Chuchujie CEO, a post-85s generation’s experience in managing millions of fans
| The first time I met Lu Jinjie was at the Tencent Open Platform Conference a year ago. At that time, he was running Huanle Tao, an e-commerce shopping guide platform on the Tencent Open Platform. Not long ago, when I saw the ChuChu Street brand appearing on platforms such as "You Are My Destiny", "Happy Camp" and "If You Are The One", I did not expect that this young man born after 1985 has successfully transformed. For a long time before that, he kept himself away from any media interviews and protected the ChuChu Street brand in a low-key manner. This year, he left Tencent's open platform and created his own independent APP - ChuChu Street. He also stayed in Yiwu for half a year and became a Taobao crown seller. Lv Jinjie has experienced three important transformation periods of China's Internet, from personal webmasters, campus network open platform to mobile Internet era. He has been continuously starting businesses since undergraduate studies. He is a developer of China's first wave of social applications, one of the first batch of large fans, and one of the earliest people to work as an Alimama Taobao customer. From 2 million UVs in the era of personal webmaster to 40 to 50 million users in the era of campus network, to 50 million fans in Tencent QQ space, and then to 40 million users accumulated for ChuChu Street within one year, this young entrepreneur majoring in "mathematics + finance" has a unique thinking on user operation. This article is ChuChu Street CEO Lu Jinjie’s own thoughts on users. 1. The era of personal webmasters: understanding traffic logic and exploring product thinking I was born in 1986, went to college in 2003, and started my Internet business while in college in 2004. Most entrepreneurs at this time are individual grassroots webmasters. From undergraduate to first year of graduate school, I worked as a personal webmaster for 4 years. The experience I gained during my time as a personal webmaster is that for a website, from domain name, virtual host, CMS, code to operation and maintenance, SEO, and making money, all these processes have to be handled by one person. Individual webmasters have no product thinking at all, and due to the traffic distribution mechanism, individual webmasters are determined to "speculate" and pursue traffic mainly. In order to make it easy for Baidu to search you, one person may even have to create a dozen or even dozens of websites to form a site cluster. I have worked on English websites promoting China for the Olympics, movie websites, and all kinds of content. Attract more traffic from QQ groups and Baidu Tieba. We achieve a total of 2 million UVs on dozens of websites every day. The biggest flaw of this process is that you cannot focus on the user because 95% of your energy is spent on details and steps, and only 5% of your energy may be invested in the actual product. Of the 300,000 individual webmasters at that time, only a few have successfully transformed themselves today. Except for a few godfather-level individual webmasters like Cai Wensheng, most of the webmasters have gradually declined because they do too many different things. The current Internet no longer needs these. User-related products and operations are more important. After good products are financed, the user base will naturally grow, and cloud services also allow companies to reduce technology and manpower investment. In 2008, the first open platform in China, Xiaonei.com, emerged. Games such as "Stealing Vegetables" made friend trading popular. What is an open platform? Xiaonei.com has tens of millions of users and thousands of employees, but all of these employees are devoted to supporting the system architecture, developing photo albums, forums and other functions. Tens of millions of users require hundreds of thousands of different types of applications. It is impossible for Xiaonei.com to complete so much development, so it must set up a mechanism to open it up to outsiders. This is an open platform. The open platform provides products to third-party users. The third party provides products to the open platform. The open platform pays Renren Beans to the third party. The third party can gain profits through Renren Beans or through advertising. The few thousand employees of Xiaonei.com did what a company with 300,000 employees did through an open platform. At that time, Baidu only had a few products such as music and Tieba. The era of open platforms has begun, allowing developers to focus on their products, because as long as the products are good, they will surely be spread. Second, I have taken over all the fans on the campus network. I refuse to ask for 3 million fans per month. My first feeling at that time was that this was a turning point in the era of grassroots webmasters, although most individual webmasters at that time did not "turn around". In 2008, I gave up all my websites and focused on developing applications on the campus network and cultivating product thinking on social platforms. There was a particularly big advantage at that time. I was still a student, surrounded by users, and I could directly see what users liked. I didn't have too much pressure while studying. By 2010, the applications we developed had a total of 40 to 50 million users, while the campus network at that time had a total of 