Zhang Bangxin, who "eliminated the famous teacher", has surpassed the achievements of the master brother Yu Minhong?

Two founders with distinct personalities have created two education companies with different business models.

This article is reproduced from Yiou Network (ID: i-yiou)

Wen 丨 cold winter

Recently, New Oriental and Good Future released financial reports.

According to the financial report, in Q2 of fiscal 2021 (the three months ended November 30, 2020), New Oriental's operating income was US$888 million and net profit was US$53.9 million. For the same period, Good Future's operating income was $1,119.1 million and a net loss of $43.6 million.

One profit and one loss, but the market value of profitable New Oriental is far lower than that of good future. As of the close of trading on January 28, 2021, EST, New Oriental's market capitalization was $28.9 billion, and the market value of Good Future was $47.1 billion, a difference of nearly double.

Behind this difference represents the two states of the education and training industry, one is the operation mode of modern enterprise, capitalization and technology in the future, and the other is the operation mode of the traditional educators of the New Oriental.

The form of a company is often also the imprint of the founder's personality. Taking Zhang Bangxin and Yu Minhong as the line, we can glimpse how two different types of founders have shaped two very different educational organizations.

The winds started in different times

In 2003, Yu Minhong, as an outstanding alumni representative, gave a speech at the graduation ceremony of Peking University.

At that time, New Oriental had been established for 10 years, accounting for about 80% of the study abroad training market share in Beijing and about 50% of the country, and the number of students trained annually reached 200,000. Through lectures around the country, Yu Minhong has also become the world-famous "godfather of studying abroad".

"Even the most hopeless thing, as long as there is a brave person to insist on doing it, there will be hope in the end." 」 Yu Minhong preached on the stage, and at this time, one of the students of the Department of Biological Sciences was excited, this is Zhang Bangxin. At the time, he was working as a part-time tutor to earn living expenses for himself.

More or less inspired, in August 2003, Zhang Bangxin formally established Xueersi, starting with Aoshu Peiyou.

Good Future was established ten years later than New Oriental, and the two belong to the products of different eras.

New Oriental is stepping on a wave of making life better by studying abroad, representing a desire to escape from the Chinese system. A good future bets on The demands of Chinese parents for their children to stand out in the education system.

In the first decade from its establishment to its growth, China's Internet was not yet popular, and Yu Minhong held lectures and motivational speeches in colleges and universities across the country to acquire users and establish a brand. Zhang Bangxin, who has an introverted personality, caught up with the era of the rise of the Internet, and soon after the establishment of Xueersi, he encountered SARS and could not promote offline, zhang Bangxin used websites and communities to obtain customers online.

In 2006, New Oriental became the first educational institution in China to be listed in the United States. At the time, Yu Minhong owned a 31.18 percent stake in the company and was estimated to have assets of more than $121 million, making him the richest English teacher in China.

In 2010, Good Future also went public in the United States. On July 28, 2017, Good Future came to the fore, with a market capitalization of $12.743 billion, surpassing New Oriental ($12.615 billion) for the first time. In that year's Hurun Rich List, Zhang Bangxin, 37, ranked 48th with a net worth of 40 billion yuan, while Yu Minhong ranked 199th with a wealth of 16 billion.

Good future nobody

In the education and training industry, students recognize teachers but do not recognize institutions. "Famous teachers running away" is a common phenomenon, and a teacher who is loved by students can easily stand on his own. Luo Yonghao, Li Xiaolai, Ma Weiwei, Zhou Sicheng and others are all famous teachers from New Oriental.

Zhang Bangxin and Yu Minhong have completely different attitudes towards "famous teachers", and have also created different organizational forms of the two education and training institutions.

Yu Minhong's attitude is eclectic, and he has publicly stated: "In a competitive market, if you don't rush in, others will rush in." If you are surrounded by excellent education companies that help your little brother, you will be even more proud. New Oriental is therefore also known as the "Whampoa Military Academy" in the field of education.

In addition, Yu Minhong also supported them with real money and silver. In 2015, Yin Jiankun, regional president of New Oriental North China, left his post to establish "Good Home in a Foreign Land", and Yu Minhong invested 3 million yuan under the pressure of the Investment Committee; in 2016, Zhao Erdi, assistant vice president of New Oriental Group, ran away to start a business and also obtained 5 million yuan of angel investment from New Oriental.

This approach also created an organizational structure similar to the "princely feudal system" in New Oriental. In New Oriental, the local principal has great power, fully responsible for the enrollment, teaching and research, teaching, logistics and other series of processes, and is also fully responsible for the revenue and profit of the branch.

Zhang Bangxin's approach is diametrically opposed to that of "eliminating famous teachers" through a central kitchen-style organization.

