After experiencing the growth of Bilibili from 1 to 10, I have 5 profound insights

After experiencing the growth of Bilibili from 1 to 10, I have 5 profound insights
You will find that the larger the community, the less likely it is to easily define its own products. The larger the number of users a product has, the simpler and more stable its performance will be. This is what is meant by simplicity being the ultimate. On the other hand, complex products that try to cover everything and have a list of more than a dozen functions will never be able to scale big. Understanding the community In fact, the practical methods of VC are difficult to abstract, and no book can really explain it clearly because it is closely related to each specific case. Therefore, this time I would like to use bilibili as a case to share with you my practical experience and thoughts on investing in the Internet community industry. When I first saw bilibili (hereinafter referred to as B station), I shared the same opinion as most people born in the 80s or even 70s, that barrage comments were inhumane. People open video websites to watch dramas, but now the screen is full of words blocking the picture. This should affect people's experience, right? This is my first confusion. My second confusion lies in some concerns about the two-dimensional culture. At that time, the daily active users of Bilibili on PC and APP totaled only three to four million, but now it has exceeded 20 million. But no one can answer how it will develop at that point in time. In addition, in our original understanding, the two-dimensional population was basically equated with the anime population, and anime was roughly equated with cartoons. Everyone thinks that those who watch cartoons are children, and that children will stop watching them when they grow up. Will it be like Renren in the future, where users gradually leave during the growth process, thus becoming a stage product with no scalability? 

*Data source: Analysys 2015-2016 ACG Industry Research Report These doubts are real and cannot be shaken off, so I talked with Xu Yi (note: the founder of Bilibili) during the A round but did not invest. I only invested in the B round. Investing itself is a process of constant hesitation and wandering, just like gambling on stones. Your experience will allow you to have better judgment and help you win; but even if you are a veteran, there is no guarantee of 100% success. During the B round, I finally cleared up my confusion and convinced myself to invest in Bilibili. At that time, I dispelled the confusion through three dimensions: data, event interpretation and user interviews. The dimension of the first data Bilibili is a typical case where rational judgment corrects emotional judgment. When making investment decisions, I think they can usually be divided into two major paths: one is rational judgment, which is mainly through collecting various data and information, then interpreting them and finally forming a conclusion; the other is emotional judgment, or intuitive judgment, which is to put yourself in the perspective of a user to understand and perceive the product. To be honest, if I had just relied on my own emotional judgment at the time, I would not have invested in Bilibili. But at this time, from the business data of Bilibili, I saw not only millions of daily active users, but also its number of comments, number of barrages, and number of UP hosts were all very good, and the user stickiness was extremely high, which gave me great investment confidence. The second dimension of event interpretation Bilibili's user loyalty highlights its community attributes. At the time when we were conducting due diligence with Bilibili, some disputes arose between a well-known video website and Bilibili. As a result, a group of Bilibili fans went to the Weibo account of that website and posted all kinds of comments, some of which made sense and some that made no sense. This really surprised me at the time, because in the Internet field, you rarely see users actively defending a product because they like it, or even uniting to fight against other products. From this point we can see that Bilibili is different from traditional video sites. It is more community-oriented, while traditional video sites are relatively more tool- oriented. In addition, there is another small incident that I still remember vividly during this process: At that time, a fan of Bilibili wrote the following sentence in the comment: "I hope Bilibili can open a charging function. I am willing to pay so that it will not go bankrupt. I can also bring my son to Bilibili in the future." Through the information collected through the above channels , I feel the difference between video communities and video websites, and I also believe that the community form will make Bilibili a unique platform in the field of Internet video. At that time, I kept thinking about the relationship between Bilibili and its fans, and I really felt that I would not be able to sleep if I didn't invest in it. The third dimension of user interviews After conducting a large number of user interviews, I gradually understood users' "love" for Bilibili. I am not a post-90s generation and I don’t like to read barrages, so I have never been able to fully understand Bilibili’s users. Later, I started to try to find people to chat with on Bilibili, but I found that I couldn’t fit in. Everyone was discussing the drama. I suddenly asked, what do you think of Bilibili? No one paid any attention to me. Then, I found another way, which was to go to Zhihu to read relevant answers, especially paying attention to those who cursed Bilibili. In this way, I added about four or five people, one of whom was a user from North America. He was a notorious "Bilibili hater". I chatted with him a lot through WeChat , and I asked him, "Aren't you annoyed by barrages of comments?" He said that sometimes he would watch it and sometimes he would choose to turn it off. So when will we see it? He said that when he watched the drama, he was no longer that interested in the plot, but he just wanted to see what other people were saying about it. Because some American drama experts will help you string together the entire story line, and even string together what happened between the actor and the rival actor in another drama. At the same time, because most of the users of Bilibili are otakus, it is boring to watch a drama alone, and the barrage feels like a virtual online cinema with many people watching with you. After I understood the logic, I opened Bilibili to watch the dramas I had watched before, and I really found the barrage quite interesting. In fact, the best way for one group of people to understand another group of people is to communicate directly. I have invested in a gaming company before, but since I don’t play games much, it’s hard for me to understand why some “big spender” players would recharge 100,000 yuan into the gaming world at once. Later, I joined a lot of game guilds and found that these people are often very rich in daily life, but cannot express it for various reasons; but in the game world, they can express it wantonly. By recharging 100,000 yuan, they can become the king of the server. As long as they come online, they will be sought after by other game players. Therefore, the added value he can get by spending 100,000 yuan in the game is very high, which may be far greater than what he can get by spending 100,000 yuan in real life. Classification of communities During the same period, we also looked at a lot of community products, and Bilibili was an opportunity we captured in the process. I found that products and ideas can vary greatly, but fundamentally, a good community is built on two basic elements - relationship chain and content. As long as entrepreneurs can grasp one of these two lines, they can survive. Ultimately, these two elements will evolve into different types of communities. For example, Weibo is a hybrid community with relationship chains as the main axis and content as the secondary axis. On Weibo, you will follow Kris Wu and your colleagues, so Weibo contains a multi-dimensional relationship chain, including real-life relationships, second-degree relationships, and even stranger relationships. Multi-dimensional relationships will produce multi-dimensional content. Through Weibo, you can see your friends’ lives, read current affairs, as well as some entertainment gossip and editorials from big Vs. Once this multidimensional relationship is formed, it will bring strong stability to the community. If a competitor wants to surpass you and attract your users, then this multi-dimensional relationship will act like a chain, tightly locking your users. Because a user has many relationships here, if he chooses to leave, it means, to a certain extent, that he has to abandon many of his original social relationships, which undoubtedly increases the user's migration cost, so a good relationship-based community is difficult to decline. Communities such as Bilibili, Zhihu and Mafengwo are typical content-based communities. On Bilibili, you follow an up-host because of the content he uploads, not because of his appearance or background. Moreover, when these users gather here because of the content, it is easy to form an atmosphere, generating much stronger stickiness than any tool-type product. At the same time, because users invest energy, emotions, and time in the community, they produce comments, moods, and videos, which will be converted into costs for user migration. 

