Even after watching too many ups and downs in the business world, the dilemma of the teaching and training industry now far exceeds his previous cognition. With the implementation of the new round of education supervision policy, the share price of New Oriental has dropped from $20 at the beginning of the year to $2. This teaching and training career that has accompanied him for 30 years should return to the basic proposition of how to survive.
A widely circulated rumor said that at an internal meeting, the management of New Oriental suggested that the company should be transformed into a nursery, so I couldn't help crying at the meeting.
"Teacher Yu didn't cry." In this regard, an insider close to New Oriental told Shenwang that it was not true to cry at an internal meeting recently.
Yu is indeed facing the biggest crisis in the past 30 years. Since the publication of the Opinions on Further Reducing Students' Homework Burden and Off-campus Training Burden in Compulsory Education on July 24, the off-campus discipline training industry, which has grown wildly with capital, has ushered in the "strongest supervision", and many businesses under New Oriental are facing standardized rectification. The company's share price has fallen by nearly 90% from its peak at the beginning of the year.
The influence of supervision on New Oriental is obvious. On the morning of July 3 1, New Oriental announced that due to the recent new regulations, the financial report release and conference call were cancelled.
The original spiritual slogan of New Oriental was "Looking for Hope from Despair". As one of the earliest off-campus training institutions in China, New Oriental, which started from the edge of policy, encountered many seemingly insurmountable obstacles in the development process and finally passed all the tests. However, as we all know, the era of blindfolded education and training industry is gone forever, so we need to face real danger.
A number of people close to New Oriental told Wang Shen that the management of New Oriental has not yet reached a * * * understanding of the company's transformation direction, but all businesses involved in supervision will definitely be completely rectified.
I am still working and living step by step. On August 2, he made his first public appearance after supervision, and appeared in the first principal training camp of Yuanshan Primary School as the sponsor of public welfare fund. An educator who participated in the activity told the reporter that although Yu mentioned the difficulties currently faced by the education and training industry, he was overjoyed when it came to rural education.
Sharing in the latest circle of friends, New Oriental will shift its business focus to the direction of quality education. Recently, Beijing New Oriental Quality Education Growth Center was established, which consists of six sections: Art Creation College, Humanities Development College, Language and Business Literacy College, Natural Science and Technology Space Station, Intellectual Sports Training Hall and Quality Parent Wisdom Hall. Schools in New Oriental Shanghai, Shenzhen, Guangzhou and Xi 'an have also been adjusted one after another.
As the most representative entrepreneur in the teaching and training industry, Yu has completely experienced the whole process of capitalization and capitalization of the industry. In the first half of this process, overseas training promoted China's integration with the international community, while in the second half of this process, the over-capitalized and involuted K 12 teaching and training industry was thrown to the opposite side of the times because of excessive social costs.
This supervision may also be an opportunity for Yu and his New Oriental to rethink how to return to the essence of education.
Yude's great era
Like many industries with public attributes, the germination, development and growth of the education and training industry have always been accompanied by changes in the great era.
The success of New Oriental cannot be separated from the context of the times.
Yu, the godfather of studying abroad, caught up with the first big era. 1978 the joint communique on the establishment of diplomatic relations between China and the United States opened the Sino-American exchanges that had been isolated for nearly 30 years. In order to encourage young people with dreams to go to the world, 198 1 promulgated the Instructions for Studying Abroad at Their Own expense and the Interim Provisions on Studying Abroad at Their Own Expense, which provided policy support for studying abroad at their own expense, and the TOEFL test subsequently entered China.
1985, the state cancelled the "qualification examination for studying abroad at one's own expense", and the "fever of going abroad" rose rapidly throughout the country. Yu and his classmates from Peking University are both students applying for further study abroad. From 65438 to 0987, he went to the United States and Canada successively, but Yu missed the opportunity to go abroad because he missed the enrollment time of the reported university, and continued to stay as a teacher at Peking University.
This is a well-known experience. In order to prepare for studying abroad, he began to participate in TOEFL and GRE teaching in some training institutions with a monthly salary of less than 1000-2000 yuan, which brought him a monthly income of 1000-2000 yuan. Seeing that the money for the training course came so quickly, I did a TOEFL training course at Peking University without much thought. 199 1, who was forced to resign and attended a full-time TOEFL training class.
