2016 was regarded as the "VR first year," and a large number of developers and start-ups are rushing into the VR industry. However, starting from the second half of the year, it was constrained by factors such as the immature hardware and the inconvenience of content continuity. The VR market began to precool. At this stage, due to the unclear profit model and the loss of half of the VR companies, this emerging market cannot escape the impact of VR bubbles. Chen Deming, former Minister of Commerce of the People's Republic of China, said at the Boao Forum, “There are some bubbles in the VR market. We need to experience the survival of the fittest in the market, break some bubbles, and allow better quality VR companies to go up.†So at this stage, What types of VR companies may be out of this wave? The layoffs and bankruptcies that began in the second half of last year can be a reference. Which VR companies are prone to fall? Some investors said that when you observe whether a company is valuable, either look at their profitability or they have a deep knowledge accumulation that allows them to take advantage of long-term competition. And if it is an early investment project (such as the current VR market), the judgment criteria include: market opportunities, teams and products. From the perspective of layoffs and bankruptcies that began last year, many VR teams lack physical breakthroughs such as domestic storm mirrors, Mido Entertainment, LeTV VR, foreign Vrideo, etc., or lack of attractive enough technologies, or lack thereof. The temptation to attract users to return to the platform will eventually lead to a lack of funds and a move toward layoffs or bankruptcy. On the other hand, the management team can not be ignored. Taking the perfect illusion as an example, the company entered the panoramic camera industry early on and received investment from Intel and other institutions. However, due to vague positioning (unwillingness to abandon the professional market, but also want to hit the consumer's mind), increased competition (Nokia, Facebook, Jaunt, etc.) caused financing constraints and other factors, eventually failed to escape failure. How can VR companies survive? Today's VR bubble reminds us of the Internet bubble in 2000: In the stock markets of many countries in Europe and the United States, the share price of technology and emerging Internet-related companies rose rapidly, and then spread to Asian-related stocks and even China's stock market. After the bubble subsided, many internet companies stopped the trading of wind funds and stopped trading. Many have not even made a profit. It is said that the most sensational statement was that a bowl with a .com written on it can get tens of millions of dollars worth of venture capital. This is similar to the influx of many entrepreneurs in the first half of the year to the VR industry and easy access to financing. As capital gradually becomes more rational, VR bids farewell to “barbaric growth†and enters the reshuffle period. Those companies that survived the Internet bubble and succeeded in becoming bigger are worthy of learning and learning from VR practitioners. Alibaba, China’s largest e-commerce platform, has experienced the Internet bubble baptism. It is said that Ma Yun has a heartfelt intuition that the Internet will change the world. In 1995, Ma Yun invited 24 friends and wanted to understand the needs of foreign traders for the Internet. In the end, 23 of them said forget it. Only one person said that you could give it a try and you couldn't escape quickly. But Ma thought about one night and decided to do it the next morning. "Even if 24 people are against me, I have to do it." The earliest Internet product that Ma Yun set foot in was the "China Yellow Pages," which many people viewed as "crooks." At the end of 1997, the Yellow Pages of China achieved profitability, but after the cooperation with Hangzhou Telecom, the two parties disagreed and Ma decided to abandon the website. It was also in this year that Ma Yun began to come into contact with foreign economic and trade business and the idea of ​​becoming a B2B website began to mature gradually. In 1999, Ma Yun established Alibaba. He has received Goldman Sachs’ $5 million in financing, and Sun Yatsen’s $20 million in financing. In this comparison, HTC's bet on VR is very similar to Ma's experience. Although VR market has some bubbles, for HTC, VR stands for the future and is expected to change the world. The company recently sold mobile phone manufacturers in Shanghai and used the proceeds for VR investment. HTC also emphasized the importance of ecological experience and integrated VR market through software and hardware. Chairman Wang Xuehong believes that the outbreak of the VR application market will come two years later, "so we have to hurry up." Also worthy of reference is search giant Google, one of the founders of the company's Brin to the Internet as the only way to the future. In 1998, Page and Brin demonstrated to Sun co-founder Andy Bechtolsheim a new type of Internet search technology and successfully obtained $100,000 in investment. In September of the same year, Google was officially established. In an interview conducted in 1999, Page made it clear that the goal of catching up in the future is Internet companies such as Yahoo. Google’s success comes from innovation. At the time of Google’s creation, the industry’s understanding of Internet search is that the higher the frequency of a keyword in a document, the more prominent the document is in the search results. Brin, on the other hand, believes that the factors determining the location of documents in search results are the frequency with which a document appears in other web pages and the credibility of these web pages. The popularity and quality of web pages in the audience are decisive factors. There is also an interesting story. Google is so concise because the two founders do not understand HTML technology. For a long time, the user can only search by clicking the Enter button (it does not have a "Submit" button). But with innovative technology, Google spent the Internet bubble and reached a height that Page and Brin could not have expected. Will there be a chance to become a giant when you live? Of course, even with innovative ideas and technologies, entrepreneurship is very difficult at the beginning. Many founders once had the idea of ​​selling the company, but they did not take over because of other reasons, and eventually they had a later commercial giant. One of the most famous non-Ma Huateng wanted to sell 1 million QQ. In 1998, Ma Huateng developed the first Chinese version of ICQ-QICQ, the predecessor of QQ. In 1999, Tencent instant messaging service was launched, and in 2000, the number of QQ registered users exceeded 10 million. However, due to the harsh winter of the Internet in 2000, Tencent lacked liquidity, making it difficult for Ma to sell QQ to ensure the company survived. Interestingly, Ma Huateng plans to transfer QQ by RMB 1 million. However, he is considered to be too expensive to find a suitable buyer. In the end, Ma decides to leave QQ and raises himself. Look at Tencent's current market value of 2 trillion Hong Kong dollars, if you can go back to the past, I am afraid there are buyers want to buy QQ millions, Ma Huateng will not be the heart of it. Other founders would like to sell the company's case, including Ding Lei's "three times selling NetEase", Google in 1999, trying to sell one million dollars, and Zuckerberg's early attempts to sell Facebook and so on. The rise of these companies that cannot afford to sell may be the “consolation†of the hard-working entrepreneurs in the VR industry: there is an opportunity to become a giant. Additional Services Increase VR Value Although the VR industry is not yet mature, it has penetrated into education, games, movies, real estate and other industries. Taking last year as an example, VR offline experience shops can be described as all over China, but many entrepreneurs get together under the VR offline experience stores, but also caused many businessmen to escape the offline experience shop model. The number of domestic VR offline experience stores exceeded 3,000 last year, but many businesses use low-end VR egg chairs and lack attractive VR content, making it difficult to obtain repeat customers. On the other hand, the content of many VR offline experience shops is homogenous, and even many games are demos, and the resulting VR experience is not very good. In addition, VR offline experience stores not only lack a good profit model, but may also face hardware changes and a number of offline experience stores gathered in the same business district, resulting in operators not making money. However, we also see that some teams achieved relatively good results through VR+ light meals or a combination of VR and cinema. This also tells us that in addition to technology and content experience, VR practitioners can also increase their attractiveness through additional services. Currently, if a company only wants to obtain funds through speculation concepts (such as all kinds of VR boxes), it cannot create real value for users, or it can enter the market prematurely and cannot wait for the industry to mature (such as Microsoft's eruption in the tablet market). Ten years ago, the Tablet PC was introduced. Xiao Bian hopes that entrepreneurs can think deeply about their own advantages, users, or market needs so that they can lead their team through the VR bubble.