Why Did O2O Enter The Cold Winter? What They Did

"Everyone is talking about the capital's cold winter." In the WeChat group, a headhunter friend expressed his emotion. After this feeling, she sent out a screenshot. In the screenshot, the news broke the news that two well-known car aftermarket O2O start-up company operations director resigned at the same time. At the same time, according to the current data of the two start-up companies, it is difficult to obtain new financing in the environment of O2O's decline. In fact, the difficulty of financing in the automobile aftermarket is not beyond our expectation.

Earlier, when we talked about car wash O2O, we had already judged that after the capital struggle, there was no change in the chaos behind the car market. Further, capital backed subsidies will fall sooner or later. But what is really surprising is the change in the O2O market as a whole. A week ago, the news came out that the massage platform Kung Fu bear was arrested for arrears of wages. According to sources, Kung Fu bears began to appear in Shanghai and Beijing in July. Some of them were in arrears. Among them, 30 of the teachers who owed wages in Shanghai were mostly left. Kung Fu bear CEO Wang run explained that the reason for the pay claim was that the quality control problem was found to be abolished.

Even so, behind the abolition of subsidies, more or less the Kung Fu Bear capital chain is tight. Not only is the pioneering company Kung Fu bear, but also 58 of its listed companies are facing similar difficulties. Yesterday, 58 came to the United States to be laid off by the explosive business and faced the collective rights protection of the nail teachers. And today, we see a company that stops O2O business and announces bankruptcy in this wave of capital downturn. Although we are still discussing the capital market, we still think that the whole environment is just cooling down and not yet in the cold winter. But obviously, in the O2O venture market, the cold winter has arrived.

Capital accumulation O2O Market Almost from the very beginning, O2O appeared in a rough and most consistent way with China's national conditions. In March 2010, Wang Xing, who had fallen head over the table, started off again, imitated Groupon and founded the United States network, and entered the local life in the form of group buying in China.

As a way to influence consumer decision making by price, the biggest competitive power of group buying is low price. Group buying is far below the consumer price of the market, acquiring users, and then guiding users to businesses, thus forming the heights of users and merchants. But there is no threshold for low prices. By August 2011, the number of domestic group purchases exceeded 5000. The competition between the 5000 companies with the same pattern is ultimately attributed to the competition of money.

On the one hand, the group buying website needs to spend enough money to be effective; on the other hand, group buying needs to ensure adequate capital support. Finally, during the capital cold winter of 2012, many group buying websites collapsed and the rest of the US group was king. After group buying, the hottest O2O is travel.

Compared to group buying, the fight in the field of travel is more naked. In travel, especially in the field of taxi, competition is almost equal to subsidy. Relying on huge capital and Tencent Ali's support, it has been burning billions of dollars. Not only is it a taxi, but almost all the O2O fields started in 2014 are subsidized.

Start-up companies need to subsidize users and subsidize their competitors. In a field of segmentation, entrepreneurs often see more than one competitor. The most direct competition for entrepreneurs with similar and similar models is capital.

As a result, you will find that almost all players who enter the market in 2014 are financing abilities. So, we see that a large number of companies have completed two or three rounds of financing within one year. On the one hand, we can see that these companies have strong financing ability, and on the other hand, they are also forced and subsidized by the industry. As for the O2O mode, it is mostly based on the premise that the opponent is eliminated, and then the user is verified after the subsidy is completed. But a lot of start-up companies can't wait for the verification mode. The autumn of death: O2O is the first industry abandoned by capital.

In the article "O2O's death Apocalypse of the whole industry" written by pin Tao net, there are nearly 100 O2O start-ups. Among them, hairdressing, manicure, real estate, travel, post market, tourism, education, catering, community, sports fitness, funeral and interment, almost all areas of subdivision.

"80% of O2O start-ups are going to die!" an investor was outspoken. Unlike other industries, venture capital companies in the O2O industry need capital to acquire users, then use these users to finance the next round of investors, and then complete the verification of business models.

In the process, most O2O start-ups are faced with the dilemma that users' behavior changes rapidly increase due to the offline business form, which means that the growth of data for most O2O start-ups is difficult to achieve. Internet The explosive growth of start-up companies. In other words, the O2O business at present is basically "capital stop, basic project stop".

And unfortunately, O2O is also a continuous race. In a malfunctioning venture capital environment in China, when the new fund poured into angel, Pre-A and A rounds, the number of VC and the fund size of B and C did not increase proportionate.

This means that for early entrepreneurs, the next round of financing competition is more intense. Compared with other Internet industries, the mortality rate is also high. So, you will find that when the capital is suddenly cold, the remaining ones are king. This is somewhat similar to the group buying that year. In the middle of 2014, a VC told me that O2O is the most suitable industry for domestic VC.

He said: O2O venture company has sufficient revenue and good water support. Some venture companies can still go even if there is no venture capital to enter. At the same time, there is a lot of room for transformation of the business form under the line. The O2O industry needs to break out and the investment space is huge. But with the passing of time and the arrival of capital cold winter a year later, O2O has become the first capital to be abandoned, and it is also the highest industry in terms of risk.

Nevertheless, I still believe in the judgment of VC - of course, the premise is that capital and start-up companies are matching growth. Over the past year, we have seen a large number of O2O entrepreneurs emerging, and a large number of early venture capital investments.

On the one hand, these new O2O entrepreneurs are taking advantage of the situation rather than solving the needs of users one step at a time. In many ways, it is hard to call innovation. We see more competition, and on the other hand, these new capital spawned more O2O entrepreneurs, but these entrepreneurs are the first tier entrepreneurs. risk investment It is also raising the mortality rate of early projects.