text | Sang Wenfeng, founder and CEO of Shence Data, O
Fang Xing, Vice President of Zhonghe Cloud Science (51 Social Security),
[Cui Niu Reading Club]
With the advent of the digital era, " paradigm conversion " has also been widely used in the transformation and innovation practice of many companies. The essence of paradigm transformation is the transformation of worldview and cognition. In this reading club, we invited Sang Wenfeng, founder and CEO of Shence Data, and Fang Xing, vice president of Zhonghe Cloud Science and Technology (51 Social Security), to share the paradigm switching and practical analysis of To B enterprises. The first two parts are the To B corporate paradigm conversion theory and Shen Ce’s paradigm conversion case shared by Sang Wenfeng; the third and fourth parts are the 51 paradigm conversion case shared by Fang Xing 51 social security, and the last part is the interactive Q&A between the two guests and netizens.
The core content of the full text:
1. To B The enterprise paradigm conversion is an inevitable trend in the era of digital transformation
2. Changes in customer demand are the root cause of paradigm switching
3. The market determines the operating paradigm
4. IBM, Adobe, Shence, 51 Case analysis of social security
Transformation and innovation: To B Why do enterprises need paradigm conversion?
1. The era background of digital transformation
The Internet technology revolution has entered the second half, from the explosion stage and fanatical stage of PC Internet and mobile Internet, it has transitioned and penetrated into the digital transformation stage of various industries.
Image source: "Technical Revolution and Financial Capital"
2. The process of scientific revolution is the process of paradigm conversion
0 The core of the paradigm contains two parts, one is a theory, one paradigm may contain several theories; the other is a paradigm case, which is like after-class exercises. After learning systematic theory, we have mastered a paradigm, but it is not easy to really explain clearly where the boundaries of the paradigm are. This is the paradigm concept that Kuhn talks about. In fact, the process of scientific revolution is the process of paradigm switching, and the transformation of paradigm is the transformation of the world outlook.
The structure of the scientific revolution is as follows: conventional science solves problems in a framework or paradigm of a basic concept. Some unsolvable anomalies will accumulate and challenge existing concepts, thereby causing a crisis. In the end, the crisis will be calmed down due to the birth of a new paradigm. In other words, paradigm switching includes three stages: abnormality, crisis, and revolution.
3. Product-type paradigm VS Customer-type paradigm
To B Enterprises include product-type paradigm and customer-type paradigm, but these two paradigms are completely different in concepts and methods:
From the perspective of providing services, the product-type paradigm is simply selling products, but the customer-type selling solutions and human outsourcing services; from the perspective of value goals, the product-type paradigm is more inclined to To B products, which tends to empower. For example, after using the database, it still varies from person to person; but the customer-type paradigm does not focus on empowerment, but applies in real scenarios to run through business processes.
From the perspective of leverage , the product-type paradigm has a relatively high leverage, and the gross profit margin is generally above 70%, but the customer-type paradigm, that is, the service-oriented one, the gross profit margin is generally 40-60%, and the gross profit margin without leverage can only reach 30%-40%; from the perspective of sales methods, the product-type paradigm includes license, maintenance and subscription system, and the customer-type paradigm includes project and subscription system.
Comparison between product-type paradigm and customer-based paradigm
As for which paradigm is better, there is no fixed answer. For the paradigm switching of To B enterprises, many times switching does not mean that A is better than B, but that A is more suitable for this scenario than B. It is possible to switch between product-type paradigm and customer-based paradigm.
4. The reasons and examples of To B enterprise paradigm conversion
Salesforce, SAP, and Accenture are all classic cases of paradigm switching in the To B field. For example, Salesforce has SaaS-based products on the one hand, and ecological partners helps to implement it; SAP has both excellent products and the ability to operate outstanding customers, and ecological partners to implement it.For SAP, many of its important customers run themselves, rather than running them with their eco-partners like Salesforce. (Extended reading: From an idea to a hundred billion dollar empire: Salesforce’s enlightenment to Chinese SaaS companies)
Salesforce, SAP, and Accenture three paradigms
Accenture is a consulting service, with a best practice knowledge base, industry knowledge-how, and success stories. Accenture adheres to the principle of neutrality and only uses third-party products, so it can maintain very good cooperative relationships with companies such as SAP, Oracle and other companies.
