Circles and the Metaverse Are Bringing New Opportunities

  Changes in information and media technologies have not only spawned new models of content ecology, but also changed the investment logic in the consumer sector. In a sense, the production of content and the construction of consumer brands have certain interoperability.
  Entering 2022, although the “fire” of new retail has passed, in this large market with more than 1.3 billion consumers, new consumption is still the focus of investment institutions. From the launch of Bubble Mart to the popularity of HEYTEA, many new consumer brands have emerged, and entrepreneurs who have come one after another are still working hard in this field. In addition, in the context of China’s deep economic transformation, new consumption, especially the new driving force in the field of spiritual consumption, is indeed worthy of attention.
  In addition to new consumption, the metaverse is also a newly emerging hot spot. What is the difference between this seemingly “mysterious” new era and the past mobile Internet era? In response to these hot spots in the investment field, we interviewed Fan Weifeng, CEO and founder of Gaozhang Capital.
  Fan Weifeng has decades of experience in editing, management and investment in the entire media industry chain. In recent years, he has focused on investment in cultural technology and the Metaverse Circuit. He has been rated as the most discoverable investor in China’s new cultural and entertainment industry. Fan Weifeng graduated from the Department of Trade and Economics of Renmin University of China. He is a director of the China International Public Relations Association and a guest lecturer at Renmin University of China. At the same time, he also manages his video account “Old Fan Says Investment”.
Not “traditional VC thinking”

  Nanfengchuang: At present, content business is still very popular, and there are more and more cross-border phenomena. For example, many people from financial institutions have begun to leave their jobs and start self-media. Some people say that content business is outdated, what do you think? Any advice for entrepreneurs?
  Fan Weifeng: The track for content business has always existed. The track is eternal, but the season may have changed. 10 years ago, that was the beginning of the text content season, and 5 years ago, the beginning of the video era. Now, perhaps more focused on interactivity and virtualization, that is, the age of the metaverse. Therefore, I have three suggestions for content business entrepreneurship:
  First, you must seize the dividends and cut in at the beginning of the season. Doing things is often twice the result with half the effort, and you can multiply your talents and expertise with traffic; if you do not seize the dividends, Then it is bound to fall into more severe competition. Of course, good entrepreneurs can also stand out in the end, but the probability will be lower than before, and the cost will be higher.
  Number two, do what you do best. It is easy to have a misunderstanding of starting a business here, that is, an entrepreneur may think that there is a market demand in a certain field, so he starts a content business, but after going there, he will find that the competition is too fierce and his chances are not great.
  For example, financial content, senior media people will come out to start a business. In addition, due to some changes in the labor market in the financial industry in recent years, people from financial institutions will also come out, so the competition in this field will become more intense. Another example is food, the same is true. If you start a business, you may compete with the top chefs in the country in the future.
  This is completely different from the entrepreneurship of replacing chicken feathers for sugar and small factories to focus on production at the beginning of the reform and opening up. At that time, as long as the market demand can be found, the possibility of success is high, but the current content entrepreneurship is not like this.
  In fact, content entrepreneurship has nothing to do with the vast majority of people. The mobile Internet has lowered the threshold for content access, channels are no longer so important, and the power of content itself will be infinitely amplified. Coupled with the changes in the external environment, especially the shrinking of the Internet advertising market, in many fields, only entrepreneurs with leading positions will survive better in the future.
  Third, don’t be pessimistic, there is still room for content entrepreneurship, as we discussed earlier, the track is eternal, and the season is constantly changing. The content of the future must be distributed and decentralized, and no one can form a monopoly, which means opportunities.
  To give a simple example, over the years, whether it is a public account or a short video, on the surface, it seems that there is no long-term top-stream IP, a certain IP must have been popular for a period of time, and then slowly fade away. It was other IPs that caught fire. But we must be clear that this IP, which is no longer so popular, has already firmly occupied its position. Among its loyal audiences and its own market segment, as long as it can continue to output, it can still enjoy the benefits for a long time.
  Therefore, unlike entrepreneurs in some other fields, for most ordinary players, entrepreneurs in the content field need new thinking, that is, there is no need to pursue the “traditional VC thinking” in the Internet field, that is, I must win Take everything and be the first to live well, but to have “business thinking”, that is to say, you don’t need to pursue exponential growth, but do a good job of my one-third of an acre of land, do it well, and you can produce good results. s return.
Spiritual Cognition and Supply Chain

  Nanfeng Window: Gao Zhang has also invested in more and more new consumer brands. As an institution that was originally famous for investing in the content industry, what is your investment logic in this field?
  Fan Weifeng: First of all, we can understand it in a simplified way: the essence of a consumer brand consists of two parts. One is the spiritual value it represents as a symbol. Consumers identify with you and purchase your products. The other part is how to establish an efficient supply chain as a physical object or service, and complete the process from product development to delivery and after-sales with high quality and efficiency.
Entrepreneurs in the content field need new thinking, that is, there is no need to pursue the “traditional VC thinking” in the Internet field, that is, I must be winner-take-all and be the first to live well, but to have a “business thinking”.

