Solid Venture &Nbsp; Low-Key To Create Tens Of Billions Of Companies.

Public comment network

CEO Zhang Tao is not very accustomed to facing the lens, though he is an Internet veteran who has been working for more than 8 years.

In the past 8 years, Zhang Tao has been very low-key, enjoying the process of making a small business bigger and bigger, but he did not expect it to be the end of 2011.

This concentration of attention is not without reason.

The number of independent users is more than 18 million, which has become the standard application of many smart phones with sina micro-blog and mobile QQ. In the field of group buying, though it is not the earliest to enter and run fastest, the public comment group has become one of the few cash flow healthy and well respected group buying websites. But more importantly, the huge volume of users on the public comment platform has a great impact on the merchants and offline merchants. As of the fourth quarter of 2011, the public comment month has more than 42 million active users, and the number of comments is nearly 20 million. In October 2011, the public comment network was named "the most investment value company of the year" by more than 70 VC such as Qing Ke and so on. As of the end of 2011, the public comment on the mobile client.

In fact, just six months ago, the public comment network was not a prominent Internet company, because the Internet in China was full of noise and hot spots at that time.

At that time, the media were absolutely surprised at the tens of millions of dollars in financing. Jingdong and everyone in the world could really attract their eyeballs. Investors always had endless meetings and speeches. People everywhere were talking about the concepts of LBS and O2O in the meeting hall and in private. Many CEO entrepreneurs were happy to focus themselves on the spotlight, and even Internet Co executives could easily occupy half of the guest seats.

By contrast, the public comment website is nothing new and fashionable. Even if they got the 100 million round of financing in April 2011, it was just a conference opened in a conference room of the company. Compared with many peers in the circle, Zhang Tao, who had been in the Internet for 8 years, seemed to have no idea how to create hot spots, attract attention and take a concept.

However, those once bustling and noisy were just like a showy banquet, which ended with the arrival of the cold wave of capital. When winter came, people suddenly discovered that the former people's scenery was not as strong as that of the solid foundation.

Business is like this. What a company can achieve at the end is always inseparable from its grasp and consideration of the basic value level.

8 years of crawling forward

If you want to understand this company, you can't abandon its founder and CEO Zhang Tao.

In the CEO of Chinese Internet companies, Zhang Tao is a man who does not seem to be full of Internet genes.

He is a middle-aged man who is not tall and tall. His shirt is covered with a woollen vest. It looks stable enough, but it can't be fashionable. He still looks uncomfortable when standing in front of the camera. Although the outside world always compares the public comment network to China's Yelp, Groupon plus Foursquare, Zhang Tao is not keen on talking about these concepts. He doesn't like to use the halo of the Internet to pack himself, but rather wants to regard the public comment as a real business. In his words, there are not two kinds of things like opening restaurants and running factories.

Zhang Tao grew up under the influence of Shanghai's business culture and graduated from the Walton Business School of the United States. Before returning to China, he served in the ERP Department of an American IT consulting company.

In 2003, when he decided to return to Shanghai to set up the public comment network, he had been studying in the United States for 10 years, and his entrepreneurial career actually originated from his initial interest in finding food.

To some extent, the experience of early years determined the path for Zhang Tao to start his own business. Maybe after he realized his financial freedom, he chose to start his own business and let Zhang Tao have the easiness and patience to have the most difficult young entrepreneurs. While growing up in Shanghai's business culture and having been in the Internet for 10 years in the United States, he also had a clearer idea of what the essence of business was. This temperament also laid the tone for the public comment network in the next 8 years.

Looking back now, Zhang Tao's original idea of entrepreneurship is simple.

Zhang Tao is a person who pays attention to the tastes and sentiments of life. After returning home, he found that even if Shanghai eats and eats, it is always a few restaurants. When it comes to the index guide for restaurants that was seen in the United States, in 2003, Zhang Tao began to try to move the restaurant information to the Internet through user reviews.

At that time, there was no precedent for doing this on a global scale.

It was not until 2004 that Yelp, dubbed the "public comment network" of the United States, was founded in San Francisco.

In the Internet far from popular in 2003, making use of the Internet to do business reviews is still a matter of crossing the river by feeling the stones.

At first, it was just an attempt, because the introverted Chinese character and the netizen structure of that period were too young. Even Zhang Tao himself was not sure whether this mode could work.

