In September 2012, Fu Sheng, CEO of Kingsoft Network, attended an industry forum. In his speech, he declared that China's Internet has entered the "era of spelling daddy".
In Fu Sheng's view, large companies and investors are the "father" of the entrepreneurial team, and being able to bring abundant funds and resources is the key to the success of the latter.
This year, Fu Sheng was only 34 years old, but he was already a prominent figure in the Internet circle, and he was favored by Lei Jun and Ma Huateng, two big men, and Yu Liang with Sogou Wang Xiaochuan, Tencent Zhang Xiaolong and others. The "spelling daddy theory" has made him suffer a lot of ridicule, but the logic behind it also makes sense.
But ten years later, Fu Sheng and his company once again fell into a trough, with nothing to rely on, and they didn't have to fight if they wanted to fight daddy.
On March 7, a report by Leifeng Network said that Fu Sheng's AI (artificial intelligence) robot company Orion Star was in trouble, accumulating nearly 1 billion yuan in cash, and a financing at the beginning of last year was also lost; the company laid off more than half of its employees in many business lines, and recently decided to slow down or stop paying salaries at the middle and high levels.
In the early morning of the next day, Fu Sheng published a 3,000-word article titled "Believe in the Beauty of the World, Optimistically Face Doubts," declaring that the report was "based on various false rumors and gossip" and that there were serious inaccuracies and errors.
However, Fu Sheng only clarified the changes in office addresses, the number of catering cooperative businesses, the cost of robot robotic arm hardware, etc., and did not directly deny the layoffs, but called it "team adjustment brought about by efficiency improvement"; the salary cut was interpreted as a "strivers plan", and the core backbone voluntarily participated.
The careful wording may suggest that Orion does face a lot of challenges. Regardless of the true condition of this subsidiary, it has become an indisputable fact that Fu Sheng and Cheetah Mobile have been unlucky in recent years.
Since 2018, Cheetah's operating conditions have entered a downward trajectory. In this year, the company's total revenue was 4.98 billion yuan; in 2019, it fell to 3.59 billion yuan, in 2020 it fell to 1.56 billion yuan, and only recorded 600 million yuan in the first three quarters of 2021. Based on the fourth quarter revenue guidance of 130 million yuan, Cheetah's revenue will fall to 730 million yuan last year, the second consecutive year.
On the other hand, Fu Sheng's robot business with high hopes claims to have landed in more than ten countries around the world, more than 100 cities in China, and more than 1,200 shopping malls, but it is reflected in the financial report, and this B-side business income rises and falls, bringing only tens of millions of yuan of revenue every quarter.
Since 2020, the quarterly revenue of Cheetah AI and other businesses has fluctuated in the range of 10 million to 30 million yuan; in the third quarter of 2021, it was 35.6 million yuan, accounting for 18% of the total revenue, and the rest of the quarters are usually less than 10%, and it is too early to pick up the girder.
The bigger problem is that whether in the open market or the investment circle, it is becoming more and more difficult for Fu Sheng to lean back against the big tree.
As of Wednesday's U.S. stock close, Cheetah shares were trading at $1.04, down 66 percent from a 52-week high; the market value was just $146 million (about 920 million yuan), 900 million yuan less than the company's cash and short-term investments. The negative attitude of investors can be seen.
In terms of venture capital, enterprise investigation data shows that the latest financing of Orion Star stayed at the end of 2019, and the amount was not disclosed. However, at that time, Fu Sheng said that after the completion of this round of financing, Cheetah was still the main shareholder of Orion Star.
In the past decade, Fu Sheng has long grown up under the shadow of the big man's wings, and the lack of foreign aid may not be expected, which makes cheetah's strategic transformation full of uncertainty. The years of care of Lei Jun, Ma Huateng and others have not gained a few pieces of the golden development period of China's mobile Internet while achieving cheetah.
As Zweig put it:
He was "too young to know all the gifts of fate, and had already secretly marked the price." ”
A
In his career of more than 20 years, Fu Sheng has met three nobles: Zhou Hongyi, Lei Jun and Ma Huateng.
