Image source @ Visual China
Text | Fast Knife Finance, author | Lu Lao'er, Editor | Huang Xiaojun
01
In 1993, the White House announced that it would start offering "online services," and within a few months, the United Nations quickly followed. Officials looked at each other, and almost no one understood the difference between "online service" and "telephone service."
Financial science and technology media reporters suddenly realized that this may be a huge hype hotspot (concept), listening around to listen to the meaning of "online", the word "Internet" quickly appeared on newspapers and television, and spread throughout the country for a while.
That same year, Gore, who was still a senator at the time and later became vice president of the United States, gave an important speech, following his father's completion of the interstate highway bill legislation, he talked about another form of highway , the information superhighway.
The media has spared no effort to promote that the Internet is the future, and people have exclaimed that the Internet will change the traditional business model. For the newly established American companies at that time, in addition to the word "technology" must be there, it was the most urgent thing to build a home page first.
Many small companies do everything they can to rub the Internet heat, add ".com" to the suffix of their company names, or string "I" and "E" in their names, and do everything they can to get involved with the "Internet".
At this time, the Chinese Internet broke out of the bud and stunned the new era.
On April 20, 1994, a 64K international private line connected Zhongguancun with the Internet, realizing the first TCP/IP full-featured connection between China and the Internet. Since then, China has become the 77th country to access the Internet with full functionality.
In January 1995, the General Administration of Telecommunications of China opened two 64K Internet nodes in Beijing and Shanghai through Sprint. Previously, Internet connectivity between China and the United States was limited to a niche level, and people on the Internet were more likely to have some kind of privilege, but now, this privilege is beginning to dissolve.
1995 was also the year of global Internet commerce. Netscape, Yahoo, AOL, Amazon, Craigslist, eBay and a large number of internet giants have emerged, and Microsoft released Windows 95, providing geeks with the possibility of leveraging and researching underlying technology platforms.
On August 9, 1995, Netscape browser was listed on the NASDAQ, priced at $14, and after the opening soared all the way to $71, 5 million shares were snapped up, closing at more than $58.
In 1996, Yahoo was officially listed on the NASDAQ, and in just one year, its stock price increased 64 times, and its total market value reached $45 billion.
These two companies, which were only 2 years old and have not been profitable, have shaken the financial circle, Wall Street is crazy, and the world is shouting: The era of the Internet has arrived!
The model may be deceptive, but soaring stocks can't be faked. Veteran professional investors have taken out a magnifying glass and have never been able to see why the stock price of this emerging industry, which hardly relies on traditional "policy arbitrage" and "relationship rent-seeking", is extremely high.
So they lamented that the entertainment industry for idiots, scientists and typists would eventually be a bubble.
On the other hand, Wired magazine, known as the Bible of the Internet, published a predictive article by the magazine's editor-in-chief, Kevin Kelly, which included the following sentence:
"The good news is that you're going to be a millionaire; the bad news is that everyone is going to be a millionaire."
Looking back now, the valuation of Internet companies has always been the focus of endless debate in the industry.
They were all right, but unfortunately they were only half right. Since then, no investor has measured an Internet technology company in terms of positive cash flow; and since then, the internet bubble has been flying with dreams.
It was from that time that the largest legal "wealth-making" movement of this century began.
02
The demonstration effect of the capital market is enormous, and the wave of wealth creation on Wall Street has swept through China at a rapid pace. Returnees, businessmen, geeks, and VC pushers are all involved in China's Internet jianghu together.
The hope that we had been waiting for for a long time to return from school finally became a reality in 1995.
Unlike the first batch of peasant entrepreneurs who were forced to "go nowhere" in reform and opening up to do business, unlike the group of businessmen with political and business backgrounds who went to the sea in 1992, this group of netizens who were born in China and studied in the United States, who are compatible with eastern and western cultures, and use the Internet to open up a green channel for competition between China and the United States.
In the era of PC portals, Zhang Chaoyang, who returned to China in 1995, took the lead.
In 1996, Zhang Chaoyang left ISI to found Ateson, while Ding Lei founded NetEase in 1997, Ma Huateng founded Tencent in 1998, Wang Zhidong also founded Sina in 1998, and Robin Li launched the Chinese search engine in 2000.
As the "godfather" and pioneer of China's Internet, Zhang Chaoyang and Wang Zhidong's contributions to China's Internet are cross-era.
The former solves the problem of where the money comes from, while the latter runs through the commercial closed loop of how capital exits.
