There is no doubt that Meituan is a strange company. It has entered many seemingly unrelated fields, but in the fields where these giants are everywhere, it always comes from behind.
Meituan was established on 20 10 and listed in Hong Kong on September 20 18, with a market value of 5 10 billion US dollars, surpassing Xiaomi and JD.COM, becoming the fourth largest company after BAT.
What is even more rare is that for most enterprises, destruction or subversion or innovation is only a one-time accident. But after repeated tossing, the latter business will always replace the original main business.
Christensen said in The Entrepreneur's Answer that the top CEO has a long-term responsibility: to lead the development of a process that we call a destructive innovation engine, through which the growth business can be successfully launched again and again.
This book was written around 2000, when he said that no enterprise had built an engine of destructive innovation that would never go out.
I think that in the field of Internet in China, Meituan is the third company to establish a destructive innovation engine after Ali and Tencent, which is the core competitiveness of Meituan.
This article is not one of the articles that analyze the Mei Tuan, such as the scattered flowers of the goddess. Telling the story of meituan is not my purpose. What I want to do is to use falsehood to correct the truth. Taking Meituan as an example, I put forward a core point of business innovation and answered a question: Can an enterprise achieve innovation from the inside out again and again after reaching a certain scale?
Moritz, the founder of Sequoia Capital, once said: "A company's genes were determined as early as its first1August. After that, the company can't have any big changes. If the DNA is correct, it is a piece of gold. If it is wrong, it is basically finished. "
Although this sentence is exaggerated, it is important to describe its early importance. In which business was Meituan's style of play formed? As the first business of Meituan, group buying triggered a thousand-group war, which was almost the worst in China's internet field. Therefore, if you want to know the core competitiveness of Meituan, you should start from that time.
In the Thousand Regiments War, the US Mission did not do the earliest, let alone the most financing. Why did it win? I use three key words to answer this question: innovation, strategy and competition.
Wang Xing is not an interested entrepreneur. In 2005, after his first entrepreneurial project was launched on the campus network, he tried nearly 10 directions, with an average of 1 projects every two months, and finally decided to go online on campus.
The same is true for group buying. When the 20 10 Meituan was founded, Wang Xing was not a well-known figure in the Internet industry. His first consideration is how to stagger with Ali. This shows that before this battle, he had already thought about finding his own position different from that of a giant. The entrepreneurial choice under this thinking is a key step for his success.
Why choose group buying? Wang Huiwen, co-founder of Meituan, discovered a theory, namely AB classification. Experienced people will feel sober after listening to it:
"The whole Internet can actually be divided into two categories, one is online supply and performance, such as Tencent and Baidu; The other category is under the supply and performance line, such as Ali. "
If you want to work in the e-commerce field where Ali exists, people usually think of subdividing in vertical industries. However, the perspective of the US Mission is different. He believes that e-commerce can be subdivided into physical e-commerce and life service e-commerce. Ali only does physical e-commerce, not life service e-commerce. This is a unique perspective!
Looking at market opportunities from this perspective, I think it is a major breakthrough. It turned out that where the e-commerce giant monopolized the sky, he found another way, pointing out that there is still a big field for life service e-commerce.
Life service is a non-standard commodity and needs refined operation. It is hard work and dirty work with extremely low gross profit margin. It is often a business that the giants don't like, but in fact the market is big enough. Wang Xing has a good grasp of macro data. He knows that 20 12 is the last year when the output value of the tertiary industry is less than that of the secondary industry, and Meituan happens to be doing the tertiary industry, which is the e-commerce of the service industry.
The field of life service can cross, one is the service of living in different places, such as Ctrip; The other is local life service. The US Mission focused its main battlefield on local life services.
The most important reason why Meituan came from behind in the war with Ctrip is precisely because of this horizontal knife. Ctrip's users are mainly business travelers who go to different places, while Meituan sees that nearly half of them live locally, especially in low-end cities and hotels. This positioning avoids competitors such as Ctrip, Qunar and E Long. In the past two years since entering the wine travel industry, the number of days spent in Meituan wine travel has been equal to the sum of all departments of Ctrip.
Choosing dislocation competition in the early stage of entrepreneurship is the key point for the survival and expansion of the US Mission. Facts have also proved that most websites that do group buying in kind are not killed by the US Mission, but dragged to death by Taobao.
Looking for local living services in a red sea to buy this blue ocean and stagger the competition with giants is called innovation-driven growth strategy.
