People's net " People venture capital

Northern lights venture capital the Yellow River: capital is a double-edged sword, which is the most uncertain variable facing the industry robot industry.

Yellow River

09 November 2018, 09:42 source: People net - people venture capital

Capital, capital or capital.

Although most of the companies in the industry are not familiar with the role, capital has been playing a role that can not be ignored. In fact, even after two or three years ago, the industrial robotics industry did not enter the field of mass capital. In addition to a few investors who had long been concerned about automation and manufacturing industry, most investors still focused on hot industries such as TMT and medical care, so even though a small number of capital events had occurred in the industry, little attention has been paid to it. But with the loss of the Internet industry direction and the unbearable valuation of the primary market, more and more capital is beginning to find new investment directions and targets. In recent years, capital seems to have seen the way ahead and began to pay more attention to the industry which was once completely out of the spotlight. As a result of the concern, a large number of capital poured into the industry and invested heavily in various locations of the industrial chain. However, if we observe calmly, we will find that behind this scene, deeper and deeper is the chaos of various industries, and even profoundly changes the ecology of the industry.

Although the industry of robot industry seems to be "big and tall", it is a manufacturing industry, in other words, it must follow the basic law of manufacturing industry. First, the growth of the company is slow, and it takes a long time to reach the point of explosion. Two, the profit margin is generally low and can not match many high margin industries. Three, the competition is more intense and the entry threshold is not high. Before the capital entered a large number of industries, the industry has been in a natural development stage of exploration, self-regulation, growth and re exploration. Although such natural development is slower, it has its rationality for the industry, without state subsidies and without capital boost, the head enterprises that grow out of it are truly tested by the market and have strong competitiveness. But with government subsidies and capital intervention, industry ecology has changed greatly as well as other industries that receive subsidies and capital intervention in China. First of all, a group of people with speculative mentality enter the industry. The purpose of these people is very clear, so we can get a subsidy and get away with it. This has created the phenomenon of robot industry park in the last two years, and finally a mess of chicken feather. Government subsidies have not subsidised, and investment from the Internet industry has been coming in again. This group of capital is still carrying a very strong logic of Internet thinking. They pay more attention to whether the team is "bright", whether the logic of the story is reasonable or not, and that the dream company can explode in a three year way, which is not sensitive to valuation. But they totally ignore that this is a manufacturing industry which is completely different from the Internet ecosystem. We must respect the basic law of development of the manufacturing industry.

First of all, the manufacturing industry has its own special development law and industry characteristics. Any team or individual who has achieved attainments in manufacturing industry has at least ten years of experience in the industry. After stepping through numerous pits, eating countless losses and having a deep understanding and understanding of the industry, such a team can really have strong combat effectiveness, which is totally different from that of the Internet industry. As a result, the average age of team entrepreneurship in the manufacturing sector is over 35 years old. It has just crossed the university gate or Research Institute. Without any industrial experience and experience, it claims to dominate the industry. However, due to the traditional characteristics of the industry, practitioners are basically in the state of being isolated from the capital, and do not understand the capital and its operation completely, and because the capital has not been cognizant of the industry before, and still has the inherent thinking set, the information asymmetry of both sides has reached a very high degree. Some investors are more willing to look for the so-called "excellent team", that is, young people with a famous school background and bright resume. These young people are active in thinking, familiar with capital, and familiar with the way of capital market. They will talk about the language and stories that can make investors excited, and pack themselves as capital like; but the teams with real strength usually do not seem to have star halo or high academic qualifications, but also do not understand capital. As far as I know, even as the "four people" in the Chuan, its staff at least 1/3 graduated from the Japanese higher education school, the rest are mostly university graduates, doctorate is almost rare, this is a typical manufacturing company employees structure;

Secondly, the 2B characteristics of downstream industrial robots and the dispersion of "long tail" customers make the early stage of market development very difficult, even if the industry veterans need some time. It is a more optimistic estimate to wait for three to five years before gradually establishing market position and entering the fast lane. In other words, the story of "getting rich overnight" can not happen here. Valuations become very important at this time. It can be predicted with certainty that up to three to five years later, all kinds of overvalued "net red companies" that have recently been touted in the capital market by the industrial robot industry and the visual industry will basically vanish. After giving enough tuition fees, investors will learn how to look at the unfamiliar industries and continue to struggle. At this time, the industry is going to pay for the spree of this batch of immature capital. This kind of injury is not unilateral, but two-way, not only for the company, but also for the industry.

