Zhihu is looking for the north: The road of trial and error is bumpy, where will the future go? | in my rose tinted dreams, pantai selot, superlock jackpot slot machine

The road of trial and error is bumpy, where will Zhihu go in the future?

Text | "Chinese Entrepreneur" reporter Li Yuan

Editor | Qi Jielun Photography | Shi Xiaobing

For the vast majority of Zhihu employees, the layoffs at the end of 2018 came quite unexpectedly.

As early as December 10, there were rumors on the Internet that Zhihu was laying off large-scale layoffs, with the proportion of layoffs reaching as high as 20%, involving all lines of business. Although the exact number of resignations has not been known, reporters learned from internal sources that at least according to the statistics of various departments’ WeChat groups, the total number of Zhihu employees has dropped from more than 1,500 to nearly 200.

In this regard, Zhihu officials stated that the rumors of layoffs were untrue and were the company's normal personnel adjustments and structural optimization. Usually, the maximum value for employees in Internet companies to be eliminated at the end of the year is 8% to 10%. Zhihu’s current “optimization” ratio has obviously exceeded the normal range.

Currently, Zhihu’s layoffs have affected departments including technology, products, marketing, short videos, etc., with the commercialization team being the hardest hit area. Since Zhihu officially launched commercialization in early 2017, the team has continued to expand, with more than 400 people before layoffs, including many fresh graduates and probationary personnel. According to former employees, the layoff ratio of the commercialization team exceeded 20%, and new employees were the first to be "optimized".

Recently, companies such as JD.com, Meituan, and Douyu have reported layoffs, but Zhihu’s layoffs are still surprising. On the surface, Zhihu’s situation is not as embarrassing as that of other companies: in 2018, funds in the primary market were tight, and a large number of companies were forced to go to Hong Kong and the United States for “bloody listings”; but in this environment, Zhihu still received US$270 million in Series E financing in early August.

Another speculation from the outside is that the layoffs may be related to CFO Sun Wei, who just took office at the end of November. Sun Wei was a partner and CFO of Miya, a sales platform for imported maternal and infant brands, and has 10 years of working experience in a top multinational investment bank. Before Sun Wei arrived, Zhihu had not established a CFO position. Sun Wei’s appointment combined with Zhihu’s just-obtained Series E financing, some people believe that layoffs may mean that Zhihu is about to go public.

However, the reporter learned from Zhihu that Zhihu has no plans to go public yet, and is likely to add a round of Pre-IPO financing in the future.

According to analysis by brokerage professionals, companies usually rarely lay off employees before an IPO. In the future, in the secondary market, Zhihu is likely to be classified as a knowledge education company. The static price-to-earnings ratio of such companies is not the key. Investors need to see its future profit growth space. If Zhihu is eager to go public, it needs to expand its business rather than save costs.

Zhihu’s departmental abolition and new business exploration are still in progress at the same time. According to Jiemian reports, short video is one of the business departments that has been streamlined. Half of the original team of fifty or sixty people has been laid off, and the remaining people are related to social media.Merge other product teams in the area. However, according to the reporter’s understanding, while Zhihu is shrinking its short video staff, it has also just begun internal testing of a short video app called “Jiying” for a small number of seed users. Jiying pays attention to social networking and encourages users to share on WeChat. Founder Zhou Yuan often posts on WeChat.

Based on the information from all parties, Zhihu’s adjustment should be more about the streamlining and restructuring of business, front, and personnel. Since the announcement of commercialization in 2016, Zhihu has undergone a lot of changes, and now it has reached a stage of summary and re-optimization of product structure and revenue model. Facing the future, where will Zhihu go?

Speed up commercialization

Before 2016, Zhihu had been moving methodically along the pace of a "slow company". Zhou Yuan mentioned many times in interviews with the media that Zhihu is a long-distance race and hopes that the team can patiently serve core users.

Zhou Yuan often uses the thinking of urban construction to think about Zhihu’s model. He likes a book called "The Death and Life of Great American Cities". The author Jane Jacobs opposed the American postwar spread of urban expansion and proposed that the essence and vitality of a city lies in its diversity. Zhou Yuan has always been extremely cautious about scale expansion. Over the past eight years, Zhihu has developed from communities and communities to "cities" step by step, until today it has become a platform that is noisy and difficult to summarize.

At the end of 2012, Zhihu, which had adhered to the invitation system for two years, began to show signs of fatigue. Zhou Yuan compared Zhihu to "a city whose population base has stopped growing." In March 2013, Zhihu opened registration. In less than a year, the number of registered users increased from 400,000 to 4 million, and an influx of mixed voices followed.

