Shao Yibo, founder of eBay, used to be the person Jack Ma looked up to, in the words of the Internet. In July 2003, eBay, once the largest auction site in China, was sold to eBay for 5 million. Shao Yibo co-founded Jingwei with Zhang Ying in 2007 and is now the founding managing partner of Matrix Partners China.
The following is to share a paragraph of Shao Yibo's questions and insights on entrepreneurship, hoping to help entrepreneurs in the confusion encountered in the process of starting a business.
Questions and answers about Entrepreneurship by Shao Yibo, founder of eBay
Q: what problems do you need to pay attention to when setting up a team at the beginning of a business?
A: if your business partner is married, you need to know his family's attitude towards his business.
When you go to build a team, you should first start with your good friends. There are many variables in starting a business, and there may be a lot of conflicts of interest. If you are good friends, you can get to know each other and trust each other at many critical moments, which is very important for a startup team. If the person you are looking for is not a good friend, it does not mean that it is impossible to start a business together, but I think it is much more likely to fall out.
We had such a case in which two entrepreneurs asked us for financing. In fact, they had just met each other, and they broke down in the process of talking to us. But this is good, and it will be even worse if you do it and then break it. So if there are two people, one is you give him a job, the other is you are his good friend, let me choose, I will choose the latter, not the former.
There is another problem to pay attention to in early start-up. If a person receives a lot of money from the company, it is not necessarily a bad thing or a good thing, but it is at least a wake-up call. Whether this person will really tighten his belt and the company through the most difficult years, whether he has the determination, you need to know what this person's starting point is.
In addition, my previous entrepreneurial experience tells me that unmarried entrepreneurs are more secure than married entrepreneurs. Why? Because when you get married, there will be different responsibilities on you. When you go to find a business partner, if he is already married, you need to know what the person's wife thinks of his start-up, whether she fully supports him, and whether there is financial pressure on him.
If the person you are looking for is not married, he will be under much less pressure. He can work late every day and does not have to go home for dinner. I had a fiancee before 2001, but she is in Taiwan. I am alone in Shanghai. I can work late every day, which is no problem for me. But after getting married, I am also a henpecked person, so I always have to go home for dinner for at least three or four days in almost five working days a week, and sometimes I have to have lunch with my wife. this is a very distracting thing for some early entrepreneurs.
You can learn from this. If your business partner is married, you need to know the attitude of his family towards his business. Is your partner willing to work 18 hours? let's make it clear that you can be less and I can be more. After we all know, I think there will be fewer quarrels in the future.
Q: should entrepreneurs contact their ideal VC or angel in the first place?
A: we want to get in touch with entrepreneurs as soon as possible.
That's a good question. First of all, let's talk about my own experience. I majored in physics. When I graduated from college, a consulting company came to me. It was a good company, but it didn't reach the level of a top company. The company came to me and wanted me to try the job, so I went, and the result was miserable because I was inexperienced and the other party didn't want me at all. However, because of this experience, I went to McKinsey and BCG for interviews, and the results passed. I later thought that if I were the first to go to a top company like McKinsey for an interview, I would probably fail in the end.
From the investor's point of view, we will want to know the entrepreneur as soon as possible, especially the early project is to see this person, and this person can not meet with this person to decide things, we hope to meet with this person many times, communicate and understand together before making a decision. If you don't give us too much time, we will get it wrong, so we hope to get in touch with entrepreneurs as soon as possible.
But I think we have a little confidence. We still have the ability to see what the nature of this person is, and which are too nervous to speak. We can still see that, especially after a few contacts, we will separate the parts that we thought he was too nervous to express at first.
Finding an investment is about the same as getting married. It is true. Very often, it is not necessary to say that one investor is suitable for all people. Most of the time, we are not looking at a company, but looking at the people you are talking to in this company. Maybe that's how those two or three people make you feel.
In the family, I often tell my son that you go to find a girlfriend more often, you will know what kind of girl you like when you get married, and don't get married when you see your first girlfriend, so you are likely to make the wrong decision. Know what kind of people you like, in order to make better decisions, of course, do not promiscuous, looking for investment is the same.
Q: how do entrepreneurs judge how much money they want to raise?
A: the money you raise must be confident that you will reach the next milestone.
