LeEco's ecological dream was dismembered by capital. Where is Jia Yueting's poetry and distant future?

Jack Ma once said, "You have to have dreams, what if they come true?" Gao Xiaosong used poetry and distant places to fuel the fighting spirit of young people, and told them not to settle for mediocrity. However, innovation comes at a price, and revolution requires bloodshed and sacrifice. LeTV boss Jia Yueting has the courage and insight that many entrepreneurs do not have. However, for LeTV, courage, determination, and stories are far from enough.

Chinese innovation cannot be separated from Lei Jun and Steve Jobs

Chinese companies and founders can basically be equated, and the founder's style determines the future direction of the company. Alibaba's Jack Ma, Baidu's Robin Li, Tencent's Ma Huateng, Xiaomi's Lei Jun, LeTV's Jia Yueting, etc. Among China's Internet companies, LeTV is a unique one. It can be said to be the best storyteller in China. At the critical juncture of the transformation of video websites, it broke through the siege and instantly planned the concept of ecology, which made friendly companies confused, investors doubtful, and users confused. How could it be reversed with several unrelated product lines?

When talking about LeTV, we have to mention Xiaomi. The two are very similar in product layout, and the starting point of their outbreak is also quite consistent. The public relations wars between them are also quite frequent, whether it is products or business models, or conflicts caused by "supply chain events". Xiaomi and Lei Jun are not the originators of Chinese mobile phone companies learning from Apple, but from the perspective of packaging and publicity, Lei Jun is the first Chinese mobile phone company boss to be publicly compared with Jobs. Indeed, Lei Jun founded Xiaomi, and whether it is a set of mysterious strategies such as Mi Fans and Internet thinking, it has made great contributions to promoting China's smartphone industry. However, when everyone unveiled the magician's veil, Xiaomi is no longer magical, and its products were quickly surpassed.

As for Lei Jun and Jia Jun, the outside world once believed that Jia Yueting seemed to be better than Lei Jun in terms of thinking height and far-sightedness. Although the global innovation ecosystem business model is still a mystery, it is nothing more than cross-industry collaboration in the eyes of the outside world. However, the outside world's initial aversion to LeTV's "brainwashing" propaganda has turned into taking its advantages, which has indeed opened up the minds of many companies in marketing innovation. For example, identifying the pain points of users and driving hardware sales with content.

Overall, Xiaomi has launched new domestic products for the general public based on user needs, starting from product innovation, which is useful to everyone, and has a relatively clear business model. Although LeTV is also making products, it pays more attention to the hype of the mysterious ecological model, and the excessive emphasis on the business model has caused the outside world to ignore the value of the product.

The capital chain problem is just LeEco's superficial problem

What exactly is the problem with LeEco? Zeng Qiang, the founder of Xingen Capital, the former second largest shareholder, said in a recent media interview that because of LeEco's market position in the Growth Enterprise Market and its disruptive ecological strategy, it has always been at the forefront of the market, like an inflated unicorn, which has brought shocks to traditional industries and also aroused different opinions in the market.

Obviously, for a startup, finding a seemingly clear model and blindly expanding is a common problem for startups, and it is also a gamble. No matter how good the business model is, it is inseparable from products, users, and value. Anything that is separated from the value of user needs is doomed to be unreliable.

In terms of products, the seven major product lines of content, mobile phones, televisions, automobiles, finance, sports, and cloud computing are all predictable market prospects. LeEco is a latecomer, and although it has driven product growth through ecological marketing, it is far from enough. Even in the eyes of the outside world, today's industrial changes are everywhere, and it is quite difficult for a company to do one thing well. However, LeEco has set up such a large stall, which consumes a huge amount of manpower and financial resources.

