My Age of Investment

Hearing this, Ricky's face turned as dark as the bottom of a pot.

He first took out one hand, but found that it was not enough, and then silently took out the other hand, "This is the sixth one. Since this year, Sequoia has robbed six projects."

Xia Jingxing frowned and said, "Do you know why Sequoia is targeting you?"

Ricky glanced at Xia Jingxing and bravely said, "I asked someone to inquire about it, and I heard that Moritz is very dissatisfied with you, Darren, and thinks that you ruined Sequoia China."

Xia Jingxing secretly thought that it was indeed what he thought, but this was probably only one of the reasons.

"Is there no other reason? Moritz doesn't seem to be the kind of person to act on impulse."

Ricky pondered for a moment and suddenly said: "An even more important possibility is that the investment success rate of Vision Capital's Silicon Valley office is too high.

LinkedIn, Workday, Tesla, Yelp, Palantir, Slide, Xingjia...

In recent years, we have almost all the most outstanding star startup companies in the United States.

Although these companies have not yet been listed, they have become leaders in their respective fields, their market valuations have soared, and their development prospects are bright.

It seems that only Sequoia has noticed this phenomenon so far.

If all these companies were to go public, and one or two of them would become Facebook or Google-level companies, I can’t imagine what kind of sensational effect it would cause. I’m afraid the entire industry would learn from us and watch our every move. "

"So, having a good investment vision is still a trouble?"

Xia Jingxing was often away from the United States, and in order to train Ricky, he gave him a certain amount of authority to independently select projects and make investment decisions.

Over the past few years, in addition to investing in Shopify, a small Canadian company, the other party has also received a lot of failed projects.

Although the fund has many failed projects, it still cannot conceal the fact that the hit rate of Vision Capital's US VC funds is too high.

People don’t focus on the number of failed projects, but only on how many successful ones you have and what is the highest return rate. This is also industry practice. After all, everyone makes mistakes sometimes. As long as one project can support the return rate of the entire fund, then you That’s the winner.

Ricky smiled bitterly and said: "Once Sequoia discovers which Internet segment industry or project we are tracking, we will immediately send people to contact and make adjustments.

But they don’t invest in all projects and have their own judgment logic. "

Xia Jingxing pinched his brows. Moritz was so cunning and cunning that it would be difficult to set him up.

Compared with Sequoia China, Sequoia America has a very good reputation and industry resources. If we use the same methods as Sequoia China to deal with Sequoia America, it will be difficult to work.

The simplest point is that although Sequoia China has the word "Sequoia" in its name, it is actually a start-up fund with no past performance. Once it encounters a setback, it will be like this. The second phase of fund raising has been stumbling, and it can only Thanks to my connections, I went to Huashan to beg for alms.

But Sequoia America is different. Even if one or two funds fail, its foundation cannot be shaken. Some people will still believe in this legendary fund that has invested in well-known companies such as Wisdom Fruit, Cisco, Oracle, Yahoo, and Google.

More importantly, Xia Jingxing found that Moritz had his own judgment and was not blindly copying Vision Capital's work. The other party was just using Vision Capital to expand its own project library and would conduct re-screening and due diligence.

I believe that with the sophistication of Sequoia America’s team, which is used to seeing all kinds of glamorous things, even if they encounter a big pit like Thousand Oaks, they won’t fall too deep into it.

The treasure chest invested by the other party was not taken away from Vision Capital in a strict sense. It was just that the other party blocked the position in advance and held it firmly in his hand and refused to let it go.

Xia Jingxing had read the introduction materials for the other five projects that were snatched away, but he had no memory of them. They should not be particularly successful projects.

Therefore, Sequoia America has not caused significant loss of interests to Vision Capital America so far, but this phenomenon deserves vigilance and attention. It is not pleasant to be plucked halfway.

“How do they quickly find out what projects we’re working on?”

Xia Jingxing's eyes turned cold, "Now I very much suspect that there is a mole in our team!"

Ricky said frankly: "I also have the same suspicion. I am currently investigating internally. If there is really a commercial spy, I will definitely find him or her out."

"We also need to change our internal mechanism. Don't have too many unnecessary due diligence processes and investment committee votes. If you find a good company, win it immediately! Don't give other people and other companies too much time to react. .

You've done a great job with a company like Shopify. I heard that you went to Canada in person and signed an investment agreement on the same day.

This is very efficient and worth learning and promoting internally. "

Ricky hesitated and said: “If we do this... there will inevitably be many mistakes.

Shopify is actually just an example and cannot represent anything.

And I had been paying attention to this company for several months beforehand. I found that the e-commerce SaaS software they were making was very unique, and I was sure that this was an important future development direction.

Even if this investment fails, it doesn’t matter. The key lies in exploration and summary. You can avoid many pitfalls by investing in similar companies next time.

As long as one e-commerce SaaS company succeeds, all the money lost by the previous 99 companies will be earned back. "

“Let’s try different business models first. It doesn’t matter if the investment fails. It’s time to gain experience.

And the most important point is that we must clearly show our attitude to Sequoia and don’t try to take advantage of us.