(1) Changes in customer demand are the root cause of paradigm switching
For To B companies, I think the fundamental reason for paradigm switching is that the fundamental change in customer demand, which leads to the fundamental change in customer demand. We can use the PEST model to analyze (P: Political, policy changes; E: Economic, economic environment changes; S: Social, social environment changes; T: Technical, technological revolution changes). The emergence of these changes brings changes in customer demand, thus leading to the occurrence of paradigm switching.
PEST mode
Secondly, we must constantly ask ourselves, who are your customers, what are the customer groups, which scale customers are your target customers, what are the customer needs, whether customers pursue personalized needs or customized needs, such as whether customers want productized bottle services or personalized nanny services.
From the theory in the book "Browsing the Gaps", due to different market maturity, customers want different things, just like the customer group of Shence serving, what they want will change at any time. It is precisely because of the fundamental change in customer needs that the previous paradigm is not working and needs to be changed. At this time, paradigm switching is needed.
(2) IBM: Paradigm switching brought by business transformation
Business transformation will also bring about paradigm switching. One very typical case in this part is IBM. IBM experienced a paradigm switch in 1993. In 1993, in the PC era, software integration demands emerged in enterprises. In the past, most software was sold in packages, which was equivalent to accessories. Later, customers needed software to solve application scenarios, but software needed to be integrated into hardware to solve actual business problems.
In this environment, IBM suffered serious losses and revenue declined year by year. Guo Shina was ordered to lead IBM from a software company to a consulting service company. IBM acquired Lotus Company as a solution and integrator, from selling hardware products to selling software and solutions. In the past, IBM only sold its own software and hardware products. Now it not only sold its own products, but also sold other products, from product-centered to customer-centered. This is the switch that IBM made at that time.
Starting from 1993 to around 2000, IBM's stock price rose 10 times, so IBM's transformation is still very successful.
IBM Stock Price Trend Chart
(3)Adobe: Productization + Customer Management + Ecological Partners Implementation Three-Plan
Adobe also had a paradigm switch in 2008. It was the financial crisis at that time. Many customers did not upgrade the new version in order to save expenses, resulting in Adobe's revenue declined by 18%, equivalent to one-fifth of the revenue; technically speaking, under the general trend of mobile and cloud, it has made it feasible to provide new functions value, and Adobe began to shift from concept to SaaS, one is to provide cloud services, and the other is to subscribe. In 2009, Adobe acquired Omniture, mainly focusing on its practical operations in subscriptions.
In terms of business, in 2018, Adobe acquired the world's largest marketing automation SaaS Market and Magento, one of the world's largest e-commerce SaaS systems, and integrated existing products to provide full marketing solutions.
Later, Adobe's services became stronger and stronger, and the product iteration method was also changing. In the past, a new version was released from 18 months to 24 months, and it was sold on the market. After iteration, it became monthly updates, so that the latest functions and value can be continuously provided.
Adobe Paradigm switching analysis
Adobe has undergone many changes in marketing, culture, etc.In terms of marketing, from focusing on the contract amount before to focusing on the number of subscription customers now; in terms of culture, Adobe pursues continuous innovation, whether it is integrating the innovative ideas of other companies or its own innovative ideas. In short, Adobe's innovative culture is very strong.
In terms of customer management, Adobe insists on its own products. You can see Adobe's financial report, with a gross profit margin of up to 84%. In fact, Adobe's productization rate is also very high; in terms of customer management, although many customers will leave it to ecological partners, Adobe must ensure the connection with customers. Therefore, the productization method plus customer management and the implementation of ecological partners, three-pronged approach, I think Adobe is still very successful.
Adobe began to transform around 2012. When it was high, its market value reached US$300 billion. Although Salesforce's market value was US$240 billion, it was about 20% worse than Adobe. It is not difficult to see that Adobe's development momentum is still very strong.
product increases customer management: Shence’s paradigm conversion
Let’s talk about Shence’s case, Shence’s development has gone through the following stages.
