What is the story of Yin Sang? Sing together? Capsize or save yourself? Can he get new financing? The following is Yin Sang's dictation of "Dark Horse of Entrepreneur" and his views on the whole event. I hope I can bring some thoughts to you who are starting a business. The following is what I shared with J.L.? Sing together? CEO Yin Sang tells his own entrepreneurial case, and more entrepreneurial projects are welcome to visit (www.oh 100.com/chuangye).
He was the first post-90s entrepreneur to attract the attention of investment bosses and well-known media, earlier than Ma Jiajia and Yu Jiawen.
Li Feng insisted on betting for him despite the opposition of other IDG investors. He also served as? Young entrepreneurs in China? Representative, interviewed by American journalists; He once managed a startup company with more than 600 employees. At the age of 20, he wants to bring American Patry culture to China, and transform KTV private rooms that can only sing all over the country into game halls and private bars.
In the eyes of the public, all these ambitions and achievements came to an abrupt end in February this year. On that day, he suddenly sent an internal letter (see the attachment at the end of the article), in which he declared that the financing failed and the capital chain was broken, making it difficult for the company to continue, and promised to find ways for employees.
The company's employees dropped sharply from more than 600 to more than 170, Yin Sang's circle of friends was skinned, and some people in Zhihu began to break the news? Is this another big joke played by an overly clever post-90s entrepreneur in the capital market?
A few months later, Yin Sang chose to appear. At the beginning of June, he decided to use entrepreneur & I'm a dark horse, tell you the current situation of the company. He said that singing together is still alive and has achieved profit. Now is a critical moment for the company's development. ? Feng Li definitely supports me. He was in IDG when he voted for me, and now he will continue to vote after he comes out. His new company is also helping me. ? Yin Sang's attitude towards entrepreneurs &; My dark horse said.
The following is Yin Sang's dictation.
February 1, the whole person is confused.
At the end of 2065438+2006 10, our financing was still very smooth, and the agreements and procedures were basically signed. On February 1 day, the management suddenly stopped voting for various reasons. I was puzzled that day, because there was no money in the company account, and we couldn't even pay the salary of 65438+ 10. The situation was very urgent. The first employee definitely needs money to go home for the New Year, and the second investor has a holiday, so he definitely can't get the money.
The next day, I chatted with 40 or 50 core members, and they all said yes. I said in that case, let's do it. Honestly, I can't do it alone. What do I have to complain about if they don't want to continue working? That just means I'm a loser.
Now that we have decided to continue working, we will communicate with the employees and tell them the actual situation that there is no money in the company's account. At that time, several of us said at the meeting that it had been in the news for hours.
Many people advised me that you shouldn't send that internal letter ("a letter to Lohas friends", which involves layoffs). I thought about it for a moment, and there is no better way. To tell the truth, how many times do you want me to pay for such a big boat? It's impossible. If this thing is done in the future, I will definitely give it, but now, the old shareholders, old employees, cooperative customers and suppliers are all on board. As CEO, my responsibility now is to make sure it doesn't sink.
There used to be more than 600 employees, but now there are more than 170 employees. Everyone signed an agreement to give up half their salary, and we tried our best to help them find jobs.
It must be very painful to write that letter, because I have been doing it for three or four years, and the day before yesterday was exactly four years. I thought at that time, this is equivalent to holding a memorial service for myself. You can see that once you die, who will help you, who will support you and who will hurt you.
After the article was published, the media began to pay attention. I was flying, and there was WIFI on international flights, so I kept watching it. My WeChat broke out at that time, with thousands of messages. There are also many people who want to help. I was very happy. But I did something wrong and was most disappointed in myself.
I was not so angry and sad when I started my business. This half year is my most painful time.
After that, many media also came to our company for interviews to see if the company was still there.
Reflection: the expansion is too fast, and the problem of making money is not considered.
Looking back, the company did develop faster. On the one hand, it is my problem, on the other hand, it is the environmental problem of the whole market. The main mistake made by the outside world in evaluating us is that we did not anticipate the risk of funds, and I agree. But I don't attribute it to our core problem. The core is the business itself.
At that time, we covered tens of thousands of rooms in 16 cities across the country, but ignored the realization. So was the market environment at that time. The first thing investors ask is, how many screens do you have? If there are 5000-65438+ ten thousand screens, he will vote.
Soon after, this momentum and angle changed, and investors began to pay more attention to the single output value of the screen.
