From grassroots to billionaire chairman, Cai Wensheng's road to wealth in domain names

From the "king of domain names" in the domain name era to the "king of webmasters" in the personal webmaster era, the "king of grassroots bloggers" in the Weibo era, and finally the "king of angel investors" in the mobile Internet era, Cai Wensheng has always been able to find the way to success in almost every era of innovation. Therefore, in the past many years, Cai Wensheng can be called the best person in China to find opportunities.

Cai Wensheng is one of the true role models of entrepreneurs. In his eyes, there is no serious business model, just relying on one or two "killer skills" to carve out a sunny road in the space of the Internet - although for a long time, he has always been ignored by the Internet community. Understand the maximization of mass needs and use the simplest and most direct functions to meet mass needs. This is Cai Wensheng's winning magic weapon. He therefore finds the lowest threshold to intervene, and then looks for the highest value of gains.

In 1999, he started the domain name business and grabbed more than 100,000 Internet domain names. Now the total valuation exceeds 100 million US dollars. His domain names span all walks of life. Cai Wensheng will not miss a good investment opportunity. He has registered and owned multiple agricultural-related domain names, and some domain names have been used by well-known websites. For example, Baidu's independent video website Qiyi.com. It is rumored that Cai Wensheng registered the domain name with the word "奇异" (kiwi) for the agricultural fruit kiwi. It is an authentic agricultural domain name. At that time, it was rumored that the transaction price exceeded one million. There is also the well-known domestic video website Tudou. This domain name was also registered by Cai Wensheng with the name of an agricultural product, and the transaction price was also not cheap. At present, he also holds the Apple domain name pingguo. As an investor in real estate domain names, Cai Wensheng seems to have "anticipated" the home furnishing industry market and has already registered a lot of good industry domain names in the domain name market. These home furnishing and real estate domain names have lived up to his expectations and brought him good results.

Cai Wensheng is the best representative of individual webmasters who have achieved commercial evolution. For most ordinary entrepreneurs, Cai Wensheng's understanding of products, grasp of users, judgment of opportunities, and his way of thinking about making money are extremely practical.

In the era of "Internet for All", only a few lucky people can achieve great things, which requires ability, courage, teamwork and luck. However, many people still have a chance to find an effective way to make money and develop a healthy business.

Domain name registration: Think a little more than others

Actually, Cai Wensheng started to deal in domain names in 2000. At that time, the golden age of domain name investment had long passed (international Internet domain names began in 1985, and domain names were free before 1992. Domain name registrars were established after 1994, and then fees began to be charged and registration began). At that time, there were thousands of people in China participating in this business, including many Internet elites who tried it.

Cai Wensheng himself had no knowledge of the Internet except for making some money by buying PCCW stocks. He accidentally saw a newspaper news in Hong Kong saying that the business.com domain name was sold for 7.5 million US dollars. That day was April 25, 2000. This immediately aroused his interest. But in 2000, valuable international domain names were almost all registered, and Cai Wensheng inevitably paid a lot of tuition fees. He registered one or two thousand domain names in one go, of all types, such as FM86.com, which imitated Lenovo's FM365.com. However, these domain names, which he thought were very good, were actually worthless, and "not a single one was sold", and he lost hundreds of thousands of yuan in one go. It was not until the end of 2000 that he learned that domain names need to be renewed every year after registration. If they are not renewed, they will "fall off", that is, they can be re-registered. So he set his sights on registering valuable domain names that might "fall off". It should be said that from 2001 to 2003, Cai Wensheng's domain name business was quite successful. He registered about 5,000 domain names and sold more than 1,000 of them. The buyers of his domain names were all over the world. For example, BIONET.COM, one of the largest biotechnology companies in Spain, bought it from him. During this period, almost all domain name business was completed by him and a partner he found in 2001. Later, the China Internet Information Center (CNNIC) launched the .cn domain name and asked him to support it. He received more than 2,000 three-letter .cn domain names. According to his own estimation, the domain names he holds are worth hundreds of millions of dollars.

Regarding his success in the domain name field, Cai Wensheng once recalled that when he was 15 years old, he bought a Sanyo 8800 dual-cassette recorder through a relative in Hong Kong, which cost 280 yuan at the time. Then he began to copy pop songs from Hong Kong and Taiwan, recording 40 boxes a day. The cost of a blank cassette was 1 yuan, and after copying, it was sold for 2.5 yuan, making 60 yuan a day. Later, he increased the number of recorders to 8, making hundreds of yuan a day, which was already a considerable income at the time. Obviously, if the speed of copying can be increased, the income can be increased. Cai Wensheng disassembled a recorder and found that the speed could be increased by expanding a plastic reel of the recorder. In the end, his copying speed was three times that of others. "I am very successful in domain name business, and I am also better than others in the tape business. Why?" Cai Wensheng said, "Maybe I just use my brain a little more than others."