1. Determine the priority of the product
From 2015 to 2017, we were doing the SaaS paradigm. Although we provided a privatized deployment method, we were actually still charged for subscription. The product concept at that time was the ultimate single product, and we made the product 90 points, and strive to be the industry leader.
From 2017 to 2018, the expansion from Internet customers to " Internet+" customers. The "Internet+" we did at that time was actually a traditional enterprise that opened new Internet businesses. In the final analysis, it can still be understood as an Internet company, so it does not involve paradigm switching.
In 2018 and 2019, Shence began to expand its product categories, from one product to multiple products, and made the product matrix like Salesforce, Adobe, Oracle, and SAP. I put forward a slogan at that time, Shence wanted to be a "data convenience store" in China, but this did not mean that we had to master data, but provided various data capabilities.
After three quarters, the east wall was demolished and the west wall was repaired. Looking back now, this strategy is wrong. Because there are not enough resources, I still feel that I should focus and not be able to play everywhere afterwards. In the case of limited resources, products alone cannot solve all problems, and products must be classified according to priority.
Shence Data Paradigm Switching Analysis
Whether it is expanding to Internet+ companies or making product matrix, we always have product-oriented strategies. In this process, although there is anxiety, we are more busy and will not have an impact on faith (cognition). However, the outbreak of the epidemic in 2020 has had an impact on my beliefs, and at the same time, it made me clearly realize that the APP war has ended and the market is indeed changing.
2. Create explosive products based on market demand
In the product paradigm stage, Shence encountered a crisis. We once really hoped to use the power of the Internet to create explosive products. Although we are To B company, we have always wanted to create downstream explosive products.
Later, we also tried to make some products, but they were not large enough. For example, we made Shence Intelligent Operation Products in 2019 and completed PMF in August 2019. We believed that we had reached scale and sold dozens of customers from October to December. We once thought that we could achieve the second legend in 2020. As a result, in 2020, after completing the analysis, we found that it was not as easy as we imagined. We found that the creation of intelligent operation products is mainly aimed at APP scenarios, but the target customers are not as many as we imagined, so it brought us a lot of pressure.
On the other hand, as the service customers become more and more in-depth, sometimes customers are not satisfied with the delivery, which leads to people not knowing how to provide services, especially when they are some big customers, there are many different voices inside us.
As CEO, I am very confident in my understanding, but when I find that the tricks are not effective, I feel very painful (sense of crisis). Pain is actually a stage of paradigm transformation. When encountering a crisis, if there are substitutes, the sense of crisis will not be very strong, and if there are no substitutes, the sense of crisis will be very strong.
3. Clarify the dual-driven paradigm of product and large customer management
At that time, we also discussed the project system internally, that is, large customer management. Through this method, I went back to the stage of paying attention to the product. My feeling was that I had to do this. Judging from the situation at that time, my heart was not accepted by this matter enough, but reality forced me to do this. It was not until the second half of last year to the end of the year that I gradually accepted this matter from the bottom of my heart. This actually had to return to what the belief of a company was? Shen Ce has three beliefs:
first, pursuing excellence. We would rather die on the road to excellence than live ordinary. If we use ordinary methods and perspectives to provide project-based services, then I would rather not do it.
Second, use scientific methods to improve efficiency. We use scientific methods to provide products and services, and our delivery methods and how we do things are also scientific methods.
Third, brings value to customers. If what we do is not valuable to our customers, then don’t do it, so this is also our underlying beliefs, which will give birth to us to think.
We cannot accept the use of ordinary ways to manage big customers. Is there any more excellent ways to manage big customers? At this time, I saw SAP again. SAP has both excellent products and excellent management by major customers. For Shence, we had hesitated whether to make products or projects, and finally decided to increase the dual-drive paradigm of customer-driven production. In fact, after truly changing my mind, I felt much calmer.
4. The three major changes brought by paradigm switching
Shence switched from SaaS paradigm to product-driven paradigm, and large customers operated dual-driven paradigm. There are many changes involved in the switching process. Some changes are related to paradigm switching, but some are changes brought about by their own iteration development, but it does bring a lot of pain because of accelerated switching.
