Image source: Visual China
In August 2016, Hike received $175 million in the Series D financing of Tencent and Foxconn, and entered the Unicorn Club for $1.4 billion.
At that time, the ultra-application of the Indian version of WeChat was eagerly awaited. Under different strategies, Hike had a chance to compete with WhatsApp to divide the instant messaging market of India's 1.3 billion people.
But what happened after that was unexpected.
WhatsApp has been riding the dust, doubling the number of users in India, and developing India into its largest market in the world. Hike, who was once a smash hit, was quietly silent and stunned.
In May of this year, Kavin Bharti Mittal, founder and CEO of Hike Messenger, admitted in a blog post that Hike had changed his "core" in the past 12-15 months. "Errors" , will return to the source in the coming year”.
This is an important moment in Hike's six-year history. It held a good hand and lost the game. At the end of the basic announcement, the problem was realized.
According to data from App Annie, Hike's monthly active users have decreased by half (from 37 million to 18 million) in the past 18 months, and daily active users (DAU) have decreased by two-thirds (23 million to 8 million) ).
These figures show that Hike has failed to identify its core audience and inevitably has a rapid loss of users. The key to the loss is that Hike's ambitions are incompatible with reality.
“They want to learn different global applications at different stages, such as WeChat, Facebook, Snapchat, etc., so that it is no longer Hike. ” An insider who asked not to be named said.
In response to the Economic Times, a Hike spokesperson said: "We use user activity as a core indicator. We call it DAU LTV…… the average time spent on this key metric is about 25 minutes, and the most users spend nearly 40 minutes. ”
Hike's decline also reveals the ruthlessness of this field — if any social media company does not grow as fast as the market expects, it will fall behind, the so-called " Snapchat Syndrome".
If we put Hike's defeat in the overall situation of social media, it obviously makes more sense.
According to insiders, the company believes that most of Hike's users are lost to WhatsApp, the dialect social network Sharechat and Instagram.
Hike's ruin has coincided with the constant changes in its senior management.
Several well-known executives in the industry —— such as Kumar Srinivasan joined from Nordstrom retail store and Abhishek Nag—— joined by Uber have already left. Today, it is in the absence of senior management & "idle".
Insiders also revealed that many senior management left the company because of the differences in the direction of Mittal's products.
“This ship is sailing in the wrong direction,” he said. Hike’s recent development of a third person said in an anonymous situation, “If there is an iceberg on its way, even a billion-dollar unicorn will sink. ”
“It’s not a suspicion about Mittal, but in India, the distinction between founders and professional management is really unclear,” said Sanchit Vir Gogia, Principal Analyst and CEO of Greyhound Research. “This also reflects investors. The performance is quite bad, investors should be more rigorous in the assessment, and the problem is smashed in the bud, not too late. ”
One person familiar with the situation mentioned earlier said, “In a startup company, there is only one founder. He needs to hire a lot of people to help him make decisions. The success of a startup depends largely on how the founders accept and analyze the data they give. In this case, Mittal hired the wrong person and they provided him with the wrong data. ”
Hike recently announced that it will lay off 25% of its strategy as part of its “return to the source” strategy, a large proportion of which comes from its newly acquired hardware company Creo and live broadcast company InstaLively.
Failed "WeChat parody show”
In August 2016, when Hike raised $175 million in a new round of financing led by Chinese technology giant Tencent and Taiwanese manufacturing company Foxconn, there were good reasons to believe that it would adopt the strategy of “super application”. Tencent's WeChat.
In this way, it will create a socially driven ecosystem where users can transfer money, book taxis, share expenses, play games, and more.
But one thing is very important. One of the basic conditions for the success of WeChat is China's closed Internet environment.
In fact, WeChat also benefits from other mainstream factors, such as the absence of a single app store or operating system, which is also useful for users who don't want to show themselves online, which is what WhatsApp can't.
Although Hike has introduced some of these features in the past 24 months, it has not really enjoyed the user's favor.
“The biggest failure of Hike is that when a big company enters this space, it should find a business opportunity and develop this niche market, but it does not. ” Another person familiar with Hike's recent development but declined to be named said.
Rich and willful
In the past few years, Hike has been using the so-called "shotgun method" in the launch strategy to launch all five bullets, hoping one of them hits.
This is in stark contrast to the so-called “sniper tactics”, literally speaking, the sniper method directly shoots the head, which clearly can be better focused.
