Xu Xiaoping: VC's winter is the spring of angels

Quote: In recent years, Xu Xiaoping has continuously invested in several listed companies. 2015, Zhengger Fund invested in a number of startups, but also gained a lot of attention from the outside world, such as honey bud baby, go out and ask, Green Deep Pupil, Nice, looking for steel, billion air drones, beast riding, youkaikou, easy to meet, cloud-made Technology and other emerging technology and Internet companies.

Xu Xiaoping: I'm not satisfied, I'm anxious

? Don't ever report that I'm late.? Xu Xiaoping ran in with a big stride, wiping off sweat while joking with reporters. As an early stage venture capitalist, he meets three or four entrepreneurs a day.

Recently, Xu Xiaoping was interviewed by China Entrepreneur and other media. As New Oriental's previous ? Troika? He was once a close friend of Yu Minhong, one of New Oriental's previous troika. And now, his close friends have turned into a new generation of entrepreneurs. It is said that they can often go in and out of Xu Xiaoping's house, Xu is personally involved in every project, and will also guide and stand for the invested projects after investment.

In recent years, Xu Xiaoping has continuously invested in several publicly traded companies. 2015, Zhenge Fund invested in a number of startups, have also gained a lot of attention from the outside world, such as Honeybud Baby, Going Out and Asking, Grimm Deep Pupil, Nice, Looking for Steel, Yihang Drone, Beast Riding, Yucai Kungfu, Easy Club, Cloud Creating Technology and other emerging technology and Internet companies.

The investment experience he has accumulated over the years has also allowed him to maintain a cutting-edge understanding of the domestic investment and entrepreneurial environment.

?The winter of VC is the spring of angels?

CE: We are concerned that the investment industry throughout the first half of the year has been cautious, with some calling it ? The cold winter of capital? How long do you think this winter will last?

Xu Xiaoping: I said five years ago that the winter of VC is the spring of angel. Angels are actually low valuation investors, poor investors. If VC encounters a winter, it's good for us. With low valuation, entrepreneurs are closer to the essence of entrepreneurship. The essence of entrepreneurship is not that I'm a bully, high valuation, but in how much money I need? How much to do? So we before this year, the real money than last year to invest in projects more, the first half of this year's rate is obviously more than last year. Secondly, it is true that our good friends, many VCs, including angels out slow, but this is a reality. Third, we see a lot of great companies that are still dabbling in growth, high speed and healthy, profitable growth.

I've been through economic cycles. For example, the 2008 economic crisis, but you look at it the other way around, a lot of great companies in China today, should be growing up at that time. This is not a philosophical point of view, but a historical fact, at a time when people are most afraid to take the plunge, Zenith Fund should maximize the embrace of the leaders and companies of the next 5 years, 10 years. I myself feel that the wave of entrepreneurship has not stopped at all since the first half of this year. I would like to question the voice a little more, which can help entrepreneurs reflect. But the boom in entrepreneurship this year, the quality of entrepreneurship, is no worse than last year, or even better.

CE: Compared with three years ago, it seems that in the B2B field, many organizations are in the layout, how big do you think the market is in the B2B field? Why can it catch fire?

Xu Xiaoping: B2B field, like looking for steel network this model, solve the information asymmetry, solve the optimization of the chain between supply and demand. After looking for steel, appeared looking for plastic, looking for cotton, looking for cloth, and then I also met looking for stone, looking for wood, I later invested in a looking for coal.

So there is no doubt that there is still a lot of room in this area. the second area of opportunity for B2B is for enterprise service companies, such as we have invested in a sales easy, is to provide services for enterprises. China's enterprise-level services should still have eighty to ninety percent of the space. So the B2B market, I think, Matrix Partners' Zhang Ying also thinks the market is too big. Why has it not developed? The entrepreneurs who have vision, the investors who have vision, can tap into the huge wealth from here and create huge social value.

I'll tell you a funny thing, yesterday came a young man, a conductor, twenty-seven or eight years old, and Lang Lang, Tan Dun is a close friend. Classical music is in the doldrums, and he said he wants to do something, which is to find soundtracks for movies. Every movie boss, every TV producer needs a soundtrack, right? The three big directors, to all the small directors, want to soundtrack you find me.