(1) Concept and business changes
In terms of concept, whether it is a product or a solution, whether it is provided with a single point or a closed loop, or a light service or a focus on customer philosophy, these have changed a lot. For example, Shence is also adjusting the business strategy , and has begun to pay attention to investigating gross profit, and some concepts have changed. In the
business, we have from data analysis to marketing technology, from the Internet-centered to digitalization as the core; in terms of value proposition, from providing big data analysis capabilities, expanding to marketing technology, and providing a closed loop around data and marketing, the entire business is also constantly changing.
(2) Changes in organization and culture
In terms of organizational mechanism, the mechanism is becoming more and more refined. We are now in the business unit. Each business unit must assess gross profit and cannot make losses. We have relatively high requirements for the degree of refinement of the assessment.
Culture, which is the belief we mentioned earlier, actually when real transformation and change, if even the corporate beliefs change, then the change is not very meaningful, but in fact every entrepreneur needs to have a sense of belief. This belief does not refer to profits, but cognitive changes.
So, we have to keep iterating and learn from role models. I once had a lot of faith in iterating with . I think the problem that cannot be solved without iterating. If it cannot be solved, iterate again. As for learning role models, such as SAP, , Huawei , and Accenture are all role models worth learning from. Learning role models does not mean reading a few pages of PPT. It is enough to understand a little, but you still have to be respectful to these great companies.
In addition, the productization we emphasized before later found that our understanding was far from enough. The core of our pursuit is high leverage, involving cultural things, such as PMF (Product Market Fit, product market matching model), and GTM (GO-TO Market Strategy, enter market strategy ). Before we determine that the product is successful, we just hammer logic, and we touch a product everywhere.
(3) Changes in products and market
Shence is still relatively smooth on the road to entrepreneurship. Whether it is financing or its own business development, it is definitely wrong to say that it depends entirely on strength, and there are more or less luck.For example, the early process of analyzing product PMF was very smooth, which was also related to our previous accumulation in , Baidu , so we can successfully pass that stage, but even if the problem is solved, it cannot mean that we have a good idea of the problem. Shen Ce itself has a relatively good way of doing To B PMF. Even so, our understanding of PMF has changed a lot in the past two years.
I also saw an article written by the CPO of a foreign intercom company two days ago. It talks about how we should spend more time discovering market demand and defining demand, rather than spending too much time creating solutions. In the past six months, we are more optimistic about Huawei's five-view and three-determinal model, and the BOM business leading model. In fact, we should look at the macro market, focus on industry customers, competition, and ourselves, and do detailed analysis.
And, we really need to know who our customers are and what their needs are. On this basis, we are making PMF is the process of building it into PMF for benchmark customers. In the past, we targeted millions of APPs. How to inventory and reach them is definitely not good, relying on the sweeping model. At this time, we will segment the industry. For example, there are more than 100 target customers in the securities industry, each of which is accurate. Who is doing competitive content and what the customer needs are? Through continuous in-depth understanding, the clarity is very high.
5. The market determines the business paradigm
switches from one paradigm to another, involving many changes in the middle. I think to a large extent, it is still a change in the way of cognition and how to do things. However, many times people may not be able to adapt to these changes. The real switching must be a process, but in this process we need to respect the facts, constantly upgrade our cognition with an open mind, and integrate knowledge and action. This is also the basic principle of the paradigm.
briefly summarizes that what kind of market determines what kind of business paradigm, that is, it is necessary to clarify what the target customers really need; in addition, don’t work behind closed doors, not only to understand it yourself but also to learn from role models. After all, iteration also requires pursuing efficiency and accelerating iteration on the basis of pursuing efficiency. This is what we should do.
SaaS software VS service products: To B two different paradigms of business
Below is 51 Share by Fang Xing, Vice President of Social Security:
My understanding of the product is all solutions to meet customer needs. The solution here has a wide range of meanings. Whether it is services, software, hardware, finance, etc., as long as it can meet customer needs, it can be called a product. The essence of a good business is to solve customer needs and replicate products on a large scale, and finally gain an absolute advantage in the market.
