On the morning of September 22, the innovation workshop led by entrepreneurial instructor Li Kaifu held the 2016 annual summit in Shenzhen. At the summit, Li Kaifu announced the official opening of its South China headquarters for innovation workshops.
In early September of this year, Innovation Factory announced that it has completed the third US dollar fund of US$300 million and raised funds with the RMB2.5 billion second-phase RMB fund. It wants to take advantage of the dual-currency funds of RMB and US dollars to capture investment opportunities in the United States and China. . What kind of observations about the trends in the Internet field have taken place in the seven-year-old innovation workshop? Why did you have to move the annual summit to Shenzhen and establish a South China headquarters at this time?
At the summit, Li Kai recounted the speech of “Innovation and Trend of the Internet in Chinaâ€. In the speech, Li Kaifu mentioned that as the demographic dividend gradually subsides, traditional entrepreneurial models that use quantity to win have already presented bottlenecks. M&A orders targeting resource integration and platform monopolies have made it more difficult for entrepreneurs to survive. At the same time, new opportunities are emerging. Emerging technologies such as artificial intelligence have ushered in new development opportunities , and vertical fields such as Internet education and enterprise applications are also growing rapidly.
Li Kaifu also introduced the investment logic and specific layout of innovation workshops this year in areas such as artificial intelligence, culture and entertainment, online education, business services, consumer upgrades, and B2B. Artificial intelligence is one of the most important areas for investment in innovation workshops. At present, it has invested 25. In the field of entertainment investment, the innovation workshop emphasized the need to focus on the profitability of the company and its potential to become a platform. In enterprise-level applications, Kai-Fu Lee stressed the need to find explosive opportunities in this area.
The following is the content of Kai-fu Lee's speech. Lei Fengnet (searching for "Lei Feng Net" public concern) made a cut without change:
Today, I would like to first introduce to everyone what we think of the current state of the Internet in China. Then we still see major investment opportunities, as well as our deployment of major investment areas and our performance over the past year.
When the Innovation Workshop was founded, we remember that we were mainly doing the Internet. We later made good investments in games, social networking, and application APP. However, as technology companies, the trend of science and technology is constantly changing. We have never positioned ourselves as a company that only invests in the Internet. If a company can understand the trend of technology and the phase of science and technology, and find this outlet, and when other investors and entrepreneurs do not see it, we bring in the money, which will bring great returns to investors.
The two major characteristics of the Innovation Workshop are that we are the VCs who know the most about investors, and secondly, the greatest value that entrepreneurs bring to us. Today I'm going to focus on these two points to explain what trends we will find in the future and what value entrepreneurs will have after investing.
Domestic Internet Trends and Changes
First, talk about major trends and changes in the domestic Internet. These trends and changes also mean that our investment and direction need to be constantly adjusted, and we are reorienting each year.
There are several major trends. First of all, although China is the largest Internet country, the growth rate is declining. So it means that in the past, the demographic dividend was only because the most populous entrepreneurial model was just burning money and burning users. The model for making money afterwards is no longer the case. The best model because the population is close to full. Of course, these people are getting more and more rich when they are approaching full capacity, and they are increasingly able to pay for mobile payments. He may bring new investment opportunities, but the past investment opportunities, so-called children's friends to do an APP fire, is not the most Good model. The general APP is growing rapidly, but actually seeing more and more zombie users using the APP. If only the really big day living is actually not a particularly good phenomenon, so once again tell us once again to find new ones. Vents, new targets, new investment directions. In the past, we also saw some natural extensions of the demographic dividend. If we go back and look at the demographic dividend seven years ago and five years ago, then slowly the area where a company can make money, from the beginning of the Blue Ocean to the Red Sea, From many competitors to a few, then the following tends to monopolization, so to see the United States and the United States, 58 Ye Hao, through the merger to achieve a reasonable final outcome of the Internet, the ultimate goal is not to want to compete with the giants, We must look for the next biggest growth opportunities.
In terms of valuation, the project is indeed too expensive from the VC's point of view. From the eyes of entrepreneurs can not find the investment, the seller is not willing to cut prices, the buyer is not willing to pay, so the market will become deserted. It is a very good year for 2015, but if the latter half of the year is the same as the first half of the year, it may only reach the level of 2015. From this perspective, there may be many concerns, but this is not the case.
In fact, the whole environment may be a little problem, like P2P, O2O may start a bit worried, but in the real fire field is still very hot, you can see a few very hot areas, in artificial intelligence, AR, VR, education market, etc. The market is very hot and has grown very well. There are many educational companies that have grown better than before. The AR, VR market, the market for consumer upgrades, in these areas of major growth or so-called outlets, we The amount of investment actually seen is increasing. The number previously hidden is that many VCs in 2015 put a lot of money into P2P and O2O, but they regretted it in 2016 and they also looked for good outlets in 2015 and 2016. , with high value and reasonable value.