Some people will say that the larger the amount of financing, the better, while others will say that I ask for no more than 25% dilution and 33% dilution. I don't think these methods are reliable. Maybe you can think about them from these two angles:
First, how much money do I need at least for the next 12 months? Why 12 months? Because financing is a very time-consuming thing, no matter how fast or whatever VC tells you, it will take you a lot of time. When I was working on eBay, I had about 1ap4 financing time, and I think I was quite capable of financing at that time, so I also spent 1ap4 financing time, which is terrible, so you should be prepared.
Second, think from the perspective of the valuation of the company. We all hope that the value of our company will increase compared with the previous round, otherwise it will be difficult for investors to come in in the next round, so how can we improve the valuation of the company? You can set some milestones, for example, the first milestone is the product launch; the second milestone is the user feedback after the product launch; the third milestone is the emergence of a trend of significant growth in users; the fourth milestone is that you can receive money; the fifth milestone may be that there is a clear trend in the money you receive; the sixth milestone is profitable.
Of course, the milestone of each enterprise is different, but the money you raise must be confident that you can reach the next milestone. Avoid running out of money before the product is made. In this way, investors can see the increase in the value of the company.
Q: how to coordinate external resources to develop themselves in the early stage of starting a business? Is there a trick in this?
A: there is really no knack for starting a business.
In fact, there is no secret, but to cry for help from my father and mother. This is what entrepreneurs can do. Harvard Business School has a definition of entrepreneurship, not enough resources, not enough time to do the market, this is entrepreneurship.
When I first got back from eBay, I didn't have a technician. I studied computer, and I had a bachelor's degree related to computer, but I couldn't program. At this time, I hired two part-time people to do it. They are two people from the IT system of Shanghai Electric Power Bureau, because very few people built a website in 1999. Later, I wanted to give them a 2% stake, but I was refused by both of them. In the end, they didn't insist on working with me, so now they regret it.
When eBay launched in August 1999, there were still no full-time technicians, and these two part-time technicians were holding on. At that time, I went to ask for a CTO, but he refused to do it and didn't come to us. After the website went online, the traffic was good, and it was down about once or twice a day. I had no choice but to find a master to help me solve this problem. Finally, I found my brother in middle school to help me.
There is really no knack for starting a business. Do you have the ability to ask him to help you when you don't give him a lot of benefits? these are not only the things that entrepreneurs have to experience, but also a basic ability that entrepreneurs must have.
Q: is there any good way for entrepreneurs to get access to investors and get feedback from investors?
A: if you want to send us an email, please be concise and clear.
I think everyone knows that there is only a 6-person gap between each person, which means that if I pass through 6 people, I can know all the people in the world, so I don't believe that entrepreneurs can't find us. Secondly, we can also recommend projects to us through our friends, and we will take the time to look at such recommendations.
Of course, if you do not introduce it at all, we will read it, but we may not necessarily reply, because there are too many. I would like to give you a piece of advice here. If you want to send us an email, please be concise and clear. Explain clearly how this product can solve users' problems, or explain clearly your background, why you are suitable for doing this, and where you are particularly strong, not to say that this project is the largest xxx in history. You must read it. If you want to write something like this, don't write it.
Q: what do unreliable investors look like?
A: in fact, the basic requirement for angel investors is that investors don't care about anything, listen to entrepreneurs completely, and don't have a lot of scruples.
He will vote for his competitors, will dictate the future of the company, and he has a problem with the next round of investment. In fact, the basic requirement for angel investors is that investors do not care about anything, completely listen to entrepreneurs, do not have a lot of scruples. I give you the money, I don't care, but when the entrepreneur needs it most, the investor can show up in time and help the entrepreneur tide over the difficulties.
Another category of unreliable investors is those who are not good at saying no. With my own entrepreneurial experience, I very much hope that an investor will simply say no to me, instead of being stuck in the manger and dragging me for months before finally saying no. It's impossible to hit entrepreneurs directly, but it's also a responsible behavior. What I hated most when I raised money was that he didn't have much interest at all. He also said that when I had more data, I would ask again in two weeks, saying that I was still watching, so I kept procrastinating.
In fact, as far as investors are concerned, he is actually unwilling to say no, which is not good for him. Because he says no, the entrepreneur is unhappy, and he may hold a grudge if he succeeds in the future. I won't say procrastinate all the time. Maybe he's getting better, and he can keep watching.
Some short-sighted investment funds will drag on for a longer time and will not tell you clearly. We will try our best to say that if we decide that we cannot do it, we will quickly say no and give you some advice in the hope that it will be useful to you.
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