For To B business, I have a coordinate axis. The vertical coordinate is customer needs, from standardization to customization; the horizontal coordinate is the solution corresponding to customer needs, that is, the product, from artificial (using people to solve problems) to software (using robots to solve problems).
To B Overall division of business
Divide the coordinate axes, and we will find that the first quadrant of is a highly standardized and software-based product. For example, Graphite, Shence, Sales Yi, and Beisen are actually in this quadrant . We call it SaaS software. SaaS software is a business model with high leverage, so it has been popular among investors; the second quadrant is to use artificial methods to meet standardization needs, which is human resources outsourcing. This business model does not have much leverage, and it mainly pursues efficiency and scale effects. The third and fourth quadrants of
are manual solutions and software solutions for customized needs, respectively. We call them expert consultation and project software respectively. Here, there is a high enough Know-how to meet customer customized needs, so the average customer unit price is relatively high.
So what is the difference between the horizontal coordinates up and down? Customers can make the products on
by themselves. Whether they sell SaaS software or human resources outsourcing, customers can make them themselves. The reason why they pay you is because your efficiency is higher than that, and you have polished out a relatively more mature product, or in other words, they only need to pay a relatively small cost to achieve their own needs and get better value-added services.
But the following customers will rely more on us. For example, Mercer, who is consulting in the human resources industry, has a deep knowledge-how in its own field, and this Know-how is generally difficult to grow within the enterprise, so the enterprise is willing to give a high enough budget and ask such companies to use their Know-how to solve their customized needs.
Of course, after SaaS software and human resources outsourcing reach a certain level, it also has its own knowledge-how, and even has developed business modules such as expert consultation and customized software. Know-how The very shallow SaaS software and human outsourcing are easily hit by higher-dimensional product dimensionality reduction in competition, such as collaborative documents and task collaboration, which are easily hit by enterprise IM dimensionality reduction.
or above is my overall division of To B business.
1. SaaS software
, which is mainly based on software and services, is actually based on software and services. From the early standardized SaaS products to the product matrix, to the customization of project software today, we have gradually moved from software to the integration model of software + service. In this field, generally speaking, about 90% of the revenue of the European and American markets are obtained from SaaS software. The remaining share is relatively small, regardless of human resources outsourcing, consulting and project software. However, in China, project software accounts for a large share.
software is the main software and the service is the auxiliary SaaS software
. Because I used to do collaboration software, I think the software is basically the most efficient solution, but when I entered the field of human resources services, I found that the logic was completely different.
2. Human resources service product, mainly service and software as the supplement,
The business in the human resources service field is actually mainly service and software as the supplement. Take China's human resources market as an example. Human resources outsourcing such as Zhongzhi and FESCO account for about 70% of the market, as well as the well-known Beisen, Yilu, and Moka. This type of human resources SaaS actually does not account for much of the market. In Europe and the United States, human resources SaaS actually accounts for a very high share.
service-oriented and software-assisted human resources service product
does To B, and you will find that the field you enter directly determines your future. Entrepreneurs who run a company, whether they are acquired by large companies or independent IPOs, hope to have a good valuation, but companies in different fields will definitely have different valuation models in different sub-industry areas. For example, human resources outsourcing, its valuation mainly comes from scale rather than PS, but the valuation in the SaaS field comes from PS or PE. I think you can use the coordinate axes to draw the field you are engaged in, what are your core advantages, and where is the future ceiling.
Customer group, products, business, and organization: 51 4 changes in the transformation of social security paradigm
I will share with you the practical experience of social security in four parts. The first is the change of customer group, from small customers to large customers; the second is the change of product form, from selling one product to selling multiple products; the third is the change of business form, from selling services to selling services SaaS; and finally the change of organization form, from a single organization to a integrated organization.
I myself pay great attention to the organization, so no matter how the first three points change, they are essentially the result of organizational changes.
1. Changes in customer group: From small customers to large customers
to do To B. Everyone will be clearer about two indicators, CAC and LTV. I will divide customers into two types. I usually say that they are CAC customers. Because the payment ability of small and micro customers is relatively limited, we have also done an analysis. The life cycle of small and micro customers is generally around one year, and there are only so many LTVs. After LTV is limited, the limit point of small and micro customers will be on CAC, which means how to do it can minimize its customer acquisition cost.
