**: TOB Industry Headlines Author: Fuji.
2023 is a turbulent year for the entire TOB industry. "From the perspective of the macro environment, China, Europe, the United States, Japan and other major economies, GDP growth is not ideal, and the global economy is in a downturn. Reflected in the country, almost the whole industry has not appeared as imagined, originally expected that after the epidemic is released, there will be improvement, but the actual situation is not optimistic, whether it is in the SaaS field, or catering, real estate, etcFrankly, everyone's not doing well this year”。Xia Haifeng, COO of Zoho China's VP and SaaS Business Unit, said. Under the influence of the global economic downturn and geopolitical conflicts, technology companies have frantically shrunk their business and lowered their full-year forecasts. Zoho was inevitably swept by the wave, but the difference is that it still maintains a high growth rate, the only ripple is the closure of the global recruitment channel, when the storm of the industry comes, it can almost be regarded as a survivor of minor injuries, and at this time, looking back at the entire TOB will also find that the tide has receded, only to know who is swimming naked. When the industry is in a downturn, capital is definitely the most sensitive group of people. Since 2022, capital has begun to retreat from TOB, and in 2023, there is hardly a lively scene of three rounds of financing in a year. When TOB companies completely lose their "water source", the companies that rely on financing to survive are struggling to survive like drowning, which is the reason why most TOB companies are difficult to operate, and it is also the reason why it is relatively easy for non-financing companies such as Zoho. However, under the performance of others who are trying to survive with broken arms, and "Zoho is not particularly bad", capital is obviously not the main reason, so why can Zoho complete relatively satisfactory growth in 2023?This question has been asked by reporters, and TOB bosses have also been asked, but there seems to be no "satisfactory" answer. It's not that Zoho is hiding and not saying it explicitly, but the Zoho model created by this huge empire has never been clear in a few words, it is mixed in Zoho's more than 20 years of development history, integrated in its business philosophy at home and abroad, and rooted in the hearts of 15,000 employees around the world, so to find the trick to Zoho's good results, you can't just look at 2023, but toStretch the long axis to find the true power point of Zoho。However, practitioners who have the "secret to success" will soon find that the advanced nature of Zoho's successful transformation and operation strategy has limitations in time and space, but we still believe that the universality of Zoho's model has value beyond Zoho's "success".
Industries in 2023**
No one is immune
In 2023, it seems that the entire TOB will be shrouded in haze, investors will be forced to change careers, bosses will be caught off guard by the emergence of AIGC, salespeople will be anxious about unfinished KPIs all night, and laid-off employees will appeal on social media about their miserable experience. In the cold winter of the industry, TOB people have only one word on their lips all year round: difficult. So, in 2023, what is the difficulty for enterprises?Xia Haifeng said without hesitation: "This year, we have clearly perceived a significant decline in customers' willingness and ability to pay, and both large enterprises and small and medium-sized enterprises are reducing their budgets and controlling IT spending. "When the cannon fire sounds, no one can help but be swept away by the tide of the times. In 2023, TOB is becoming more and more difficult to acquire customers, and Xia Haifeng, who leads the team to sprint on the front line, has first-hand experience of this change in water temperature. First of all,The customer's decision-making cycle has become longer. Zoho is a relatively short and fast product, and in previous years, the customer's decision-making cycle was about 1 to 3 months, but this year the cycle has almost doubled. And then there'sUncertainty grows. In previous years, customers with unclear intentions accounted for about 20%-30%, but this year's first-value potential customers are only 50% or even less. Again,Customers pay particular attention to price-performance ratio. This year's bargaining efforts are more exaggerated than in previous years, and "retreating to the next best" according to demand has become the norm. For example, customers who originally considered Salesforce will now prefer Zoho, and customers who originally chose Zoho will now research other brands. These are just the difficulties that can be named, and there are many more difficulties that cannot be solved. "For example, if a customer is interested in Salesforce, then this challenge can be dealt with, but this year, many times the customer just says that they can't talk about it, what can you do, this kind of cliff-like breakup, gives people a deep sense of powerlessness. Xia Haifeng admitted that he was very helpless. The customer's willingness and ability to pay is like a barometer of TOB companies' revenue, but it doesn't rain in the world, and it is not something that TOB companies can control, so how does Zoho save itself in this disadvantage?Xia Haifeng said: "In the short term. .On the one hand, we will tap the new needs of old customersBecause Zoho has more than 50 products, in addition to CRM, it will also recommend other useful products to customers, such as BI, HR SaaS, etc., for cross-sellingOn the other hand, we will provide value-added servicesBecause of the large scale of existing customers, converting existing customers into increments is an effective method for Zoho. "ButThe short-term approach can only solve the pain, and in order to cope with the future, it is necessary to find new growth points, so Zoho China is aiming at overseas markets. Xia Haifeng said: "In the long run, although the global economy is sluggish, some emerging countries and regions such as the Middle East, South Africa, and Latin America are growing rapidly, so we will invest heavily in these 'potential stocks' to make up for the decline in these major economies, including Europe and the United States." "You must have to find a way, it's impossible to lie flat. Xia Haifeng paused and said, "From our point of view, the world economy has not yet reached the freezing point, and it should be worse in the next 3 to 5 years, so we must be prepared to 'fight a tough battle', but don't fall into anxiety inexplicably, and do things more patiently, calmly and calmly, otherwise the anxiety transmitted from top to bottom will easily lead to high-quality projects becoming inferior projects, and they will not be able to make money, which will be more than worth the loss for enterprises." "Compared with the anxiety of some companies in the face of customers not buying it and the industry's best war, Zoho is very calm. On the one hand, this is because Zoho has enough food and grass and enough self-confidence, Xia Haifeng said, "Even if we don't do anything now, there is no problem for the company's cash reserves to be maintained for two years".On the other hand, because the Zoho model has solved the existing problems, and at the same time has a huge territory and imagination, which is an important reason why the company can still complete 40% growth in the industry storm, and it is also Xia Haifeng's hole card for Zoho to be calm and calm.
