Interview with Li Haoyang: With a debt of 900 million yuan to survive, someone once spent 300,000 yuan to threaten my personal safety
A difficult transition for an education company.
Text: "Chinese Entrepreneur" reporter Zhao Dongshan
Editor|Li Wei
Image source: Respondents
In the past three years, Squirrel Ai and its founder and chairman Li Haoyang have experienced difficult survival and transformation.
In 2014, Li Haoyang founded Shanghai Yixue Education Technology Co., Ltd., and Squirrel Ai is the company's artificial intelligence education brand. But in July 2021, Li Haoyang completely shut down the company's education and training-related business, and the monthly revenue of Squirrel Ai fell directly from 70 or 80 million yuan to 0.
To add insult to injury, because in the past, the main business model of Squirrel Ai was to cooperate with offline off-campus training institutions across the country to provide the latter with intelligent adaptation SaaS systems and related markets, and to collect usage fees for educational services, and the sudden closure of the business triggered a wave of student refunds from dealers, which made Squirrel Ai owe 900 million debts at once, in addition, it has to be added to the company's monthly losses of tens of millions of yuan.
In the face of the squirrel Ai in stagnation, dealers from all over the country have flocked to the Shanghai headquarters of Squirrel Ai. In order to allow Li Haoyang to repay his debts as soon as possible, individual dealers even took extreme actions.
"Some people said they would spend 300,000 yuan to buy my ears, and some people ran to my ex-wife's house and shouted that they wanted to threaten the lives of their children. Li Haoyang told "Chinese Entrepreneur". Some dealers cook snail noodles in the squirrel Ai office, so that employees can't work normally, and some dealers want to open the office window and jump off the building......
After months of communication and reassurance, Li Haoyang decided to transform and start again, and built the intelligent adaptive learning system that has invested more than one billion yuan in research and development since its establishment into the learning machine. In his view, learning machines are a huge market, and iFLYTEK and Huawei have been deeply cultivated for many years in the past, and more companies such as Baidu, Xueersi, and Ape Tutoring are ready to enter.
Similar to the original model, Li Haoyang continued to choose the dealer agency model, where Squirrel Ai sold learning machines to dealers, who sold both learning machine hardware to students and SaaS usage fees paid by time period. In addition, dealers can also carry out supervision services similar to book self-study rooms based on learning machines, on the one hand, to create a learning atmosphere and environment, and on the other hand, to answer the problems encountered by students and parents in the use of learning machines.
After 2 years of exploration, Li Haoyang said that in 2023, Squirrel Ai will sell nearly 200,000 learning machines, and has completed the business layout of 2,000 offline smart learning machine stores with agents, with an overall business growth rate of 300%. Among them, 20% of the learning machine business dealers come from the conversion of the original dealers.
"Chinese Entrepreneur" found that the price of Squirrel Ai's learning machine is generally higher than that of the learning machine of iFLYTEK, Xueersi, NetEase Youdao and other manufacturers on the market, and even the price of the latest new product is as high as 16,000 yuan, and Squirrel Ai does not even have a dedicated hardware design team inside, mainly adopting the OEM (original equipment manufacturer) manufacturer OEM model.
Li Haoyang delivered a speech at the annual meeting of business leaders of "China Entrepreneur". Source: China Attempt Library
In this regard, Li Haoyang told "Chinese Entrepreneur": "The hardware itself is not our advantage, the difference between us and others is the AI intelligent adaptive learning system and the understanding and precipitation of education, which is our characteristic." The key is to look at the learning effect of students, and when parents recognize the effect, they will not care about the price and investment."
However, after interviewing a number of agents and parents of students in the same category of learning machines, they all said that Squirrel Ai does not have too obvious advantages and differences with the learning machines of brands such as iFLYTEK, Xueersi, and Ape Tutoring on the market. At present, the agents of squirrel Ai are distributed from provincial capitals to fourth- and fifth-tier cities.
But in Li Haoyang's view, with the intelligent adaptation of the large model to the learning machine scene, this will be a huge market of 200 billion yuan, and Squirrel Ai can also rely on this product to cross the financial crisis.
The following is Li Haoyang's own statement, edited by "Chinese Entrepreneur":
900 million in debt
In July 2021, Squirrel Ai said goodbye to education and training completely.
Actually, we have an online education and training business license, but we don't do it. At that time, our monthly revenue went directly from 70 to 80 million yuan, plus the student refund on the dealer's side, we owed 900 million yuan in debt, and we had to add tens of millions of yuan in losses every month.
At that time, our dealers all felt that the company was going to fall, and they didn't know if the direction of your transformation was reliable, and they didn't know if the squirrel Ai could survive, so they all went to our Shanghai headquarters office, smashed all kinds of smashing and robbing, and smashed all the offices, some people said that they would spend 300,000 yuan to buy my ears, and some people ran to my ex-wife's house and shouted to threaten the lives of their children.
At that time, the company did not have enough money in the account to refund all the arrears to everyone, and we could not pay off individually. Therefore, there are many people who are very irrational and hope to get money through extreme behavior.
Some distributors cook snail noodles in our office, so that we can't work normally, and some people even want to open our office windows and jump off buildings......
The dealers are indeed miserable. At that time, we had more than 4,000 dealers in the country, and they owed an average of more than 200,000 yuan each, but many of them may have made more investment, such as obtaining certificates, meeting fire protection standards, and being in a special period at that time, etc., and some have increased their investment by more than 1 million yuan, and the losses are even more serious.
