How Do I Invest in the Nanotechnology Market?

Sequoia Capital (Sequoia Capital) was founded in 1972, has a total of 18 funds, and has more than $ 4 billion in total managed capital. A total of more than 500 companies have been invested, more than 200 have been successfully listed, and more than 100 have successfully exited through mergers and acquisitions. As the world's largest VC (risk investor), Sequoia Capital has invested in a number of well-known technology companies such as Apple Computer, Cisco, Oracle, Yahoo, Google, and Paypal. Sequoia phenomenon established by Sequoia Capital. At present, the total market value of the companies it invests in exceeds the Nasdaq market value by 10%.

Sequoia Investment Company

Company founder: Don Valentine (

Meet the most powerful venture capitalist in Silicon Valley today, and his Chinese "apprentice"

The sand dunes of Monroe Park are exposed in California's unrealistic sun.

It's not too wide, and the buildings beside the road are plain in color. There are too many trees, so that most of the 2nd and 3rd floor small buildings built in the first half of the 20th century only showed wooden low-sloping roofs. On weekdays, sunlight, tree shadows, and rolling hills across the road form a group of tranquil scenery that penetrates the gaps of the shutters.

In contrast to this quiet and ordinary scene, this stretch of road is called "Wall Street on the West Coast of the United States" by some people because it is densely populated with hundreds of 260 billion venture capital companies. . Despite the lack of Wall Street-style majesty or aristocracy, if you think of the vast majority of Silicon Valley's high-tech companies that have been propped up by investors here since Intel was founded in 1969, you can know what it means to Wall Street.

On this paved road, Sequoia Capital is a true legend. As a venture capital company that has been operating for nearly 35 years, it has overcome technological transitions and economic fluctuations, thereby achieving an outstanding project density that corresponds to this length of life: In the era of mainframes, it discovered the PC pioneer Apple Computer, and when the PC was a big Development, it cultivated network equipment companies 3Com, Cisco, and when the computer was widely connected, the Internet era came, it invested in Yahoo and Google ... because of its secrets did not reveal their investment performance, the outside world often cited such a Statement: It has invested in more than 500 companies, of which more than 130 have been successfully listed, and more than 100 projects have successfully exited through mergers and acquisitions. The total market value of companies listed for their investments exceeds 10% of the total NASDAQ market value.

Let this magazine give you some numbers that have never been disclosed in China: With an 8-year cycle, Sequoia's No. 6 Fund, established in 1992, has an annualized IRR of 110%, established in 1995 The internal rate of return of the No. 7 fund was 174.5%. Even if the fund of No. 8 was not fully recovered because of its late establishment, the internal rate of return between 1998 and early 2003 reached 96%. This is a series of numbers that will make anyone in the venture capital industry stand out: the average internal rate of return of the industry is between 15% and 40%.

Moreover, Sequoia's legend continues: Industry estimates that after Google went public in 2004, Sequoia changed its $ 12.5 million into more than $ 5 billion in return. And its $ 11.5 million investment in YouTube also became $ 495 million with Google's acquisition.

Such a distinctive achievement in a highly competitive industry full of talents makes Sequoia inevitably a high-profile target in the industry, and investors in its star projects, such as those invested in Apple, Oracle and Cisco Don Valentine and Michael Moritz, who discovered Yahoo, Paypal, and Google, became superstars on the dune roads-almost all reviewers would have Don Valentin, Michael Moritz and Arthur Locke, KPCB's John Doerr, who invested in Intel in the early years, also call the industry's "Big Four Kings"-even so, most people in the industry candidly admit that Sequoia is puzzling.

In an office on Dune Road in March 2006, Kevin Fong, Mayfield Fund's managing partner: "Who do you think is the best investor here?" He said directly: "Michael Moritz" . the reason? "Because he can invest in projects that others cannot," said Stuart Osop, a former partner of NEA Investment Corporation. "I have competed with Moritz a lot, but I don't know how he makes investment decisions. ,I'm confused."

