Exclusive Interview 丨 Aijia Life Chen Jun: The doubts and criticisms of the outside world are spurring us to grow

Disruptive innovation in any industry is inseparable from controversy and doubt.

Aijia's life is like this. The company is "controversial" in the home improvement industry, with some seeing it as a new species in the home improvement industry, some saying they don't understand its business model, some saying it's maverick, and others accusing it of playing numbers games. In short, for Aijia's life, there are always different voices in the market.

Chen Jun, chairman of Jiangsu Yide Group, founder of Aijia Life, and the eighth rotating chairman of the Midtown Alliance, often rowed with Wang Shi, and also mixed with the post-80s and post-90s every day. At the beginning of 2015, pulling serial entrepreneur Pan Dingguo to start Aijia Life together, Wang Shi reminded Chen Jun that Aijia's life is either a myth or a joke. On September 26, 2016, it received hundreds of millions of yuan of A round financing from Dachen Venture Capital and Zhenghe Island Fund, with a valuation of 1 billion yuan. In 2017, the contract amount exceeded 10 billion yuan. At present, it has completed the 1 billion yuan b round financing of Tiantu Capital, with a valuation of more than 1 billion US dollars, and officially entered the unicorn industry.

On September 26, 2018, Aijia Life held a press conference in Beijing. In addition to announcing the B round of financing, as the founder of the brand, Chen Jun spent nearly an hour to expound the development logic of Aijia's life, getting a revelation from the theory of evolution, and evolution needs to be driven, and the driving force, collaborative relationship and common good ecology will form the ihome evolution trilogy. With the drive of good money expelling bad money, we build a triangular driving force of models, technologies, and services. Create five levels of collaboration between ihome engine, internal system and external system, and ultimately realize value synergy and revenue synergy.

In the cognition of Chen Jun and Pan Dingguo, the argument and questioning are not unexpected. Yiou Home Exclusive Dialogue Aijia Life Founder Chen Jun, face to face the outside world's questions, which may be a compulsory course for each company on the road to growth, and jointly tap the core source power of "Aijia Speed" and spy on the business logic behind the new "unicorn".

Here's part of the conversation:

Yiou Home: Do you know how the outside world evaluates Aijia's life?

Chen Jun: I don't know, I guess, the outside world will definitely think that we are bragging every day, a bit of a void.

Yiou Home: Many people have reported that Aijia Life is a company worth studying, but sometimes I can't understand your business model.

Chen Jun: Home improvement industry, there is no good company, I have studied for so many years and found that the main reason is: the ecology of this industry is extremely chaotic, separately, decoration companies want to take over business, you must rely on low prices, but decoration happens to be a low-frequency industry, only cut corners can make money; because of the low price, the quality of the project is definitely poor, the lack of organization of professional industrial workers and a clear division of labor; often wait for materials, construction period and time delay, long-term, the status quo of the home improvement industry is still bad money to expel good money, Everyone doesn't want to do it well, because if they want to do it well, they will definitely lose money. This naturally leads to a very poor user experience and satisfaction.

So, how do you do that? First, there are no contractors, no companies, only industrial workers. Second, the division of labor is clear, and professional people do professional things, and the quality will definitely improve. Break the original interest mechanism, the previous company and the contractor should not earn money, are given to industrial workers, so as to stimulate everyone's enthusiasm; to create the ultimate supply chain, with professional procurement agency services to replace the couple to run a broken leg to buy the inefficiency of the material, because they do not have the ability to calculate the accurate demand, professional supply chain platform, so that the material is not wasted, will not be because of the purchase of more or less, and increase costs and waste.

To this extent, it must be to receive orders, such as receiving 100 orders in the same community, doing centralized services, the cost is likely to come down, the C-end market is more dispersed, the cost is not easy to reduce, and such a centralized order mode is unlikely to be realized in the old housing market, and the new housing market is completely possible, so this is the BBC model of Aijia life.

Yiou Home: Why did the developer choose Aijia Life, and what problems did you help the developer solve?

Chen Jun: Why did the real estate developer let you pick up? What problems do we want to solve with developers? If the developer does custom hardcover and finds a construction unit to do it, it will definitely drag the money and reduce the price, and then sell it to consumers after the price increase, and then have the motivation to do this thing. For example, for example, the developer finds a construction unit to press the decoration price to 800 yuan / ㎡, but the consumer must increase the price to 2000 yuan / ㎡ to have a profit. Because of the delay and price reduction, the construction unit of this custom hardcover is unwilling to do, and the custom hardcover of this thing, the small company does not have the ability to advance funds. Therefore, hardcover has become the weakness of the developer, if not done, this is a piece of business, and the market is huge, if you do, and there is no money to earn, tasteless, abandoned pity. Developers want to sell rough houses, and they don't want to sell finely decorated houses.

