Zhang Yida asked Zhang Lan to fly to Shanghai together to discuss cooperation with musical.ly founders Ma Jun and Yang Lu.
Zhang Yida and Zhang Lan met the two founders in a business incubator in Wujiaochang, the magical city.
Zhang Yida's arrival made them both extremely happy.
Last year the pair raised $250,000 in venture capital from a friend.
I formed a small team of 5 people and stayed in an incubator near Wujiaochang, Shanghai, and spent 6 months developing an educational video APP called "Cicada".
The angle of entry is that experts in various fields can record a short video of 3-5 minutes to teach a knowledge point.
This doomed product quickly cost more than 50% of the venture capital money.
Later, their team created the musical.ly APP, which was a hit domestically but not bad abroad. It received 500-1,000 downloads every day just after it was launched.
This data is not very good. With this project, the two of them met with more than 20 investors, but no one dared to invest.
The reason is that "no Chinese company has ever dared to say that it has challenged overseas markets and achieved success."
There are no benchmarking success stories, the data is not beautiful enough to convince investors, and the new musical.ly project is almost at a deadlock.
At the end of 2014, Cheetah CEO Fu Sheng teamed up with Luoji Thinking Platform to launch an entrepreneurial incubation platform called "Fu Sheng Team" with the purpose of helping young entrepreneurs and providing them with a full range of entrepreneurial services.
In desperation, Yang Lu also joined Team Fu Sheng, but was unlucky and was eliminated in the semifinals.
So the musical.ly project just kept holding on, holding on, and last month it slowly saw a turn for the better.
Musical.ly’s “data” has reached an inflection point, and its ranking in the Apple App Store has been rising steadily.
This month, in addition to investors from Team Fu Sheng contacting them, there are also several sources of capital that have extended an olive branch to them.
As a result, a "big fish" Zhang Yida came today.
Who is Zhang Yida?
Chairman of the “Decacorn” Ruixiang Jinke, founder of the “Unicorn” Huimin Bicycle, and Yimin Wangjin.
In addition to these three large companies, they also know that several companies such as Pate.com, Huinongdai, and Yimin Holdings are also quasi-unicorns.
This is an entrepreneurial tycoon, the God of Wealth, who appears with his own background music.
Yang Lu and Ma Jun looked at each other, and the joy in their eyes could no longer be contained.
I thought to myself, this is the end of our hardships for us brothers, we finally have a big brother to hug us.
After Zhang Lan entered the incubator, she looked around a few times and saw that everything except "small" was "small".
Was musical.ly, which Mr. Zhang admires so much, born in this entrepreneurial environment?
A small entrepreneurial team of just a few people is still working in an incubator, and I'm afraid they haven't even received financing!
After Yang Lu and Ma Jun invited Zhang Yida to visit the company, they took them to the conference room shared by several small companies in the incubator. After pouring them two cups of boiled water in paper cups, they said with a smile:
"Mr. Zhang, I made you laugh! Our environment is too simple and we did not provide good hospitality. Please forgive me!"
Zhang Yida shook his head and said with a smile: "Isn't this how all entrepreneurship happens? Ruixiang used to stay in the incubator of the Peking University Mass Entrepreneurship Center!
These are all trivial details, don’t worry about them.”
Yang Lu smiled and said nothing. He was already in his 40s and had accomplished nothing, yet he still had to humble himself in front of a 20-year-old young man.
Sometimes, God is so unfair!
However, Zhang Yida didn't put on any airs, which still made him quite fond of him.
Zhang Yida glanced at Yang Lu and thought to himself that among the startup companies he had invested in, he should be considered the oldest.
To be precise, Yang Lu is still a senior Internet entrepreneur. In 2000, he founded an intellectual property trading website and an online clothing customization website.
Luck is bad, so fate is misfortune.
I have started my business many times, but have never made any big splash.
Zhang Yida took a look at this person's information yesterday and found that he is also a very unscrupulous person.
In 2000, when piracy was rampant and people's wallets were thin, it was not surprising that intellectual property and clothing customization were a hit.
The concept is a bit too advanced, and it is not enough to be implemented now.
After chatting for a while, Zhang Yida returned to the topic and asked:
"Mr. Yang, Mr. Ma, as far as I know, musical.ly is currently ranked around 1,500 in the Apple App Store, right?"
Ma Jun and Yang Lu nodded. These are all data obtained through consultation, without any water content.
"What do you think of the future development of short videos?"