It is not easy to analyze how this "value machine" works-Moritz told the magazine frankly: "We are not interested in providing a guide for other venture capital companies to act"-but a rare perspective is red The establishment of Shan China. It more fully reflects how Sequoia chooses the team, how to form a tacit understanding with new members, and how to find new opportunities in a brand new market. For this reason, in the past three months, Global Entrepreneur interviewed four Sequoia China principals, founders of nearly half of its projects, and interviewed Moritz again in one year.

"There are many levels in the venture capital industry. You look simple, but if you want to do well, you have to learn and understand many levels. This is the same as a good painting. Even if it looks simple, it actually contains a lot of complexity. Michael Moritz analogically said. He never plays golf and likes painting in his spare time. And his summary of Sequoia is: "We are a group of people who work very, very hard, trying to make sure that the next small company we invest in can become great."

This Welshman, who has studied seven years of history and has written two commercial books, has excellent writing skills and clever metaphors, but he prefers to explain his ideas in a simple way. For example, on a small question that cannot be ignored: How does Sequoia define the success of a venture capital company?

On September 12, 2006, Moritz, who visited China in front of hundreds of entrepreneurs, elaborated such a point of view: there is only one criterion for measuring the success of startup companies and they will survive. The success criteria for investors is to help startups survive to the greatest extent possible. In an interview in 2004, Moritz said that good venture capital companies need to maintain two qualities: one is a convincing record of return on investment, and the other is to maintain a high degree of competitiveness.

This is not false. If Sequoia is unique in that it has been ahead of the technology trend for 30 consecutive years, in a deeper sense, this stems from some methods of maintaining competitiveness: hard work, curiosity and crisis awareness, not investing for market fluctuations. Basic principles, tacit understanding and common progress between partners in a long time ... They are not difficult to summarize, but they are difficult to implement for a long time.

Although this is just a methodology for a partnership enterprise with a scale of dozens of people, it is of great universal significance. In this accelerated business era, business models that have remained unchanged for years often face challenges after achieving two or three years of success. Looking at the awkward innovation pioneers such as Microsoft, Intel, and Sony, as well as the entire automotive industry-continuing to stay ahead of trends and looking for business opportunities with tremendous explosiveness, it is exactly what any company should learn from Sequoia experience.

Bet on the track, not the racer

American thinker Emerson once said: "An institution is an extension of one's influence." At Sequoia, this person is the founder Don Valentine.

The so-called Valentine's style can be summed up in one sentence: "Investing in a company with huge market demand is better than investing in a company that needs to create market demand." Because of its overemphasis on the meaning of the market to a company, for many years, this phrase has been extended to be more popular betting on the track, not the racer.

This is perhaps the most famous method on the dune road dedicated to the venture capital industry, and it is also the most controversial quote in the industry. On the face of it, this sentence seems to underestimate the value of entrepreneurship to startups, and it seems quite personally empirical: Before Valentin founded Sequoia, he worked in sales for Fairchild Semiconductor and National Semiconductor. Is considered good at reading market changes and knowing how to respond to them. And his personal venture investment education also comes from the experience of the National Semiconductor period: because its size was small at the time, and resources were too limited to even provide products for all customers, someone must judge who has a bright future and deserves long-term cooperation and which customers Need to be resolutely rejected. Valentine, who is in charge of this decision, must constantly make predictions based on the market outlook of the other company and the commercial value of the short-term product.

But it must also be pointed out that Valentine is not a bad man. When he was still a sales manager at Fairchild Semiconductor in the 1960s, he recruited a number of future Silicon Valley figures. Such as AMD founder Jerry Sanders, Maxim founder Jack Gifford and Apple's first CEO-Mike Marcula.

That being the case, why does Valentine's personally inclined discourse become a venture capital firm's stylistic orientation for 30 consecutive years?

Basically, this is a differentiation effort. Although all venture capitalists will acknowledge the importance of the market, even in the United States, because data on market conditions are always scarce, most people are more willing to look at companies from a different perspective to answer seemingly important questions: Is the technology unique? Is the management team good enough? Can the product be patented? These questions are not trivial, but they can only provide one-sided support for one judgment, and when investors try to answer multiple questions at the same time, it is easy to lose focus.

