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Hongcheng Education Huang Bo: Nasdaq'S First Chinese Female CEO

2010/5/6 15:39:00 70

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For most people, online education is still a relatively new word. Few people know that Huang Bo and her Hongcheng education enterprise team had begun to get involved in this industry 10 years ago. And 10 years later, when the country began to invest more in the construction of online education, the industry leader who has been in the CEDU for 10 years and has already started its new 10 year plan.
The adventurer adventurer
In Huang Bo's career choice, taking the risk and trying it is his greatest character. And in life, this kind of character is also vividly displayed.
As an amateur mountaineering enthusiast, she has been professionally climbing the highest peak in Africa, Kilimanjaro. In her opinion, hobbies, including mountaineering, put aside all kinds of distractions, like what they like, and why they give too much purpose and meaning. Every effort, every stagger and even persistence after climbing is a footnote before success. When staring at the top of the mountain, we gaze back at the road, looking at the scenery that can not be seen under the mountain. The pleasure of conquering the mountain is compared with the success of the individual. Why should we weigh the difference?
In her nearly 20 years of career, such challenges also exist all the time. In the early stage of entrepreneurship, the Internet is just emerging in China. Too narrow bandwidth makes many people do not optimistic about the feasibility of online education in the future market development. This is what Huang Bo did not expect. At first, Huang Bo Ben, an investor, tried to make the company go public for 1-2 years, but the reality had to let her get rid of it.
In the first 2 years of enterprise development, the state of the whole enterprise is basically in the state of production. The main task is to make courseware. Huang Bo recalled that the enterprise management at that time, no matter from the spirit of enterprise, the ambitious goals of enterprises, the formulation of enterprise strategy, or in the financial system and personnel system, is not the same as today. Now the new employees know what to do on the first day, and from 1999 to 2000, there is only one person in the Ministry of human resources, who is only responsible for wages. There is hardly a series of processes such as career planning, goal setting, performance appraisal and so on. In terms of business, the mode of online education was not as clear as it is today.
"We were fortunate to have spent $7 million in the end of the 2000 bubble to help us solve the problem of capital demand for business expansion at this stage of 2000~2004." Huang Bo called the period from 1999 to 2004 as the pioneering period of enterprise business. At this stage, the business mode, legal framework, teaching mode and application of technology platform are all in an expansion stage.
From 2004 to 2007, it became the most rapid development stage of Hongcheng, which is also the most difficult stage for Huang Bo to control. In her words, enterprises are growing every day. As a decision maker, every decision may be related to the fate of the future of the company. In this process, both gains and lessons are learned.
At the end of 2004, the Tiger Fund and McGraw-Hill jointly invested $16 million in Hongcheng, and in August 2005, Hongcheng education raised another $12 million. This has also made Hongcheng's rapid expansion since then.
In 2005, Hongcheng education bought 80% of the 101 online schools (100% acquisition after the listing), which made it perfect the gap in the direction of primary and secondary education in network education, thus setting up a nationwide network education service system. Subsequently, it acquired two entities of basic education institutions in Jinzhou and Anqing, thus achieving the "landing" outside the network education; in 2006, it completed the acquisition of international education institutions, thus establishing an educational group with a comprehensive education system.
Nasdaq's first Chinese female CEO
For China's education industry, the capital market has been a distant word in the last century. The constraints of politics and public opinion make the education industry one of the most open industries in the market economy. For investors, even when the emergence of online education, which is dominated by new business models, is not a good business model in their eyes. Wang Gongquan, founder of CDH venture capital, once had a brilliant explanation for this: "the overall market is long time, making small money, not doing much, and many opponents."
However, the huge market demand and the gradual marketization of education industry have changed all this. In September 7, 2006, Yu Minhong held the New Oriental listing on the New York stock exchange. In this connection, education and capital markets began to intermingle. In 2000, Wang Gongquan, who was a IDG capital partner, took a fancy to another business in this industry, Hongcheng education, and became one of the investors of this company.