This is the most wonderful. You see what the tradition is? You made the movie, you know Xu Xiaoping, make a music, it is a small workshop, can it do a billion dollars? You can say it can't, but it can do 100 million dollars, can't it? It can then set up a Chinese symphony orchestra to feed the great classical music. At this moment, Mr. Wang Qiang is taking him to meet investors.

This is the disintermediation, which solves the information asymmetry that exists in all of our industries now, and is actually a manifestation of the Internet sinking down. And find steel network a thought, find the value of steel, model, universally applicable, go to the middle, and then information transparency, supply and marketing process optimization. Therefore, I think looking for steel is a philosophy, this philosophy includes what aspects? Worldview, look at the nature of things, cause and effect.

A few days ago, one of my good buddies came back from the United States, said Xiaoping I want to do a dating version, better than the Century Jiayuan dating site, I listened to me on the spit, I said the Century Jiayuan once to be dead, you want to do a thing in accordance with a sample of the death of the bullshit. My idea is that many entrepreneurial opportunities are gone, you really go back to do a traditional offline education, frankly speaking, the opportunity is basically gone, maybe you can make a living, can eat, but where is the great opportunity?B2B is an opportunity.

? Pain motivates me to find good programs?

CE: You said that the success of investment is to get a high return, the success of entrepreneurship is to make a profit, and the success of life is to be satisfied deep inside, are you satisfied now? What is your more satisfied state like?

Xu Xiaoping: I'm not satisfied now, I'm very unsatisfied now, when I see a lot of excellent entrepreneurial enterprises quickly rise, bring joy to people, bring value, bring profits, I found that we are not inside, I have a sense of loss and frustration, and no matter what I did yesterday? I always feel like I need to catch another DDT today, another Meituan, and without it, I'm in perpetual torment and pain. Those who don't know me say I'm worried, those who know me say what do I want? What do I seek? Of course, there is also possessiveness in it, but it is also a sense of accomplishment, of course, when society ultimately says that a person has done what contribution to society? He has done a lot of good for society, and this is a dimension. The mountain is not too high, the sea is not too deep, the Lord of the Week spits out only projects. But I am also constantly asking myself, is this greed? Is this shamelessness? Is this a positive emotion or a negative emotion, my conclusion this is still a positive emotion, really, every time I come to the office, I am very kind, but in fact my language will reveal a message, Zhenge Fund is nothing, we must get a good project, tomorrow to invest in a good project. For example, looking for steel net, this is one of my psychological comfort.

You understand that this burning feeling, this sense of nothing, drives me to meet and talk to more entrepreneurs. I met with a startup just now, I met with a startup late last night, I met with four or five yesterday, and I'm meeting with an average of three or five startups a day, and reading about ten startup reports.

CE: I heard that entrepreneurs frequent your home?

Xu Xiaoping: I have a homeoffice, my wife is not next to me, otherwise she will collapse, opening a million dollars. As an investor, the most important thing is to invest in good projects, invest in projects with a high rate of return. As for what has this investor done for society? For example, a piece of paper TS, two pieces of paper PSA, SPA, or our encouragement to entrepreneurs, etc., are all by-products.

Where is the next unicorn?

CE: You seem to have talked about wanting to find an investment criteria with a market capitalization of over $100 billion. Now do you think if there is such an opportunity down the road, what area might it be in? Where are the unicorns?

Xu Xiaoping: I have spoken similar words, the biggest dream of investors lies in investing in a BAT, investing in a millet. Every project we invest in, I think it is a unicorn, I do not dare to say that every project has a 100 billion dollar possibility, every project in my investment, I think it should be the possibility of 1 billion dollars, otherwise it will not be invested. So what is the significance of this dream? Its significance lies in the fact that every entrepreneur comes here, and I use money to give him proof, and I use money to endorse him, saying that this is a billion dollar dream. Angel investors are the check signers of the entrepreneurial Chinese dream. The entrepreneurial Chinese dream, the philanthropic Chinese dream, and the educational Chinese dream, the environmental Chinese dream. Each of these projects I think is a billion dollar project.