For example, many people in the industry point out that compared to investing in Yahoo and Google, it is more amazing that Sequoia invests in X.com. When multiple investment companies were optimistic about X.com at the same time, it suddenly experienced a collective resignation of employees, which discouraged other investors. But Moritz did not change his original intention, and eventually sold it to eBay, making a lot of money.

When this magazine asked Moritz about this "fighting from the fire", his most direct answer was: "We still believe in the market prospects." According to its judgment at that time, the electronic payment market pioneered by X.com existed, and had huge development space. The only problem is that it has been in a fierce competition with Paypal, which is just across the street, and both sides consume a lot. This presents it with an uncomplicated option: to merge the two companies at the expense of dilutive shares and gain leadership in this market.

Another reason to bet on the track is that talented entrepreneurs are very rare. Valentine has said that he has only seen two entrepreneurs with superhuman insights in his life: Robert Noyce of Intel and Steve Jobs of Apple. Even so, when Steve Jobs found Valentine in 1977, he was only 22 years old and had only been in college for half a year. He loved playing barefoot and looked like Ho Chi Minh. His experience and identity were difficult to convince investors.

The same problem occurred with the Yahoo project. Yazhi founder Yang Zhiyuan once told this magazine: "The key skill of Moritz is to look at people. Back then, Ferro and I and the two founders of Google were still students. We would not bet ourselves to be successful. "

But for Sequoia, this is not really a problem. When Moritz discovered Yahoo, it was still in its infancy with only two founders, and it was almost impossible to judge its future achievements based on the talents of only two people. Therefore, this is not the primary consideration for Moritz. The real question is what most investors are confused about: if all the information on Yahoo is free, how does it make money?

This ultimately depends on Moritz's judgment on the market. He has worked for Time magazine for several years, he knows that radio and television are also free, but they can still achieve great commercial success, which should be the future of Yahoo. It was he who passed on the future he saw to Yang Zhiyuan and David Ferro, turning a classified information retrieval page into a portal and eventually the first media empire on the web.

Of course, that's not to say that Sequoia doesn't care about the quality of entrepreneurs.

If you look at the lineup of founders in Sequoia's portfolio, it is not difficult to find that although Sequoia rarely looks for entrepreneurs who are sophisticated and can solve all kinds of problems from technology to management, its most successful projects are usually made by Complementary team building. For example, the founder of Cisco is a couple, Sandy Lerner is a very aggressive, savvy and strong-willed female scientist, while her boyfriend Lin Bossack is cheerful, likes to let go of management, and is somewhat theoretical. Yahoo's Yang Zhiyuan is outgoing and likes to think about business affairs. Ferro is introverted and focused on technology. And Google's Larry Page likes to think about how things happen, Sergey Brin likes to improve the fait accompli ... they all know their strengths and weaknesses, and what another person can do to the company .

Moreover, Sequoia rarely invests in entrepreneurs who have had great success, and prefers to invest in entrepreneurs who have experienced frustration. In Sequoia's view, those who continue to succeed often cannot objectively understand the reasons for success, and it is easy to fall into personal heroism and ignore the general trend, timing, others and luck. Those who have failed, if they are still eager to succeed, can look at themselves better. For example, Wilf Corrigan in the late 1970s. He had an excellent promotion process at Motorola, but his years of traveling to Fairchild Semiconductor were extremely difficult. When Valentine met him again, he had learned from his mistakes what was ineffective, which gave him the opportunity for Sequoia to invest in his LSI Logic company. In contrast, when Jobs was swept out of Apple and founded NeXT, Sequoia did not invest in him. Just because it is a company "for revenge".

This brings us back to the issue of the relationship between the racer and the track. As Moritz joked: "Judging from the odds of survival, are you willing to bet on geniuses to jump off the cliff, or on ordinary people to jump off the second floor?".