The latter is the path that most startups tend to choose, most of the time due to lack of funds. But for Hike, it wants to fire five rounds of bullets, several of which hit a bullet.Because there is sufficient capital to support the company, this makes it a tempting choice to adopt the “shotgun method”.
But the problem is that Hike may not understand the "shotgun method" at all.
Hike's strategy shows that the company's understanding of its target population is low. Hike's users, what they want, it has a clear misunderstanding, so the use of "shotgun method" is just a blind scan of an unknown target.
Hike's common assumption is that most of its users come from third- and fourth-tier towns and those who might be classified as second- and third-line secondary.
But it failed to get the right market opportunities. If a company targets a specific audience, it must identify and build a niche market for its core audience. This is what the competitor Sharechat has done and has been doing.
“The metric for registered users is much like GMV. It makes no sense. Because someone downloading an application does not make him an active user. Essentially, the game is not the number of active users, but the depth of their use. ”Gogia pointed out.
Hike's product philosophy is to build a function for a group of users and quickly switch to another without getting the right business opportunities.
“For Hike's loyal users, people who like this product may have a habit of using Hike's stealth mode, and there are also many people who like it. Ideally, Hike should implement this for the user, but that's what it didn't do. ” A person familiar with the development of Hike mentioned earlier.
Similarly, Hike introduced the “story” function instead of its popular “timeline”, which led to a significant loss of users. “It has to pay more attention to the timeline function. Considering that Indian viewers use the product in this situation, it must adjust its product philosophy. They switched from one product to another ——story —— so they lost a lot of users. ” This person said.
“Hike didn’t figure out what the audience wanted. It's like your core loyal users use emoticons and GIFs, but it wants to be Instagram. & rdquo; He teased.
Similarly, when Hike launches a product feature that allows users to search by name rather than phone number, it loses some core users.
And these, to a large extent, can explain why its "shotgun method" failed.
Now Hike wants to build multiple applications, that is, it will build different applications for different markets.
The main user group that Hike is currently targeting is what Google calls “the next billion users”. Or, it is a user who may start using the Internet in their native language.
There is also a product similar to Snapchat for its core group of college students. According to reliable sources, this “application group” strategy will involve a mix of UGC and PGC, and Hike provides tools for the former, which is similar to Inshorts, and Hike licenses or purchases its content.
According to sources, such an application might be a copy of Sharechat, and users can create and share content in their own language. “This may be a compromise for their initial positioning, but if done well, they can get a good size. ” A product manager for the Bangalore startup who did not want to be named.
Perhaps helpful to Hike is his experience in growth marketing, which goes back to the time it offered free time and SMS to attract users.
“They want to behave like bytes. “A person who understands Hike’s strategy, Bangalore professionals, said.
However, even in the case of seemingly starting from scratch, Hike continues his “shotgun method” and still hopes for multiple applications.
& ldquo; It now takes users first. But it is now considering three types of users rather than one. It will launch three different bullets on the application side and hope that one of the three applications will grow and the company will double it up. ” A person familiar with the matter said.
Another method Hike is currently considering involves investing in similar products. According to sources, these investments are both Mittal's own personal investments and investments on behalf of Hike. “They have started to approach the startup and have a preliminary discussion, and there is no final conclusion. “The Bangalore professional mentioned earlier said, “This is another point of similarity to bytebeat. ”
Now, let's go back to a core issue —— Given its decline, how do Hike investors Foxconn and Tencent respond to the company's development?
According to sources, Tencent will give more patience to this company with a history of six years. “Tencent is ready to provide more time for Hike,” said a venture capital professional focused on technology. “This shows that Tencent is preparing to double its investment, even at the expense of profit. ”
According to a Hike spokesperson, the company still has enough funds, at least for more than two years in the future.
“Hike still has more than half of the $175 million raised from the previous round. Therefore, we have more than two years of time. This further allows us to take on huge risks and try new things, social media and content will be our core focus. & rdquo; The spokesman said.
But as Gogia warned, “the pressure from investors will increase dramatically. If it wants to survive, it may have three or four quarters to prove itself. ”
[Titanium Media Author: Wen/Zhao Yiying, this article was originally published in Zhixiang.com WeChat public number (ID:passagegroup). Zhixiang.com witnesses the globalization of Chinese technology companies. For more information on science and finance, please pay attention to the public number of Zhixiang. 】