Fu Sheng joined 360 in 2005 and took two or three people in charge of the edge product security guard at that time. At that time, Zhou Hongyi wanted to wrench his wrist with Baidu, and invested a lot of energy and resources to do search, portal, etc., but the effect was very average.
Meanwhile, 360 Security Guard grew faster than expected, with daily installs reaching 200,000 in 2006 and doubling to 400,000 the following year. In 2008, the installed capacity of this software has reached 100 million times, occupying half of the domestic PC security market.
Zhou Hongyi simply turned the company's focus to security, launched 360 anti-virus software and other products, held high the banner of free to attack the city, and the old anti-soft manufacturers such as Ruixing, Jiangmin, and Jinshan, which still charged fees, were gradually defeated. Fu Sheng, who has been a great hero, has since gained fame and become a hot figure in the Internet circle.
Also in 2008, Fu Sheng suddenly left 360 to join Matrix Partners China and began a short investment experience. As for why they left, Fu Sheng and Zhou Hongyi had their own arguments, and even attacked each other. But if there is no "Red Sect Leader" with green eyes, Fu Sheng is just an ordinary member of thousands of product managers, and it is much more difficult for his career to take off.
Fu Sheng did not work in investment institutions for a long time, and in 2009, he started a business again and did a cow image. After the non-compete period ended, Fu Sheng turned his business direction to safety.
Lei Jun (left) and Zhou Hongyi (right)
At this time, Lei Jun of Kingsoft found Fu Sheng and hoped that he would safely merge Ke niu and Kingsoft in the way of "snake swallowing elephants". Lei Jun also looked for Ma Huateng, hoping that the latter would invest some money.
According to reports, Ma Huateng called Lei Jun for more than an hour and asked "Fu Sheng is not okay in the end." In the end, Lei Jun still persuaded Ma Huateng, but Niu and Kingsoft Security merged into Kingsoft Network at the end of 2010, with Fu Sheng as CEO and Lei Jun entering the board of directors.
Fu Sheng, who did not get 100% trust from Ma Huateng at the beginning, soon ushered in an opportunity.
At the same time as the establishment of Kingsoft Network, the "3Q war" between Tencent and 360 entered a white-hot situation, and the two sides blocked each other on the user's computer and fought hard. Kingsoft Network stood on the side of Tencent without hesitation, and the two sides jointly released the security kits of QQ Computer Butler and Kingsoft Poison Bully, and confronted the "360 Family Barrel".
This very timely "letter of submission" greatly changed Ma Huateng's view of Fu Sheng, who was only 32 years old at the time. In July 2011, Tencent invested US$20 million in Kingsoft Network, which gradually connected its products to Tencent's open platform. Kingsoft Network has since gained a firm foothold and will become Tencent's bridgehead against 360 in the next few years.
However, after Tencent personally ventured into the security field and launched the "QQ Security Family Barrel", Kingsoft Network was unable to "seize the wife" and could only set its sights on overseas.
In September 2012, it released the mobile memory cleaning software Clean Master on the Google Android app store, with more than 150 million users in one and a half years, ranking first in the category. In the following years, it launched apps such as Battery Doctor, forming its own matrix of tool software, most of which responded well.
Embedding ads in free apps was the most important way to make money on Kingsoft Network and later Cheetah Mobile. With the help of Google and Facebook advertising alliances, Fu Sheng found a cash cow and relied on advertising diversion to make a lot of money.
In May 2014, the renamed Cheetah Mobile was listed on the New York Stock Exchange. Fu Sheng's "Spelling Daddy" philosophy reached its peak.
In terms of shareholding, Kingsoft and Tencent are the largest institutional shareholders of Cheetah and rely on AB share design to control most of the voting rights; in terms of revenue, 70% of Cheetah's advertising revenue comes from Baidu, Ali and Tencent; in addition, Kingsoft, Xiaomi and Baidu will also subscribe for IPO (initial public offering) shares.
This means that Fu Sheng has gathered the backers of "BAT+ Lei Jun" in just two or three years; overseas, Google and Facebook, the two most powerful Internet companies, are continuously generating revenue. As long as big companies such as BAT, Lei Jun, Google, and Facebook do not go out of business, Cheetah can "lie and win" forever.
