The internet wave has been invincible for 20 years, and the education track is almost the most difficult fortress to overcome.

For Internet technology, educational scene is an extremely personalized and highly specialized field, and China online education companies landing in the NYSE capital market are rare. As the first independent listed subsidiary of Netease, Netease Youdao (NYSE: DAO) achieved rapid results in 2020, with a net income of165438+65 million yuan in the first half of the year, a year-on-year increase of 1 12.3%.

Netease has a good name from "a gentleman loves money and has a good way to get it". What is the so-called Tao? It is not easy to find such a way in the red sea where giants stand.

Ding Lei, CEO of Netease, said: "I feel that I am a victim of education and a beneficiary of education." Listening to a math class, why is this math teacher so vivid and boring? Because each teacher has different ways of expressing and guiding the same educational content, it will produce different learning effects.

Ding Lei told Forbes China: "There is a saying that the most important investment is content. Netease is not particularly anxious. I believe it's only a matter of time. It will not simply and rudely think about the problem of realizing in the short term. "

"I have been preparing for education for ten years."

20 19 10, Netease rang the bell of NYSE. Ding Lei said: "Netease has been looking for the embodiment of corporate social value, in addition to making money. We have made many attempts to create some value that enterprises can do for the society. The Internet is originally a platform for knowledge sharing, and I myself am the beneficiary of open education. Therefore, I am very interested in education. I have been preparing for education for ten years. "

Since 2020, the sudden outbreak of COVID-19 has made the advantages of online education more prominent. Under the influence of the epidemic, the penetration rate of K 12 online education industry reached its peak in March 2020. In the second quarter, the net income of Netease Youdao learning services and products was 520 million yuan, up 190% year-on-year. The income growth of this sector is mainly attributed to the income growth of excellent courses. During the reporting period, sales of Youdao excellent courses reached 460 million yuan, up 265,438+04.5% year-on-year, accounting for 74% of the company's net income. Among them, K 12 is the main growth engine.

Ding Lei said that in the past, many educational resources were invested in the school hardware environment, but now, Internet companies are investing in the course content. Through market competition, we can improve the quality of course content and reduce the cost for families, enterprises and online courses. He thinks this is the greatest thing that the Internet has done in China. "The best investment in the world is in education," Ding Lei said.

The greatness of science and technology lies in that it can make people become better people and make the world a better world, rather than just pursuing faster speed and higher efficiency at the same latitude.

Ding Lei recalled that Netease started classes as early as 20 10, which had a great influence on the education industry at that time. In the past ten years, Netease Open Class has translated 13000 class hours into Chinese at its own expense, all from top universities in Europe, America, Japan and South Korea. The purpose of opening Netease class in Ding Lei is to build a 24-hour university course without walls. "Because I had such a regrettable experience in college, there was a teacher next door who taught the signal system very well, but I didn't have a chance to listen. Foreign open classes provide such an opportunity that you can watch videos, videos and translations 24 hours a day. "

At that time, there were no public classes in Chinese mainland University. With the appearance of Netease Open Class, China Online Open Class and China Massive Online Open Class have gradually emerged.

Starting from 20 10, Netease has invested millions of yuan every year to purchase course copyrights. Netease open class allows everyone to watch the video content of the course for free, even without advertisements. Ding Lei said frankly that as an enterprise, doing these things does not make money. For him, this is not his main job. But he thinks that an entrepreneur should change and improve people's life and study through technology and innovation.

However, one problem that they gradually discovered is that Netease Open Class provides university courses, which are more oriented to adults over 18 years old. Ding Lei said: "I have been unable to solve the problem of K 12 education. How can these children get a good education before 18? "

In fact, there are already many giants on the K 12 track. The offline teaching and training institutions that focus on New Oriental and a better future have been deeply cultivated in the industry for many years, and the competition for online new unicorns has also entered a white-hot stage. Why does Netease have a way to open its own path in the Red Sea?

In 20 14, Netease began to explore the field of online education. Now Youdao is the leading intelligent learning company in China, which is committed to providing 100% user-oriented learning products and services.

In the business world, one of the most exciting things is to create new things from old things. This is not only pleasant, but also the most effective way for enterprises to grow.