40 to 50 million users. At the time, 6 of the top 10 apps on the site were made by me under different names. This is actually the experience accumulated during the time as a personal webmaster. Don't put all your eggs in one basket to prevent being blocked by the campus network. During this period, I developed many applications, including some horoscope and IQ tests. The "character test" and "roll call" that were popular on the campus network at the time were also developed by us. The first game I made on the campus network, Tricky Brains, lasted only three months before I stopped because the number of users increased too quickly, with over 1 million users in a week and 1 million visits every day. Now 20 people are making a game, but back then there was only me. From the early virtual hosts to VPS and then to Windows servers, the technical capacity could not be improved any further. Users could not open the web pages because the traffic was too high. There was no cloud service at the time, and we had to watch helplessly as so many users were unable to open web pages. This is also the reason why I have always preferred to develop applications. It is no problem for one person to support millions of users. In 2011, Xiaonei.com launched a personal public homepage. Through the application I developed, I attracted 16 million fans to the homepage. This is a huge and very pure number of fans. If you use an account with 2 million fans to post a message, the number of views will be over 500,000. By posting an Alimama ad with an account with 2 million followers, one can earn 20,000 yuan in commission, which means a transaction volume of 400,000 yuan for Alibaba. At that time, I was among the top 6 in terms of the number of fans on campus network, and I was far ahead of the second place. In 2009, if each account posted an advertisement every day, I could earn 3 million yuan a month. But coming from the days of being a personal webmaster, I understand that it is extremely difficult to acquire 10,000 UVs. Sending a message can attract 300,000 or 400,000 UVs. The value behind this is infinite. If you keep sending advertisements, you will be killing the goose that lays the golden eggs. This will hurt users and cause them to leave. I decided not to make the 3 million. 3. I missed Sina Weibo after working for a year. How can I know whether it is a blessing or not? Although I was sure that I would start my own business, I still wanted to find a job when I graduated from graduate school. At that time, I had 40 to 50 million users and 20 million fans, so it was no problem to direct some UVs to the website. But if I had started my own business right away, I might have become a lone ranger. Many individual webmasters are alone. They buy houses and cars and have money but no team. Starting a business requires a team. No matter how great a person is, he cannot beat a team. I decided that I would like to pursue a career in the future, but as I had just graduated and didn’t know anything, I had to learn formal corporate culture. I worked in a consulting company for a year, and as an assistant I organized interview materials for thousands of people, from large state-owned enterprises to small private enterprises, from big bosses to front desk staff. Write industry research reports every day to cultivate industry thinking. What grassroots entrepreneurship learns is focus, while industry thinking is to see how high the ceiling is and establish a big framework. In that year, 2010, I first came into contact with Sina Weibo. At that time, the largest grassroots fan account had 100,000 followers, and I had 16 million followers on the campus network. I did an experiment and invited everyone on the campus network to follow my Sina Weibo account. In one night, I gained 20,000 followers. At that time, I calculated that if I sent a message every day for a week on each account, inviting everyone to follow my Sina Weibo account, then the top 10 accounts with the most followers on Sina Weibo might all be mine. However, I have only tried this one. Between learning and Sina Weibo opportunities, I can only choose one. Looking back today, the biggest gain from this year’s work is that I passively avoided the crisis of Sina Weibo. If I had been trapped in it, I would have been really trapped. I would have been tied up by financial indicators and increasing followers, and would have had no extra energy at all. I might have also missed my next opportunity - Tencent Open Platform. 4. From giving up to exceeding Paipai in transaction volume I missed Sina Weibo but caught up with Tencent Open Platform. Four years ago, the Chuchujie APP that we operate today was registered. At that time, chuchujie.com was exactly the same as Meilishuo and Mogujie. Some people called this model "social e-commerce shopping guide", which is actually a big Taobao customer (Alimama's advertising marketing model, earning commissions by directing traffic to Taobao). But unlike many of our peers, we only developed it for one month and gave up after operating it for two months. Chuchujie had 400,000 unique visitors per day at the time, while Meilishuo and Mogujie had only 200,000 unique visitors per day during the same period. The reason for giving up is that this is a capital-driven game. I was one of the post-90s generation, and four years ago the industry looked strangely at people of this age starting