After the innovative positioning, let's talk about its landing strategy.
100 years ago, Schumpeter defined innovation methodology as: the recombination of basic elements in the original economic structure. There are two key steps. The first step is to eliminate the basic elements with small enough granularity from the economy. Second, combine them in different ways. The first step in formulating a strategy is to find the most critical "one", that is, the meta-starting point, and synthesize all other elements around "one". There must be one and only one meta starting point.
According to this methodology, e-commerce has three basic elements: demand side, supply side and connection side, which can be expressed as people, goods and fields respectively.
Of course, Meituan and Ali will eventually occupy the market, traffic and super platform, but the market is the result and needs to be established from both people and goods. The great difference between Meituan and Ali is that the "that" they found is different.
What is Ali's "one"? Businessman. This is written in its mission-"Let there be no difficult business in the world". Why did Ali succeed? Its business model has always revolved around its mission, and all organizations that support this strategy have revolved around it.
The "one" of Meituan is the consumer, which is its strategic breakthrough. In its mission, it said, "We help people eat better and live better", and Wang Xing himself said, "Customers are divided into two ends: consumers and businesses. Both ends are very important, so we should take good care of them. If there is a conflict between the two, choose to put consumers first. If there are no consumers, businesses will not use us. "
In the book "Good Strategy, Bad Strategy", the sentence that has the greatest influence on me is this: "Strategy is leverage. What is a lever? Find a fulcrum, and after stretching, press all the limited resources here through leverage to solve the core problem. "
After the "consumer first" strategy of Meituan is determined, it also means that other temptations are relatively easy to break.
20 1 1 At the craziest time of the Qianmeng War, all families were engaged in advertising wars. Tuanbao Com invested 550 million in advertising and 200 million in glutinous rice. Public comments are 300-400 million advertising fees. In contrast, the US Mission A only has120,000 US dollars.
If you want to advertise, you are afraid of having no money, and if you don't advertise, you are afraid of death. At that time, when Wang Xing hesitated to follow up this advertisement, he asked Guan, the former chief operating officer of Alibaba. Guan gave him a key opinion: "Business advertising, that is, B-side advertising is useless, and there are more advertisements on the business side, which is not as good as the offline team with execution; For the consumer side, Ali's experience is that online advertising is far more cost-effective than offline. "
These two sentences are to go back to the essence of thinking. If consumers are the first, then online advertising is good. If the business is second, then pushing the team is better than advertising.
By 20 14, there were only 176 group buying websites in China, with a mortality rate of 96.5%, avoiding unnecessary burning of money, and the cash flow of the US delegation was very good in the cold winter.
A good model has a feature called enhanced cycle, and its sentence pattern is "the more, the more". We can also call it the growth flywheel. Bilateral market is a good growth flywheel sentence. The more consumers there are, the more businesses there are, and the more businesses there are, the more consumers there are. But remember, there is a threshold effect, "You must exceed a certain threshold to enter a positive cycle, and you must invest, invest, invest before it reaches the threshold."
Here comes the next question. Generally speaking, the flywheel effect has at least three wheels, while the engine generally has only one wheel. If you put all your money into three wheels on average, so that each wheel will increase by 30%, it is better to put all your resources into one wheel and make it turn at 100%. As long as one wheel can turn, it can drive the other.
Because the initial starting point of Meituan chose consumers, its big growth flywheel is consumers first. So, what does Meituan use to promote the growth flywheel of "consumer first"?
Specifically, it is three highs and three lows: high technology and low gross profit-> high efficiency and low cost-> high quality and low price. That is, consumers always like low price and high quality->; This requires operators to have high efficiency and low cost. How to improve efficiency? ——& gt； The answer is high technology. So far, the research and development expenses of Meituan are more than 10% of the income.
Looking back on the key elements of the success of Meituan group purchase, on the demand side, we should seize the consumer first and adopt the tactics of doing our best to make the mobile Internet. The supply side pays attention to business second, and the tactical point is to push the team's three highs and three lows; Third, the tactics used are high technology. And these things are basically when it thinks clearly at 20 10, 20 1 1, 20 12.
Strategy first, competition last. How did Wang Xing fight business wars? There are three key words in this part: grasping the mass market, dislocation competition and low-end subversion.
In the group buying war, the real long-term competitor of Meituan is public comment. Public comment was established in 2003. In the early days, it had more financing than Meituan, and it occupied a great advantage in traffic, especially in first-tier cities, and its market share always occupied the first place.
