Accelerate classroom and business models
Killer Skills: Business Model Reconstruction Killer Skills Index: ☆☆☆☆☆☆ Replicable Index: ☆☆☆☆☆☆☆
Technological change is constantly emerging, and the business society has entered a new era. With the help of technologies such as the Internet, any idea that can impress consumers can become a business label at the fastest speed by word of mouth and ultimate experience. The key to these depends on whether the company has an advanced business model. Excellent business model can help the company to be infinitely close to the market end, have a strong customer organization capability, through the Internet and IT technology, drive the efficient linkage of the industrial chain, and at the same time grow rapidly in a way that exceeds the conventional. So, how can entrepreneurs upgrade and optimize their business models?
Pan Dingguo, CEO of Aijia Life, is a serial entrepreneur who has started a business in five industries: real estate, environmental protection, micro-e-commerce, catering, and home improvement. He is a practitioner of the Internet platform model and is good at using C-end thinking to rebuild the industry ecology. The Internet home improvement platform Aijia Life, which he founded in 2015, received 1 billion yuan of B round financing last year, with a post-investment valuation of more than 1 billion US dollars, becoming a new unicorn in the industry, and the total transaction volume of the platform exceeded 10 billion yuan.
Recently, in the business model module of the 19th phase of the Dark Horse Growth Camp, Pan Dingguo started from the logic of industry restructuring and comprehensively analyzed the necessary thinking cognition, key steps and core tools for enterprises in the process of building business models.
This article is 4664 words, which is excerpted from the 33,000-word dark horse growth camp classroom content (click to learn about the dark horse growth camp).
Is the times making heroes, or are heroes driving the times?
I think it's the former.
For entrepreneurs, choice is more important than effort. From the planned economy to the market economy, from the PC Internet to the mobile Internet. Only by seeing the development trend of the times can we know how to effectively layout.
If every technological change allows all industries to redo, then now we face 5G, face the Internet of Everything, and the business model will change.
Since 2004, I have done 5 companies, located in 5 different industries, all of which are still in operation, of which 4 have been financed and have developed rapidly.
Based on my own experience in the reconstruction of these industries, I summarized some laws and methods to share with you.
01
Pattern Refactoring 1.0 – The Ultimate Piece
Business case: Five-compartment warehouse
Industry: Community fresh e-commerce
At the end of 2013, I founded the five-grid warehouse and began to sell cherry, which was one of the first people in China to engage in fan economy and do community fresh e-commerce.
At that time, a series of terms such as Carving, Huang Taiji, Fan Economy, Crowdfunding, O2O, C2B and so on have been hyped up by all walks of life. Although it seems that some of them are phenomena and some of them are essences, at that time, I created my own set of "Dao Magic Device" thinking methods to help me think about which patterns can be iterated and which cannot be copied at all.
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Tao refers to grasping the direction and setting the goal. The essence of business is to grasp who bought what under what circumstances, so the analysis of "Tao" is further divided into "the user's Tao - the change of user consumption time and space", "the Tao of the environment - the change of the user's consumption market and behavior" and "the Tao of the product - the change of user consumption habits and needs".
Law refers to finding the law and ascending the dimension. The emergence of the mobile Internet has made the business model from one dimension to multi-dimensional, and the traditional model of relying on price and information asymmetry is being replaced by the model of obtaining a large number of users for free and then making money through value-added services and added value.
Technique refers to grasping pain points and drawing camps. Through the emergence of endless, constantly updated marketing methods to hit the core logic of consumer pain points, one is that the development of material and spiritual stimulates the rich potential needs of users; the other is that the immediacy and interactivity of the network will make everyone a communicator, even a free communicator.
Device, refers to strong experience, deep connection. When the product changes from a lifeless object to a bond with emotional attributes to firmly tie the user, then the so-called brand, word of mouth, professionalism, and details really have value. Anyone who can create the ultimate experience for users is worthy of our profound pursuit in this era.
