Vocational education or there will be hundreds of billions of dollars in companies

Who can grasp the key watershed of this cycle, who can become the leader of the next era.

On the first day of this year’s college entrance examination, Xinhua News Agency released a piece of heavy news that the revised draft of the Vocational Education Law was first submitted to the Standing Committee of the National People’s Congress for deliberation a few days ago. This is the first major overhaul of the Vocational Education Law in more than 20 years. The most important one is that the draft emphasizes that vocational education and general education are equally important.

As investors who are best at looking for investment opportunities from policies, the most important thing is to find high-quality and suitable targets. Also on July 11, the online vocational education brand spun off from Wisconsin began its course , and announced the completion of the 600 million yuan B1 round of financing, and the monthly revenue will exceed 200 million yuan. It only completed the 550 million yuan A round of financing when the class started in the middle of last year. The investors are Gaorong Capital and Hillhouse Ventures.

How do entrepreneurs other than investors view this benefit? A founder who has received multiple rounds of financing interpreted 36Kr. “This policy is definitely the greatest benefit for the vocational education track, and it is equivalent to a clearer policy basis. A benefit means that some new opportunities have been created. For example, the state is focusing on promoting new engineering education disciplines with scientific and technological innovation at the core. Professional development also requires companies to provide more high-quality technological innovation and digital talents.” 

In order to seize this structural opportunity, the founder extended his goal from secondary vocational to senior vocational school. Another entrepreneur who shared his opinion added that “the industry space has indeed been further expanded, but the requirements for enterprises have also increased a lot. If there is only a single training course and a single subject category, it is estimated that the stamina will be obviously insufficient. Nowadays. What is fighting for is the comprehensive strength of platform, service, industrial chain, R&D, etc., and it will no longer be just marketing capabilities.”

I believe that all entrepreneurs are also aware that, in addition to changes in the policy level, the changes in talents brought about by the changes in the national economic structure are also happening at the same time. Therefore, the entire industrial chain is ushering in a restructuring of the pattern. Refactoring means reshuffling the cards, which means that the leader in the existing pattern may be replaced at any time.

So, who can grasp the key watershed of this cycle, who can become the leader of the next era . More importantly, the traditional leader is mainly offline, so it determines the ceiling of the market value of RMB 200-300 billion. But in the era of online vocational education, the ceiling has risen to hundreds of billions of dollars, which is equivalent to doubling the market value of traditional leading companies.

When will the “war” of vocational education begin? How will the final game be deduced? Is it time to reassess vocational education again?

Four major development stages of vocational education

Looking at the development of the entire vocational education industry, it can be roughly divided into four stages: the budding period from 2000 to 2013, the growth period from 2014 to 2018, the rapid growth period from 2019 to 2020, and the new cycle after 2021. . 

In the embryonic stage, vocational education relied only on the offline mode. The first industry appeared around 2000. At that time, the social economy has made great progress after the reform and opening up. Therefore, a large number of people need to continue their studies, whether it is to improve their academic qualifications or vocational skills. The mainstream mode that emerged during this period was night school, where you went to work during the day and studied at night.

Later, with the development and penetration of Internet technology, the demand for IT technical talents has blown out, so a large number of vertical sub-organizations focusing on IT and accounting have emerged . Typical representatives such as Dane, Xinhua Computer, New Oriental Cooking and so on. However, offline institutions have been slow to expand due to time and space constraints and slower scale expansion. This mismatch of supply and demand cannot meet the needs of a larger area of ​​students, so MOOCs (MOOCs) that have emerged in the United States have begun to enter China. This mode of recording and broadcasting courses still has a large market space to this day. But the problem with MOOC is that it emphasizes content without service, let alone personalized interaction.

The opening course mentioned in the previous article was established at this stage. The earliest entry direction is IT, a major discipline, positioning the MOOC learning platform for pan-IT disciplines. Since the commencement of it’s growth rate is very quick to take to the Group’s parent company Huike capital injection of $ 20 million yuan and 100 million registered users. 