If 350 prefecture-level cities in China are divided into five levels of SABCD, S is a super city in the north, Guangzhou and Shenzhen; AB is the provincial capital and CD is the second, third and fourth tier city, so which region should the limited resources be invested in? The strategy of the US Mission is to choose the priority flank to enter AB City.
Gan, the former vice president of Alibaba's sales, joined the US Mission as a new member and made a decision, only biting the top three cities in S, and never fighting for the first place, because the money from playing such a city can be used to play many AB cities. When all the families put their battlefields in a super city, Meituan gained an unquestionable lead in all AB cities within half a year.
And the result? 20 1 1, the US Mission came second, 20 12, the US Mission came first, and finally won the war.
20 15, 10, meituan and public comment merged. After the merger, the market share reached 82%, and the Thousand Regiments War ended.
The story is not over yet. Thousands of regiments were killed everywhere, but absurdly, the day when the war ended was also the day when the group buying industry disappeared. In 20 14, the whole group-buying website met the limit point, and in 20 15, Meituan. Com's own group buying business has also met the limit. What should we do at this time?
The practice of the US Mission is to upgrade. Upgrade the group purchase business to store-arrival business:
1. Supply-side upgrade: It turned out that consumers went to merchants to spend money, and Meituan upgraded, helping merchants to do Internet services, that is, doing 2B services from 2C services, such as installing code scanning discount services in stores, which became a new O2O business, while the group buying business itself was declining. By 20 15, as a business started by Meituan, group buying didn't even have a name in its organizational chart, and the whole department was upgraded to a store-to-store business group.
2. Demand-side fractal: the business scope of the store has been expanding, and hotels, tourism and other businesses have been added to make up for the decline of the original group buying business.
This upgrade was very effective, but soon after it was completed, the store-to-store business reached the ceiling of growth again. At this time, the US Mission is faced with the problem of "how to do it".
Win "Hungry" and fight back with destructive innovation by independent small teams.
In The Innovator's Dilemma, Christensen proposed that there are three ways for enterprises to face new business: one is to acquire a company with new processes and values; Second, transform the company to adapt to new processes and values, just as Microsoft did; Third, set up an independent small organization, run a new business line and a closed loop in an independent group organization, and find a new growth engine.
Wang Xing chose the last one, using an independent small team to find the possibility of destructive innovation. These small independent teams grow up in the wasteland, and the attitude of the company is to give you complete independence. If you do well, I will invest more resources in you. This is another form of exploration and realization. Wine travel and film business have been successful, and take-out has become the second largest channel business.
After the internal verification of this model is feasible, it needs to invest huge sums of money to start competition. At that time, the main competitor of Meituan takeaway was hungry. Hungry, founded in 2009, is the earliest take-away team in China. 20 13 When Meituan first launched in June, Hungry was the only company with a market share of over 50%.
From a static point of view, is this war impossible? At that time, the US Mission played like this:
Hungry? At that time, it was positioned as a college student market, and Baidu was positioned as an urban white-collar worker. These two markets are completely different. The difference is that the market for college students is large, but the unit price of white-collar customers is high. Meituan's takeaway found that the white-collar market has yet to be educated, but the campus market has been almost educated by Hungry. And in the campus market, there is no exclusive share if you are hungry. So they made a strategy: stabilize the existing white-collar market and put most of their energy into the campus.
After staggering Taodian and Baidu, how can Meituan go to war with Hungry, which has occupied 50% of the campus market? The answer is still misplaced competition.
Hungry? At that time, there was a serious misjudgment that the opportunities outside the first-tier cities were small and the market was immature. Meituan's judgment is different: although the first-tier cities are large, they account for at most 30% of the total market share, and the greater opportunities are in second-and third-tier cities. What's more, hungry has been successfully verified in first-tier cities, and Meituan should quickly push this model to the whole country.
After seeing the bigger chessboard, the US group without the first-Mover advantage quickly competed around the enclosure. In 20 14 years, they can open a new city in an average of 1.5 days. This push speed is the core advantage that Meituan has established since the era of group buying.
In the summer vacation of 20 14, they rented an auditorium and several floors of dormitory in geely university, recruited 1500 people from all over the country, trained for one month, and sent them to 100 cities for ground promotion. In August, when I was hungry, I found that this tactic began to follow up, but it was too late. Because we are hungry, there are only 300 people, and we have not fought a large-scale battle and have no underground experience, so the original operation rhythm and inertia have been disrupted.
