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Text | Bullets of Fortune, Author | Huang Yanhua, Editor | Mr. Egg
The “rich” ByteDance has “moved the knife” on its education business again.
According to LatePost, Yang Kang, the head of Byte Education’s hardware business, will be transferred to the Business Strategy Office, and Yang Luyu, the first head of the business, has also resigned at the end of June. Prior to this, there were media reports that ByteDance’s education and game businesses had launched a large number of layoffs. Among them, about 80% of the education business had been laid off, and the team size after the layoffs was about 1,000.
According to “Bullets of Finance”, the layoffs of this vigorous education have affected almost all business lines, and the intelligent hardware team of vigorous education is one of the “hardest hit areas” of the layoffs. At least 50% of the thousands of people will leave, and In the future, Dali Intelligent Learning Lamp will no longer release new products.
Obviously, vigorous education, which was once burdened with ByteDance’s great expectations in the field of education, has shown signs of fatigue, and the development of its smart hardware business is not as good as expected.
Since the implementation of the “double reduction” policy, many education companies have shifted some of their focus to the intelligent education hardware business. Is the unsmooth development like vigorous education a case or a common phenomenon? What are the difficulties for enterprises to develop intelligent education hardware business? A personnel “cleaning” is about to start in the intelligent education hardware industry?
01 Vigorously and intelligently lay off more than 50% of employees
Objectively speaking, ByteDance once attached great importance to intelligent education hardware.
In January 2021, ByteDance announced on a small scale that the Neostone Lab established by the original Hammer Technology team was merged into the educational hardware team led by Yang Luyu, the original founder of Musical.ly. The merged hardware team will focus on the education field and will no longer develop other unrelated products such as Nut phones and TNT monitors.
“We are optimistic about the prospect and value of educational hardware. In order to enhance the research and development capabilities of the educational hardware team, Neostone Labs will merge with the desk lamp team to form a Dali intelligent team, focusing on educational hardware.” The relevant person in charge of Dali Education has publicly stated.
In September of the same year, Guagualong, a brand of vigorous education, announced the launch of a smart writing pad to explore writing with smart hardware. In November, ByteDance adjusted its organizational structure. In ByteDance’s education business, intelligent hardware has become one of the four major focuses.
Of course, the vigorously intelligent hardware business, which was once highly expected, has achieved fairly good results. Take the Dali intelligent learning lamp as an example. This intelligent hardware product was officially launched by Dali Education in October 2020. According to the company’s official data, as of December 2021, the cumulative sales of this product have exceeded 1 million units.
Everything looks good, but the Dali Intelligent team has not escaped the fate of layoffs.
In June of this year, ByteDance was revealed to have laid off about 80% of its education business, and the team size after the layoffs was about 1,000. At least 50% of the thousands of people in the intelligent hardware team of vigorous education will leave, and there will be no new products released in the future.
The reason for the massive layoffs of the vigorously intelligent team is related to the less-than-expected development of its intelligent hardware business. You must know that although the layoffs of this vigorous education have affected almost all business lines, the degree of impact on different business lines varies. For example, the career development business line is less affected.
If placed in the past few years, even if the development of the intelligent hardware business is not as good as expected, the vigorous intelligent team is very likely to avoid the fate of being laid off. But the problem is that ByteDance is showing more and more listing intentions to the outside world, and it pays special attention to the performance of the team and each business line.
As early as 2020, it was reported that ByteDance was studying the spin-off of Douyin to go public in Hong Kong, and negotiated listing arrangements with investment banks such as Goldman Sachs. Then in March 2021, Zhou Shouzi announced that he would leave Xiaomi and join ByteDance as CFO. At the same time, there is no shortage of heated discussions that it may put the IPO on the agenda.
In April this year, ByteDance announced that Gao Motion would join ByteDance, replacing Zhou Shouzi as CFO; in May, according to the website of the Hong Kong Companies Registry, ByteDance (Hong Kong) Co., Ltd. had changed its name to Douyin Group (Hong Kong) Limited, effective May 6, 2022.
In addition, several other companies under ByteDance have also successively changed their names to “Douyin”. The Tianyancha App shows that ByteDance Co., Ltd. was renamed Douyin Co., Ltd.; the National Enterprise Credit Information Publicity System shows that Beijing ByteDance Technology Co., Ltd. was renamed Beijing Douyin Information Service Co., Ltd.
