King of Capital

"What did you talk about?"

"Am I satisfied with my current job status? What is the biggest pressure I face? What businesses are I interested in? What role do I play in market competition..."

"Okay, you go and do your work first."

Liu Zhen is a middle-aged woman with a broad forehead and slightly flat features. Compared with her cousin Liu Qing, she is more rigorous and rigid. Her background as a lawyer in the United States for more than ten years has deepened this image.

She lightly sent her subordinate away, then walked to the office window, folded her arms across her chest and looked towards the conference room diagonally opposite.

Jim Gotz seemed to notice and raised his head and nodded. Liu Zhen responded with a standard smile and pulled down the louvered curtains to end the staring match.

This well-known 'Silicon Valley rainmaker' from Sequoia Capital USA walked into the company yesterday afternoon to explain that he was here to attend the Internet Conference and visit Uber China on the way to evaluate the next round of financing.

Then, he arrived at the meeting room on time early this morning and was busy with his own business. He occasionally met with employees individually, from senior executives to front-line business personnel, and discussed strategic consulting and headhunting issues as an investor.

"What on earth do you want to do?"

Liu Zhen sat back at her desk and frowned in front of the computer screen. The roster on the employee management system interface was largely empty, as if it had been gnawed by a dog - by Didi.

After a whole year of intense competition, both Xie Jingxing and Liu Qing publicly praised Uber for its profound technical experience and strong adaptability. On the contrary, Uber China was also torn apart by its strong competitors.

When the battle broke out at the end of last year, the management structure was planned to be reorganized into a three-level management system of city-region-Silicon Valley. Local markets had more flexibility and autonomy, but the overall brand level was in disarray.

City managers only care about their own interests. Wang Xiaofeng, one of the iron triangle of the Shanghai team, was the first to leave Mobike. Tan Jing then resigned to start her own business. The person in charge of Beijing, Jiang Zhiya, was transferred back to the Silicon Valley headquarters.

Then, following Didi's footsteps, the company launched the "People's Uber" sub-brand, which caused serious resistance within the company. Many employees who admired Uber's halo as a multinational giant thought that the express business was low-end and low-priced, and left one after another.

The most fatal thing is that these spiritual worshippers are precisely the middle-level managers and business backbones with excellent academic qualifications, abilities and network resources!

Liu Zhen has lived in the United States for more than ten years and is very familiar with the so-called public intellectuals' mentality among the domestic social elite, but she has no time to appease and dispel the absurdity.

On the third day after taking up the position of Chief Strategy Officer of Uber China, the Guangzhou office was raided, and I rushed to the local area and tried my best to adapt to and integrate into the domestic business environment for several consecutive days.

As a result, I contacted the counterpart unit to organize a meeting within a week. While I was busy setting up the venue and putting out the mineral water, I received a notice that Jingyue City was interviewing, Liaoning City, and Harbin City. The three provinces were on the same page...

Liu Zhen has been flying all over the country from last year to now, being questioned in various places, seeking help from his uncle, and raising another question when one question is not answered, repeating this cycle over and over again, making him exhausted.

I spoke to Liu Qing no more than ten sentences throughout this year. One time, when I was busy with several questions at the same time, I couldn't help but send her a message on the way back to the hotel at three in the morning, asking: Are you asleep?

I received a reply at 10 o'clock the next morning, saying, "Don't work too hard and get enough rest, as your health is the capital of revolution."

Liu Zhen read the short message many times and almost laughed out loud.

"At some point, there were things that were beyond my imagination. In terms of competition, it was definitely a little more physical than I had expected."

She later said this in an interview with the media, but it was just talk and it did not help to change the situation of being squeezed from all sides.

In September, Kalanick came to China to attend the Internet Industry Summit and said that Uber's market share in China was close to 35%. Liu Qing responded remotely that Didi's market share was 90%. Kalanick then returned to Uber China and caught up with Didi's 30% of its business volume.

Everyone is arguing with each other, and Liu Zhen estimates that the actual market share of each company is no more than 15%, which is a result of burning $11.5 billion in one year.

Perhaps the company’s management team needs to undergo major adjustments, as the cold winter and new year will be difficult to overcome.

Liu Zhen closed the employee management system and picked up her phone to check. Her senior executive friend at the company's Silicon Valley headquarters had not yet sent her any inside information.

"Dong dong dong."

Before I knew it, the sky outside the window was gradually darkening and the dusk was shrouded in gloom. There was a slight knock at the office door, and Liu Zhen sat up straight: "Come in."

"Jen, excuse me, I have a few questions I need to confirm with you." Jim Goetz said politely, holding his laptop.

Liu Zhen raised her hand and asked him to sit down: "Of course."

