House Dad's Literary Life-Chapter 300
Chapter 300 – Fate, Inexplicably Wonderful
Lan Zhoukai invited Yang Yi out for a tea at a private club where he had shares. As soon as they met, he complained, “Little Yang, you are too unkind! That day, you got my interest up, and left it at that. If I hadn’t had someone conduct a business investigation and happened to see your name, I wouldn’t have known you had such a big industry!”
Yang Yi was taken aback for a moment. He knew that Lan Zhoukai was conducting investment research on internet companies, but he didn’t expect that his own company would be on the list that he obtained.
Yang Yi didn’t want Lan Zhoukai to know before, fearing that he would doubt his motives. But he didn’t expect that the consulting company still recommended him to Lan Zhoukai.
Really fate, inexplicably wonderful!
“Sahara Online Shop?” Yang Yi asked.
Lan Zhoukai showed a surprise expression and said, “Is Sahara also yours? Isn’t that an industry owned by a boss named Fu something.”
The consulting company initially recommended him to invest in Sahara Online Shop, and Lan Zhoukai also entrusted an investment bank to negotiate with Fu Jun. However, Fu Jun’s offer was a bit high. Lan Zhoukai thought he was being played, so there was no follow-up.
“I’m just a small shareholder in it, but you’re not referring to Sahara Online Shop, then what are you referring to?” Yang Yi smiled awkwardly, realizing he had made a mistake.
“Weibo!” Lan Zhoukai said, staring.
Yang Yi really didn’t expect that Weibo, which was still in its infancy, would actually catch the attention of the consulting company. It seemed that he should not underestimate the discerning eyes of this world’s elite!
Currently, Weibo has a certain influence, with tens of millions of registered users and about a million active users. Due to increased investment, Yang Yi has now started to let Mao Peifu start setting up a company, integrating Weibo and Facebook into one company. The company’s name has already been registered, and was called “Houlang Technology Company”
The meaning of “Houlang” might not be well understood by people in this world, but Yang Yi knew it well. Just like the later waves of the Yangtze River push the earlier waves. This company aimed to become the last wave to survive on the beach… 1
On the road to formalization, Yang Yi naturally needed to hire professional managers to steer the helm of “Houlang”. After the company has been established, Mao Peifu would step back to the second line and work and learn as the HR manager.
It has to be said that Mao Peifu was indeed an excellent management talent, but she still lacked some experience in operating a large company. Yang Yi had her take a step back to focus on cultivating her. If Mao Peifu showed the level that Yang Yi wanted to see in the future, Yang Yi might not let her go further.
Moreover, Yang Yi didn’t break his promise and signed a new contract with her, who had done a lot of work in the early stages, for a period of four years. If Mao Peifu still held an important position at Houlang after four years, Yang Yi would give her a 3% original share reward.
This was quite a lot!
Digressing a bit, now Lan Zhoukai wanted to invest in Yang Yi’s Weibo, but he didn’t know the news of the establishment of “Houlang”.
“My investment advisor suggested that I acquire Weibo because social networking has great potential for development. However, since it’s your company, Little Yang, I won’t do that. We’re brothers, so let’s make money together!” Lan Zhoukai laughed heartily, “I’ll provide you with funds, and you can speed up the development. What do you think?”
Lan Zhoukai used a consultative tone, obviously he didn’t want to affect their relationship because of this matter.
However, Yang Yi furrowed his brow and said, “Brother Lan, let me tell you the truth! Weibo is actually a project that’s difficult to make profits from, whether it’s in the early or later stages, it requires continuous capital investment. In terms of revenue, I haven’t figured out a particularly good profit model…”
Of course, Yang Yi has some ideas about the profit model, but what he said was not wrong. Weibo was indeed not easy to achieve profitability. Just like “Zhalang” in his previous life, it took more than five years to turn losses into profits. The secret of turning losses into profits was seizing the popular trend of short videos and the internet celebrity economy driven by live streaming at that time.