Entrepreneurship method: Do it as soon as you can make money

"Why are southerners better at starting a business than northerners? Because southerners don't have much choice, they do it as soon as they think it can make money. Northerners consider too many business models, think too much, and end up not doing it. The best business is not to look for a business model, that's all nonsense..." After 2003, Cai Wensheng has gradually realized that although buying and selling domain names can make huge profits, it is ultimately just a personal business. However, domain names are the most basic application of the Internet after all. Through domain names, he studied all the outstanding websites in China. At this time, he discovered hao123.com, which has a homepage full of various URLs, but has extremely high traffic and is ranked in the top 100 on Alexa.

Investment principles based on traditional business experience

"Traditional business taught me two things: First, there is value if there are users. Whether a store is good or not depends on the flow of people. If there is flow of people, it means that people like to come here, and you can sell a lot of things. Second, business sensitivity and decision-making speed. I make decisions very quickly. Some important investments are finalized in half an hour, and the money is transferred."

In April 2005, Cai Wensheng personally paid for all the food and accommodation, and held the "China Internet Webmaster Conference" in Xiamen for two consecutive days, inviting 150 personal website webmasters with the largest traffic in China to participate, including Pang Shengdong, Yao Jinbo and other people who later received huge venture capital. This webmaster conference is also considered a symbol of the transformation of personal websites to commercial websites, and Cai Wensheng has since become the leader of the webmaster alliance. Although he later admitted that when he first stood on the stage to give a speech, "his legs were shaking."

At the end of 2005, Wang Dingbiao, the founder of Chinabbs, who participated in the first webmaster conference, found Cai Wensheng and wanted to buy a better domain name. Cai Wensheng talked with him for several hours and made a series of suggestions for the development of Chinabbs. Wang Dingbiao agreed with them and invited Cai Wensheng to be a shareholder. IDG was also an investor of Chinabbs, and IDG did not object. Cai Wensheng gave daqi.com to Chinabbs, and added his ideas and resources to become a shareholder of Daqi.com.

Another participant, Yao Jinbo, the founder of 58.com, was also a successful domain name investor and had a good personal relationship with Cai Wensheng. When he founded 58.com in 2005, Cai Wensheng was also optimistic about the direction of classified information websites and invested in them. In addition, Cai Wensheng often helped some smaller websites in terms of servers, bandwidth, domain names, etc., but usually did not hold shares.

After selling 265 in 2007, Cai Wensheng believed that he had basically achieved success. In addition to 4399, angel investment became Cai Wensheng's main interest. Cai Wensheng has two ways to invest.

1. The website itself has a large user base, usually reaching tens of millions. "Users have value, and reaching tens of millions of users means that it has achieved initial success." This understanding comes from Cai Wensheng's experience in the clothing business in his early years. Cai Wensheng also formed a standard for judging the value of a website, "As long as there are enough users, a business model will definitely be found, it's just a matter of how big it can be."

2. Cai Wensheng sees what the market needs, identifies a direction, and will take the initiative to organize a team. For example, Meitu Xiuxiu is Cai Wensheng's belief that ordinary netizens need a fool-proof version of Photoshop to process pictures. This picture processing software that can easily produce a variety of effects is one of the fastest growing Internet applications in recent years.

But Cai Wensheng's most distinctive investment feature may not be the above two points, but "fast". He usually discovers potential projects at a very early stage and then quickly makes investment decisions. "I make investment decisions very quickly, sometimes in half an hour - not to make a decision, but to transfer money to the other party's account." Obviously, compared with the long negotiations, investigations, and legal signings of VC institutions, this fast investment is extremely attractive.

The next big business: more opportunities in the era of universal Internet

"From 1998 to 2003, it was the elite era of China's Internet, and all the models were copied from overseas; from 2003 to 2008, the number of Internet users increased from tens of millions to 300 million, which was the era of the masses, and the locals surpassed the overseas students; and from 2009 to 2014, the number of Internet users in China will increase from 300 million to 600 million, which will be the era of universal Internet, and there will be more opportunities."

