Huxiu, the latest addition to China’s burgeoning online media outlets which focusing on business reports, detailed the decline and fall of 17 Chinese internet ventures a couple of weeks ago. Businesses fail, so new ventures fail is no news. To paraphrase Tolstoy, every unfortunate company is unfortunate in its own way, so you can’t really hope to prevent future mistakes by compiling past failures. With that being said, however, some failures are so representative of China, they have to be discussed in some detail. A case in point is failure #17: Woyo.
You can’t make this stuff up. Woyo’s goal was to become “supersized e-commerce platform that could satisfy a person’s every need from cradle to grave. Accompanied by providing content and social networks, Woyo will become a combination of Sina, Taobao, and Renren”.
Liu Xu, the man pulling the strings of this gigantic enterprise, was sure this vision was going to work out. Of course, he has never worked a day in his life, let alone having working experience in the internet industry. But Mr. Liu believed his background qualified him for this task; he has learned finance at USC, as has read the biographies of the likes of Robin Li (Baidu), Ma Yun (Alibaba), and even Steve Jobs (surprise)!
Of course, reading success stories was only part of Mr. Liu’s resume, he is also the son of the richest man in Shaanxi Province. This provided Mr. Liu with ample firepower. In addition, the “guanxi”(means relationship in English) accumulated by the father also came in handy when Woyo applied for the notoriously difficult-to-obtain Chinese licenses.
But to be a daddy’s boy is not congruent with Mr. Liu’s concept of himself as a self made man.The part time racer claimed that he has raised $100 million in venture capital from an American firm that has never before stepped foot in the Internet industry, and that was the money that he was burning through.
Burn money he did. Woyo’s corporate motto was “if we offer a car a day, buyers will come”. That’s why in the beginning the company was prepared to burn billions building the business. Money was not a problem, because Mr. Liu believed his company would be listed in NASDAQ within 9 months. You see, the public would be the suckers, not him. What Mr. Liu was worried was how much stressful success was, his weibo talked constantly about the difficulty in leading a team of thousands.
Somehow, against all odds, a company aiming to beat down every Chinese internet giant, helmed by a amateur, did not prosper. After spending $15 million, Woyo’s 1600 employees was reduced to maintain a website that basically sells less than a hundred items a day.
Faced with such devastating failure, even Mr. Liu humbly admitted defeat. He described his company of possessing “the body of an 18 year old, but the mind of a newborn”. By the body of an 18 year old, Mr. Liu is lamenting the fact that his company is somehow engaged in 32 different lines of businesses. Simultaneously. Think about that. Presumably, the mind of the newborn referred to himself.
Woyo didn’t shut down, though, as that might be too much for the fragile psyche of business visionary. Woyo is now a “social B2C of fashion”, “a tumblr like search engine of fashion”, whatever that means.
In the end, Woyo didn’t make any money. The internet firm, that is. Mr. Liu and his family? Oh, they made a boatload of money, as Woyo was able to obtain a piece of land on the outer rim of Shanghai, gratis.
So the rich always make out alright. Even when they beat on, boats against the current, they are still borne back ceaselessly into unimaginable riches.