ifanRank 2020 Internet: After madness, return to common sense

Two years ago, the founder of Meituan Wang Xing shared such a paragraph on Fanfou:

2019 may be the worst year of the past ten years, but it will be the best year of the next ten years.

People have already lowered their expectations for the future, but they did not expect that 2020 is so crazy, far from being good and bad.

In 2020, the number of searches for "Why" on Google hit a new high. The ensuing black swans made us no longer surprised by accidents. Many of the values ​​we once embraced suddenly collapsed, constantly impacting our understanding of the world.

From the US stock market’s two-fourth meltdown to the recent retail battle against Wall Street shorts, even the 89-year-old "stock god" Buffett exclaimed "Living to see you."

The dust of the era splashed by the new crown virus, even if it does not turn into a mountain and press on you, it will definitely drag you into an unprecedented online social experiment. A QR code becomes a passport for 1.4 billion people.

You may not be more free when working at home. The Internet industry is moving inward, and it is not just the takeaway riders who are trapped in the system. Some people have paid the price of their lives for this.

During the epidemic, community group buying became a life-saving straw for countless people, and suddenly became a Leviathan that destroyed the individual economy, and the meaning of innovation was rethought.

Not long after people ridiculed Luckin for "cutting capitalist leeks and asking Chinese people to drink coffee," Eggshell Apartments waved their sickles at young Chinese people, and the shadows of Ofo and LeTV were faintly visible on them.

▲Picture from: Discount The Obvious

Ruixing and Eggshell have been thundered one after another, and has the "pseudo Internet economy" that only burns money without making money has come to an end? People said the same when the Internet bubble burst in 2000.

So some people began to reflect, is the Internet a detour in human history ?

This is not to deny the promotion of the Internet to human civilization, but to try to retrieve the discarded rationality and logic and pick up the simple common sense.

What is common sense?

Injecting disinfectant into the body cannot kill the new coronavirus;

Is a business must be profitable;

There is no free lunch in the world, but you have to pay it back no matter where you borrow money…

Magic 2020 is born in 2021, "common sense" should once again become a respected force, returning to the pursuit of order, rules and humanity .

Strip off the emperor's new clothes called "Internet"

A year ago, American retail investors had not beaten Wall Street's big shorts, and the muddy water, known as the "killer of Chinese concept stocks," used an investigation report to pierce the bubble of Ruixing Coffee.

Soon Luckin admitted to financial fraud, and the stock price plummeted by 100%. Some people ridiculed "Drinking Luckin coffee at 1.8% and buying Luckin stock at 1.8%."

▲ The short selling report pointed out that Ruixing was exaggerating the price

All this is not without warning. In 2019, when Luckin Coffee announced its IPO, the little yellow car ofo had already owed 1 billion deposits, and the number of people waiting for deposit refunds had exceeded 10 million.

One shared bicycle and the other sold coffee, but the business models of the two companies were exactly the same. They both put on the "Internet cloak" and rely on crazy subsidies to maintain user growth.

Ofo is essentially a bicycle rental business, and Luckin is actually still a traditional retail industry, which will not change because they made an app.

Various "Internet concepts" have always been high-frequency words mentioned by Ruixing executives, such as "traffic words" and "social genes". Luckin continues to emphasize that it has changed the store model of the traditional retail industry with technology-driven, and has shaped itself as an Internet company.

In fact, Luckin does not have the diminishing marginal costs brought about by the scale effect of the Internet. Its growth depends entirely on subsidies for burning money. The cost of traditional coffee shops has not been reduced. Compared with Starbucks, the "high cost performance" is based on an unsustainable model.

Luckin even created a new profit concept in the financial report. While announcing that the store is profitable, it did not include the marketing cost of the major expenditure. But everyone knows that without those large subsidies, there will be so many people buying Swiss Fortunately coffee.

Another Thunderstorm’s eggshell apartment also packaged itself into an Internet company, claiming to be a "new rental model based on Internet big data."

If Luckin is at least still a retail business in the "Internet cloak", then after the emperor's new clothes of the Eggshell Apartment were stripped off, people found that under the skin of the housing lease, it turned out to be a financial scam similar to P2P.

Houses acquired at high prices are rented at low prices. This asset-heavy model can expand rapidly, which itself does not conform to the laws of the market. The young man thought that he had taken advantage of it and eventually became the harvested leeks.

It is not difficult to understand why these companies are trying to get involved with the Internet, which can give them a higher valuation in the capital market. Why is the concept of "Internet companies" so magical?