The listing intention is too strong, and the factors of the general environment are superimposed. For ByteDance, cost reduction and efficiency increase are naturally particularly important. The development of the intelligent hardware business is not as good as expected, and it is not difficult to understand that it is “moved” by ByteDance.
Xiao Feng, who has been engaged in the intelligent education hardware industry for a long time, said to “Bullet Finance View” that vigorously education has not yet opened up the sales channels of intelligent hardware, such as the vigorously intelligent learning lamp, which not only involves online sales scenarios, but also involves various offline sales. stores, and the opening of various related markets.
“From the perspective of the industry, Byte has never done education hardware business before, nor does it have the genetic advantage of intelligent hardware track.” He added.
It should be pointed out that the difficult predicament of vigorous education does not represent the entire intelligent education hardware industry.
For example, NetEase Youdao, according to the financial report, in the first quarter of 2022, the company’s smart hardware revenue reached 253 million yuan, an increase of 25.25% from 202 million yuan in the same period last year. According to NetEase Youdao, the first batch of Youdao smart learning lamps has been sold out within a month since its launch in early April 2022.
Another example is iFLYTEK, the latest data shows that from January to February 2022, the total sales of iFLYTEK smart hardware reached 83.13 million yuan, a year-on-year increase of 13.2%.
02 Financing or worse?
As for the impact of the layoffs of the vigorously intelligent team, the industry has different views.
“As far as I know, the current layoffs of the vigorously intelligent team have little impact on peer companies. Except for the well-known heads or giant companies, there are actually many smart education hardware companies on the market. Every year, many players die, and many others. New players enter. Each company has its own business and strategic focus judgment, and is not easily affected by layoffs by peer companies.” Xiao Feng analyzed.
Feng Hao, an executive of an off-campus training institution, told the “Bullets of Finance” that the layoff of the vigorously intelligent team may dispel the idea of some new players entering the intelligent education hardware track.
After all, giants like ByteDance have not achieved good results in the intelligent education hardware industry. It is obviously not easy for other new players with less obvious advantages to survive and gain a firm foothold in the intelligent education hardware industry.
“The layoffs of the vigorously intelligent team may make it more difficult for peer companies to raise funds.” Feng Hao mentioned.
You know, the previous intelligent education hardware market has been cold. According to public market data, a total of 44 financing events will occur in the smart education hardware market in 2021. Compared with 2020, the number of financings and the overall scale of financing will shrink slightly.
Today, the news of layoffs from the vigorously intelligent team is bound to make capital more cautious.
The result of the difficulty in financing is likely to be that most intelligent education hardware companies have started to “reduce costs and increase efficiency”. Personnel shrinkage is the most direct and effective way for intelligent education hardware companies to reduce costs. At the same time, intelligent education hardware companies will focus more on profitable business lines, optimizing or even stripping off loss-making business lines.
03 Where is the difficulty of intelligent hardware?
Although vigorous education cannot represent all peer companies, its disappointment in intelligent hardware has also brought some industry difficulties and problems to the surface.
such as content-level difficulties. Different from non-learning intelligent hardware, learning intelligent hardware has an important section-content in addition to the necessary hardware and AI algorithms. “After all, what students learn is the content embedded in intelligent hardware.” Xia Xia, head of NetEase Youdao intelligent learning hardware product sales, said to “Bullet Finance View”.
As we all know, there are differences in the versions of textbooks used in different regions and even different schools. If intelligent education hardware is to be sold nationwide, it is necessary for companies to create diversified content to suit the needs of students in different regions and even different schools.
The content in the intelligent hardware is divided into textbook content and value-added content. “Textbooks are important, but after all, every student originally has them. It’s nothing more than electronic or paper versions. Whether someone will tell you the difference, but how to improve students’ academic performance, the value-added content is particularly critical.” Summer Say.
Whether the content embedded in the intelligent hardware is reasonable, whether the provided method is effective, and whether it can judge the real demands of students, obviously requires a lot of accumulation.
In addition to doing a good job in content, intelligent education hardware companies also need to have certain funding capabilities.
The model of traditional education and training is usually that institutions can start enrolling students after preparing courses and teachers, and then arrange teachers to attend classes after students have paid tuition in advance. However, before the intelligent education hardware products are delivered to users, enterprises need to pre-produce a batch of intelligent education hardware products.