a business. For the same thing, others can raise 10 times the funds. With our scale at that time, if we had raised funds from the big guys like Mogujie or Meilishuo, it would have been no problem to raise 10 million. This industry almost only allows the first place to survive, and even the second place is difficult. At that time, there were more than 50 startups with this model, and today most of them have failed. We gave up on the surface, but in fact we did not give up in our hearts. We just told ourselves not to confront it head-on and to take a detour. This detour was to develop applications on Tencent's open platform that had nothing to do with e-commerce. We worked on it for 8 or 9 months, developed 50 or 60 applications, and grew to 100 million fans. If you post an advertisement, and each one costs 50,000, you can make a maximum of 10 million per month. Although we have had experience with Xiaonei.com and Weibo, we have not made a penny from this so far. You can't choose between short-term gains or a more promising future. Once you get caught up in short-term gains, you will only think about making money every day and will not have the energy to do long-term things. Things finally took a turn for the better in June 2012. Before this, Tencent and Taobao were irreconcilable and neither allowed the existence of shopping guides. However, after the 3Q war, Tencent became more open-minded and gradually opened up to everything. When he met with Ma Huateng a few days ago, he particularly emphasized the need for an open mindset. After Tencent opened up, the real challenge came - if we don’t monetize in the short term, what exactly should we do? My path is definitely in the shopping guide e-commerce field, because I have accumulated 50 million fans, chuchujie.com, and can reach 1 million traffic every day. But at that time, Meilishuo and Mogujie had also been in operation for a year and did not show much advantage. We were afraid of damaging the Chuchu Street brand, so we created two brands, Huanletao and 9.9 free shipping, and specialized in product selection and operation. After only half a year of operation, they earned 3.87 million in commissions on Singles’ Day, which means a transaction volume of tens of millions. At that time, our daily transaction volume was higher than that of Paipai, and Tencent made a B round investment in us. 5. Only focus on mobile devices: Betting on the post-90s generation and giving up 4 times the traffic of Tencent During the six months we have been working as shopping guides, the most common question we receive from users is: How do I register on Taobao? How to transfer money via Alipay? We give you the money, and you send us the goods! This suddenly made us realize that we were actually attracting new users for Taobao. Alibaba went public last year, and its prospectus revealed that Taobao’s active users reached 270 million in 2014, compared to 200 million in 2012. At that time, QQ Space had 700 million active users, which means that the 200 million Taobao users at that time completely overlapped in QQ Space. If you randomly pick a handful of users from QQ space, you will find that five out of seven have never used Taobao. Most of the users of Meilishuo are those who have Taobao accounts. They are dissatisfied with the account and choose carefully the things on Meilishuo. In fact, what Taobao lacks most are Tencent users, or users born after 1990. The reason behind this is also obvious. Users born after 1990 often started using QQ and had QQ space when they were 4 or 5 years old. When they were 23 or 24 years old, they were still using QQ but no longer using QQ space. Taobao was founded 10 years ago. The users of Taobao 10 years ago were definitely not those born in the 1970s, because they did not have computers at that time. Most of those who had computers 10 years ago were those born in the 1980s. Those born in the 1980s gradually graduated, received salary increases, and had children in 2007 and 2009. Taobao's products also accompanied this generation from being messy and poor 10 years ago to pursuing quality - Taobao brands, offline big brands, international brands, and maternal and child brands. Taobao’s rapid growth in the past 10 years is also related to this generation. Why has Taobao grown so rapidly in the past 10 years? The past 10 years were the golden period for those born in the 1980s, between the ages of 22 and 30, when their income and consumption increased rapidly. Taobao has captured the post-80s generation, but the users it lacks the most are definitely the post-90s generation. ChuChu Street passively seized this wave of users. Now 20% of Taobao and JD.com users are born in the 1990s, while 75% of us are born in the 1990s. Many of them made their first online shopping experience with us. ChuChu Street has entered into a strategic partnership with Jiangsu Satellite TV and has also placed advertisements in programs such as "Happy Camp", "If You Are the One", "Fight for Her", and "Let's Fall in Love" to attract the attention of post-90s. In 2012, Tencent invested in us, and the Tencent board of directors decided to give us four times the traffic, but we made a decision not only to not take Tencent's traffic, but also to abandon the Tencent open platform and PC-based shopping guide business for the entire company and only focus on the mobile side. It’s the same reason as giving up