The well-known economist Xu Xiaonian pointed out in the book " The Essence of Business and the Internet " that the power of the Internet comes from four effects: the Metcalfe effect, the bilateral market effect, the scale effect and the synergy effect .

To put it simply, Internet revenue can increase exponentially with the increase of network nodes, and the rate of increase in costs is much slower than the number of customers. The efficiency of the enterprise is greatly improved, and the supply and demand sides can achieve a virtuous circle of mutual promotion.

▲ Internet companies occupy the top position among the companies with the highest market value in the world. Picture from: howmuch

This can be a criterion for judging whether a company is an Internet company and whether it is sustainable. From ofo, Luckin to eggshell, they are simply antonyms of these effects.

Such "pseudo Internet companies" are not uncommon in recent years. They rely on external blood transfusions to survive and invest a new round of financing on how to attract the next round of financing, rather than product and technology development. They are neither 2B nor 2C, but 2VC ( Venture capital funds), the value created is far less than the depletion of social resources.

Technology and the Internet have indeed changed the world, but the nature of business has not been subverted. It is the most basic common sense that a company must be profitable. Xu Xiaonian has a good saying: "Business that is not profitable is a hooligan."

How long can the tuyere blow under the epidemic?

Before 2020, the Internet industry has begun to enter a cold winter, with fewer and fewer outlets, and financing increasingly difficult.

The sudden epidemic has suddenly accelerated the process of digitization. The real economy is facing huge challenges, and the Internet is open again.

Especially in the field of online education, under the Ministry of Education's policy of "listening to classes without stopping school" across the country, the demand for online classes has surged. Elementary school students who have no hope of extending the winter vacation have poured into major app stores to give Dingding a star.

Almost all mainstream online education platforms have announced the launch of free live course content products, many offline education and training institutions have closed down one after another, tablet computers are in short supply, and they were once out of stock.

Some people say that the epidemic will quickly cultivate user habits for online education, and this industry will usher in explosive growth. Ape tutoring received US$3.2 billion in financing last year. iiMedia Consulting’s report shows that my country’s online education user market has reached 309 million in 2020.

But when those online educational institutions above the outlet disclose their financial reports, all of which are huge losses, the main players in the market still have to fight prices to attract users.

People can't help but wonder whether the demand for online education spawned by the epidemic is a fake demand? Although New Oriental is also deploying online education, the founder Yu Minhong also said not long ago :

Until now, I still don't think online education is a business model that can run through.

Yu Minhong believes that education is not a product that can be absolutely standardized. Education itself is a process of individualized development under standardization .

However, current online education institutions still have no time to consider these issues. A large amount of money is burned in attracting new customers. The cost of acquiring customers in some institutions has reached 12,000 yuan. It seems that whoever sprints to get more users can win the final victory.

▲ The same “teacher'' appeared in the advertisements of several online education institutions.

In fact, from the battle of hundreds of groups , the battle of ride-hailing software to the battle of shared bicycles, it has been fully proved that scale does not constitute a barrier for enterprises. If the market can be occupied by low prices alone, then anyone can enter in the same way at any time. Will evolve into endless money burning.

On the contrary, only by building barriers through product power can the scale be truly expanded for a long time. Online education is not necessarily a false proposition, but only by devoting more resources to improving the curriculum experience through technology can this trend continue to develop healthily after the epidemic.

The essence of online education is still education. The first thing that needs to be met is education, not a simple flow and capital game.

The community group buying of giant melee, the destruction of individual economy

In 2020, the individual economy experienced two extremes of ice and fire, and the "street stall economy" suddenly became popular, and suddenly there was smoke and fire everywhere. It didn't take long for the community group purchases of major Internet giants to compete and take away a lot of stolen sales. The livelihood of the vegetable vendor.

Whether community group buying is a business innovation that brings convenience to people or a meaningless zero-sum game has become a topic of debate for a while.

Some people think that consumers have indeed received tangible discounts. It is also the market's choice for vegetable vendors to be eliminated. Shouldn't physical retail also face the impact of e-commerce?

"People's Daily" published a comment , hoping that Internet giants should not worry about the flow of a few bundles of cabbage and a few kilograms of fruit, but should explore the star sea of ​​technological innovation.

These two seemingly contradictory views are actually reasonable. It is natural for companies to seek profit, and it is not only technology companies that develop rockets and chips that are worthy of respect. Subversive innovation sometimes does not necessarily require high technical content.

In 1962, Wal-Mart opened its first store in the suburbs of Arkansas. At that time, department stores were open in the bustling city center. Founder Sam wanted to use lower rents in the suburbs to reduce costs and attract customers at lower prices.