Subsequently, the investment proved to be successful. Since 2002, Hongcheng education has been growing at an annual rate of over 150%. It has been selected by DDT for 50 consecutive years, the top 500 in China and the Asia Pacific region. In response, Gao Xinmin, executive vice president of the China Internet association, said in an interview: "Hongcheng education has been upgrading from the early time to the" enclosure "to the continuity and versatile of the system platform. In the past ten years, it has been upgraded to a network degree education, which is unmatched by general vocational training.
Two years later, in December 10, 2007, Hongcheng education was officially listed on NASDAQ.
Despite the adjustment of the Fed's federal funds rate and discount rate, Hongcheng education on the day of the listing was hit by a break (opening price of $10 per share, unchanged from the initial public offering (IPO) price, eventually closing at $7.97, 20.30% lower than the issue price), but this did not affect Huang Bo's delight in listing. In her view, being able to go public has proved the success of Hongcheng education in the domestic online education industry. Huang Bo has also become the first female CEO in China's NASDAQ listed companies.
In the prospectus of Hongcheng education, the total revenue of the company in 2004 was $12 million, which reached $27 million in 2006, while in June 30, 2007, its operating income reached $15 million 760 thousand and net profit was $1 million 640 thousand. In 1999, it was just a small company that only had angel investors inject millions of RMB.
Three master's degree students in the US
Huang Bo's success is not accidental to lead enterprises to go abroad.
At the end of the 80s, the boom of going abroad began sweeping across China, and Huang Bo became one of them. In 1989, she graduated from Lanzhou University and set foot on her way to the other side of the ocean. However, unlike the current study abroad, her study abroad has no specific career planning. "It's not very clear about what profession to study. It's just a matter of seeing where there's a scholarship." after all, it's a very happy thing to read in the United States at that time.
With this idea, Huang Bo initially chose the master of Microbiology in Tennessee State University. After graduation, the fact that she had to accept is that in a highly market-oriented country, research majors like microbiology are not easy to find a good job. "That kind of market-oriented employment environment we did not expect at that time. Only a doctor can find a job in biology, and engineering and computer graduates will have an annual salary of 30 thousand -4 dollars after graduation.
So Huang Bo chose to continue his study of chemical engineering before his undergraduate studies. This time, she found her job as she wished. After graduation, she entered the Merck Co (MERCK&CO., INC) as an engineer, mainly responsible for the pharmaceutical research and development process and automatic control.
However, this kind of work did not last for a long time. She liked the challenge and became interested in another industry. The magic of financial capital market began to attract her. "In Merck Co, I saw the career paths of senior executives, and their experience influenced me and made me reconsider my future."
The prosperity of Wall Street's capital market has been involved in her life. In 1993, Huang Bo began to set foot in the capital market, and he sold stocks on his own, and made quite good gains. "I find that frying stocks is much faster than making money." Although it is a joke, the subtle relationship between capital market and wealth has led Huang Bo to make her next decision.
After working in Merck Co for 2 years, she entered the Business School of Columbia University and got financial MBA. After graduation, she worked in stock analysis at BANKERS TRUST investment bank, and then served as senior manager in ERNST&YOUNG LLP management consulting company, responsible for strategic planning and management consulting service for the world's top 500 companies.
From financial management to online education
It can be said that these stable and well paid jobs in the United States have already satisfied Huang Bo's previous goals. However, a chance changed her later life.
One day in 1999, Huang Bo, who had been in America for 10 years, received a call from an old schoolmate. At that time, IDG, a student at the time, advised her to go back home and have a look. "At that time, everyone was just chatting. He advised me to go back home and see that there are many opportunities." Huang Bo didn't return to China for a long time, so he also wanted to go back to see it. So he asked the company for 3 months' leave, and ordered the round-trip ticket back to Beijing.
Huang Bo was excited by the sight. "Compared with the mature market in the United States, China's Internet Co was really" Earth "at that time. But you can see a kind of vitality that makes you unconsciously want to do something. At IDG headquarters, Huang Bo met the founder of Tencent, Ma Huateng. This kind of acquaintance also gave her a deeper understanding of the needs of China's Internet market. "At that time, IDG was discussing the matter of financing with Ma Huateng, and the expansion of Tencent was almost impossible for me to imagine. Almost every month there will be double growth."
