Source: brocade
Today's layoff of Feishu is not surprising.
At the 11th anniversary annual meeting of Byte Beat a year ago, Liang Rubo, CEO of Byte Beat, directly said that the company's investment in research and development of flying books and volcanic engines was no less than that of Tiaoyin and TIKTOK. From now on, the return on investment is not very cost-effective.
After that, the rumours of layoffs in Flying Books never stopped. Xie Xin, the CEO of Feishu, also needs to clarify in person that Feishu has no 8000 employees.
This week's letter from all staff, and even the rumored layoff of thousands of people, is a call back to leaders after a year.
The last business sector named was the one that was profitable at that time. At one time, the total number of employees reached more than 3000 in Zhaoxi Guangnian, which is one of the six business sectors (the six sectors are Diaoyin, Vigorously Education, Feishu, Volcano Engine, Zhaoxi Guangnian and TikTok).
As a comparison, the number of employees of the game publishers ranked among the top five in the global revenue, Mihayou, which earns 16.1 billion yuan a year, is just over 4000.
In addition to the strong education of 80% layoffs reported previously, three of the six King Kong graduates in three years.
01
Efficiency of advanced tool producers
The per capita efficiency of flying books is really not appreciated.
Someone has already calculated an account: for a team of 5000 people, the ARR (annual subscription) of $200 million will be shared equally, and each person can only bring a subscription income of 280000 yuan per year, while the average wage cost of flying books is about 800000 yuan per person.
In 2023, the byte income of 160000 employees will exceed 860 billion yuan, with an average income of 4.4 million yuan per person, more than 15 times that of Feishu.
In the same period, Pinduo had 13000 more people, with a total revenue of 247.6 billion yuan, and a per capita revenue of 19.04 million yuan.
To be fair, it is unfair to compare the efficiency of 2C consumer Internet companies with that of 2B collaborative office companies.
But even in the office software track, the number of employees who fly books is huge in comparable terms:
For example, according to the financial report, Jinshan Office will only generate 3.61 billion subscription revenue in 2023, with 4558 people and an average per capita AR of 780000;
According to Late LatePost, the number of people nailed disclosed last year was more than 1600, and the total number of Tencent WeChat, Tencent conferences and Tencent documents was more than 2200. The ARR of these two companies has been on a par with the revenue of Feishu, and the human effect is at least twice that of Feishu.
Whether compared within the group or with the same industry in the co office race track, Flying Book is not young, and is far from one of the six pillars expected. As an advanced productivity tool used by advanced enterprises, the manufacturing efficiency of Flying Book is extremely low.
Liang Rubo said that in a mediocre and inefficient organization, employees are more likely to feel tired, because even though they work hard, the final effect is not ideal.
In fact, there are two familiar employees around everyone. From their tired faces, you can also feel something about this sentence.
02
Elaborate public opinion narration
Whether through the letter of all staff announcing the layoff, or the public opinion presentation with quite accurate time before and after the release of the letter of all staff, it is not difficult to see that among the two clues, one is bright and the other is dark, Feishu is making every effort to save respect for today's layoff in the public opinion.
Taking the "Seven Years of Flying Books" of Late LatePost as an example, the narrative of reverence can be divided into three paragraphs:
First of all, Feishu is simply the embodiment of product experience first and contemporary craftsmanship spirit:
In the eyes of many founders and engineers of technology enterprises as well as inside the byte, Feishu can greatly improve the efficiency of office collaboration, while also bringing excellent user experience and reputation. As a result, Feishu has gained a lot of revenue, won a large number of customers and won endless public praise.
Secondly, at the moment when the situation of flying books was very good, the upsurge of remote work brought about by the epidemic and the change of management team's thinking disrupted the rhythm of flying books, forcing flying books to pursue DAU, scale, recruit many people, and the organization expanded rapidly. This expansion and consequences are obviously not the problem of the current organization.
