After the Divorce, I Could Hear the Voice of the Future-Chapter 53: ofo Shared Bicycles

"Mr. Liang, hello, my name is Lu Liang, from Tianxing Investment..."

Lu Liang arrived at the exhibition management office, introduced himself, and inquired whether the startup team of Little Huang had participated in this exhibition.

"Little Huang?"

Liang Juntao followed his gaze and suddenly realized, "Mr. Lu, that's the team from Beijing University's ofo shared bike startup. They're also participating in our university's startup exhibition, but it's scheduled for tomorrow."

The Shangcai entrepreneurial exhibition was originally planned for one day, but this year, due to the large number of teams that registered, it was extended to two days, divided into two sessions.

Liang Juntao then asked, "Mr. Lu, are you interested in this project? We could introduce you to them."

The founder of ofo comes from a remarkable family background, and just yesterday, senior leaders called him to pay close attention and, if possible, help introduce some investors.

Unexpectedly, before he'd even started making introductions, someone took the initiative to ask; if he could facilitate an investment, it would be a no-cost favor gained.

Tianxing Investment was unfamiliar to Liang Juntao, but the invitation was tiered, and a gold-edged invitation was the highest grade.

It seemed their capabilities were quite impressive.

"Then I'll have to trouble Mr. Meng."

"Mr. Lu, please wait a moment. Here is their business plan. Have a look at it, and I'll contact Dai Wei for you."

Lu Liang was escorted to the lounge, where a part-time female student gently asked, "Sir, what would you like to drink?"

"Some ice water."

Lu Liang browsed through the business plan, his mind elsewhere.

ofo's entrepreneurial concept revolves around the sharing economy plus smart hardware to solve people's last-mile travel issues.

It was founded in December last year with a registered capital of 1 million, and they have 1800 shared bicycles across four campuses of Beijing University and Tsinghua.

To participate in this college student entrepreneurial exhibition, they started placing 300 shared bicycles at Shangcai last week.

Their profit model is based on hourly charges, 0.5 yuan per hour, with less than one hour counted as an hour, and a daily maximum charge of no more than 2 yuan.

They currently have over 20,000 paid users, an average daily usage of roughly 8000, and the company is valued at 5 million, willing to offer 10% of their shares for angel round financing.

Lu Liang walked to the window, opened it to ventilate, lit a cigarette, and exhaled plumes of smoke, bearing a contemplative expression.

ofo's business idea was promising, but its biggest challenge was expanding beyond campuses.

In the past six months, a total of 1800 shared bicycles had been placed, with a loss rate of only 1.7%.

The main reason is that operations were confined within campus, particularly at Beijing University and Tsinghua, China's top educational institutions.

The students and faculty have high standards, perhaps due to the prestige of their schools, compelling them to maintain high quality.

If deployed outside the campus, keeping the loss rate below 20% would be considered very fortunate.

The cost of producing one Little Huang bike is 330 yuan; increasing production or self-use could reduce costs.

But the damage and loss rates must not be too high, or else the company would eventually collapse due to unsustainable losses.

Lu Liang continued searching for related information online,

until he was interrupted by a knock on the door, prompting him to put away his phone.

"Dai, this is Mr. Lu from Tianxing Investment..."

Liang Juntao entered with a smile, accompanied by a group of young individuals in their twenties, all ofo co-founders and also classmates from Beijing University.

Lu Liang smiled, shaking hands with everyone.

Finally, his gaze rested on Dai Wei, the proponent of the idea and the largest shareholder, owning 70%.

Lu Liang said, "Dai, I just looked over your business plan, and I'm quite interested in this project. Could you tell me more about it?"

Dai Wei, a young man in his twenties, was visibly thrilled as he began discussing ofo's advantages and future market prospects.

Lu Liang smiled courteously, not interrupting his presentation, occasionally nodding and reflecting.

Until Dai Wei finished explaining.

Lu Liang gradually toned down his smile, "Dai, I have a question that I'd like you to help me understand."

"Mr. Lu, please ask," Dai Wei said with a big smile, joy radiating from being acknowledged.

Lu Liang asked, "If ofo were to be deployed outside campuses, how would you reduce the loss rate?"

