Why China's SaaS business is not easy to do, here is an explanation of the deep reasons

Editor's introduction: SaaS is a very hot topic in recent years, but in China, SaaS business is not easy to do, in addition to the current economic situation in China, there are education, industrialization, Internet and other aspects of the comprehensive led to SaaS business in China is not easy to do. The author has made a detailed discussion in this article, let's take a look.

Business is not easy to do, in addition to the current economic situation and China's ToB status, this article from a macro analysis of China's ToB market, I personally think that education, industrialization, Internet development and the development history of ToB and ToC will have a great impact on the market, comprehensively lead to China's SaaS business is not easy to do.

Education

In addition to the imperial examination system, China's education should have begun in 1977 to resume the college entrance examination, so that the broad masses of people have the ability to contact and learn high-level knowledge.

Before the resumption of the college entrance examination, ten years of the Cultural Revolution, everyone's energy was focused on the path of rebellion and struggle, and China's education was mainly concentrated at the level of primary and junior high schools.

Coupled with the big pot of rice and the idea of preferring sons to daughters in China at that time, many people did not go to school, especially in the vast rural areas.

Before 1998, the working class of state-owned enterprises implemented a succession system, as long as the children of workers, the father retired, the next generation can take over, which also led to the cultural level of many people is not good.

Around 99 should be another watershed, before 2003, China's education belongs to the elite level of education, many people can read teachers can be teachers, reading higher vocational schools is already a very good student, after the expansion of enrollment, there is a more reasonable college entrance examination, only most students can contact higher education.

The expansion of the college entrance examination has improved the per capita education level in China, and after education has reached a certain point, the sensitivity of the masses to contact new things has increased.

American higher education began in the colonial period, and colonial universities were already established in 1636, and Harvard University was founded in the United States in 1636, even China's Peking University is 262 years apart.

However, the watershed of American education In 1819, the United States began to establish a large number of state universities, mainly because after the Revolutionary War of 1776, the United States entered a period of development and required a large number of management talents. After the end of the Civil War in 1865, American colleges and universities entered a period of rapid development.

Interestingly, since the Civil War, there has been no war on the mainland, which has also given the United States a lot of room for economic, educational, and industrial development.

In addition, from the comparison of university education level, we can see the gap in China's education, and we can also see the future of informatization and intelligence.

According to the results of the 2020 census, 218.36 million people in China have a university education, an increase of 73% over 2010. In 10 years, the population of China's university education has more than doubled, which is the backbone of society.

The 2018 U.S. Census showed that 13.1 percent of the U.S. adult population had a master's, professional, or doctoral degree, up from 8.6 percent in 2000. From 2000 to 2018, the share of people aged 25 and over who received bachelor's degrees and higher rose from 25.6% to 35%.

According to the share of Chinese university education, the proportion of university education in 2020 is: 15.49%, and 35% of those over 25 years old in the United States have a bachelor's degree or above.

Here to explain, the university education level does not represent a bachelor's degree, in the country, only undergraduate graduates, people who have obtained graduation certificates and degree certificates have bachelor's degrees, and it is estimated that less than 10% of people with bachelor's degrees and above in China should have a gap of 4 times.

Although education does not determine everything, educational attainment can be reflected in another aspect, the speed and attitude with which people accept new knowledge and new technologies.

In the Internet industry, technical personnel and now middle-level and above managers are basically people who inform the level, but saaS business is deeply rooted in all walks of life, so the education level of management also determines whether they can quickly accept new things.

Especially in some traditional industries, in the process of digital upgrading, a lot of resistance comes from the management departments with real power, due to the uneven level of education, in the process of project promotion will encounter different troubles and problems. This is one of the reasons why SaaS business is not doing well!

Second, the process of industrialization

China's industrialization can be traced back to the Foreign Affairs Movement, when railways, textiles, weapons, etc. gradually realized industrialization, but due to the backwardness of the Qing government, various uprisings, warlord melee, war of resistance against Japan, civil war, etc., although China has industrialization, the overall development is too slow, it can be said that after the third industrial revolution of others, China's industrialization has not yet developed.

After the founding of New China, the process of industrialization was too anxious to promote the era of the Great Leap Forward, although the output of steel in the Great Leap Forward rose, but it was based on the consumption of resources as the fundamental way, and the rest was still not developed.

The nationalization of industry and the succession of workers further inhibited the process of industrialization and made it difficult for the public to access it. At this stage, the infrastructure of industrialization was completed, and at least the pavement for industrialization was completed.

In 1978, foreign projects were first introduced, and it was not until 1998 that the industrialization system achieved a major reform, and there was a rapid development of industrialization.

The industrialization of the United States began in 1800, and in 1860 the first stage of industrialization in the United States was completed, becoming the fourth largest industrial power in the world, and the industrialization process of the United States was accelerated after the Civil War, and the second industrial revolution began in 1870 and the second industrial revolution was completed in 1924.

So far, the industrialization process of the United States has gone through more than 200 years, while China's industrialization process has only been 40 years, although we have referred to the world's advanced experience, it is undeniable that there are still many imperfections in the current industrialization process.

This has also led to many entrepreneurs, hard to complete the full production of industrialization, and now there is intelligent, information-based production, which also means that the labor force is reduced, and the investment funds are reduced, do not forget that the education level of Chinese universities is only 15.49%.

On the one hand, in order to ensure employment, on the other hand, it is necessary to informatize, and many places have built a model of informatization in the process of weighing, and still maintain the stability of local employment.