This meeting, let Huang Bo make a choice again, she simply returned the air ticket, quit the work of the United States, and began to intervene in China's Internet capital market. Under the recommendation of friends, she began to serve as the 8848 vice president of e-commerce enterprises, helping enterprises to conduct financing and listing. Acer industrial technology development company, a subsidiary of Wantong Group, invited Huang Bo to help him with financing. According to its report, the adult college entrance examination in 1997 and 1998 reached 21 million passengers, while online education was not an advantage of time and space restriction. It was an effective way to enter the market, and the state encouraged part of higher education to adopt market-oriented operation. At this time, Renmin University of China adult online education project is also looking for funds everywhere, after many communication and in-depth understanding, the two sides finally came together. In March 19, 1999, in Wanshou Road, Beijing, B 15, the two sides signed a contract, invested 14 million yuan by Acer Xingye, and Renmin University of China's intangible assets 30%, and registered capital of 20 million yuan. This achieved the combination of Internet technology and the most realistic educational needs in China. In a blank distance education market, the silk thread was woven into a successful business model, which made the venture capital fund, which was originally deeply misgivings, become more and more interested in online distance education.
Then, in August 2000, a month after the Ministry of Education formally approved the people's Congress network as a pilot school for modern distance education, dongxingye raised 7 million dollars from five overseas investment institutions such as Citibank and IDG. Dongxingye took up 70% of its shares and established overseas partners with Hongcheng Technology Development Co., Ltd. At this point, a person familiar with capital operation became the common demand of investors. Huang Bo was invited to Hongcheng technology as CEO. Subsequently, Societe Generale replaced all the financing capital, including the shares of the people's Congress, to Hongcheng technology. As a result, a website called China learning network has become the initial carrier of Hongcheng education.

Coupled with previous work, Huang Bo has engaged in 4 industries, including medicine, finance, e-commerce and education in the past 10 years. So frequent career change also let her have her own value judgement standard. In Huang Bo's view, this career change may have a lot to do with its own character. "I like challenges, and I always want to try anything that is unknown or risky. Of course, every choice is not done by impulsiveness. In the face of opportunities, how to make the right judgments, in fact, contains all aspects of factors.
First of all, "attitude decides everything." To do something that you are interested in and feel meaningful, you will put in considerable enthusiasm and face positive challenges. Another kind of "instinctive" judgement is that the instinct is actually the first reaction accumulated over many years of study and work experience, which can help her to seize it tightly when the opportunity comes, and the right time to do the right thing.
Almost every time, Huang Bo will make a decision after he has enough judgement. Intercourse to education is not a whim for her. "Since 1994, I have been very fond of surfing the Internet. After 1995, I did some internet education communication with ERNST&YOUNG LLP when I was doing management consulting, so I know more about Internet Education in the United States." These experiences were subsequently applied to China.
In the Chinese Internet market, communications and electronic commerce became the leaders in the forefront. In Huang Bo's opinion, education has become a "virgin land" neglected by many people.
First of all, the demand for education in China is very large. Due to various reasons, students who do not go to university can provide them with opportunities to go to university. Online education can provide great convenience for their learning because of those who do not have time to study in school. Second, the distribution of educational resources in China is still very uneven. Many remote areas can not get the best education, so online education can provide them with a high-quality platform for educational resources. Third, the mode of payment in online education also has great advantages. Generally, payment is made according to the annual payment, which is not so slow compared with the small payment of e-commerce.
"When I contacted the online education mode, I found that many aspects were better than e-commerce, and it was a rigid demand from the perspective of demand. That's why I put myself into the field of online education. However, for Huang Bo, the seemingly simple educational industry's network business mode is not as easy to control as the capital market. Hongcheng's development is always accompanied by thorns.
Lessons learned after listing
Capital operation is a double-edged sword. While enabling enterprises to grow rapidly, enterprises will also be harmed. Hongcheng is no exception. A series of problems brought about by M & A are not previously thought by Huang Bo.
"We recognize that in the course of development, mergers and acquisitions have been adopted more frequently. This has made us learn a lot from the M & a process, and at the same time, there are many lessons. " Huang Bo admitted that if you buy an enterprise, if the main business of the business is very relevant to your business, the risk will be relatively low. But most of the time, the acquired companies and buyout companies often have differences. The core of this is human problems. In Europe and the United States, the success rate of mergers and acquisitions is slightly less than 50%, but the success rate in China may be only 40% or 30%. "The integrity of human integrity and the integration of two corporate cultures is quite big."