In 2014, some big Vs began to leave Zhihu due to the unfriendly discussion environment. Zhou Yuan described Zhihu at this time as "the Renaissance period in New York when the population increased from 7 million to 9 million" in Jacobs' book. The prerequisite for urban prosperity at this time was the improvement of infrastructure.

In 2016, when Zhou Yuan was still focusing on improving community infrastructure, the battlefield suddenly changed and foreign enemies entered. Payment for knowledge has become a trend, and many players have poured into the track. As a natural representative of the "knowledge" field, Zhihu has no reason to cede its sovereignty.

On April Fool's Day in 2016, Zhihu's new feature "Zhihu" was launched. Users can share a piece of valuable information to Moments, and the key parts will be coded. Users can pay to read the complete information. In the official video of Zhihu, Zhou Yuan showed his face: "Many people always ask us how to commercialize it, which bothers me. So I led a team to make a commercial thing, wouldn't it make money?"

This seemingly April Fool’s Day joke opened Zhihu’s commercial treasure box. This year, Zhihu launched institutional accounts that it had refused to open, and launched Zhihu Live and bookstores.

In 2016, commercialization in the exploratory stage still adopted the exclusive agency model. In July 2017, Zhihu officially established a commercialization team. Within one year, the team expanded to more than 400 people and was equipped with independent product, technology, R&D, planning, and sales departments. In addition to producing native advertising, setting up scenes, and designing offline activities for the brand, which later evolved into streaming media advertising, Zhihu also gave the brand aSome special tools, such as "brand questions", "personal answers", etc. The effect was immediate, with Zhihu’s commercial revenue in 2017 reaching five times that of 2016.

Zhihu’s commercialization actions were quickly recognized by capital. In January 2017, Zhihu received US$100 million in Series D financing led by Capital Today, with a valuation of US$1 billion, making it a unicorn.

At the end of 2017, Zhou Yuan appeared for the first time at the Wuzhen Internet Conference and was invited to attend a luxurious dinner organized by Ma Huateng. Zhou Yuan officially entered the most powerful circle on the Internet.

In the first half of 2018, Zhihu’s commercial revenue has exceeded that of the whole of 2017. Such achievements naturally make the funders smile, and the E-round financing is a matter of course.

According to the latest official data released by Zhihu, as of the end of November 2018, the number of Zhihu users had exceeded 220 million, a year-on-year increase of 102%. In addition, in the first half of 2018, Zhihu's commercial advertising revenue increased by 340% compared with the same period last year. The knowledge service product "Zhihu University" provided more than 15,000 knowledge service products, with 6 million paying visits.

From community to square

Parallel to Zhihu’s commercialization process, which is like catching up with the trend, is the user controversy caused by changes in the community’s temperament after Zhihu’s popularity.

After 2016, many old Zhihu users felt obvious discomfort. After the large influx of "grassroots" users, entertainment content was flooded, too many advertisements were added to the information flow, and the intention of channel sinking was obvious.

An employee who participated in the early community operations of Zhihu recalled: In the early years, Zhihu consciously controlled the content of gender questions and answers. While gender is one of the hottest public topics, "it's an area that's easily dehydrated." In this regard, the Zhihu team has personally written high-quality gender questions and answers to guide users in their creation. But in Zhihu now, this persistence no longer exists. Recommended topics on the home page often include content such as "What's it like to have a girlfriend who looks like XX", "How scumbag is the most scumbag guy you've ever seen".

In terms of composition, the number of Zhihu users from second- and third-tier cities has increased significantly, and the proportion of young users has increased. The original community atmosphere has been diluted, and many users who are eager to grab traffic and influence from Zhihu have been mixed in. Zhihu has gone from a niche discussion community to a crowded square, truly becoming a "national" Zhihu.

Qiming Venture Partners managing partner Gan Jianping invested in Zhihu very early. At that time, he did not expect Zhihu to be as big as he is today. "At that time, the biggest question discussed by the investment committee was: Can Zhihu achieve 1 million DAU or 10 million DAU?" In Gan Jianping's view, when a company has a large enough user base, a wide enough coverage, is welcomed by users and is concerned by the government, commercialization of operations or moving from community to platform becomes an inevitable choice.

The current Zhihu includes the models of many popular products: if Zhihu is regarded as a knowledge payment platform, Fenda, Get, and Ximalaya are its competitors; at the same time, Zhihu can also be regarded as a content search and distribution platform, which has the shadow of Baidu and Toutiao; if you browse Zhihu’s daily recommendations, it seems to have learned a lot of tricks from Weibo’s entertainment thinking; if Zhihu is regarded as a diversion entrance for content e-commerce, it can become another “what is worth buying” and Xiaohongshu.

