Top of the big era

When things go awry, there must be a demon. For Nie Caijun, who happened to be working in financial auditing in the United States during Yahoo's peak period, he can basically guess, "It's because of financing."

Zhou Buqi nodded, "Yes, financing."

Guo Pengfei was stunned for a moment, "Scamming money?"

Zhou Buqi said with a smile: "It's not about cheating money, it's actually just a capital game. At that time, there were two major used car trading websites in the United States. The difference in user numbers was not big, and they both needed to raise funds. In the Internet industry, winning is often the case. The winner takes all, which means that the first in the industry has an exponential advantage over the second in the industry.”

As soon as these words came out, everyone suddenly realized.

It’s really evil!

For example, during financing, if an institution values ​​a registered user at US$1,000, then 1 million registered users can allow venture capital institutions to value it at US$1 billion.

But there are also differences between the first in the industry, the second in the industry, and the third in the industry.

Being first in the industry will have an extra strengthening halo, being third in the industry will have an extra weakening halo, and being fourth in the industry will basically have to cry on your knees and beg for venture capital.

Zhou Buqi said: "This is also a very classic business case. When Lao Yang told me about it, he was very touched. At that time, the two second-hand car websites in the United States wanted to raise funds at the same time. The one with the second largest market share originally That website found Yahoo and spent US$10 million. In fact, at that time, the website only had US$13 million on its account, so it spent US$10 million to cooperate with Yahoo.”

Zhang Yiming said: "In order to take a chance, you are really gambling! This is the way of playing on Wall Street!"

Zhou Buqi smiled and said, "I don't know if it's a financial officer who used to be on Wall Street. In short, the effect is very good. The second-hand car website that was originally the second largest in the market has had a huge increase in the number of page views, number of active users, and number of new users in a short period of time." Both the number of new users and the number of registered users have surpassed competitors and become the first in the market. Although the leading share is not high, the bargaining chips are already in hand."

Nie Caijun raised his hand and added: "I was an intern in the United States at the time, and I knew something about the situation. It was a crazy era, and all the money was rushing to Silicon Valley, and there was not even due diligence. Because Due diligence is a waste of time, and if you miss the opportunity, the investment opportunity may be taken away by other venture capital institutions.”

Zhang Yiming sighed slightly, "In an overheated market, money no longer counts as money."

Guo Pengfei waved his hand and interrupted him, "What happened next? What was the result of the financing?"

Zhou Buqi said: "Later, this second-hand car website won the bet and received US$120 million in financing, while its competitors only received US$60 million. At first glance, it cost US$10 million to only buy 20,000 new units. Users, it was too expensive, too uneconomical, and they suffered huge losses! However, they used the leverage amplification mechanism of the capital market to allow the company to get tens of millions of dollars more in venture capital from the capital market. In this transaction, Yahoo The one who received US$10 million seemed to have made a lot. But the other party received US$120 million and made even more."

Nie Caijun nodded and did not find it strange. "Making money through financial digital games is the fastest way to make money. Compared with traditional industries, the Internet is a virtual economy that competes with the real economy. However, compared with Wall Street, The Internet is considered the real economy.”

Zhou Buqi has two major private equity funds under his control, and they are also playing this kind of capital numbers game, so he understands it very well, and said: "Yes, this case is enough to illustrate the madness of the Internet market at that time. Under the enthusiasm of capital, Huge Internet bubble value was created, and Yahoo was the most critical bubble water in the bubble value.”

Guo Pengfei vaguely felt it and said suddenly: "Yahoo's bubble water is its core value. This is the main reason why Yahoo became the world's largest Internet company at that time."

"That's right!"

Zhou Buqi felt that he had followed his own train of thought.

Meng Houkun didn't quite understand, and frowned, "What's going on? Can you tell me more details?"

Guo Pengfei said: "When Internet companies are looking for venture capital, there are only a few evaluation factors. One is the entrepreneurial direction, the other is the team, and the other is the market performance after the product is launched. The entrepreneurial direction is actually easy to handle, and Silicon Valley has never been short of it. Creativity…”

At this point, Nie Caijun raised his hand and added a sentence after being approved, "The Internet industry at that time was not mature enough, and many venture capital institutions did not understand the Internet. They were just joining in the fun. Many entrepreneurial projects seemed inexplicable. , they were able to get financing at that time. I remember that I had the idea of ​​Sky Internet at that time, invested tens of billions of dollars and then screwed it up."

Guo Pengfei smiled and said: "That would be easier. The industry is immature, and any entrepreneurial project can get financing. Because of the popularity of capital, due diligence is not detailed enough, and there is no team review. Then there is only one left. , is the market performance of the product. As long as the market performs well, small projects can easily become large projects and obtain tens of millions or even hundreds of millions of dollars in financing."

Zhou Buqi was very satisfied and thought this guy was very smart, "Yes, that's the idea. How can we get the best market effect when a new product is launched? The simplest and most crude way is to advertise. At that time, Yahoo, as the world's largest The website, the most popular traffic center, has certainly become the brightest pearl in the entire Internet industry."

