It’s one of the rare Chinese successes that is home grown instead of being imported or copied from overseas. It’s also a one of the few social networks that has attracted 100 million users and is nearing profitability, yet there is a million questions surrounding its business model.
The site referred to above is Douban. In its most basic form, Douban is a place where you can record films you have seen, records you have heard, and books you have read, then discuss it with others who share your interest. Later on, Douban also adopted BBS forum that has been enormously popular in China. There have been cases where power users of Douban’s forum have successfully transformed themselves into real world minor celebrities. Most recently, Douban has expanded in various directions, mimicking companies such as Twitter, Pandora and Groupon.
Douban has long intrigued observers. The first, of course, being Douban’s enormous success, especially considering its explosion is almost organic. In a recent interview of Douban’s founder Yang Bo, he confirmed that Douban is a product of idealism. At first, Yang merely wanted a place for like minded people to gather. No one had any idea Douban would explode and attract so many users.
But just as Douban’s success has been confounding, most people are also fascinated by the fact that Douban seems to have no idea where it is going. Many people don’t know what Douban is, at least in regard to its business model.
Recently, Douban has been in the news because it is rumored that people are fleeing from the company, which has inflamed people’s doubts. Many of Douban’s products, such as Douban FM, are not bad, but none of the existing products seem like sure bets. And those are some of Douban’s best products. Douban has experimented in products that no one knows the purpose of. For example, Douban dabbled in online gaming and commerce by introducing an ambigious product named AlphaTown. Neither Douban nor its hundred million users figured out what AlphaTown was for, and the effort has been mostly abandoned.
No one denies that Douban has been very successful in its niche, and has inspired Chinese companies and foreign companies alike. But if Douban ultimately fails, the niche mentality and the organic growth will also be its downfall. In a nutshell, Douban’s idealistic bend in the beginning has resulted in the site attracting millions, but has no idea what to do with them. Even worth, Douban’s main audience, the bohemian artistic type, is not a good target in regard to commerce perspectives.
In fact, one could argue Douban’s success has made it symbolic of what is wrong with many internet companies. Many entrepreneurs don’t realize that “girth” instead of “size” is of the uttermost importance. By girth, we mean willingness of the users to pay.
However, there is still hope yet, if not for Douban. The New York Times has pointed out that the Internet market, which used to be “neatly divided between the unglamorous business-to-business or B2B companies, operating mostly out of public view, and the flashier business-to-consumer or B2C companies”, is merging, and this is due to the fact that enterprise companies are much better customers in term of ability and willingness to pay.
Besides the movement toward serving “bizumers”, another trend noticed by the Times Is the shifting of attention from the “New New Thing” towards the more ordinary, as entrepreneurs are looking for the innovation in ordinary tasks and doing so based on leveraging pre-existing ideas and products. The future “may not lie in being enchanted about the newest social networking start-up. It’s more likely to be in the simple and ordinary. It’s about spotting the everyday problems and providing solutions”. After all, money is to be made.