Therefore, the starting point of each decision we make in entrepreneurship should first start from the "Tao" to consider, and start from the "device" when the implementation is implemented. It was also based on the judgment of these four dimensions that I finally decided to do B2C fresh e-commerce by building a fan economy.
What kind of users count as fans? We have a very important indicator, that is, users who have purchased more than three times are iron fans. How do I get my customers to repeat a purchase? We drive conversions by providing users with the ultimate experience from buy to eat:
Interesting: borrowing the routine of WeChat red envelopes, providing a cherry gift function;
Minimalist: without any extra buttons, an order can be completed in five seconds;
Convenient: docking logistics company system, logistics progress at any time to view;
Temperature: When users choose to give gifts to friends, we will remind them to care more about their families;
Outer packaging: the use of perforated anti-pressure box, not only can prevent the cherry in the transport squeeze damage, but also as a water filter box for convenient cleaning and storage;
Inner packaging: Imported from Japan a transparent bag that can completely isolate the air, on the one hand, it increases the shelf life of the cherry, on the other hand, it ensures that it will not be skewered in the refrigerator;
Through the mining and capture of various needs of users, we finally reached a shocking data in the industry: every user who has posted a five-grid warehouse in the circle of friends can bring us an average of 5 acquaintance conversions.
So, I used the same logic to add egg categories and sold the most expensive "local tycoon" eggs in the country at that time, 9.8 yuan a piece. But later, I gradually found that the fresh brand recognition was not high enough, and it was difficult for a chicken to sell the chicken separately at a premium like KFC. So it also gave me the motivation to want to do catering.
02
Pattern Refactoring 2.0 – Creating a Closed Loop
Business case: Cow Brother shop
Industry: Catering
Why are mobile Internet companies developing so fast and have such high valuations?
I think the most central thing is that consumers and suppliers are online in real time. Therefore, link empowerment is a crucial logic and ability, and when translated, I think it is to create a closed loop.
A company model that is particularly worth learning in the era of mobile Internet is Xiaomi. My cow brother shop can be said to have copied Xiaomi's model in the catering industry. At least one of Xiaomi's partners gave us the most thorough copy of the Xiaomi model so far.
I translated the triathlon that Lei Jun talked about: hardware, software, and the Internet into a language that everyone can understand, that is, self-built traffic, self-built channels, and self-built products. 280 million rice flour is self-built traffic, Xiaomi Home is a self-built channel, and many ecological chain enterprises that are invested by capital are self-built products. How do we make these three self-built into the catering industry?
Self-built traffic: First of all, I made a public account called Brother Niu Duanzi, and the reason for targeting the "comic" crowd is very simple, because they are good at eating and lazy. So through the traffic entrance of the public account, we have established a community around the comic crowd, and we have now accumulated about 800,000 fans.
Self-built channels: After analysis, we found that since there is a mall like Wanda, many catering brands can quickly replicate. The reason is that Mall has established a standard: eat a big meal on the third and fourth floors, and eat snacks on the negative first floor. In a day, basically 50% of the people eat upstairs, and 50% of the people eat downstairs.
Obviously, I definitely don't do the third and fourth floors. Because the chef and waiters at the dinner are particularly important, I have to do the negative ground floor. And you will find that all the negative floors of the mall, each category has only one, the overall number will not exceed 30. So what we have to do is to monopolize the channels on the first floor of the negative, when 50,000 people go to the first floor to eat, 80% of the stalls are yours, will you still worry about business?
Self-built products: First of all, you need to create a blockbuster, and the rest is the supply chain. The top three restaurants in China are Xibei, Haidilao and Grandma's House. Because the negative first floor can not be made into a fire but can only be heated, so the products of Haidilao and Grandma's house are not suitable. So we dug into Xibei and found that there was a product that was in the top 3 of sales for 3 consecutive years - cool skin. Therefore, the first product made by Brother Niu is the cool skin of Brother Niu. Not only that, because the mall is characterized by the constant temperature of the four seasons, it also makes the cool skin a favorite all-season food of the public.