From 2065438 to 2008, the self-operated course model has achieved a revenue scale of 284 million yuan. 20 19 In the first half of the year, the number of monthly active users of Youdao Dictionary reached 510.2 million, making it the number one language App in China. The early success of Youdao Dictionary has enabled Netease to continuously expand into the field of educational products and services.

Netease Youdao, Netease Cloud Music and other businesses have pressed the growth acceleration button for Netease. In the second quarter of 2020, Netease's net income was 620 million yuan, a year-on-year increase of 93.1%; The net income of innovation and other business segments was 3.73 billion yuan, a year-on-year increase of 38.7%. It is worth mentioning that Netease's operating net cash flow continues to be positive, and its gross profit margin continues to be optimized, showing a positive and good development trend.

Ding Lei believes that "flow is king" does not seem to be fully applicable in the current educational context. The real threshold of Internet education is' content'. "Once the content barrier is overcome, it will become its own moat.

2065438+September 2009, Netease Group's public welfare project "One Screen" landed on a large scale for the first time, and entered more than 300 counties in China 10, benefiting tens of thousands of students. With the live broadcast system of excellent courses, students can receive high-quality teaching content online. At the same time, Netease will also give "online classes" to teachers in poverty-stricken areas, and set up teacher training classes, so that outstanding teachers in northern Qing Dynasty can take them to prepare lessons and improve teaching quality from the source of teaching.

Ding Lei hopes to gather the best educational resources in China, bring the top "school districts" online, and realize his dream: let the knowledge flow without classes, and let China fill the school districts.

He hopes that technology will not only change education from offline to online, but also promote the overall change of the industry.

Polished texture, as always.

In the fast-paced Internet, polishing the texture is a luxury, but Ding Lei said it was only a matter of time. Creating high-quality products was Netease's firm line 20 years ago. Netease had just been established for three years. Young Ding Lei thinks that it is the right choice to clear the fog and win the competition in the Internet world.

For more than 20 years, Ding Lei has kept the initial intention of entrepreneurs. Debut with a product with a soul is considered by the outside world to be a "very easy" thing. After long-term study and insight into people's hearts, Netease can polish a game in 20 years or make a music App in several years.

Taking educational products as an example, unlike many educational brands that sell knowledge, Netease has a way not to be a platform, but to seek cooperation with famous teachers to jointly create high-quality content with "studio mode". On the road to "becoming a famous teacher", Youdao has been committed to cultivating famous teachers.

Ding Lei said that products should have a sense of texture. Behind the texture that users can see is the core of Netease technology. He believes that many people use technology only to improve efficiency and reduce costs, and the significance is not particularly great. Any technology must have an application scenario and know what kind of scenario it is. Technology is not the absolute threshold of the Internet. It is the most important thing to have the application of the scene and generate value in the scene. When it comes to AI, Ding Lei thinks that it is either AI labeling or artificial intelligence, and technology should be really used in valuable places. Starting from the pain point and driven by demand is one reason why Netease has a successful AI education tool. It is this way of exploration that makes Netease's achievements and technologies in AI often have practical and in-depth uses at the beginning of its birth, and quickly presents a lot of feedback, which feeds back the improvement of technology again.

Picking up the dictionary pen, Ding Lei's pride in his products came to his face, much like an enthusiastic entrepreneurial youth.

Two years ago, Youdao began to lay out intelligent hardware. 20 17 10, Youdao launched the first intelligent hardware "Youdao Translation Egg". Since then, hardware products such as Youdao Translation King and Youdao Dictionary Pen have been introduced one after another. As of August this year, Youdao has launched 9 educational intelligent hardware products, and more will be launched one after another. These products are determined to improve the learning efficiency of Chinese people with the landing of AI technology.

What kind of products are good for online education?

Ding Lei analyzed that learning and games are very different. Games are like eating delicious food, falling in love and singing karaoke, which is human nature. Only study, to some extent, is anti-human and makes you uncomfortable. Therefore, there is a saying in China that "learning the sea is endless". . However, if learning products can be integrated into the game spirit of "upgrading monsters", users will gradually have the motivation to continue learning.

He believes that the best educational tool in the future is the combination of artificial intelligence with AR and VR. For example, the arrangement of carbon atoms in diamonds is different from that in ordinary graphite. How does this abstract three-dimensional structure become a learning product that users prefer? The blackboard can only draw a plan, but with the help of AR technology, one will never forget the vivid three-dimensional structure.