Because there were no conditions to apply for a school license at that time, the first training course founded by Yu was affiliated to a private school called "Oriental University", and the management fee of 15% was required every year. 1993 165438+1October16, and finally got the school license, and established Beijing New Oriental School, the predecessor of New Oriental Group.
The increasing number of students studying abroad in 1990s is a beautiful landscape of China's reform and opening up. The TV series with the theme of Beijingers living in New York is bursting with popularity, and people who have been open for a long time are full of curiosity and yearning for life abroad. New Oriental, founded by Yu, is the first choice for many China students to prepare for TOEFL and GRE exams. Inadvertently, Yu has become a bridge between China and the West.
Later, with the joining of Xu Xiaoping and Wang Qiang, New Oriental came to the road without rivals. Yu Zeng said in public that "New Oriental has no competitors for a long time".
It was not until many K 12 training institutions appeared in the education and training market that Yu realized that "the market is going to change".
The background of the second big era that Yu experienced was 1998. Beijing carried out education reform, canceled the unified examination for primary schools, and changed to the current junior high school model that combines the nearest entrance with the independent choice of key middle schools. This means that students who are not selected will participate in "computer allocation", and the computer will randomly allocate students to schools according to the wishes of the district newspaper.
In order to let children choose the best candidates, parents often find tutors for their children in the campuses of famous universities such as Peking University and Tsinghua, and part-time tutors became the "second jobs" of many students in Peking University and Tsinghua at that time.
Among the extracurricular tutoring in various subjects, the market for mathematics tutoring is particularly huge, because "excellent" in merit-based admission mainly refers to excellent performance in various mathematics competitions and excellent performance in the Olympic Mathematics examination organized by key middle schools themselves.
Yu's younger brother, Zhang Bangxin, saw this opportunity in Northern University and founded the extracurricular tutoring of "Learning and Thinking" in 2003. Since then, a large number of K 12 teaching and training companies, such as Gauss Education and Elite Education, have been established first, and their disciplines have expanded from Olympic Mathematics to more and more categories.
If we want to find a dividing line for the domestic teaching and training industry, then 2006 is very suitable. Before this, the domestic teaching and training industry was basically the world of studying abroad, and then K 12 after-school tutoring gradually became the trend or even the mainstream.
Also in 2006, New Oriental was successfully listed on NYSE, becoming the first educational institution in China to be listed in the United States.
But in hindsight, driven by industry and capital, the company gradually shifted its business focus to the teaching and training field of K 12.
Tuyere and capital inflow
With the listing of the company, capital has brought growth requirements to New Oriental and made many mistakes. In the book I was on the verge of collapse, Yu concluded that the main mistakes were relying on marketing and blindly opening a campus.
The attitude of being responsible for growth and capital makes New Oriental gradually deviate from its original intention when it was founded. Yu later reflected: the premise that marketing and sales can promote growth is that you have good enough products and services. But in the field of education, good teachers and products are limited for a period of time. Due to the limited educational resources, customers brought by marketing and sales may not accept your original good teachers and products, and the quality of teaching they are exposed to may not be so good.
However, at that time, New Oriental, like most teaching and training institutions, was on the road of expansion. From 2008 to 20 18, golden decade was also a chaotic decade. Many educational companies do education not with the mentality of exploring the essence of education, but with the mentality of capital, internet technology and even marketing, hoping to profit from it.
Overwhelming marketing advertisements pay more attention to data such as orders, conversions and repurchases. Compared with the teaching effect. More and more anxious parents and more and more "involuted" students have become the most obvious changes after a large number of entrepreneurs and capital poured into K 12 teaching and training.
The pursuit of capital for the tuyere is particularly obvious in 2020 under the epidemic. The epidemic at the beginning of the year brought a test to all offline training institutions, but it also made online education stations popular and capital poured in rapidly. According to public statistics, the online education industry raised more than 50 billion yuan in 2020, exceeding the sum of the past ten years. Both Ape Tutor and homework help have completed billions of dollars in financing, with a valuation of more than tens of billions of dollars. Capital has piled up a new track with a huge amount of money.
Yu has always been cautious about online education, and the online education business of New Oriental has long been regarded as lagging behind its competitors. Yu Zeng explained to Shenwang, "Not only the outside world thinks so, but even some employees of New Oriental think so, but I still hold the view that the profit model of head online education has not come out, and marketing by burning money alone is not a long-term development model."