Foreign big data company Palantir, cloud computing company Snowflake, is a big customer. Some of their larger customers can only give hundreds of thousands of dollars a year at the earliest, and finally grow to more than 10 million dollars a year. So I think big customers should pay attention to LTV, which can invest a lot in the early stage, but we have to spend a lot of energy to allow such customers to grow for a long time.
From small customers to large customers, my own definition is from CAC customers to LTV customers, and the changes in customer paradigm mean that the overall underlying organization also needs to have a very large upgrade.
In 2019, we promoted the upgrade of our sales organization. After the upgrade, we upgraded from the original single sales team to online signing for small and micro customers, consultants for medium-sized customers, KA for large customers in the industry, and channels for peers and agents.
In 2020, we upgraded the entire customer service team. First, we divided the customers into "head", "waist", and "tail". We configured different customer success teams for customers at different levels.
In this process, we will find that the customer acquisition model of the entire market has changed, including our brand. When we were the first to be small customers, we did a lot of traffic acquisition. When we went to big customers, we did a lot of offline activities and brand promotion, and even put in special focus brand advertisements. Of course, in the past few years of the epidemic, a large proportion of offline activities have also been transferred to online.
During the epidemic, we only worked as a small and micro online signing team, and signed about 7,000 or 8,000 customers a year. While alleviating our business anxiety, we also allow consultants covering medium-sized customers and KAs, which can release their energy to focus on expanding large customers. After two or three years of practical combat, KA, including consultants from all over the country, has contributed many industry beacon customers to us, so the upgrade is relatively successful.
However, there are many challenges in the implementation process, such as the sales model has also changed from small customers to large customers. How to achieve the original system without affecting the original system during the upgrade process? At that time, we physically isolated the online signing team from the original system's sales team, and the online signing team was built in Chongqing from 0.
What is more important for small and micro to convert large customers is whether managers can keep up during the paradigm upgrade process. Because in the past, managers were small and micro customers, it was actually difficult to upgrade to management KA or national consultants. Because customers of different sizes and sizes have different needs complexities and different decision chains, the factors that allow customers to decide on payment are also diverse, and they are no longer able to sign contracts simply by matching demands. Therefore, in this process, managers need to constantly break through the circle, grow and empower the team.
2. Changes in product form: the transformation from single-service product to multi-service product
product form. Starting from 2018, we went from social security, salary to disability insurance , and finally to business outsourcing and commercial insurance. There are more and more products. Unlike SaaS software, our underlying product team is called the integrated soft-serve product team. Our products are actually mixed with the underlying service delivery and product R&D team.
For example, to make a software product, you only need to divide a team into the original production and research team, or directly form a new production and research team. But we are different because we are a software and substitute team, and the products are combined by the entire underlying service delivery team and the production and research team (in the past, when doing human resources services, we communicated by email, but now we have a complete set of SaaS systems, where customers can draw service bills in the system, including our official or tax communication, and also switched from offline to online. We also use RPA robots, so in fact, this is not simply providing service products, but also including production and research)
In this process, we have many challenges, such as our social security business. This is actually to combine a very official business with the services we provide into a SaaS system form product. Know-how Whether students who need service delivery can provide training for students in production and research, and how to coordinate and connect different businesses is difficult.
For example, if we sign a customer, how to deal with the employee's labor relations, salary, social security, and commercial insurance? This is a long process. In this process, how different businesses can coordinate. We need a system to link information flow, service flow, capital flow, etc. together. In order to solve this problem, we pioneered the industry's service product manager team, which is actually a paradigm change.
Since last year, we have transformed the service delivery team from a single overall skill to a multi-skill, and established a large service system of Chongqing SSC+ national branch centers. You can simply understand that McDonald's employees who originally only needed French fries can now make hamburgers, which can solve the resource coordination problems caused by business peaks and troughs in different periods. At the same time, the production and research team has also been upgraded to a large product system of the underlying PaaS platform + multi-service SaaS. This is also the paradigm we are practicing. At present, the progress is relatively smooth.