Although Yang Yi could sell Weibo for a good price in the future, its main purpose was really not to make money!
“So, if you want to invest in Weibo, it’s better to invest in Sahara. This online shop is currently the largest online shopping platform in the country, but this market is far from being fully developed. Think about it, with billions of people across the country, if even one-tenth of them, that is about 100 million people, shop on Sahara, how terrifying would the cash flow be?” Yang Yi revealed the core profit model of Sahara Online Shop with just a few words.
That’s right. Sahara might not make as much money as some newly established online shopping platforms on the gross profit of individual products, but it could attract more customers and harvest more orders by using the low-price advantage of its products. Higher sales volume also allowed them to have lower procurement costs and longer payment periods.
The accumulated cash flow could enable them to do more things, such as making quick-return investments.
However, Yang Yi temporarily restricted Fu Jun’s approach and instead asked him to use these funds to expand the scale of Sahara, such as establishing a logistics team, improving service quality, and placing more advertisements and expanding more marketing channels. Combined with increasingly lower product prices, this formed a strong competitive barrier against newcomers to the industry.
If they wanted to tap into Sahara’s customer base, under the advantages already established by Sahara, it was almost impossible!
Of course, Sahara has not yet reached such a large scale, after all, online shopping was still a new thing, and many users were still observing…
So Lan Zhoukai had some doubts about Yang Yi’s statement, “Can there be such a high participation rate of 100 million people? Is the country now so wealthy that everyone can afford internet access?”
“It is not possible now, but our focus is on the future. Now we must firmly grasp the existing market in our hands. In the future, as the times develop and the cost of accessing the internet decreases, coupled with the popularization of mobile internet that I have told you about, online shopping will become as common as eating and drinking. At that time, Sahara will truly become a giant in the Internet industry!”
“Just like buying a house? As long as there’s a continuous influx of rural population into the cities, the market will continue to expand.” Lan Zhoukai connected the logic from another perspective.
“Yes!” Yang Yi nodded, “So compared to my Weibo, Sahara is more worthy of your investment, Big Brother Lan.”
Yang Yi realized that since Lan Zhoukai brought it up, and he and Fu Jun were also looking for financing, why not bring Lan Zhoukai in? Everyone could make money together, and the fertile water wouldn’t flow into other people’s fields!2
However, Lan Zhoukai still has some hesitation and said, “But now Boss Fu is asking for quite a lot of money. The consulting firm provided me with data, and this company is worth at most around 200 million. However, he wants more than a hundred million for only six percent of the shares. Isn’t that too exaggerated?”
“Big Brother Lan, do you know how much this company was worth six months ago?” Yang Yi asked Lan Zhoukai.
“How much?” Lan Zhoukai really didn’t know.
“Less than ten million!” Yang Yi smiled slightly, “And this also includes many investments in real estate rights.”
In the early stages of Sahara Online Bookstore, Fu Jun was indeed ambitious and wanted to make a career, so he made a lot of investments in both the company’s office building and the warehouse for goods transfer.
Don’t underestimate these investments. Even if he withdrew from this project, the sale of these appreciating real estate assets would still allow him to recoup his investment.
Even so, in half a year, to be precise, in less than half a year, the company’s value grew from 10 million to 200 million. This development speed was astonishing!
“Brother Kai, this is Fu Jun’s personal phone number. You can go back and discuss with your investment advisor again and see if this investment is worth it!” Seeing Lan Zhoukai was a little moved, Yang Yi didn’t persuade him anymore. He smiled and said to Lan Zhoukai, “What Sahara needs now is to seize the opportunity. If you can complete the financing earlier and believe in its development speed, you will soon be able to recover your capital!”
Lan Zhoukai naturally wouldn’t make a decision based on Yang Yi’s words alone. For a large deal worth several hundred million, Lan Zhoukai needed to handle it carefully. Even if they were close brothers, he still had to make clear calculations. It was not impossible to even ask a consulting company to do a more detailed investigation later!