Compared to starting classes, Huike Group entered colleges and universities earlier (2010), and only did one thing-to build IT majors with colleges and universities, from 985 graduate students to undergraduates to junior college students. After the first batch of students graduated and entered the workplace, Huike Group also pushed back the upgrade of its own needs, and it started classes.

In 2014, capital entered the entire online education, regardless of K12 or vocational education, a large number of education companies began to obtain financing. Due to the maturity of 4G networks and live broadcast technology, live broadcast classes have gradually been introduced into the education field. Therefore, a large number of independent APP, community, and tool platforms have emerged one after another, especially pure online education companies have begun to emerge. They are aimed at online customer acquisition, online services, and online operations.

The help of capital has accelerated the penetration rate of the entire Internet, and the industry has entered a growth period. But after this wave of turmoil, everyone began to realize that the teaching effect of pure online mode is not as good as offline, especially because the increase in players has led to a sharp increase in customer acquisition costs. Therefore, they have begun to seek online and offline integration, which is the early form of “OMO” . 

In order to enter the market faster, we adopted the method of mergers and acquisitions. In 2016, we acquired three vocational training institutions. In addition to the IT category, the two majors of big data and product design have been expanded. However, this model soon encountered problems in terms of organization and efficiency, so let’s start the course in 2018 and cut off 10 offline campuses, and there are only more than 10 employees. 

In fact, it’s not just about starting classes, the entire vocational education industry has hardly run through the business model at this stage. Until the online Taipan model matures, the remaining companies begin to find their own business paths. It’s the third stage.

In 2019, the education industry’s summer war broke out for the first time. Several giants burned tens of billions in the summer alone, and the number of users also increased rapidly. Therefore, indirectly boosting the penetration of online education, for example, the opening of classes that once fell to the bottom has found its own path, that is, focusing on the vertical category of IT and doing online education for digital talents. For this transformation, Dr. Fang Yechang, founder and CEO of Kaiba Bar, explained to 36Kr that “online has a higher ceiling than offline, and more offline users can only be mainly graduated college students, and online can quickly cover the job. Incremental space. It is equivalent to doing both university student employment and in-service user promotion.”

Another logic is that the demand side has begun to expand from purely technical talents to pan-digital application talents in different positions in various industries. In the corresponding supply side, it is obvious that the online supply side is easier to develop new product forms to meet and reach this part of the pan-technical population, such as non-technical talents such as administration, personnel, finance, and operations. . So let’s start the course and upgrade to an online education platform for digital talents.

With the outbreak of the epidemic in 2020, online education has entered its peak period. Especially offline losses are serious, and pure online cannot solve problems such as face-to-face instruction. Therefore, in this new stage, what is needed is a new model in which delivery and operation are mainly online and offline as a supplement. Users began to need a platform company that can provide one-stop services for college education scenes, personal learning scenes, and enterprise internal training scenes.

Vocational education or there will be hundreds of billions of dollars in companies

Let’s start Beijing headquarters

A new cycle of online vocational education begins

“The changes in the policy environment this year mean that the old era has passed. A typical trend is that the expansion speed of Internet giants will be significantly reduced, and anti-monopoly has brought rules and reshaping of the pattern; a trend is that the K12 in the education industry has been severely compressed, and the occupation Education has become a new strategic demand; another trend is to boost the capital bubble, and the pause button has been pressed.” A head VC analyzed the entire macro trend change for 36 krypton.

What he did not clearly state is that online vocational education has ushered in an important window period. This window period not only refers to the window period for seizing market share, but more importantly refers to the growth speed and scale of the new power giants far beyond the traditional.

Take the course as an example. In April of this year, it entered the recruitment and qualification examination track and achieved 50 million income from 0 in three months. The competition on this track has been very fierce. The traditional Zhong Gong Education , Gordon, and Suntech have been entrenched for many years.

As for why the quantity can be started so quickly as soon as entering, Fang Yechang’s analysis is that in a mature track, it is not only the market share, but the core is to look at the relationship between category logic and user needs.