Finally, after the adjustment of Yitong's architecture and products, Feishu has become more capable of serving the overall interests of Byte. What follows is that the senior management is expected to be more patient.
In short:
"In the past few years, the team has made Feishu bigger and stronger, with good intentions and the right direction. However, the former leader has made greater investment and impulse, and has made great achievements in home office dividends. This is a mistake that every major Internet factory will make."
In a word, we have taken some detours.
In the end, in these narratives, everyone should be happy except the unlucky ones who were recruited into Zhichun Road and cut off for no reason.
03
Lack of business logic
However, there is no doubt that Feishu is less effective than others, and there are too many logical loopholes in this set of narrative that has been shaped intentionally or unintentionally.
First of all, the centaur threshold of ARR 100 million dollars, which Feishu has long been proud of, is itself misleading:
In terms of the bytes that believe in miracles, it is hard to say what achievement it is. It is rare that ARR does not reach 200 million dollars. It's like comparing Wang Sicong with ordinary people who can make money faster.
For a SaaS company, frankly, as long as it dares to burn money, it is not surprising what kind of ARR numbers it makes. In the eyes of any knowledgeable SaaS investor, what is more important is the price paid for such ARR.
An indicator often used by people in the SaaS VC industry is ARR (subscription revenue)/CAC (customer acquisition cost), which refers to the cost of getting an ARR of 1 yuan.
A cruel fact is that many Chinese SaaS companies, including Feishu, have surprisingly low ARR/CAC numbers, which are all made by VC.
This is also an important reason why many Chinese SaaS companies fail to go public overseas:
In the eyes of knowledgeable SaaS investors, the ARR/CAC ratios of these companies are surprisingly low, and their listing constitutes a fraud in the pure sense of looking for people who are destined to receive offers.
When the proportion is low to a certain extent, or even more comically, the number is selectively not released like a flying book, which means that the business is not established at all and will not be profitable after burning all the money that can be burned.
It goes without saying that for a company like Feishu, the ARR/CAC, which only publishes the ARR but not the input-output, is itself a very delicate misleading of public opinion. Most SaaS companies can't burn so much money like flying books. Of course, there won't be too many centaurs coming out.
Secondly, it is hard to say that the announced figure of ARR of 200 million dollars is really in line with cloud subscription: Feishu has been focusing on grabbing big customers at all costs in the past few years, and most of the big customers signed up are almost on the path of private deployment.
The most classic major customers of Feishu: Xiaomi, China Resources, Huazhu, New Hope, Haier, are all privatized. The cost is that Feishu has sent hundreds of teams, and the longest service cycle is more than one year, but the return is basically a loss making business.
This has completely failed to meet the definition of subscription business:
The subscription business model will allow the renewal revenue and expansion revenue to generate revenue in the case of natural renewal, rather than the one-time privatization deployment revenue of several major customers:
At the extreme point, the power of the subscription model lies in that if we say that the cloud subscription model of Feishu generates an ARR revenue of 200 million dollars, all the thousands of people of Feishu will be cut today, and dozens of customer success managers (CSMs) will be retained. Next year, there will be an ARR of 200 million dollars.
The privatization deployment model is completely the opposite: take the key account model of Feishu as an example, these seemingly rapidly rising key account privatization deployment revenue has buried hidden dangers for subsequent customers to renew their contracts. Not only is the revenue of the second year unfunded, but also a new round of customer acquisition needs to be organized, which is also a new round of cost, This competition intensity will increase again.
From today's layoff intention of Feishu, it is obvious that the state after layoff will be more like the latter than the former.
In fact, the figure of 280000 efficiency per capita is so small that the industry will never mention it.
Wages and R&D are only a small proportion of the total cost of labor costs, the amazing deployment costs and the continuous regeneration of customer acquisition costs, which are not mentioned by Feishu at all.
Finally, we try to put the Flying Book in Centaurus with the logic of 100 million dollars. In fact, we intentionally or unintentionally ignore the biggest difference between the Flying Book model and other companies: the main revenue source of the platform SaaS company is ecology.