For LeTV, if it wants to play with the ecological model, money is still an unavoidable topic. LeTV is even always hungry for money. LeTV holds high the banner of subversion and uses money to exchange for space and time. Hardware products are sold at low prices and negative interest rates. LeTV Sports over-stocks event copyrights, which has led to LeTV's capital chain being highly strained. In addition, the sharp price increase of the TV supply chain last year and the arrears of mobile phone suppliers directly led to the collapse of LeTV's capital chain, making it difficult to operate with borrowing from all over the place.

In particular, the LeEco Supercar project, which has been questioned by the outside world and investors the most, has recently suffered the resignation of senior executives. Zeng Qiang believes that if LeEco Auto wants to go further in the future, it will have to face three challenges in electric vehicle manufacturing: first, whether it can meet the demand for further funds; second, whether it can make independent breakthroughs in important technical fields and breakthroughs recognized by third parties; third, whether it can achieve the various comprehensive issues such as safety and cost control required for mass production, especially safety issues.

Sun Hongbin, known as the "good Chinese fellow", believes that he has never seen through LeTV's super car strategy, and thinks it is wrong for LeTV to play in the Chinese Super League. It invested 1.3 billion and lost 500 million. Don't play football just because people like it. After all, it is still a business.

Although it seems to outsiders that LeTV was crushed by money problems, the fundamental reason was the capital market's unclear outlook on LeTV's future. Even after years of development, it is still unclear, leading to some hesitation in investment. The share price of LeTV's listed company LeTV.com continued to fall, reflecting the basic attitude of capital towards LeTV.

Where is the poetry and distance of LeEco’s ecosystem?

Recently, the media reported that Sunac has injected 12.4 billion yuan into LeEco and sent directors to the three companies invested by Sunac. Sunac China Chairman Sun Hongbin said when talking about the investment in LeEco, "LeEco is developing in a good direction. You have to give LeEco a process of development. LeEco needs to cut and merge businesses that need to be cut. The direction of our investment has not changed. LeEco is selling what it should sell, cooperating with what it should cooperate with, and adjusting personnel where it should adjust. These are not negative, but positive. If you look at each of LeEco's sectors separately, they are all correct, but if you combine them, it is not right because you don't have the resources."

Obviously, there are differences among investors on LeEco's development direction and resource allocation. Investors prefer LeEco to do concrete business instead of playing with abstract ecological concepts. For example, the current smart TV products have indeed achieved market leadership in the industry and are also known as LeEco's high-quality resources. However, it is still a high-investment period, and it will take time to achieve large-scale profits.

For example, on November 27 last year, the media learned from an insider of LeEco that LeEco was planning to lay off 10% of its employees and implement an N+1 compensation system, and that the non-listed sub-sectors had already begun to deal with it. As of the end of 2015, LeEco Group had more than 8,000 employees, which means that the scale of this layoff is about 800 people.

Then, LeEco sold properties to provide funds for subsequent development. On the morning of March 10, Shanghai Sunac Real Estate Development Co., Ltd. agreed to acquire 50% of the equity of Shanghai Longshi Investment Management Co., Ltd. held by LeEco Holdings (Beijing) Co., Ltd., thereby acquiring the ownership of the above-ground and underground properties of the North Building of Longshi Plaza in Shanghai Hongqiao Business District.

It can be seen that, regardless of whether it is affected by capital, LeTV's development is becoming more rational, which can stop the bleeding for LeTV at present. However, it is still difficult to judge how much impact it will have on LeTV's ecology. At least, the past strategy of strong content has been restricted, especially the sports event copyright drives the sales of mobile phones, TVs and other hardware. After losing the heavyweight copyrights such as the Chinese Super League, LeTV will be greatly impacted.

In short, looking at Chinese companies through LeTV, they are too eager to break through, too eager to prove their own value, too eager to be unique and innovative, and even innovate for the sake of innovation and creation. The process is not meticulous enough, and the work is too exaggerated. Once problems arise, it will not only cause great harm to the company itself, but also to the entire industry. At least, from the current perspective, LeTV's poetry and distant future are becoming increasingly blurred.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.