"I want to know that the initial subsidy target for the Chinese market was $25 per newly registered user. As long as the corresponding users were attracted, the teams in each city had the power to decide how to spend the subsidies, with almost no need for review by the Silicon Valley headquarters."

Jim Goetz paused and continued, "And the average cost per new user for Chinese local competitors Didi, Yidao, and Shenzhou Car Rental is 20-30 yuan?"

"You said this was the earliest period, and I hadn't joined the company at that time. I can only tell you that our market positioning was high-end at that time, and our driver fleet was mainly hotel concierge fleet. We needed to acquire users by sponsoring various fashion parties and business exhibitions." Liu Zhen could hardly hide his confrontational emotions.

Jim Goetz just smiled and didn't argue: "OK, after the People's Uber sub-brand goes online, the average subsidy for drivers of the private car business is 30 yuan per order?"

"In the initial stage. Didi has just launched the Didi Express service covering 12 cities across the country. Every Monday, all users, yes all, can ride Didi Express for free without any restrictions!"

Liu Zhen spread her hands and pointed out the window: "I don't know what you want to ask. Maybe you should ask Didi and hear how much money they burned this year. 15 billion US dollars or 20 billion?"

"Uber China has only 600 full-time employees, which is less than one-fifth of Didi's. In such cold weather, there are still hundreds of interns working on the streets for Uber because they believe they are working for a great company."

She instinctively used American workplace political correctness: "All my colleagues are trying their best to cut costs and use money as bullets to shoot at the front line, and you are playing the role of a military logistics auditor at this moment? I have to say that this is an insult to my colleagues in China and the Uber brand."

"Uh, $40 billion?" Jim Goetz asked calmly.

"what?"

"I saw a news report that cited data from somewhere and claimed that Didi spent $40 billion on market cultivation this year," Jim Goetz explained seriously.

Liu Zhen couldn't tell whether it was praise or slander for a moment. If Uber China could gain a 40% market share while Didi burned $15 billion, then the China team would be amazing.

15 billion to 20 billion US dollars is still realistic and reasonable, and it can be estimated by comparing with Didi's annual financing amount. The old white man is playing dumb and has a black heart.

"Like you and all my colleagues in China, I believe in Uber, a great company."

After using some tricks to get Liu Zhen to stop talking, Jim Goetz brought up the topic again: "Kalanick can always raise more money faster than his competitors, and then seize the market at a lower price until he defeats all competitors." "This trick has always been successful and has enabled Uber to quickly grow into a unique global unicorn company. Your offensiveness is undoubtedly the greatest weapon."

He said slowly and calmly: "In just one year, Chengdu replaced New York to become the city with the highest number of Uber orders. Among the top ten cities in the world, seven are from China."

"From this we can conclude that China is a 'digital dragon', a digital dragon with hundreds of millions of Internet users."

Jim Goetz raised his voice slightly and changed the subject: "It makes sense that this dragon gave birth to Didi, which is better at raising funds and burning money than Kalanick, and is more aggressive, right?"

“So you are currently in a small predicament and need to launch a new round of financing to support a strong attack, attack, attack!”

He clenched his fists and tapped the desk with his knuckles, his tone stern and his expression fierce.

This must be Kalanick's style, which is absolutely not in line with Sequoia's US investment style. Liu Zhen became more and more confused.

"I will return to Silicon Valley immediately to report the situation to the board of directors and make suggestions. If all goes well, you will start the B round of financing soon. Be prepared to increase the intensity of competition again."

Jim Goetz quickly put away his laptop, stood up and held out his hand: "We haven't found a suitable candidate for the CEO position in China yet, and it can't remain vacant any longer. I personally hope you can take on the responsibility."

"...Jim, I'm sorry, to be honest, this is very different from what I thought. Can you talk about it in detail?" Liu Zhen shook hands with him half-believingly but half-moved.

"I can't say much right now. Kalanick will tell you in a few days, probably after Christmas. I wish you and your team success." Jim Goetz patted his laptop and gave a relaxed blessing with a smile.

With 25 US dollars per user and 30 yuan per order, they are still unable to defeat Didi with such a strong offer. It is clear that there is no need to continue this war.

I hope the ignorant frontline soldiers can push the battle line to the negotiating table. Whether Kalanick is willing or not, he has to choose to sit at this damn table!
Xiao Xie is talented in frontal warfare, but as for how to balance the board of directors and make the founder bow his head, he has little experience and needs to grow.

…………

Jim Goetz returned to Silicon Valley with the evaluation results, and Uber's board of directors unilaterally and efficiently passed a resolution to end the war, while at the same time holding down the furious Kalanick to submission.

Domestic, Beijing.

Another founder, Dai Wei, received unconditional support from the entire board of directors and started an all-out war with Mobike.

