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“Losing money for education hardware” How does ByteDance plan the “third growth curve”?



Aside from the title of ByteDance’s senior vice president, Chen Lin appeared for the first time at the “Dali Education” brand press conference as “Dali Education CEO”. In the first few sentences of the speech, Chen Lin got stuck, “The track is switched a lot, but it’s still a bit nervous.” Before being in charge of the education business of Bytedance, Chen Lin was the CEO of Toutiao and was responsible for social networking (Fly Chat, Duo Flash) , Understand Chedi, Lark and other innovative businesses. Today, education is another innovative and unfamiliar field for him.

"Losing money for education hardware" How does ByteDance plan the "third growth curve"? 1Vigorous Education CEO Chen Lin

ByteDance has been in the education industry for two years. During this period, the outside world has a lot of suspicion and suspicion about this “algorithm company” doing education business, but except for Zhang Yiming’s description of the education business in the eighth anniversary letter, the byte official The progress of the business is rarely communicated to the outside world until this first educational brand launch.

“Actually, the real effort to do (education) started last year. It’s been more than a year now. Last year, the team discussed that there should be an independent brand to undertake all products. In the early days, the outside world didn’t think much. We get it, but we know internally that there will definitely be some projects that can be launched next year. From this perspective, there will be a lot of products that need to be undertaken by independent brands in the future, and the brand recognition can be stronger in the minds of users.” Chen Lin in Sohu In interviews with technology and other media, this describes the reason for launching “vigorous education”.

Different from Internet giants such as Alibaba and Tencent to provide B-end and low-level technical support in the education industry, ByteDance is the only Internet company that has launched more than 20 products through self-support and acquisition and investment, and has launched more than 20 products. -k, K12, enlightenment and other age groups and multiple fields.

Previously, the outside world’s perception of the more than 20 educational product lines owned by Byte was messy, and they did not know the key points. In the past two years, none of the products came out. Some insiders speculated, “Probably the single business has a poor ability to realize money. Cast a net everywhere”. According to a report from Caixin in October last year, Bytedance once stated that Chen Lin spent more time on educational hardware that has not yet been listed.

On October 29th, with the release of the “Dali Education” brand, this educational hardware finally surfaced-Dali Smart Operation Lamp.

Educational hardware is no longer a new outlet. Among the dazzling education hardware on the market, a smart lamp does not seem to be very eye-catching, but for ByteDance, this is a node. The hardware constitutes a node that links the ByteDance education business. , It also hides the bigger layout and ambition behind the byte.

"Losing money for education hardware" How does ByteDance plan the "third growth curve"? 2Former Musical.ly founder and head of Dali Intelligence Yang Luyu

“Selling hardware at a loss”

Education is currently the highest priority strategic focus of ByteDance. Zhang Yiming made it clear in the 8th anniversary letter, but the reason is not just because education carries the third growth curve besides Toutiao and Douyin. , And more importantly, byte’s hardware strategy, the plan starts from education.

From the point of view of the “Dali Smart Homework Light” itself, its core function is intelligent tutoring, equipped with an AI camera, and with the help of artificial intelligence and related technologies, it can intelligently scan the calculation questions in the homework and give answers and intelligently identify children in the textbook Point to English words and perform functions such as follow-up reading. In addition, with the help of the dual cameras on the desk lamp, parents can more conveniently realize remote teaching and guidance to their children.

In terms of functions, smart lights are more like integrating multiple needs in the online education market, and seizing the gaps in the home education scene, making a difference with products such as reading pens and wrong-question printers on the market.

This product was launched on the e-commerce platform in July this year, and in the three months so far, the Jingdong page has shown that it has sold more than 5,000 copies. Yang Luyu, the former founder of musical.ly and the person in charge of Dali Intelligence, said that this result exceeded expectations. “Before this (October 29), we did not do any brand promotion, that is, a product without a brand can be sold. Many, purely rely on its product power.”

The price of Vigorously Smart Task Lamp is 799 yuan. Some people in the education industry told Sohu Technology that the price is low in the industry. From the perspective of the supply chain, the profit margin is extremely low. And Yang Luyu also admitted that “hardware is not profitable, it is selling at a loss.” The Dali Education team does not believe that smart lights are a pure hardware business, so it is within their expectations that it is not profitable. Yang Luyu believes that hardware is a service carrier. If this hardware actually solves the problem, it means that it has a long life. Cycle, during the cycle, the team can provide more services.

“We hope to follow the idea of ​​infrastructure. In some daily and repetitive tutoring tasks, we use hardware to solve them. When we need people to provide specialized and difficult services, we give it to the teacher. So we can Think of it as a combination of two different scenarios. We believe that the final education must be a combination of hardware plus algorithms and human services to cover the entire scene.”