At the end of 1996, Zhang Chaoyang received $225,000 ($170,000) of angel investment from Negloponty, Edward Robert and Bond to found Sohu's predecessor, "Artesin Information Technology Co., Ltd.", in Delaware, USA.
Then spent 20,000 yuan to "save" a server to put on the backbone network just built by Beijing Telecom, which is the first commercial server in China to host.
In April 1998, Atessa received a second venture capital investment of more than $2.2 million, including Intel, Dow Jones, Morningside, IDG, etc., and changed its name to The Louder Sohu Company.
With direct investment in foreign capital, overseas registration, and domestic operation, Zhang Chaoyang successfully solved the problem of where the money came from, and Sohu also became the first Internet company established in China with overseas venture capital funds.
It was also in this year that Zhang Chaoyang was selected as one of the 50 most influential people in the global computer digital field by Time Magazine in the United States.
On July 1, 1999, just as Wang Zhidong led Sina to prepare for listing in the United States, the Securities Law came into effect, clearly stipulating that Internet companies with foreign backgrounds must be approved in advance for overseas listing.
Many people may not know that for a long time, foreign-funded enterprises and individuals, including foreign-funded enterprises and individuals in China, are prohibited from entering the postal and telecommunications industry (ISP and ICP) industry.
To put it simply, for Internet companies in the mainland, to list on the NASDAQ in the United States, they must pass two passes, one is the Ministry of Information Industry, and the other is the Securities Regulatory Commission.
The "Yugoslav Embassy" incident occurred in May, and in October, China and the United States began to negotiate accession to the WTO. In the negotiations, an important weight of the Chinese side is that telecommunications are not open, which also includes the foreign investment in the Internet and related policies.
China does not allow foreign capital to enter the Internet; listing in the United States is actually to introduce foreign capital; listing must have the concept of the Internet, and the three sentences placed in front of Wang Zhidong cannot be unified together.
Technical genius Wang Zhidong "made a clever move" and came up with an unprecedented method: to divide the company into three - the main body of the work is a domestic company, not to go public, the listed is an American company, not to do network business.
Specifically, the original Sitong Lifang company is now divided into three, newly registered a Beijing Sina Internet Information Service Co., Ltd. as an ICP, and then registered a joint venture Sina Interactive Company.
Then "Internet Interaction" - Internet in the domestic website, the earned advertising income to interactive, other income to "technical support fees" transferred to Sitong Lifang, and then two companies ran to the United States to go public.
This also explains from another side why in the mysterious bermuda in the history of science, there will be a large number of Chinese Internet companies names.
Sina finally got the approval of the Ministry of Information Industry for the first of the three major portals, and then got the outbound green card of the CSRC and rode straight to the NASDAQ.
In 2000, Sina finally successfully bypassed policy and supervision, and successfully listed on the NASDAQ on April 13; on July 5, NetEase logged on to the NASDAQ, and a week later, Sohu quickly followed up and got the last sleeper ticket of the PC era.
Sina's listing successfully solved the core problem of how to exit capital and ran through the closed loop of commercial realization.
After this, the Chinese Internet has even formed a set of conventional success paths: foreign capital + American concept + Chinese market + local transformation + American listing.
Learn to copy the most successful business models in the United States at the fastest speed, and then quickly localize, win users, generate revenue, and then go to the U.S. capital market to go public, raise funds and then develop.
As the number of Chinese netizens gradually showed explosive growth, portals and search engines were like a key, helping China's early netizens open the door to the Internet, and indirectly setting off the first wave of Internet "wealth freedom" to make a fortune movement.
03
But who would have thought that the front foot of the three major portals just ran out, the back foot Microsoft anti-monopoly and Enron scandal superimposed, the late 911 incident fueled the wave, the Internet bubble swept the world.
With 500 NASDAQ-listed companies going bankrupt, 80 percent fell more than 80 percent, and Chinese stocks Sina, NetEase and Sohu fell below $1.
In March 2000, Barron's survey of 207 Internet companies came up with the following data: 71 percent of companies had negative profits and 51 companies ran out of cash in 12 months, including Amazon. Feeling that the economy was overheating, the Fed began a round of interest rate hikes, raising interest rates from 4.75% to 6.5% after six times of raising interest rates by 175 basis points, directly giving the Internet a fatal blow.
