The failed entrepreneurial experiences of ten business bosses

Who has not had a setback on the road to entrepreneurship? Even Jack Ma, Lei Jun, Zhou Hongyi, Liu Qiangdong...these Internet giants They have also experienced bloody lessons, but they did not get back down because of a fall. Instead, they learned a lot of entrepreneurial experience and lessons from the failure and got back on their feet. Below is the content related to the failed entrepreneurial experiences of ten business bosses that I compiled. Welcome to refer to them.

Lei Jun: Founder of Xiaomi, now valued at US$45 billion

Failure experience

Before success, he founded a three-color company, which went bankrupt due to inability to make a profit. .

When he was in college, Lei Jun read a book "Fire in Silicon Valley" about the early entrepreneurial legends of Gates and Jobs, which greatly touched him - "I was deeply attracted by the story of Jobs. Attracted. After working hard in Wuhan Electronics Street for a while, I felt good about myself and started to dream: I dreamed of writing a set of software to run on every computer in the world, and I dreamed of starting the best software company in the world. ”

So, he founded Sanse Company with three friends in his senior year. Unfortunately, the company was forced to dissolve within half a year.

Insights from failure

In this regard, Lei Jun has three reflections: first, there must be a clear profit model; second, there must be forward-looking market awareness; third, there must be certain team management ability.

Chen Ou: Founder of Jumei Youpin, with a market value of US$2.4 billion

Failure experience

Founded the GG game platform.

When he was studying at Nanyang Technological University, Chen Ou built an online game platform GG with a computer, and invited two top World of Warcraft players, the WCG champion and the ESWC champion, for a peak showdown. This won him his first users.

However, as the number of users increased, Chen Ou, who had no financial reserves, became increasingly embarrassed. The sponsorships he could get were meager and investors dismissed him, which made GG's development difficult.

At this time, Chen Ou was going to Stanford to study for an MBA, so he introduced a professional manager to manage the company and sold part of his equity. Subsequently, the professional manager introduced other angel investors, and through operation, Chen Ou's equity was reduced to just over 30%. He lost control of the company and was eventually squeezed out of the company.

For his second entrepreneurial venture, Chen Ou established a game company in China, imitating the American business model and integrating advertisements into social games. However, due to the large differences between the domestic market and the United States, the company soon went bankrupt.

Insights from failure

These two failed entrepreneurial experiences gave Chen Ou two gains: First, the company needs a healthy equity organizational structure; second, copying foreign models will not work. .

Zhen Ronghui: Founder of 51life, with a market value of US$2 billion

Failure experience

Once invested in voice mail and magnetic materials.

Zhen Ronghui was a consultant before starting his own business, with an annual salary of one million yuan. In the tide of rapid economic development in mainland China, he wanted to become a "billionaire", so he built a voice mail delivery system part-time and also invested in magnetic materials. But both ventures ended in failure.

Insights from failure

When summing up the lessons, he said: Starting a business requires a lot of energy and must be done full-time; starting a business cannot only start from products. Having good products does not mean that Once there are customers, customers need complete services, and entrepreneurship needs to change from product-oriented to customer-oriented.

Wu Xinhong: CEO of Meitu Company

Failure experience

He once founded the 520 social platform, but later stopped operating it.

In 1999, Wu Xinhong, who was still in high school, saw a piece of news: a domain name called "business.com" was sold for US$7.5 million in the United States.

So he borrowed 10,000 yuan from his family and started investing in domain names. From this, he made some money and met Cai Wensheng, a later company investor.

In 2002, Wu Xinhong, who dropped out of school and stayed at home, discovered a good domain name: 520.com, so he copied Tencent and made money by charging membership fees. Two years later, "520" has accumulated hundreds of thousands of paying members. However, because its products and operations cannot keep up, most members stopped renewing after only paying for one month. In the end, Wu Xinhong was forced to close "520" and sell the domain name.

Insights from failure

Looking back on this experience, Wu Xinhong said that he has learned two lessons: First, reverse entrepreneurship does not work, and you cannot set up a company just because you have a good domain name; The important thing is that if you are not good at sociability and do not know the needs of users, how can you talk about building a dating website?

Wang Xing: Founder of Meituan.com, valued at US$7 billion

Failure experience

He once founded the school network and was later forced to sell it.

In the winter of 2003, Wang Xing, who was studying for a PhD in the United States, returned to China to start a business. After experiencing several failed projects, Wang Xing found that social acquaintances among students could be an entry point, so he set out to build a school network.

In Beijing at that time, it was very troublesome to take the bus to the train station, so during the winter vacation, Wang Xing launched an activity at Tsinghua University, Peking University, and Renmin University where people who registered on the campus network could take the bus to the train station for free. At the same time The bus will start when 50 people gather at the same place. In order to increase the number of people, students go around recruiting fellow students to register, which is equivalent to promoting the website. This activity attracted 8,000 seed users to the school network. However, due to the lack of a clear profit model, the capital side was not optimistic about the project. In the end, the capital chain broke and the internal team had disagreements. Wang Xing was forced to sell it.