By the end of June, 2065438+2004, Meituan take-out has occupied the first place in the number of cities (60: 40); In terms of performance, the performance ratio between Meituan and Hungry is about 2:3.
At the end of 20 14, meituan basically established its victory in the campus market, then began to fight back at the low end, and moved to the white-collar market at the beginning of 20 15. If the most important key factor in the campus market is demand, then the most important factor in the white-collar market is the ability to perform. Time and stability of each delivery are very important.
After learning about this matter, in 20 15, Meituan made a major decision, which meant a heavy investment, that is, the self-built rider distribution system, which established a very big barrier for Meituan and the order density reached a new high.
Behind the visible rider is invisible technology. Meituan Takeaway has developed a take-away super-brain system, the full name of which is "O2O real-time logistics and distribution intelligent scheduling system", which intelligently schedules according to different distribution scenarios, so that orders and riders can be intelligently matched, and the transportation capacity can be kept in the best state.
The description of the technical team has such a data: "Under the premise of the steady increase of the rider's salary, the average distribution cost has decreased by more than 20%." The gross profit of the food and beverage take-away industry is low, mainly due to the high cost of riders, accounting for 90% of the whole cost structure. However, the technical support of Meituan still brings relative operational efficiency and cost advantages.
In this way, Meituan's take-away business has successfully surpassed the two core levels-externally, the take-away business has surpassed the hungry, and internally, it has surpassed the group purchase and store arrival business, accounting for 62% of its total business income in 20 17 years.
From group buying to take-away, behind the complex business, why can Meituan derive and control so many businesses? Back to the starting point and essence, there is only one thing to learn in this case, that is, fractal innovation engine.
How to build a fractal innovation engine, in short, there are four steps:
1. The first step is to strengthen the first curve and consolidate its main business channels by upgrading the supply-side technology.
2. After the main channel of the first curve is compacted, the second step, namely fractal exploration, must be carried out to explore various emerging services on the basis of the original demand side flow. It is usually done by a small independent team in a closed loop.
3. Once the business can be completed in a closed loop in a small scope, invest enough resources to compete with real opponents and form a second curve. At this time, the average CEO usually leaves resources in the main business, but the top CEO will make a completely different choice-put all resources on the second curve.
At this time, the best way is destructive innovation, which Christensen said is subversive innovation-finding a factor at ten times the speed and competing with the leader with low-end subversion.
4. After the subversion is completed, turn the second curve into its own new main channel. At this time, the company mainly has two main waterways, the original first bend and the new second bend. At this time, the company must be able to break the discontinuity in spirit and organizational business cutting in Shanghai.
The destructive innovation engine above has two key nodes, and entrepreneurs always forget the second one:
1, starting from the demand side, Volkswagen just needs high frequency and cuts into the blank market.
2. But in the final analysis, it is the upgrading of supply-side technical capabilities that tames the moat. In the past decade, we have seen many innovative companies seize the opportunities of traffic and market, but why don't they have the stamina?
Why didn't a moat form? That is to say, the upgrading of technical capabilities on the supply side has not yet been completed.
Only after the demand-side market enters and the supply-side capacity upgrade is completed can this destructive growth engine be said to be completed.
This theory may sound empty, but it can be guaranteed that if you use this model to reorganize the business of Meituan, your understanding will be much clearer. People usually use "one horizontal and one vertical" to describe the business of Meituan. "One vertical" refers to all its business related to eating, and "one horizontal" refers to other business except eating.
But this expression is too static. I think a better expression is fractal innovation:
1, the first curve of Meituan is its main business when it was established-group buying.
2. The group purchase business was later upgraded to the store-to-store business, the main channel was consolidated, and the Meituan upgraded the moat.
3. Before the group buying business reached its limit, Meituan began to explore fractal on the demand side. In those years, they should have done dozens or even hundreds of fractal explorations. The more successful ones, including movie tickets, takeout and wine tours, are all supplied to other business lines from the traffic of the first curve.
In many explorations, takeaway has grown into its second curve. Next, the take-away business continued to consolidate, that is, the supply-side upgrade mentioned above, including platform 600,000 riders, catering ERP, platform, 2B, supply chain and so on. Takeaway business has been consolidated as the main channel of home business.
On the second curve of takeaway, Meituan has started the fractal of new business, such as cycling, online car rental and so on.