“For example, if you plan to sell 100,000 smart learning lights, then you must at least ask the factory to stock thousands or even tens of thousands of them in advance, and the pre-production of these products, plus early user research, content research and development, and product design, etc. It’s actually a lot of money to come down.” Feng Hao analyzed.
And this cost recovery is difficult to complete in the short term. Feng Hao said that for the powerful big players, the challenge is not too big. However, for some enterprises without established channels and user markets, the challenges facing the development of intelligent education hardware business are enormous.
Summer also expressed similar views. For players such as Youdao with strong strength or good reputation in the industry, they do not need to pay all the funds in advance. After all, many cooperating factories are willing to share some risks out of high trust and confidence in the final sales of brand merchants.
“For example, some factories can prepare materials for brand merchants in advance, and when the delivery is over, the brand merchants will pay the factory. Even for some smart hardware products, the distributors pay the brand merchants first, and the brand merchants pay the upstream suppliers. ‘ said Summer.
However, for many new players, their credit in the industry is usually not high, and it is difficult to convince partners to share risks. “And if the brand merchants want more orders, the factory will be more afraid to take them. After all, if the brand merchant falls, the factory may have nowhere to go with debt.” Xia Xia analyzed.
In addition, intelligent education hardware companies also need to have strong channel capabilities. According to Feng Hao, traditional educational hardware manufacturers represented by BBK have their offline terminal sales outlets penetrated into counties and even townships, and have built a relatively complete distribution agency system.
In contrast, latecomers such as NetEase Youdao and iFLYTEK are inferior in the layout of offline channels. “They mainly complete the sales of smart hardware products through online e-commerce platforms.” Feng Hao said.
Once the pre-produced smart hardware products cannot be sold, it will become inventory, which is a direct pressure on the enterprise, and the inventory will be depreciated after a period of time, because the inventory products that exceed the time must be dealt with at a low price .
In this regard, NetEase Youdao has given its solution. Xia Xia mentioned that the logic of NetEase Youdao channel construction is that where consumers usually buy smart education hardware products, the company will go to these places to cover them accordingly. At the same time, the company will also expand the offline market by setting up provincial and prefectural-level agents.
“We will reach consumers in a more flexible way. For example, some online orders under the epidemic will be delivered by local offline dealers, because this is more efficient.” Xia Xia said.
Of course, smart education hardware companies also need to think about “how to further reduce the purchase threshold for consumers”. In Feng Hao’s view, the current prices of smart education hardware products on the market are generally on the high side, with an approximate price range ranging from 1,000 to 10,000 yuan.
In addition, intelligent education hardware companies need to think about “how to improve students’ learning initiative”.
As we all know, the sense of gain is the reason why children fall in love with learning. Learning is essentially a problem-finding and problem-solving activity, so real learning should be undertaken by the learner himself. And all kinds of intelligent education hardware mainly do the work that is output to children, and will continue to dissolve such a learning process. Over time, children’s willingness and ability to actively learn will decline.
In this regard, NetEase Youdao does not seem to be worried. Take Youdao smart learning lamp as an example in summer, the learning lamp will set 3-5 small tasks for children every day, and children can get corresponding rewards when they complete the established tasks that day.
Another example is the Youdao AI learning machine. Students can do a few questions, and the learning machine can roughly judge which knowledge points the student is weak in, and improve the weak parts of the student. After he overcomes the weak points, Then give positive feedback, and the entire learning process is recorded and traceable.
“We will try our best to reduce children’s pain in the usual learning process, but let them enjoy the fun and convenience of learning more, and finally develop the habit of active learning.” Xia Xia said.
04 Conclusion
The transformation and entry of K12 institutions, the accelerated deployment of Internet technology giants, and the counterattack of traditional hardware manufacturers have all made the originally “tepid” intelligent education hardware track suddenly lively.
However, through the layoffs of ByteDance this time, people can see that there are many problems in the intelligent education hardware industry for a long time, which also sounded the alarm for the peers, and what new measures will Vigor Education take after this adjustment , people inside and outside the industry are paying attention.
Although the intelligent education hardware track has broad prospects, it does not mean that any player can enter the game. It is foreseeable that with speculative psychology, irrational and blind entrants will eventually leave the market.
(Xiao Feng is a pseudonym in the text.)
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