No next Google

Valentine once declared that since he went to Silicon Valley in 1959, "nothing is revolutionary, it is all evolution." That is to say, all technological advances echo each other, so investment decisions do not come out of thin air.

To a certain extent, Sequoia's story can indeed be reduced to the chain reaction under the evolution of technology: After investing in Apple Computer, it will find that it needs storage equipment and software, so Sequoia invested in the 5-inch floppy disk business Tandon and Oracle. The next thing is 3Com, an Ethernet equipment company that connects computers in a small area. When Ethernet technology matures, computer connections in a wider area are necessary, so Sequoia found Cisco. After the infrastructure of the Internet matured, the investment in Yahoo and Paypal became logical. Even, the original idea of investing in Google was: At least it will help Yahoo's search engine ...

But the essential question is: Almost all venture capital companies are in the process of technological change, and it is not difficult to feel the changes in macro trends. Why is Sequoia frequently seizing the best companies in each technological evolution?

Due to the contingency of history, it is impossible to answer the question sufficiently and necessary. But it is worth thinking about: What is unique about Sequoia's investment process?

First of all, Sequoia does not follow the popular trend created by public opinion. It rarely affiliates with the trend of large companies to build with a lot of funds, such as the "interactive TV" that cable companies are clamoring for, and it is as far away from the fiery concepts in the capital market, such as nanotechnology and P2P software in recent years.

This high degree of independence may even seem too cold in some cases. Valentin, who has invested in Oracle, has publicly denied the "software industry will be integrated into the world of several large companies" proposed by Larry Ellison in recent years, but praised the openness and innovation of small software companies. Moritz, who had invested in Flextronics because he saw the trend of hardware outsourcing, pointed out ruthlessly because of low profits, a large marketing budget, and the need to compete with retail giants' own brands and Asian imitations. In recent years One of the popular investment concepts for consumer electronics is the "big dung and quagmire."

Second, Sequoia believes in opportunities for small companies under a paradigm shift.

In the traditional industry, "David beats Goliath" is rare, but in the high-tech field, this is the main theme. Looking at the semiconductor industry, as early as the early 1960s, Texas Instruments was already huge, but technological innovation still allowed Fairchild Semiconductor to rise rapidly, and then Intel surpassed Fairchild. Until recent years, long-term follower AMD is challenging Intel's position.

Although the changes in the industry have taken place quite naturally, it is extremely difficult for an individual to insist on continuous self-renewal in the changing tide, especially to refuse the constraints brought by success.

One detail is that when Valentine left Fairchild in 1967 and went to National Semiconductor, its core member Robert Noyce said, "It's too late to start a semiconductor company. Why don't you stay here? We have done well enough, and we can do better. "In response, Valentin responded:" My destiny is to keep moving. "By 1969, when Neuss went to found Intel, Was Lentin specifically called the other party: "Bob, you told me too late two years ago, why did you go to start a semiconductor company now?"

Within Sequoia, Valentine and his partners strive to maintain a never-ending self-renewal. Whenever Sequoia achieves great success in a company before the beginning of the era, it says goodbye to the past like a restart of the computer and rediscovers those small, not widely recognized innovative concepts.

In this regard, you can refer to the portfolio of Michael Moritz after Google: blog company Sugar Publishing, weatherbug website Weatherbug, disposable camera sales company Pure Digital, Eons website serving people over 50 years old, debit card issuing company Greendot, online game rental service Gamefly, online address book Plaxo, e-commerce companies Red Envelope and Zappos, travel website Kayak, mobile game company Digital Chocolate, A123 that uses nanotechnology to make next-generation lithium batteries, training software company Saba and India's Business Process Outsourcing Service Provider 24/7 Customer.

All of these companies have nothing to do with popular capital concepts, and you can hardly find similarities to success stories like Google and Yahoo. In this regard, Moritz said that as long as they can provide first-class services, they can obtain a huge user base. What he didn't say much about is that all these companies have vast space for providing value-added services.