Let's take nails as an example. The commercialization plan of nails includes three types of models:
1. Software subscription, including three special fees (professional version 9800 yuan/year, exclusive version 100000 yuan/year, exclusive version 1 million yuan/year);
2. The platform distributes products for software partners and receives a maximum commission of 15%;
3. As for hardware, ecological partners develop hardware based on the nail SDK interface, and nail charges 10% commission.
It is not difficult to infer that with the gradual expansion of the nail ecology, the commission of the latter two must account for a higher proportion in the revenue.
Microsoft is an excellent example of such an ecosystem. In the past 40 years, Microsoft's partner ecosystem has carried more than 95% of Microsoft's business. For every dollar of revenue Microsoft has received, its partners have received more than $9 in revenue.
As the flying book of the platform SaaS, once again intentionally or unintentionally ignored the proportion of ecological income in the ARR 200 million US dollars, drew a proportion of these key indicators, compared the ecological income with the single income of vertical SaaS, and tried to make the followers have an impression that they are divorced from the facts:
"Feishu has become the top SaaS company in China. Its brand, reputation and revenue scale are unparalleled."
In fact, it is not difficult to see that Feishu still doesn't understand what is wrong with itself today, just from the fact that the external reports on Feishu's choice of customers are irrelevant and the guidance data is selectively released:
In the process of Feishu's efforts to narrate, the issues such as monthly life and usage time, which have been trying to play down, are rather insignificant for a SaaS company; However, a normal SaaS company should pay attention to CAC performance and the proportion of subscriptions, but Feishu didn't mention a word.
Three years after making great efforts to make a miracle, in addition to contributing a lot to the Beijing software talent market and a lot of achievements to the volcanic engine, today's Feishu has not found the right path for SaaS business growth, and even does not know where it is wrong.
04
ToB's life, ToC's heart
In terms of product creation and operation strategy, Feishu has chosen the cold start scheme that is very popular among foreign peers from the very beginning: with very obvious traces of the PLG (Product Lead Growth) product leading growth strategy.
In a word, this set of strategies is to condense the products in the hands of users through development logic, design philosophy, brand marketing, customer sales, continued purchase and additional purchase, and transfer them to many users in the same enterprise through user experience. The widespread use of users will in turn affect the purchase behavior of the company.
From this point of view, this is the core reason why Feishu has been focusing on the more Internet based indicators such as monthly live, daily live, online duration and user experience: this very C-end color strategy is a poor version of the traditional B-end strategic push and marketing strategy.
By default, the traditional software market strategy is that manager=decision-maker=evaluator; Modern managers are more willing to get answers from the end users (employees) of products. The background of this strategy is that in Europe and the United States, the decision-making center of software procurement has been transferred from the management to the end users.
The rise of this strategy in Europe and the United States has a key environmental factor:
The software industry reconstructed by cloud computing is generally facing new challenges. The industry is gradually changing from the seller's market to the buyer's market. The cost of getting customers for software companies is gradually rising, while the establishment of professional markets and sales teams is not the most cost-effective solution.
Therefore, PLG's business strategy is basically to seek a large-scale customer acquisition system driven by low cost at the C-end.
To be fair, this set of very C-end strategies is applicable to most American SaaS companies. The enterprise representatives of the PLG model, such as Figma, Dropbox, Slack, and Atlassian, are also players in the same niche as Flying Books.
Zoom, which is the target of Tencent Conference and Flying Book, has finally become so popular.
Referring to its peers in North America, Feishu is obviously convinced of the efficacy of the drug PLG. From the perspective of hindsight, from the lineup of invited support guests, Feishu did not spend less resources on this strategy:
In July 2022, Luo Yonghao, who is debt free and light, started a new journey and founded the fine red line of AR company. The first decision of the new company is to open the company to the flying book, which is a new office tool of Luo Yonghao's new company.
