Huachuang Capital Xie Jia: We are more willing to start from the "problem"

The author | Zhang Xue

Cover | Visual China

#本文是虎嗅 + Bai Ze jointly released one of the "2021 Track Best Pitcher Series Interviews", which aims to deeply interpret the layout and thinking of the listed investors in various fields.

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Over the past year, the excitement of the corporate services sector has been visible to the naked eye. According to incomplete statistics from IT Orange, there were as many as 70 listed companies in the field of enterprise services last year. In terms of investment, the amount of investment in the first half of this year alone has exceeded 311.2 billion yuan, setting a new high.

For many investment institutions, the enterprise service industry is a newly grown opportunity recently, and it is an area with predictable high returns, but for some early institutions with early layout, it is obvious that it has entered a harvest season, and Huachuang Capital is such an institution that seizes the opportunity to enter the early stage.

We know that enterprise services themselves are a relatively broad field. According to the business model, it can be divided into at least three different types, one is software and various clouds; one is a very active B-to-B transaction, mostly around the supply chain scenario; and the other is the service in the enterprise service, its gross profit is usually not too high, but it can help customers solve the problem. However, such companies are not typical targets for VCs.

In a recent interview with Xie Jia, an investor in huachuang capital to B field, he told us that what Huachuang has always insisted on and focused on investing in is still the first category.

As one of the few research-driven investors, Xie Jia covers areas such as SaaS / Cloud Infra / AI & DataTech / Cybersecurity. He is responsible for promoting and executing many investment star projects in Huachuang Capital, such as PingCAP, ONES, Mengcheng Technology, Tiandan, Zhongrui Tianxia, FONE, Graphite Documents, JuiceData, Baiguan Technology, Xiaoman Technology, etc.

This time, he also explained Huachuang Capital's observation and understanding of the to B field for us, and shared some behind the story.

In the software industry, the efficient market is the key evaluation point

Tiger Sniff: Why did you choose the Enterprise Service Track?

Xie Jia: Before joining Huachuang, I was a product manager on Weibo, I had a lot of curiosity and enthusiasm for venture capital, I felt that early investment was a very exciting thing, choosing to B, I think, on the one hand, is a personal interest, on the other hand, it stems from the most recognition of the value of to B's business innovation.

At the end of 2015, I basically put my energy on the direction of to B, when even some excellent to B companies received not much attention, and now looking back, there were still many excellent to B companies in the years around 2015.

Tiger Sniff: What do you think the investment logic of Enterprise Service should be?

Xie Jia: Just discussed the benchmarking overseas, we are not benchmarking overseas investment logic, but we are actively doing research on overseas excellent companies to establish an understanding of the entire software industry, which is a continuous process, and some objective laws are common.

In fact, in investment practice, we prefer to start from the "problem", in the investment decision, we spend the most energy to understand and judge what problems a to B company helps customers solve, and how to define and understand this "problem" future business opportunities.

Tiger Sniff: What did the first project bring to you?

Xie Jia: The first project was an angel project, and in retrospect, it may be more of a tuition-paying lesson. In fact, even now, I have observed that the industry may be making similar mistakes, that is, the business logic of some B companies is too based on a reasonable chain of assumptions, and it is not frank and profound enough to face the "problem" itself.

I also often remind myself of these simple truths, the smallest unit of to B is to provide enterprise customers with product services to help solve problems, which requires its customer value to be clear enough to find a good PMF

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This article originated from Tiger Sniff Network