The latest structure of Meituan is as follows:
The original main business of Meituan was group buying, hotels and tourism, collectively referred to as shop arrival business. This is the first curve, and the second curve is the home business triggered by takeaway. The second business in its prospectus is called new business and others.
By April 30th, 20 18, the first curve (arrival, hotel and tourism business) only accounted for 27%, and the second curve accounted for 6 1%. When did this change happen? Take-away business accounted for only 4.3% in 20 15, and reached 62% in 20 17. In other words, in the past two years, Meituan has completed the handover of the first and second curves and improved its internal capabilities.
To sum up, I think Meituan is the third company in China's Internet field to establish a destructive innovation engine after Ali and Tencent, which is the core competitiveness of Meituan.
A one-off event that destroys innovative knowledge unless ....
We can use the second curve theory to interpret the past of Meituan. Similarly, this theory can also be used to predict its future. Where is the danger of the US Mission? What is its next third curve?
I think there are two dangers:
First, its growth engine is single, and the current growth engine is still based on consumption and traffic;
Second, its competitors are upgrading, just like playing monsters. After the battle, all the big BOSS appeared, and it was another big battle.
The growth engine is very important. Apple's growth engines are hardware phones and iOS systems. Amazon has two e-commerce and AWS; Tencent has QQ, WeChat, payment and games. Ali has Taobao, Ant Financial, Alibaba Cloud and Rookie; Today's headlines include headlines, Tik Tok and semi-internationalization.
But looking back at Meituan, the engine of group buying has come to an end. The biggest traffic entrance of Meituan, from business income, traffic entrance to demand side, is take-away. In the past, its group purchase encountered a limit point, and future takeout will definitely encounter a limit point, and the more intense the competition. The more intense the approach, the faster the limit point will be met. So what if the new business curve does not rise before the take-away business meets the limit point?
As mentioned earlier, the disruptive innovation engine has two key nodes:
Node 1: Start from the demand side and find the mass, high-frequency, just-needed and blank market. Meituan has already done so.
Node 2: What really tames the moat is to improve the technical capacity of the supply side.
Therefore, only two suggestions are needed on the demand side: First, the take-away market will flourish; Recommendation 2: Find a new traffic portal on the demand side as soon as possible. There should be two criteria for the selection of new traffic portals on the demand side: one is life service, especially local life service; Standard 2, Volkswagen, high frequency, just needed.
Volkswagen, high frequency and just need also appear in its prospectus. Why? Because the new business needs to be a traffic portal, the total customer acquisition cost is low, and the value that can be created in the life value of users is high.
In line with these two standards, let's review again. Should the US delegation buy mobike or take a taxi online? The order volume of Meituan takeaway day is 2 1 10,000; Mobike's daily order volume is 25 million orders; The single amount of Didi taxi is 20 million per day. These are all in line with local life services. According to this standard, it is wrong not to do business. So, remember to ask Xin Xu, the founder of Capital Today, what do you think of the trip of the American delegation? Is it worth continuing to invest? Xin Xu's answer is similar to what I said just now, that is, the frequent business trips are just for business trips, and the US delegation is very suitable.
If the US Mission wants to break through the market value of 100 billion dollars and become a real first-line force, it must change its way in its own category. Besides finding the second curve on the demand side, we should also find the second and third growth engines on the supply side. Only when there are two growth engines can the company stabilize and become a top-level company.
Wang Huiwen gave a speech on March 20 17, entitled "Opportunities in the second half of the Internet are in the supply chain and 2B". He said that if the next wave of Internet in China wants to accelerate, an important direction is the innovation of supply chain and 2B industry. There is a sentence in Meituan's prospectus: "Meituan wants to build a data service system based on catering business". Isn't this catering cloud computing? Meituan invested in almost all information facilities used in restaurants, such as menu, location, cashier, SAAS, ERP and so on. This incident is likely to become the third curve of the US Mission.
Finally, talk about competition. Today, the opponent of Meituan has become Ali.
The competition between Ali and JD.COM, in a nutshell, is to do addition, you do logistics, and I will go outside to be a rookie and attack you. Can Ali crush the US Mission with the same addition? I used to be a physical e-commerce, and your US Mission is a local life service. Then the same local life service, I will give hungry and word-of-mouth support. Can you fight the US Mission?
What should come will come sooner or later. Xing, who came back from the dead, is the king after this war? I don't know, but there is no doubt that this war will be very interesting in the next two years.