In the advertising film of the Flying Book Conference that year, Luo Yonghao and Ma Dong, the host, Ideals Auto, West Master, Blue Lake, praised Flying Book together. They are more cutting-edge companies that are considered as advanced enterprises by Flying Book. Also mobilized by Feishu are Shen Nanpeng, the founder of Sequoia China, and Horizon, the ideal chip supplier.
It is conceivable that the founders and executives of these companies are flying book platforms, and none of them can be a small sum. From C to B, Feishu is a typical representative of PLG strategy and has gained a large number of fans with extraordinary enthusiasm.
However, from the perspective of later commercialization growth, it is hard to say how much the low-cost PLG strategy has brought to Feishu:
On the one hand, the revenue of Feishu is still brought by the privatization deployment+price war strategy of several key customers. On the other hand, from the situation that we are unwilling to disclose the cost of acquiring customers' CAC, we can see that this set of PLG is ultimately not very low-cost, and the level of customer transformation is not enough to be disclosed.
Why does the word-of-mouth marketing and user oriented growth of Flying Books seem to have little use in China? In other words, why didn't the ideal situation in which employees force the boss to use a certain software product?
First of all, unlike European and American employees who have a strong sense of independence and are more flat in corporate decision-making, most enterprises in the world still maintain the traditional top-down decision-making process, and only a small proportion of Internet companies prefer to make equal decisions.
Secondly, in most Chinese companies, software purchase decision-making is a highly centralized process and a huge expenditure, so it often needs to be reviewed by many people in the management. In such review meetings, the general satisfaction of employees with a certain product only constitutes a small impact factor.
In other words, the popularity of PLG strategy among Internet practitioners and so-called advanced enterprises is more like an ominous metaphor:
In new enterprises (content creation, programmers) where collaborative office can be influenced by employees to make decisions, most of them do not have strong desire to buy software except for the top companies, and the production mode has been highly decentralized. Many Internet practitioners have already worked at home, and Internet users have become complacent on a certain productivity tool, Most did not affect the final decision of the enterprise.
Furthermore, for most Chinese business owners who are in the decision-making position, the so-called value of office productivity improvement brought by flying books is very suspicious.
According to a survey, most business owners' decision-making priorities on software spending are: first, it can bring revenue growth; second, it must be installed because of regulatory requirements on compliance and security; However, it is not difficult to understand the underlying logic of the improvement of office collaboration efficiency and the demand for management methodology, which rank very low in the minds of business owners:
In terms of the highly competitive salary level of Chinese employees, many office efficiency promotion functions can be replaced by the service of piling up manpower; What kind of SaaS can help them sell more goods and reduce costs is the core pain point of 99% of Chinese business owners in SaaS.
This set of PLG and the so-called byte methodology and process of Feishu have a sense of dragon killing in the eyes of most enterprises.
In the eyes of these very pragmatic enterprises, despite these good reputation and excellent user experience, most cooperative office software are similar in terms of underlying functions. Feishu is no exception. Compared with its competitors, Feishu can provide functions such as meeting, clocking, instant messaging, and document. Most products of the same type also have such functions.
In the eyes of these enterprises, the functions that are not available in the collaborative office of other peers can be solved through ecology, while the so-called self developed and refined functions of Feishu, strictly speaking, do not produce any subversive innovation, which can attract these pragmatic entrepreneurs to pour money into Feishu.
From the strong C-end color of the product operation idea to the C-end bottom gene of the product design, Feishu has taken a product development path that can meet the very special needs of a small number of fanatical fans from the beginning, but the huge community voice generated by this small number of people has led Feishu into a completely different dilemma from its competitors from the beginning:
Internet practitioners (1%) who applaud Feishu strongly are not entrepreneurs who actually pay for Feishu (99%).
The higher the number of cheers from a few people, the more it will make Feishu focus on the voice of a few people. It will continue to refine on the extremely subtle product functions. This functional improvement will in turn continue to mobilize the enthusiasm of Feishu users, and a reputation cycle that does not bring about payment will be forged here.