For example, Weatherbug, a website for weather forecasting, has taken care to build one of the most complete weather forecasting information networks in North America. If this information can make a large number of users develop the habit of understanding the weather here, it can provide daily diets corresponding to weather conditions, Value-added services such as clothing and travel-these contents may become the source of advertising sales.

This deliberate effort to innovate in part stems from previous lessons. Moritz may be the investor who most likes to share failure experiences with others. He often mentions that he invested $ 53.5 million in Webvan from 1997 to 1999. This company tried to change the logistics delivery system and spent a lot of money across the country. Laying outlets. This made it famous in the technology field, but extensive management made it burst into bankruptcy after the dot-com bubble burst.

This failure strengthened Moritz's own investment beliefs: only target those companies with large profit margins, avoid industries with capital accumulation, never underestimate the difficulty of changing user behavior, and do not try easily before determining the path is correct. The biggest lesson? Wall Street's readiness to invest in millions of dollars is not the real goal.

And the fiery concept of Wall Street is similar to previous successful experiences. "Without the next Google, it's like without the next Cisco, the next Yahoo, the next Apple, the next Intel, the next Microsoft," Moritz said. "Companies are different, and great companies have their own uniqueness. The way of doing business has its own mark and logo. "

The way to find a "great company" in a changing market is still to answer the most basic question: Who cares about this product? Will people keep paying attention to this product for a long enough period-for example, 8 years is a cycle for venture capital companies? Almost all future investments that have proven great can surprise these two questions.

Respect the rules

So far, Sequoia's story has been unfolded with two main characters. This way of telling ensures the efficiency of the narrative, but it also easily leads to a misunderstanding: It seems that the success of Sequoia is a game of two people.

If you have a conversation with Sequoia China partners, it is not difficult to feel that although Valentin and Moritz are famous outside, but internally, they are only two of the 20 US partners. Even if you emphasize that they are the leaders of Sequoia, this statement will be corrected as: Sequoia already has two generations of investors, the first generation with Don Valentine and Pierre Lamond ) Is leading, the representative of the second generation is Moritz and Doug Leone.

Who are Pierre Raymond and Doug Leone? Compared to Valentine and Moritz, who have a series of star projects, the projects they invest in are not well known. But this does not prevent the respect of the two people within the company.

This is the side that Sequoia rarely shows to the outside world. In addition to striving to stay ahead of the trend according to a series of correct methods, the fundamental way to keep it competitive is the complementarity, tacit understanding and common growth between partners.

Formally, this is reflected in two aspects: one is that in addition to the founder of the fund, Don Valentine, it also has five partners who joined in the 1980s. This group of "seniors" who account for 1/3 of the total partners is equivalent to more than 120 years of Sequoia experience. Second, even Valentin or Moritz will not abuse personal authority. As Zhou Yi, director of Sequoia Capital China Fund, said, Sequoia gave him the biggest feeling: "Here is a lot of respect for the rules. Although everyone is successful, it is still an organization where everyone respects the rules."

"Rules" is a very important word for this company whose creativity is the source of revenue, but it is also the most often ignored by the outside world. If its investment method points to what Sequoia chooses, its rules, or its values, it is clear what it is giving up.

For example, on the issue of entering China, Sequoia has been investigating the Chinese market for many years, considering various methods such as acquisitions, joint ventures, and cooperation, but has not made any progress, the main reason is that it is unwilling to sacrifice values for benefits. In the end, the combination of Shen Nanpeng and Zhang Fan was chosen not only because of their brilliant investment history, but also because the two sides could hit it off on some basic values.

This key factor that eventually led to the cooperation between the Chinese and American teams seemed at first glance to be vague. "First of all, success does not depend on whether I have invested in Google today and how much I have earned. Second, the success of Sequoia China is not even the success of the one- and two-stage funds. It should be like Sequoia in the United States for many years. Development platform. Therefore, the most important task at present is to build a strong investment fund culture, not only to support entrepreneurs, but also to maximize the investment team in operation. "Shen Nanpeng concluded.