In terms of the company, the above capital does not understand the characteristics of the industry, and imposes unrealistic high expectations on the growth rate of the company, which has paid an overvalued value, which means that the capital will exert considerable pressure on the company, because the essence of capital is still profit driven, especially the tendency of profit seeking of short-term capital will be more obvious. When we find that the growth of the company is not as good as expected, this kind of pressure will lead to the distortion of the company's actions, not carry out its own strategy and tactics well, and the company lacks the ability of hematopoiesis. It can only rely on continuous story telling to get another round of higher financing valuation, and alleviate the enormous pressure from the previous round of investors. However, the story can not last forever. Once the company can not make corresponding progress in the limited time that investors can wait for, and the capital also sees the essence of the industry and gradually returns to reason, the bubble will burst.

In terms of industry, it is difficult for blind capital to invest capital into the right entity enterprises, and absurd valuation will cause some "net red" companies to obtain large amounts of capital without technology and market. If such mismatched funds are consumed only by start-up companies, the damage will not be too great. At the very least, the cost of obtaining talents in the industry will be higher. But if companies use capital to expand in the industry, dig around everywhere, or compete at low prices, the injury to the industry will not be a single stark. And from the past observation, such companies will inevitably perform the above actions due to lack of technology and market capability. This will not only cause the natural development of good companies in the industry to face the vicious competition, but also affect their normal development, and the practice of killing one thousand of the enemy themselves by eight hundred will eventually lead to the vicious competition in the whole industry. And the more capital intensive industries enter into, the more frequent this happens, so it is really a big problem to do evil against the capital of the industry. For the industrial robot industry, this negative effect may be more obvious. The main reason is that the industrial robot industry is a capital intensive industry, and the demand for capital is huge. Under such a background, excellent companies in the industry must take the initiative to learn capital related knowledge, contact capital, understand capital, and be good at making good use of capital, and can not be complacent. Otherwise, it is easy to get bad money to drive out good money effect. In fact, the industry robot industry has already seen a large number of capital bubbles. If allowed to develop, the industry will have a bad future. Once the bubble burst, industry companies will suffer a lot of damage, and the development of the whole industry will lag at least three to five years.

But what we need to see is that capital is a double-edged sword. If we can make good use of capital, we will not only cause damage to the industry, but will greatly accelerate the development of the industry. Capital is not good or bad, the key is to see what kind of place it is used. Whether the current expansion of enterprises needs to increase or a large number of R & D investment in technological capabilities, there is strong demand for capital. Even in the next second stages, from the middle and lower reaches of the industrial chain, from the parts to the ontology to the chain, after the initial development, it is necessary to achieve industrial integration, upgrading and relocation through a large number of M & A operations, in which capital will play a very important role.

The future "danger" and "machine" coexist. The industry robot industry should not repeat the low cost of many other industries in China.

At present, the downstream market of China's industrial robots has not yet been fully opened, and the bulk business is still low-quality, low-priced and repetitive in some single categories and applications. Therefore, if we do not find another way to find a better blue ocean market and dessert, then the ultimate winner in the field of Ontology is hard to be the active part of the current market share. As for parts suppliers, now, whether controllers or reducer, are at a stage of stagger starting. They need a lot of R & D input to improve products and shorten the distance from international giants. If the downstream profit is depressed, it can not be invested in R & D, and the product can not be further improved. This means that the downstream ontology can only be applied in some low demand applications, but also at low barriers, so as to enter a vicious cycle, or even directly destroy the Chinese industrial robot industry. At present, the industrial robot market is like a dangerous chess game. All players, no matter how beautiful they are at present, if they can not jump out of the current low price competition, the future is likely to be a wrong move. At present, the key to solving the problem lies in the hands of the business owners, looking for the application of terminal pain points with more ability to pay, opening up the blue ocean market with different application scenarios, jumping out of the inertia thinking of low price competition, leaving enough profit margins for the upstream parts manufacturers, doing their jobs well, working together to pass the childhood of Chinese industrial robots, and creating a good competitive environment, so as to open up a broad road for the industrial robot industry.

In the process, I believe that the enterprises that will win eventually will have some or even all of the following characteristics: a deep understanding of capital and a good use of capital; a more comprehensive layout of key components, whether R & D, M & A or shareholding companies; with a certain integrated application capability, a deep understanding of downstream terminal customer needs and the development of different application markets. And the industrial robots enterprises that have grown up in China will eventually become the new "four masters" of China and compete with the traditional industry giants. (author of northern light venture partners the Yellow River)

(Editor: Huang Lingli, Zhang Chen)

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