It started with Mobike’s red envelope bike activity, and three days later ofo followed suit and updated the red envelope bike function.

On Christmas Day, the former announced a week of free riding from Christmas to New Year's Day, and the latter launched a New Year plan to randomly give away 1 free monthly riding passes in January.

In the early morning of January 1st, ofo’s free monthly pass function was launched. At nine o’clock in the morning, Mobike officially announced the completion of a US$1 million Series C financing round, led by Tencent and Foxconn, and followed by early investors such as Huazhu Hotels and Sequoia.

New users who go online on the same day can ride 5 times per month without deposit, or pay a deposit to get a free monthly riding pass.

The next day, Hellobike, a newly established local bike-sharing company in Hangzhou, announced that it would offer free rides for three days...

In just over ten days, the subsidy competition friction that everyone was accustomed to gradually escalated until it turned into an all-out war with no choice.

"How much money do you need now? Is $7000 million enough? Alibaba will lead the new round of financing. It would be best if Matrix Partners China could follow suit and give up 15% of the equity. This money will be used for emergencies first. I will help you contact SoftBank later to get some strategic investors to buy in."

On the other end of the phone, Alibaba's second-in-command, Joseph Tsai, finalized the plan in a few words, leaving Dai Wei no chance to hesitate or discuss it.

However, concerns about the impact of share dilution on actual control were quickly replaced by excitement. One year after its founding, the company was valued at US$4.8 million. If there is anything more exciting than this, it would only be the moment of defeating Mobike!
"Contact Phoenix to expand production capacity and adjust the strategic press conference in a few days. I want to announce the news of the new round of financing on the spot!"

Dai Wei hung up the phone and rushed out of the office, shouting to nearly 100 employees in the public area: "Ask Lu Han to be my spokesperson, and the marketing department will come up with a plan immediately. Ask a celebrity or internet celebrity to be the one who's popular. We'll pay for the users' rides, and there's no time limit for free rides!"

"Heads of all departments, gather in the conference room."

He spoke as he walked and moved with great resolution, leaving the employees looking at him in confusion, not knowing what was going on.

"Ray (Dai Wei), has the financing been secured?!" Co-founder Xue Ding, wearing a pair of retro black-framed round glasses, came closer and spoke with excitement.

Dai Wei raised his elbow and bumped his arm: "7000 million US dollars!"

"Damn, Jack Ma is a timely rain. It's not in vain that you went to the Internet Conference to meet him!"

Xue Ding's Adam's apple moved and his voice broke. He tried to suppress the tingling pleasure on his scalp and reminded him in an objective manner, "Isn't free riding a bit radical? Let's first surpass Mobike with the free top-up promotion, and then do something like a low-priced monthly cycling pass."

"It's too late for us to leave the campus, and Mobike has stolen several months of development. Now we have to move faster and faster. If we want to fight, we have to go all in." Dai Wei rejected it without hesitation.

Although he is good at marketing, when Xie Jingxing went to Peking University for a salon interview last year, he consciously began to tie himself to Hu Weiwei to hype the topic of young male and female entrepreneurs.

It seems that the competition between the two sides is difficult to determine, but when it comes to business level, it always requires real money-burning operations.

Xie Jingxing was too willing to spend money and resources on Hu Weiwei. If this lineup of Xiyou + Tencent + Didi + Xinda'e was put into any field of the Internet industry today, anyone would be confused if they confronted it head-on.

Based on this, it is generally believed within the venture capital circle that the data announced by Mobike at the beginning of last month that its daily active users exceeded one million is not exaggerated.

Ofo has 35 daily active users, and its overall investor lineup of Jinshajiang and Matrix China, led by Alibaba, is quite stretched.

Dai Wei knew very well that Alibaba chose to invest heavily in him because ofo was the closest to Mobike. Dozens of shared bicycle brands that sprung up like mushrooms after a rain behind the two had jointly created a quagmire, making it a mess and it would be difficult for any of them to climb out of the quagmire and catch up in a short time.

In this case, instead of thinking too much and making careful calculations, it is better to make an explosive effort to clear out the ammunition, firmly hold the second position in the market and then challenge the first position in the market.

Show investors that if they are interested in entering the shared bicycle market, the only ones they can invest in are Mobike and ofo, and the rest are garbage!
"Entrepreneurs should never worry about next month's operating funds. As long as you spend all your money this month, money will naturally come to you next month."

Dai Wei placed his hands on the long table in the conference room, bent his waist like a wild animal hunting, and looked around the room: "Do you know who said this?"

"It was Xie Jingxing who said this at the Peking University symposium last year. Now we are returning this sentence to him."

Dai Wei has a hunch that he will capture SoftBank and DST, these top investment institutions. (End of this chapter)