1,000 yuan per hour, let employees betray the company's secrets: when Douyin Taobao fights, the payment can be tens of thousands

Source: Visual China

Author | Li Xiaobai

Edit | Jan Pudding

Produced by | Prism Tencent Xiaoman Studio

How much money does a phone call make you willing to tell your company's trade secrets? For many people, for 1,000 yuan an hour, they will know everything about strangers.

Wheat (not her real name) has been working for several years at a well-known business due diligence consultancy, and it is her daily job to call industry "experts" and collate reports — the subjects of paid interviews, all of which are collectively referred to as "experts" by consulting firms.

With money, interviews are usually smooth — there's no transition between greetings, and the two sides go straight in, "just keep asking for data." You don't have to be rude to people who have higher positions and higher payers: "Every minute is expensive." But as long as the money is paid, the other party generally says everything. Talk for 10 minutes If you are not satisfied, you can hang up the phone. Wheat said to the author of Prism.

Talent and information are the cornerstones of the business world, and secretly extracting information from the mouth of talent is the business of a group of business due diligence consulting companies. "As long as you've updated your resume online and left a phone number, your identity is transparent." Guo Zi (pseudonym), an analyst who worked at the due diligence company, told the author.

In March this year, the commercial due diligence company Kaisheng Rongying submitted a prospectus to the Hong Kong Stock Exchange. The prospectus shows that in the database of Kaisheng Rongying, nearly 400,000 "experts" have been accumulated that can be paid for at any time. Kaisheng Rongying declared that the top 20 VC/PE companies with the largest number of investments in China, as well as the top 20 securities companies with the highest total assets, are basically their own customers.

Similar to Kaisheng Rongying's business, there are also foreign-funded GLG, High-Lin, Bain Consulting and other companies. In Luckin's earth-shattering fraud case, due diligence companies such as Huisheng, Jiuqian, and BDA from the local area have also become famous and surfaced.

As an information tentacle, every year large companies will buy market information and business intelligence from due diligence consulting companies in bulk; due diligence companies will also appear as intermediaries to connect the two parties to the information transaction. In the financing process, they are the issuers of due diligence reports; if necessary, they will also participate in the short-selling investigation in the secondary market, as in the Luckin case.

Due diligence consulting companies have a lot of revenue, but they are subject to the color of the industry, and they have always chosen to sneak low-key.

From 1,000 yuan per hour, buy the company's secrets

In the database of the due diligence company, you can find various data from most well-known companies, most of which are revealed by internal employees in paid interviews – of course, this is not allowed by their companies.

The author of "Prism" got a number of expert interview reports from two industry head due diligence companies, including two Douyin e-commerce reports, each of which was 10,000 words long. The report not only has figures from monthly active months, anchor GMV, payment rate, customer unit price, ROI, user duration, conversion rate, return rate, user characteristics and distribution, annual goals, etc., but also includes personnel information such as team composition, number of people, KPIs, and reporting lines of a business.

The interview time of this report is exactly when douyin e-commerce and Taobao live broadcasting are fiercely clashed, and the source is the operation employees of douyin's front line. "When the two families are fighting, if they can give this core data, the payment can be up to 10,000 yuan per hour." For grassroots employees, the attraction is still quite large. Fruit said.

Studying competitors is a compulsory course for companies. External traffic figures are never a secret, especially for large companies with deep pockets, which can be monitored by means of "crawlers" or "heads counting". Such as the Internet company's DAU, MAU (daily active and monthly active), store sales data, etc., every day in the opponent's statistical vision.

Success or failure is financial data, which can only rely on internal excavation. "For example, when Douyin rose, you know how many users it has grown. But how much profit these users create depends on intelligence. Fruit said.

Many people think that this will only happen by installing commercial spies, but in fact, many of the intelligence work is done by due diligence consulting firms. Opponents' operational data, budget inputs, competitive strategies, profit returns, team members and even the privacy of their bosses, all valuable information is traded semi-publicly.

In return, due diligence companies pay "experts" ranging from $1,000 to thousands of dollars per hour. Executives who have core data can reach tens of thousands to 100,000 yuan an hour.

The contact information and job information of these experts come from major recruitment websites and career communities. As long as you have left your resume and phone number, you may be caught. The well-known professional platforms will basically secretly resell information to due diligence companies. The company where the fruit works can cost millions of dollars a year to purchase expert materials.

Naturally, such employee interviews are explicitly prohibited by the company. Once discovered, they will be decisively fired.

In recent years, in the reports of violations of large factories, there have been frequent cases of dismissals from paid interviews. In order to keep secrets, the monitoring of employees by large factories has become increasingly strict, the permission to view data has gradually shrunk, and more extremes such as Pinduoduo have forced employees to disband all WeChat work groups. But due diligence companies have never lacked "experts": "The people who refuse to be bribed are in the minority. Fruit said.