In the big waves, we are more enthusiastic, and the number of people has expanded from 100 to 600 in half a year. We haven't settled down to seriously consider this matter. If we had calmed down at that time (last August and September), it would be no problem for the company to support the cash flow for three years.
In fact, if you want to do this well, there are only two points:
First of all, there is a fast and repeatable scale speed.
Second, single-screen users participate and users pay to realize user value.
Satisfy these two points, we can be infinitely bigger, and finally the listing will come naturally. But last year, it began to expand on a large scale without verifying these two aspects, which led to the loss of a city.
Because our idea at that time was to circle the screen first and then consider the later implementation. However, in the case that the capital market as a whole is cold, once your changes cannot be verified for a period of time, investors will be very cautious.
In addition, some investors are biased against the KTV industry, thinking that KTV is a karaoke bar and nightclub, which will also have an impact on financing.
The company actually made money last year, with a revenue of nearly 20 million, but the money collected was probably less than10 million. When blood flows to the brain, we don't think about making money. Finally I committed suicide.
The problem must be capital risk and insufficient reserves. Everyone understands the truth, but in practice, it needs to be sensitive. At that time, my cognitive ability was not enough, because I had never experienced success or failure, and many things could not be predicted and mastered.
Our whole team is shrinking now, and only the company's core products, R&D and designers are kept.
Why didn't I run away?
I insist that the KTV industry has great potential. Online entertainment is very popular now, but offline entertainment is still scarce. People just go to the cinema to watch movies, which is not suitable for group activities. We believe that offline party-style entertainment gathering must be the general direction. For example, if you have 65.438 billion screens in China, and the income of each screen is 65.438 billion, then the upper limit of your daily income is 65.438 billion. So this market is very big.
At present, the service of KTV places only stays at the singing level, which is not fun and rich in content. We want to turn KTV into a party house through content networking. For example, you can watch the European Cup at KTV, which is definitely better than at home or in a bar. There is a lack of atmosphere at home and the bar is not private enough.
This matter is also valuable to businesses. First, the content has increased, and the consumption frequency of users has increased. If you just sing, you may go once every three months, but if you have an on-demand movie or a ball game, you may go once a week. Second, the business hours of all KTV rooms have become longer. We have a statistic. In the past, the average opening time of a room was 180 minutes. After using our function, it was obviously 220 minutes. People used to go home when they were bored, but now there are video games, somatosensory dancing, bowling and so on.
This market is very big, no one does it, only our family. Like BAT, meituan and public comment, they are also our potential investors, or they are already investors and will not do it. In addition, the outside world has always misunderstood that IDG is the only investor who sings together. In fact, as early as 20 14, the public comment was already an investor in our B round.
As of May this year, we also have some data that can reflect the activity of users.
Now 60% of the rooms can play? Intelligent access? 100% of the rooms are using value-added services, and at least one room is used. Among the people who play, 20% and 30% are paying users, whether it is red envelopes or props. I just started doing it now, and there is no hukou system, points system and so on. In the future, it may cost five or six yuan to buy a prop and sixty-two yuan to watch a movie. The pricing level of a single service item will not become the threshold, because it is not sensitive consumption. In KTV, a bottle of beer can be sold at a high price.
This matter also has high barriers. First of all, the research and development of products and the time cost are very high, which is difficult for startups to do. If a company raises 50 million yuan just to develop products, investors will definitely not invest. Including research and development, production, mold opening and testing. Our research and development expenses are more than 50 million. When we got the B round, the product had not been made yet.
We have made a software and hardware management and payment system, which is equivalent to a financial+hardware company, so it is very heavy.
We talked a lot about VC last year and this year. So far, several companies have not changed. First, I haven't changed. I'm still the CEO. Second, five or six executives have not left, and the core team has not changed. Third, this matter has not changed. We haven't transformed to do anything else.
The key is that our business objectives have changed fundamentally:
Change 1. B We lost money last year, and we have a net profit this year. We can earn hundreds of thousands of screens in every city now. These screens will also be my future advertising value and traffic portal.
Change two, the user's participation and interaction rate in the screen have improved.
These are the reasons why I will continue to do it. Also continue to raise funds.
Finally, I don't think I will give up. Because if I give up, I may be recognized as a quitter all my life.
Anyway, I'm not afraid to wear shoes barefoot now. From the perspective of starting a business, I am poor. Investors and teams are supportive, and you can't be a man without running forward.