Zoho mode, down roots
So what is the Zoho model?As the saying goes, if a tree grows taller, it must not grow upwards first, but first take root downwards, so find itThe first step in Zoho's pivot is to look inward. In China, many companies regard Zoho as something worthy of respect and want to replicate. It's just that people who come to learn from the experience will find that on the test paper of the industry, the difficulties in obtaining customers and the strict control of corporate budgets are the same, but the ability to solve the questions is different, and the test results are naturally different. So, how is Zoho's problem-solving ability forged?Time is the best coach. In 2000, the Internet bubble burst;Two years later, the aftermath was transmitted to the upstream telecom market, and with a single product, Webnms, AdvenNet (the predecessor of Zoho), which had been doing business among dozens of telecom giants around the world, encountered an unprecedented crisis, and since then, Zoho has realized that it must do itDiversified development,And soWith one hand, we will broaden the scope of the service industry, and the other hand will march into SaaSThe strategic puzzle laid the foundation for its development for more than 20 years. Looking back at the development of SaaS in China, in just 20 years, many SaaS companies have not yet been systematically established in terms of experience and diversification concepts, so from the perspective of time scroll, Zoho is like a pioneer, and has left Chinese SaaS companies far behind. In addition to leaping forward, Zoho is also constantly transforming its products. Whether it is foreign giants such as Salesforce, Oracle or Zoho, it is clear that integration is the direction of the future. But unlike Salesforce, which is integrated through banknote capabilities, Zoho is on the one handSelf-research is achieved through the proportion of highly invested R&D personnelOn the other hand,The strategic focus for the next 3 to 5 years will be on product integration, and we will continue to build our own integrated fortress. In this way, Zoho stands out from many "followers" of the integrated concept at home and abroad, and continues to bring customers a more cohesive and seamless product experience. In this extremely spanning chase,If time is the initial nourishment of Zoho, then respecting customers is the nutrition that Zoho can provide for long-distance running. In China, the phenomenon of "selling dog meat on the head of a sheep" is not uncommon, and many manufacturers are doing things that "harm others and are not beneficial to themselves" in the name of "customer-centric". For example, in order to fight the first war, many companies have launched unreasonable discounts in some holiday nodes, which will lead to serious opacity of new and old customers, harm the rights and interests of old customers, and on the other hand, destroy the product value system of the market, disrupt the market order, and then cause harm to the entire TOB practitioners and customers. And Zoho has gone in almost the exact opposite direction. Xia Haifeng said that Zoho never "kidnaps" customers, and customers can freely choose the purchase method, no matter how many accounts they have and how long they have subscribedIt will not blindly discount, only focus on signing orders and ignore the feelings of customers. “Customer reputation is a very important metric for us to measure whether Zoho's products and services are in place. In other words,If you want money or face, then Zoho must be the most important face (good reputation). Bosses often say that Zoho comes out step by step, and never forget your roots at any time. "Where it's easiest to overlook and frustrate, Zoho gives users hope. The execution of a company's strategy must be inseparable from people, but for many SaaS companies, tools are more important than people. Therefore, when large factories optimize personnel, many SaaS companies will take the opportunity to pick up leaks while optimizing employees. However, Zoho's concept of talent is slightly different: first, Zoho will train its own employees, so the newcomers and old people are treated equally, and they don't think that the talents poached from outside must be talents;Secondly, Zoho believes that the renewal rate of customers is directly proportional to the retention rate of employees, and if the stability of employees cannot be maintained, it is difficult to ensure the stability of the service for new employees who have simply trained for a few months. Based on this, in the context of 2023, Zoho chose the latter among the choices between expanding new business and increasing the existing income level of employees. In this cultural background and atmosphere, on the one hand, the concept that everyone is a CEO is deeply rooted in the hearts of the people, and employees have a strong internal drive to solve customer problems;On the other hand, Zoho's current backbone members are almost all brought up by themselves, so the staff with skilled skills and experience ensures the stability of the service for customers. Diversified business philosophy, integrated products and customer-respecting services, like the shape of a pyramid, seem simple and stable, but the inner thinking structure and cultural genes are difficult for many companies to achieve, which is also an important reason why Zoho can boost many TOB companies in the haze of the industry.