3. Changes in business form: The business from the service flow to the management flow
This part is what we started this year and has not been fully completed. Everyone can understand this part of business form as employment management. There are many modules for employment management. We slowly entered the customer's management process in the process of doing it. In the past, customers only had to throw a lot of transactional work to us, but as the business is getting deeper and more and more products are being made, we found that customers actually need us more in employment management.
In response to the increase in the complexity of the business form, we made brand upgrades in the first half of last year: group brand + three service brands + one SaaS brand. At present, we have three service brands. 51 Social Security specializes in providing professional employers for full-time employees, Haier Technology specializes in flexible employment, and a new business unit called Shizai Insurance, which mainly targets To B companies to do employee commercial insurance. We also have a software brand 101 HR, which is actually to better enter the management process in the future. Overall, this is also some paradigm changes we have made this year.
4. Changes in organizational morphology: single tissue to fusion organization
first, talent model. For startups, challenging traditional companies depends on innovation. In the process of innovation, openness and high-capacity talents need to come in. After reaching a certain stage, you will find that the current talent echelon can no longer meet our evolution and upgrading, and you may also need to recruit some people to share their resources with us. For example, KA, I think it is difficult for KA to grow from the inside of the organization. Although it can be cultivated, the cycle will be longer, so it is best to dig from the outside. For entrepreneurial companies, time = life, because the core of KA is its resources. As the paradigm continues to upgrade, the demand for talents is also different. At the beginning, it may be high-capacity talents, gradually becoming experienced talents, and then becoming a resource-based talent.
Second, the organizational challenge, the most core point is that high-level leaders cannot become bottlenecks.For the early stage of startups, there were a group of relatively powerful senior executives, and the grassroots' execution ability was very strong, so they started to do it. But if you want to become a world-class company, you will face a big problem that the strength of the company's waist may not be able to support it, because the previous waist may have done a lot of execution, and innovation and decisiveness may be lacking. Therefore, as a senior executive, you must continue to nourish the waist classmates to grow and give them opportunities so that they can stand alone, and at the same time, you must continue to break the circle and continue to grow.
Third, the integration of culture. Whether it is bureaucratic management or flat management, if you want to do something more innovative so that everyone can unleash their potential, how to integrate the two types of organizations and do things for the entire strategy together, the overall values are very important to integrate with culture.
Finally, let me tell you what I feel. In the process of continuous upgrading of paradigms, first, it is really painful, because you have to constantly break through yourself and learn new things. The former colleagues cannot keep up with the current pace. How to integrate new colleagues in the process are all painful; second, in the process of making adjustments, both middle and senior management will be a little painful, because we need different people and different perspectives. The best way is to put them in a new position.
For example, last year we put the executive responsible for the overall backend service delivery to the position of a sales executive, which made him very painful because he had no sales-related work experience before, but over the past year, he will have some obvious growth and changes. I think these are all very good experiences. It will definitely be chaotic at the beginning, but don’t stop doing it because of chaos. In the end, you can definitely make continuous progress in chaos.
interactive Q&A
1. What is a paradigm? What is the difference from the model?
Sang Wenfeng: The paradigm only borrows the usage of the book "Structure of Scientific Revolution", and is not an accurate definition, and overlaps with the meaning of the pattern.
2. How do different enterprise software service companies grasp the timing and method of paradigm switching?
Sang Wenfeng: I think the first thing is that the previous paradigm switching encountered great challenges, or the current paradigm is not applicable to existing scenarios. At this time, paradigm switching can be done, but try not to turn if you can. When you have to turn, I think it is just to turn.
Fangxing: Paradigm switching comes from hindered growth. For example, some enterprise service fields have network effects and bilateral effects (such as electronic signing, collaboration platforms and recruitment platforms). In the short term, paradigm switching is not necessary because its own growth is strong enough. But most companies that take scale effects need to grasp the opportunity of paradigm switching. When should they do paradigm switching? First, growth slows down; second, trend changes occur. You should communicate with the best investors or excellent CEOs in different industries. In fact, you can see that many trends will change. At this time, you may have some early response strategies.
