The Red Era: Living in Seclusion in a Siheyuan as a Boss

Chapter 819 Campus Social Network!!!

Wang Huiwen is also a genius; otherwise, he wouldn't have been able to study at the Chinese Academy of Sciences.

Upon hearing Wang Xing's call, he immediately asked the institute's leaders for leave and then took a taxi from near the Chinese Academy of Sciences straight to Liujiazhuang West Bank District.

Wang Xing finally met Wang Huiwen and shared his thoughts with her. Before long, the two reached a consensus.

Next, Wang Xing invited Lai Binqiang, a high school friend, and the three inexperienced young people began their entrepreneurial journey.

Wang Xing told his two closest friends that if an ordinary old man from Liujiazhuang could give up his "golden rice bowl" to start a business and eventually achieve success, there was no reason why the three of them, the chosen ones, couldn't succeed.

He said, "It's impossible for me to work for anyone else in the future. I will never work for someone else again in my life. I will definitely make something of myself..."

Wang Huiwen and Lai Binqiang were greatly encouraged by what they heard. They felt that young people should be brave enough to try and strive.

The three of them didn't have much money and only managed to scrape together 300,000 yuan. Although Wang Xing's family was wealthy, he was proud and arrogant and didn't want to take money from his family. He wanted to build his career through his own efforts.

And so, with an initial investment of 300,000 yuan, Wang Xing and his two partners began their internet entrepreneurship journey.

Since Wang Xing's rented place was on the west bank of Liujiazhuang and was a private house, which was not conducive to their future development, the three young people rented another private house in the Information Industry Park and lived there temporarily.

At that time, they had nothing but enthusiasm, knowledge, and ideas.

Wang Xing and his team first created a website called "Duoduoyou" where anyone could make new friends, which quickly attracted a large number of users.

However, this period of prosperity was short-lived. As the number of users surged, the problem of frequent server crashes began to emerge.

One late night, the three of them were crammed into a small rented room, staring at a flickering computer screen, when Wang Huiwen suddenly discovered a serious vulnerability in the database.

"It must be fixed immediately!" He pushed up his glasses, his fingers flying across the keyboard. Lai Binqiang, meanwhile, was busy answering customer complaint calls, fine beads of sweat forming on his forehead.

With his funds quickly running out, Wang Xing had to re-evaluate his business plan.

He noticed that although users were active, the retention rate was extremely low.

“We can’t just do superficial work,” he said, tapping on the data on the whiteboard. “We must find the real needs and pain points.”

Starting a business is not always smooth sailing, especially for young people with no experience.

If the expected goals are not achieved after several months of operation, failure will be the only option.

A year later, the three founders decided to start over. Learning from their previous failure, Wang Xing and his team achieved initial success with "Xiaonei.com" within just three months, attracting 30,000 users.

Soon after, the number of users of "Xiaonei.com" exceeded 100 million.

However, as the number of users continues to increase, the amount of money required to invest also increases.

Expenses such as server expansion, technical maintenance, and marketing are devouring their financial reserves like a bottomless pit.

Every morning, Wang Xing would repeatedly calculate in the ledger, his brows furrowing more and more as his fingertips traced those shocking red numbers.

“We need to reach an agreement with the venture capitalists as soon as possible,” Wang Huiwen advised.

Wang Xing nodded: "Talk to those companies and see who has the highest valuation and the best terms. Choose that company for the angel round."

"okay!"

One early morning, Wang Huiwen suddenly pushed open the conference room door, clutching a reply he had just received from Sequoia Capital: "They agreed to invest $500 million, but demanded 45% of the shares, otherwise there's no point in discussing it."

The three of them fell silent, the sound of cicadas outside the window seeming particularly jarring.

Lai Bin slammed his fist on the table: "That's impossible. If we agree to it, wouldn't we be giving them our jobs?"
"We worked tirelessly through over three hundred sleepless nights to build this empire; why should others reap the benefits?"

“But the valuations of the other companies are too low, they don’t meet our requirements at all,” Wang Huiwen said unwillingly.

Wang Xing frowned and said, "We can't agree to Sequoia Capital's offer. They want almost half of our shares in just the angel round. If we have a few more rounds of financing, we will lose control of the company."

“If we reject them, Awen, you’ll have to keep contacting other venture capital firms. I don’t believe that without Zhang the butcher, we can only eat pigs with hair on.”

"Okay, I'll look for other companies!"

Wang Xing stood up and walked to the window, looking at the twinkling city lights of Liujiazhuang in the distance. He suddenly turned around and said, "Actually, we have overlooked an important issue - the business model."

No matter how fast the user growth of 'Xiaonei.com' is, it's all just empty talk without monetization channels.

He picked up a marker and drew three concentric circles on the whiteboard: “‘Xiaonei.com’ has social networking at its core, content on the outer circle, and services on the outermost layer.”

We can introduce sponsorships to the campus activities section.

Lai Binqiang's eyes lit up: "For example, during the freshman enrollment season, nearby restaurants could place advertisements?"

Wang Huiwen immediately added, "We can also develop a ticketing system so that students can sell tickets online when organizing activities."