Now we have a total of 15 products, as long as the things are not difficult to eat, it is no problem. Any store cannot be profitable within three months and will be replaced. Because I have 15 categories, I can constantly change, depending on what people around me like to eat, and in the future, we will do at least 100 categories to gradually enrich our own catering ecology.
Behind this is the business model ladder from self-construction, self-operation to openness.
03
Model Reconstruction 3.0 - Shared Ecology
Business Case: Aka Life
Industry: Home Improvement
Didi has "unified" China's travel industry in three and a half years, and Mobike has covered all prefecture-level cities in less than a year, and behind their exponential development, I think it is the ecological construction of the sharing economy model.
In 2015, when I started Aijia Life, I told my partners and investors that Aijia wanted to achieve 100 billion (GMV) in 5 years. At first, they were all unbelieving, so I showed them such a set of logic, and this logic can also help everyone to judge whether there are opportunities and conditions for doing ecology in their respective industries.
The underlying logic of ecological construction: from farming to industrialization to Internetization
For any industry or enterprise, we can use 3 civilizations to summarize its development stage and characteristics:
Farming civilization - do addition: the industry's head enterprise scale is less than 10 billion yuan, the development is very dependent on the core positions and core talents; industrial civilization - do multiplication: enterprises have the ability to standardize business processes, division of labor specialization, and begin to enter the stage of running enterprises through marketing and management; Internet civilization - exponential level: from the logistics, information flow, capital flow 3 dimensions, to achieve the industry's internal linkage and empowerment.
Looking at it in this logic, home improvement is a typical agricultural civilization industry, because there are two core positions that cannot be avoided in any way: designer, who goes to the home to measure the house; contractor, who goes to the home to work. At the same time, these people cannot provide quality services without 3-5 years of accumulation.
Therefore, in this trillion-level market, there are a large number of small companies and small platforms, and it is difficult to break through the scale of 100 million yuan.
But we also see that there are indeed some traditional home improvement leaders in the industry, and they have entered the industrial civilization: professional division of labor, system management, and process collaboration.
But in 20 years, a huge team of thousands of people has been established, more than half of which is sales, and the other half is designers and supervisors, but the scale has stopped at about 4 billion.
Therefore, the mission I defined Aijia's life at that time was to redo home decoration in a civilized way on the Internet. Therefore, we have no sales, no designers and supervisors, and half of the employees are software developers, focusing on building our core strength - a set of AI+ real-time online system platform.
Just like Ma Yun can not understand the production of clothing, but can build a Taobao platform. Aijia uses the Internet to integrate all the core personnel of the home improvement industry into the platform, link between upstream and downstream, and then achieve intelligence after having this foundation, use data to make decisions, provide tools and standards to empower, and eventually achieve ecology.
And it turns out that Aijia has broken through 10 billion in 3 years, and this path is correct. Although there is still a gap with the ideal, I am full of confidence in the goal of 100 billion yuan in 5 years.
The top-level design of ecological construction: from B-side thinking to C-end thinking
Understanding this logic, before we start to build an ecology, we must also solve the shift in thinking. Many traditional businesses have "user-centric" written on their walls, but that's why they can't do it.
Starbucks and Luckin are two companies with completely different thinking. Starbucks sells coffee and enjoys coffee scenes, while Luckin sells coffee so that more people can drink coffee at any time.
Therefore, I call the logic of subcontracting layer by layer and wanting to make more money from the user's hands at each layer as B-end thinking; the logic of providing users with fast and cost-effective services and products and obtaining profits from the B-end is called C-end thinking.
In order to understand C-end thinking, I once led a team to learn from Amazon. Many people may think that how fast and good to save 4 is a game relationship: think more, the service is not easy to do; think well, the price is not cheap... But in fact, refactoring is to re-establish the logic, so that how fast and good the province becomes the 4-wheel drive of the balance of the enterprise.