But in the field of artificial intelligence, there is no doubt (I am very optimistic). I think AI itself is an aggregator of various disciplines, such as big data, computer vision, and we have a lot of investment in all of these areas. For example, there is a company in Guangzhou who installed an anti-theft system in Walmart, and in one month it reduced theft losses by an order of magnitude, and it didn't require anyone to intervene. Imagine this kind of thing installed in shopping malls all over the world, how great a contribution would this make to shopping malls? The $100 billion thing can be a wild dream, but $1 billion is a dream that every entrepreneur can realize.

Today's entrepreneurs, in fact, the most important two points, the first you have to be the solution to the problem, the second you have to be a participant in solving the problem, you have to be a participant in the 'leader', or let's say a little bit better, a little bit more humane, you have to be a masseur of the pain, your fingers must be in the pain on the massage, you must be in this masseur, it has to be the head.

I'm going to go to Taizhou to do a speech, tell people there how I started my business in New Oriental, my pain point. My pain point is no money, to solve the pain of no money, teach. What was my pain point when I started Zhenge Foundation? I had money and nothing to do, also quite painful, and a large number of students, something to do but no money, is also a pain point. The combination of the two pain points is joy, negative and positive. The combination of the two pain points is good.

CE: You also mentioned that things that can revolutionize human life technologically may be more attractive to venture capitalists. Maybe the first five years of the business model is more sought after, whether it is B2C, or O2O, etc. Now, in everyone's impression, this kind of pure business model innovation, this kind of business model innovation based on the Internet has reached a bottleneck? Do you value the business model more now, or the technological innovation?

Xu Xiaoping: I totally agree with this point of view. In fact, the entire Internet ecosystem has been three kingdoms, the powers have been established today, you have to rely purely on the model to innovate, it is more and more difficult. You have to have the kind of innovation that the great powers would perish themselves if they did. For example, now online education 51talk went public, is an epoch-making event, although the general public has not been too much cheering. And New Oriental, Scholastic will have a hard time doing that. Because the bigger they get online, the more their offline teachers feel that they are clearly stealing their jobs. It's important to do a self-revolutionary innovation, and Kodak is the classic case.

Just rely on the model is probably not work, have to use a new level of technology, new ideas, new methods. For example, today's headlines, today's headlines in the rise, in fact, sohu client users over 100 million, phoenix client, news client is cheering, today's headlines will be completely subverted, because it is completely completely different kind of mode, technology, concept, I think it is the concept of a complete subversion. It's getting harder and harder to innovate on just one model or whatever. And hard tech startups are getting more and more, there are more and more world-class tech startups in China, and it's a fact that goes without saying today. For this kind of top hard technology entrepreneurship, BAT only buy the part, not that I want to make a product to destroy you.

But, for example, when the Internet was made high-tech, and now no one thinks the Internet is high-tech, IT only. And now the artificial intelligence big data, computer vision, these things, once the giant formed, it will bring a new round of model innovation.

My judgment is that the era of model innovation based on the Internet and mobile Internet may have passed, and based on artificial intelligence these hard technologies, AR, VR, these things, this era may have arrived. Once I discussed a pure proposition with Cai Wensheng, saying how to subvert WeChat. In fact, WeChat can not be subverted, as if only smart phones can be subverted functional machines. So how can you subvert WeChat, must be out of the dimension of WeChat, not a faster, better and more beautiful application interface, never. Rather, it is a completely different technology platform that can subvert the giant, which is often slow to respond to new technologies that can shake it.

CE: How many projects in AI have you invested in this year?

Xu Xiaoping: We have invested very much in this area. We invested in a project yesterday, which is a big data application made by two top Stanford professors, genius-level PhDs, to help BAT-level companies do services. The emergence of this kind of thing, Ma Yun can only look at the ocean, for this kind of technology, I will only have to take off my hat. We want to invest in this kind of investment, so the enterprise is our worship of the enterprise.