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The road to B of a lonely innovative Internet service provider

Time: 2019-11-26 07:44 Source: Internet Author: admin Hits: 1321 times
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Beginning in 2018, the term "the second half of the Internet" has become increasingly popular. Internet companies have transformed from business to consumers (to C) to business to businesses (to B), from consumer Internet to industrial Internet. This is widely interpreted as the mainstream business trend in the second half of the Internet.

But who can tell what the meaning of to B is? Internet practitioners hold big data, cloud computing, the Internet of Things and artificial intelligence in their mouths, but it seems that no one can say clearly their commercialization path. As one of the basic business of to B's cloud business, Alibaba Cloud, Tencent Cloud and Jinshan Cloud are all at a loss. The Internet services sector, influenced by the digital transformation of enterprises, seems to have unlimited potential, but the profit situation is unstable.

Perhaps through this article's introduction to a company that has long been engaged in to B business, we can generally see some clues about the commercialization of Internet services.

This company is Bora Networks. A big data analysis and marketing company based in Chongqing. Its experience has been a long story in the short history of the Internet.

Bora Networks, founded in 2006, started as an Internet company with a complete business to C. Its founder, Tong Yi, founded Qihoo.com in 2004. This is the earliest domestic content aggregating website that provides a personalized information index aggregation of "turn on your computer and see the world you want to see". It should be said to be the early PC version of "Today's Headline", one of its sub-products. It covered all domestic BBS communities that year. Qihoo.com was acquired by Zhou Hongyi in 2005, becoming the predecessor of Qihoo 360 today.

Tong Yi's early adopters in Qihoo were successful because he captured and created the earliest aggregation model in China. At the beginning of the creation of Bora Network, it still wanted to take a familiar path, but replaced the aggregated content with "aggregator"-blog. It wants to imitate the model of performing arts brokers, act as "brokers" for bloggers, find good authors for advertisers, and let bloggers open individual online stores to sell things. This is the predecessor of Bora Network-blog marketing.

Money has never been the biggest concern for Bora Networks. At that time, blogging was the hot air, and investment came. But from a marketing perspective, being too advanced is not a good thing. Blog marketing was ten years earlier than the current popularity of online celebrities. The e-commerce model has not yet matured. According to Yu Minhong later, even Alibaba is still looking for its own business model at this time. Bora broke through 4 million members on one side, but burned a lot of funds on the other. In 2008, the world's biggest financial crisis caused the web 2.0 Internet bubble to burst, and Internet companies closed down in large numbers, and capital liquidity weakened. Affected by this, Bora's online account left at least 700,000 yuan.

This is a time of anxiety. It is not capital, but traffic that Bola Networks has taken down. In 2006, the monthly visits of Bora Network reached 600 million people, with millions of registered members and covering more than 30,000 cooperative websites. But monetization is a problem.

Bora's next turn was in a direction no one expected. It has accumulated rich data as a forum search engine before, and turning to data analysis and processing can be said to be natural. From to C to to B. The first step in the start was in the automotive industry. In 2009, China's auto sales increased by 46.15% year-on-year. China surpassed the United States and became the world's largest new car market. Demand for various types of automotive data is skyrocketing, but there is no suitable data analysis and marketing service.

"Automotive customers have tens of millions of car owners offline, why not help industry customers manage their users in the way of Facebook?" Bora Networks later told the author of this article. This thinking prompted Bora Networks to launch a public opinion monitoring system for cars. This is also the earliest Internet public opinion product in China. In addition to monitoring car sales related information, it also added dynamic web data sources for car social media such as car forums and car blogs-a capability that most data service providers lacked at the time. The hard core advantage made it finally win its first bucket of gold. So far, Bora Networks can still maintain its comparative advantage in data analysis and marketing of the automotive industry. It must be said that it has to do with the business opportunities of the era when emerging markets broke out. But at the same time, being too advanced will bring loneliness that is difficult for most people to understand.

All the work of Bora Network since then has been an upgrade of data analysis and marketing operations. From a horizontal perspective, Bora Network's business extends from automotive networks to fast-moving consumer goods, 3C appliances, e-commerce and retail. From a vertical perspective, its product line does not stop at digital marketing and other businesses, but expands beyond digital In addition to marketing, we will comprehensively expand corporate online sales, corporate digital technology development, and corporate user data hosting to provide customers with digital solutions.