Although Cai Wensheng now spends only 1% of his energy on domain name investment, he still talks a lot about domain names. He knows the stories of all the well-known website domain names in China, and many domain names are closely related to him. For example, he sold g.cn to Google China. If Chen Yizhou had not been influenced by Cai Wensheng, he might not have registered the domain name kaixin.com of Kaixin.com later. He would show off his collection of classic domain names from time to time, such as Romantic.com, "I won't sell it without a million dollars", "I also collected domain names of thousands of local cities in China, enough to set up a local portal alliance". And domain names are likely to be the basis for his next big business.

In early July 2010, an American domain name investor flew to Xiamen to visit Cai Wensheng. Mr. Cai was very famous among foreign domain name investors. The investor asked him why he didn't do domain parking when he had so many valuable domain names.

Cai Wensheng admitted that Chinese companies' brand awareness was not so high, and there were many click frauds, so the time was not yet ripe for domain name parking. However, he expected that in the next three to five years, this market would gradually mature, and this might also generate a steady stream of income for his domain names.

Cai Wensheng found a few people to form a team and decided to do one himself. At that time, he had three three-digit domain names, 870.com, 716.com and 265.com. He used 870.com first, and after a week, the traffic reached more than 100,000 a day. Cai Wensheng was more convinced that "this seemingly fool-proof application is exactly what hundreds of millions of ordinary netizens in China need."

He resolutely changed the domain name to 265.com and directed all the good domain names in his hands to 265.com. By mid-2004, the daily traffic of 265.com had reached nearly 4 million. At this time, the investment manager of IDG came to him, hoping to invest in 265. In Beijing, he met IDG partner Guo Yihong, and after talking about the domain name business for a long time, Xiong Xiaoge and Zhou Quan from next door came to listen to his story. However, "they only understood half of the 265 business", and finally, 265 got a million-dollar investment.

This valuation is not very high, but Cai Wensheng is the first grassroots webmaster to receive VC investment. This halo effect made Cai Wensheng quickly become the big brother of webmasters. More importantly, Cai Wensheng entered the mainstream of the Internet. After obtaining investment, 265 moved the company from Xiamen to Beijing, and Cai Wensheng himself began to have direct contact with major Internet companies.

In 2005, Wang Jianshuo, CEO of Keqiji, visited Cai Wensheng and found a business card of a person in charge of investment affairs at Google in Cai Wensheng's business card folder. This surprised Wang Jianshuo because 265 was such a grassroots website that had nothing to do with the high-tech Google, and Google had not yet entered China. In fact, 265 was Google's second investment in China, the first being Baidu.

When accepting the investment, Cai Wensheng planned to acquire hao123 and then merge it with 265, so that it would definitely become bigger, "influence the Chinese Internet and search engines", and IDG also recognized the idea of acquiring hao123.

But Cai Wensheng made a mistake. As a competitor, Cai Wensheng was worried that it would be difficult to communicate directly with Li Xingping, so he expressed his willingness to acquire Li Xingping through various relationships, but Li Xingping rejected all of them. In August 2004, Cai Wensheng suddenly found that the registration information of hao123.com had changed. In September, Cai Wensheng went to Xingning to find Li Xingping in person, only to find out that hao123 had been acquired by Baidu and lost the opportunity to merge.

But Li Xingping's understanding of users and sensitivity to products made Cai Wensheng quite "admiring". In the second half of 2004, the two began to cooperate quietly to build the small game website 4399. In more than 4 years, 4399 mainly provided free flash small game services and did not make much profit. In 2008, the web game market began to explode, and 4399 also began to introduce web games. With the popularity accumulated before, it quickly began to make profits. Some large companies and investors came to the door hoping to buy 4399, but Cai Wensheng and Li Xingping decided not to sell it. In 2009, the two set up a team in Guangzhou and officially commercialized 4399.

4399, which currently has hundreds of millions of users, is positioned as the largest Chinese game distribution platform in China, with more than 12 million registered web game users, nearly 200,000 new users every day, 16 million daily traffic, an average of 800,000 online users at the same time, and a monthly income of tens of millions. Large companies such as Shanda and Giant have begun to cooperate with it.

Cai Wensheng is a successful businessman. He pioneered the China Webmaster Conference, bringing together well-known domestic VCs and grassroots webmasters, and became the veritable king of webmasters in China. He is the first grassroots person invested by IDG in China. He has also invested in many Internet companies. His success is also a classic in the domain name industry and the Internet. He is a role model for entrepreneurs to learn from.