B
"Spelling Daddy" has made Fu Sheng, but the hidden dangers have long been buried.
In the first 6 years after the establishment of Kingsoft Network, Lei Jun and Ma Huateng were the real owners of the company, indirectly controlling the equity and voting rights far more than Fu Sheng, and in fact controlling the company's course.
In 2014, Cheetah disclosed in its prospectus that Kingsoft held 54.1% of the shares and Tencent held 18%, both exceeding Fu Sheng's 17%. In addition, the two major shareholders also hold a large number of voting rights with the help of AB stock design, while Fu Sheng's voting rights account for only single digits, which can only be regarded as professional managers.
Fu Sheng was particularly grateful for Lei Jun's kindness, which also affected the role of the two in the company. Rumor has it that as soon as Lei Jun began to speak, Fu Sheng took out a notebook to take notes. The cheetah's expenditure of more than 1 million yuan must be sent to Lei Jun for signature.
This respect extends even beyond the company. Lei Jun once wrote an article "Who is Xiaomi, why Xiaomi struggles"; Fu Sheng immediately forwarded the full text of his public account, and published an article the next day "Who is the cheetah, why the cheetah is struggling", in order to sing peace.
Fu Sheng once publicly stated that life needs nobles, and one of his nobles is Lei Jun, and the other is Zhang Ying of Jingwei China. Some people joked that cheetahs are Lei Jun's pawns across the river, and when Tencent invested in Sogou in 2013, Zhou Hongyi sent a Weibo, mocking Sogou for not forgetting to carry Fu Sheng: "Congratulations Tencent, I originally wore iron pants (Kingsoft Network), and now I have a dog!" ”
However, Fu Sheng will also inadvertently reveal his desire for autonomy. In a media interview, in the face of the "chess piece theory", Fu Sheng said that "although we are a pawn, it is also a stage pawn.".
In February 2017, Kingsoft and Tencent began handing over voting rights to Cheetah management. A year later, Fu Sheng's voting power soared from 5.9% to 45.4%, almost catching up with the sum of Tencent and Kingsoft, and finally became the helmsman after seven years of entrepreneurship.
But in the long time when Fu Shenggan was the "prince", although cheetah increased its advertising revenue by 45 times, it continuously missed the important outlet of the mobile Internet, spending most of its energy and time elsewhere. This has led to it never being seen as a core player of the Chinese internet, even in its most glamorous days.
Cheetah laid the basic income model of "free tools + embedded ads" in 2012, and has not been majorly adjusted since then. This model is not only very sensitive to the external economic situation, but also relies on the advertising networks of large Internet companies, and inevitably undermines the user experience, triggering controversies in business ethics and information security.
Fu Sheng also tried to make a change. He invested in Musical.ly in 2014, incubated live streaming platform Live.me in 2015, and acquired mobile news service News Republic in 2016. However, the cheetah team is accustomed to tools, and is not good at content operations, and although the three products have developed, they have not soared.
Fu Sheng himself did not seem to be focused enough. In the years after Cheetah went public, he wrote many public account articles to share entrepreneurial experience and chicken soup for the soul; set up a "Fu Sheng team" to try to be a business incubator; and even quickly made an air purifier after seeing the smog. These things did not bring meaningful income to Cheetah, and tossed half a day and still made money from advertising.
At the same time, more potential descendants such as Weibo, WeChat, Kuaishou, and Douyin have risen, cutting the Internet time of mobile phone users and the marketing budget of advertisers. In contrast, cheetahs do not have impressive movements in emerging sectors such as social networking, live broadcasting, and short videos.
Fu Sheng once said that the most terrible barrier to the Internet is not money or technology, but time. He also quoted Lei Jun as saying, "Don't use tactical diligence to cover up strategic laziness." The reason is good, but it is easier said than done, fu Sheng loudly reminded others not to make mistakes, but he made them.