The latter practice is called "Internet +". Bora's big data business segment is such an online software that integrates marketing, users, and data into an Internet mindset.

Take the automotive industry as an example. The rise and sinking of BBS and blogs has happened almost 10 years ago. Bola didn't disappear with this tuyere. It uses the big data cloud platform to create an "e-commerce cloud store system" for large car companies, and centralizes the data of potential customers and sales diversions of hundreds of dealers across the country to the car company's unified data center for operation and management. The establishment of this system proves that the technology development capability of Bora Network is far different from that when the market and public opinion system was developed.

At the same time, to B's business requires Bora Networks to deepen its technical moat, so that it can be invincible in the same industry competition. This forces it to invest more in scientific research. In terms of overall new retail solutions for large-scale business and supermarket enterprises, it has been able to use new technologies such as big data, O2O, mobile payment, AR / VR experience, and AI intelligence to help enterprises upgrade their operating models.

On the whole, Bora Networks has been running on the road of Internet data services in the past ten years, which makes it proud to say in the prospectus of science and technology board submitted in 2019 that it "served more than 300 Fortune 500 companies and industries Leading Enterprise ". Public information shows that Bora has been profitable. From 2016 to 2018, the compound revenue growth rate was 38.68%, and the cumulative profit in the past five years reached 200 million yuan.

It is a pity that the increase and decrease of business often bring about a large adjustment in revenue and gross profit margin. For investors who expect stable returns, it brings a certain amount of return risk. However, changes in business boundaries not only provide opportunities for trial and error, but also bring new thinking: Bora proposed that in the broader non-enterprise internal management field, software, marketing, and data should be provided by three companies commonly used in the industry. , Changed to a new model of "enterprise digital services" provided by one company. This model reflects the innovation ability of Bora Network under the collision of industries.

In contrast to the rapid rollout of business, Bora Networks struggles to tell its story to the securities market. It had suspended the trading for the GEM after landing on the New Third Board in order to build a VIE structure for listing overseas. The listing on the GEM had to undergo the strictest review and had to retreat, and then suffered a setback on the science and technology board. Excluding some accidental factors, for a company that has been ranked among the top 100 big data companies in China for several years since 2016, standing in the forefront of the industry and going public is a natural direction. However, how much the final encounter made Bora Network unexpected, and also put a trace of sadness on the listing process.

This is not to say that Capital does not recognize Bora Networks. In 2014, the value of Bola Network reached 100 million yuan. In 2015, a targeted additional issuance of 88 million yuan pushed the valuation up again. Finally, when the science and technology board applied for listing, Bola Networks raised funds according to a valuation standard of more than 1 billion yuan. The five-year valuation has increased tenfold. In the past year, Bora has received another 100 million yuan capital increase. Among its investors are both the first-round investor who first discovered Tencent, and Jack Ma's angel investor. Bora Networks has this confidence: Capital is willing to pay.

Confidence comes from two places. One is that Bora already has a very solid basic disk and the business boundary is already wide. The other is that the prospect of the Internet data service market is promising, especially in the first year of 5G commercial use in 2019, and a stronger infrastructure. Drive the explosion of data services. Market research agency IDC predicts that the compound annual growth rate of China's big data and business analysis solutions market from 2019 to 2023 will be 23.5%. By 2023, the market size will grow to $ 22.49 billion. Among them, related service expenditure and software revenue accounted for 54.8%.

Regarding its business positioning, Bora Network expressed this in its public information: "Bora Networks is an enterprise big data service provider. Based on the self-developed E2C (E-service to Company) digital business big data cloud platform, "Big data + technology products + application services" business model, to provide corporate customers with technology development services and big data application services. "

However, the complexity of this concept is not understood by all parties. Some people think that this is the business of an Internet advertiser-the reason for this idea is likely to be that it is associated with the blue cursor of A-share listing and Xuan Ya International ’s advertising companies in the prospectus Benchmarking company for big data marketing.

Bora Networks launched a digital media delivery business in 2018, which uses big data algorithms and technologies to automatically achieve targeted advertising for precise target audiences. It is mainly concentrated on social media such as WeChat circle of friends and today's headlines. This business provided 25.69% of the company's revenue in 2018. The rapid growth of this business has strengthened the external "advertising company" setting for Bora Networks.

