Today, an internal email sent by CEO of Renren Company, Charles Chen, to his employees was leaked. In the email, six clear requirements were mentioned: Renren Network must transform from SNS (Social Networking Service) to SMS (Social Messaging Service), expanding its core user group from students to young people. The gaming business of Renren should shift from web pages to mobile terminals, quickly gaining more market share. Renren will continue to increase investment in Nuomi.com. Original video content created by mobile users is the main development direction for 56.com. Through investment and practice, Renren will explore the objective laws of integration between the Internet and traditional industries, finding opportunities for a major revolution in the company's genes. For long-term development, the company needs an unshakable "base".
In short, the two most important points are: one, closely follow the trend of mobile Internet; two, build a "base".
Taking a look at Microsoft, Apple, and Google overseas, as well as Baidu, Alibaba, and Tencent domestically, these giants have become giants for many reasons. However, one point cannot be overlooked: they all have one or several unshakable "bases." For example, Microsoft has Windows and Office, Apple has the App Store and iTunes, Google and Baidu have search engines, Alibaba has e-commerce, and Tencent has QQ, etc.
Renren Company's idea of building a base is very beautiful, and moving towards mobile Internet is also a prevailing trend. However, reality remains harsh. China's social networking craze has passed, and Renren Company’s attempt to transform itself has changed from being a pioneer in domestic social networks to now being chased by the tide. Moreover, Renren's financial reports have always been less than ideal, with continuous losses year after year.
Firstly, transforming SNS into SMS and expanding to younger audiences is indeed necessary since the social networking craze has already passed. However, competition in the SMS direction is greater. Renren Network was originally founded specifically for student groups, with classmates forming a very solid but highly limited bond. Therefore, expanding this relationship chain is extremely difficult. Moreover, Renren Network currently faces the issue of drastically reduced user stickiness after graduation. It will be even more challenging for Renren to adopt an offensive strategy instead of a defensive one.
Page games and mobile games are currently hot topics. The development speed of mobile games is rapid, and the popularity of "Plane Wars" after the release of WeChat 5.0 is evident. In the field of mobile games, companies like Shanda have taken the lead, and WeChat is also preparing to launch. In terms of first-mover advantage and strength, Renren cannot match Shanda, and on the platform side, Renren cannot compare with WeChat either. Page games are definitely not a long-term solution, and breaking through in mobile games is extremely challenging.
Regarding video services, 56.com, and group-buying services, Nuomi.com, it is difficult to create differentiated products. They are not industry leaders and can only continue competing fiercely while relying on Renren Network.
Next comes the key part of Charles Chen's thoughts: gene revolution and constructing a "base." Renren Network's focus on social networking but inability to sustain it has been acknowledged as a reality by Chen. Gene transformation and "base" construction are strategies that have been carefully considered. Strategy formulation is undoubtedly important, but strong execution is even more crucial. Chen openly expressed his admiration for the bases of Alibaba and Baidu.
At the beginning of this year, Renren Company announced the establishment of an independent wireless business division, focusing on new product research and development and operations in the mobile Internet field. Now, it has been some time since Renren proclaimed shifting its focus to mobile terminals. But what are the results? Have influential products been launched? Has the basic mobile application experience been improved?
Moreover, when explaining the need for Renren Company to undergo gene transformation and establish a stable "base" supporting company development, the necessity of exploring the "objective laws of integrating the Internet with traditional industries" was mentioned, along with setting a plan for Renren Company to develop a platform-level business within five years, providing cash flow, talent, and a foundation for the rapid start-up of new businesses.
This means that Renren Company has yet to find the rules and does not have a specific direction. With the relatively complete layout of domestic TAB (Tencent, Alibaba, Baidu) powerhouses and the tendency toward platform construction being completed, Renren Company realizing the need to catch up is indeed too late. The first five points mentioned by Chen were things that should have been done earlier, and by now, there should have been initial results. At least, the direction of platform construction should be clarified.
Building a base-level platform is something every company, especially Internet companies, wants to achieve. However, few succeed. Everyone wants to taste the fruits of platform construction but is unwilling to sow the seeds. Even if they sow the seeds, they don't water or fertilize them. After much effort in making it sprout, natural disasters or misfortunes can ruin everything instantly. Jack Ma has achieved success now, but the hardships during the early days of Taobao have become a classic entrepreneurial story.
Additionally, five years is an awkward amount of time. In the Internet world, five years is a long time, enough to bend giants like Nokia. Yet, five years is also a short time, as platform construction may only be in its infancy. Copying a page isn't hard, but platforms cannot be copied.
The current predicament of Renren Company is also a reflection of domestic Internet enterprises. They caught a wave of enthusiasm but couldn't find the next direction. Lucky ones, like 91 Wireless, can be acquired at high prices and rely on big trees, while unlucky ones can only be swept away by the waves.
Cover image from: economicstexas