Yu has always adhered to the strategy of not burning money because he has always adhered to an idea that education is a slow job, not something that capital can pile up. In order to cultivate a group of students who are humane, emotional, physically and mentally healthy and can live in harmony with everyone, the role of face-to-face teachers and parents will always be irreplaceable.
The epidemic in 2020 was the catalyst, and the struggling New Oriental completed the transformation of OMO model, hoping to combine online and offline business.
Objectively speaking, Yu has a clear understanding of the irrational prosperity of the education and training industry. At the end of last year, he publicly reprimanded his peers:
"For today's training and education industry, the most important reason for so many people to invest in it, even their lives, is definitely not the initial heart of education, but funds, technology, talents and models." He also warned that "training and education are over-developed, and online education will burn all kinds of money. After the capital ebbs, chicken feathers are everywhere. "
I didn't expect the avalanche to come so quickly. On July 24th, the policy of "double reduction" finally landed, clearly stipulating that all localities will no longer approve new off-campus training institutions for students in compulsory education; Discipline training institutions shall not be listed for financing, and capitalization operation is strictly prohibited; Off-campus training institutions shall not occupy national statutory holidays, rest days and organize discipline training in winter and summer vacations. Each of these regulations is an "unbearable burden" for the teaching and training industry.
In fact, there are traces of regulatory policies. As early as 20 18, the general office of the State Council issued the Opinions on Standardizing the Development of Off-campus Training Institutions, and in 20 19, the Ministry of Education and other six departments issued the Implementation Opinions on Standardizing Off-campus Online Training. Since March this year, the market supervision bureaus in Beijing, Shanghai, Hangzhou, Guangzhou, Shenzhen and other places have ordered many teaching and training institutions to carry out rectification, and who to learn from and who to teach.
However, in this process, most educational institutions and investors have illusions and even turn a blind eye. In 2020, due to the special situation of the epidemic, the pace of policy supervision in education has been delayed.
I can't stay out of it. The over-capitalized and involuted K 12 teaching and training industry has been thrown to the opposite side of the times because it has increased too much social cost.
Back to the starting point
Regarding the future of teaching and training institutions, Caixin understands that in the implementation of the "double reduction" policy, Beijing plans to require teaching and training institutions to complete the "non-profit" transformation of discipline teaching and training institutions before the end of the year; The Education Commission has informed the heads of various head institutions through industry associations, suggesting that enterprises should transform into high schools, vocational education, lifelong education and mixed formats.
K 12 is a big income of head teaching and training institutions such as New Oriental, and the difficulty of transformation can be imagined. The Q3 financial report of New Oriental as of February 28th, 20021year shows that the net income of its educational projects and services increased by 30.5% year-on-year, accounting for 92.7% of its income, mainly due to the increase in the number of students who participated in K 12 extracurricular tutoring courses. (Overseas exam preparation business decreased by 65,438+02%, while overseas consulting and study tour business increased by 65,438+065,438+0%. )
K 12 business has brought high growth, high profit margin and high valuation to New Oriental. However, combined with the policy details and implementation direction of "double reduction", K 12 education, which began to expand after the listing of New Oriental in 2006, may face liquidation, and its business has returned to the place where it was founded many years ago.
Most public opinion believes that Yu, who is recognized as a "world-class anti-strike capability", can find a way to lead New Oriental out of the predicament. It has been suggested that the real direction of New Oriental in the future may be to fill the weak points in the frontier innovation of basic education science and education science and technology in China, because this is in line with the national strategy.
From another perspective, supervision may also be an opportunity for Yu and his New Oriental to rethink how to return to the essence of education.
In an exclusive interview, Yu said that New Oriental was questioned by the outside world to be backward in the field of online education, and at the same time faced with the impact of competitors such as a good future. At that time, it was said that the hurdle faced by New Oriental was how to find a bridge between traditional education and science and technology education, which was both a hurdle and a challenge, but it would do well in the future if it was done according to the essence of education.
Nowadays, in the face of the new requirements of the supervision of the teaching and training industry, the idea of leading New Oriental out of the predicament is naturally to return to the essence of education.
What is the essence of education? The essence of education has rich and profound connotations, for example, the most basic thing is to cultivate students into talents with all-round development and sound personality. Yu Zeng told Shenwang, "New Oriental has been exploring something that really benefits China's education for 26 years (currently 28 years). What New Oriental can do for education in China, especially for balanced education and education in poverty-stricken areas, is the most important thing for me in the future. "