Front-line operations and marketing personnel who are directly exposed to data are the focus of due diligence companies, and assistants around executives are often targeted. "They are in an important position and their income is not high. Although the assistant does not necessarily know the details of the transaction, in some key cases, the analyst can spell out a lot of information by revealing the boss's recent business trip and who he has met. Wheat said.

There are also experts who are not impressed by the payment and will also be interviewed. Wheat revealed that one of Pinduoduo's directors is in the database of several companies. Every time there is 6.18 and double 11, Ali and Jingdong learn about Pinduoduo's subsidy data from him. "He cares more about the exchange of information. At the same time of output, it can also get the subsidy strategy of Ali and JD.com, which is convenient for response and reporting. ”

Wander the grey areas and earn information spreads

Wheat's due diligence company is larger, and before he calls the expert, he will first entrust an outsourcing company to do preliminary communication to find out whether the other party is willing to be interviewed. The outsourcing company first gives the experts a list of outlines that range from ten to dozens of questions. Experts make checks, how many questions they can answer, and also determine their price tag.

When Wheat calls an expert, if the other party is not sincere enough, or the value of the information provided is not large, the analyst can hang up the phone within 10 minutes without paying. However, in practice, this situation is not much.

There is undoubtedly ethical pressure to leak company information, and some people will provide false data as a result, but it is often penetrated by exhaustive inquiries from analysts. "It's going to be very detailed, and it's going to ask for some data that we already have. For example, in a baidu information flow number, we know 10%, but you say 50%. ”

Sometimes due diligence companies simply act as intermediaries, allowing experts to talk directly to customers. "The client is generally a member of the company's strategy department." However, in most cases, customers will still entrust due diligence companies to conduct research. "The due diligence company's framework is more systematic, not only asking for data, but also summarizing it into an analysis report. If the data strategy department is not satisfied, it can ask the due diligence party to find someone again. Wheat said.

In the prospectus just submitted by Kaisheng Rongying, you can clearly peek into the business model and profit margin of the due diligence consulting company.

Although Kaisheng Rongying defines itself as a knowledge information service provider and benchmarks with knowledge payment products such as Zhihu and Get, in fact, its model is to match transactions between the two sides of the information and earn the difference.

According to the prospectus, Kaisheng Rongying pays experts a fee ranging from as little as 1,000 yuan to thousands or tens of thousands of yuan per hour. Charge a minimum fee of 4500 YUAN/hour or more from the information requester. If the demand side requires offline interviews, it will cost an additional 1/2.

From 2018 to 2020, the total revenue of Kaisheng Rongying was 385 million yuan, 461 million yuan and 643 million yuan respectively, with a compound annual growth rate of 29.2%; the company's gross profit margin was 48.9%, 43.3% and 51.5% respectively; and the net profit was 84.5 million yuan, 92.7 million yuan and 167 million yuan, respectively, with a compound annual growth rate of 40.4%.

However, the industry still mainly regards Kaisheng Rongying as a labor-intensive "interview company". According to the prospectus, it currently provides customers with interviews, research and conference services, of which expert interview revenue accounts for 88.4%. In the database, more than 70% of the experts are ordinary employees worth 1,000 yuan / hour.

In addition, it should be noted that the SEC in the United States stipulates that when due diligence companies do business interviews, they can only interview employees who have left the company for more than 6 months. However, in China, a number of people in the industry revealed that this rule is basically useless, which also makes the current domestic paid interviews walk in a gray area. As a result, many due diligence companies keep their interviewing business secretive and avoid talking about it.

Although in the link of expert paid consultation, most due diligence companies are similar to Kaisheng Rongying's playing style, companies such as Gao Lin, BDA, Jiuqian and other companies will also participate in the VC/PE due diligence report writing in the financing process, as well as similar to the short investigation in the Luckin fraud case.

Compared with simple expert interviews, these businesses have a more lucrative single income, but they require a higher-level team of analysts, stronger financial support, and more complex and chaotic formats to deal with.

VC engages in "relationships" and due diligence as "coolies"

Before a VC company invested in Heytea, it entrusted a head due diligence consulting company to issue a due diligence report. "We do not recognize some of the data and models of Xicha, and investors are very dissatisfied, thinking that writing like this will make founder Nie Yunchen unhappy, so let us revise it overnight so that he can pass the meeting as soon as possible." The due diligence company analyst revealed to the author.

In the investment process, the final due diligence includes commercial due diligence, financial due diligence and legal due diligence. Some due diligence processes are done by the investors themselves, while a large number of cases are outsourced to due diligence companies.

A VC investor revealed to the author that the remuneration given to the outsourcing due diligence company in a case is about 1%. "The dollar agency that can really make a lot of money, no one has the hands to do these things." As far as he can see, the due diligence company will earn anywhere from one or two million yuan to one or two million DOLLARs in a case. The highest order, a VC in the due diligence session alone cost $6 million.

Under the standard process, the due diligence "open visit" of the investment institution and the "secret visit" of the third party due diligence need to be carried out simultaneously. After the due diligence company obtains the real data from various channels, it builds a model, calculates the profit and loss, and finally outputs the company's business value estimate to the customer. A few years ago, a fully responsible due diligence should have been set aside at least 2 months for a third party.