If they insist on competing with us on whose decision-making speed and investment speed are faster and do not do too much due diligence and analysis, then that is exactly what I want, and everyone will hurt each other! Let’s see who can’t stand it first. "

Ricky thought about it carefully and found that the idea proposed by his boss was actually a response plan. It would not leave Sequoia too much time to grab the project. In this way, over time, the other party would give up unless they made some changes like Vision Capital.

But change is difficult, especially for an established organization.

It is also very difficult for Vision Capital, and serious problems will arise if it is not run properly.

Seeing the confusion and hesitation on Ricky's face, Xia Jingxing felt angry and amused.

The good thing is that the other party and the team are given greater authority, but the other party doesn't want to accept it; the funny thing is that this is exactly a manifestation of responsibility.

Xia Jingxing said: "Tell me about the process of investing in Shopify."

Ricky introduced one by one.

Shopify was founded in 2004. The founder, Tobias Luke, is a German software engineer. Since his work visa is about to expire, in order to stay in Canada, he simply chose to start his own business.

As a ski enthusiast, Luke's first thought was to create an online store selling snowboards.

But in the process of starting a business, he found that the website building software on the market was not easy to use, so he simply made his own website building software Shopify, and then used Shopify to develop a snowboard sales platform called Snow devil...

After listening to the introduction, Xia Jingxing's mouth twitched, feeling absurd and funny, "So, Shopify, the subsidiary product of his startup, has become the main entrepreneurial project?"

Ricky nodded, "Yes, but Xuemo is developing well and has become a well-known snowboard e-commerce website in Canada."

"How did you learn about Shopify and decide to invest in it? You judge that it represents an important development direction in the future. What is the basis for your judgment?"

Ricky replied unhurriedly: “I have a lot of contact with the founders of Workday, so I pay close attention to entrepreneurial projects in the field of SaaS software.

In addition, I also like skiing. I went skiing in Canada with my family last year, so I learned about Snow Magic, and then I learned about Shopify.

In fact, I have been following this company for half a year.

At first, the charging strategy they adopted was transaction commission, that is, an e-commerce seller builds a website through Shopify, and then for every transaction it conducts thereafter, it needs to pay a certain percentage of the transaction amount to Shopify.

Many merchants are dissatisfied with this charging strategy, especially those with large transaction volumes.

In response to this situation, Luke and his partners decided not to use this charging strategy and instead charged subscription fees based on service time, supplemented by a small commission on credit card charges.

It was this change that prompted me to make up my mind to invest in this company.

This shows that the founder is not obsessed with making small money, but has the ambition and vision to build a large enterprise.

In addition, this transformation has turned Shopify into an on-demand service enterprise, which is an important characteristic of a SaaS company.

Its business model is exactly the same as that of Working Hours, except that one serves the e-commerce industry and the other serves the human resources industry.

With the same logic, I think SaaS can be applied to more industries, such as finance, catering, foreign trade, etc.

This is an emerging industry that is rich in business imagination and can reshape the landscape of the software industry! "

Xia Jingxing pursed his lips and smiled, very satisfied with Ricky's analysis.

Some of Shopify's functions are equivalent to domestic Weimob and Youzan, which can help small and medium-sized business owners build their own online stores.

Because each store is independent, it is also called an independent station, which is different from large markets and shopping malls like Amazon and Ali.

But because independent websites also need traffic, they are usually built on social media platforms.

As far as Xia Jingxing knows, TikTok, a benchmark project overseas in its previous life, has established in-depth cooperation with Shopify to jointly explore social e-commerce.

After Facebook, YouTube, and Twitter's advertising revenue growth hit a ceiling, they are also pursuing the idea of ​​​​e-commerce.

This is a big trend. After all, the Internet industry only has three and a half profit models, games, advertising, and e-commerce count three, and finance counts half.

In addition, SaaS software is indeed, as Rich said, beginning to empower traditional industries and reshape the landscape of the software industry. Traditional enterprise software vendors, such as CRM, ERP and other software, are accelerating SaaS.

For example, in his previous life, Xia Jingxing ate in a small restaurant. He could select dishes and place an order by scanning the QR code posted on the dining table.

It is obviously impossible for an ordinary small restaurant to maintain a software development team or customize software. The services behind them are all SaaS software service providers, such as 2D Fire, Keruyun, Delicious and so on.

However, the payment rate of domestic SaaS software is very low. Generally, the software services used by small and medium-sized catering companies are provided by manufacturers to expand new customers. After the expiration, you can change to a new SaaS system and continue to use it for free. If you change it several times, the restaurant will go bankrupt. , there is no need to spend any more money.

Rich continued: “Shopify is secretly developing a feature, and they plan to open up API interfaces to transform into a platform enterprise.

This is a transformation of great significance. If they are allowed to make it, it may have a significant impact on Amazon and eBay.

The e-commerce industry is no longer dominated by one or two companies. Independent e-commerce websites will spring up like bamboo shoots after a rain to compete for and encroach on the market of e-commerce giants - I call this an e-commerce empire. of cracks. "

Seeing Ricky talking more and more energetically, with his nostrils turned up in the sky, Xia Jingxing thought to himself that you are really awesome.