However, among the majority of paying users who really need to reach the target, Flying Book is no different from the common cooperative office software. They don't need to pay for it, and the improvement of its functions has nothing to do with its real needs. The repeated iterations and improvements of Flying Book have no impact on the down payment and renewal behavior of business owners, even negatively related.
To be fair, from the results of the reputation marketing of Feishu and the momentum of user growth, Feishu really moved its mind on the promotion of low-cost products and brand building, and this kind of C-terminal tactical literacy with strong byte branding is also quite effective.
But it is precisely this strategic orientation that is out of touch with most domestic SaaS operating environments that makes the implementation of tactics on the brand of Feishu better. Strategically, Feishu will deviate from the goal of low-cost customer transformation farther.
05 Going to sea is not the way out
Unlike e-commerce and short videos, the reason why books fly today is not that they don't go to sea. In fact, the massive investment of Flying Books at sea is not uncommon:
By the middle of 2020, Feishu will start to translate 16 languages including Hindi, Japanese and Thai at the same time. It wants to grow overseas.
In 2022, Lark, the overseas version of Flybook, also made it clear to accelerate the progress of overseas commercialization, and set the goal of achieving a global revenue of 6 billion yuan in five years. The overseas market is mainly Southeast Asian countries with lower competitive intensity, such as Thailand, Singapore and Malaysia.
One of the main logic of going to sea is that Chinese enterprises have poor payment habits, Feishu has missed the growth bonus of Chinese home office users, and the intensity of overseas competition is low.
However, from this letter of all staff and the guidance of public opinion, going to sea is difficult to become the way out for flying books:
Not surprisingly, a flying book going to the sea will move its domestic strategy of chasing big customers, privatizing its deployment, and gaining customers at no cost to overseas markets.
This is precisely the main reason why the commercialization of Flying Books has not been as long as expected:
Unlike short videos and e-commerce, which can often produce miracles, SaaS is just the last thing that the Internet spends money on buying users and exchanging traffic for free. What it needs is efficient and effective high-performance growth. In the collaborative office SaaS track, vigorously will not produce miracles, but will only produce chicken feathers.
06
epilogue
There is a joke in the SaaS industry: When was the first year of China's SaaS?
The answer is every year.
Because every year, there will be a group of amateur VC investors, who are hot headed, trying to quickly spawn a Centaurus SaaS company by stacking the sales team's crowd tactics, or by spending a lot of money on the channel's extensive growth model.
More and more money is burned, but every year the experience of bankruptcy is new.
The past extensive growth models, such as recruiting a large number of people for sales, or investing a large amount of money in marketing, no longer meet the growth requirements of SaaS for high performance, and its reaction often only leads the team farther and farther away from the right path.
In fact, up to now, the $200 million ARR and $10 million monthly living expenses that Feishu is proud of are hardly achievements without mentioning investment. To be honest, for the bytes with abundant resources, the investment in Feishu is really not a huge loss.
However, from the point of view of the public opinion guidance of the whole staff, the selective disclosure of guiding indicators by Feishu inadvertently reveals deeper problems:
The problem of flying books today is definitely not to invest ahead of time, recruit thousands of more people, take some detours, go to sea, or be more patient, you can regain growth.
Ironically, on the eve of the arrival of the AI wave in 2023, Feishu is still trying its best to iterate the product, and has done enough work on every button and label. Baidu Wenxin Yiyan and Alibaba Tongyi Qianwen have successively appeared, and the ability of Feishu AI was officially implemented until the release of "Feishu Smart Partner" at the end of November. This slow response to AI intelligence has made the product experience that Feishu is proud of gradually become suspicious.
Judging from the tone of the whole staff's letter and the public opinion stories, it is not difficult to find that the logic of SaaS business should be followed, even today, flying books are still inaccessible. In the future, we will continue to explore hard.
(Statement: This article only represents the author's view, not Sina.com's position.)
