Zhihu's "ambition and endgame"

The charm and value of market competition

It took Zhou Yuan six years to finally build Zhihu into a unicorn company.

In the middle of 2016, I seriously considered whether or not to work at Zhihu (but later I didn’t go anywhere and started my own business , creating the public account 42 Chapters of the Sutra). I still remember that I sent a WeChat message to a senior executive of Zhihu, saying that I heard that the internal pace of Zhihu was very slow, and whether there was a problem with execution?

You know, for an Internet startup company, internal execution and everyone's work attitude directly determine life and death. The reply that person gave me was very interesting. He replied:

“No longer exists.”

The Chinese word “了” indicates the perfect tense and is very appropriate here.

Not long before I asked this question, Ji Shisan's Guokr had just launched a new product called " Fenda ". After that, Zhihu's pace became obviously faster, with continuous iterations of new products such as Zhihu , Zhihu Live, and e-bookstores.

So, subjectively speaking, as a daily active user who loves Zhihu (I logged in 360 days in the whole 2016), I am grateful to Ji Shisan and Guokr.

This is the charm and value of market competition.

“In uncertain times, we must pursue certainty.”

Last week, I attended Huaxing’s New Year Media Communication Conference. The sentence that impressed me the most was what Bao Fan said: “In an era of uncertainty, we must pursue certainty.”

Last year, the number of investments in the entire primary market increased instead of decreased. However, if we look at it separately, we can find that the number of early-stage investments has dropped significantly, while the number of late-stage investments has increased significantly.

Obviously, the funds are also "pursuing certainty."

After a brief contact with Zhou Yuan, Xu Xin finalized the investment at an extremely fast speed and with a high valuation. As a friend who is a late-stage investor told me a few weeks ago: "Zhihu's financing round went so smoothly that it's hard to grab a share even if you want to."

For Capital Today, Zhihu is such a case with relatively strong certainty. After all, entrepreneurial projects can be divided into top, middle and tail projects. As one of the few top projects in the market, Zhihu is more stable than many similar projects.

However, there is often a contradiction between certainty and upside. What will be the final outcome of Zhihu? How much room is there for further growth? How to make profit...?

With these questions in mind, I read through all of Zhou Yuan’s answers on Zhihu while thinking about them. I found that among his 341 answers, there were a lot of very deep thoughts that could directly or indirectly answer many of my questions.

Zhou Yuan, founder of Zhihu

1) What is the essence of Zhihu?

Demand is never created but reshaped, relocated or transformed. Therefore, Zhihu's product form must have restored a certain offline scenario, that is, question-and-answer dialogue.

Communication between people continues by asking each other questions, so Q&A is the most basic way for people to deepen their connection with each other. As I wrote in the article "Let's talk about the nature of social media from the new product "Zhihu Live", the essence of social media is to build media, so Zhihu is undoubtedly the most natural medium.

As Zhou Yuan said, humans exchange a large amount of information every day, and question-and-answer is one of the most important ways. However, traditional offline question-and-answer is inefficient. For example, you may not be able to ask the right person, and your conversation cannot be preserved for future generations to share.

Therefore, what Zhihu wants to do is to improve the efficiency of people exchanging information, and the information must be truly valuable.

In the article "Original Aspiration" on Zhihu, Zhou Yuan also said:

We believe that in the ocean of Internet information flooded with junk, truly valuable information is absolutely scarce. Knowledge - high-quality information that is systematized and organized - still exists in individual brains and has yet to be effectively mined and utilized. Zhihu provides a tool for generating, sharing and disseminating knowledge. We encourage everyone to share knowledge, gather everyone's knowledge and make it available to everyone.

Therefore, we can know that what Zhihu wants to do is actually to improve the efficiency of people exchanging knowledge by connecting people through questions and answers and allowing each individual to contribute his or her brain.

2) Why did Zhihu become successful?

The simpler something is, the more valuable it is, but also the harder it is to make. Why is Zhihu able to do Q&A, which seems like an extremely simple thing?

Zhou Yuan mentioned in one of his answers:

If a community wants to operate on a large scale, it must have four elements. The first is scale. Diversity means diversity, and diversity means richness. The second is cost. The cost of communication must be low enough, otherwise the community will operate very slowly. The third is clarity. Every user knows clearly what they can do and what they can get from the community. The fourth, which is also the most important and most easily overlooked, is culture.

From a product perspective, Zhihu has done well on the first three points. From an operational perspective, Zhihu has done particularly well on the fourth point. I think this is the main reason why Zhihu has been successful - sufficiently patient and sophisticated operations (specifically manifested in things like controlling and screening early users, a policy of not opening registrations for long-term internal testing, etc.).

Users continue to come because of the high-quality user group and the good content produced by this group.

From the perspective of product barriers, Zhihu has a certain degree of network effect and a greater degree of scale effect.

For the community, the network effect of users is single-point radial, that is, the so-called "big V" in Zhihu outputs one-way to their many fans, so for big V, there is a certain network effect retention, but for the vast majority of long-tail users, Zhihu does not provide social value, but the value of reading and learning.

In other words, Zhihu’s greatest success, and also its biggest barrier, is actually its scale effect. The more people there are, the more likely each question will be answered by the right person, the more likely good "knowledge" will be retained and added, and the more attractive it will be.

3) What are the differences between Zhihu, Fenda and Luoji Siwei?

Although these three products are all representatives of the hottest "knowledge monetization" trend, they actually have huge differences.

What Zhihu does is to connect people and the knowledge behind them, and ultimately it is a community with accumulated content. This product form is what I am most optimistic about.