On November 10, 2000, China Mobile launched a new business brand - "Monternet Mobile Monternet", for Chinese Internet companies that do not know how to collect money from netizens, the emergence of Mobile Monternet is undoubtedly a blessing in disguise.
China's high-tech Internet companies mainly rely on games and "mobile Monternet" to survive. In particular, the opening of the innovative micropayment channel of game point card and SMS deduction has saved a large number of Internet companies.
Relying on the two major cash flows of games and phone bill deductions, the three major portals have successfully flipped, and online games have ushered in its full blowout and peak period, until the advent of the mobile Internet era.
Of course, topics such as arbitrary phone bills and SMS scams are often the front page headlines of major portals.
Chinese computers gained a large number of popularity between 1999 and 2003, and the number of Internet users began to run from 600,000 in 1997 to nearly 80 million around 2003.
Online music websites and resource download sites, first-generation communities such as "Cat Poker, Tianya" and BBS, countless local stations have sprung up.
In that era when mobile phones are still two-way charges, off-site communication is long-distance, and hanging QQ can only be on desktop computers, setting off a unique Internet café culture with "Chinese characteristics".
The so-called story of the diaosi counterattack, the collective carnival, and the sinking of the Internet has only just begun from this time.
In 2003, China suffered from SARS, and all crises are always both dangerous and opportunity. In the months of reduced or even suspended school trips, many Internet companies have ushered in a golden period of user growth and business growth.
At the end of 2003, the Chinese companies that survived the first wave of the Internet were the ones that invested the most energy in a certain field and gained a leading position:
News portals for Sina, Sohu and NetEase, Instant Messaging for Tencent, Online Games for Shanda and Nine Cities, wireless value-added services for Tom, Skynet, and Pocket Linkcom, as well as Ctrip's travel, 51job recruitment, Baidu search and Alibaba's B2B.
Alibaba and Ma Yun seized this opportunity, and e-commerce and e-commerce shopping platforms ushered in a development opportunity.
At the end of 2004, the concept of web 2.0 was proposed in the United States, and after a five-year low of innovation, the Internet once again became the new favorite of established investors.
Social networking, e-commerce, search, and gaming are gradually becoming the core of China's Internet, but the once hot portals are increasingly marginalized.
2005 has also become a turning point in China's Internet, from the perspective of the external environment, Google has discovered a number of new directions, the P2P concept led by Skype, the online community starring MySpace and Facebook, the video platform pioneered by YouTube, the local life information sharing platform represented by Craigslist, and the three-dimensional virtual community presented by "Second Life"...
All of these concepts seem to be retooled in China, especially after successful replications like Baidu and Taobao, which U.S. investors have also embraced. Since the second half of 2005, billions of dollars have been flowing into China non-stop.
This period is also known as "copy to China", every small innovation of the Internet in the United States, in China on the west coast of the Ocean, there will be people to learn, learn from or even imitate and follow.
Domestic Internet entrepreneurs are all copying what they see in the United States, and the "take-ism" is quickly localized, re-seeking identity, and looking for their own connection point with the market.
In 2007, Jobs took out the world's first iPhone at the press conference, and two fingers released a song "Boulevard of Broken Dreams", announcing the advent of the mobile Internet era.
2008 is the peak of the PC Internet, when Sohu is still addicted to becoming the exclusive agent of the Olympic Games, the world's first Android mobile phone HTC G1 was quietly released, the rolling wave of mobile Internet and the US subprime mortgage crisis swept in, 4 trillion directly stimulated the domestic market, hot money also rolled in.
In 2010, the song "Boulevard of Broken Dreams" finally reached China, where almost all Internet products are facing transformation.
And one of the episodes profoundly influenced the future direction of the Internet. In March, Google shut down the Google.cn, Google's withdrawal, the Internet instantly became a local area network, Baidu gained a monopoly of the fact, but also announced the end of an era in advance.
In the era of mobile Internet, any slight change on the screen of a mobile phone that is only a few inches in size may affect the core traffic distribution mechanism of the platform.
Any new APP is almost a commercial extension of functions such as the expansion of mobile phone hardware (Bluetooth, contacts, microphones, NFC, positioning, cameras, photos) and other functions, which contains great opportunities for intergenerational replacement and overtaking in curves.
The mobile Internet era is also known as the mobile phone screen battle.
From the beginning of the new century to the present, emerging business models such as portals, search, games, social networking, e-commerce, group buying, sharing, and O2O have emerged one after another, almost laying the foundation for China's Internet business model in the next decade or so.