In fact, Shopify does have two brushes.

Until the time of his rebirth, the transaction volume of merchants on his platform had exceeded eBay, accounting for 6% of the global e-commerce industry. The company's market value was as high as 200 billion US dollars, and it was hailed as the most likely challenge to Amazon's e-commerce hegemony. Challenges from competitors provide e-commerce sellers with another development path.

Of course, now it is just a very humble small company. Ricky invested US$500,000 on behalf of Vision Capital and got 15% of the company's equity.

Xia Jingxing began to analyze Ricky’s investment motivations bit by bit: “Because you came into contact with Manhour Company, you learned about SaaS software and formed your own investment judgment theory. This is the most important reason for you to invest in Shopify.

In the future, you may also invest in SaaS software for different industries and business usage scenarios such as business management business, office communication tools, business process outsourcing, data analysis services, information security services, and vertical industry-specific categories.

In fact, a thorough study of the SaaS industry alone will be enough for you to benefit from throughout your life.

In China, you would say you have found your own way and have begun to attain enlightenment. "

Ricky chewed on Xia Jingxing's words, and the more he chewed on them, the more interesting they became, especially since the other party's industry segmentation of SaaS software was obviously more than one level higher than his own.

The boss is the boss, and the level is high. When it comes to Man Hour Company, it was actually the boss who first discovered and negotiated with it personally. He only took over halfway and was responsible for additional rounds of investment.

Xia Jingxing looked into Ricky's eyes, "But have you ever thought about whether the partners who work together can find their own way like you?"

Ricky wondered: "Aren't they just responsible for the specific implementation at this stage?"

Xia Jingxing shook his head and laughed, "Your idea is obviously wrong. Employees also need to grow with the company. If Vision Capital wants to go higher and further, and even build a decades-old store like Sequoia, we need to have a set of training methods The mechanism of talent.”

"Then how can we cultivate talents?" Xia Jingxing looked into Ricky's eyes.

Ricky was prepared for this and blurted out: "I plan to make a set of internal sharing courses based on my experience and summary of how I tracked working hours, discovered that the SaaS industry has a gold mine buried in the SaaS industry, and then invested in Shopify, to train employees. .”

Xia Jingxing nodded and said, "This is just a theory. You can't cultivate real investment experts unless you pull the trigger yourself.

I thought of a plan. How about everyone on the investment team having the right to make their own investment decisions once a year? Only limited to angel round or A round, the amount is controlled within 5 million US dollars.

Whether you are the lowest-level analyst or investment manager, you have such an opportunity.

Maybe someone, like you, has taken this opportunity to find his or her own path?

The information transmission process is attenuated. Sometimes the big guys on the Investment Committee may not be as good at judging a certain project as the soldiers on the front line.

Let those who can hear the sound of cannons make the decision. I think most people will cherish this precious opportunity to shoot.

There are never any investors who are born extraordinary. They all summarize, summarize, and reflect in actual combat, and then grow up step by step. "

Ricky fell into deep thought. He didn't think the boss's proposal was ridiculous, because the other party really focused on talent cultivation, and he paid too much attention to it.

There are not many unique skills in the venture capital industry. If there are any, brands and resources must come at the back, while talent cultivation and discovery must come at the top.

An investment institution as impressive as Kleiner Perkins Caufield \u0026 Byers could compete with Sequoia Capital in the last century. Now that talent is running out, it has begun to decline. No matter how much money it raises, it won’t work. If I give you money, you just can’t invest. Yes.

After thinking for a long time, Ricky finally asked: "What if we failed a hundred projects and finally trained one person, and then this person changed jobs?"

"As long as the mechanism is correct, I believe that the second and third ones will be cultivated soon!

Even if these people change jobs after working for a period of time, or start their own business, it doesn't matter.

This just shows that our training mechanism is correct and talents are emerging in large numbers. However, the talent retention mechanism needs to be improved. We cannot leave all the people and I am the only boss left. "

Ricky smiled and scratched his head. The Silicon Valley VC fund team is not large. Not counting business support departments, such as legal affairs, finance, etc., there are only a dozen people in the investment team, which is an elite route.

Most of them do not have the authority to make investment decisions. If this authority is really opened up, tens of millions of dollars more will be spent a year, which is not a small expense.

It is difficult to define whether it is good or bad. It may take hundreds of millions of dollars to see a certain effect.

"The American team will try it for a few years. If it works well, I will consider introducing it to China. We should give more opportunities to young people. After all, they represent the future and understand emerging markets best.

If you were asked to vote for a beauty brand that young girls like, could you name it? "

Ricky shook his head hurriedly. He was not gay, so he didn't know much about beauty brands.

But Xia Jingxing really moved him. If he had the opportunity to try to be an innovator and changer in the industry, why should he be a follower?

After a few years, I might be able to become a venture capital godfather.

Well, the Godfather is worthless now, and all the cats and dogs are claiming to be the Godfather.