability of individual soldiers. They need to form a synergy between soldiers and soldiers. They also need a strategic command center such as a commander.The formation of a unified and orderly transfer of technical, algorithmic and commercial capabilities is not a matter of filling resources in the past, as in the past, but truly maximizing resource utilization efficiency.
At this point, Tan Siliang admires the byte beating. “I feel that half of its success is built on a commercialization system. The chain involved in this matter is very long. Unlike the C-end, there is an innovative entry point that is easy to reach users. Advertisers, there may be agencies in the middle, it depends on how you really build a competitive advertising platform to achieve precision. “Tan Siliang said.
In the fast running process of Qu Toutiao, it lacked the polishing and accumulation of the entire commercialization system and did not form a strong network effect on the realization of advertising. This is also the focus of Qu Toutiao. , Accumulate more data, improve the effectiveness of recommendations, attract more advertisers, form a positive cycle, and establish their own barriers, and this will be a long process.
The question before Tan Siliang is more important to balance. As a listed company, every aspect of Qu Toutiao will be paid attention to by the media and investors. The situation cannot allow Qu Toutiao to focus on making up lessons. The huge pressure of revenue growth and reversing losses has forced Qu Toutiao to run while changing wheels. many.
Since being aware of the problem, Tan Siliang quickly made adjustments. In March last year, Qu Toutiao opened up some innovative monetization business lines. Considering the environment of the entire advertising market, it began to make some layouts for other monetization forms, including live broadcast. , Games, and thoroughly adjusted the company’s strategic center from growth to improve health, which is bound to face greater external pressure, but for the company’s long-term development, Qu Toutiao chose to “temporarily slow down.”
“We can never do just two months,” Tan Siliang said.
The effect of adjustment is slowly presenting. The most direct is the ROI (return on investment). The important business models of interesting headlines are user recommendation and user points promotion, that is, “recommend friends to withdraw” and “see information to make money” In the fourth quarter, the user recommendation cost of Qu Tiao Tiao and the purchase cost of third-party channels both decreased, and the user point subsidy also remained at a low level, which improved the cost of Qu Tiao Tiao and narrowed the losses quickly.
While throttling, the other side is also working hard to open source. The optimization of technology and algorithms and the polishing of the commercialization system make the ARPU value (average revenue per user) of Qu Toutiao begin to reverse, and the increase in traffic quality makes up for the increase in traffic. The rapid decline drove revenue growth.
“The barriers at the product level, such as network effects, are definitely not formed now. This is no doubt, but we are trying to form some organizational barriers and technical barriers, make large-scale investment in technology and data, and strengthen The construction of the content system hopes to form a local network effect, but it is still too early to say this. “Tan Siliang said.
In any case, Qu Toutiao has gone through the hardest time and everything is moving in a good direction, but the process of “changing wheels while running” will continue for some time.
Mi Reading——Breakthrough of Fun Headlines
After encountering a bottleneck, Qu Toutou first thought about two questions: First, what did you make? Second, what do you do? One is the way to come, and the other is the way to go. The interesting headlines standing on the nodes need to be clearly seen.
What sets Tan Siliang proud of is a set of innovation incubation systems, that is, what to do from 0 to 1, how to find a good idea, how to quickly perform MVP verification, how to expand rapidly, and how to further manage it later Refining. It is this innovative system that makes Qu Toutiao particularly good at finding a blue ocean of growth.
The idea found by Qu Toutiao is gold coins, that is, the user is motivated, others see the information for free, and you see the information to make money. This is the point that attracts users. The Mi Reading novel hatched by Qu Toutiao is paid for free. Do not look at piracy, have a better user experience, and do not have to pay for a book, which is also the point of attracting users.
Since it was launched in May 2018, it took half a year for Mi Fiction to read the novel, and the number of daily active users exceeded 5 million. There are two logics to its success. This is also the interesting headline innovation system to evaluate an idea. The core dimensions are: first, the future market is not big, and second, whether the breakthrough point is innovative enough. When the idea is OK, we will try the feasible mode at the fastest speed. After running through, we will use blitz to do industrial expansion, avoid being copied, and finally find ways to maintain continuous growth.
“This is one of our core advantages at present, but the key issue is that this advantage is not necessarily enough now.” Tan Siliang believes.
Whether it ’s Qu Toutiao or Mi Du, we have gone through the previous three stages. What we need to do now is to maintain growth. In addition to the original idea, we need more precipitation to support it. Good recommendation algorithm, and what Mi Reading needs to work on is the content system.
