Ten ways for startups to die, which are very valuable for start-ups

Since its establishment, Fortune Ventures has invested more than 13 billion yuan, reviewed more than one million companies, conducted due diligence on more than 10,000 companies, successfully invested in more than 350 companies, and eventually listed 53 companies.

This sample is large enough to include both successful and failed cases. Through this sample data, we have summarized ten ways that startups die, which are very valuable for reference.

The first type: The founder is not good

There is an old Chinese saying that goes, "Appearance is determined by the heart." We created a graph of successful entrepreneurs in the Dachen Group, looked at it over and over again, every day, and constantly revised the algorithm. Finally, we concluded that successful entrepreneurs all have the following qualities:

First, be like Tang Seng. An entrepreneur must be determined. Even if everyone is shaken and thinks there is no future, he is still determined. He has a lofty goal, is single-minded, and moves forward courageously, regardless of the noise.

Second, I am like Liu Bang. Modern business competition is very fierce. You can only run a small business by yourself. If you want to achieve success, you must have a team of partners. How to form a team of partners? Do you have the ability to train partners? Are others willing to follow you? These are all very important.

Third, emotional stability. Successful entrepreneurs are calm and composed. It is rare to see their mood swings. It is comfortable to be in touch with them. Men's hearts are expanded by more grievances. Entrepreneurs face many grievances, a lot of pressure, and a lot of messes every day. If they do not have this quality, they will definitely have emotional fluctuations and will definitely not be able to face them. They will fail long ago. Entrepreneurship is anti-human. Why is it more difficult for female entrepreneurs to succeed? Because women are closer to the essence of human nature and are more emotional, so it is difficult for them to become successful entrepreneurs.

Fourth, long-term success depends on character. Character is very important. Successful entrepreneurs, true entrepreneurs, must have good character. Really good entrepreneurs are low-key, simple, and modest. They are low-key on the outside, but very strong on the inside. Basically, they do what they say, and their actions are always better than their words.

The second type: lack of focus on business

From a business perspective, we sent a questionnaire to Dachen’s business partners, asking them what the common characteristics of their business have been over the years of investment. The first answer in the questionnaire was focus.

We can look at the three most successful cases of the Dachen Group: Focus Media, Wangsu Technology and Aier Eye Hospital.

Aier Eye Hospital has a market value of 36 billion yuan and has opened more than 200 hospitals. It is the only private hospital that has gone public through an IPO. In theory, it can do many other specialties, such as dentistry and cardiology. Many people asked it to do business, and many local governments offered it some state-owned hospitals at very low prices. We discussed it over and over again, and finally decided not to do it, and to choose to only do ophthalmology. Because although Aier Eye Hospital has become so big, it only occupies less than 10% of the Chinese ophthalmology market. The Chinese market is so big that it is good enough to do this well. There is still huge room for ophthalmology. Because it is very focused, the stock has never fallen and has been moving forward.

Since Wangsu Technology went public, its market value has increased 30 times, and now it is 50 billion, and at its peak it was 60 billion. We could not imagine this company back then, as it was just a very small company, or even a very ordinary company. It has been focusing on one business for so many years, and has made a profit of almost 1 billion. When we invested, the profit was only about 30 million, and it has grown so much. But it still focused on this one business and made it bigger and stronger.

When Focus Media went public in the United States, Jiang Nanchun acquired dozens of companies and entered countless industries. What was the final result? He lost his main business and his market value was in a mess. In the end, he cut off all those dozens of acquired companies and returned to his core building advertising. Now it seems to be very correct, with a profit of 3 billion and still growing, and a market value of more than 100 billion.

The third type: Failure to seize opportunities in the capital market

Successful entrepreneurs have firmly seized the opportunities in China's capital market.

Many institutions say how many unicorns they have invested in with a valuation of more than $1 billion, but Dachen has never mentioned that. Dachen actually has 34 companies with a current valuation of more than $1 billion. Our valuation is liquid and realizable, and is real, not a fictitious valuation. Why? Because the Chinese capital market has given us great opportunities.

Many people criticize China's capital market, but my conclusion is that China's current securities market and capital market are the best listing markets for small and medium-sized enterprises. The valuation of our small and medium-sized enterprises is the highest in the world; the market liquidity of our small and medium-sized enterprises after listing is the best in the world; and the number of our small and medium-sized enterprises listed each year is the highest in the world.

Many so-called unicorn companies cannot be listed overseas, and their valuations after listing may even be one-tenth of what they are now. Our companies have seized the Chinese capital market and have grown rapidly through it.

There were two companies doing the same business. One was Wangsu Technology. At the time, Wangsu ranked second in the market. The market once thought that Wangsu was not going to do well. Was our company doomed? There were a lot of rumors.

But after we went public, we kept moving forward because the Chinese market was so strong and had very high valuations. We made good use of the market and did a good job with our equity incentives and private placements. After so many years of development, NetEase's market value is now almost 100 times that of another company. This shows that choice is more important than hard work.

The fourth type: no innovation ability

The common trait of successful entrepreneurs is first of all the ability to innovate. If your company is no different from other peers and is homogeneous, it will definitely not be able to survive, will definitely engage in price wars, and will definitely not make money.

Differentiation may be in technology, business model, or management, but it must be different from others.

Some entrepreneurs say that they are in a new industry and must continue to innovate, but how can we innovate in a traditional industry? We can’t innovate!

We invested in a chicken farm and are about to go public. This should be the most traditional industry! The boss raises chickens and thinks every day about how to make an extra penny from the chickens.

The boss thinks that our chicken wings are sold at a high price, while chicken bones are sold as cheap as garbage, so he must sell the chicken bones at a high price.

No one wanted chicken bones, what to do? He developed a product called bone-in-meat, turning chicken bones into a product, and recommended this product to KFC and McDonald's, telling them that they could sell chicken bones this way. Later, his chicken bones were sold at a higher price than chicken meat. Through innovation, he maximized the value of a chicken.