At that time, our company had more than 100 million yuan in cash, but I can't say that whoever makes trouble will give it, this is everyone's money. Only if the company continues to move forward can it afford to pay back everyone's money. Moreover, if only 10 percent of the arrears can be paid off by each person on the spot, it is impossible for everyone to accept it. After consulting with everyone, we decided to invest the 100 million in R&D.
It was a difficult process to appease the dealer, but first, as long as someone came to make trouble, I would definitely meet with him and not hide, even if many people couldn't appease him at all; second, many people suggested that I go to the United States to hide, and the company filed for bankruptcy liquidation, but I didn't do it; third, I went to each province to communicate with the dealers and let them know that the situation at that time was either liquidated and shut down, or continue to transform and invest in R&D to move forward, and slowly repay everyone's debts.
The whole process is really difficult, no less than rebuilding a company, or even more difficult than that. In the end, some dealers chose to transfer shares, some chose to sell their debts at a discount, some chose to continue to support our transformation direction, and some agents waited and watched.
Bet on learning machines
Soon, we saw a much bigger market – learning machines.
At that time, there were three main directions for the use of artificial intelligence education technology in the world: first, the largest market was in full-time schools, which basically accounted for 70% in the United States; second, there was an education company in India with a maximum valuation of more than 20 billion US dollars, and 70% of its revenue came from learning machines, and Messi was invited to endorse it, and large domestic enterprises such as Huawei and iFLYTEK were also making learning machines; third, there was also a part from the education and training market.
Excluding the third one, it is clear that there are only two directions in front of us, one is to enter a public school, and the other is to be a learning machine. However, compared with government procurement, we are better at market-oriented play, so we chose the learning machine, and decided to all in the learning machine.
Once the direction was set, a sense of urgency came immediately. At that time, Huawei and iFLYTEK had been deeply involved in the learning machine market for three or four years, and more companies such as Baidu and Xueersi were also ready to enter.
We held a learning machine conference in September 2021, and at that time, the intelligent adaptive learning system had no time to be built into the learning machine. We had no choice but to put the web version on it first, and the launch was not even an official product.
Learning machine is our new business, but we don't have a big team for hardware, and we don't directly hire hardware designers, more to find OEM manufacturers, when the manufacturer customizes, our hardware team and software team have to be stationed in the factory. The reason for this is because the value of hardware in the whole product is not high, and our core and feature is AI intelligent adaptation technology, not hardware.
As soon as our learning machine came on the market, it was sold more expensive than iFLYTEK, Huawei and other manufacturers, and even our dealers thought, you are crazy, why should you compete with other companies with a market value of hundreds of billions of dollars in debt?
When the big model came out, our effect began to show gradually, and the learning time of our student users increased by 151% throughout the summer of 2023, compared to a 20% growth rate before.
Source: Visual China
The price of our learning machine products ranges from 4999 yuan to 9999 yuan to 15999 yuan, and the price is not cheap, but for parents, whether it is compared with the past education and training, or tutoring, it is already too cheap. As long as the student is willing to use it, and the most important thing is that it is effective, he feels that it is too worthwhile.
In 2022, our average monthly wholesale revenue of the headquarters will be 15 million yuan, in the first half of 2023, the monthly revenue will increase to 20 million ~ 50 million yuan, and by the second half of 2023, the monthly wholesale revenue of our headquarters will reach 60 million ~ 90 million yuan.
This time, we still adopted the model of dealer agent for learning machines, because the biggest problem of the online store is that it is almost impossible for parents to see this product and understand what artificial intelligence adaptation is. It's not like a car, how much battery life, how long the car, how wide the car is, etc. are all quantitative data, but the effect of the learning machine can only be known after trying.
In 2023, Squirrel Ai will complete the business layout of 2,000 offline smart learning machine stores. Dealers can build smart study rooms for offline custodian institutions and small and medium-sized off-campus training institutions. After students purchase learning machines, they study in the smart self-study room after class, and dealers do not need to recruit teachers, but only need to be equipped with inspectors to guide children to use learning machines.
Landing education model
At the beginning of 2024, Squirrel Ai also released a large model of all-discipline intelligent adaptation education. This large model is completely self-developed by us, and the parameters have reached the level of 10 billion. We are neither a general model nor a large language model, we actually use the logic of the large model to plan students' learning paths and improve learning efficiency, which is a large model of intelligent adaptation.
We started researching (large models) two years ago, and at the end of 2022, large language models have begun to show signs, but we judged at that time that if we make large language models, we will definitely not be able to compete with these giants, which is not a matter of tens of billions of yuan in investment, and we think that the educational effect of using large language models is not necessarily good.
What we want to do is to combine the advantages and abilities of large models with educational theory, cognitive psychology and cognitive brain science, and apply them to the pedagogical theory and effect of knowledge learning. The learning behavior data of more than 10 billion parameters accumulated by Squirrel Ai in the past few years can be used to train the model.
Squirrel Ai now has a team of 27 scientists in North America, and we spend tens of millions of dollars a year on their salaries alone, from Harvard University, MIT (Massachusetts Institute of Technology), Stanford University, Georgia Institute of Technology, as well as Microsoft, Amazon and other well-known companies. In the past year and a half, the whole of North America has been robbing people like crazy, and we directly increase 30% or 40% of the salary, and then add the attendance allowance.
Since 2014, Squirrel Ai has been making intelligent adaptive learning systems for almost 10 years, and our learning engine has been optimized. With the combination of AI large models and learning machines, in 2023, nearly 200,000 of our learning machines will be sold. I think this will be a market of more than 200 billion yuan in the future.
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