“In the past, vocational education could not produce super-large companies. The reason was that there were strong regional boundaries offline. For example, Henan has Henan characteristics and Shandong has Shandong characteristics. At this time, it is easy for everyone to occupy a hill; the other is the subject boundary. Subjects such as IT, civil servants, and law are scattered; traditional Internet education platform companies are not essentially education companies. They distribute educational content on platforms without teaching effects. Online can break these boundaries.”

In his view, online expansion of categories is not simply a superposition, but to meet multiple needs of users, so that there is a re-purchase related to it. At this time, the focus is no longer a single UE or ROI, but the LTV of the entire user, and the cost of a single customer acquisition. As long as this model can have positive cash flow, the efficiency of competing with other single products will be much higher. Take the ROI in IT as an example. If the coefficient of another family is 2 or 1.5, you can start the course even if the coefficient is 1. Because after IT comes in, other products will be repurchased. According to 36 krypton, the IT repurchase rate reached 50%.

For the largest public examination in the field of vocational education, although the public education has been absolutely headed, there will be no ceiling in the industry in the next 5-10 years. Because in a few years, 2024 will usher in a cliff-like “retirement”, the number is about 500,000, but only 200,000 are recruited each year, the gap is large; the increase in the urban rate and the participation rate is huge. space. This ensures that the company can maintain its current growth rate.

If you want to cross regions and disciplines, if you want to explore the common capabilities between different categories, you can only rely on strong middle-level capabilities. So, what is included in the capabilities of the middle office?

The first is the product technical ability, because behind this is the data ability of the fight. Only by making each user’s label fine enough can it be beneficial to subsequent renewal repurchase, that is, precision marketing. This ability is difficult to achieve only offline, and it cannot be achieved in a single category.

The second is organizational ability. For education companies, the two-handed focus is on the supply side and the demand side. The supply side focuses on teachers, teaching, teaching and research; the demand side focuses on traffic acquisition, operation conversion, and service. For teachers, teaching and research, there are more and more Chinese-Taiwan combinations that can expand interaction, such as postgraduate categories, in addition to regular public courses and mathematics and English politics, there are management, computer, finance, etc. Then, teachers of the corresponding category can also teach these graduate students to complete teacher sharing.

It is equivalent to the completion of the crossover of flow and supply side, which is a typical middle-office capability embodied in the organization. For example, sales are often divided into telemarketing, social influence, network marketing and others. How to move these various marketing methods across categories or form an organizational synergy requires strong middle-level capabilities.

The last capability is operational capability, especially in the flow of operations. After a user enters the traffic pool because of category A, it does not mean that there is no demand for category B and category C. So how to use different categories to gather the corresponding groups of people is particularly important. For example, for teacher qualification certificates and financial-related certificate categories, more than 40% of the students in Python courses may also have the same needs.

After all, the background of the times puts forward new demands on talents, it is impossible to rely on a job for a lifetime, and the requirements for comprehensive digital capabilities are getting higher and higher. Therefore, the path of extension from IT is the optimal solution, and what is needed is multi-disciplinary cross-learning and compound talents.

From the perspective of the demographic structure, the great changes in the career choices of the post-90s and post-00s generations have caused this group of people to hope not only for promotion and salary increase, but how to be more free in the workplace. If they cannot provide personalized courses to them, this part of the incremental market can only be lost. At the same time, many people will also choose some side businesses to try in addition to the main business, so multi-scene is really imminent.

For the final judgment of the entire vocational education industry, 36Kr combined with multiple practitioners and finally concluded that there is a high probability that a new giant with a market value of 100 billion US dollars will appear in the future. But this giant must be online as the main and offline as a supplement, and it must also cover multiple disciplines, all categories, and users can cross repurchase, so that user LTV will be the most efficient.

At the same time, 36Kr also noticed that the offline model was being reconstructed, and new business models began to appear. No longer just a traffic acquisition channel. The biggest value point here is that if we can use school-enterprise cooperation to get the supply side of colleges and universities, and build and revitalize the resources of college students, this kind of TO B and TO C coordination and innovation will be great.