*Previously, Bilibili released a user profile that showed that people under 17 years old were the majority I remember when I invested in Bilibili, a user commented on some "Bilibili haters" and said: "Although they say Bilibili is not good in this or that, they still don't come to play every day. If you can check their login logs from the backend, maybe these people log in more frequently than others." Another type of community is a tool community based on relationship chains. Typical examples are WeChat, which focuses on the relationship chain among acquaintances, and Momo, which focuses on the relationship chain among strangers. Needless to say, WeChat has become a giant. Although WeChat Moments has become a major channel for people to obtain information, I still believe that it is a community with strong relationship chains. I don’t know if you have this feeling, but if you exclude the updates of people you care about, including friends, relatives, colleagues, etc., there are actually relatively few good contents in your circle of friends, especially original ones. I have always believed that this is also an important hidden factor in Weibo's "resurrection". It is the limitations of WeChat in terms of relationship chains and content that created a turning point for Weibo. Another type is the stranger relationship chain community that focuses on looks, which can also be called stranger social software. I feel that it is generally difficult to develop this type of community. On the one hand, the user relationship chain it forms is very fragile and users are prone to churn; on the other hand, its content is difficult to settle and users find it difficult to develop stickiness. I think it might be better if it is positioned as a tool for strangers to get to know each other rather than a community, because the operating ideas of the tool will be very different from those of the community. For a tool, if the ROI (return on investment) of user acquisition and monetization can be calculated, then it can develop sustainably (by buying traffic). Now there are many live streaming platforms emerging like mushrooms after a rain. I think live streaming platforms can generally be classified as a tool for strangers to get to know each other. However, due to fierce competition, whether the live streaming platform can continue to acquire low-cost users and control ROI is a matter of life and death. At present, some entrepreneurs want to try to grasp a direction and find a dimension to create community products. However, if the field you choose is not broad enough, there will be a lack of synergy between the content, and the frequency and stickiness of user visits will decrease. In other words, you are not making your product vertical, but narrowing it. Community Education No matter what type of community it is, it takes a certain amount of time to grow before it can explode. For example, Zhihu started incubating in 2011 but exploded in 2014; Mafengwo started in 2009 and took many years to get started. Therefore, respecting the "slow" law of community products is the most effective approach, especially when there are many giants and the traffic dividend is almost coming to an end. To put it in an analogy, a community is a place I build where everyone can come and play at any time; it is not a classroom where everyone who comes in has to listen to me. The community needs to slowly do a good job of content stratification and tone processing. Within a certain period of time, large quantity does not necessarily mean an advantage. If the tone is not managed well, it is possible that the product will be ruined when more new people come in. This is the nature of building a community, so it cannot be accelerated by spending money in a short period of time. Based on these characteristics, I would like to share two rules for your reference on how to cultivate a community: The first rule: You must master the rhythm of community development and avoid excessive marketing in the early stages. A community is like a child. It is best not to give him hormones before his bones are fully grown. Some communities had a very good tonality in the early stages, but when they grew to a certain size without any breakthroughs, and happened to get a lot of money, they started to advertise frantically and bought a lot of traffic. However, because they could not accommodate the traffic well, they ended up starving themselves to death. It's like you build a building, and as soon as the lobby is completed, you invite thousands of people to come. But in the end, everyone can only stay in the lobby and can't go anywhere. After staying there for two hours, they get bored and leave. Zhihu is a positive example here. It opened registration only after it had painfully waited until there were a certain number of opinion leaders and discussion atmosphere in every field such as technology, finance, and film. It's like a building has been built with more than a thousand rooms. Even if many people come in, everyone will go to different rooms and have their own fun. The second rule: pay attention to user guidance and follow the trend. A good community evolves with its users. For example, Bilibili’s users initially focused on new anime and American TV series, but later on, it gradually became richer in ghost videos, music, dance, games, etc. On the one hand, new users with this demand are attracted; on the other hand, old users also bring more related enthusiasts. So what Bilibili needs to do