This kind of local and American-style wealth-making movement has produced enough sunshine rich people and intellectual heroes, and the big wave of the Internet has turned ordinary people into public figures and industry idols, and has become the internal promotion of Internet innovation in China, and has once again become a "national carnival" movement.
04
From 2010 to 2020, China's Internet has been in a fierce fight for 10 years, if you can only use two words to describe China's mobile Internet, in addition to "burning money", it may be the most appropriate "bubble".
Incomplete statistics, in the early 2010 years, there were originally only 500 VC/PE in China, and now it has soared to 4,000. They put 6.69 trillion yuan into the primary market, 6.69 trillion yuan is equivalent to nearly 2 times the GDP of Beijing in 2020, and more than 4 times the GDP of Hangzhou, and they have used hot money to create an exciting story.
Looking back at the development of the Internet in the past 10 years, it is the story of subversion and subversion, the story of the new king and the old king, and it is also the story of burning money.
In 2010, the Groupon group buying website, which originated in the United States, blew the group buying wind to China's venture capital circle, and for a time poured into more than 5,000 startups to do group buying websites.
For a time, overwhelming advertising, position warfare, tug-of-war flocked to 2014, only 176 group buying websites remained, the mortality rate was as high as 96.5%, the craziest "Thousand Regiments War" competition, only the US group occupied the top and sat on the O2O dividend.
In 2011, after the end of the Thousand Regiments War, the O2O pattern gradually stabilized, but due to the difficulty of O2O business to make a profit, takeaway became an important growth point, and a takeaway war was about to start.
This "takeaway war" between meituan and hungry mo lasted for three years, and meituan once again won the takeaway war after the thousand regiments war.
From 2013 to 2015, the domestic OTA market led by Ctrip, Qunar and eLong was in turmoil, and in October 2015, it agreed to merge with Qunar, and after the merger, Ctrip will own 45% of Qunar's shares.
The biggest money-burning war is called the online ride-hailing travel war, Didi, Kuaidi, Uber China, Yidao, UCAR, Shouqi Travel, CaoCao Chuxing seven companies in the primary market to raise more than 27 billion US dollars (about 172.3 billion yuan), of which Didi with more than 22 billion US dollars of financing to rank first, the peak moment in 4 months burned out 2 billion.
In the end, Didi stood out with "localization", but the final "ending" was not optimistic.
The sharing bicycle war seems to be still vividly remembered, those customers who queue up to return the deposit, are still in the tens of thousands of miles away, and the sharing economy is almost completely destroyed in the end.
Around 2015, the concept of "Internet +" was hot, and P2P network lending, as a representative of Internet finance, also ushered in the outlet. Unfortunately, in 2018, the P2P industry gradually began to recede, and has been regulated, so that P2P has gradually returned to rationality in strong supervision.
In 2017, unmanned retail represented by unmanned convenience stores and unmanned shelves became a star track and won the favor of capital, with a total of 138 unmanned retail enterprises in 2 years, of which 57 obtained financing, with a total financing of nearly 5 billion yuan, but unfortunately, vicious competition, high loss rate, supply chain defects and other drawbacks continued to emerge, and the last chicken feathers.
Online education, which has begun to be touted by the epidemic, has been sought after due to the education method that breaks through time and place. At the beginning, it fell into a battle for traffic, student sources, and prices, but who knew that from the "double reduction policy" landed, the education and training industry was almost completely destroyed.
And now the big war is underway, called "community group buying", the Internet technology factory personally went down, and small traders and hawkers robbed customers.
In the era of automatic Internet, rapid entry, domination of the head, loss-making growth and the maximum speed to achieve the first in the track, almost become the "magic weapon" of the big factory.
There are probably three elements of economic development, the first element is capital accumulation, the second element is population growth, and the third element is technological progress.
All business progress has only one direction: greater efficiency.
The story of the consumer field is almost inseparable from the three elements of "people, goods, and fields", and in the era of mobile Internet, there are also similar three elements - people, information, and commodities.
Looking at China's Internet for 30 years, the Internet industry has been making efforts to erase the world. Focusing on the problem of how ordinary people participate, how to speak out, and how to interact, Internet manufacturers have completed the commercial closed loop of "selling tickets - watching performances - charging".