We have invested in a number of cases, including U Thant Science and Technology Wu Gansha, including the fourth paradigm. These companies are all in the so-called bubble, the so-called winter when they use very good valuations to get into the next round, and they do not Large enough income, when these companies have great founders and find a good outlet, they don’t really worry about investing. VCs don’t want to look at the Red Sea in the past, but instead spend time looking at these new emerging areas. What are the opportunities?
Innovation Workshop Investment vs Market Heat
The number of investments in innovative workshops has some contrast with the market's temperature in the field. In P2P finance, the so-called P2P finance is the use of a seller's opportunity to form a market on the Internet, you can break the monopoly of the market, can produce very good opportunities, but it may bring a lot of fraud, a lot of infidelity, there are many issues of supervision and so on , so we chose never to enter P2P finance.
I remember that when I got sick, the reporter always asked me why I did not enter this opportunity. I was worried that something was going wrong and it happened, so I did not ask us this question now. Of course it is possible to miss one or two opportunities, but more importantly, the opportunities we have seized are also correct. Even if we miss one or two, it does not matter. In fact, it is OK to not vote.
The opportunities for financial reform and innovation lie in its core technology, whether it is artificial intelligence or blockchain technology . These technologies are true, sustainable, and long-term for financial reform and can be seen in this field. It is not very hot when you can lay out, this area also put AI into it. We can see that during the 2012 AI investment, the industry hasn’t heard of AI. It was the same in 2013. It started to become conscious in 2015. When we went to AlphaGo in 2016, we’ve invested in dozens of cases. This is what we’re doing. Innovative workshops identify the advantages of trends.
There is also the advent of O2O, and consumption upgrades. They are slowly being identified as important areas. These two areas are somewhat relevant. O2O We never think that it is untenable. O2O even if it burns a lot of money today, many challenges and the company closed down, but this company is not to make back all the money lost by the travel company, the problem is that some companies burn too fast Even with the 2BC model, this method will certainly fail, not the O2O problem, but the VC style and choice. Because DDT and such companies have caused mobile payments to grow rapidly, there have been mobiles in the past, and now there are mobile payments. With a lot of consumer payments, O2O can be seen. We are basically going with the market as a whole. However, the actual amount of investment is very small . As long as we look at our LP report, we can see that we are different from others. Our investment is very cautious. The amount of companies we invest in is not large, and the amount of money is not great. Most situations are good.
The consumption upgrade will explain this area again, that is, when the demographic dividend disappears, these users who have been called the mobile Internet for three to five years, how do they want to live well, this is an area that we attach special importance to The word "upgrade" has not yet been created and we have taken a lot of cases.
In 2014, we stopped mobile games. On the one hand, we think that the game has reached a top level. So when we were learning games, we had a very deep understanding of virtuality and change, but we put this understanding on how to make money in a virtual society. In the new field, we voted in the field of culture. This field may seem wide, but simply speaking, movies, TV series, variety shows, whether on the Internet or traditional channels are very profitable, but they will enter more Internet ages in the future. We need to learn how to use the game's methods to operate, profit, and cash out, so we are very strange to become the best investment partner for many movies and television. This is something that we didn’t expect to have, and we’ve also made money from it. It may not be the highest return, transfer to culture and entertainment.
From these examples, we can see that innovation workshops are the most hopeful investors to understand the trend of science and technology. They can be fully reflected in these two areas. We choose whether to vote or not, what areas we choose to vote in, and where we choose to transfer Directional, data-based examples are still relatively accurate.
Dual Currency Fund
Another point is that in today's financing sector, a dual-currency fund is a must. If we review the past 10 years, the top VCs in China will definitely be US dollar investors. Therefore, when an entrepreneur wants to use the money, he must decide whether to ask for the US dollar or the yuan. What is the US dollar for? The US dollar is suitable for high-tech and high-growth growth; the RMB is suitable for what foreign analysts cannot read. Why such a clear division is how to go public, domestic like this model, foreign like that model, in fact, we do not have much conflict, it is not our choice.
Another important point is that the US dollar's cycle is 10+2. Our renminbi cycle is 5+2. U.S. standard projects may have the largest probability of success being only 10%, but they can get a 100-fold return. The most typical RMB project can The probability of a successful exit is 40%, but it may be 8x to 10x. We are also very happy to serve both. We are happy to be two services. We hope to be attractive to all entrepreneurs. We must have two currencies. Not all VCs see this clearly. We think we can see this and make it right. Adjustment is the best.