Attachment: Yin Sang's internal letter dated February 3, 20 16.
Loha's little friend:
This is the most difficult email I have written since I started my business. I feel guilty and regretful, and I don't know how to write it.
Last year, we started the C+ round of financing on June 5438+February, and the time was tight, just in time for Christmas and New Year's Day, and we didn't contact too many investors. Fortunately, on June 5438+ 10, we received several VC/PE investment intentions. After weighing, we chose one of them and reached an agreement on terms, valuation and financing amount. Seeing that it went so smoothly, I was confident (which later proved to be a misjudgment) that we launched a cross-river campaign all over the country, and then bought a lot of hardware and equipment and spent all the cash left in our account.
Unexpected things still appear. On October 29th, 65438/kloc-0, we agreed to sign our investment agreement. 654381inform me to go to Beijing on October 30. Fly from Hangzhou to Beijing overnight, and officially receive the notice from the investor in February 1? Wait and see, it will take at least a few months. They said that although they recognized our business, they were worried about our cash flow, so the investment Committee finally decided to suspend it. Now, it's too late for me to contact other investors, and the investors who refused before don't want to go back. With the company's cash flow almost zero, new investors have no time to continue to talk to me. The investors' hasty decision put our company in a desperate situation. For the month of 1 and the salary behind it, cash will definitely not be issued now. The news is so sudden that I haven't had time to digest it. Now I will relay it to you.
A friend told me that if we find an excuse, we can continue to postpone it after the new year. It is normal for a startup company not to pay wages for two or three months, and there may be opportunities. I've been thinking for a long time these two days and decided to tell you the truth. I have been in the business for three years, and I have never owed my salary, and I don't want to cheat everyone's trust by lying, so I will tell you the situation clearly here, at least tell you a truth.
The year is approaching, and the year is sad.
Thank you for your efforts last year. Product technology has developed the most awesome KTV products, and the sales volume has helped us to be the first in the country. The functional departments silently supported us. Only when I am with you can I create a happy life. I didn't actually do anything. The present situation is unexpected and I dare not think about it. When I first found out, I was shocked, angry, sad and desperate. Because of my mistake, the company has fallen into such a situation, and our efforts have been reduced to ashes, which has brought great trouble to your dearest person. I'm scared and I don't know how to explain it. We just held a grand annual meeting, giving prizes to everyone and giving gifts to your families. The small partners in the group are celebrating with red envelopes, and we are all immersed in the joy of working hard for a whole year. Many friends sent me WeChat, thanking the company for its development last year and bringing him exercise. They said last year was hard, but it was full and meaningful. They said they thought next year would be better and we would be more awesome. I put a letter looking forward to the future in the gift package sent to your home. All this is so sudden and ironic. I am ashamed and don't know how to face you.
Because of my lax management, lack of company system, insufficient risk prediction, extravagant expenses and unhealthy collection process. My biggest feeling is regret, regret what I did and regret what I didn't do. If I do it again, it may not be like this. But what I regret most is meeting you lovely people. Meeting you is the greatest luck since I started my business, but what I bring you is not achievement and glory, but disappointment. It is fate to start a business together. Now I only have fear, guilt, regret, and I am deeply sorry for you.
No matter what lies ahead, we still have to move forward. I need to make up for the company's responsibilities.
To be honest, due to objective reasons such as time, business and external environment, I don't know when and when I can get this financing, and I dare not continue to drag everyone down. I have to face the fact that the money in my account may only be enough to pay the monthly salary of dozens of people. If accounts receivable are included, it may be a little more. The company also has no fixed property. If it goes bankrupt and liquidates, it is difficult to give 100% people a monthly salary. I dare not hide such a situation, but I can only tell you the truth at the first time. This is cruel. There are so many people that I can't decide who to send it to or who not to send it to. So please contact Lu Kai of HR via email, and they will have a mechanism to pay you in sequence after the year.
In addition, after the year, I will ask the HR department to contact a large number of headhunters and companies to help you recommend more reliable companies and find more suitable jobs in the first time. I hope these aftermath can help you, even a little.
Finally, nice to meet you. I am very lucky and grateful. This is the most important experience, adventure and lesson in my life. We walked together in the business sea, although we didn't appreciate the wonders of the top of the mountain, we didn't miss the scenery along the way. Whether it's going up or down, I just want to indulge in moving forward.
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