When Ding Lei was young, he had a thirst for knowledge, and personally felt the shackles of the lack of educational resources, which was his initial intention to make educational products. Since Netease Cloud Music 20 13 was founded, Ding Lei has also recommended his favorite songs and song lists on the platform for a long time; Even, a pair of jeans put on the shelves of Netease YEATION have traces of Ding Lei's pursuit of texture. If we pursue all this, it can only come from "love".

Ding Lei said: "In fact, I have been thinking about Apple products in the Steve Jobs era. They combine many feelings of industrial design. You can feel the sound of this product with your heart. "

Jane avenue. The grand proposition of changing the world, for Ding Lei, is to polish a product that can touch people's hearts and reach the soul.

He has repeatedly told the outside world that he founded Netease 23 years ago and was inspired by the autobiography "My First Half Life" of TSMC founder Zhang Zhongmou. Ding Lei said: "When I see that a 56-year-old predecessor can do something with passion, why can't I do it as a 26-year-old young man?" The power of idols is infinite, which will affect many people's desire to change the world.

Starting a business at the age of 26 depends on the blood of personal heroism. Today, 49-year-old Ding Lei has a greater responsibility to shareholders, employees and society. As Jim Collins wrote in the book, "Shareholders, partners, employees and consumers, you can't hurt the interests of any of them."

Polishing products can sharpen a sword in ten years, but to realize products, we need to find a new business model.

First expand users through free products, and then realize business. This is typical Internet thinking, but it is not Ding Lei's way. Ding Lei believes in: first, make the products to the extreme, and then consider the market and users to pay the bill. Jane avenue.

On the day Youdao went public, Ding Lei once said that the future online education methods and forms will be more diversified, not only based on the use of a computer or mobile phone screen, but also based on AR and VR, which will make people more immersed, efficient and interesting.

He believes that the core of educational competitive advantage is to use scientific and technological tools and means to help users complete educational courses, master the knowledge chain of education, and repeatedly improve and strengthen the weak links of a certain knowledge point in a targeted manner. Especially when a new thing appears, as an entrepreneur, we must be able to grasp the new business model that can be generated in the application of this new equipment.

Ding Lei said, "We are actually looking forward to AR glasses. AR glasses are more comfortable than VR glasses, and I think AR glasses will generate great power for the world. Because Netease has been deeply involved in the field of content and technology for a long time, we know which products we can combine to innovate after the advent of AR glasses. If you bring a magazine today, you can't read this passage, but your glasses have radar. When you scan the magazine, all English is translated into Chinese. This may be something that will happen soon. "

"For entrepreneurs, you have to have the ability to track and imagine the development of science and technology, and you have to be prepared. For example, other companies can't do this translation process, only we can do it, because the core technology of the whole process has been done for almost twenty years, and the engine is in our hands. Glasses are just a device that helps me get information and complete information input or output. In order to wait for the advent of such a product, Netease has made long-term technical preparations. " Ding Lei believes that only by doing a good job in basic technology research and preparation, when opportunities and trends come, products can further explode and expand the application scope.

Now, games, music and education are the three major development fields of Netease, and the similarities among them are all content. But in such an era when traffic is king, how can content build a moat of its own value?

Ding Lei believes that the core is the creativity of creation, the means and process of creation and the application of science and technology. Technology can solve the problems of efficiency and cost, and can help some enterprises generate value in PGC content.

Netease Cloud Music has always been Ding Lei's favorite.

Why are songs such as Qian Qian's Bird Song and Life written by popular Japanese creators in the 1990s enduring?

China's music industry needs an industrial system and a commercial system, so that these musicians can continue to grow. Music is like this, so is education.

In 2003, 32-year-old Ding Lei ranked first in Forbes China Rich List with a net worth of US$ 654.38+US$ 76 million, becoming the first rich man with Internet background in Chinese mainland. But for Ding Lei at that time, how to build a great and enduring company was a road that needed to be explored for a long time.

Ding Lei said: "In 2003, I read" The Foundation will last forever "and in 2005, I read" Must Win ". I have met for a long time. " Evergreen Foundation answered my most important question, what is the value of enterprise existence.