  Obviously, the development of China’s manufacturing industry has made our supply chain unparalleled in the world. In almost all consumer goods fields, from cosmetics to home appliances, to various consumer electronics, the Pearl River Delta and the Yangtze River Delta have the world’s best factories and supply chains. In other words, when the supply chain is no longer the highest threshold, the first part, the consumer’s perception of the brand, will highlight a more important value.
  Therefore, our investment logic is also: you have a brand and loyal fans (users) first, and then we will invest. As for the construction of the supply chain, as long as the entrepreneur has an open mind and the team has certain industry experience, it is easy to integrate resources and quickly build an efficient supply chain system. The pineapple zebra we invested in started out as a residence guide, but it is now making products and supply chains, and its brand is developing rapidly.
  For brand owners, there are too many excellent supply chain talents and resources in Guangdong and Jiangsu, and the production capacity of products is essentially more and more surplus. With good brands and loyal audiences, brand owners only need to If you run the factory seriously, the problems of the supply chain can be solved.
The circle is the brand moat

  Nanfeng Window: In the past, when we talked about consumers, we would say “post-90s”. They are so young. Now they are talking about “post-95s”, calling them Generation Z (“Secondary Generation”). What are the characteristics of this generation of consumers? How do they affect the investment logic of investment institutions?

  Fan Weifeng: We must understand two backgrounds. First, compared with the “post-70s” and “post-80s”, the information gap between the “post-90s”, “post-95s” or “post-00s” generation and their parents is actually smaller. As the “post-70s” and “post-80s”, our parents know less about us. The environment in which we grew up and the information we are exposed to are completely different from our parents, and we are more likely to have some insurmountable recognitions with each other. knowledge gap.
  But “post-90s”, “post-95s” or “post-00s” are easier for their parents to understand. The two generations grew up in a more similar era, and there are many overlapping ways of contacting information. Therefore, there is no need to over-exaggerate the differences between Gen Z and the parent generation.
  But the second point must also be acknowledged that this generation has indeed grown up in a “specialized culture”, and the mobile Internet has strengthened the circle culture. It is difficult for this generation to form a general so-called “consensus” with others on a certain issue. ”, they will be “stubborn”, stick to themselves, and enjoy themselves.
  Why don’t they sing karaoke? Because they don’t have the “same song”, everyone has their favorite star and is very different. In the karaoke room, they can’t pretend to understand other people’s idols. Unlike middle-aged people, who can hum the songs of Andy Lau and Faye Wong, everyone can find common interests.

On September 3, 2022, Shanghai, the global flagship store of Bubble Mart was unveiled in Hongyi Plaza, Nanjing Road

  As far as investment is concerned, that is to have a deep insight into this circle culture. For example, when investing in new consumer brands, it is best to invest in the top brands in the vertical circle. In the past, we said “subculture”, but later it was “two dimensions”. In fact, it is divided into circles and layers, and the formation of isolation between circles means that there is no one brand that can capture everyone. This is the opportunity for a new brand to rise. Once the brand rises, the circle it is in will become its brand moat.
  For example, some people queue up to buy a milk tea for half an hour. As an efficiency-oriented “post-70s” or “post-80s”, you may find it incredible. However, as long as you understand the circle structure of the new generation of consumers and their identity culture, it is easy to understand.
  With the advancement of media technology and changes in social and economic structure, the evolution of circles is a dynamic and unstoppable process. Therefore, new brand opportunities and investment opportunities will continue to emerge.
The Metaverse is the Age of Content

  Nanfengwindow: The evolution order of the Internet is from the PC Internet to the mobile Internet, and then to the Metaverse Internet. You have a point that the metaverse is the quintessential content industry. Now, the metaverse is said to be very mysterious. How is it different from the Internet in the past?
The Metaverse Internet brings two differences: one is a revolution in display effects, and the other is a difference in economic mechanisms. Two differences bring different investment opportunities, the former such as VR and AR industry, the latter such as blockchain.

  Fan Weifeng: First of all, we cannot understand the content industry narrowly. It is not text, audio and video that are the content industry. The content industry is an extremely broad concept. The game industry is one of the most profitable content industries. Its bottom layer is essentially code. On the basis of the code, allowing players to have an immersive audio and video enjoyment and interactive experience, which is essentially the same as writing text to give readers a sense of pleasure in reading.
  Moreover, it is not necessary to directly consume content products to be the content industry. The product model that attaches content to other substances also includes the content of the content. For example, Bubble Mart is very popular. In addition to the physical meaning of the doll, the spiritual value attached to it and its IP are the reasons why consumers are willing to buy it. Then, the process of building spiritual value and building IP is also the scope of content creation.
  In my opinion, the content industry is just constantly entering a new technological cycle, bringing different content consumption and operation models. Compared with the Internet in the past, the Metaverse Internet brings two differences: one is a revolution in display effects, and the other is a difference in economic mechanism. Two differences bring different investment opportunities, the former such as VR and AR industry, the latter such as blockchain.
  First, in terms of display effects, through new technical means such as 3D, VR, AR, etc., the interactivity of content consumption has undergone revolutionary changes. For example, the evolution of our content consumption in the past was looking at pictures and reading, followed by listening to music and watching movies, and then games with a strong sense of virtual identity substitution, while the metaverse is the state of immersive virtual reality interaction. It can be seen that the evolution of the content consumption model has gradually deepened the degree of sensory pleasure brought to people. Therefore, the evolution of this state is irreversible.
  Games are just one of the many application scenarios of the Metaverse. In the fields of education, medical care, and industry, the application prospects of the Metaverse are also very broad. Based on these application scenarios, there are numerous investment opportunities for hardware and software in 3D, VR, AR and other fields.
  Second, another difference in the metaverse compared to the internet of the past is its economic mechanism. What we often talk about is the distributed concept and decentralization model, and the blockchain is one of the internal mechanisms. This distributed and equal concept will have a profound impact on many industries and give birth to new business models.
  I believe that the Metaverse will bring about the explosion of content business under the new technology cycle, and each of us should embrace it with an open learning attitude.