The Chinese market needs SaaS, but we need to do better.
文 | 文ran General Manager of Die Chuang Holdings The recent article " The Chinese Market Does Not Need SaaS" has aroused great repercussions among SaaS practitioners and investors. Many phenomena described in the article are recognized, but in the end The conclusion made people feel helpless and resentful, and the rational judgment is somewhat inappropriate. Today I want to say that the Chinese market needs SaaS, but we need to do better!01
Origin of The analysis of Chinese SaaS has to start with the analysis of China's software industry. When foreign independent software vendors have developed to a fairly mature level, China's independent software industry started falteringly, and this start was established under a rather "deformed" software environment. As we all know, the first set of software used by most Chinese software users starts from pirated versions. Start to learn to develop software; but on the other hand, in the mental model of most Chinese software users, software should be free, or at least cheap, which is a very bad social psychology for Chinese ISVs environment. At this time, the manufacturers that really make China's independent software industry stand out are not relying on intellectual property protection and social needs to a greater extent, but policy factors are the biggest driving force. Companies such as Kingdee and UFIDA have achieved commercial success driven by laws and policies related to computerization. On the contrary, manufacturers of general-purpose operating systems, databases, and office software are quite worried about their survival in the era of rampant piracy. After decades of development of , China's general environment has undergone great changes, and the demand for informatization has become increasingly rigid. However, long-term social and psychological habits still have a huge impact, and it is clearly reflected in business. Let's look at the more mature ERP field:02
New Difficulties SaaS has described many difficulties in the article " Chinese Market Doesn't Need SaaS", so I won't repeat them one by one. The new difficulties in recent years have indeed brought greater impact to the industry. one: capital ebb. Since 2015, capital has invested heavily in the SaaS field, and capital has joined the market for investing in To B with the enthusiasm of investing in To C, and calls to build China's Salesforce and Workday have come and gone. From the perspective of capital, since China’s Google and China’s Amazon can be successful, then China’s Salesforce and Workday are also likely to be successful, and China’s labor costs continue to soar. As SaaS is a sharp tool to break the cost pressure of enterprises, the probability of success It is even higher. "Making a miracle with great effort" first burns money to pile up performance, and quickly goes public to obtain more resources. Success does not seem to be far away. The "fire" of SaaS is soaring, especially the stock prices of some companies are soaring in the secondary market, which makes capital full of passion and investment. But the momentary ebb, especially the retreat of the US dollar fund due to various reasons, made the original "burning money" model suddenly unsustainable. Second: Market volatility.The three-year epidemic and post-epidemic adjustments have indeed dealt a heavy blow to Chinese companies. When companies face huge pressure to survive, their demand for SaaS has significantly weakened. This super "black swan event" has broken the original plans of many companies. . The instantaneous pressure on business and funds increased sharply, and various actions began to be dealt with on the fly, and a slight inappropriateness would cause even greater difficulties.03
There are solutionsNo matter how difficult SaaS is, there are at least a few fundamentals that have not changed:
- SaaS has increasingly taken root in Chinese companies. After nearly ten years of development, SaaS has become more and more popular, and more and more Chinese enterprises have accepted such an application model and realized its superiority more and more. - SaaS companies themselves are increasingly aware of customer needs. Unlike the development of foreign SaaS or domestic software that copied a lot of foreign SaaS or domestic software when they were first started, after several years of accumulation, SaaS companies can better understand China's needs and better meet customer needs. - SaaS has gradually achieved success in some companies. Some companies have gradually begun to maintain continuous growth through the SaaS model, and some have achieved cash flow balance or even operating surplus. is based on the affirmation of the fundamentals, so how to solve the problem of Chinese SaaS? 1. Come on, change your mind! The environment has changed, the times have changed, and if the thinking is not adjusted accordingly, there is no way to move forward. The money-burning model has helped many SaaS companies take off, but today they have to consider giving up, at least in stages. It is always a basic requirement for an enterprise to create profits when its revenue exceeds its costs, and its cash inflow exceeds its cash outflow. Even if the money-burning model will one day have to answer this question, today’s time point is just ahead of schedule. Give up fantasy and face reality, maybe anything is possible. Don't worry about whether to go OP or pure SaaS, it's a good choice to let the enterprise survive and pay for it. 2. Product! product! The SaaS company is essentially a company based on product value. As time goes by, the needs of customers will become higher and higher. It is the basic logic of this industry to always maintain product leadership and applicability. Even if the company started in 2015 has been around for nearly ten years, whether the products can meet the continuously improving needs of customers and whether it has a sustainable competitive advantage in the face of competitors is already a real challenge for many companies. Continuous iteration, upgrading, and even refactoring and redoing your own products are the way to survive and develop in this industry. 3. Reduce costs and increase efficiency. The long-term money-burning mode of has caused some companies to develop a relatively extensive habit. How to reduce costs and increase efficiency is indeed a bit uncomfortable. SaaS companies have now entered a more refined management stage. How to continuously reduce costs through various management measures while maintaining combat effectiveness, and at the same time improve per capita energy efficiency faster has become a real technical task. All links need to consider this proposition and strictly implement it. 4. To bow your head is to look up. Some companies are small in scale, but even though sparrows are small and well-equipped, they like to do everything by themselves, but due to resource constraints, it is difficult to do well. Do what you are good at, do the most cost-effective, and use more mature technologies, products, marketing and other resources from other third parties, so that you can maximize your strengths and avoid weaknesses, and the company's operations will also achieve better performance.04
Postscript To B business is a long-term business, even Salesforce has worked hard for decades. In the face of the particularity of the Chinese market, SaaS companies may face more difficulties, especially in an environment with major changes, the impact will be greater, and more patience and effort are required. When the tide rises, there will be a day when the tide ebbs. Under the general trend, ask the original intention, not the west and the east. believes in the Chinese SaaS market, believes in Chinese SaaS manufacturers, even if the road is long, it will come, and even if it is difficult, it will be done!Swipe up and down to view the original content of "The Chinese Market Doesn't Need SaaS"
Video about The Chinese market needs SaaS, but we need to do better. Wen | Wen Ran, General Manager of Die Chuang Holdings The recent article "The Chinese Market Doesn't Need SaaS" has caused a lot of repercussions among SaaS practitioners and investors. Many of the phenomena described in th
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