How An Editor’s Career Crisis Led To A $500 Million Dollar Startup

For example, the video titled “Architectures’ New Wave” circulated in the architecture enthusiasts scene. Another video about tea was viewed among the fans and lovers of tea. The one about a boutique hotel was widely shared among hotel industry.

Yitiao’s first food video was about a wonton shop.

The reason for this was that not only were the videos highly produced, the protagonists in each video were all individuals who were doing very interesting work in a particular industry. Xu’s decades of editorials work showed its strength in the effective sourcing of these stories.

What became clear was that most of China’s top sites aimed for the mass public audience. Audiences who preferred editorial and highly produced content, although perhaps only 10 percent of the population, were always overlooked. But given the scale of China, that audience alone could be in the tens, if not hundreds of millions.

Mobile Video Growth

Yitiao grew to 6 million followers in seven months. In three years, China’s mobile video audience as a whole would grow from 56 million to 353 million.

Mobile video viewers in China (in 100 millions), with growth rates from 2014 to 2017. Source: iiMedia Research

This ability to pinpoint social, economic, and population trends before they hit mainstream was what had led to the pivot at The Bund nine years earlier. And it seemed that Xu managed to pull off the same transformation once again. His former colleague Dai Guo Feng noted, “In terms of positioning and taste, there is none other like Xu in China.”

How to Retain Followers

To retain followers, the videos’ quality and release schedule both needed to be maintained. Xu thought that the best way to do that was to codify the production process.

They key is to make the sourcing of story, shooting, editing, and distributing of content repeatable and efficient. The team analyzed its previous work and iterated on a template.

The level of detail that ended up in the final template was extremely meticulous. For example, for cinematography alone, the number of long, tracking, panning, and dolly shots were spelled out.

Common camera movements

For narration, a 950-word template was created to establish a logical order of storytelling. It could be used to tell any story in no more than 10 points. In terms of timing, every minute and half, as the audience got bored, a new thread of points were revealed to refresh viewer attention. Another example was to show the most interesting footage at the beginning, because if the first 5–10 seconds weren’t interesting, many viewers would churn immediately.

As a result, the quality of the videos was kept consistent despite not having directors, producers, or scripts. But this method did create some tensions among the team. Xu spoke candidly about how there is a constant struggle between artistic freedom and product discipline.

“Often I have to remind people that they are not here to create art, they are here to build a product. If their goal is to to create art, which is a noble goal, they should pursue that, but not at Yitiao.”

What is the Product?

Revenue soon became the elephant in the room as the audience grew. Naturally, advertising seemed to be the obvious answer.

Given the coarse and ineffective styles of pop-up advertising and blocker videos, the team decided against that early on. They initially focused on native advertising.

Xu pointed out that content and marketing have always been intertwined. He gave the example of Michelin, a tire manufacturer that publishes the renowned restaurant guides. The guides were initially created to helped drive demand for automobiles, back at a time when the auto industry was still at is infancy.

The first Michelin guidebook

That model seemed to be a perfect match for Yitiao. Through videos, Yitiao had attracted a group of viewers who had, by pressing the follow button, informed Yitiao of their desire to keep up with content that showcased more ways of living with quality.

In this sense Yitiao could be the “Michelin Guide” of lifestyle products — a media platform that connects people with products and brands that match their tastes. In order to do that, Yitiao must first discover products, then present them and connect the audience to them.

The team began working on this idea after reach 6 million followers in mid-2015. However, Xu soon realized that just connecting the audience with products wasn’t enough — many of these shops had little to no experience selling products online. Some shops didn’t even have websites or WeChat pages. This meant that there was no way for them to expand beyond one city.

Yitiao Pivots to E-Commerce

The need to for Yitiao to venture into e-commerce was apparent.

Rather than linking videos to shops and websites, Yitiao could integrate both the marketing and selling portions of the experience and allow suppliers to focus on creating great products. This way customers could truly enjoy the benefit of buying directly on Yitiao.

As the team pondered this idea, they soon reached 10 million subscribers. It was clear by then that they had to dream bigger, because there existed a much bigger opportunity than advertising. The hypothesis they came up with was this: “Users love our content, because we showcase interesting products, designers, and independent brands. Why don’t we allow user to place orders right here on Yitiao?”

In late 2015, the team created a lean test. The first item available for sale on Yitiao’s WeChat public account was a series of reprinted vintage textbooks from the Republic of China era (1912–1949). This is a niche item with a relatively high price tag of $120, but it tapped into the buzz around retro books and furniture.

First items sold on Yitiao: vintage books

From a business perspective, the risk was minimal. Having these orders placed in advance would help book publishers budget their prints and eliminate stockpiled inventory. To test the profitability of this model, Yitiao even charged a hefty commission — 30 percent of the sale price. As Xu later put it, “this would be the cost to access the aggregated high-intent audience that individual Taobao shops would not able to find or target on their own.”

The experiment was a surprise to everyone involved. In a mere two days, over 430 copies were sold, grossing $47,000. A week later, the publisher not only cleared its inventory, it had to add more prints to match the influx of new orders. By mid-2016, this book series alone would gross over $300,000 in sales.

This proved Yitiao’s hypothesis to be true and gave the team the confidence to proceed. In addition to making videos, Yitiao began selling products.

Don’t Sell Products, Sell Stories

With the newly hired technical staff, Yitiao built up a robust shopping experience inside its WeChat public account by early 2016. Two weeks after its launch, the account, “Living Hall,” would gross over $1.5 million.

The team continued the technical efforts and launched a stand alone iOS app seven months later. The app and the public account had the same interface so that users could access Yitiao wherever they preferred.

Source : https://medium.com/@TonyJing/how-an-editors-career-crisis-led-to-a-500-million-dollar-startup-c04499002801

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