You call this entrepreneurship?

Chapter 563

The "Group Buying War" in 2010 became a significant milestone in the internet industry, marking the beginning of the era of massive online spending wars.

From then on, burning money became an important competitive tactic for internet companies.

In particular, established internet giants love to use "money-burning" competition tactics.

This allows large companies to fully leverage their financial advantages, raise market entry barriers, and use a "capital-driven" approach to squeeze out smaller players.

Meanwhile, competitors outside of large internet companies either sold themselves early on to join internet giants, or desperately raised funds by giving up shares, using other people's money to burn.

Whether it's entrepreneurs or employees of projects at major internet companies, burning money is something that is very welcome and something they actively participate in.

The reason, of course, is that it's profitable. With so much money being distributed, everyone can benefit and share in the profits.

Do the company's senior management and investors know about this?
Of course they know, but they don't care.

If the water is too clear, there will be no fish; this is something that cannot be avoided.

Moreover, they don't care where the money goes; they only care about getting the results they want.

Anyway, the money doesn't belong to them. The company's funds come from the stock market, and the investors' funds come from financial institutions.

If the project achieves results, the invested money will be doubled back.

Even if you lose money, it's okay. Investing involves risks, and it's normal to lose money. Investing involves both gains and losses, and it's not your own money anyway.

Since the "Group Buying Wars," the internet industry has been keen on burning money, which has gradually become a common practice.

Qin Shaoyan was naturally prepared for this and had also prepared the necessary funds.

However, he didn't plan to pay for it all himself. Sentinel Technologies would contribute a portion, he would contribute a portion, and the rest would be given to the philanthropic venture capital firm.

Naturally, the first people to be notified in this situation are our long-term financial backers, IDG and Sequoia.

Over the past few years, these two venture capital firms have participated in almost all of Qin Shaoyan's domestic internet projects and made a lot of money as a result.

The cooperation between the two sides was quite pleasant. Basically, all the collaborations proposed by Qin Shaoyan would be followed up with investment. Even if they didn't invest, they would recommend other venture capitalists and would also give face by coming to support them and acting as shills.

However, Qin Shaoyan disliked the other venture capital firms, finding them all lacking in vision and driven only by greed.

IDG's Xiong Xiaoge and Sequoia's Zheng Nan readily agreed when they received Qin Shaoyan's call. They were quite interested in hearing about a new way to make money.

"President Qin, you haven't made any moves in the past two years. You must be working on a groundbreaking innovative project, right?" Xiong Xiaoge asked expectantly as soon as she entered the room.

Zheng Nan chuckled, "Now everyone knows that President Qin is the most knowledgeable person about the internet. His two-year seclusion is bound to be astonishing."

Qin Shaoyan smiled and had his secretary bring out tea and snacks. "I do have a big project here, and I'd like to ask if you two bosses are interested in investing."

“We at Sequoia will definitely support your project, Mr. Qin,” Zheng Nan said first. “Just tell us how much you want.”

Xiong Xiaoge hesitated for two seconds before asking, "What is a project?"

Qin Shaoyan didn't beat around the bush and went straight to the point: "Of course it's group buying. Right now, group buying is the hottest thing on the Chinese internet."

Zheng Nan and Xiong Xiaoge were stunned, their eyes showing surprise.

"Seriously, Mr. Qin? You've started following trends now?" Zheng Nan frowned. "This isn't like you."

Xiong Xiaoge also found it strange, "Why did you decide to get into group buying?"

"I think the group buying business has a lot of potential," Qin Shaoyan said with a smile. "Look at how many companies are getting into group buying now. This shows that there is a market for group buying and it can definitely make money. Of course, we should participate in something that can make money."

"The concept of group buying is indeed popular, and perhaps a bit too popular," Xiong Xiaoge said after a moment of contemplation.

Zheng Nan also sighed, "I can meet with twenty or thirty entrepreneurs who want to do group buying every day. It seems like the whole internet is doing group buying."

Besides these new entrepreneurs, the group-buying sector has seen the entry of major portal websites as well as newly established group-buying websites. Platform-based internet companies such as Sina and Tencent have also entered the group-buying field one after another, and group-buying has almost become a standard feature for internet companies.

"To put it bluntly, it's just following the trend. The current situation is somewhat similar to that of video websites back then." Xiong Xiaoge had carefully considered this new trend.

"Just tell me whether you're going to vote or not," Qin Shaoyan asked directly, without wasting any words.

"Mr. Qin, if you've asked us to, we'll definitely invest." Zheng Nan paused for a moment, "But you need to be honest with us: are you just jumping on the bandwagon with this group buying, or are you going to stick with it to the end?"

"Of course I'll stick with it to the end," Qin Shaoyan replied frankly.

Xiong Xiaoge looked at Qin Shaoyan with a serious expression, "What's the reason?"

Qin Shaoyan smiled and said, "Groupon is an investment of mine. It was built up together with Facebook. I didn't sell it even though Google offered me six billion dollars."

Xiong Xiaoge and Zheng Nan were shocked.

"Why didn't you say so sooner!" Zheng Nan's face showed a mixture of surprise, dissatisfaction, and regret.

Xiong Xiaoge pointed at Qin Shaoyan, "You, you always keep something to yourself. You should have told us earlier that you started the group-buying business, so we could have planned ahead."

Group buying is now very popular, so if you want to get involved, you'll have to spend a lot more money.

