The reason why Su Hua resigned as CEO of Kuaishou

The reason why Su Hua resigned as CEO of Kuaishou

The reason why Su Hua resigned as CEO of Kuaishou. The predecessor of Kuaishou, called "GIF Kuaishou", was founded in 2011. It is a software that converts videos into It is a tool for GIF format pictures. The original founder was Cheng Yixiao, the reason why Su Hua resigned as CEO of Kuaishou. Reasons why Su Hua resigned as CEO of Kuaishou 1

On the evening of October 29, Kuaishou Technology issued an announcement stating that the board of directors has agreed to the company’s co-founder Su Hua’s resignation as CEO and has approved co-founder Cheng Yixiao assumes this position, effective from October 29, 2021.

Su Hua will continue to serve as chairman, executive director and member of the remuneration committee, responsible for formulating the company's long-term strategy. As CEO, Cheng Yixiao will be responsible for the company's daily operations and business development, and will report to Chairman Su Hua.

Before joining Kuaishou, Su Hua worked at Google and Baidu, and served as the architect of Baidu Fengchao system. Su Hua chose to start a business after leaving his job and is a standard serial entrepreneur.

Cheng Yixiao, the former product manager of Renren.com, resigned to start a business and launched the picture software "GIF Kuaishou". In 2013, after the company encountered a bottleneck, Cheng Yixiao met Su Hua with the help of Zhang Fei, a partner of Morningside Capital.

Later, two people with similar ideas became the co-founders of Kuaishou. Su Hua is responsible for technology, strategy and external affairs, and Cheng Yixiao is responsible for the client.

Su Hua is called "Brother Hua" by employees within the company. The two co-founders perform their respective duties, and Kuaishou, which has transformed into a short video community, has entered the fast lane of development.

In 2014, in order to seek a broader user base and market opportunities, Kuaishou positioned its new products downwards, focusing on users in lower-tier cities. The sinking market has brought huge traffic dividends to Kuaishou. Within half a year, the number of Kuaishou users has increased more than 20 times, and the "old iron" culture has gradually taken shape.

In the distribution of platform traffic, Kuaishou has changed the traditional Internet "distribution by time series" and the "distribution by watch list" of Weibo and official accounts, and adopted "inclusive distribution". Pay more attention to ordinary users and strive to make products record the various aspects of ordinary people's lives.

In 2017, the total number of registered users of Kuaishou exceeded 700 million, and the number of daily active users exceeded 100 million. The development curve ushered in rapid growth. Also in the same year, Kuaishou, which had just entered the mainstream public opinion field, was pushed to the forefront due to the frequent appearance of excessive content on the platform.

In order to quell public doubts, Su Hua, as CEO of Kuaishou, published an article "Accept Criticism, Reorganize and Move Forward" on the official account. It publicly apologized in the article, saying that Kuaishou would not shirk its responsibilities and evade supervision.

Since then, Kuaishou has improved its long-standing algorithm, established a protection mechanism for minors, and severely cracked down on vulgar pornographic content on the platform.

Starting from the second half of 2016, Kuaishou’s organizational scale also began to expand rapidly, and the business promotion department and marketing department were established successively; in 2017, Kuaishou began to prepare for international business, and the number of employees increased from two to three hundred. Up to a thousand people.

After Douyin’s rapid rise and continued encroachment on Kuaishou’s territory, Su Hua and Cheng Yixiao issued an internal letter expressing dissatisfaction with the company’s past loose state. This reform is called the K3 campaign, and it is claimed that Kuaishou will tear off the label of "slow company".

In the following year, Kuaishou made frequent moves - spending heavily to acquire Station A to get involved in the second dimension, launching the Kuaishou live broadcast PC platform, setting new goals for internationalization, chasing 300 million daily active data, etc., a series of events related to Commercialization-related initiatives were implemented quickly.

On February 5, 2021, Kuaishou was listed on the Hong Kong Stock Exchange. As of Kuaishou's IPO, Tencent holds 21.57% of Kuaishou's equity and is the largest shareholder of Kuaishou. Kuaishou co-founder Su Hua holds 12.65% of Kuaishou's shares and founder Cheng Yixiao holds 10.02%.

As of press time, Kuaishou’s share price closed at just over HK$103, which is still lower than its listing price of HK$115. In September, Kuaishou’s share price was as low as HK$64.5, far from its post-IPO peak of HK$431.

Currently, Kuaishou’s revenue is mainly contributed by three major businesses, including live broadcast, online marketing and other businesses (including e-commerce, online games and other value-added services). As of the end of last year, Kuaishou had more than 16,000 employees, of which more than 5,000 were R&D personnel. Reasons why Su Hua resigned as CEO of Kuaishou 2

Jack Ma once said that being a CEO is hard work and you need to be prepared to go to hell.

As a CEO, you must first be responsible for the strategic development of the company, think about the next ten or eight years, and chart the direction for business development. For an Internet platform like Kuaishou, the number of users is crucial. Therefore, how to acquire users and scale up should be a CEO project.

The K3 campaign proposed at the end of 2019 is a typical CEO project. The strategic goal of the K3 campaign is to achieve 300 million daily active users (DAU). This is the first time Kuaishou has set such a clear KPI since its establishment.

In the early morning of January 25, 2020, Su Hua and Cheng Yixiao, the two founders of Kuaishou, walked out of the "A1 Combat Command" with smiles on their faces. They and their colleagues who had worked overtime at Kuaishou for two consecutive months More than 1,000 employees witnessed the most important moment in the history of Kuaishou: under the impact of the huge traffic of the Spring Festival Gala, Kuaishou withstood unprecedented peaks, and the data far exceeded the previously set K3 campaign goals.