Yang Luyu’s interpretation reveals a corner of BYTE’s ambition for education ecology. The aforementioned industry insiders analyzed to Sohu Technology that Bytedance is following the logic of “Xiaomi IoT”, starting with learning scenarios, selling at low prices, and then laying software. On the sales page of the Dali Smart Lamp, you can find that the gift includes Guagualong worth 899 yuan and you took a course package, “This is the content of the pipeline.” The industry insider said.

ByteDance has previously launched more than 20 products, acquired the hammer team and other layouts. At the moment of hardware launch, the logic behind it became clear. First of all, tools and hardware products have wide application scenarios and strong user stickiness, which are excellent entrances. Secondly, content education products in different fields such as GOGOKID and Guagualong can be opened up through a single hardware product to form a word Festival beating the closed-loop ecology of educational products.

Yang Luyu often tells the team that he hopes to finally build a huge online classroom with desks distributed in everyone’s homes-this is very much like the prototype of a learning community. He revealed that the first educational hardware is aimed at the home scene, which is just a cut. After the home scene is sufficiently penetrated, the possibility of linking to more scenes such as schools in the future is not ruled out, and the next smart hardware will be launched in the first half of next year.

"Losing money for education hardware" How does ByteDance plan the "third growth curve"? 3

“We need to recruit the best talents”

With its own powerful algorithms and the hammer team that is responsible for the company’s hardware mid-stage, it’s not difficult for bytes to connect data, products, and users. However, an Internet company that uses algorithms and technology as its genes has entered a massive effort to focus on content and In the education industry it serves, the polishing of its core teaching and research is still being questioned.

“Many people in the industry are paying attention to this. Are we doing education business from a technical perspective.” Chen Lin told Sohu Technology that the company has issued 2 million annual salary to recruit famous teachers from Qingbei, and the class teacher team has thousands of people. However, Chen Lin did not provide further explanation for the improvements brought by the expanding teaching and research team to the teaching and research system and teaching content. According to reports later, the teaching and research center is still being formed.

“Talents” is what Chen Lin talks about. For example, when talking about the set KPIs in the interview, Chen Lin said that there is no specific numerical goal, but to speed up the team building, he hopes that the team will recruit the highest-matched talents. Increase talent density. In March, he also stated on Wei Toutiao that BYTE would recruit 10,000 people for the education team this year.

Byte has indeed made a big splash in the competition for talent. Some GOGOKID resignees revealed to Sohu Technology that the previous GOGOKID teaching and research team was basically dug from VIPKID. In addition, many former staff members also told Sohu Technology that ByteDance has carried out a large-scale digging from a good future. In addition to teaching and research, it also includes technical and product personnel.

Chen Lin pointed out in the interview that many of the acquired education businesses are based on the purpose of talent acquisition, “which can help you accelerate and form a business team faster.”

As far as the education industry is concerned, the lack of genes is first reflected in the fact that the teaching and research team is not too hard. In order to build the team, Byte is doing its best to dig people. With byte’s financial resources, this process is not difficult. Chen Lin also said that he feels that the company is very attractive to high-level talents. The education and research, products, and operation strategies of the executive level of the education industry can be leveled by the flow of key personnel from other leading companies. From this perspective, byte jumping is a latecomer and there is indeed a chance to tie the competition.

A staff member who once worked for Good Future and is now employed by ByteDance Qingbei Online School told Sohu Technology that he felt the difference in thinking logic between the two companies. “Good future is business logic. From the perspective of the entire business, what should be The focus of development is to focus on the big and let go of the small. Perhaps the development of this business does not require system participation at all. Byte is more like a rigorous science student, and more hopes to solve problems with products and systems.”

However, there is no definite answer to which logic is in line with the virtuous circle of the education industry, which has become the main contradiction between Internet companies and traditional education companies.

NetEase is an opponent that cannot be ignored among companies that do education business from the Internet like ByteDance.

NetEase Youdao, which went on the market in the second half of last year, has also been focusing on the layout of educational hardware products. At present, relevant products include Youdao dictionary pens, translation eggs, smart answer boards, pocket printers, etc. It can be seen that NetEase Youdao hopes to focus on tools, The content and hardware aspects form their own product matrix. Financial report data shows that learning hardware products achieved 152 million yuan in revenue in 2019, a year-on-year increase of 396%, and the growth data is the most eye-catching among all products. The star product “Youdao Dictionary Pen 2.0” sold more than 100,000 in Q4 of 2019.

But if you look at NetEase’s education structure as a whole, the products are relatively independent, and a single function supports a single product. So far, there has not been a systematic business barrier, which gives the byte jump chance.