Faced with the questions from the two investment mentors, Qin Shaoyan appeared even more surprised.

"I told you about group buying a few years ago," Qin Shaoyan said, his face showing a mix of grievance and helplessness.

"years ago?"

“Yes, when I first started the campus network, I mentioned the group-buying concept to President Zheng. It was an important selling point when I was raising investment.” Qin Shaoyan said as he got up and rummaged through the safe. “I remember it was written in great detail in the business plan at the time. I also mentioned it when I founded Facebook in the United States. Wait a moment.”

After searching for a while, Qin Shaoyan took out two business plans and handed them to Xiong Xiaoge and Zheng Nan respectively.

One was from the campus network, and the other was from Facebook. Both clearly stated the group-buying model and future market predictions.

Xiong Xiaoge and Zheng Nan flipped through a few pages, exchanged their plans, and then fell silent.

They were surprised to find that everything Qin Shaoyan said was true; he had indeed proposed the concept and idea of ​​"group buying" seven years ago.

They hadn't paid any attention before, thinking it was just another name for e-commerce business and that Qin Shaoyan was just hyping up the concept.

In addition, Qin Shaoyan's successful cooperation with Jingdong Mall opened up the e-commerce market on university campuses, so they overlooked it.

And after so many years, how could they possibly remember that this ever happened?

However, Xiong Xiaoge was not one to engage in internal strife. After a moment's thought, she said, "President Qin, that's not right of you. You should be reminding us. We have so many things to do, handling hundreds or even thousands of projects. How can we remember everything?"

Zheng Nan nodded in agreement, "Yes, yes, President Qin, you really didn't do a good job. You should have told us when you first wanted to do group buying."

Qin Shaoyan didn't expect these two to be so shameless, and he was both amused and exasperated. "Alright, alright, this time it's my fault. At first, I thought the domestic market wasn't mature enough, so I wanted to test the waters in the overseas market first, and then transplant it to China."

"I worked with Facebook for three or four years to get results, but before I could even make any moves, someone else beat me to it."

"But it doesn't matter. When it comes to business, no one knows more about group buying than me," Qin Shaoyan said confidently. "I plan to set up a separate company to do group buying. I will personally contribute a portion of the money, Sentinel Technology will contribute a portion, and the other two will contribute a portion as well."

“No problem, just tell me how much it costs,” Zheng Nan asked directly.

Qin Shaoyan pondered for a moment, "I'll reserve 20% of the shares, and each of you will contribute 100 million."

"One hundred million?!" Xiong Xiaoge frowned. "Are you robbing me? How can it be so much?"

"Where is the extra?" Qin Shaoyan asked in surprise. "Groupon is worth six billion US dollars, and my group-buying company in China isn't even worth a billion?"

“Too many, too many.” Zheng Nan shook his head. “Cut it in half, and I’ll throw it.”

"No, no." Qin Shaoyan also shook his head. "There are too many competitors in the group buying business, and there are too many places to spend money. One hundred million is not enough."

Xiong Xiaoge put down her teacup. "How about this, let's say the valuation is one hundred million US dollars? We'll give you twenty million US dollars in financing."

Qin Shaoyan pondered for a moment, then asked, "Are you still going to participate in the Series B funding round?"

"Of course, I still trust you, President Qin," Xiong Xiaoge replied naturally.

"Then let's go with Mr. Xiong's suggestion and value it at one hundred million US dollars." Qin Shaoyan sighed and reluctantly agreed. "It's only because of your and Mr. Zheng's influence that I would agree to this valuation."

"You, Qin Shaoyan, have so many profitable businesses, one more won't make a difference," Zheng Nan said with a smile.

"There are quite a few money-making projects, it just depends on whether you two have the vision." Qin Shaoyan specifically looked at Xiong Xiaoge.

"Speaking of which, President Qin asked me to invest in mobile internet before, but I hesitated at the time," Xiong Xiaoge said with some regret. "I really didn't expect that Apple's iPhone would be so powerful, and mobile internet suddenly became a hot commodity."

"I asked you to make phones with me before, and you complained that it wasn't profitable," Qin Shaoyan teased. "Now you know how powerful I am, right?"

Xiong Xiaoge shook her head. "Your phone is indeed good, but it looks too much like an Apple product. It's like a knock-off Apple."

"You don't know anything!" Qin Shaoyan was displeased when he heard this. "It was clearly Apple that copied my design. I'm already being lenient by not making them pay me back."

"You should say that Apple copied my Jiucai phone!"

"Yes, yes, Apple is indeed not very particular. You, Mr. Qin, are very magnanimous," Xiong Xiaoge said perfunctorily, then changed the subject, "However, I heard that Apple's system review is very strict, and domestic Internet companies have encountered a lot of difficulties with their products."

Qin Shaoyan asked curiously, "What difficulties are there? I haven't heard about them."

"QQ has been removed from the Apple Store, citing security risks. They've asked us to rectify the issues before it can be relisted, but the new version just won't pass the review." Xiong Xiaoge looked at Qin Shaoyan. "QQ has been stuck for three months now. I heard Ma Huateng's hair is turning white."

"President Qin, do you think there's something fishy about this?"

Qin Shaoyan remained calm. "Oh, really? Maybe Tencent really did something wrong. After all, Apple is just a phone seller; it doesn't need to make things difficult for domestic internet companies."

(End of this chapter)