Is The New Business Model Valuable?

No matter where and where to go, there are four important points for a startup to succeed, and these four points can basically judge whether a new business model is valuable. In 2004, it has been almost 12 years since the beginning of this year. The past few years, one thing can be sure, that is, no matter how the Internet develops, what new business models and new concepts will emerge, so far no one, no company or country, can break the basic law of the economy.

　　 First, team

People are always the most important. Each of us has different ideas and different purposes. Some are for fun, some are for family support. I have read the book published by Laopan. Two years after graduating from University, my reason for starting a business is also very simple. My grandmother was ill in bed at that time and needed a lot of money to cure her illness. Money was raised by her family. I just want to start my business and make money quickly, so I don't have to sell grain at home so that my grandmother can afford to cure her illness. So it's a very simple goal.

Until 2004, when I became an e-commerce provider, I began to understand what business model was. Until 2007, I learned what venture capital was, and got the first financing. Before 2004, we did traditional retail for six years, when we built a "reverse triangle" system inside. Jingdong mall has used more than ten years of system, the bottom is "team", is the most basic.

This year, we invested in dozens of enterprises, some of which were successful and some failed. Yesterday, we invested in an enterprise closed, of course, is not the entrepreneur's own ability problem, is indeed the industry choice, the financing of the grasp, cash flow control and other factors. As a start-up company, we lack some experience. We believe that if we have more investment, we will firmly give him money again, because we are optimistic about this team. We are optimistic about this group of people who are very smart after 80 years. They are very hard-working and very passionate.

For any enterprise, the team is the most important. For example, the IT industry, we all know IBM, in the early 80s and early 90s, IBM sold a computer /PC machine net profit can earn ten thousand yuan, he mainly sells mainframe, minicomputer, sell one can earn hundreds of thousands of dollars. But in 90s, the PC machine was still in the era of profiteering. When all our Lenovo, Acer, DELL and so on were making PC machines, IBM even said that they had to transform, do services and make software.

And we can see that after the transformation, the entire IT industry is only IBM, although IBM has encountered new difficulties in recent half year, I think they need a transformation. Any enterprise usually has a big transformation in 7 years -10 years. At least IBM in 90s, when the whole PC industry was very profitable, he foresaw that in the future, the transformation made software and services, which laid the foundation for the IBM manufacturers who made IT in the past 20 years in 80s. Only IBM's market value maintained a high profit of 20 years, which provided huge returns for shareholders.

Why? The core is that IBM's team can make the transition ahead of time, find a new growth point of the industry, and also find that the IT industry begins to go from this hard to soft process. If we fail to start a business, there will be only one type of enterprise, that is, some industries highly related to the policy, and the industry that relies on policy to eat may fail because of the team. Most businesses die because their teams are not working. Many Chinese enterprises often say that the difficulty of my business is bad market, consumption transformation and so on. In fact, the core is still not able to keep up with the team.

The founder is absolutely responsible for the company, so I often say that if one day, Jingdong's performance and growth are not good enough, it will not go up, and its performance will decline significantly. It is often our core management team, especially the core management team headed by me, which is not able to keep pace with the development. There is a limit to the resources and capabilities of any individual. When every company may have bottlenecks in its development, the team is very important.

　　 Two. User experience

Whether products or services, hardware or software, is the Internet or traditional industry, the core competition is your user experience. With the development of the economy for hundreds of years, the success of any company in the world is due to providing better user experience. IBM is successful. The success of transformation is that IBM has found a large enterprise with huge demand for software and services, and its user experience will do better. So is Microsoft, Apple Corp.

　　 Three, cost

If any business mode fails to reduce the cost of the industry, it will eventually be problematic. As you can see, in the past twenty or thirty years, the world is not just the Internet. Taking traditional industries, such as airlines, for more than a decade, airlines have become a burden in almost any country. There are very few investment airlines and airlines, but the market value is very low and most of them are losing money. As a result, the United States has come out of a new airline for more than ten years. Besides China, the profit of the global airline 70-80% has been taken away by a company.

Why? It's because after forty or fifty years of aviation business, the management cost of aviation has been greatly reduced through the management of the airline industry. The world's first business model since the advent of human society is actually the business model of Jingdong group, retail. The exchange of shells, the exchange of goods and articles is the process of social exchange, that is, the process of retailing.