C
2016 was a turning point for Cheetah's overseas business. This year, Facebook's advertising platform was opened to more third parties, Cheetah's competitors soared, revenue was diverted, and the stock price fell 1/3 in two months.
At the end of 2018, Cheetah was accused of ad fraud, and Facebook immediately stopped cooperating; in February 2020, Google removed 45 cheetah apps from the shelves, and the ad network cooperation was terminated.
Overseas advertising revenue, which was once the pillar of the company, fell off a cliff, and Fu Sheng's dream of "Chinese companies going global and changing the world" has completely come to naught. He had to return to China and come up with the All in AI strategy after some research.
In March 2018, Cheetah held a press conference at the Water Cube to release 5 robots. Fu Sheng jumped down from the jumping platform and declared, "What can't kill me, make me stronger" as a way to express his determination to transform to AI.
At the same time, Lei Jun and Ma Huateng faded out of the cheetah one after another and returned to Fu Sheng. At the age of 40, Fu Sheng finally completely mastered the fate of the cheetah.
But Fu soon exposed gaps in strategic intuition. He is undoubtedly a top product manager and a good startup CEO, but he is not a first-class Internet strategist.
For example, less than a quarter after Fu Sheng regained power, Cheetah packaged Musical.ly stake with News Republic and sold it to ByteDance for about $300 million.
Fu Sheng later spoke about the sale, claiming that he "didn't give up, but I didn't have much choice." At that time Musical.ly the Daily Active Users of the Chinese version were only 400,000, while Douyin already had 5 million, and "everyone felt a little unable to move."
But in any case, after selling the Musical.ly, the Cheetah lost its foothold in the short video track and missed an accelerating era express. Byte merged Musical.ly with TikTok, eventually becoming the world's largest short video APP.
In the choice of main channel, the AI track selected by Fu Sheng is not bad. After all, SenseTime, Megvii Technology and other AI four dragons were once popular with venture capital, and have been listed in the past two years, and Baidu, which bets on AI, has also received a lot of help.
But the problem is that Cheetah went a step further and stepped directly into the more subdivided AI robot track. This not only requires strong software and hardware development and supply chain integration capabilities, but also puts forward high requirements for marketing capabilities for B-end and government agencies.
From the financial report, although Cheetah's AI business has been recognized and welcomed by some users, it has been unable to contribute a lot of revenue, and the quarterly revenue so far is less than 50 million yuan, but the cost is very high.
On the other hand, Cheetah makes AI robots, basically relying on its own blood transfusion, reflecting from the side that the "fight daddy" philosophy does not seem to be suitable for this new track where the business model is not yet sound.
BAT, Xiaomi and other companies have given cheetah full support, but in the field of AI, they have more or less layout, and "outsiders" such as Orion Starry Sky can only stand on the side.
Even Lei Jun, who has been accompanying him for a long time, can help this business more than he can. Xiaomi can certainly contribute some sales to Orion Starry Sky, but from the perspective of industrial chain coordination, there is no particularly prominent action at present.
At present, Cheetah is still the main shareholder of Orion Star. Under the pressure of transformation, Fu Sheng hurriedly stepped into an unknown field that seemed to have a promising future, but he did not meet a new nobleman for a long time.
In 2010, the 32-year-old Fu Sheng and Zhou Hongyi became rivals, and finally walked out with the support of Lei Jun, Ma Huateng and others, and issued a sigh of "Fighting Daddy Era". Twelve years later, the 44-year-old Fu Sheng once again fell into a daze, but under the look around, he found that there was no "father" to fight.
Resources:
Chuang Li, "The 13-year dream of North Drift finally came true, and the CEO chartered a plane to cruise more than 2,000 people to Sanya Disney"
CBN, "Fu Sheng: Becoming a tool trapped in a tool Cheetah looking for a new track"
E-commerce Newspaper, "Fu Sheng: Even if I am a chess piece, it is also a staged chess piece"
Late Post, Fu Sheng: Reflections on the Cliffside
Lei Feng Network, "Fu Sheng and the Robot Dream of "Running Wildly": Burning Up a Billion, Painful Layoffs, High-Level Suspension of Wages"