Insights from failure

The failure of this project gave Wang Xing the following inspiration: First, the entrepreneurial team must have a clear division of labor, and the CEO must be liberated from company affairs and pay attention to the industry and the times. , the development trend of society; second, you should get in touch with capital as early as possible, lower your posture and make compromises; third, you must start a business with people you trust, so that you can remain united during the downturn.

Liu Qiangdong: Founder of JD.com, with a market value of US$40.3 billion

Failure experience

He once opened a restaurant in Zhongguancun, but it closed after being defrauded of money.

After graduating from college, Liu Qiang bought a restaurant near Zhongguancun. Before, store clerks had very low salaries, lived in basements, and only ate leftovers. The boss personally controlled the funds. After Liu Qiangdong took over, he increased the wages of employees, improved the accommodation environment, and gave purchasing and cashier rights to employees. Due to loose management, employees found ways to embezzle the store's money. Within a year, the originally profitable hotel lost all his investment.

Perception of failure

The lesson Liu Qiangdong learned from this is that you must trust your employees, but trust does not mean no management.

Chen Yizhou: Founder of Qianoak Interactive, later renamed Renren, with a market value of US$1.1 billion

Failure experience

Founded the ChinaRen community.

At that time, Chen Yizhou and others, who were still studying at Stanford, designed a combination based on the characteristics of several popular community websites in the United States at that time, named ChinaRen. But no one in Silicon Valley was willing to invest in their project, so they finally "crowdfunded" $200,000 from classmates at Stanford.

In March 1999, they returned to China to register the company. After receiving investment from Goldman Sachs, they quickly launched the ChinaRen community and obtained tens of millions of dollars in new financing. After that, ChinaRen began to spend money on advertising like crazy.

At the beginning, Chen Yizhou and the others felt scared, but investors said it didn’t matter. There would still be investment after the burn, and there would be no way to go public without the burn. But soon, the U.S. stock market crashed in 2000, and capital entered a cold winter. As a result, the attitude of investors who originally supported burning money changed drastically and they clearly told Chen Yizhou that there would be no new investment and that the company should be sold as soon as possible.

Chen Yizhou had no choice but to sell the ChinaRen community to Sohu.

Insights from failure

In fact, this case is similar to Xiaonei.com: starting a business requires rational use of existing capital, and it is best to have your own hematopoietic ability, so that you can Capital survives the crisis during the cold winter.

Zhou Hongyi: Founder of 360, with a market value of US$6.4 billion

Failure experience

Once built 3721, one of the earliest search engines in China.

Before starting 360, Zhou Hongyi once made a search engine called 3721, and Baidu also launched a similar service. The competition between the two sides is fierce. Zhou Hongyi added a module to the 3721 client specifically for deleting Baidu's client, but this module itself cannot be deleted. This made Zhou Hongyi wear the hat of "the father of rogue software".

Later, Zhou Hongyi felt that Baidu’s search model was better than his own, and the Internet industry was in a downturn at that time, so he sold 3721 to Yahoo when he had an advantage in market share, resulting in the search problem. A US$1 billion market was finally occupied by Baidu.

Perceptions of failure

Regarding these past experiences, Zhou Hongyi said: "When you do things, don't just focus on your opponents, you must focus on user needs, and you must persist and don't give up easily. ”

Zhang Xiaolong: Father of WeChat and Vice President of Tencent

Failure experience

Foxmail developed by Zhang Xiaolong.

Foxmail developed by Zhang Xiaolong was once With 2 million users, it is the largest shared software in China. Zhou Hongyi said that Foxmail had no business model back then, so he often criticized Zhang Xiaolong, saying that it needed to add advertising and make profits, but Zhang Xiaolong said, why does it have to be like this? As long as there are users and sentiments.

Later, Foxmail became a big burden for Zhang Xiaolong. Countless people urged him to move forward every day, but the popularity and user volume did not bring him any benefits.

A year later, Zhang Xiaolong sold Foxmail to an unknown Internet company.

Perceptions of failure

Many Internet company founders now say: We don’t need to consider money now. Once we have users, we will naturally find profit points. But Zhang Xiaolong’s experience tells us: before starting a business, a clear profit model is extremely important.

Jack Ma: Chairman of the Board of Directors of Alibaba Group, with a market value of US$182.5 billion

Failure experience

Jack Ma went through three entrepreneurial ventures until Alibaba went public in the United States.

In 1994, Jack Ma founded his first organization: Haibo Translation Agency. The first month's income is 700 yuan, and the rent is 2,000 yuan. Jack Ma carried a sack alone and went to Yiwu to set up a stall to support the translation agency.

In 1995, Jack Ma accidentally came into contact with the Internet in Seattle, and he determined that the Internet was the future direction. After returning to China, Jack Ma, his wife and friends raised 20,000 yuan to found Haibo Network and launched the China Yellow Pages project. However, after cooperating with Hangzhou Telecom, the two parties had differences, and Jack Ma decided to abandon the website.

At the end of 1997, Jack Ma was invited to serve as the general manager of the China E-Commerce Center of the Ministry of Foreign Trade and Economic Cooperation of the People's Republic of China, and he began to be exposed to foreign economic and trade business. Jack Ma's idea of ????building a B2B website began to mature. In 1999, 35-year-old Jack Ma decided to return to Hangzhou to start a business and start another startup of his own - Alibaba.