“Our product form is both a traffic platform and a content platform. Essentially we want more users to gather on this platform, but at the same time we also hope that the content ecology, including content creation, has a strong positive Feedback, hoping to really incubate the novel content that users like, so a big change from last year to this year is to shift from products with partial traffic to products with partial content precipitation. “Mi Yang, the CEO of Mi Fiction, told Ran Finance. In his opinion, to the development of the Internet today, it is difficult to build strong barriers by relying on the innovation of pure product forms. For a content platform like MiRead, the core value must be the content itself, which is the novel. Therefore, in terms of content breadth, MiRead strengthened its in-depth cooperation with CP and improvedThe coverage of novel content is already the head of the same type of platform; establish its own original content system in terms of content depth, and promote the development of exclusive content.
MiRead is like Qu Toutiao. It will build more attention from blindly growing to a deeper system. But just as Qu Toutiao is not today ’s headline, Mi Ding will not be reading. It starts with the core free differences. What Mi Reading has to do is to incubate content suitable for its users and build a big data-oriented content system.
In the third quarter of last year, MiRead established its own original team, and began to develop vigorously early this year, gradually fighting back from the traffic side to the content side. Because there is enough traffic and user preferences to analyze what the users of the entire free novel really like, some newly created original content can already be compared with the top works of the free novel content industry. According to Yang Yan, MiRead has sorted out the content links so clearly that user size and user preferences can give positive feedback to the content. The first step is to go through.
Content is a long-term battle. Yang Yan believes that MiRead and other paid platforms are essentially different from the competition. The core user group of MiRead is a larger free user, so it will be similar to reading in terms of content form. There are great differences in other paid platforms, but competition at some levels is inevitable, and the free-fiction track itself is also highly competitive. For example, the Seven Cats novels that Baidu has invested in will be supported by Baidu traffic. Overall, MiRead is still It needs to go its own way and cultivate its own author group and content ecology with its data and systemization capabilities.
“More user feedback means more accurate content provision. This must be done more by the free platform, because we have a large number of users, and we will also incubate works suitable for free reading. Form. “There is a paid ecology for free, and a free ecology for free. The principle is the same as for cinema movies and online movies, Yang Ye firmly believes in this.
The confidence of Mi Du’s novels is a huge group of free readers. No matter the author’s income or effective feedback on the author’s creation, it needs a huge user base to support it. Through data analysis and accurate distribution, it promotes the value exchange of authors, readers, and advertisers in the entire content ecosystem.
Attract users with free, monetize traffic through advertisements, invest the revenue generated into the construction of the content system, and then attract more users with better works, turning the flywheel, and early MiRead cares more about users Growth, now MiRead will cut more resources into commercial realization, content construction requires long-term investment, MiRead will explore its own rhythm, but also need to do a good job of balance.
Fun headlines should be a pan-entertainment platform
Whether it’s an interesting headline or a meter reading,At present, they are exploring more internalized things outside of the core growth strategy. Although they have slowed down, compared to many market participants, this speed can still be regarded as “slow with fast”. The logic behind it is the same. Is to have scale first, then do precipitation, first pursue speed, then pursue quality. Externally, “play fast with slow,” internally, “support slow with fast.” After all, it will return to the slow rhythm. This is the content itself. decided.
Only by practicing internal skills can we reach a higher level.
Fun headlines are ambitious. Tan Siliang firmly believes that the content itself does not have a strong network effect. It is very difficult for a complete family to be dominant. In the end, there will be a few oligarchs in the content industry to divide up most of the market. For Quoting headlines, whether it is down or up, there is nothing left, and there are more possibilities.
“I hope that among the four or five entertainment companies in the future, Qu Toutiao is one of them.” Qu Toutiao has changed its position from a content aggregation platform to a pan-entertainment platform. Qu Toutiao has now covered information and web articles. , Short video, games, live broadcast and other fields, of which the live broadcast launched in January 2019 quickly opened the market, and the game distribution business has also completed the establishment from 0 to 1.
At this stage, Fun Toutiao will put 80% of the company’s energy and resources on the main products such as Fun Toutiao and MiRead, and the remaining 20% will focus on innovative business such as games and live broadcast. While enriching the entertainment content experience of users, it will optimize Revenue structure drives revenue growth.
Make-up lessons are ongoing, but in addition to wherever you look, there are poems and distant headlines. After the speed is put down, you are slowly accumulating strength and waiting for greater development.
But this is not enough. Fun headlines need to improve the combat ability of individual soldiers. They need to form a synergy between soldiers and soldiers. They also need a strategic command center such as a commander.The formation of a unified and orderly transfer of technical, algorithmic and commercial capabilities is not a matter of filling resources in the past, as in the past, but truly maximizing resource utilization efficiency.