is to develop in line with user habits, open up more channels, provide a better place for content, and make it easier for users to find and watch. So you will find that the larger the community, the less likely it is to easily define its own products. The larger the number of users a product has, the simpler and more stable its performance will be. This is what is meant by simplicity being the ultimate . Weibo, you can send messages with just one button; Momo, the product hardly changed before it went public; Kuaishou, many product changes are made in the background, so on the surface it seems that there are no changes. On the other hand, complex products that try to cover everything and have a list of more than a dozen functions will never be able to scale big. Community Monetization For all Internet companies, monetization is an unavoidable topic, and communities are no exception. If your user base is still growing explosively, you'd better not think too much about monetization. Because a team has limited energy and a CEO has limited energy, what you should do is take advantage of the opportunity of rapid development to build your house high enough instead of busying yourself with decoration. If you have become a relatively large traffic portal, and through scientific judgment, you find that user growth has encountered some bottlenecks, then you need to consider the issue of monetization. As I understand it, there are two ways to monetize. One way is to do it yourself; the other way is to open your own traffic entrance and let others do it. The more successful monetization methods I have seen are generally the second one. Zhihu is now trying to help its users with live broadcasts, publishing, and paid Q&A. The same goes for Bilibili. It does not develop games itself, but instead engages in game joint operations . It does not have its own e-sports team, but supports other teams to play games on it. There are also some communities with a traffic base that have started live streaming. These are all beneficial attempts to monetize the community. My investment experience In fact, when researching and investing in communities, in addition to these characteristics, I also saw some common problems among startups, such as team expansion, fluctuations in company development, and the role of investors . Next, I would like to share with you some of my thoughts on this issue. When we invested in Bilibili, its team had less than 100 people, and now it may have expanded 10 times. For startups, there will be major iterations in each round, with more money being raised and people of different sizes being invited to join. From 0 to 1, it is not only the expansion of valuation, but also the expansion of people and teams. This is not a simple mathematical superposition. 0 to 100 people is one level of management problem, while from 100 people to 500 people and from 500 people to 1000 people are another level of problem. The management upgrades here include team coordination, coordination between new and old employees, etc. Many Internet companies will encounter many problems during their development. I think the best way to solve the problems is not to stop and reorganize, but to run fast. This is the same principle as national development. When the GDP grows very fast, many internal conflicts are resolved invisibly because everyone's income is increasing overall. So when the business growth rate is in a very good state, many problems of startup companies can be solved. The team will have an overall positive attitude. The pie is getting bigger and bigger. Although there are more people, my share has not decreased. On the contrary, the labor of latecomers has increased the value of the entire pie. On the contrary, if a company keeps hesitating, small problems will become big problems, because if you take a bite of the cake, I will have one less bite, and it will eventually become a zero-sum game. As an investor, after investing in a company, I always remind myself to "help rather than cause trouble." I remember there was an article written by a Silicon Valley investor, which basically said that most of the time should be spent on managing the invested companies. In fact, I don’t completely agree with this. On the contrary, I think investors should not manage too many details, such as product details or the planning of some marketing activities. An investor's expertise lies in making judgments, not in helping companies solve operational problems like a consulting firm. To put it extremely, a qualified investor should be able to basically decide the win or loss at the moment he throws the money down. Of course, I don’t mean to just throw the money away and ignore it. Due to the different investment stages, the requirements for post-investment management may also be different. Take the Xiangfeng Qiyun Fund that I am in charge of, for example. Our main investment stage is after the B round. Usually when we invest in it, the company has already reached a certain scale and the management team is relatively mature. Therefore, in terms of talent introduction, we are more focused on helping to bring in senior management talent; in terms of business, we will provide advice on the general direction; in terms of subsequent financing , we give our invested CEOs our full support. But for the final decision, we will still choose to respect and trust the team.

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

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