Tencent, for example, allows you to chat for free, make friends at home and buy things for free. This is the use of the Internet to create convenience; For example, Didi, 2 yuan sits for 3 kilometers and is on call, which is to use the Internet to efficiently use idle resources; For example, e-commerce, shopping malls have been reducing prices since their appearance, that is, using the Internet to solve information asymmetry.
For pure Internet products, such as information, community, tools, etc. , first give users free use, and then realize it through advertising or value-added services; For products in internet plus, we should first cultivate users' habits by subsidizing them, and then gradually increase the charging price or other services to boost users' contribution value and realize profitability.
But no matter what kind of products, the foundation of internet entrepreneurship is based on the premise of having a large number of users. With a large number of users, information asymmetry can be solved, efficiency can be improved and marginal cost can be reduced.
So today we see that as long as it is an Internet company without a large number of users, it will not be favored by capital, and it is impossible to go to the end. If a company has only tens of thousands of customers, but it is alive and well, it must be a traditional company, such as an Internet advertising agency, such as traditional education, medical care and tourism, which uses the Internet to advertise for customers. These are traditional companies, not internet startups.
The dividend and disappearance of internet entrepreneurship
In a sense, the dividend of internet entrepreneurship is the dividend of traffic.
In the early days of internet entrepreneurship, it was very easy to acquire users and the cost was very low. Around 20 10, SEO is very popular, and the daily peak of the mobile phone community built by a friend of mine is close to one million. A chain hospital recruits 500 people to do seo full-time and reserves a group of stations. The effect of SEM is also excellent. Neither CPC nor the conversion rate will be as high as today's CPC, but the conversion rate will drop a lot.
Almost ineffective press releases like today were very effective in the past. During the period when I just graduated, I once contributed articles for brands such as Telecom, China Unicom, Taobao and Didi Dew. A good manuscript can get thousands of dollars, and it is posted on the inner pages of some portal websites, which shows that it is very effective. But today this demand is gradually disappearing. I mentioned in the article that traffic thinking is dead, interaction and content marketing are eternal, and the early traffic dividend depends on users' thirst for information and fierce market competition.
In the past 12 years' development of PC Internet and 6 years' development of mobile Internet, users have experienced portal era, search era and social era successively, and users' demand for information has experienced a process from passive acceptance to active search to self-control, and the appeal of media to users is gradually declining. However, in the early days, due to users' thirst for information, traffic was in a dividend state. Just like when the official WeChat account first appeared, users will pay attention to you no matter whether your content is good or not.
When users are in the information-hungry period, the brand seems to be failing. For example, when you are searching for why the back of your head hurts, you may enter the marketing website of a small hospital, but you don't know that this is an advertisement, so you finally choose to see a doctor through consultation. Even if you know the strength of this hospital through Baidu's encyclopedia, it is difficult for most people in the early days to distinguish between good and bad.
On this basis, there is little difference between big brands and small brands in the conversion of Internet traffic. In other words, during this period, whether it is a big brand or a small brand, CAC is still far below the ARPU value, and there is still a lot of room for operation.
During this period, whoever quickly throws money and grabs traffic will win. For example, the early 58 cities, where to go, car home, and later Tuba Rabbit and Golden Axe, including the official WeChat account, such as Yi and Chao Life, all used traffic quickly during the traffic bonus period. For example, it costs only 1 ~ 5 yuan to get a fan in the early tide life, but a fan can contribute tens of yuan.
Generally speaking, the longest traffic bonus period is the search engine bonus period. SEO and SEM practitioners are far better than any other traffic operator, and their salaries are far higher than others. Although they can't do it now, they won a lot of bids or SEO with a monthly salary of 50 thousand at 20 1 1. This also fully reflects that doing content and engaging in interaction at this time is far worse than buying traffic rudely.
When more and more apps poured in, traditional brands accelerated to touch the net, the media continued to raise prices, and CPC began to reach a historical peak; For example, the highest bid for keywords in the medical industry is 999 yuan, and some people are buying it. On the other hand, with the change of the way users receive information, users' attention is fragmented, and their trust in the media is declining. However, users' recognition of advertisements is getting higher and higher, and they are increasingly disgusted with hard and wide, and their transformation power has dropped to the historical freezing point.
A data can show that the conversion rate of Internet traffic (pay per click) has dropped from three thousandths in the early days to less than one thousandth. In other words, it takes 1000 clicks to bring a user. According to the average click cost in 0.5 yuan, the acquisition cost of a single user is 500 yuan.
The online cost is so high that a large number of new Internet companies begin to pay attention to brands and markets instead of simply buying traffic. Such as rickshaws, melon seeds and hooks. Com is heavily invested in Focus Media or Subway, because offline exposure is expensive, but the conversion is good, and CAC may eventually be lower than the Internet. More importantly, because brand advertising has better trust promotion, it can enhance user retention. This is the same as the opening effect of ov's online shop. In terms of traffic cost, offline is definitely high, except for renting and labor, but the one-on-one explanation of the little girl, coupled with the experience brought by physical shopping, has a high conversion rate, and finally CAC may be lower than online.
Another interesting thing is that after the traffic dividend disappears, big brands are determining the critical price of traffic. Traditional brands and internet brands can seize traffic with higher CPC or CPM because they have accumulated popularity and higher conversion rate. Taking information flow as an example, if the CPC is 1 yuan, the conversion rate is 2/ 1000, and CAC=500. If the conversion rate of a big brand is four thousandths, you can bid for 2 yuan, and the traffic will be tilted like a big brand.
Generally speaking, after the traffic dividend disappears, Internet entrepreneurs are in an embarrassing situation where CAC is higher than ARPU. Only with the subsidy of capital can we move forward reluctantly. However, the foundation of internet entrepreneurship is a large number of users. Without a large number of users, it is impossible to reduce marginal costs and achieve profitability, and it can only face bankruptcy.
Enlightenment to Internet Entrepreneurs
There are many explanations for the accelerated collapse of Internet entrepreneurship. For example, a group of unqualified entrepreneurs killed in the Red Sea with few opportunities, and more than half of them died of natural causes. In terms of opportunities, the pits of pure internet are full. Even if there is, diaosi can't get in, and it may become cannon fodder, such as live broadcast. The pit of pure internet basically belongs to BAT, and there is a lot of traffic. You are like Tencent, the video is done late, but Tencent's video is in the forefront; Express delivery is also late every day, becoming the second and catching up with the first; There are also the application treasures behind, which are also in the top few.
That leaves internet plus. For example, Internet home improvement, many Internet home improvement startups actually do traffic, APP just does traffic matching, and the dirty work of home improvement is handed over to third parties. This will definitely not work. If we only circle users and do not provide services, we will become traffic traffickers, and traffic traffickers will face the above problems, and CAC is too high.
Therefore, the projects in internet plus must not be too light, but the heavier the better. We must do all the dirty work. Only by going deep into the industrial chain and solving users' pain points can we rebuild users' trust and reputation, reduce users' acquisition costs and improve ARPU.
20 17 in today's increasingly difficult internet business, a large number of users may not be your dish, but survival is the key.