But it can be implemented. At least for a long time, two Sequoia China entrepreneurs couldn't focus on finding a project, but spent a lot of time discussing with US and Chinese partners and conducting internal management. For one year, Moritz and others have participated by telephone in the weekly regular meetings of Sequoia China. However, what impressed everyone was that even if US partners such as Moritz always asked questions sharply, they did not prevent Shen Nanpeng and Zhang Fan from taking full responsibility for China's investment decisions.

"Moritz should be to us like Tang was to him," Shen Nanpeng said. Although he has received quite high praise in the domestic investment community, he is still willing to accept this "heritage"-when reporters asked Moritz how to find projects when he first joined Sequoia, he replied: "Sequoia partners spare no effort to let me Understand: The real success in Sequoia is not how much investment projects I found in the first few years, but how much I helped my partners ", and he claimed that his early contribution was" don't make too many mistakes And realize what I do nt understand. "

Another issue that cannot be ignored is that, just like Valentine and Leymond, Moritz and Leone, Sequoia China also implements a "two-headed system"-Zhang Fan was an investment by Baidu, Kongkong, and Focus Media Shen Nanpeng is the co-founder of Ctrip and Home Inns, and has invested in Focus Media. How can these two people who have achieved outstanding results lay a good foundation for long-term cooperation?

This is obviously a topic with a lot of room for imagination: in the Chinese investment world, "strength and power" are rare. When the reporter threw this question to Zhang Fan, he stood up and kept talking about the problem for ten minutes.

Another basis for their long-term cooperation is that although both belong to the "young and young" representatives of the domestic business community, their ego is not inflated. Shen Nanpeng is a born entrepreneur. Even when investing in a bank, he did not blindly compete with his peers for large orders, but instead found junk bonds with higher profit margins and more suitable for the operation of his investment bank. Subsequently, Ctrip's entrepreneurial experience allowed him to experience the arduous development process in the low market period. Zhang Fan, who is 3 years younger than Shen, experienced frustration in his early 20s. After studying in Tsinghua for only two years, he moved to the United States with his family. Without a college degree, Zhang Fan first entered a medical device startup company as the underlying technology. Staff, shortly after the company failed, he suddenly lost his job. He will continue to reflect on this life in the future, so that he can judge the problem more objectively.

"If we hadn't thought about it before, Sequoia wouldn't have so much trust in us," which is a conclusion. The so-called thinking is the possibility of discord among several teams, and why he and Shen Nanpeng can avoid it.

Two more easily circumvented possibilities are: one, the two founders are diligent and the other is casual; two, one of them is happy with corporate politics. Because the two people s current vision is to build an empire, and both are known for their workaholics, there may not be a big difference in the short term.

The deep danger lies in whether two people can agree on an investment style? Because their competitiveness is based on inspection and judgment, two people who require joint decision-making can be tacit on the path of deriving conclusions. If one person is very detailed, another person is very macro, or one focuses on people and the other on business models, conflict becomes inevitable.

At least so far, Shen and Zhang have maintained enough trust in the other party. They met in 2003 and maintained discussions on various projects for the next 2 years, and "impressed each other's ability to judge projects." And they seem to have the same way of thinking, in Zhang Fan's words: "I can observe very well in the details, but can go back to the macro level to grasp it."

Even so, they are careful to "balance" their processes. In addition to the weekly meetings, each time the two parties see a project with a certain investment potential, they will immediately communicate with each other over the phone and listen to feedback. This kind of instant discussion, to a large extent, avoids major differences in the final investment decision.

They can even replace each other's roles. For example, the Zhonghe Insurance project originated from Shen Nanpeng's accidental hearing from Liu Erfei, chairman of Merrill Lynch China, and he had a 3-hour communication with entrepreneurs that night, with great interest. But he was in Hong Kong at the time, and the only way to promote the project was to have Zhang Fan go to the Zhonghe Insurance team to meet the next day.

The last question is: If two people are on different boards of different startups, if one of them is a director with a significantly better performance than the other, will the gradual psychological gap affect the long-term cooperation?