Yiou Home: When deciding to take the BBC model as the starting point at the beginning, what kind of play did Aijia Life adopt, and how was the market verification?

Chen Jun: We take the BBC model as the starting point, let users save money through f2c, improve users' aesthetics through design copyright, and let users worry through various systematic management. To be honest, at the beginning, it was done in general, and all aspects were not very perfect, but it also gave us the opportunity, as long as it was better than the couple's organizational ability, there was a chance. The most difficult is the first shot, consumers will question, you have not done decoration before, why find you to do, so please Jianye Group as a shareholder and credit endorsement, only persuaded Hu Baosen to invest alone, providing 60 real estate, about 10,000 or 20,000 sets. If it is not up in Henan, this business cannot be up, and later the whole of Henan is covered.

Yiou Home: What core competitiveness do you think Aijia Life has?

Chen Jun: What is the core competitiveness of Android, what is the core competitiveness of Jack Ma and Taobao, and what is the core competitiveness of Windows. We can't talk about core competitiveness from a point or what technical capabilities we have. Once many things are formed in scale, they have core competitiveness, but in the relative process, users first recognize it, which is its core competitiveness. The core competitiveness of Aijia Life is the entire "ecological operating system".

Any company must realize both industry value and social value, and user value allows users to save their minds, aesthetics and money. The value of the industry lies in the fact that through the design of the system, good money is expelled from bad money, and problems are solved through ecological methods, the Bank of China does "love home loans", and the newly established Big Home New Era Alliance, connecting these actions, and found that we do not have anything, but we have the world.

Yiou Home: Have all the 10 billion orders in 2017 been delivered?

Chen Jun: No, 10 billion is the amount of the contract signed, from signing the contract to delivery, there is a 1-2 year delivery cycle in the middle, last year (2017) about two thousand sets were delivered, this year's delivery volume may reach five or six thousand sets, 2019 may be a period of centralized delivery.

Yiou Home: Last year (2017), how much was the total amount of money returned? Is there a profit?

Chen Jun: In 2017, the payment was about a billion yuan, and at present, it is still a state of loss, because a large number of houses have not yet been delivered, but the commission and sales costs of our signatures have been paid.

Yiou Home: Just completed a new round of 1 billion yuan B round of financing, what is the overall feeling?

Chen Jun: This round of financing is really not easy, the capital environment is not good, in this round in addition to Tiantu Capital, there are also some well-known investment institutions that want to lead Aijia Life, and some have signed ts. We think about it, compare it, and finally choose Tiantu Capital, and Tiantu Capital has invested in many excellent enterprises in the field of consumption.

Yiou Home: What things or research has Tiantu Capital done in the entire investment process

Chen Jun: Tiantu Capital's investment, in addition to finding a third-party institution to do research, also went to Henan alone to investigate our users, and even found my wife to do interviews, the most demanding thing for me is to find the departing employees of Yide Group to do interviews, but in the end everyone's evaluation is good.

Yiou Home: After this round of financing, it should play a big role in the company's long-term strategic planning.

Chen Jun: On the one hand, we have officially entered the unicorn camp, with a valuation of $1 billion. On the other hand, we hope that by September 26, 2020, we will achieve a valuation of $10 billion. Taking advantage of the momentum of financing, several core cXOs have been introduced, and talents, funds, and business expansion can match high-quality resources and begin to move towards a positive cycle.

Yiou Home: After the success of the B round of financing, did you share it with your good friend Wang Shi for the first time?

Chen Jun: After Wang Shi got this news, he sent me a voice congratulations, (Wang Shifa's voice was released on the spot, which roughly means: in such an environment, it is very difficult and not easy to get the recognition of the capital market). Back when I started doing this, Wang Shi said, either it was a myth or a joke. In fact, Wang Shi's potential meaning is that 90% of this thing will be a joke, you are a lot older, don't toss it, it is better to row with me. The next time I open a financing conference, I am ready to find Wang Shi to come and give me endorsements.

Yiou Home: What is the profit model of Aijia Life?