Zhang Yida wanted to compare the two. The ideal situation would be to acquire the company together with him. If he couldn't acquire it, he would still have to acquire more shares.
Zhang Yida remembered that in his previous life, in the past month or two, Fu Sheng invested 5 million yuan in musical.ly and took 30% of the shares.
Later, when DouShi acquired musical.ly for US$1 billion, Cheetah still held a little over 17% of the shares.
In two years, he made a huge profit of US$170 million!
The most important thing is that Zhang Yida must put in a nail to avoid being acquired by Kuaishou in the future.
In the previous life, Kuaishou also wanted to acquire musical.ly, but Toutiao had a deal with Cheetah PY and failed to buy it.
Toutiao participated in the Series B financing of Cheetah Mobile's subsidiary Live.me with US$50 million, and also acquired News Republic, a news aggregation platform owned by Cheetah Mobile, for a consideration of US$86.6 million.
With these two additions, Cheetah happily sold musical.ly to DouShi.
“Short videos will definitely become a hot field comparable to mainstream social applications in the future.
Overseas, Fastagram, Twitter, YouTube, and Snapchat are currently at their peak, but in the future there will definitely be a short video product that can rival them."
Before Yang Lu could speak, the younger Ma Jun couldn't help but jump out and "make wild remarks."
Yang Lu quickly kicked him secretly under the table. What should he do if Zhang Yida was scared away by shouting such loud slogans?
“So this short video APP is musical.ly?”
Zhang Yida quite admires Ma Jun's drive. If you want to enter overseas markets, you must have this kind of confidence.
If you don’t have confidence in yourself, then it’s better not to go abroad to embarrass yourself.
"Not necessarily!" Ma Jun shook his head, and then said: "Capital, technology, and luck are all indispensable. We have technology and luck, but capital is missing."
Seeing that the second in command had said this, Yang Lu also rolled down the hill and said:
"Yes, Mr. Zhang, we just lack capital support now. The musical.ly model has worked, but we just lack operating funds.
After we have operating funds, we can open an office in North America to get closer to the market, conduct localized operations, and improve product quality."
"I came here today just for this matter and will give you an answer."
Seeing Yang and Ma looking happy, Zhang Yida asked again: "Tell me about your positioning of musical.ly and your future aspirations!"
“Compared with Vine or Dubsmash lip-syncing APPs on the market, I think musical.ly is not just a tool-based entertainment APP. In the future, it will be a kingdom with countless “small centers”, a
Decentralized social community.”
Ma Jun is quite conceited and even looks down on his two foreign seniors.
"The most basic attribute of musical.ly is a tool. The next layer is "connection", which can bring social attributes to users. The third layer is "Engage". Users participate in the community, and the platform has community attributes.
Pop culture and subculture began to emerge.
Only when it reaches the third level can musical.ly truly take root overseas and begin to lead cultural trends."
Yang Lu began to describe Zhang Yida's grand blueprint for the future.
Zhang Yida thought to himself, I believe your evil deeds and have cultivated several foreign Internet celebrities, so I will lead the cultural trend.
However, there is no problem with this entrepreneurial idea. The tool acquires customers, the social network retains users, and the community deepens user stickiness.
"I won't hide it from you, I also made a short video APP called DouShi, which will be available to domestic users soon.
I invested 1 billion myself, and Blackshirt Capital and others are lining up, waiting to join.
I accidentally saw your product and I think your product is pretty good.
So I would like to discuss a cooperation with you and combine the two products into one. DouShi will focus on domestic products and musical.ly will focus on overseas markets.
I believe that with sufficient financial support, musical.ly’s overseas journey will definitely go further and smoother.
What do you think?"
After listening to Zhang Yida's words, both Ma Jun and Yang Lu were stunned.
I'm so envious of investing 1 billion yuan in short videos. I can't even raise millions of yuan in investment, but you only need 1 billion yuan to invest, and there are top capitals like Blackshirt Capital queuing up to invest.
It sounds like why is this story so magical?
But it’s normal to think about it. Zhang Yida can definitely afford 1 billion, and Blackshirt Capital has a very good relationship with him and has participated in the financing of many of his startup companies.
According to Zhang Yida, the so-called "two into one" means acquiring his own musical.ly.
Ma Jun and Yang Lu looked at each other. It had been more than half a year since they founded musical.ly. It was a lie to say that they had no feelings at all.