This also proves that innovative workshops have a unique vision, style, and courage to make some correct changes at the right time. Moreover, these six areas are closely related to the trends just mentioned, and the demographic dividend has reached its peak. We must consider the path of these people and look for more investment opportunities from their upgrades.
What is the next revolution in the mobile Internet? The next revolution is artificial intelligence. We think that in the next 10 years, most people who need to think about 5 seconds or less of their work will be replaced . For example, the "The New York Times" article will not be simple, but simple transaction type, all The intermediary company, all the assistants' companies, and positions will disappear. Artificial intelligence does not have the wonderful structure of our brains, but when compared to the data that people can see throughout their lives, because of the large amount of learning and special learning methods, it can surpass people.
Artificial Intelligence Blueprint for Innovation Workshop
At this summit we have a lot of artificial intelligence experts. Artificial intelligence can transcend human performance. The simplest example from the left is the recognition of objects and the recognition of 1000 objects. Over the past five years, computers have surpassed humans, such as the recognition of human faces. We are investing in Face++ today. Humans have been able to recognize human faces better than any human beings, and jobs that recognize human faces have been replaced, such as security departments, and voice recognition, such as customer service, etc. have been replaced. Not very mysterious science-fiction interaction, including advertisers' data, including traditional banks, brokers, etc. They are all areas. If you want to learn AI, you should learn about Google. Google recently did a lot of work to extract Google's data for search and advertising, so it named Alphabet, using the speed of deep learning methods, from 2012 to 2016, from 0 The growth of 1500 applications, so from its commercial actions and the use of internal technology, this artificial intelligence era is not only about to come, but has already come.
Here you can see a blueprint for innovative workshops on artificial intelligence, which can be divided into five parts.
The first is big data, and the second is perception. We think that the recognition of speech and face and objects will become better and better, but the understanding of natural language can be done well in one area, but it needs to be longer in cross-sector. Time, and in terms of sensors, are now more expensive, but as large quantities of production become cheaper, robots are more commercial applications than home applications because robots give people the same illusions as humans. But it is actually quite far away from people, but we are not optimistic about home robots, but there is an exception, like can play music.
The brown in the middle is the most important, that is, the formation of the platform. We think that the formation of the artificial intelligence platform will continue for several years . The platform is a so-called graduated programmer. As an IOS engineer, you don't need to learn the IOS fingerprinting program. When artificial intelligence reaches such a level, it can be popularized and the application can be blown out. In 4 to 5 years, the platform will go to the well blowout opportunity platform, and today to 4 to 5 years later, artificial intelligence experts have very unique advantages and advantages. If we find these experts, we have the opportunity to start business. Since any good technology becomes a platform, it will take several years to evolve. The mobile Internet is such that artificial intelligence is.
We have invested many companies in this area. Our unique advantage is that we have investments in China and the United States. The top American algorithm companies can help them bring about China. We can see that the U.S. investment is very focused on the field of AI while China graduates. The students are very interested in AI and will drive young people in China in the next two or three years. Before the advent of the platform era, there should be great opportunities and business opportunities . We have top media reporting on our company at home and abroad. We didn't share much at the annual conference last year, because we were still exploring the direction in the early days, but once we find the direction, we can see that our projects have been reported in The Times of New York and Forbes magazine.
Culture and entertainment
Entering our second largest investment area should be the field of culture and entertainment . The first is IP, and IP is sustainable, showing high growth. The second depends on the user's platform . Because an IP can make money, it cannot make money in 5 or 10 years. Only the platform can make money. For example, the Weibo and WeChat public accounts are a platform. Of course, the platform can never be found. It is not a platform to be made on the first day of the venture. This is the two directions we mainly see.
Then we have a specialty in terms of content. In the past, we introduced it to you. After understanding 95, we have a batch of product managers who look for new phenomena and investment opportunities every day. For example, when they voted for Mei Xiuxiu and SNH48, for example, we voted for anime. , is Japan's top, and we voted for antiques, young people like this, poetry, songs, etc., they are about to open concerts in the Bird's Nest, these people may not be able to understand here, because after the 95th batch People are born and raised in the virtual world. Their way of thinking is different from what we want. What they want is right. They want what they want. They will become opinion leaders. Those who are too old. Basically no more.
I was very fortunate that when my child was using it, I couldn’t pursue their footsteps again, so I am not yet a user of it, but my child allowed me to become his friend on Facebook, so I was Facebook will not send anything, but I will understand its trend. One day, we will find that we are old and the children are not used to playing with things. Finally, OUT, I believe that in the country we see live broadcasts and online games, they will go faster and faster, and one day they will also Will OUT, my sorrow, one day you will feel the same subject.