Perceptions of Failure

In Jack Ma’s view, the successful experiences of enterprises are different, but the lessons of failure are similar. "My biggest lesson is to think about how others failed and what mistakes people must make." Jack Ma said that it is not easy to run a business. "95% of companies have fallen." Avoid making the mistakes of those who have fallen. "Mistakes become nutrition" can become the surviving 5.

Extension: The personal experience of a failed entrepreneur

Soon, my team got an opportunity to sit down with a well-known investor to discuss the possibility of financing. Even though our business hadn't started making money yet, and none of us had ever held a CEO position, we were confident. After all, we have already predicted that the gross profit will reach 200 million after the company's financing. How could investors refuse our request?

We will definitely be rich. All we needed to do was raise a small amount of money - 15 million.

I always thought, "How difficult is this going to be?" We were so naive, stupid, and whimsical.

There is a slight problem with our plan. None of us knew how to cater to investors. So I did what any entrepreneur without a clue would do: I looked online for "how to cater to investors."

I didn’t see any helpful information online. Before even stepping into the conference room, we quickly discovered that our presentation was going to fail. In fact, it was already failing when we started writing the business plan.

At the beginning of the recall, one of the investors asked me to give him a one-page plan introduction. We didn't have a brief prepared, so I gave him the first 11 pages of the 95-page proposal.

Strike one.

Before I reached the fourth page of the 32-page slide, the second investor interrupted and asked me: "Okay, stop. I understand. You don't need these 1,500 at all." Ten thousand".

In order to defend the financing plan, I overconfidently defended; "This profit cannot be realized without this amount of money."

"Really? It cannot be realized?" He was like one of the scoffers replied with a smile.

Strike two.

Then the two investors asked a lot of questions at the same time:

"How much money have you invested in this company? Is it almost 15 million?"

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"Why should I pay 20 people a salary, and why should I give a high salary of 100,000 to an executive with no record?"

"How much profit has your company made so far?"

"Why should I give you 15 million when your company has not yet earned 15 million?"

"How do you prove that you can have 200 million in the third year? Gross profit? ”

“Why do you want to produce and sell 10 products at the same time? What if there is already a company that can produce 10-in-1 products? ”

Questions came one after another. one. None of the questions were pro-attitude.

Strike three.

As you may have guessed, we did not raise the $15 million from that meeting. However, I later realized that one of the reasons was due to my relatively young career. I learned more about real-world financing issues in this 30-minute meeting than many entrepreneurs learn in a lifetime. To commemorate this day, whenever I have to cater to investors to solve financing problems, I will always clearly remember the following six precious lessons:

1. The less the better

It is important to have a clear and direct purpose. Tired presentations and lengthy explanations will not impress investors and may scare them away. Present your business plan in a concise, engaging, and precise way. Investors need to feel confident knowing that your company will attract and retain customers. If investors don't understand your business philosophy for a short period of time, they may assume that customers won't either.

2. Eliminate guessing. Execution, execution, execution.

Use facts rather than conjecture to inspire your confidence. Most investors look for low-risk businesses, and they favor hands-on managers who can deliver on their commitments as much as possible. A company with cash flow, a track record of business operations, and real-world experience is often more likely to raise capital than a company with a plan that promises huge returns to investors.

Find a way to test whether your company can survive with little or no money, then turn the idea into a functional business plan before you seek funding.

3. Avoid big words and empty words.

Get investors excited about the blueprint you describe, but make it reasonable and feasible. Avoid big words and empty words. If you describe a meaningless financial budget and boast that your company's profits can increase from 100,000 to 50,000,000 in 3 years, respectable investors will not take your project seriously. Show investors three financial budget scenarios you have constructed based on reality: the best scenario, the average scenario, and the worst scenario. Industry and competitors develop good countermeasures and defensive assumptions based on facts, past and current data.

4. Learn to fall in love with discount stores.

Cheap things are fashionable. At an age when you can't control your spending, you need to prove that you are financially rational and know how to make the best use of every penny. Leave some wiggle room in your operating and marketing budgets, but avoid being too conservative. You must not ask for high salary or high subsidies. Investors want you to be in a position where everything about the company is up and running.

5. The city of Rome was not built in a day. Neither will your company.

Investors are very cautious about radical entrepreneurs. Radical entrepreneurs always have "big eyes but small stomachs." Before investing millions of dollars into 50 departments and hundreds of products, you have to prove that you can create and manage a single product and satisfy consumers. Show that your company has grown to the next level before you even take a stand. Improve your marketing strategy, sales strategy and operating procedures. Investors like your company to have a sustainable, step-by-step iteration that can lead to exponential growth. Remember, even Google's success was built on a single product.

6. Choose not to be the smartest one.

Understand what you already know, know what you don’t know yet, and discover those people who you don’t know but do know. Build a team of trusted experts. The smartest leaders in the world are those who surround themselves with wise people. Investors invest the same amount of money in a management team as they do in a business opportunity. ;