After a pause, he continued: "To put it simply, if other Internet companies want to blow bubbles, make the bubble bigger, and push up their market value, they need to borrow bubble water from Yahoo. This core position allows Yahoo to Its market capitalization exceeds US$100 billion."

Nie Caijun said: "Yes, that should be the logic. In order to blow bubbles, other entrepreneurial projects or Internet companies need to advertise on Yahoo. After the bubble blows up, and financing is obtained, it is possible to make the product better. Big, thereby realizing a true self-business model.”

"Huh?" Meng Houkun reacted, then opened his eyes wide, "Damn! Isn't this Ponzi? It's a pyramid scheme!!"

Product A advertises on Yahoo, acquires users, obtains financing, and develops its own products. After several rounds of financing, it’s time to develop your own business model.

For the Internet, the most important business model is to sell advertising, just like Yahoo.

Who are the ads sold to?

Product B sold to Internet companies.

Product B didn’t have that much money to advertise directly on Yahoo, so it went to advertise on A, and then gained traffic and users. After Product B develops, it will no longer be able to rely on financing to make a living. If you want to make money yourself, the way to make money is to sell advertising.

Advertising was sold to Product C.

After product C is developed, it sells advertising to product D, and product D sells advertising to product E...and so on. This is a proper pyramid structure.

The general logic is that Yahoo is at the top, and Yahoo collects money from downline A, who in turn collects money from downline B, who collects money from downline C, who collects money from downline D, and who collects money from downline E. money……

The entire industry is constantly asking downwards, looking for successors step by step.

Once the industry craze cools down and the last successor is gone, the entire pyramid will collapse layer by layer starting from the bottom.

If D cannot collect money from E, D will die; if D dies, C will not be able to collect money, and will encounter a cash flow crisis and may go bankrupt; if C goes bankrupt, B will also be in danger; B will be in danger If A is miserable, Yahoo will inevitably suffer a huge drop in market value.

The Great Depression is coming for the entire industry.

During the bubble crisis, tens of thousands of Internet companies around the world went bankrupt, and those at the bottom suffered more miserably.

The bubble crisis of 2000 and the subprime mortgage crisis of 2008 were essentially the same thing—the successors were gone.

As for the pyramid structure under this kind of financial game, once no successor can be found in the end, it will suffer a collapse step by step, leading to the complete collapse of the entire industry.

Meng Houkun said this was a Ponzi scheme, which was a bit exaggerated, but he was right when he said it was a pyramid scheme.

There are divergent opinions on whether pyramid schemes are illegal.

Because the modern economic structure is originally a pyramid scheme, and it is similar in all walks of life. The Apple system is based on Apple as the tip of the pyramid, and Apple's partners and supply chain system are the middle and lower layers of the pyramid. Apple is like this, and so are Disney, Coca-Cola, Nike, and Haier.

This structure is dangerous, so we must vigorously fight against monopoly.

For example, in the mineral water industry, there should be 10 pyramids. Once one of them collapses, the middle and lower levels of this pyramid can at least take refuge in the other 9 pyramids to prevent a large-scale industry collapse.

If there is a high degree of monopoly and there is only one pyramid, this will be very troublesome and will cause huge hidden dangers to economic stability.

The Internet is too powerful and has brought together too many talents. Not only domestically but also abroad, Internet giants are actually developing in the direction of independent pyramids.

This is very troublesome, and there will be systemic risks.

In fact, the monopoly of state-owned enterprises is not bad. If there is a crisis, because it is a state-owned enterprise, the country can save it at all costs, so that the pyramid will not collapse.

But the Internet giant is different. This thing is too big, with a scale of hundreds of billions of dollars, and it is difficult for the whole country to save it. Moreover, there is a large amount of foreign capital in Internet companies. How can there be any reason to spend national finance and taxpayers’ money to save foreign capital?

Therefore, from the perspective of social stability, appropriate deleveraging is necessary.

The so-called deleveraging means blowing away the bubbles. The long-term pain is worse than the short-term pain. Once the pyramid collapses, there may be endless disasters in the future.

Just like a certain real estate company, it was painful to pop the bubble when it had a debt of 2 trillion, but at least it was still within the tolerance range. If we let them continue to blow bubbles and create false impressions, and then collapse on their own when the debt reaches 10 trillion or 50 trillion in the future, it might be a bubble crisis or a financial crisis on the level of a subprime mortgage crisis in the United States. Ten years of wealth may be wiped out overnight.

However, this topic is too big, and Zhou Buqi does not intend to discuss it at this time. He just made a conclusion: "Yes, it is the pyramid marketing structure. Capital is giving money and constantly transfusing blood into this industry, and it will The bubbles that fuel the industry are getting bigger and bigger. As long as you are not the last person to take over, the bubbles have value. And to maximize the value of the bubble, you must stand at the top of the pyramid."