What’s interesting is that although Zhihu has so many products, it does not directly compete with any of them. The secret is: Zhihu’s years of experience in operating content communities, the moat it has built, and its differentiation are enough to allow it to explore freely for a while. Moreover, the current 220 million users have not yet reached Zhihu’s ceiling.

In the view of Wang Hua, the earliest investor in Zhihu and the managing partner of Sinovation Ventures, China’s urban population that has received considerable education has reached 500 million, but the upward instrumental needs of these people have not been fully met. Different from the pursuit of sinking demographic dividends and entertainment by Internet platforms such as Douyin and Weibo, Zhihu has chosen a large market that seems unpopular but actually takes time to trigger, and the dividends are delayed.

Still on the road

Zhihu also experienced a challenge from Toutiao.

In August 2017, Toutiao’s Q&A product “Wukong Q&A” was exposed to poaching 300 Zhihu influencers at high prices. In November 2017, Wukong Q&A further released the news that 1 billion yuan would be used to subsidize answerers in 2018.

For Wukong Q&A’s direct provocation, Zhihu did not give a tit-for-tat response in terms of business strategy. When the time entered July 2018, not only was the 1 billion yuan invested in Wukong Q&A nowhere to be seen, but the product itself was also revealed to have been merged with "Micro Toutiao" and strategically abandoned. This once sensational poaching battle ended with Zhihu “losing the win”.

Did the rise of Douyin change Toutiao’s established strategy? Upon closer analysis, it is not that simple. According to a Zhihu big V who was once poached by Wukong Q&A, Toutiao’s conditions for big Vs are like a labor contract, which stipulates a contribution fee of 500 yuan per article, a monthly cap of 10,000 yuan, and strict requirements on the number of words in answers, update intervals, and a minimum number of articles per month.

Over the years, Zhihu’s development has been tepid, and almost no subsidies have been given to creators. However, it is not difficult to find from the debacle of Wukong Q&A that Zhihu’s appeal to big Vs and its unique community operation strategy cannot be replaced by a simple money offensive.

Why do people spend time and energy to answer a question seriously? A Zhihu community operation employee said that in addition to building personal authority, building brands, expanding relationships, and converting implicit interests into explicit interests, big Vs also pay more attention to the relationship between people, so as to stimulate high-quality answers. “On Zhihu, relationships and content complement each other.”

The incentives for UGC are nothing more than profit incentives and honor incentives. Experts in a certain field are more likely to be impressed by honor incentives, opportunities to compete with experts, and invisible privileges, such as more exposure opportunities, customization rights, personal promotion, etc.

All of the above require time and energy to build the community’s atmosphere, environment, topic screening and promotion. For example, how to fight against violence and counter-intrusion, how to promote user autonomy, and similar community operation experience, Zhihu can be said to have formed a complete set of methodologies.

So, based on years of accumulation, we have createdmoat, would Zhihu not care about destroying them all for commercial purposes?

The reporter came into contact with an internal employee of Zhihu who had communicated with Zhou Yuan. He believes that Zhou Yuan is also confused about how to deal with Zhihu’s current huge user base and how to use new technologies to stratify users more effectively. Algorithmic push seems to be a more direct model. In an interview with "Chinese Entrepreneur" magazine in 2017, Zhou Yuan admitted that the effect has not reached the ideal state and there is still a lot of room for improvement.

In 2017, Zhou Yuan spent more than half a year poaching Li Daren, a former Baidu NLP (natural language processing) expert, as the vice president of technology at Zhihu. He hoped that the latter would first focus on solving the problem of more effective stratification and push for users.

Since the launch of commercialization, more than 90% of Zhihu’s revenue has come from advertising, and paid knowledge products have not yet created economies of scale. In this regard, Wei Wuhui, an investment partner of Tianqi Amoeba Fund who has been engaged in Internet research for a long time, believes that the current knowledge payment platform is mostly driven by micro-business, and the repurchase rate is very low. Himalaya has been trying for three years, and it still needs to invest repeatedly in marketing costs every year. Zhihu has not done much in micro-business, and probably feels that this model is not suitable for itself.

"Payment for knowledge is very similar to publishing a book. In the past, publishers would not pay royalties higher than 20% to authors, but the share of payment for knowledge can reach 50%. And books will not sell for 200 yuan in any case, but there are many online courses selling for 199 yuan. From this perspective, payment for knowledge can still be done for many years." Wei Wuhui said.

In an earlier interview, Zhou Yuan said that Zhihu was and is doing the right things, not easy things. Apps that do easy things are slowly disappearing, while apps that do difficult things will always have a place.

Obviously, in addition to capital, Zhihu needs more time.