The three became more and more excited as they discussed, and were still refining the plan at three in the morning.

The next day, they revised their business plan, emphasizing the concept of a "closed-loop campus ecosystem."

A week later, Wang Huiwen met with five venture capital firms on Victory Avenue in Liujiazhuang with his new proposal.

This time, he clearly sensed a difference in the other party's attitude. One investor said, "You've finally figured out how to make money."

Ultimately, it was Duan Yongping, CEO of "Jingxi Capital," who gave the highest valuation.

"Jingxi Capital" offered $800 million in Series A funding, offering only a 25% stake and promising to bring in strategic resources.

These are excellent conditions; Duan Yongping truly deserves his reputation as a "timely rain" in the domestic investment field.

Wang Xing was also very satisfied with the investment terms offered by "Jingxi Capital".

On the day of the official signing, the three of them opened champagne in a simple office. Wang Xing's hand was trembling as he raised his glass: "This is just the beginning. Next year, we will cover 1000 universities across the country!"

After the funds from "Jingxi Capital" arrived quickly, the "Xiaonei.com" team immediately launched the "Campus Ambassador" program.

As Facebook, founded two years ahead of schedule with investment from "Liu's Overseas Capital," swept the globe, Wang Xing deeply felt the enormous business opportunities it contained.

Having been dedicated to researching the "six degrees of separation" theory, he decided to draw inspiration from Facebook's model to create a social networking platform for campuses.

So Wang Huiwen led twenty interns to universities all over the country, while Lai Binqiang developed the photo tagging function—an innovative design later known as the "Southeast University version of Facebook," which caused user activity to surge by 300%.

When the server crashed for the Nth time due to a surge in traffic, the three looked at each other and smiled. This time, they knew that a happy trouble had arrived.

With the injection of funds, "Xiaonei.com" entered a period of rapid development.

Posters with orange logos can be seen everywhere on university campuses, and the first thing students say to each other has changed from "Have you eaten?" to "Have you joined the school's intranet?"

Every day, Wang Xing receives media reporters who come to interview him because of his reputation, and his office is piled high with faxes of interview invitations.

One evening, while Wang Xing was organizing user feedback in the backend, he discovered an interesting phenomenon: many girls were complaining about not being able to find suitable outfits for campus activities.

He immediately called a team meeting, pointing to the data and saying, "Looking at this demand gap, we can totally try to create a campus e-commerce platform." Wang Huiwen adjusted his glasses: "But what about warehousing and logistics? We have no experience in e-commerce!"

Lai Binqiang suddenly slammed his hand on the table and stood up: "Can we ask Mr. Duan from 'Jingxi Capital' for help!"

Jingxi Capital has invested in e-commerce platforms like Taobao and JD.com, as well as logistics company SF Express, hasn't it?
I'm sure Mr. Duan can help us in this regard. Only when we develop well will 'Jingxi Capital' see returns, right?

Wang Xing thought Lai Binqiang made a lot of sense. Wouldn't it be foolish not to cling to Duan Yongping, such a powerful ally?
So the three of them worked through the night to revise the event plan, and the next day they took the new proposal to the Liujiazhuang headquarters of 'Jingxi Capital'.

After listening to the report, Duan Yongping smiled and dialed the number of the person in charge of investment in the warehousing and logistics sector, inviting him to his office for a face-to-face meeting. He said, "These young people have a lot of ideas. Give them a fast track."

Two weeks later, the "Campus Picks" channel was launched, and sales exceeded 50 yuan on the first day.

Wang Xing specially hung an electronic screen in his office to display transaction data in real time. The jumping numbers filled every team member who worked overtime until late at night with enthusiasm.

At the same time, the social media explosion triggered by the photo tagging feature exceeded everyone's expectations.

One weekend, a college beauty posted a photo of herself reading in the library, and the number of students who tagged her in the post exceeded 5000 within 24 hours.

This school beauty instantly became an "internet celebrity" and went viral.

This inspired other users on the "Xiaonei" website to follow suit, and for a time, beautiful women and handsome men from all walks of life flocked to it.

When the "Xiaonei.com" server crashed again, Wang Xing smiled and said to the technical team, "This time we have to reconstruct the server architecture. In the future, there will be more and more of these sweet burdens."

Three months later, the number of users of "Xiaonei.com" officially exceeded 2000 million, with an average of 800 million daily active users.

The GMV of the campus e-commerce sector is growing at a rate of 30% per week, and Wang Xing has begun to frequently appear on the covers of major business magazines.

One rainy night, while organizing quarterly reports, Wang Xing discovered that the growth rate of users from universities in third- and fourth-tier cities had slowed significantly.

He immediately convened a meeting with the core team: "Our user base in first- and second-tier cities is nearing saturation, but there is still huge potential in the lower-tier markets."

Lai Bin emphasized the backend data: "The network infrastructure of these schools is too poor, and..."

"How about developing a lightweight version?" Wang Huiwen suggested. "Optimize the photo compression algorithm and cut some non-core functions."