Yang Lu was the first to speak: "Mr. Zhang, thank you for your kindness. We at musical.ly still want to develop independently.
We welcome investment, but acquisition is exempted!”
Seeing his partner's statement, Ma Jun also said: "Forget about the acquisition! I also want to build a business overseas."
The reaction of the two people was expected by Zhang Yida, who then said: "Don't you listen to my conditions? I will pay 20 million yuan to acquire musical.ly, while retaining the brand and operating it independently as an overseas subsidiary."
Musical.ly will continue to be operated by you and another 100 million yuan will be injected into it.
In addition, you can also get a certain amount of shares in the parent company of DouYu.”
After hearing this condition, Ma Jun and Yang Lu stopped talking.
Cheetah offered them RMB 5 million for 30% of the shares. In other words, the valuation of musical.ly was RMB 16.66 million.
Zhang Yida offered 20 million yuan for the acquisition. In addition to sharing a portion of the acquisition money with their friend who invested US$250,000 in them, each of them could also receive several million yuan.
I have been starting a business for so long and I have never made so much money.
In addition, the two of them can continue to be responsible for the operation of musical.ly.
Zhang Yida also promised to give them 100 million to develop musical.ly. With this money, the development speed will definitely be like a rocket.
Moreover, Zhang Yida also said that he would give them a share of the shares of DouShi's parent company, so that they can get a share of the dividends from the development of Musical.ly and the development of DouShi's parent company.
Should they operate musical.ly by themselves, or overseas, what will it be like in the future? They themselves don’t have much knowledge.
Although the data has increased a lot in the past month, it is hard to say whether it is worth 20 million yuan.
Holding Zhang Yida's thigh, I feel a lot more confident.
So the two of them were very entangled now. They looked at each other several times and wanted to talk, but Zhang Yida was hindered by the fact that they were here.
Zhang Yida observed the expressions of the two men and guessed that they were tempted.
In the previous life, they were able to sell musical.ly for US$1 billion, which shows that they are not the kind of people who cling to the company and never let go.
"Let's do this! You two, think about it carefully. I will stay in the city for one more day, and you can just give me an answer tomorrow."
Zhang Yida called Zhang Lan and left in a considerate manner, leaving space for thinking to the two entrepreneurs.
After Zhang Yida left, Ma Jun and Yang Lu stared at each other, not knowing who said:
"Then why don't we sell it? The harvest will be guaranteed despite droughts and floods? We can also have an apartment in the Magic City."
“Let’s see if the purchase price can be increased, and we also need to determine the shareholding of DouShi’s parent company.”
"Well, if I hug Zhang Yida's thick legs and work as a senior executive, my income won't be much different."
"That's wrong. What people should value is that we have brought musical.ly overseas, and there has been some improvement."
"Yes, we still have to run musical.ly well so that we can have a place in the parent company in the future."
"Yes, Zhang Yida gave us 100 million to practice, and we went to North America to practice.
Regardless of success or failure, this is a valuable entrepreneurial experience.
With this entrepreneurial experience, you will have a good foundation when looking for a job or starting a business in the future.”
"Okay, let's add up the purchase price and shares and give them an answer tomorrow."
…
After leaving the incubator, Zhang Yida walked on the road.
"Mr. Zhang, is it necessary to value them so much? Another 20 million and a share."
Zhang Lan felt that this small company was nothing special, but she was lucky enough to go to the United States and make great achievements like sesame and mung beans.
"Their entrepreneurial ideas are very clear, just take a look! musical.ly's achievements overseas will definitely shock everyone's jaws."
Zhang Yida knew that this was a good opportunity for the development of short videos, but in the final analysis, DouShi was still a bit slow. The best way was for DouShi to slowly develop in China.
At the same time, it also supports musical.ly to expand overseas. In a year or two, it will be time for the two swords to come together.
"Okay! Mr. Zhang, since you think so highly of them, I won't say anything more.
To avoid judging a gentleman’s heart with a villain’s heart.”
Zhang Lan did not continue to struggle with this topic. The boss had already decided what to do, so just a few words of advice would be enough. Any more words would be a hindrance to herself.
"Hehe... I'm optimistic about you too. Tell me what Zhang Ming thinks of the short video field."
Zhang Yida is also very concerned about whether Zhang Ming will enter the short video field in advance and compete with him.
Speaking of this, Zhang Lan got angry and said: "It's not just like that. I proposed this idea in 2014. Zhang Ming always said that the time was not ripe..."