After encountering a bottleneck, Qu Toutou first thought about two questions: First, what did you make? Second, what do you do? One is the way to come, and the other is the way to go. The interesting headlines standing on the nodes need to be clearly seen.
What sets Tan Siliang proud of is a set of innovation incubation systems, that is, what to do from 0 to 1, how to find a good idea, how to quickly perform MVP verification, how to expand rapidly, and how to further manage it later Refining. It is this innovative system that makes Qu Toutiao particularly good at finding a blue ocean of growth.
The idea found by Qu Toutiao is gold coins, that is, the user is motivated, others see the information for free, and you see the information to make money. This is the point that attracts users. The Mi Reading novel hatched by Qu Toutiao is paid for free. Do not look at piracy, have a better user experience, and do not have to pay for a book, which is also the point of attracting users.
Since it was launched in May 2018, it took half a year for Mi Fiction to read the novel, and the number of daily active users exceeded 5 million. There are two logics to its success. This is also the interesting headline innovation system to evaluate an idea. The core dimensions are: first, the future market is not big, and second, whether the breakthrough point is innovative enough. When the idea is OK, we will try the feasible mode at the fastest speed. After running through, we will use blitz to do industrial expansion, avoid being copied, and finally find ways to maintain continuous growth.
“This is one of our core advantages at present, but the key issue is that this advantage is not necessarily enough now.” Tan Siliang believes.
Whether it ’s Qu Toutiao or Mi Du, we have gone through the previous three stages. What we need to do now is to maintain growth. In addition to the original idea, we need more precipitation to support it. Good recommendation algorithm, and what Mi Reading needs to work on is the content system.
“Our product form is both a traffic platform and a content platform. Essentially we want more users to gather on this platform, but at the same time we also hope that the content ecology, including content creation, has a strong positive Feedback, hoping to really incubate the novel content that users like, so a big change from last year to this year is to shift from products with partial traffic to products with partial content precipitation. “Mi Yang, the CEO of Mi Fiction, told Ran Finance. In his opinion, to the development of the Internet today, it is difficult to build strong barriers by relying on the innovation of pure product forms. For a content platform like MiRead, the core value must be the content itself, which is the novel. Therefore, in terms of content breadth, MiRead strengthened its in-depth cooperation with CP and improvedThe coverage of novel content is already the head of the same type of platform; establish its own original content system in terms of content depth, and promote the development of exclusive content.
MiRead is like Qu Toutiao. It will build more attention from blindly growing to a deeper system. But just as Qu Toutiao is not today ’s headline, Mi Ding will not be reading. It starts with the core free differences. What Mi Reading has to do is to incubate content suitable for its users and build a big data-oriented content system.
In the third quarter of last year, MiRead established its own original team, and began to develop vigorously early this year, gradually fighting back from the traffic side to the content side. Because there is enough traffic and user preferences to analyze what the users of the entire free novel really like, some newly created original content can already be compared with the top works of the free novel content industry. According to Yang Yan, MiRead has sorted out the content links so clearly that user size and user preferences can give positive feedback to the content. The first step is to go through.
Content is a long-term battle. Yang Yan believes that MiRead and other paid platforms are essentially different from the competition. The core user group of MiRead is a larger free user, so it will be similar to reading in terms of content form. There are great differences in other paid platforms, but competition at some levels is inevitable, and the free-fiction track itself is also highly competitive. For example, the Seven Cats novels that Baidu has invested in will be supported by Baidu traffic. Overall, MiRead is still It needs to go its own way and cultivate its own author group and content ecology with its data and systemization capabilities.
“More user feedback means more accurate content provision. This must be done more by the free platform, because we have a large number of users, and we will also incubate works suitable for free reading. Form. “There is a paid ecology for free, and a free ecology for free. The principle is the same as for cinema movies and online movies, Yang Ye firmly believes in this.
The confidence of Mi Du’s novels is a huge group of free readers. No matter the author’s income or effective feedback on the author’s creation, it needs a huge user base to support it. Through data analysis and accurate distribution, it promotes the value exchange of authors, readers, and advertisers in the entire content ecosystem.
Attract users with free, monetize traffic through advertisements, invest the revenue generated into the construction of the content system, and then attract more users with better works, turning the flywheel, and early MiRead cares more about users Growth, now MiRead will cut more resources into commercial realization, content construction requires long-term investment, MiRead will explore its own rhythm, but also need to do a good job of balance.