"Although your current loss rate is only 1.7%, it's mainly because you are only deployed in the Qingbei campuses."

"The quality of students and faculty on the campus is high, and they would not commit any dishonest acts, but off campus, it can't be guaranteed," Mr. Lu said. "You should be aware of this, right?"

"Clear," Dai Wei replied with a smile that gradually stiffened.

He answered, "We have seriously considered this and plan to mitigate the risk by collecting a deposit."

Dai Wei couldn't help but look at Liang Juntao. Hadn't they agreed that the investors seemed easy to talk to? Why the sudden change?

Liang Juntao was silent, his eyes downcast.

After all, he had seen even the most troublesome investors before, and satisfying them was the only way they would be willing to invest.

Of course, it could also be a compliance test. Lu Liang wanted to gauge Dai Wei's tolerance to see how easy future dealings might be.

But none of those concerned Liang Juntao anymore. His mission was complete, and all he needed to do now was to remain silent.

Lu Liang nodded slightly, then asked, "How much deposit do you plan to collect?"

"99 yuan," Dai Wei answered.

"Less than a third of the total cost of one bike."

Lu Liang remarked in an indifferent tone, then asked, "What makes you think people will trust you and be willing to deposit 99 yuan?"

Dai Wei thought for a long time, "We plan to first expand the market and then promote our brand to gain customer trust."

Suddenly, Lu Liang laughed, "With an estimated value of five million, financing 10%, that's five hundred thousand yuan in funds. How big can you make the market with that?"

The cost of one Little Huang bike is 330 yuan. Even without operational costs, 500,000 yuan could only purchase 1515 Little Huang bikes.

Even if they deployed 300 bikes to a university, they could only target five more institutions and would then face a shortage of funds again.

Dai Wei and his colleagues exchanged glances, all seeing the bitterness in each other's eyes.

They had previously considered this issue, but dare not delve too deeply into it.

The cost of one Little Huang bike is 330 yuan, charging 0.5 yuan per hour, it's uncertain when they would break even and start profiting.

Lu Liang smiled slightly, seeing that the moment was ripe, and approvingly said, "Your thought process isn't wrong."

He paused, then added, "But the execution isn't clear, and you had initial problems with the positioning of this project."

"Mr. Lu, I'm all ears," Dai Wei, undeterred, was eager to hear Lu Liang's insights.

"The concept of shared bicycles dates back to 1965 in Amsterdam with a government-led free bicycle system..."

Lu Liang had just done his homework; the concept of shared bicycles had existed for a long time, and by now, it should be considered the fourth generation.

In his view, this project, rather than being an internet + product, would be more aptly described as a financial product.

This 𝓬ontent is taken from freeweɓnovel.cѳm.

Due to the substantial initial investment required, a few investors alone cannot fill this gap.

But if treated as a derivative financial product, it would offer significant operational flexibility.

The characteristic of a financial product is that it can leverage, and the leverage multiple depends on how big you can draw the pie.

"As time passes, when the daily usage nationwide breaks through one hundred million, the net income for that day would be fifty million."

"Moreover, if there were only your company in the market, the price could be raised to 1 yuan or 2 yuan."

"One hundred million uses would amount to one hundred million or two hundred million yuan."

Lu Liang's pie-drawing ability was robust, and Dai Wei and his colleagues were mesmerized, as if reaching one hundred million uses per day was just within reach.

They were still envisioning their wonderful future life.

In the next moment, Lu Liang personally burst their bubble.

He said coldly, "But your project has a very critical flaw."

"Mr. Lu, please tell," Dai Wei replied, his expression grave, having already discarded any underestimation.

"There's no core technology, and it's extremely easy to replicate."

Lu Liang spoke slowly and deliberately, each word hitting Dai Wei like an arrow, which he could hardly refute.

Because in mid-last month, his friend in Hang City had informed him that Hang University had already seen the emergence of a Red Bike, named Mobike.

Their development route was exactly the same, and they had already begun deploying in University City, no longer limited to campuses.

The emergence of a homogeneous competitor in the market made them feel very pressured, as this market has always been winner-takes-all.

That's why they were willing to finance 10% of their undervalued assets, in hopes of quickly dominating the market.