▲Wal-Mart in the 70s. Picture from: Wal-Mart

The important premise for Sam to make this decision is that he observed that the popularity of cars has expanded people’s travel radius. Consumers can make a centralized purchase on weekends. This low-cost storage model also greatly affected the traditional department stores and Mom-and-pop shop.

Like community group buying, Wal-Mart also pursues a low-price strategy. The difference is that Wal-Mart’s low prices are based on reducing costs through mid- and back-office capabilities, supply chain transformation, and the development of its own brands. This is Wal-Mart’s core competitiveness.

In contrast to community group buying, the price advantage is completely dependent on huge subsidies, and it has not changed the efficiency of the circulation link to the supply chain. Vegetables and fruits are also non-standardized products. So far, it is still a traditional retail business and has nothing to do with the "Internet". Big.

Nie Huihua , a professor of economics at Renmin University of China , believes that the so-called innovation of community group buying is a stealth concept. "The car is more efficient than a horse-drawn carriage. It has improved efficiency by several tens of times or even higher, and has truly revolutionized technology. But community group buying just cuts away some of the existing cake, but it does not really make the cake bigger."

As mentioned earlier, low prices can become a product's selling point, but they can never become its core competitiveness .

If community group buying can achieve price advantages through model innovation and technological innovation, and transform the entire agricultural supply system, it is understandable that the livelihood of vegetable vendors will be affected, because this creates greater value for the entire society. As Lu Qi, the founder of YC China , mentioned in a speech not long ago:

In any historical environment, the core of entrepreneurship is always the same, that is, excellent entrepreneurs use technology to create products, use products to explore the market, meet people's needs, and create commercial and social value.

996 and internal volume, the real price of convenience

In 2020, the mobile Internet that has run wild for the past ten years has slowed down, Moore's Law has failed, and the demographic dividend has ended. The academic term "involution" has suddenly become a new buzzword.

"Involution" was originally a sociological concept. It was first proposed by American cultural anthropologist Clifford Geertz in the book "Involution of Agriculture: The Process of Ecological Change in Indonesia". It was used to describe the development of social culture due to repeated labor. slow.

After entering China, the meaning of "involution" has changed. At first, a few photos of Tsinghua students using computers for cycling have attracted attention, and then they have been used by all walks of life to describe irrational competition. Among them, the Internet The industry's resonance is even greater.

One of the most typical incidents was that last year it was reported that Microsoft employees boycotted former Alibaba and Huawei employees who came to quit, and there was a discussion on the Internet about "Boycott Struggle X". The so-called "struggle X" refers to a group of people who actively work overtime to attract the attention of leaders and cause inflation of other employees' workload.

Whether it is a takeaway rider "trapped in the system" or a 98-year-old Pinduoduo female employee who died suddenly after working overtime not long ago, it is another aspect of the rollover. This is a price to be paid while enjoying the convenience of the Internet.

This problem has always existed, but it has been further amplified in the context of the slowdown in Internet growth.

We don't need to pay much cost to have the convenience that is available 24 hours a day. This is not without a price. Only the 996 of countless people can maintain this fast-running system.

Some time ago, many people began to discuss, strictly enforce the eight-hour work system, two days off, what will society become ? Zhihu's most praised answer tells the truth. In the past, the sun was very slow. There was no 996, but there was no express delivery that arrived in one day.

The Internet of science and technology was born in order to meet the various needs of mankind, but it has brought new constraints, from win-win to involution. Is it really like the New York Times said that reducing the Internet is the only answer ?

Embrace change and respect common sense

Peter Thiel , a well-known Silicon Valley investor and author of "From Zero to One", said that 2020 is the first year of the 21st century, and new economies, new technologies, and new trends have been rapidly established in just one year .

The last year described in this way was 1945. The scholar Henry T. Luce called this year the " zero year ." The old world was shaken, and a brand-new, unknown new world kicked off, becoming a key turning point in human history.

But the only constant fact in history is that everything will change. When we are busy embracing those new trends, some "common sense" should not be forgotten. Some seemingly simple common sense may hide huge energy.

Zhang Xiaolong believes that simple products are easy to use. Jobs praised "Don't add entities if necessary." These are the reasons why many people start using WeChat and iPhone. However, there are not many products that respect these common sense.

Respecting common sense means doing the right thing, which is a more important quality than changing the world. After a magical 2020, the end of the Trump era, the return of common sense should become the Internet thinking of the next decade.

Title picture from: "Joker"

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