Not only after the 95th, we also think that a lot of tradition, because we do SNH48, because we did Ma Dong's "Oh," because we are VCs who understand the Internet, because we understand the docking, we become the entertainment industry. Entrepreneurs, if they want to take the Internet route, we become their first choice. For example, we have voted here for the first project. We can't talk too much detail here. The first film festival's famous producers, and the second is the top level of the TV class. You have all seen his projects. These are ours. Focused investment will also help them move toward the Internet platform. Apart from these investments, one of their characteristics is that they can quickly make money. In addition, the entertainment we don’t often talk about is actually not entertainment or knowledge. We think we can see many phenomenal news events today. Of course, many gossip incidents don’t come from Microblogging comes from knowledge, so it has significant current value. We are very optimistic. We all have the chance to realize the platform through knowing.
online education
The next area is online education. We see several trends. One is that you can rely on the Internet to spread and win customers. Then the problem of audio quality is slowly solved. Therefore, space and distance are not problems. You can learn from a distance, and the same Clear and wonderful. The third is to solve the parents' problem first. I hope that the child will go to school. The teacher's problem is that the student's score is higher. Therefore, more and more interactive and interesting investments can really enable children to learn more. And we see that AI can be applied to education, what to do, what hints should be given to parents, and what route children should take is an advantage of artificial intelligence.
Regarding the field of education as a great opportunity for Sino-U.S. investment, the United States will take the lead and can invest with them. We have invested in three major areas. The first is VIPkid. The second is the tool that teachers use in the classroom. It is a tool that can help students grow. It has already entered 10,000 schools and is basically the top of all the top cities. High schools are using it for teaching English. The third is the smart piano. This was introduced before. The entire sale was close to 6,000 a month.
B2B
The following is the B2B field. The era of B2C has reached its peak. The following we would like to see more is how to link the industrial chain with the industrial chain. How can we sell things to enterprise users instead of the ultimate users? This can be divided into two parts. Species. After the platform can be quickly obtained, the capital chain can be obtained, but we believe that B2B can also enter the era of 3.0, not how to buy the fastest and cheapest, such as want to buy cloth, not to buy the cheapest but the most suitable for him For example, to buy a car, not to consider who is the cheapest, but to get the fastest, not to look at the price, see the speed, look at the supply chain and other issues. In addition, we are the only partner with å®å®.
Consumption upgrade
Next, I would like to talk about consumption upgrades. Here are some opportunities for people to think about a good life. The first opportunity is to go through channels and do products and brands that were not available in the past. For example, let’s start by telling people to travel without having to go to a travel agency. To start is suitable for China. In terms of housing, using the Internet economy to help many people, this is also a good use of the middle.
The second is the way of Internet communication. For example, after Weibo and WeChat public numbers can spread many new brands and products. In the past there was no such thing as the new fashion we invested in. Design is a product that was difficult to build in the past, but now The power of the Internet and Internet Red can change.
Also, we can see the reorganization of the supply chain, for example, we are in the diet, because the Internet and food delivery have changed China's eating habits, but also thanks to Baidu's take-out and hungry, so in this regard we are all investing in this Class companies. Yuan Maishan Pumping Co., Ltd. has quickly obtained tens of millions of profits because of its own platform.
Finally, I would like to introduce that we have US$300 million in funds and there are also RMB2.5 billion in second-phase RMB funds. As we continue to help entrepreneurs in training, we continue to be our Brotherhood, and we are also doing our Majesties. The Majestic Club will be established in various places. New South China Camps, Alumni Associations and so on will give us more sources of funding. Thanks to us. The fund is big. If these entrepreneurs can invest in A or B, we can invest in it. Here we talk about classmates. We went to Google, Apple, Facebook, etc., and met their top entrepreneurs. Then we started the business. The growth process was particularly motivating for them because Chinese entrepreneurs have succeeded at a rapid scale, but there are still many who want to learn from the United States in the course of a great dream and a company with a billion or even a hundred billion US dollars in value. This is also a very special training program that only innovation workshops can do.
In addition, we are in Beijing and Shanghai, and we have established a company in Shenzhen today. There are also many partners who can help our entrepreneurs. When our products need to be endorsed, they also find stars to promote them everywhere.
Lastly, yesterday we established the Institute of Innovative Engineering Artificial Intelligence, and we hope to bring in particularly early scientists to help them start a business. Scientist entrepreneurship is not the same as APP entrepreneurship in the past. Because scientists are particularly skilled, but not particularly good CEOs, so to help them find the CEO, but these people create great value. The day after tomorrow, I would like to go to the United States to bring back top U.S. Chinese people and let the Academy think of them to start businesses so that we can invest in them. thank you all!
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