"Every decision is made by us together. If one company fails, it is also our common fault, not one's fault," Shen Nanpeng answered decisively.

Icebreaker

Although Sequoia China was established just one year ago, it is too early to judge its achievements. However, since the Spring Festival this year, a series of projects it has invested successively are still eye-catching.

For one thing, its investment portfolio seems quite strange: sometimes there are mainstream Web2.0 websites, such as the Chinese version of the American Web 2.0 success model such as MySpace, YouTube, and Facebook, but also a series of difficult to be classified, Extinct in your portfolio, such as vegetable, insurance, animation, lottery companies, and even small companies in remote areas, such as BitTorrent download site Bitcomet and mobile search company Gototel.

Secondly, some reports about its investment volume made Sequoia China quite generous, and it was easy to invest at the scale of 10 million US dollars, which seems to be inconsistent with the US Sequoia's cautious investment tendency.

Regarding the latter, Sequoia China's team can easily argue that during the year from September 2005 to August 2006, the total amount of more than ten projects they invested in was only more than 50 million US dollars, and no single investment exceeded 10 million.

The more difficult to explain is the previous question: it does not seem to have the sense of coherence and the line of the Sequoia US portfolio-this is exactly why Sequoia is Sequoia: even if there is such a successful US model, when it enter A new market is still exploring completely different opportunities than in the past.

"When you look at Sequoia in the 1970s, you can't see its path, but 30 years later, when you look at it the other way around, everything is very clear. So is ours," said Zhang Fan. The conclusion of Shen Nanpeng is that what they did was just to find the new demand brought by the increase of personal consumption under the growth of China's GDP. Because the US consumer product market has matured decades ago, Sequoia can only focus on technological development, but in China, in addition to technological changes, the development of the consumer market itself is a huge opportunity.

This forced Zhang and Shen, as investors, to examine those icebreakers who were not conceptually "sexy" but were innovative in specific areas.

In this regard, Shen Nanpeng had paid attention to it long before the founding of Ctrip. The success of Ctrip and Homecomer reinforces its philosophy: Good projects in China do not have to play the role of "disrupter" like Google or Skype, as long as they can creatively provide value-added and improvement to a traditional industry, and its The model can be widely copied to a relatively large market, and it can create great value. The interpersonal resources accumulated by Shen for many years have become the first breakthrough for Sequoia to discover opportunities in this field.

For example, Zheng Lei, the founder of insurance agency Zhonghe Insurance, met Shen Nanpeng, who still worked at Deutsche Bank, as early as 1999. At that time, Zheng Lei was setting up an information terminal company that served the securities market. He failed to raise funds in a timely manner because of his cautious attitude towards venture capital. Eventually, he failed to start a business because of funding problems.

Later, after carefully observing the models of Ctrip and Gome, he decided to use the same model to enter the insurance industry: like Ctrip and Gome, if the single market is operated, its operating effect will be very bad, but if a mature business Expanding the model nationwide and gaining better bargaining power relative to insurance companies can achieve economies of scale. After a sales channel was established across the country, Zhonghe was able to extend from auto insurance business to property and life insurance. Moreover, unlike Ctrip's air ticket and hotel reservations, the cost of insurance business is lower.

No investor can better judge its value than Shen Nanpeng. The two talked on the phone for a long time, and Shen concluded: "This is the Ctrip model of the financial services industry I am looking for." The two years of friendship led Zheng to abandon his original plan to raise funds from three investors. Choose a single investment by Sequoia.

According to Zheng Lei's forecast, the company's profit in the first year after financing can reach 3 million US dollars, and after 3 years, it can obtain a profit of 30 million US dollars, and then it can go public.

Since the listing of Super Agricultural at the end of 2000, Shen Nanpeng has been paying attention to the agricultural industry, especially after the listing of China's green food in 2004. Shen believes that this industry has become a section of the capital market: if new and improved companies appear, the listed and No problem.

