this man is not calm

Chapter 535 Burning Money
From the perspective of the capital market, the first wave of the internet technology stock frenzy is about to begin.

As the shadow of the financial crisis two years ago gradually fades, global capital urgently needs a new area to accommodate the flood of excess hot money.

At this time, the IT industry, which was good at "storytelling," ushered in its golden age.

Many companies don't even have any actual business operations; they just have a domain name, register a website, and assemble a team, and then they can raise funds.

Undoubtedly, most of these projects are scams, but the sheer number of them is overwhelming!
If you invest in just one successful project, you can recoup your losses and even make a profit from any failures.

Whether it's exiting at a premium midway or cashing out upon listing, the profit expectations are extremely strong.

Leaving aside the clamor in the international market, the domestic landscape is actually quite stable. Jinxi Mall has a first-mover advantage, and latecomers can only barely survive in niche markets. Occasionally, one or two may have the hope of breaking into the mainstream, but they are powerless in the face of a weak market.

Despite the rapid pace of development, future prospects remain largely unrealized. Projects with real strength, capability, and decisiveness are extremely rare.

As for competition at the level of browsers, antivirus software, email, portal websites, and even operating systems, technology and investment are both indispensable. Without strength, you simply cannot compete. Most entrepreneurs focus their efforts on portal websites, BBS, or application websites, so Jin Shang is not really worried.

Despite the immense potential of instant messaging, Jinxi Culture has maintained a restrained approach, yet its value has still been recognized by discerning individuals.

Jin Shang simply did not believe that capital would favor a field with almost no profit prospects, a subtle moat, easy imitation, and no ability to monetize traffic.

Having a positive outlook is one thing, but actually investing real money in it is quite another.

In this life, Fetion is in a much better situation, and its main backer is a state-owned basic operator, not someone who is purely pursuing capital gains through project activities.

No matter how much it is underestimated, instant messaging is still a form of social interaction. Especially after Jinxi Chat demonstrated its extraordinary influence in areas such as group chats, Moments, personal spaces, casual games, SP wireless value-added services, and online tokens, it made those who have been looking for market opportunities realize where the right path lies.

If, twenty years from now, chat accounts for nearly 80% of the market share, there will be no need to worry about others "copying" our methods; the only possibility will be our own people "borrowing" from others' excellent attempts.

At the beginning of 1999, the existing market was difficult to shake, but the number of internet-connected computers and internet users in China was growing at a compound annual growth rate of nearly 60%. Under such circumstances, stabilizing the basic market and then aggressively acquiring new users and young internet users was the key to securing the path to the future of the internet.

In this respect, Jinxi Chat, which offers a better user experience, actually performs worse than Fetion.

To put it bluntly, having state-owned assets backing it naturally earns the trust of new young netizens.

Excellent but niche chat software will eventually become a small circle of experienced users entertaining themselves, or an application tool with overly specialized application scenarios, rather than a popular platform that is inclusive and all-encompassing.

Neither Want Want, Momo, DingTalk, nor Skype are what Jinshang hopes for; only "Little Penguin" or WeChat can become giants in the IT industry.

Given the current state of IT applications, not only in China but also in developed countries abroad, most netizens have a very superficial understanding of them. They find it difficult to distinguish which technology is more advanced, which application is more convenient, which is more secure, and which represents the future. Instead, they tend to be particularly fond of the software they use for the first time, and once they form a habit, it becomes very difficult to switch to other competing software.

In the past, Jinshang was not worried about direct competition between Jinxi Chat and Fetion. Even though it was not as good at attracting new users, it was confident that it could win over netizens. Ultimately, this was because Jinxi Culture had a very complete product line and its user experience far surpassed that of its competitors.

However, if Fetion goes public, not only will its brand awareness increase, but its financing costs will also decrease significantly. It will have enough strength to "buy, buy, buy" and the resources to integrate it. It can also recruit a group of capable senior executives, making it very difficult to defeat.

Fetion, despite its seemingly large and powerful workforce, is actually not very capable. However, if it goes public, the situation will completely change, and its available resources and management capabilities will take a significant leap forward.

In addition to the factors mentioned above, the fact that the person who came forward to integrate the efforts was Tan Qian, Tan Mingli's high-achieving "sea turtle" son, also made Jin Shang somewhat wary.