The "Xiaonei.com" technical team worked continuously for 72 hours to launch "Renren Speed ​​Edition," which is only one-third the size of the original.

This decision had an immediate effect, with 60% of new users that month coming from universities in prefecture-level cities.

At the same time, the logistics resources introduced by Duan Yongping began to show their power.

By connecting to Taobao's warehousing system, the delivery time for "Xiaonei Youxuan" has been shortened from 3 days to 18 hours.

During a group-buying event, 2000 boxes of milk were sold out within 2 hours.

But crises are always accompanied by opportunities.

One Monday morning, Wang Xing received an urgent report from the legal department: a user had maliciously photoshopped images using the photo tagging function, which had already caused three campus disputes.

"Immediately launch a content moderation system!" Wang Xing decided without hesitation. "Also, assemble a moderation team of 200 people, working in shifts 24 hours a day."

This incident made the team realize that as the platform's influence expands, its social responsibility also becomes increasingly important.

In an internal letter, Wang Xing wrote: "What we want to do is not just create commercial products, but also a trustworthy campus community."

Now, Xiaonei.com is about to launch its Series B financing round, with a valuation that has reached an astonishing $5 million.

However, the growth rate of users on "Xiaonei.com" slowed down and soon encountered a bottleneck.

Because the University of Tokyo only has 4000 million students enrolled in its higher education institutions.

Several strong competitors have also emerged for "Xiaonei.com".

In 2018, Renren.com faced fierce competition from many sources, such as the morning exercise program, dorm99, looface, and the seat-saving website.

Among them, 5Q.com, owned by Chen Yizhou of Wanxiang Group, poses the biggest threat to Xiaonei.com.

A year ago, Renmin University's campus network was operating at three universities: Yenching University, Tsinghua University, and Renmin University. It only supported registration for enrolled students and encouraged users to register with their real information.

In an era where communication methods are scarce, the emergence of "Xiaonei.com" has undoubtedly brought college students a refreshing way to make friends, while strict real-name authentication also ensures the quality of users.

Later, by borrowing ideas from Facebook and localizing its content, Xiaonei.com began to spread at an unimaginable speed among the student segment.

It's important to understand that back then, China's internet industry was still underdeveloped, and even mobile phones weren't widely available.

The "find people" function launched by "Xiaonei.com" has undoubtedly attracted the attention of countless students—elementary school classmates, junior high school classmates, high school classmates... Countless friendships that had lost contact were reconnected because of Xiaonei.com, and the huge advantage of word-of-mouth promotion brought more users to Xiaonei.com, ultimately forming a viral marketing effect.

The success of "Xiaonei" stems from two factors: users' need for social interaction and the human desire to pry into the privacy of others.

The success of Facebook was described in the later film "The Social Network": "People always like to know the privacy of people they know and don't know well."

This model allows people to spy on others' privacy without disturbing the person being spied on.

The same applies to "Xiaonei.com". Using Xiaonei.com to see what people you know are doing has become a new way of socializing, while another group of people who like to show themselves have also found a sense of belonging on Xiaonei.com.

However, as the number of users grew, Wang Xing and Xiaonei.com, which had not yet received Series A funding, encountered a problem—they ran out of money.

The number of users grew much faster than initially estimated, and the newly added servers were soon insufficient to cope with the demand. As a result, the company had to continuously spend money to purchase new servers, and the problem that followed was that the company was short of funds.

Wang Xing had already noticed the "winner-takes-all" nature of social networking sites, so he valued the expansion of scale and user base more than profitability—when Xiaonei.com became the ultimate winner, profitability was only a matter of time.

There's nothing wrong with this approach, but Wang Xing overlooked the time and money needed to survive until profitability.

Xiaonei.com, which has yet to find a way to make a profit, encountered a cold reception in its Series A funding round and was temporarily trapped in a predicament.

Unlike the inexperienced Wang Xing, Chen Yizhou, CEO of "Wanxiang Group," is a seasoned investor.

Chen Yizhou saw the huge potential of "Xiaonei.com" and, taking advantage of Wang Xing and his team's initial lack of funds and A Lun's predicament in investment, wanted to seize the opportunity to acquire "Xiaonei.com".

If it weren't for Duan Yongping of "Jingxi Capital" lending a helping hand to "Xiaonei.com", Wang Xing might have eventually sold "Xiaonei.com" to "Wanxiang Group".

Seeing his prize slip away, Chen Yizhou of Wanxiang Group was furious.

Although Wanxiang Group and Chen Yizhou are very powerful in the domestic investment field, they are helpless in the face of the financial behemoth Jingxi Capital and Duan Yongping, a big name in the investment field.

In a fit of anger, Chen Yizhou created "5Q" network, which was exactly the same as "Campus Network" and started competing with Wang Xing's "Campus Network".

Suddenly, the "campus network" faced the most dangerous situation since its establishment.

First, the "Campus Network" is only open to on-campus college students for registration, and it is about to reach a user bottleneck.

Another example is 5Q.com, which, with the financial support of Wanxiang Group, has developed rapidly and is poised to overtake others.

(End of this chapter)