Another 50 trillion new direction: 12 billion capital tycoons entering

Pencil: every investor has his own understanding of the connotation and extension of enterprise service. As an expert who has been working in this field for 20 years, what does Mr. Peng think of this industry? And because of what kind of thinking and recognition of this industry?
Peng Zhiqiang: the United States likes to use the concept of enterprise service. In recent years, in China, there will be more changes in the concept of industrial Internet, but the characteristics of their to B are unchanged. There will be a to B merchant, organization or enterprise.
Shengjing is recognized for this industry, because we can see that about 50% of the investment portfolio in the United States today is to B investment, while the investment portfolio in China has increased to 15% - 20% in recent years, compared with about 10% three or four years ago, and the investment proportion is relatively low.
In fact, we can find that the development trend of the United States is a direction of China's investment, and enterprise service is a relatively high degree of certainty.
Nowadays, the consumer Internet has encountered a bottleneck, and the dividends have been fully exploited. However, there are many new formats and fields in tob's industrial Internet, which have achieved rapid development in recent years. The logic behind this is that the labor cost is more and more expensive and the cost of getting customers is higher and higher. Therefore, from the perspective of cost reduction and efficiency enhancement, enterprise service is a highly deterministic demand, and the growth space of to B is very large.
From the perspective of investment, industrial Internet and consumer Internet are also very different. For example, the capital efficiency of some representative projects in the consumer Internet is relatively low, which is the so-called relatively burning money. However, tob's companies generally do not, and the ratio of investment to market value is relatively healthy.
For example, some consumer Internet projects have a market value / valuation of US $60 billion, but VC alone may have invested more than US $10 billion, and the ratio of investment to market value is less than 1:6. However, tob may invest a few billion, and it can run out a company with 10 billion or even tens of billion. The ratio of investment to market value output is dozens or even hundreds of times that of consumer Internet projects.
In fact, after the capital market has gone through the hundred regiments war, the online car Hailing war and the money burning war of bike sharing, people pay more and more attention to capital efficiency, so at this time, the investment of to B is more certain.

Pencil said: enterprise service is not a new thing for a long time. Today, have you observed any new changes, problems and trends in this field compared with a few years ago?
Peng Zhiqiang: whether it's enterprise service or industrial Internet, in the early days, people started from the perspective of SaaS. The logic of China's SaaS service in large and medium-sized enterprises is probably established. Customers are willing to pay, but it's difficult to establish it in small and medium-sized enterprises.