Zoho mode, explore upwards
FoundThe second step of Zoho's fulcrum is to extend the tentacles outward. Over the past 20 years, Zoho has cultivated a fertile land through cultural watering, and at the same time has taken deep roots in the land. Today, the tree has lived up to expectations and has sprouted and blossomed in the harvest of the year. Talking about the outstanding achievements in this year's stability maintenance, Xia Haifeng said with a smile: "This year, in addition to expanding dozens of customers in the hot new energy industry, we have also successfully served a number of new global enterprises in overseas markets. ”Behind the expansion of overseas customers, it reflects the current trend of Chinese enterprises going global. In 2023, the slogan of not going to sea, going out will resound in the TOB circle, and going overseas has become the hottest topic in the past two years. In this regard, Xia Haifeng explainedWhy are TOB companies willing to make sea?Because the revenue and profit of doing overseas markets are higher than those of domestic alone, it means that the ability and willingness to pay are also stronger. But it is not easy for TOB companies to go to sea, Xia Haifeng saidTechnology companies still face two big problems when going overseas, one is the difference in localization, and the other is external competition. Let's start with localization differences. One is the logical difference. There are differences between Chinese and Western ideas in software. Although it can be done functionally, the logic of the underlying architecture is different, so if domestic manufacturers only do simple sinicization or multilingual, it is actually difficult to work for customers;The second is customer differences. Chinese customers like to find someone to solve something, while foreign customers like to read the user manual by themselves. In the case of Zoho, for example, most of the overseas customers are subscribed, while in China, the subscription accounts for less than 2%. Let's talk about external competition. First, there are more competitors. There are not only large factories such as Salesforce and Microsoft that have advantages in products, services and brand influence, but also small factories with relatively low-end R&D but cheap products, so although everyone always says that domestic volumes, from my point of view, foreign volumes, CRM track is not a good choice to go to sea;Second, the competition is at a disadvantage. For example, Zoho is a global product by nature, and it can quickly integrate into the local market and adapt to the needs of customers, while it is difficult for domestic manufacturers to do so, which is not to say that the capabilities of Chinese software companies are not good, but the problem of natural genes, so it is actually the same difficulty for international manufacturers to enter China and Chinese manufacturers to go out. Although the results of going overseas are indeed eye-catching, Zoho has a clear understanding of the current situation - the bigger the tree, the more nutrients it needs, so it still explores new directions in addition to overseas genetic advantages. In 2023, AIGC will make a strong debut, and Zoho will naturally try its best to keep upCompared with the statement in the middle of the year, Zoho, which constantly updates its cognition, also has new insights at the end of the year. Xia Haifeng shared unabashedly: "We think that the large model is at least useful for SaaS, and we can't deny its value, but how useful it can be is to put a question mark." For enterprises, enterprises should have their own small models, and have the ability to filter and transform large modelsOtherwise, there is no value in connecting one's own products directly to the large model, and of course, there may be intermediary manufacturers who adapt to the large model and the product in the future. "The future is full of brightness, but the unknown tunnel is destined to be difficult, and Zoho, which is at the forefront, will inevitably encounter many problems, but it also provides a direction for the future development of the industry. Xia Haifeng shared: "There is now a gap between the artificial intelligence imagined by customers and the artificial intelligence that products can provide, because people's imagination and expectations for AI are great, so each customer's demands for AI capabilities are also different. The differences here can be simply applied to the CRMAI is not a standardized function, but an individual requirement. Therefore, some customers will be impressed in the pre-sales demonstration stage, but the actual application is not ideal, so we need to do the AI that the customer wants, not what kind of AI the manufacturer wants to do. At present, although there is no direct connection between the product combination model and the customer increment, whether the product is combined with the large model has been one of the factors considered by some customers. As mentioned in the middle of 2023, we will continue to increase our investment in large models in the future, and this may be an important growth point for Zoho in the next decade. Standing at the end of 2023 and looking back,On the one hand, Zoho takes internal strategy, products, services, and employees as the "root system" and takes root in the earthOn the other hand, with "going to sea + AIGC" as the new vitality, we will seize the future market. Therefore, when many companies wither in 2023, Zoho can resist disasters and grow steadily. However, looking back at what Zoho has done well in the past, is it a revelation to learn that "all enterprise development paths are zigzag forward"?Is it to learn the management method of "customer renewal rate is directly proportional to employee retention rate"?Is it to learn the development path of "providing a more customer-oriented experience in the future"?Neither. To borrow Mr. Yanxi's idea, the significance of choosing Zoho as a sample is:If you are still worried about the company's performance cut in half, losing more than half, and losing no hope, and don't know where the confidence in 2024 comes from, you might as well take a look at Zoho's 2023 and maybe understand a truth: in the face of true long-termism, no matter how violent the cyclical fluctuations, it is only an insignificant trace. I hope that in 2024, long-termism will sound the clarion call for the enterprise to move forward, and I hope that in 2024, the death knell will not ring again.