As we all know, in the past ten or twenty years, there is a Costo in the United States. Today, I saw a Chinese media report on why the company succeeded. The headline was written by Costo to reduce gross margin to 10%. This is contrary to our past capital market investors' ideas. From the first round of financing to our listing, I have several principles. First, cost is more important than gross margin. Of course, many people do not understand that they believe that the gross profit margin of all companies is the most important. Whoever gets the gross profit margin will be high enough to vote for anyone, who will not vote for whoever has a low gross profit margin.

In fact, the core should not be the gross profit margin of a company, but the cost of the company. Why do we make gross profit margin 10% and make money? WAL-MART today is the gross profit margin of 24%-26%, because Costo has put the gross profit margin to the extreme. If all the other businesses that have nothing to do with retail business are stripped completely, the cost of the company will be less than 10%, because he has a huge membership fee, and the net profit of his company is mainly from membership fees.

The success of Costo is because the cost of the retail industry, the cost of the entire industry in the past, needs to be reduced to only 10% of the cost of 15%-22%. This is the real core competitiveness. So four or five years ago, there were many people who laughed at me on micro-blog. I said at that time that Jingdong's operation cost could be greatly reduced. Because of its lower cost, it has the ability to provide consumers with low prices. If the cost does not drop, it will only provide consumers with a low price, which is doomed to be a dead end.

　　 Four. efficiency

Four or five years ago, I said that the company's cash flow is more important than profit. The core is efficiency. Now let's take a look at our cost. If Jingdong finance, Jingdong intelligence and Jingdong come home, the investment of cloud will be stripped of all the new businesses which are not related to the Jingdong mall. The cost of convergence is less than 10%. As you can see, all the retail businesses, such as Gome, Suning, WAL-MART, Carrefour, and RT mart, have a cost rate of at least 15%. If Jingdong removes the low value of food and books, the total cost of electronic products will not add up to 8%. Compared with Gome and Suning, our cost will be reduced by 50-60%.

The core efficiency of a retail companies is inventory turnover. Gome and Suning are probably more than 10000 to twenty thousand or thirty thousand varieties. Their inventory turnover is about 60-70 days. The about 2000000 varieties of Jingdong managed by the Treasury are 100 times the number of varieties of Gome and Suning, but last year, our inventory turnover days were more than 30 days.

So according to this principle, you can say that today's successful companies in the market have achieved four points. On the basis of excellent and successful team, you only need to achieve at least one user experience, cost or efficiency three, and at the same time, the other two points are not derogatory. There is no derogation. Never say that as long as the user experience is good, you will succeed.

We have recently analyzed the hottest O2O project, which has been controversial for a long time, and I was also a "skeptic" at that time, because I never counted it. For example, the case of car wash at home, three people, riding a small three rounds, get water to ride to your home, for half a day, after washing away, three people can only wash two or three cars a day. When you drove to the shop to wash the car, 10-20 yuan was washed, and the result was three people running to your home, the cost was greatly improved, and the efficiency was greatly reduced.

Some people say that user experience has greatly improved, but your good user experience is based on rising costs and falling efficiency. Even with some profits, this business mode is hard to succeed. For example, Jingdong, we all know that our user experience is very good, so many people today have spent in Jingdong, thank you very much and thank you. If we do a better job of user experience, we can make it simpler. We do not need to make several express companies. All of them are shipped by Shun Feng. All of my goods are ready to make 500 warehouses in the whole country. Each storehouse is only 500 meters away from your home. You buy everything in stock and send it home in 15 minutes.

But in this way, your cost is greatly increased, and the days of inventory turnover you operate are greatly lengthened. The success of user experience does not mean that our new business model can be successful. This is also the problem of many entrepreneurs in mobile Internet today. We forget the cost and efficiency, and always emphasize the good user experience, thinking that users can make money.

Therefore, no matter what business we start, no matter what we do, we must return to the business mode itself. If there is a problem in the business mode, it may be very good in a short time, and the problem will be faster sooner or later. Obviously, it has violated the common sense. This is the status quo of our Internet development today. There are many new Internet start-ups' models which are seriously contrary to the basic economic common sense.

If there are difficulties for the entrepreneurs, I hope you can reflect on your business model and the team's problems for the first time. If you think about it, you can be sure that there is no problem in the business mode, and there is no big problem in the team. The only thing left to do is to stick to it, stick to it and stick to it. We must stick to the last thing we can do.

If there are problems in business mode or team problems, we must solve these two problems first. Otherwise, it is meaningless to persist and waste our youth.

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