Chen Jun: Now, we mainly rely on soft decoration to make profits. The future of Aijia life is to rely on the household data consumption entrance to make money, the ultimate goal is to become a global technology company with household data as the entrance. For example, through intelligent household products to record the user's physical health behavior data, air quality data and other services to collect service fees.

Yiou Home: In May 2017, it reached a strategic cooperation with Shangpin Home Delivery, how many orders will it contribute to Shangpin Home Delivery?

Chen Jun: About one or two thousand orders.

Yiou Home: What role does Aijia want to play in the whole big industry?

Chen Jun: To think about and understand Aijia's life, we must focus on the two theories of the cornerstone, one is the iteration of farming civilization and industrial civilization to Internet civilization, and the other is that the b-end hard installation is standardized, and the c-end soft decoration is personalized, to solve the contradiction between large-scale production and personalized services.

In fact, the reason why Apple can succeed is because he handed over the hardware to Foxconn to do, and the software was handed over to 4 million companies across the country to do. We have learned from Apple's model of "hardware standardization and software personalization" to create a model of "hard installation standardization and soft decoration personalization" of Aijia Life. At this stage, we also need to organize the construction of the supply chain system, build an open resource platform, to screen high-quality supplier service users, in the future, when our traffic reaches a certain level, we only need to build a good ecological platform, countless suppliers are stationed in our platform, so that everyone can compete fairly. Whichever user chooses in the future, we can all take a profit from it, because we maintain order and rules on this platform.

Yiou Home: You have been very successful in doing Yide Group, and now you are starting a business to do Aijia life, is there any common business logic?

Chen Jun: Actually, over the years, there are two sentences that have had a very profound impact on me, one is that it is reform and opening up, and the other is that science and technology are the primary productive forces. Applied to the home improvement industry, reform and opening up means that reform is the reallocation of internal resources and the solution of internal efficiency. Opening up is the introduction of external resources that are not available, such as the introduction of capital and high-quality talents. Science and technology, through technological innovation to solve the problems of the industry, we now have more than 100 people R & D team specialized in dim software.

Yiou Home: Do you have anything to say about the outside world's doubts about you?

Chen Jun: The current concern in the industry is whether there are limitations in Aijia's life, there will definitely be such and such problems, and the outside world will definitely look at Aijia's life with a scrutinizing eye, which is actually reasonable. But we must use the vision of development to solve the problem, but the perception and experience created for users is getting better and better every year, as long as the experience is getting better and better, such a large market will certainly not run away, do not expect to pursue one-click perfectionism. All the criticisms in the market now should be solved one by one through our efforts, and become a force that spurs us to continue to grow. All need to be tested by the market. But one thing is certain, it is certain that it is not possible to do things without creative thinking and innovative thinking. At that time, Sun Hongbin told us that to achieve 10 billion, no one believed it, they all thought he was bragging, and now everyone has achieved 100 billion.

Yiou Home: Why set the time point of 2020 to achieve a valuation of 10 billion US dollars.

Chen Jun: To be honest, at my age, it is impossible to do a ridiculous thing, and I and Lao Pan (Pan Dingguo) are now starting a business, and achieving financial freedom is certainly not our own goal, just to keep a name. I told Lao Pan (Pan Dingguo) that this matter has been working hard for several years, it must be achieved on this scale, and our kind of startup company, if you can't do it in three or five years, you can't do it, otherwise it doesn't make sense, it doesn't depend on time, and it doesn't mean anything to stay up.

Aijia life with more than 3 years to get the pursuit of capital again, officially entered the "unicorn" camp, especially in the case of the primary market is not particularly prosperous, in terms of business and industry, have proved that Aijia life new model and new playing style has been recognized by the market and commercial verification, Chen Jun and Pan Dingguo as serial entrepreneurs, and are rowing depth enthusiasts, could have enjoyed a comfortable life, wealth and reputation, but they chose to free up energy from the original career to open a new possibility, Every enterprise will face some controversy and doubts in the process of development, and each enterprise will have more or less problems to solve, which is normal, because this is also forcing enterprises to continue to iterate and innovate.

Home improvement industry has experienced a wave of so-called entrepreneurial tide, leaving the cruel fact that more than 100 entrepreneurial enterprises to the abyss of bankruptcy, tens of billions of funds have been wasted, the real remaining enterprises are few, the more this time, the more we transform the industry's original intention and confidence to be firmer, the more to innovate and open our thinking, as said at the beginning of the article, the road to subversive innovation is not easy, only the heart is firm enough, it is possible to make change happen.