From the three major portals of the old Internet (Sina, Sohu, netease), to the giant BATJ (Baidu, Ali, Tencent, JD.com), to the hard-working Internet upstart TMDP (ByteDance, Meituan, Didi, Pinduoduo), and the oldest needs of the Internet: social, games, pan-entertainment (film, music, literature and news) and other fields, almost all have a super player.
The three pc giants and BAT have completed the connection between people and information, people and commodities, and people and people, and the Internet manufacturers have moved almost all of the information, people, goods, services, logistics, and capital to the Internet.
Around people, information, goods and services, the Internet giants have launched a sharing economy war, an online car war, an OTA war, O2O and other major wars, giving birth to seven super unicorns such as ByteDance, Meituan, Pinduoduo, Kuaishou, Didi Chuxing, Xiaomi Group, and Weilai Automobile.
With the continuous iteration of scientific and technological development technology, the Internet continues to reduce the threshold for participation in interaction, from first-tier cities, transition to fourth- and fifth-tier cities, sinking to the vast rural areas, and users are gradually spreading from young adults to the elderly and children.
The so-called solo music is not as good as the crowd music, the crowd music is not as good as "enjoying with the people", it can be said that in order to let us "enjoy the whole world", the Internet factory has broken the heart.
In the grafting of Internet technology and traditional industries and the contribution to the real industrial economy, China's IT enterprises are more slogans than actions, and concepts are greater than technology.
Any Internet company will not give up the mining and accumulation of user data on the mobile phone side, dig deep into the function of a sensor of the smart phone, form an application innovation, and then use this innovation as a starting point to carry out model changes in a certain field.
China's online world is also full of countless speculators without original spirit. It was they who "airdropped" the latest network dynamics on the other side of the ocean to the weak Chinese market at the first time, setting off round after round of conceptual heat waves.
In such speculation, the funds of naïve traditional enterprises, shareholders and governments at all levels have become the accelerant for them to create myths, and the golden signboard of the "Chinese concept" in the capital market has been scraped off layer by layer of "gold powder" little by little.
Anxiety about wealth and fear of class solidification have made material pursuits the most prominent "moral index" of our time, and no venture capitalist chamber of commerce has held its stake in the Chinese network until the internet company makes money — unless he can't find a next home.
05
China's Internet, born from the Asian financial crisis in 1997, ushered in the darkest moment in the Internet bubble of 2000, survived SARS in 2003, ushered in the big blowout of 2005, was affected by the "subprime mortgage crisis" in the brief glory of 2008, and finally gained a foothold in 2010, but was forced to "merge" in the capital winter of 2015, the new crown epidemic suddenly struck in early 2020, the global science and technology supervision became stricter, the Wind direction of the Internet industry gradually changed, and the undercurrent surged forward.
The contribution of the Internet to China's traditional industries is beyond doubt, and to this step today is actually most of the new business models that rely on the Internet such as traffic and entrance subsidies.
With the "three axes" - grabbing traffic, fighting for scale, and looking at growth rate, it can be said that the Internet industry, in just 30 years, has completed the road of 60-70 years in the traditional industry.
Consumer Internet platform manufacturers will face core problems such as high market concentration, monopoly of giant internal volume, obvious financial attributes, weak technological innovation, more than enough terminal integration, and insufficient vertical extension.
Where is the profit point? When will the turnaround? Those who didn't answer these two questions well died on the beach.
A consensus is that what kills an industry has never been anti-monopoly and policy supervision, but a rolling wave of technology, and the story of the mobile Internet is more about the innovation of business models than the huge changes in technology itself.
The new wealth story is hidden in scientific and technological innovation, in the field of industrial Internet, they may be a new energy vehicle, or it may be a breakthrough in autonomous driving technology, they all need enough money and patience.
With a population of 1.4 billion and the world's second largest consumer market, China provides a broad ground floor space and performance stage for various scientific and technological innovations and applications.
But behind this piece of prosperity, China's Internet industry is still a long way from true self-sufficiency and true independence.
Looking at The Chinese Internet for 30 years, bubble dreams have soared, cheering and noise, looking and confused, moving forward and suffering, and suddenly descending.
China's charm lies in the speed of its rapid development, the charm of the Internet lies in its high imagination space, and the charm of the Chinese Internet lies in its high speed and sexiness, which is not what you don't like.
Churchill said: Don't waste any crisis. Don't be too late, as long as you believe in the Internet, it is not too late to enter the market at any time.
Welcome to the "Shuffle Era" - the collective unconscious of the national carnival, entertaining to death.