"Everyone is very happy and very, very proud. In that atmosphere, you will feel that Kuaishou is the most awesome company in the world, and there is nothing wrong with it." A Kuaishou employee at the scene told Ran Finance remember.

The joy of the Spring Festival Gala faded quickly. At the Kuaishou strategic review meeting in February 2020, Cheng Yixiao once summarized the K3 campaign: “I am not satisfied with the result, but I am very satisfied with the process of achieving the result. "The whole company has been in the "hard-core mode" for more than half a year and fought a tough battle. Although it did not fully achieve the goal of "changing the organization, optimizing the structure, and iterating products," it at least exposed the problems and gave Kuaishou a direction to adjust.

For Kuaishou, the Spring Festival Gala is a node, with peak DAU far exceeding 300 million, indicating that Kuaishou’s K3 campaign has achieved phased results, but this is not the end. The K3 campaign is the first The second phase goal is to maintain Kuaishou’s DAU at 300 million and achieve greater breakthroughs on this basis.

Unfortunately, a full year later, the second phase almost ended in complete failure. On January 24, 2021, on the eve of listing, Kuaishou updated its prospectus and disclosed user data for the second half of 2020: In the 11 months ended November 30, 2020, Kuaishou’s average DAU was 263.8 million, which is the same as before. Compared with the peak, at least 40 million "old irons" have disappeared.

According to the financial report, in the first quarter of this year, Kuaishou’s DAU data was 295 million, which still did not exceed the previous peak. The average DAU of Kuaishou Chinese apps and mini-programs combined is only 379.2 million.

This number is still far away from Douyin. The worse news is that it has been surpassed by WeChat video account. Previously in June 2020, WeChat officially announced that the daily activity of video accounts had exceeded 200 million. By September, according to calculations by Founder Securities, the peak daily activity of video accounts had reached 350 million. Recently, sources close to Tencent said that the number of daily active users of video accounts had exceeded 200 million. Daily active users have reached 450 million.

Regarding the problem of slow user growth, Kuaishou is still under great pressure. But before going public, Kuaishou's management attributed the decline in daily activity to the impact of the epidemic. It grew rapidly in the first half of the year and naturally fell back in the second half. It believed that growth would resume in 2021, but overall it would not grow too much.

When talking about the listing, a Kuaishou employee said that the listing in 2021 seems to lack a sense of grand ceremony. The Kuaishou headquarters is extremely quiet. There is no roar or carnival in the Kuaishou building in Xierqi. Almost all employees are there Work quietly.

On the contrary, many employees of ByteDance are actively pursuing new projects and have made a small profit.

With the aura of “China’s No. 1 short video company”, the capital market has high expectations for Kuaishou. An investment banker involved in the underwriting of Kuaishou’s IPO said that whether it is Kuaishou’s management or investors, Previously, user growth was not considered a big problem.

However, now that Kuaishou’s stock price continues to fall, the negative nature of these problems will be amplified.

Short videos are regarded as contemporary text expressions and are also the Internet content that accounts for the largest share of per capita consumption time on the Internet. Its limelight has overshadowed social networking and long video tracks. Kuaishou’s stock price is sluggish. In the final analysis, it is still the market. Lack of confidence in Kuaishou’s future.

An industry insider said that in the current business transformation scenario of short videos and live broadcasts, e-commerce is not the optimal solution, at least not the most efficient, whether it is Kuaishou’s “trust e-commerce” or Douyin. Yin's "hobby e-commerce", they will eventually have to go through the path that JD.com and Taobao have gone through. The long-term infrastructure investment is very large. If there is no continuous blood transfusion, they are likely to fall into the quagmire.

Advertising is a more efficient way. Kuaishou’s advertising business has grown rapidly in recent years, and its proportion in total revenue has increased year by year. The financial report shows that from 2017 to 2020, advertising business revenue accounted for a percentage of total revenue. They are 4.7, 8.2, 19.0, and 37.2 respectively, but the total amount is not large. In 2020, the annual revenue of Kuaishou’s advertising business was 21.9 billion yuan. Compared with major companies such as Alibaba, ByteDance, Tencent, and Baidu, there are also quite a few The gap is not enough to become Kuaishou's cash cow.

The "Statistical Report on China's Internet Development" released in February showed that the number of online video (including short video) users in China reached 927 million, an increase from 2020. In March, the number of short video users increased by 76.33 million, accounting for 93.7% of the total number of netizens. In other words, the growth dividend of short video has basically disappeared, and Kuaishou will face a stock. Competition in the market and the acquisition of every new user may lead to fierce battles.

At this time, if Kuaishou wants to carry out more actions in the new business battlefield, it needs a person to coordinate in order to achieve it. Various departments work together. Unfortunately, Kuaishou currently lacks general managers. According to Luanfanshu, at the beginning, Kuaishou did not have to fight hard because its development was too smooth, and its human resources could not keep up. After the rise of Douyin and others, it was found that there were no generals. Only a few CXOs were able to adapt to the situation and left one after another within a year. The CEO’s recruitment of senior executives was poor and then continued to be turbulent, which would be very harmful to the company.

In Yuan Lihua’s view, if Kuaishou is successful. The best position to find this person is CEO, because being a CEO means that you must be responsible for performance, whether it is for market value management or to fundamentally reverse the current unfavorable situation, Kuaishou needs to organize users again. There is a big battle for growth, and finding a new CEO who will be responsible for the entire outcome is a critical step.