Vocational education “war” is about to happen, and it will be 3-5 years slower

The restructuring of the industry structure also means that a “war” is needed to reclassify the seats. Why does it happen at this point in time? The main reason is that the training of cognition, talent reserve, and online education has been put in place. Once a company with high financing appears in the industry, the capital will be increased madly until this battle arises. After all, in the early days, everything may still have a chance.

Different companies have different strategies. When media asked a well-known vocational education entrepreneur, he said, “We are not ready to participate in this restructuring immediately . If that day comes so soon. We still have to rely on products. And service, delivery ability is not what we are good at and pursue.”

In fact, for the founder of a company, the core and scarce resource is not capital but the attention of the founder. Capital can be financed, but time is not. Therefore, regardless of the changes brought about by the external competitive environment, the founder always need to stick to their strategy, tactics and rhythm can be seasonal and change. However, if the strategy is vague and not firm enough, it will be easy to chase hot spots and lose focus, leading to chaos.

From the perspective of competitors, when K12 is forced to transfer to vocational education, although their traffic capacity will be strong, vocational education relies on supply chain capabilities, and the complexity is much higher than that of K12, so it must take enough time to build awareness Secondly, when the traditional veteran offline vocational education giants switch online, although they understand education, due to the lack of Internet genes, the gap in data and digital transformation capabilities is even greater. Moreover, due to the long-term binding of interests, it is extremely difficult and challenging to overthrow the organizational structure and adapt to the Internet, but it will consume their years of accumulation.

Therefore, whether it is a pure Internet online company or a traditional offline organization, it will take a long enough time to supplement the supply side, effective flow, and educational genes. And another point that is easy to overlook is that the barriers to the advantages of offline channels are capabilities that are difficult to build in a short period of time.

In the end, it boils down to one point. What vocational education really strives for in the end is the organizational ability of the enterprise . For TO B companies, management needs to be done from top to bottom, while TO C is the opposite. Therefore, in a company, the founder should always focus on strategy, have a strong strategic determination, and learn to delegate power in specific tactics.

If you split the strategy and strength, you can find that the best way is actually to invest, and cross-track investment is more conducive to the understanding of the industry. Because investment requires in-depth knowledge and judgment on macroeconomics, technical structure, secondary markets, human nature, etc., after seeing these clearly, you will basically reflect on the strengths and weaknesses of your main business more clearly. The clearer and farther you can see, the tougher you will naturally be.

Specifically, the talent composition of enterprises needs to be clearly differentiated. In the talent structure of education companies, talents with diverse backgrounds such as online, offline, B-side, C-side, Internet companies, and education companies are needed. This diversification The structure can ensure that huge mistakes are not made strategically due to homogenization of thinking. Innovation can be produced in such an open and inclusive environment.

In the same way, talents in different positions also need to rotate irregularly. The advantage of this is that everyone has a holistic thinking, empathy with upstream and downstream partners; and can put the right people in the right positions.

In addition, one thing that cannot be ignored is that inter-generational communication is also very important. Post-90s and post-00s have become the mainstream, and they need to use their methods to communicate and manage. They will pay more attention to the sense of value and honor that work brings, and they must be motivated. With these, the rest is internal cultural training, and it is best for the founder to bring it personally.

As an investor who has invested in many unicorns said to 36kr, “What is the essence of investment is to look farther than the best entrepreneurs, and then choose based on the far and right Create the most competitive company to take this path for yourself.”

The external benefits of the vocational education industry are one after another, and the internal is also surging. I believe that after the rewrite of the industry structure, a company with a hundred billion dollars is no longer a pity for many investors, and it is no longer out of reach in the PPT. dream. “Although the number of investors in K12 in the industry has decreased a lot, there are still many vocational education wait-and-sees. Everyone is digging for more suitable targets. This rare opportunity has exploded with amazing explosiveness and growth. Failure to announce does not mean that there is no When investment moves happen, there are still many opportunities in this industry, and there is a lot to do.” The above-mentioned investor said at last.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/vocational-education-or-there-will-be-hundreds-of-billions-of-dollars-in-companies/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-07-16 07:23
Next 2021-07-16 07:25

Related articles