The results of the verification found that although Chinese characters are introverted, they are still willing to express themselves on the Internet. In the relatively developed commercial environment of Shanghai, the restaurant's natural environment makes the netizens naturally choose and compare their desire to eat and drink. This also lets Zhang Tao firmly believe in his own principle: to do the reviews, we must choose the areas where competition is intense, information is abundant and users need to make frequent choices.

"If we chose to comment on real estate or comment on the massage parlour, we might have died."

Zhang Tao said happily that he liked food.

In October of 2003, Zhang Tao tried to publish a book that initially accumulated restaurant reviews, and the response was pretty good. On his website, a group of core users began to stick in the community all day, writing high-quality reviews.

This also let Zhang Tao begin to have the courage to go out of Shanghai, the initial mode in Beijing, Hangzhou, Nanjing, Shenzhen and other cities to reproduce.

The process of replication is equivalent to re doing the new city in Shanghai.

From collecting local restaurant information, finding people to write comments, and then forming a community atmosphere gradually let users produce content, a little deep tillage and meticulous work, which is not like the mercury draining land when Internet Co occupied the foreign market.

This hard work lasted for over a year. By the end of 2004, public comment had covered more than 20 major cities. The next step was to find out how to find a profit model.

However, even at that time, Zhang Tao and his public comment network, apart from their new models, were still a small business far away from the mainstream of China's Internet. "The mentality is good and what profits have been made", which has become the main question for investors to comment on the public at that time.

In 2004, when the traffic volume became king, the public comment network did not seem "sexy" to investors at all. Not to mention that the total number of Internet users in China in 2004 was only 80 million, of which the pleasure of writing comments on beer and skittles was even more rare. The flow of public comment could not persuade advertisers to advertise. In the 2004 of "traffic = advertising = earnings", in the eyes of some investors, the value of public comment network was far less than that of a website navigation station.

Before that, the development of public comment has always relied on the start-up funds of several founders from their own pockets. Since financing is hard to find, finding ways to find profit models has become a vital choice for this website.

The pition eventually came from Zhang Tao's contact with offline merchants rather than the persistence of online traffic.

"At that time, we found that many merchants had their own discount cards, and we wanted to have a unified membership card. The user spent 1000 yuan and could get 100 points. This money could be consumed again, and could also be exchanged for gifts, recharge cards and so on. So we made membership cards, and then we relied on this to finance."

Zhang Tao recalls.

In 2005, by virtue of the membership card business, the public comment finally won the A round of $1 million for Sequoia Capital Investment. Although the money was actually poor compared with the financing of tens of millions of dollars, such as Dangdang, excellent and billion dragon, it was already a timely relief for the public comment network that just started.

However, after Zhang Tao's view, the business model of membership card is not smart, but it is much more difficult to implement than it is.

First of all, the demand for membership cards exists, but it is only a small number of people's needs.

For general users, the discount is enough. Complex integral calculation experience is not good.

From the merchant side, the membership card business needs to change the habit of many merchants. For those merchants, discount cards can barely be understood. But membership in the membership card involves a series of links including the collection of cash, which is the most difficult way for traditional merchants to change.

"The lesson that this incident brings to us is that we must be cautious in dealing with the innovation of the charging mode, and try not to do things that will change the habits of businesses and users unless we can bring huge benefits to them."

Zhang Tao concluded afterwards.

This also allows Zhang Tao to start thinking differently from the Internet way of thinking as the real pain point of traditional businesses. Traditional merchants do not care about any patterns and concepts in the Internet field. They only need partners to bring real customers to the market. Businessmen need the settlement method of their partners to be as simple as possible, at least let the cashiers with low educational level be able to master them.

This leap from the Internet to the offline entities has made the public comment network extremely painful: the Internet language merchants do not understand, and VC just like to scramble for all kinds of trendy Internet concepts. The identity entanglement at the two ends allows Zhang Tao to explore the profit model in the past two years after the membership card mode.

Looking back, the two years of continuing to explore the profit model are a bit of a dead end for the team.

In fact, between 2005 and 2006, it was the UGC (user generated content) concept that swept the Internet in China. The public comment network was considered an early Internet Explorer through UGC. If Zhang Tao "smart" voluntarily wrapped up himself or was willing to follow the hot spots of investors to adjust his business direction, financing would not be a difficult task. Accepting any temptation would allow public comment to have a more relaxed cash flow at that time. But Zhang Tao still hoped his company could remain focused and clearly understand its core position -- helping merchants to do marketing and helping consumers find concessions.