In response to this, Bora Network explained somewhat reluctantly: "The launch of digital media delivery business is not a simple 'advertising business', but a big data service application scenario where the company adapts to the new situation of digital new media development and naturally extends."

The bad is bad in the phrase "naturally extended big data service application scenarios", because it is often hidden from people's experience, and only a few forward-looking industry people can understand the trend, even the bosses of Internet head companies not excluded. The famous example here is that Tencent stood on the sidelines when Ali started throwing money at Jianyun's business eight years ago, while Baidu considered this to be "new bottled old wine."

Today, cloud computing is in the ascendant. 5G, which is entering commercial use vigorously, has no one dared to deny its commercial value. However, in the field of segmentation, such as the research and development of big data analysis technology from graphic information to video content, the potential geometry is still difficult to judge. In this regard, Bora Networks solutions have been put into practical use in AI visual recognition projects in the field of energy security-it has nothing to do with advertising. For Bora Networks, 5G video is a ticket for the next 5 years, and it must advance in three directions: video recognition technology, marketing data, and software products. The securities market, which has always been waiting for the market to enter the market, is still looking in this area.

The simple "E2C Enterprise Digital Services" concept can be difficult to explain clearly the problems encountered by Bora Networks and other similar companies. On the one hand, Internet service providers are mostly asset-light companies, and their ability to tell stories is not as exciting as the big Internet companies. A large factory like Tencent can use a visual way to build infrastructure to prove that its investment has a specific forward return. Judging from the traditional Internet concept, this method of burning money + financing + listing is mature. Jinshan Cloud has been losing money for years, but in the 47 days at the end of 2017, it announced three consecutive rounds of financing, raising nearly 4.6 billion yuan. The reason is no more.

On the other hand, the market needs a company that can turn around flexibly. From the automotive public opinion monitoring of the year to the AR / VR / AI, and even the Internet of Things and 5G, the enterprise service itself has non-standard characteristics. The big data asset management system provided by Bora Networks to a Fortune 500 retail company and the online cloud store system for dealers provided by Changan Automobile are completely different in terms of architecture. How to evaluate their commercial value is naturally not easy.

"The business model has been over ten years in the past and has been plagued by this team." Bora Networks said to the author of this article. In fact, it is not only Bora that is troubled. In the early years, Alibaba had a lot of fights before 2018, all of which caused various criticisms because of its advanced model. To this day, if you only look at the corresponding A-share listed companies on the Bora Prospectus, including companies such as Blue Cursor, most of them have entered the Internet data service market through mergers and acquisitions of related companies. Enterprises with similar businesses as their main business, that is, 100% of their revenues from data services, are still blank on the securities market.

Since you are an Internet service provider, you should try three ways to prove your strength to the capital market. The first is to continue to increase investment in research and development to ensure that products can keep up with the pace of industrial Internet development, which is often the most direct way to gain investor trust.

Second, continue to build your own business model. A radish and a pit project, of course, can bring real benefits, but it also makes it difficult to find comparable models of listed companies, making the capital market look like a cloud. In the era of the explosive growth of industrial Internet data in the future, there are more and more subdivided fields. You can consider drawing on the China-Taiwan organization structure currently being promoted by large factories. It establishes standards and mechanisms to determine uncertain business rules and processes through industrialization and marketization, which not only improves the degree of response, but also shows a concept and architecture that can be understood by the outside world. Finally, splitting the company into three distinct but collaborative companies that are clearer in technology, marketing, and products may be easier to understand.

The road of Internet service providers to B is a lonely innovation road, both in technology and business. Even following the development of the above path and gaining external recognition in the fight for the capital market, long-term patience and hard work are still necessary.

The author's memo: "Huawei's leading secret: only 12 words in 30 years" mentioned in the article: Huawei's internal consensus is a simple 12 words, "" customer-centric, struggling-oriented "" may be appropriate A road in Bora. Continuous advancement and innovation, although it is a business advantage, is bound to be questioned by most people. The turbulent business battle makes the enterprise form difficult to be understood by most people. And industry customers only care about value creation and solve the problem of value acquisition. In this sense, these twelve-word proverbs need to be remembered and upheld by practitioners.

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