On May 28, Mr. pengzhiqiang will attend the enterprise service conference of pencil road digital economy summit, share an important trend and recommend readers to sign up.
There are three high and two low phenomena in SaaS market in China: SaaS company is generally faced with high R & D cost, high sales cost and high customer maintenance cost, but annual charge is very low, and renewal rate is not ideal. Therefore, many small and micro enterprises are difficult to develop and grow.
SaaS company is generally faced with the problem of long development cycle, in fact, this situation also exists in the United States. In SaaS companies of American stock, it takes 13 years from the establishment to listing on average, and a lot of companies have been listed for 20 years or even 30 years.
These factors determine that the industry needs not only patience, but also a strong financial capacity. In SaaS, VC is more willing to invest than before, but there are still many challenges in the business of the enterprise.
We are now increasingly optimistic about saas+. Tencent also put forward similar views before, pure tools are not working, so SaaS needs to add transaction, micro consulting, operation, training and other services, which is still to make customers succeed in essence, but enterprises no longer sell only one tool. Only sell tools to customers. If they are not good, customers may not think that is the reason for themselves, but they will think that the tools provided by the enterprise are useless.
For SaaS industry, to do saas+, in fact, it is to build business model effectively based on data-based SaaS. The key point is what is added after SaaS, so that enterprises can be scaled up.
Pencil: in saas+, what are the services behind plus more favorable?
Pengzhiqiang: I think the best is "plus transaction", and once "saas+ transaction" forms "baas (business as a service)", this is the logic of the industrial Internet trading platform.
In China, we are still willing to pay for the results of the transaction rather than for the tools. So baas will be a big trend in the future in enterprise services or industrial Internet.
The micro alliance we have invested through the parent fund is a typical saas+baas model. From 2020 to now, Hong Kong stocks have increased more than 4 times. It has two businesses, one is SaaS with high margin, the other is the precision marketing with low gross profit, that is, advertising. The coincidence degree of customers of these two businesses is 40%, which is a good combination boxing.
In baas, there are two types of more successful models. First, B2B e-commerce, such as the joint stock of the Federation of nations we have invested, has online trade in industrial raw materials, which is a logic that conforms to the to B Industrial Internet. Therefore, it has developed from the 300 million valuation when we invested to now has a market value of 30billion.
Another model is s2b2c, which, like one of our investment companies, has revenue of 60billion and Gmv of 4000 to 500billion.
Different entrepreneurs in different tracks need to choose the mode according to the characteristics of the track, including SaaS type and saas+ to baas type. The consumption service in baas is inclined to s2b2c mode, while the raw materials of industrial products are B2B e-commerce mode.
And shell housing, which is a platform model of industrial community, provides platform level services for second-hand houses, earns commission through new houses, and then derivatives some new services,   At present, it has developed into the largest company with the largest market value in the field of industrial Internet.
This is also a trend in the industry. According to different fields and tracks, various models are differentiated. Practitioners can be more in line with customer needs, while business logic can be self consistent. Earlier years, they rushed into SaaS, and now the simple SaaS company has lived a lot. SaaS tools have become the basis of baas.
The concept of enterprise service and industrial Internet is too big. Under the condition that the investment of to B accounts for 50% in the United States, it is not only an investment track, which will include many tracks, and different models in different tracks are different.
In a narrow sense, it may be said that enterprise service is SaaS, which is artificially limited.
The core is always creating value
What are the factors that companies that invest in these models value as investors, pencil says?
Pengzhiqiang: different models, the key indicators and core competence of relevant enterprises are different.
For example, the core of SAAS and saas+ companies looks at its NDR (income retention). For example, there were 100 customers who paid 80million yuan last year. How much more did the 100 customers pay this year? If this proportion is 130%, companies like US stock standards are 20 times market sales rate, and if it is lower than 110%, it may be considered that this is not a company worth investing. At the same time, the investment institution will be very concerned about the renewal rate and the ratio of LTV (customer's full life cycle value) /cac (customer cost). 3:1 is acceptable, but if it is lower than 3:1, the institution may not invest.
B2B e-commerce is another group of indicators, such as accounts receivable, inventory turnover, gross profit rate and expense rate, etc., while s2b2c will see the user activity, purchasing penetration rate, etc.
These models and models will be run out by new companies at all stages. For example, in saas+ field, we will see relatively general-purpose companies like micro League in the past. Now, we will pay more and more attention to vertical saas+ companies, such as catering, clothing and other fields. It is difficult to be a general saas+ company now. S2b2c has gradually been related from commodity to service.
Pencil: what do you think is the most important problem for an enterprise service company? Find your own model or something else?
Pengzhiqiang: the core problem is still the value problem. Why do a b-end customer use your product? What is the value that will be of great importance to him after using it?
The purpose of the product is to make the customer succeed, only sell a tool to the customer, which is meaningless to the customer. Many enterprises are still in the stage of tools, and they can not realize the value of products at all. They think a tool is needed by users, but users are often different from what they think.
On the Internet platform, what b-end customers need is not only information, but what price and time the products are finally sent to his warehouse. From the platform perspective, it is undoubtedly the most easy to provide information, but from the perspective of customers, it is the core demand to send raw materials to the production line.
In fact, SaaS, together with the links of operation, consultation, training and trading, are all things that practitioners who did SaaS tools in the early years were unwilling to do. They think the mode is too heavy and difficult to copy and difficult to form a scale, but this ignores the demands of users.
Many entrepreneurs have not really explored or met the needs of customers, many of them are still entrepreneurs who stay in the Fifth Ring Road. This may be the origin of the problem, and the next more detailed problems are caused by this. For example, the willingness to pay is not strong, because the customer is not really able to solve the pain and demand of the customer, the customer is definitely not willing to pay and not want to renew the contract.
Pencil: why can't many companies solve this problem?
Pengzhiqiang: this problem is more reflected in the cognitive and organizational level, but even after the two aspects are improved, it will take time. It takes time to pull out standardized elements.
Sap (SAP) takes decades to develop into the current volume, and there are many things to build up for to B service. This is inseparable.
There is also money. To achieve this, we need enough funds. We can see that listing is the starting point for many to B companies, because there is enough capital and brand endorsement of listed companies, so the certainty is stronger. To B services will face many customers with larger volume than themselves, and customers will be more recognized after listing.
No surprise, only accumulated
Pencil: in the field of enterprise service, many people are emphasizing the standard question. What is your idea about this?
Pengzhiqiang: standardization must be the source of the core business value of the company. For example, the company that does the project, the market rate we give may be 3 or 4; If it is a company that is a standardizable product, the market sales rate may be 10 or 20. As can be seen from the valuation multiple, all investors recognize the standardized value.
The enterprise must be standardized in the end, but the entrepreneurs in the actual operation process, standardization is not one step. Many companies with large customers are doing projects at the beginning. It is impossible to standardize at the beginning. In the process of continuous project, based on the deep understanding of industry and data precipitation, the standardization can be extracted. Different models, customer types and business forms may also have different standardization degree.
However, it is not possible to standardize for standardization, but we must first solve the needs of users and create value for them. When there are more services provided, it can only be standardized.
Pencil: now, there is a huge opportunity for industrial upgrading and development space in this industry, while on the other hand, there is fierce market competition. Giant companies and entrepreneurs are all involved in the market. For entrepreneurs, how do you think they should break through and develop?
Pengzhiqiang: in the final analysis, the logic just talked about is to create value for customers first. This is the starting point. As long as we do this, we don't have to be afraid of the giants.
To B involves enough tracks, customers' needs are differentiated enough, and market space is large enough. Entrepreneurs do well enough at one point, and giants can't enter at all, and then they can only buy these companies. Entrepreneurs first of all, they should take root of their foothold and, after they have done so, they should use their own organizational capacity to break through the ground.
Pencil: what potential do you think a successful to B entrepreneur needs?
Pengzhiqiang: entrepreneurs who do to B business should be composite talents.
First, entrepreneurs need to have a deep understanding of the industry, and most of them are not young. Most tob entrepreneurs are older than to C entrepreneurs. Entrepreneurs must look at the needs of customers, know what their pain points are, and then solve them in a digital way.
Second, we should be familiar with digital, SaaS and other fields. Therefore, entrepreneurs either originally came from software background or had a perfect team. Unlike in the field of consumption, the lack of a link in technology, product, sales, operation and other links in the to B field is not possible.
Practitioners also need to be patient. It is a growing process to do business services. There is no amazing in the to B field, only accumulated continuously.