3. Is there any way to learn from an enterprise that breaks through the bottleneck and completes the paradigm switching?
Sang Wenfeng: I think it is to open up and create together, learn from excellent companies such as SAP and Salesforce systems from outside, and introduce suitable people internally.
Fang Xing: I think it is also important to maintain the vitality of the organization. If you do it later, you should consider how to give young people some opportunities, look at problems from the perspective of young people, so that the organization can have more vitality, let them make decisions on their own, and it will be better if they try some things.
4. For start-up SaaS enterprises, choose product-driven or customer-operation-driven?
Sang Wenfeng: Objectively, products are easier to scale. If you have to make a choice between the two, my suggestion is to choose the product type. After all, the scale of the product type is definitely stronger, and you still need to pay attention to efficiency leverage, but this ultimately depends on the market you are facing.
Fang Xing: I think when you do To B, it is not that I am still a big customer when I make products, but that I have to see what the gap in customers’ needs is. I think the gap means opportunities for startups. After finding the gap, the problem will be solved, because the gap determines whether you are making products or other products.And I personally think that starting a startup may die miserably when it comes to becoming a big customer. Your products and services are not complete, so it is difficult to serve big customers well.
5. How to complete the transformation from small and medium-sized customers to large customers?
Sang Wenfeng: Actually, it is just how to convince customers, convince themselves, and how to balance the values you bring to customers.
Fang Xing: First, relatively speaking, large customers will put forward many relatively high demands and have high expectations for service, so I think it is definitely not possible to go from small and medium-sized customers to large customers overnight; second, we must dare to replace people. For entrepreneurs, it is actually to break the path dependence and can do this with innovative ideas. Moreover, if we become large customers, we must introduce people outside, and we must resolutely introduce people without hesitation. Even if we fail, we must introduce new people without hesitation. In this process, integrate with the internal and overall, we can build big customers.
6. Is To B companies pursuing hot products, is they trying to break the bottleneck of To B's linear growth?
Sang Wenfeng: Yes, I hope to use To C to do To B.
Fangxing: The essence is to follow the PLG route, but it is generally applicable to decision makers and users who are the same person and product usage scenarios can be C-terminalized (for example, all employees need to use documents). A large number of B-terminal products should be made solidly by customer.
7. What difficulties and challenges do software enterprises usually encounter when they want to SaaS? How to complete paradigm conversion?
Sang Wenfeng: You can refer to the content of Adobe transformation mentioned earlier.
Fang Xing: The biggest challenge is organization, you can learn from Lianjia, and be independent teams and independent physical space when you are doing Beike. Paradigm transformation includes agile iteration of production and research, changes in sales customer groups and charging models, and the resulting changes in sales management system.
8. What are the growth paradigms of To B companies that are more suitable for the domestic market?
Fangxing: Expand product version: freemiun (free value-added model), professional (professional version), enterprise (enterprise version), etc.; expand product line: sales, marketing, service, etc.; expand customer groups: small and micro enterprises, small and medium-sized enterprises, large groups, etc.; expand industry: retail, finance, Internet, manufacturing, etc.; expand region: North America, Europe, Asia-Pacific, etc.; expand ecosystem: agents, industry partners, application stores, etc.; and "buy, buy, buy"-style mergers and acquisitions.
Author Profile
Sang Wenfeng, founder and CEO of Shence Data, master's degree in Computer Science, Zhejiang University, and a student of the fifth phase of Lakeside. He worked at Baidu for 8 years and built the Baidu user log big data platform from scratch, serving as the technical manager of the Big Data Department. In April 2015, he resigned from Baidu and created Shence Data, providing products and services related to big data analysis and marketing technology, and is committed to helping Chinese companies achieve digital operations. He has authored "Data Driven: From Methods to Practice" and "Enterprise Services From Zero to One".
Fangxing, vice president of Zhonghe Cloud Science (51 Social Security), To B customer operations expert, and formerly served as Director of Kingsoft Office Operations. With many years of experience in collaboration management and human resource management SaaS, specializing in SaaS product design and customer operations.
Articles are from Niutoushe official account (ID: Neuters)