Now, both overt and covert visits are like the tacit understanding between some brokerage research institutions and companies of "market value management", which has become a formality.

"Some investors ask for a report within a week, otherwise they won't get the investment." Fruit said. While due diligence companies have direct access to the market and a wealth of intuitive data, they are still downstream of the VC industry's chain of disdain.

More expensive than knowledge products are capital and relationships. Venture capital firms focus on front-end businesses such as fundraising and maintaining relationships, and due diligence companies undertake intensive labor, "still a 'coolie,'" Guozi said.

After the Luckin fraud case in 2019, the business received by due diligence companies such as Gao Lin, Jiuqian, Huisheng and BDA, which participated in offline investigations and short-selling, increased sharply. The above-mentioned investors revealed to the author that the number of personnel and orders of these companies has doubled to several times.

Especially from 2019 to 2021, the new economy and new consumption formats are on fire, and the tracks such as community group buying, new tea and coffee, new domestic goods, new consumption, and chain catering are overwhelmed, and the conquest of the investment circle is also unprecedentedly anxious.

Guozi revealed to the author: When the community group buying rose, the company received a large number of orders every day to investigate the opponent's strategy, and the due diligence orders of investors were also in a hurry, and the company's hundred or so analysts pounced on the business every day, or went to the fourth and fifth-tier small cities to investigate. "Investors themselves do not do this kind of dirty work, they have to go around the founder, understand the boss and market preferences better, and buy data sources for finishing."

Even if a due diligence company finds data fraud, it usually doesn't sway investors' decisions. "We did a community group purchase fresh APP, and the number of leaders was falsely reported. But investors took the report and simply asked the founders to lower some valuations. Fruit said.

Investors are also helpless about this: in the final analysis, the due diligence report is not to verify the logic and results of investors, but to support investors to pass the meeting. "Before giving the money, you have to have made the decision that I want to invest in this project to spend so much money, otherwise this money will not be exported." The above-mentioned investor said to the author.

Everything is Source

From the second half of 2021 until 2022, with the rapid cooling of the track such as new consumption, the investment circle began to turn collectively to the direction of hard technology and carbon neutrality, and it was becoming more and more difficult to do the business of due diligence companies.

Guozi revealed to the author that the revenue of the due diligence company shrank by about half last year, and analysts in the company have shifted from the consumer field to chips, semiconductors, metacosms, etc., and are stepping up to supplement industry knowledge. "But the hard technology threshold is high, the exit cycle is also very long", the company where the fruit is located is considering chopping the list, before the main dollar fund, hundreds of thousands of yuan a single; now the RMB fund is also done, thirty or fifty thousand orders are also received.

However, for analysts, switching tracks, rapidly absorbing knowledge and transforming has become their normal work.

"In this industry, the top talent can earn $1.5 million a year." According to wheat, better analysts can also achieve wealth freedom within a few years. Their work is extremely intense, rarely leaving work before 10 p.m., and conference calls that last until 12 a.m. are more common.

Due diligence companies don't have to start at a high starting point for analysts, and may start with making a pay call. And those who do well can turn to brokerage institutions in the future, can enter large companies, and can also stand on their own.

In addition to the establishment of a knowledge system, the first thing that determines the direction of their careers is the accumulation of contacts. There's a saying within the due diligence consulting industry: "Everything is source." "As a gathering place and dispersal of information in the business world, due diligence companies and the company's strategic personnel and other information holders together form a close-knit organization.

Wheat introduced to the author that the analysts and the strategy department are not as strong as the outside world imagines. "Isn't strategy a dead-and-die strategy, and studying your company will bring you down?" That's not true. "At the talent flow level, analysts may move to strategic departments or go to small companies to become CEOs, so that they have more network resources."

Sharing sessions are often organized between them and operators from major companies are invited to participate. In the common WeChat group, people also exchange information and resources.

In this industry, information itself is not a barrier. Especially among analysts who attach importance to management, a person interviewed an important information update, appeared in the notes of a research institution, and quickly formed an information consensus. "When one person knows the information, everyone knows."

Therefore, in a higher dimension, the ultimate consideration of the analyst is his logic and penetration ability. Wheat takes Baidu as an example: "How much money has been made by the Fengchao system, information flow, medical care, and e-commerce, everyone knows." But how to model, Baidu's sustainability and strategy, need analysts to give answers. ”

And people with strong logic, "there can't be one out of a hundred people." For example, one of the best "sense" Internet "sense" strategists in the circle has now started a consulting firm. In 2015, in his research report on Meituan and Hungry, he predicted that Meituan would win with "grand certainty"; when Youku was just founded, he also predicted that video platforms are difficult to make money in the industry, because its deep logic is that users should follow the content, not the platform.

"So, there's no secret to the data itself, but the business model is not something that everyone can do." Wheat said.

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