The SaaS business, digital factories, intelligent production, etc., at every turn, which requires a big step of capital, and how to arrange the next workshop personnel to avoid the scene of large-scale laid-off workers in 1998.

In this business, as long as the government does not provide special funds to subsidize enterprises, it is still difficult to achieve comprehensive upgrading and transformation, and this business is not easy to do.

Third, the development of the Internet

China's Internet development is very interesting, most of them are walking on the path of others, leaving others with no way to go. For example: google first, Baidu first, Uber first, and Didi.

First the three major portals, then the BAT three-legged standing, to the current BAT, TMD of the first-line factory, the division of the second-tier factory, is undoubtedly based on the popular applications abroad, localization transformation, and then stepped on the Chinese dividend.

The three major portals in the PC era, the number of people using computers in China is still dominated by college students and higher vocational employment groups, and around 2013, with the vigorous promotion of operators, China has realized the replacement from 2G mobile phones to 3G smart phones, which has also brought secondary vitality to the already sluggish Internet.

The rapid development of APP and the APization of products in the original PC era have enabled most users in China to enjoy the convenience of the Internet.

Most people are based on APP consumption of their own time and energy, and most of the earning power of the consumption Internet should be based on free content, gather a large amount of traffic, and then monetize through advertising, so invisibly instilling a kind of idea to users, the content of the Internet itself should be free.

These are all rapid developments of the consumer Internet based on Chinese dividends, and there is limited content that can be innovated, and the technology is based on foreign open source components.

Today's Internet companies also have some characteristics, can use MySQL components for a team, and will never use Oracle's paid products.

In the last two years, the form of payment has begun, and the Internet has begun to transform and directly commercialize, but this will take some time to complete.

The SaaS business is directly commercialized, and users have not yet developed this habit, so in some businesses, they will encounter the problem of not going to the price.

Now in the process of transforming the consumer Internet into an industrial Internet, the entire saaS system has not been fully established, most saaS companies still rely on the giants of the consumer Internet, such as holding Ali, Tencent and byte's thighs, and belong to the situation of the princes competing for hegemony, small companies around the world have also begun their own business expansion, I believe that in the near future, after the elimination of a large part of the SaaS players, this market can gradually cool down and rationalize.

After the continuous education of the market and the cultivation of customers by various SaaS companies, users can adapt to the industrial Internet, and they can form a real SaaS scene of hundreds of schools in unison.

On the other hand, the foreign Internet is very interesting, although Google is the largest company in the consumer Internet, but foreign countries are not the first to appear on the consumer Internet.

In 1911, the CTR Company was founded, renamed IBM in 1924, the Xinhai Revolution in China overthrew the Qing government in 1911, and the Kuomintang cooperated for the first time in 1924.

In 1972, SAP was sold in Germany, In 1972, China and the United States established diplomatic relations, and Yonyou was established in 1988.

In 1977, Oracle's company began to be founded, in 1978 Oracle1 products began to be launched, so far has a history of more than 40 years, in 1978 China just corrected the chaos and resumed the college entrance examination.

Yahoo was founded at Stanford University in 1994, China was officially connected to the Internet, NetEase was founded 3 years later, and Sohu, Sina and Tencent were founded 4 years later.

Google was founded in 1995, Ali 4 years later, and Baidu 5 years later.

In 1995, Amazon and EBay were established, eBay was established in 1998, and Taobao was established in 2003.

Salesforce was founded in 1999 and Sales Easy was founded in 2011.

In the early days of the industry Internet, China did not have a real SaaS business, in the era of consumer Internet, China caught up, stepped on the route that the United States has taken and began to grow, and grew into the world's largest Internet user.

Because the Foreign Industry Internet takes the lead and the consumer Internet only comes later, their SaaS market and business are more mature.

Compared with the history of the SaaS field at least 40 years abroad, China only called the first year of SaaS in 2015, so China still has a long way to go.

And by the consumer Internet era of play, and because the consumer Internet giants began to transform the SaaS business, so China's SaaS business, or by the C-end of the company dominated.

Whether it is the responsible business line personnel or entrepreneurs, they must think about the impact of the consumer Internet on the industrial Internet, and then explore the characteristics of the game suitable for the reverse trend of China's Internet, develop China's SaaS industry, and make really valuable things.

Here is the main comparison between China and the United States, we have gone through the journey of others for a hundred years in 40 years, which has also led to a series of problems such as rapid transformation, high-density knowledge popularization, and high investment in the industry.

These problems are also necessary to go through on the way forward, and only when we solve these problems can the SaaS business truly develop. Although some policies and projects in China need to be customized, some companies rely more on their own R&D systems, which is also a one-sided problem in the SaaS market.

However, I still have great hopes for ToB, because we are getting closer and closer to the level of knowledge, with the popularization of university education, the faster users can contact advanced concepts and skills, and the popularity of SaaS by major companies, in the near future, about 3-5 years, SaaS business can have a greater turnaround.

If you do SaaS business, do not start from now, I am afraid that in the future, I am afraid that I will be eliminated on this future path

#专栏作家 #

Zhang Mu, author of "Operational Thinking", is a product manager columnist. 7 years of Experience in Internet product operation, WeChat public account: Operation Officer Zhang Mu.

This article was originally published by everyone who is a product manager, and reproduction without permission is prohibited

The title image is from pixabay, based on the CC0 protocol