For Hong Cheng, the acquisition of entity colleges is much more difficult than they imagined. As a physical school, whether it is basic education or private universities, in the process of acquisition, there may be many laws and regulations and the coordination of local governments. "Maybe the acquisition of the former company is very strong with the local government or the local school, and when you buy it, you may find that you are faced with a great challenge to rebuild the relationship. When you buy more than a dozen such schools, your relationship with the government and local relations will become more and more difficult. "
In these respects, Huang Bo has too many lessons. "If we do not carefully verify the financial situation of the acquired company before the acquisition, or some details are deliberately concealed, after you get the company, the tax liability will be found immediately, you must pay a lot of taxes for acquired company." At the same time, the legal structure and financial structure of the acquired company are often more time than building a new company. When a new company is established, it is possible that the company will be on track in a year, but it may take two years or three years for the acquisition of a company to straighten out its structure.
At the same time, it has been questioned by investors. "What we are thinking about is how to be strong and strong, and in the eyes of foreign investors, why don't we do the best of our strongest online education, but to expand so much business." On the issue of M & A in international education institutions, Huang Bo was impressed by the fact that some of the directors opposed the expansion of the business, and the fact proved that, for today's Hong Cheng, international education did not occupy the market share they wanted.
Optimistic about China Internet Education Market
In Huang Bo's introduction, the main body of Hongcheng education is online education, which is also the most profitable part of the company. Of the 67 online degree programs approved by the state, 30 have been working with Hongcheng education. 10 of them are joint ventures, and the rest are not technical services or investment service cooperation.
However, due to the strict supervision of the country in academic education, and in the areas of non academic education, including corporate training and language training, the market has developed rapidly due to the relatively vague supervision. Before, Hongcheng education cooperation in some universities online education, by the Ministry of education to provide online degree curriculum authorization, time arrangement and so on, need the Ministry of education to approve. However, the most serious problem is tuition fees. Private educational institutions are subject to price regulation, and the rules are formulated by the Ministry of education and the national development and Reform Commission. Any increase or decrease in tuition fees must be submitted for examination and approval. This process usually takes a long time.
This is also the reason why Huang Bo not only carried out online academic education, but also diversified development on this basis. "If we want to develop our online learning center, it is not enough that we only have online education. This requires us to acquire some complementary companies and projects so as to improve our business structure. " Huang Bo said. This also seems to explain that Hong Cheng completed its fourth $8 million financing in June 2007 before listing and refinancing $68 million 200 thousand in the subsequent listing.
According to the analysis of AI consulting, China's online education market is in a period of rapid growth. Since 2008, the network education market in China has been growing at an annual rate of over 23%. By 2011, the overall market scale is expected to reach 40 billion 500 million yuan.
This is an incentive and a challenge for Huang Bo. In her view, in the Internet industry, the online education industry will become the most favored investors in the future.
"In the past ten years, the development of online education in China is obvious. The most striking thing is academic education, from thousands of students to 23 million students. With the development of economy, this business will grow steadily." Huang Bo takes the United States as an example. In 2000, University of Phoenix had twenty thousand or thirty thousand students online, and now there are 300 thousand students, and the gross enrollment rate of American higher education is 45%. On this basis, there is such a high growth rate. Moreover, China has only 22% gross enrollment rate, and the growth space is still very huge. "If the policy allows more schools to carry out online academic education and more smoothly examine and approve the learning centers outside the network, then the development of online academic education will be faster."
Huang Bo believes that the second growth points of online education in China are skills training and vocational training. Secondary vocational and vocational colleges are facing many challenges. They are all thinking about how to innovate in the teaching mode, how to make students learn useful knowledge and play a role in employment. Therefore, the introduction of higher quality network resources is bound to become the direction of their development. In addition, the development of IT and accounting vocational training will also accelerate the subdivision of the online education service industry. Finally, with the continuous increase of family education investment, online education in primary and secondary schools will continue to grow. These are all growth points. The question is whether our business models and service models can attract students and acquire the knowledge they need.