At the same time, Aijia borrowed from Apple's "hardware standardization, software personalization" model, created Aijia's "hard installation standardization, soft decoration personalization" model, and did 3 things around the C-end thinking:
More choices - reconstruction designers: I set up a design company called Xishe Chuangxiang, which pulled various unique designers in China to the platform, and invested 300-400 million yuan to make a set of DR design software, established a screening mechanism, and each designer became an independent IP and spoke with works.
In this way, on the one hand, users can spend 2,000 yuan in copyright fees to choose their own home decoration style in nearly 10,000 programs, and then with the DIY function of Aijia APP, they can help users completely realize design customization and personalization; on the other hand, these designers can generally receive 4-5 orders per month in the past, and each program is only for one user. Now they can rely on their own 1-2 high-quality solutions to obtain hundreds of thousands of yuan, or even more than one million yuan in royalties. The better the work, the more it will receive sustained long-tail revenue.
Cheaper - refactoring costs: In the field of home improvement, if you only save 5% or 10% of the money for the user, it is difficult for the user to have perception, but saving 50% of the user perception is very obvious. So I set the cost requirement for the supply chain at 50%.
F2C manufacturers direct supply, mechanic group purchase, C2M production according to the order, the cost of three tricks down the significant reduction, the future does not rule out red star, actually in the dealer will be in Aijia to get goods. In this way, squeezing out profits from the supply chain and then giving profits to consumers, Aijia's share in the stock market of home improvement can achieve exponential growth.
Better service - reconstruction of the scene: In terms of construction, we directly signed an agreement with the user, promised to complete it in 90 days, and did the overall responsibility and full bottom. And the construction site to achieve workers brush face punch card, professional supervision of the whole process of control, while installing cameras to ensure that the process is fully transparent, not only so that the efficiency of each link to the maximum, but also let users feel 100% worry- and at ease.
So many people ask, who is Aijia's competitor? I said, whoever does it well, we will work with whomever we want. We are not a competitive relationship in the industry, neither raise designers, nor raise project managers, nor open furniture factories, like Gold Mantis, Shangpin Home Delivery, Love Space are all on aijia's platform to serve users, who is good to use whom. Use C-end thinking to choose high efficiency, high quality and high cost performance for users.
04
The core law of pattern reconstruction is from things to people
Just three cases, are my own trading from 0, little by little to do today. A lot of people ask me if I'm busy?
In fact, as entrepreneurs, we only need to understand two types of people:
The first is who to serve (strategic choice);
The second is to pull a group of partners (organization execution).
I have done 5 different industries and followed the most essential approach from things to people.
The logic of things is very long, and you need to establish rules to improve efficiency and reduce costs. But in the end, around the operation of things, you can only earn the difference between the commodity and the channel difference.
Today, most of China's industries are in excess capacity, and many consumers have entered the trend of segmentation. So all the things-based services today will become people-based services in the future.
Why are today's headlines on fire? Because it can understand users better than users, and can provide services that users do not know they need in a personalized and professional way. It will constantly iteratively upgrade itself, and it will be more efficient.
Recently chatted with a classmate of the 17th issue of Dark Horse Camp, he sells bagged tea is already the world's first, who will his future competitors be? Not a tea merchant in Fujian, nor a small pot of tea, but a tea of Xi, Nai Xue, and Ruixing. Although it is also called tea, in fact, according to the different age groups, it has begun to extend many different forms.
Therefore, from things to people, you can find multi-dimensional opportunities for profit. Nowadays, Aijia has at least four dimensions to be profitable, and Niu Brother has three dimensions to be profitable. That makes it harder for your competitors to PK with you.
The business model of the future is no longer to solve the problems that I have and others do not have through one thing. It will be more about surrounding a specific group of people to solve all the things they need.
All industries can be re-do with new technologies and new thinking.
*This article is from the Dark Horse Growth Camp Classroom, dictated by Pan Dingguo, sorted out by the Entrepreneurship Dark Horse Knowledge Center, edited by Li Xiao, Copyright of Entrepreneurship Dark Horse Academy (ID: heima_ying), and may not be reproduced without authorization.
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