Luoji Siwei is essentially a publishing house in the electronic age. In the past few years, many people have moved publishing houses online, and what they have done is simply to turn paper books into e-books. But in fact, after the media has been completely changed, why can't the way content is presented change as well?

All forms of content, including video, audio, text, etc., are publications. The team you get is the editorial department of the electronic age, and the imagination space you get is the entire publishing content market.

However, compared with Zhihu, Duoduo is currently more like a purely self-operated team, and its scalability is not as good as UGC platforms like Zhihu. I believe that in the future, Zhihu and Luoji Siwei will have certain competition at certain levels, especially in the top "opinion leader" resources and corresponding e-publishing business.

Finally, Fenda is the one I am least optimistic about so far.

Zhou Yuan once commented on "social products with or without public areas (communities)". He said:

I think the biggest difference between the two in product design is that if the "write operation" (content creation) occurs in a private area, it is difficult to accumulate information on a large scale and produce content in a purposeful manner.

Zhihu is a community with a public area, while Fenda is a personal monetization tool without a public area. The tool follows the route of traffic, and is more about short-term monetization and harvesting traffic. So how to sustain it in the long term and how to compete with Zhihu and even Weibo, which are naturally endowed with traffic, users, and content, is the biggest problem for Fenda.

4) What makes Zhihu profitable?

As a leading project, Zhihu’s biggest uncertainty is still its profitability. I don’t think the current products such as Zhihu and Zhihu Live can support Zhihu’s $1 billion valuation.

Although Zhou Yuan emphasizes knowledge sharing, we have to admit that much of the content on Zhihu can be regarded as light knowledge at best, the kind that makes people feel like they are getting better, but it is not certain whether it is actually useful.

A lot of knowledge that really needs to be learned is more like taking classes, which requires effort and sweat, and is anti-human.

A lot of the current content on Zhihu Live can at most be called “sharing” rather than “courses”. But the ones that can really generate long-term profits and make money are courses, especially exam-oriented education. This is because learning contains some anti-human factors, and most people need to be supervised or forced to study.

Therefore, education courses such as postgraduate entrance examination training, CET-4 and CET-6 training, overseas examination training, civil servant training, IT career training, etc. are the most long-lasting and sustainably profitable in the market (except K12, because K12 users and payers are two groups, so it is an exception).

The common points of these trainings are:

1) Have clear time nodes and milestone events

2) Training quality and results can be quantified

3) Clear benefit outcome orientation

Therefore, if Zhihu really wants to make long-term profits with its Live products, I would suggest separating a route for exam-oriented education courses from the current "sharing" category. Otherwise, "sharing" is also an act of harvesting traffic. Even if Zhihu's content can continuously attract traffic, the completion rate and recurrence rate of paying users will definitely be problematic in the long run.

Of course, in addition to paid knowledge , another thing that Zhihu should do but has not done well is advertising.

The main source of profit for all communities, especially information flow products, has always been advertising. How to do advertising well without damaging the user experience is the most important step for Zhihu. For example, Moments ads have gone from being a detriment to the user experience to becoming a part of the product that people look forward to.

The main cycle of the Internet economy

5) What is the end of Zhihu?

I have quoted the above picture in my article "The Undercurrent of the Internet World". This picture describes the main cycle of the Internet economy.

After seeing the news that Xu Xin invested in Zhihu, I suddenly thought of the investment in “ What’s Worth Buying ” led by Wu Haiyan of Huachuang Capital last year. I think these two cases have a lot in common in essence.

As Xu Xin mentioned in his answer on Zhihu:

As the Internet enters the second half, large transaction-related platforms have been formed and almost monopolized. If you are doing e-commerce , you have to ask yourself two questions: How are you better than JD.com? How are you better than Taobao? And the spring of content has just begun. In the past, people bought things because they were cheap, and cheapness was the source of traffic. Now the entrance to traffic is content. Whether it is buying things or making various decisions in life, everyone has to look at the content.

Whether it is Zhihu or What’s Worth Buying, in the main cycle of the Internet economy, they are both in the position of “what to buy” (not just physical goods, but also virtual services). This is the value of content as an entry point.

For example, now whenever I buy anything, I will subconsciously search Zhihu to see if there are any recommendations. Of course, "What's Worth Buying" also provides links that can solve the problem of "where to buy" at the same time, which is even more valuable. This should also be a direction that Zhihu can explore.

But no matter what, what the e-commerce giants in the market lack most is “what to buy”. It can even be said that the act of selecting products by looking at content may eventually replicate the essence of people's offline "shopping". So, can Xu Xin, who also invested in JD.com, bring together Zhihu and JD.com to have more cooperation in the combination of content and e-commerce? This will be something I’m particularly looking forward to.

Finally, let’s talk about something further and open your mind.

In response to the question "What do you think of the Google Search Group being renamed 'Knowledge Group'?", Zhou Yuan said:

Logically, data, information and knowledge are in a progressive relationship.

…

Google has done a great job indexing information, and its servers are still crawling information every day. However, there are some things that search engines cannot index, or that cannot be processed using conventional methods.

If it is true as Zhou Yuan said that data, information and knowledge are in a progressive relationship, then are Baidu and Zhihu also in a progressive relationship? From the search for information to the search for knowledge, what will happen in the next five years or even longer?

No matter what. To realize these visions, there is no doubt that more money from this round of financing should be spent on upgrading the team. A valuation of one billion dollars is a sign of the beginning of a new stage. If you are lucky enough, the road to tens of billions of dollars is still ahead.

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The author of this article @Qu Kai is compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!