Although Tan Qian's studies were mostly in the field of manufacturing, and his family's business was mainly in chain hotels, he had studied abroad and his understanding of the internet was significantly more sophisticated than that of domestic entrepreneurs.

As long as his knowledge and insights are combined with localized improvements, both Jinghua Mall and Fetion have the potential to transform from "cannon fodder of the times" into true "players in the race."

"He's a formidable rival!"

Judging from Tan Qian's entrepreneurial journey over the past two or three years, he was originally inclined to "follow" the more successful Jinshang. Although he was overwhelmed by the first-mover advantage of Jinxi Culture, it was not because the Tan family father and son were too weak, but because Jinshang was too strong.

The operators probably realized that it's unrealistic to directly compete with Jinxi Chat using mobile phone calls and text messages. They should be targeting Xiaolingtong (a type of mobile phone service), not competing with internet software. By separating Fetion, maintaining the existing structure, following market rules, fully leveraging the advantages of shareholding reform, introducing strategic investment, and hiring professional managers, they can grow bigger and stronger.

The protracted stalemate has deteriorated into a protracted and arduous struggle!

Jin Shang believes that the future of Jin Xi's chat will definitely be bright, but the road ahead will certainly be full of twists and turns.

Jin Shang isn't worried about competing step by step; what he fears is that his competitors will choose the "money-burning" technology path, using their capital to hurt others, attract customers, and gain a dominant position, which would basically guarantee victory.

The characteristic of the internet and IT industry is that the winner takes all. When competing with peers in the same niche, newcomers can't even catch up with the best.

There are instances of comebacks or overtaking on a curve, but most of them are due to changes in external conditions, mistakes in decision-making by pioneers, or simply technological advancements that disrupt the entire industry landscape, resulting in a "dimensional reduction attack" from another industry that is truly difficult to defend against.

After much thought, Jin Shang recalled the key to "Little Penguin's" success in his previous life. After pondering for a while, he asked Huang Yiyi to come over and discuss an important matter.

"Huh, Advisor Zheng isn't here?"

Normally, when it comes to discussions of important matters, especially cooperation or competition with the telecommunications company, Zheng Liangzhi would be consulted for advice.

Huang Yiyi was very curious, but Jin Shang had no interest in explaining for the time being. Instead, he gestured for her to sit down and then said leisurely:
"Has the report from the Strategic Development Department been sent to the General Affairs Section yet? It's about Fetion and Jinghua Mall..."

"Yes!"

As a key area in Jinxi Culture's overall strategy for balancing technology and culture, IT and the internet are of paramount importance for development. While their current scale and profitability may seem insignificant, the inherent monopolistic tendencies of this industry indicate its immense potential. Truly successful businesspeople must possess a far-sighted and strategic vision.

What business is the easiest to do, the most profitable, and the one that puts you at the top of the competition?

"High-barrier-to-entry businesses include industries like operating systems, the internet, data centers, semiconductor chips, and emerging materials; industries requiring government-mandated entry include hydropower, gas, oil and gas, mining, finance, chemicals, rare earths, tobacco and alcohol, and edible salt; and then there are monopolistic industries where dominant positions are easily established, such as the internet, media, culture and arts, and film and television production. Coincidentally, instant messaging is one of the mainstays of the internet industry, a platform application that undoubtedly meets strong demand and satisfies humanity's basic social needs..."

In the past, more than one new force emerged that was superior to Tencent and WeChat in terms of technology and user experience, but in the end, they all vanished in the face of overwhelming user numbers.

No matter how good the social media app is, if users can't find the people they want to communicate with, get the information they want, or enjoy the services they need, they will naturally churn.

In the past, Jinxi chat utilized the "network ecosystem" to meet the latter two user needs. However, as for the primary goal—the ease of finding contacts—Fetion was superior.

That's why there's a sense that the two are evenly matched, or even that the chat tonight has the upper hand.

One of the reasons for this phenomenon is that the growth and expansion of PHS (Personal Handyphone System) has indirectly weakened the motivation for mobile phone users to convert into internet users.

Before the advent of the mobile internet era, the conversion of users on both sides was mainly based on communication needs, and the added value provided by the internet ecosystem did not play a decisive role.

"Mr. Jin, we haven't received a specific listing plan yet, but based on publicly available information, the market value after listing is estimated to be no more than 300 million."

"Three hundred million... Does anyone actually believe that?"

