Investors have stopped funding pure content, because content is the saddle, not the thoroughbred
Content companies succeed far more often than most businesses, but their ceiling is set by the nature of the industry: a hundred flowers blooming means low concentration. So investors treat content as a whip and go looking for a horse they can ride.
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The ability to make hits is innate talent, not methodology
Lao Fan's core judgment: the ability to make hits is an innate attribute, unrelated to methodology. He gives the example of Mimeng — back then a Southern Metropolis Daily leader told him he had an editor who hadn't yet written a WeChat public account, but if she did, she would definitely blow up. He added her on WeChat, they tried to arrange a meeting, never managed it, and then Mimeng became famous in three days. He also says Churchill's and Kennedy's best speeches were not logically strong; they relied on inflammatory appeal; using logic to make hits is a dead end. But a good content entrepreneur needs both emotional resonance and logical ability — people like Steve Jobs are extremely rare.
— Fan WeifengHearing is inherently inferior to sight; podcasts are undervalued but can't get big
Lao Fan uses ‘supernatural powers cannot overcome karma’ to explain the innate weight of media: if you had to lose either hearing or sight, losing sight is more painful, so what you see has always weighed more than what you hear — TV largest, newspapers next, radio weakest. He maps newspapers to WeChat public accounts, Douyin and Kuaishou to TV stations, Xiaohongshu to city papers plus fashion magazines, while radio is a weak but stable category. Podcasts are best for input of ideas, because you have to listen continuously for half an hour to an hour, making it easy to influence others; the rise of political factions abroad and stock-investing shows both relied on radio. The conclusion: podcasts are undervalued, but they can never become the most mainstream category.
— Fan WeifengThe podcast ecosystem has no true top tier
Lao Fan, kicking over the table, says: among all podcasts today, including everything on Xiaoyuzhou, no true top tier has appeared. He defines ‘hot’ — you've never heard his show, yet you know he's a star. He cites Wang Yibo and Dilraba; he hasn't seen any of their work, but that doesn't stop him from knowing they're stars; the true top-tier are Zhao Benshan, Michael Jackson, Elvis — the whole country has seen their work, you couldn't avoid knowing them if you tried. For a podcast to break out of its circle and be known by everyone, the next step up is going on the Spring Festival Gala. He also says he now records podcasts completely uninhibited, and his rule for himself is ‘I may not be famous, but I will tell the truth’.
— Fan WeifengContent is the whip; business is the thoroughbred
Lao Fan explains why content cannot be the horse: content is a hundred flowers blooming — the good is the hundred flowers, the bad is that market concentration is not high. No matter how much you like a singer, you can't get everyone to like them, but you can get everyone to use WeChat and drink Coca-Cola. So investors prefer to fund companies with high ceilings and high concentration. He calculates that Gaozhang's portfolio, by users, has roughly 300 million in traffic; in the 2016 new-media wave it was one of the few that actually got returns and mentioned carry. But he also says the ceiling for content companies isn't that low: with China's one billion netizens, gaining the deep trust of one percent is ten million people; at a thousand yuan per person per year, that's ten billion.
— Fan WeifengDecide what to invest in first, then reverse-search for the person
Lao Fan reviews investing in Fantuan Dai Laoban: first figure out clearly that you want to invest in someone writing middle-class finance in a WeChat public account, with buy-side thinking and fund-manager thinking, then work backwards to find the person. At the meeting the other party said, ‘Even if you hadn't come looking for me, I would have come looking for you.’ His method for judging people is to look at very little work — to see whether someone can survive in short video, three clips are enough. He looked at several paragraphs in one of Dai Laoban's articles that used several memes; his colleagues didn't know these memes, but still thought it was well written and interesting; those who knew the memes smiled knowingly, those who didn't still found informational value and emotional resonance — that is a top-tier master. Xingqiu Yanjiusuo was also a reverse search: he had colleagues find every account with ‘geography’ in the name, and finally someone searched ‘planet’ and found it, with fewer than ten thousand followers at the time; the founder didn't even have a BP, and Lao Fan helped him talk through the BP.
— Fan WeifengDoing hard and right things is poisonous chicken soup
Lao Fan directly disses the phrase ‘hard and right’, saying it's very misleading: you should do the right thing; whether it's hard doesn't matter; if it's hard I'll still do it, if it's easy even better. The vast majority of right things are not hard, because you're going with the wind. He cites what Lei Jun said for many years, and buying a house in Beijing or Shenzhen fifteen years ago — that was an incomparably simple and right thing. He also uses weightlifting versus skiing and tennis to show that difficulty and ceiling are not the same thing: a weightlifter, even at world-class level, earns less than a second-rate skier or tennis player, because weightlifting has no derivative product categories; no one sculpts themselves in the image of a weightlifter.
— Fan WeifengSociety has already built the monetization chain for content companies
Lao Fan divides content companies into three layers. The first layer is individual self-media: as long as you have continuous hit-making ability and don't build any company organization, revenue of one to two hundred million is no problem; he cites Liu Shen Leilei and Mantou Dashi. The second layer, reaching five hundred million or a billion or more, requires building a company, supply chain, clients, government relations; representatives are Xingqiu Yanjiusuo and the like. The third layer, above a billion, either has the attribute of a small platform on a big platform, with independent channels and a large private domain, or becomes an excellent consumer brand, like Boluo Banwa, which went from media completely to a consumer brand, and the consumer side fully opened up. He stresses that a content company will definitely make money as long as it keeps producing hits, because society has already built the monetization steps for you; if you don't want to deal with clients, just put up a price and the deal closes; try that with a consumer company — absolutely impossible.