It is precisely in this nearly business model of the back to sea, after nearly two years, the public comment network has found the electronic coupons this simple and direct marketing method.

The reason why membership card mode is not mature at that time is that our traffic is mainly online, and membership cards are consumed online. This can not make good use of our online traffic advantages, and will become heavier and heavier. We are still a small company, hoping to make products lighter, and ultimately choose electronic coupons.

Zhang Tao said.

For merchants, discount sales are frequent business behaviors. In the past, more people were seen to promote sales information, and more manpower and resources were needed to make them distributed along the street. The emergence of electronic coupons solved their demand.

And for the small public comment at that time.

Electronic coupons are light products. The cost of trial and error and the cost of business understanding are very low.

At the beginning, they were sent to merchants free of charge. After seeing that the coupons brought effect, many merchants began to choose to pay. On the basis of win win, the public comment network also gradually defined its own profit pattern.

Zhang Tao is well aware that under the Internet thinking, it is easy to make the business model design extremely exquisite but too complex. But the key to the success of the business model is to see whether the traditional merchants can understand and smoothly butt up. On the surface, the electronic coupons are simple and crude, but because of its simplicity, the public comment network can continue to be a light company without being dragged down by the heavy line business.

In 2007, the public comment network ushered in the second round of US $4 million financing. The scale is still not large. After all, in VC's view, a very complicated coupon product seems to be worth little. Maybe after that, the public comment will be a small company with little wealth and ease.

But then the financial crisis changed everything.

In retrospect, Zhang Tao will be very grateful to the 2008 financial crisis, not because of how many of the public comment network competitors have been defeated by this crisis, but because of the cold winter forcing Zhang Tao's company to make radical changes from management to marketing.

"If there is no financial crisis, we planned to carry out the third round of financing in 2008. When the financial crisis first came to find that the financing could not be melted, we would not want to melt the money. We began to think about how to push ahead with the sales and the pace of our company going further.

When the financial crisis comes, we may not be able to hold up any longer when we do not have the money to burn up. If we start earlier, our sense of crisis will not be so strong, so this is a lucky time for us.

Zhang Tao said.

Today, if there is no financial crisis, perhaps the public comment network will gradually become silent in the small fortune that is created by electronic coupons.

Unlike other electric business enterprises, the business mode of the public comment network determines that its operating cost is not high. It does not need to rely on sufficient funds to occupy the market. Instead, its business model comes from the user's quality comment information. The establishment of this atmosphere requires years of hard work and execution. Once the capital is formed in winter, it will generate terrible energy and form huge barriers to competitors.

In 2008, Zhang Tao found that the field of life that he had worked for many years began to appear to be a strong competitor with both technology and capital.

A rival with technology aura is the love network created by the original Baidu CTO Liu Jianguo. With its vertical search technology, some comments on the public comment online are directly copied onto the platform of AI Bang network.

At the same time, YAHOO's word of mouth network has begun to get involved in the local life service field. Relying on huge funds and YAHOO's traffic advantages, the industry once thought that the public comment on the word of mouth with abundant resources may be doomed.

It was also at that time that the public comment network began to let the latecomers who covet the local life field feel the strength of their community building for many years: from the capital flow to the staff scale, the public comment network was not an opponent of the giant, but the atmosphere of the reviews it had accumulated over the years and the word-of-mouth formed by the merchants in it was a time-consuming and painstakingly "bitter business". There were many things that could easily make money in the Internet field.

What is more discouraging than creating a good community atmosphere is that the public commented on the line of business reputation accumulated in the more than 20 cities in the past 5 years. Until then, Zhang Taocai found that the hard word-of-mouth and brand accumulation for the local merchants in the previous 5 years were not wasted. The trust established by the local businessmen after numerous cooperation with them has become the most difficult crossing for the Internet giants.

Willing to focus on other people's unwilling to enter the bitter business and insisted on many years, just formed the public comment network industry barriers.

With the establishment of industry influence and further promotion of electronic coupons and other businesses, the public comment network finally achieved profitability at the end of 2008. At the same time, the promotion of sales and operation during the financial crisis also began to receive results. Besides the electronic coupons, the key words for merchants were promoted to become another profit point of the public comment network.

"In this way, we get a profit every month in 2009. According to the natural growth at that time, we can reach the scale of listing in 2010 or 2011, even if there is no detonation of group buying and mobile phone."

Zhang Tao said.