"Backed by the three major telecom operators, and orchestrated in the foreground by Tan Qian, whose father, Tan Mingli, has quite a network of connections. Even without seeking foreign capital, they can set up a domestic arrangement to help bring in strategic investors. In addition..."

Huang Yiyi explained helplessly,
"If it weren't for the fact that it's in direct competition with Jinxi Chat, Jinxi Culture would probably be the biggest lead investor."

Upon hearing this, Jin Shang remained silent, tapping his fingers lightly on the desk as he composed himself before quickly making a decision:
"We need to burn money on subsidies to quickly equalize the ratio of new customers, new users, and new netizens. Otherwise... if we run with one leg crippled, even if we have an endurance advantage, in this 'marathon'-like long-distance competition, we will have to worry that others will 'cross the finish line' first, and then it will all be over."

At some point, once Fetion's user base and activity level exceed a certain threshold, it will create a siphon effect, attracting other users to the platform, either actively or passively.

"Is this what Mr. Jin meant by the key sectors and pillar industries of the internet, where victory or defeat is at stake, and life or death is at stake?"

Kim Sang nodded seriously and answered affirmatively:
"This is a winner-takes-all game where whoever gains dominance first wins everything. I can fall behind temporarily, but I must not let someone else win first."

"Going public...can't we stop it?"

"Too late!"

Recalling the development process over the past two years, Jin Shang said with great certainty,
"You can't expect capital to restrain its profit-seeking instinct. If... I mean if, Jinxi Chat and Jinxi Mall had opened up financing, this might not be what it is today."

"If you can't get on the Jinxi Chat and Jinxi Mall train, then get on the one next to it. Even if it looks a little worse, take a break, work harder, and maybe you can catch up later."

Jin Shang was very satisfied with Huang Yiyi's judgment, and later said with great emotion:

"Both sides felt we were too greedy. The investors thought I was too arrogant and the valuation premium was too high, while I thought those other investors were too poor and low-class to offer a price. A whole host of applications, including Jinxi Chat, such as browsers, email, portals, and operating systems, basically didn't give the capital market a single drop of profit. Jinxi Mall did make some noise, but it kept bouncing around without a contract being signed..."

"Didn't you say that everything had been agreed upon?"

"There are some conflicts between the postal system, the syndicate, suppliers, and employee stock ownership. The general direction has been set, but the details are still being discussed. I didn't put pressure on Jiang Long. The benefits of Jinxi Culture... if you want to take a bite, it depends on whether you have the strength. So... many large and small capitals that are unclear about the connections and strength go to find alternatives."

If the strongest party can't get a stake, they'll support their competitors to fight it out.

For the average entrepreneur, this hurdle is very difficult to overcome.

But Jinshang is different. It's not an ordinary internet upstart, but a powerful force with an equally impressive background and strong earning power. When faced with provocation, it no longer needs to think about any trivial matters. It directly launches a "money-burning" war, confronting each other head-on and competing head-on.

"Now that the other side has fired the first shot, it's not up to you to decide when to stop."

What kind of skill is it to start a war?
A true hegemon is one that has the ability to stop wars!

"I understand! Mr. Jin, to what extent should we go, and which business segments should be involved?"

"Traditional media advertising is a must: subway and bus billboards, elevators and buildings, newspapers and magazines, radio and television, product placement in movies and TV shows, program sponsorships, on-the-ground promotions and roadshows, and campus flyers—nothing can be omitted; discounted packages will be offered for mobile phones, PHS phones, and Jinxi Chat, as for information exchange with Fetion..."

After a pause, Kim Sang decided to keep it.
"This cannot stop, otherwise we will be looked down upon by netizens and lose our moral high ground. In a contest where the odds are evenly matched, we must not ignore the will of the people; the most important thing is the support of the entire internet ecosystem, such as movie ticket discounts, offline lifestyle coupons, online shopping points, online videos, online music, large-capacity email, the online game 'Fengshen,' and value-added services like Jinxi Coin, etc..."

He said a lot of things, and Kim Sang spent several years stretching out the battle lines for this moment.

"Carrier strike group, set sail!"

Even some immature "small gunboats" have started using it, such as online stock trading, fund fixed investment, bank wealth management, and air and train tickets, hotel reservations, etc.

Even a small gain adds up to a considerable amount.

The internet frenzy has arrived, and the influx of hot money is constantly stirring up waves. In the next year or two, Jinxi Culture may face another major challenge.

(End of this chapter)