on making 10 million before. Tencent gave four times the traffic and was about to make money, but after the mobile terminal came out, the timing was very delicate. There wouldn’t be much innate advantage if you did it early, but if you did it late, you would die. Past experience has taught us that we must focus on doing things. Why not focus on mobile, throw away the PC, and do it. In fact, we are seizing the future and throwing away a piece of fat in the short term. The benefits for the next two to three years will be huge, and today, Meilishuo and Mogujie are still unwilling to let go. Cultivate user habits on the mobile side. Cutting off 50% of the PC side does not mean cutting off 50%, but moving the remaining 50% of users directly to the PC side. In this way, the company can focus more on doing things. PC and mobile are two systems, and this is what we should do once the future trends are clear. When our business was booming, Tencent invested in us and hoped to give us four times our current traffic. We refused at this time. We decided to abandon the PC side and only focus on the mobile side, truly transforming from an e-commerce shopping guide website to an e-commerce platform. The first half of 2013 was very painful. After the technical products were launched in the middle of the year, we made a macro judgment in May and June that if we did not reach 10 million users by the end of the year, we would definitely die. Because by 2014, the cost of acquiring mobile users will be higher and there will be no free users. Fortunately, by the end of 2013, with the joint efforts of the team, Tencent and external parties, we had accumulated 10 million users. Building a platform means there are two parties, users and sellers. If there are too few users on a platform, merchants cannot sell their products and so they leave. When users come and find that there are few merchants, they will leave. At that time, we had too few users and merchants didn’t come. Secondly, the platform and the shopping guide are 90% different. The shopping guide only attracts customers, while the platform involves site selection, logistics, decoration, design, purchasing, and accounting. What we lack most is e-commerce experience and capabilities, and we don’t have logistics and product capabilities. So, in the first half of 2014, I took a partner to Yiwu and stayed there for half a year. I started by renting a basement warehouse and opened a Taobao store selling household products. From decorating the store to visiting every household, to buying, selling and delivering goods, I packed more than 10,000 packages myself, posted express delivery orders, talked to 5,000 customer service representatives, and finally automated the orders. I managed the entire warehouse process and achieved a gold crown in half a year. At this moment, Beijing has found 30 to 40 million users a year, and has personally experienced the less than 90% of its capabilities with its partners. We understood the systems of Taobao, merchants and suppliers, and came back to formally transform. Before January 2015, we did not accept any media interviews and did not issue any public relations releases, just to avoid Taobao's attention. If we had announced it to the public half a year earlier, Taobao would have blocked it by surprise. We also use the "9.9 yuan free shipping" strategy to confuse people. There are too many people selling products for 9.9 yuan. This concept is like eggs and rice in a supermarket. It loses money but gains publicity, but you still have to buy other items. New users spend 9.9 yuan on the first purchase, and basically buy other things the second time. Why do we really want to transform into an e-commerce platform, and those born after 1990 are our target users. First, let’s take a look at the future of Taobao and JD.com. There are now more than 300 million online shoppers in the country, and Taobao and JD.com have occupied almost the same share of the market. China has a potential of 1 billion online shoppers in the future, and the remaining 700 million are their future. The remaining 700 million are divided into two dimensions: one is those who do not have smartphones yet, for example, those who were not Internet users have become Internet users; the other is those who are children who have grown up. The rural strategies of Taobao and JD.com are correct. The majority of the 700 million users must be in rural areas, but 100 million of them may be those born after 1990, and those born after 1990 will definitely be the pioneers of this part of users. The increase from 700 million to 600 million and then to 500 million must have been led by those born in the 1990s. Secondly, the post-90s generation will definitely lead the e-commerce landscape in the next five years. In the next five years, the average age of those born in the 1990s will drop to 22-28 years old, which is a period of wage growth and life changes. Taobao has grown to a very large size. Alibaba's 30,000 employees can hardly support the e-commerce needs of 1 billion netizens, unless Taobao quickly expands its employees to 1 million. However, Alibaba's organizational structure makes this impossible. This year, Tmall has only recruited employees and not left. JD.com, Vipshop, Jumei and more and more new e-commerce platforms will definitely share Taobao's cake. |
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