Following this idea, he found Ma Chengrong, a former super-large agricultural executive who has more than ten years of experience in the agricultural field. Although Ma Chengrong, who often goes to work in the field, has not studied the so-called Ctrip model, his Linong Group has the same expansion idea: in the field of vegetables with high added value but difficult to grow, find a set that can be universally copied. Production management model, and then widely sold through the channels of Wal-Mart.

Constructing this model is not easy: the effect of growing vegetables varies from place to place, and the habits of consuming vegetables vary from place to place. Moreover, managing farmers who grow vegetables and managing white-collar workers in office buildings require very different wisdom.

However, Ma Chengrong planned his "industrial production" preparation work in three levels. First, through a large number of experiments, he ensured that his vegetable varieties were leading. At present, Li Nong tests more than 3,000 varieties of vegetables each year to find products with high yield, good disease resistance, good appearance and products that can radiate a large market consumption habits. The success rate is about one-thousandth. Second, hire professionals to study the consumption habits of each city to understand which varieties of vegetables can get better sales and sales prices each month. Thirdly, to become a supplier of Wal-Mart and build a brand from the Fujian market.

So far, everything has gone smoothly. It is said that the entire set of specifications will be completed in December 2006. If implemented smoothly, this year's revenue of 30 million yuan will be expanded several times.

Although there is no clear division of labor between Shen and Zhang, the investment of Sequoia in the Internet field has helped Baidu and Kongkong.com to grow. Zhang Fan, who has focused on this field for 5 years, is more representative of his style.

Compared to Sequoia China's unique series of investments in the consumer sector, its characteristics in the internet sector seem more difficult to highlight: in the past year, domestic investment in internet companies has been quite large, but clear winners have yet to emerge. Looking at it another way, the effect of investment in this competitive environment will better show whether Sequoia's approach in the United States can be fully replicated in China.

If you sum up the current investment of Sequoia in the network industry, it should be summarized into two considerations: one is to find the needs that conform to the market trend, and the other is to work with teams with rich experience and flexibility. The combination of the two standards gives the company that it invests a relatively large space for change-like the various investments that Moritz has made in the United States, as long as the product itself has a longer-term market value, what kind of profit will it use? Ways are not something that needs urgent consideration.

The most typical example is the strange tiger founded by Zhou Hong and Qi Xiangdong. Although Qihoo defines itself as a search engine for communities and blogs, it is difficult to say that it will stick to a model without changing. If Zhou Hong's experience in 3721 is enough to explain what it is, he is very good at cutting into the market with a technology, while perfecting the technology while adjusting the business model according to industry changes.

This quality seems to be universal in Sequoia's portfolio. Whether the industry's more controversial 51.com CEO Pang Shengdong, or the low-profile pioneer of the public comment network Zhang Tao, has even been frustrated in the past six years, barely maintaining the company s founding team, the founding network, they The ability to obtain investment is actually due to the common traits: having strong enough faith, immersing in a certain field for a long time, and experience failure and success. To sum up with Zhang Fan's argument, this is a team with a lot of accumulated energy.

Anecdotal news in the industry is that one day Shen Nanpeng chatted with Tian Suning, who also transformed from an entrepreneur to an investor, and asked how busy he was. Tian said, "Fortunately, it's easier than when I was at Netcom." Shen's answer was: "That's not right, it should be busier than starting your own business." At present, Shen and Zhang work more than ten hours a day. Can be described as extremely high intensity.

This state of work even puzzled their friend Zhou Hong: "At least Shen Nanpeng is already one of the top 100 rich people in China. I don't understand why he is so diligent."

Perhaps the most reasonable explanation of its dynamics should be repeatedly emphasized by Zhang Fan: "This is an era of building empires, and we want to be one of the century-old shops." Inside Sequoia China, Zhang Fan often cited Goldman Sachs legends Gus Levi's famous saying: "We are greedy, but we are long term greedy". Although the word greedy is often translated as "greedy", Goldman Sachs values the "motivation" in the word more-"we have desires, but we are long-term desires."