When it was only a year after starting a business, two famous teachers took away the elite class at that time. Zhang Bangxin began to think: "What kind of organization should be built to enable the long-term and healthy development of the enterprise?" This organizational system is the "big backstage, small front desk" pursued by Internet companies such as ByteDance and Alibaba today.

In 2008, Good Future organized the most powerful teaching and research team in China, developed standardized teaching content and teaching processes, and launched the ICS intelligent teaching system. In 2016, IPS (Intelligent Practice System) was launched.

ICS and IPS split the "back office" and "front desk", and handed over the "teaching content research and development" and "teaching process design" to the teaching and research team, so that teachers can focus more on teaching and tutoring. Since then, Good Future has adopted a dual-teacher classroom, separating "learning" and "xi", the live broadcast teacher is responsible for taking the children to "learn", and the tutor is responsible for "xi", undertaking the organization of the classroom, encouraging students and judging the problem.

This standardized teaching and research model achieves the purpose of "removing famous teachers" and makes the organization more stable, but at the same time, it also eliminates the personalization of teachers to a certain extent.

From the organizational level, Zhang Bangxin, who was born in biotechnology, has created a more modern enterprise organization, with more standards and machinery, and less humanities. And New Oriental is more like the "Liangshan" of the education industry, with more feelings and less stability.

New Oriental does not burn money

The difference between Zhang Bangxin and Yu Minhong is also reflected in the attitude towards science and technology and the choice of business model.

In terms of attitude towards science and technology, Zhang Bangxin and Yu Minhong are radical and conservative. In the two waves of technology waves of the Internet and AI, the good future is ahead of New Oriental.

As Xu Xiaoping said, Good Future is an education company with the heart of the Internet.

In 2008, Good Future incubated Xueersi Online School. In 2013, Xueersi changed its name to Good Future, clearly positioning Good Future as a "science and technology education company". In 2015, Xueersi began to broadcast live mode.

In recent years, the revenue share of Hao future online business has continued to increase, from 5.2% in Q4 of fiscal 2017 to 24% of Q4 of fiscal 2020. New Oriental is partial to offline, with online business accounting for only 4% in fiscal 2019.

In the wave of AI technology, the good future is also more radical than New Oriental.

In 2017, Yu Minhong said at the summer summit of the Yabuli China Entrepreneur Forum that he regretted spending 1.5 billion yuan on artificial intelligence and big data. "The money is like a water drift, I just feel that the internet is looking up the data a little faster."

This year, Good Future acquired FaceThink, an artificial intelligence startup known for its emotion recognition technology, and established the AI Lab, investing 1 billion yuan and 4,000 R&D personnel throughout the year.

In 2018, Good Future held an artificial intelligence conference and released a new upgraded version of the "WISROOM" smart classroom solution and the "Magic Mirror" intelligent assessment system, integrating AI technology into the classroom. At the GES 2018 Future Education Conference in December of the same year, Good Future announced the opening of its own AI education platform to share the underlying AI capabilities with the entire education and training industry.

In terms of business model, Zhang Bangxin chose the common means used by Internet companies, first burning money in exchange for scale, seizing a large enough market share and then making a profit. But Yu Minhong was relatively cautious and insisted on not burning money.

In recent years, with the entry of educational startups such as who to learn, homework help, ape tutoring, etc., the competition in the industry has intensified, and companies have to increase marketing investment to seize the source of students.

In the summer of 2019, a number of online education companies such as Learning and Thinking, Homework Help, and Ape Tutoring launched a round of marketing wars. Xueersi invested a total of about 1 billion yuan, and homework help and ape tutoring invested nearly 400 million, but New Oriental was indifferent. Since then, in every marketing war, new oriental figures have rarely been seen.

"At that time, someone inside the company asked me, Teacher Yu, do we want to invest more than a billion yuan in marketing, I said no, you first develop the best teaching auxiliary facilities and teaching and research systems, and then we gradually promote marketing work, that summer we spent 20 million yuan on marketing." Yu Minhong said in an interview with the media.

This is also the reason why the good future income in the financial report does not increase profits, while New Oriental is profitable.

epilogue

Zhang Bangxin and Yu Minhong, two founders with distinct personalities, have created two education companies with different business models.

Zhang Bangxin is more like a modern entrepreneur, he uses a standardized system to build a stable organization, boldly invest in technology, and burn money to gain customers. Yu Minhong, on the other hand, is more like an educator, tolerant of blessings for the members of the organization who have fled, and insists on not losing money.

Obviously, the capital market prefers the former, believing in the story of growth. However, moderately maintaining the distance between capital and education may be a point that Zhang Bangxin needs to restrain while building a modern education organization.