— Fan WeifengTraffic-type companies: hits but not called IP
Lao Fan distinguishes people who play IP from people who play traffic: people who play IP are more famous, people who succeed at traffic are very rich. Traffic-type companies also produce hits and have continuous hit-making ability, but after the hit you have 100k-plus or a million-plus, and you still haven't heard of them, because they don't make hits under a media name. Pull up the reading list of WeChat public accounts, and you haven't heard of a single one of the top few dozen articles, because they spread across society, not among the cultural elite. He judges traffic-type companies on two points: whether they have continuous hit-production capability, and whether they have excellent traffic buying and selling capability — it's more like a trader, wholesaler, futures trader; how much per click, how much per downloaded user, sold to game companies and health-product companies.
— Fan WeifengYoung people should not take over the baton from the middle-aged and elderly
Lao Fan's advice to young people: do new things, don't join the games of middle-aged and elderly comrades, don't take over the baton from them. He gives examples: a few years ago you should have been studying web3, not studying antiques, jewelry, jade, emeralds, walnuts; when WeChat public accounts came out, do public accounts; when Douyin came out, do Douyin; when podcasts came out, do podcasts; when MR comes out, do MR. When new things come out, believe first, because the cost of trying is extremely, extremely low, and once it works you can leap across classes in one go. He also says if you already have a job, you can do it as a side hustle first, paddle a bit — big companies won't miss you; a person in a big company effectively works maybe two hours a day at most, and most of the time is spent paddling and attending meetings that don't need attending.
— Fan WeifengIn their own words · checked verbatim
I increasingly feel that making hits is truly a person's innate attribute — a badass content creator makes hits, but a badass content entrepreneur really may not be able to make hits himself.
我越来越觉得 爆款这件事情 它真的是一个人的天赋属性的 是一个牛逼的内容创作者 他是爆款 但一个牛逼的内容的企业家 他真的他不一定自己能做爆款
Fan Weifeng6:40
That is, the visual thing, seeing, is more important, has higher weight, so the things you hear have never been as big as the things you see. So you look at how TV was biggest back then, newspapers next, and only then radio — this is determined innately, you can never change it.
就是说视觉这个事情 看到这个事情是更重要的 权重更高的 所以听的东西呢 一直就没有看的东西大 所以你看当年电视最大 报纸其次 然后才是广播 这个是就是先天所决定的 你永远改变不了的
Fan Weifeng10:05
I feel that in today's podcast world, including all podcasts on Xiaoyuzhou, I think no true top tier has appeared yet.
我感觉今天在播客世界里面 包括小宇宙所有的播客里面 我觉得目前没有出现真正的头部
Fan Weifeng16:31
Content is that whip, business is that horse, the thoroughbred. The pure content we used to invest in, you could say we invested in many expensive whips, expensive horsewhips.
内容它是那个鞭子 商业呢是那个马 是千里马 那我们原来投的纯内容 你可以说投了很多 名贵的鞭子啊 名贵的马鞭
Fan Weifeng20:10
Many people say you should do hard and right things, right? Actually this saying is a bit of chicken soup. Doing the right thing is enough. Why must you do hard and right things? If the right thing is easy, why not do it?
很多人说要做 难而正确的事情是吧 其实这句话吧 有点鸡汤 做正确的事情就可以了 为什么一定要做 难而正确的事情呢 如果正确的事情就很容易 为什么不做呢
Fan Weifeng38:01
The monetization chain for content companies — society has already built it for you. If you're just simply monetizing traffic, it's very, very easy.
内容公司的变现的链条 这个社会已经帮你打造好了 如果你只是简单 这个流量变现的话 是很容易很容易的
Fan Weifeng46:00
Don't join the games of middle-aged and elderly people, don't take over the baton from them — that's one point — join the new game.
不要参与中老年人的游戏 不要给中老年人接盘 这是一个点啊 参与新游戏
Fan Weifeng1:03:11
Figures
| Total traffic of Gaozhang Capital's portfolio | About 300 million users | 20:10 |
| Number of groups personally maintained by Xiaomasong | 93 | 25:45 |
| Sales of Xingqiu Yanjiusuo's first book | Over one million copies, priced at over one hundred yuan each | 41:16 |
| Sales of Xingqiu Yanjiusuo's second book | Close to one million copies | 41:16 |
| Effective daily work hours required by Xiaomasong's company | Four hours | 1:04:30 |
Glossary
- carry
- The manager's share of a fund's excess returns.
- BP
- Business Plan, the project description document used when raising startup financing.
- MR
- Mixed Reality, a display technology that overlays virtual content on the real environment.
- NFT
- Non-fungible token, a unique digital asset certificate on a blockchain.
How to listen
People making content, investing in content, or considering a content startup; founders and investors who want to understand how investors judge a content project's ceiling and a founder's innate talent.
The opening small talk and the WeChat-public-account/podcast ecosystem comparison can be fast-forwarded; information density is highest from 20:10, where content as a whip begins.