“There must be projects coming out next year”

The concept described by the Vigorous Education team is complete and beautiful, but at this stage, the reality of the development of various content products within the system, the lack of reputation, and the consolidation of the core of teaching and research also need to be faced.

In December 2017, ByteDance communicated its ambitions in education to the outside world for the first time. At the Education Industry Future Summit held by Toutiao, officials disclosed a set of data: From January 2016 to November 2017, Toutiao’s educational business cooperation customers increased by 263%; total advertising consumption in the education industry increased by 260%; The distribution of educational business customers is dominated by pan-university education, K12 education, and language training, with a proportion of over 70% to 80%.

This set of advertising data reflects the prevailing environment in the education industry at the time. At the same time, it also means that the education industry on today’s headlines is not a small commercial scale. This gave some inspiration to the byte beating.

But the other side of the coin is that the high cost of acquiring customers in the education industry has caused continuous price wars. In three years, the money-burning war has never stopped. In this process, countless online education companies have fallen. The two most crowded tracks of K12 and online English have also become relatively mature. Several companies that are stable at the top have begun to face growth bottlenecks and card position wars.

ByteDance has educational products that were once brilliant. In May 2018, Byte launched GOGOKID. At the beginning of the launch, the advertising campaign was strong and directly targeted VIPKID, but apart from the huge marketing momentum, the business level did not achieve much in a year. Some netizens even broke the news that GOGOKID carried out large-scale layoffs, with a ratio of 70%-80 %, the number of sales has been cut from 700 to 800 to 200. Then in August 2019, the newly appointed post-90s CEO Qian Qichen took office and again carried out a series of rectifications on the team.

Although the new CEO is ushered in and the team has expanded its enrollment after rectification, a ByteDance developer told Sohu Technology in April this year that the development of the GOGOKID project has not yet improved, “not ideal and in danger”, and according to The aforementioned leavers revealed that last fall, this project was the largest team in the education business and the most money spent.

Regarding whether GOGOKID has been abandoned, Chen Lin responded at the beginning of his speech at the press conference on the 29th: “Many people have asked about the situation of GOGOKID. It is still growing, and we pay more attention to long-term development.”

Since last year, the staff structure of ByteDance’s education business has been adjusted several times. For example, in the two relatively mature projects of Qingbei Online School and GOGOKID, the head of Qingbei Online School, Liu Yong, left in October last year and is now taken over by Deng Shujun. The latter is the former head of Xiaoyuan’s search problem algorithm department and NetEase Youdao. Product manager. At the same time last year, GOGOKID rectified and laid off employees. In March of this year, Li Fei succeeded Zhang Lidong as the general manager of GOGOKID.

The management turbulence has affected the stable development of the business to a certain extent, and the multi-point attack method also made the overall education business of Byte unable to focus. Before the launch of Vigorous Education, Byte’s education business was done reluctantly and hastily for a long time, leading to a lot of funnels.

“From the very beginning, I felt that their style of education was too impetuous and too hasty,” a former GOGOKID employee told Sohu Technology. “The teaching and research team is not solid, the product polishing, etc., are very much in need of improvement. For example, the most basic website. Design, system stability, etc. are not done enough.” Another insider of the leading online education company told Sohu Technology that although GOGOKID had a significant growth momentum in the past, its share is now small.

In the two years of exploring education, the market has become a sea of ​​red, and his own business has not looked good, but Zhang Yiming has not shaken his determination to do education, which most people in the industry did not expect. The aforementioned former employees of GOGOKID said, “Bytes did not intend to attack only one direction, but layout. They did dare to spend money to explore, but once they found that it didn’t work, they would be removed soon.”

For content-based education products, BYTE adopts a fast-breaking and fast-rewinding strategy. Multiple projects in multiple vertical fields are launched in parallel at a high speed and promoted. Projects with overlapping businesses will be internally raced, but they will also conduct internal competitions on various projects at a very early stage. Carry out development evaluation, if the stamina is insufficient, it will stop immediately. For example, the aiKID product launched in the same year as GOGOKID stopped updating last year, and there is news that aiKID has been merged into GOGOKID.

The follow-up strategy of the byte education business is very obvious. GOGOKID vs. VIPKID, Guagualong vs. Ape’s Zebra AI class, you take a pair of standard spark thinking, Qingbei online proofreading and thinking online school are all projects that have been a priori successful. On this basis, continue Competing for talents from top companies to make up for shortcomings. At the same time, Byte has the financial resources to do marketing.

From a logical point of view, a series of work makes Byte’s education business seem to have a low success rate. Although currently no product has gained considerable market share, Chen Lin still clearly pointed out that there will be projects coming out next year. . It seems that the entire team is betting on the performance of this hardware, which can directly change the direction of the business.

Produced | Sohu Technology

Author | Song Wanxin

Edit| Yang Jin