How can you become a star without money?

Chapter 60 The Bet [Please Read On]

The special episode of "Campus Belle is Here" has almost finished filming, Gulnazar's exams are over, and we even managed to snag some footage of Dilraba Dilmurat and Zhong Chuxi, as well as Zhang Yuqi's pending collaboration. It's been a very fruitful day.

"Then go call Auntie, let's head out. Where are you going, Reba? I'll take you there?" Wang Yao asked with a smile.

“Brother, you go back first, don’t worry about me. Today, Mom and I are having a gathering with our fellow villagers.” Naza whispered in his ear, “It turns out that besides me and Reba, there are a total of 10 fellow villagers participating in the art exam. I’ll help you find a few more.”

Wang Yao was stunned. He hadn't expected there to be so many students from northern Xinjiang this year, so it couldn't be a coincidence.

"Okay, you guys have fun. If you have any problems, call me or Ni Ni." Wang Yao nodded, nodded to the other two girls, and returned to the car to send messages to Ren Quan and Luo Hongming.

"Huh? Isn't that Ren Quan? Nazha, did your company sign with Huayi?" Zhong Chuxi looked at Ren Quan with some surprise as he got into the same car.

“No, my company is called Skyfire, and Quan is my brother’s friend,” Naza explained.

"Then your brother is the boss's son?" Zhong Chuxi imagined the relationship: handsome man and beautiful woman, brother and sister, it was easy to guess.

Basically, Wang Yao is a rich second-generation with some connections in the entertainment industry, and he and Gulnazar are in a romantic relationship.

Tsk, that brat has such a lucky life.

“No, my brother is the boss, the big boss,” Naza explained again.

"Wow? So young, and his family already owns a company for him?" Zhong Chuxi was shocked again before she could even start to feel envious.

boss?

It's impossible for someone of that age to be a self-made millionaire; he must be a top-tier second-generation rich kid.

Oh dear! She really got to spend all that money!
"It's not run by his family, he runs it himself, I think," Naza replied, though she seemed unsure.

"It must be a family business, otherwise they couldn't have made Ma Ruo so popular," Reba said seriously with a straight face.

"Huh? Ma Ruo? Is that the BMW-driving sister Ma Ruo from recently? I'm a fan of hers! Is she from your company?" Zhong Chuxi was both surprised and excited.

She has an outgoing personality and is a self-reliant individual. She thinks that Ma Ruo's comments on Weibo are like a queen's speech, which is so cool.

"Hehe, let's keep it low-key. My brother doesn't allow us to publicize this, but if you want to meet, I can help you arrange a meeting."
"How about I treat everyone to a movie tonight? Sister Ruo has free private screenings every night, we can cover it up, hehehe." Naza's face was full of smugness, her vanity was exceptionally satisfied.

Seventeen or eighteen is the age of vanity. She was usually suppressed when she was around Wang Yao, but among her peers, she could indeed be considered superior.

"Go, go, go! I want to see him in person!" Zhong Chuxi was extremely excited.

"Won't this be a bad idea? There are more than ten of us," Dilraba said, worried about the high cost.

"It's okay, I'll just pay. I've saved up a lot of pocket money recently," Naza said with a generous wave of her hand.

On the way back, Wang Yao asked Ren Quan for information and finally understood.

It turns out that the Shanghai Theatre Academy has a targeted training program for students from northern Xinjiang/northern Yuan this year, so it may recruit about twenty recent graduates of the right age. That's why there are so many people from Nazha's hometown.

However, it seems that Nazha's mother was unaware of this news.

Wang Yao only knew that the Northern Frontier/Northern Yuan had an advantage, but he didn't expect it to have such a big advantage. He still needs to learn more about the Zhengce strategy.

After leaving the Shanghai Opera House, Wang Yao was sent back to the company by Ren Quan, who then helped Ni Ni, Cai Haoyu, and others complete the company's registration procedures.

We first paid 50 yuan into Cai Haoyu's [Spark Games Co., Ltd.] as start-up capital.

They also developed Xingyou Company's first official project, an iOS mobile game called "Fruit Assassin".

Wang Yao couldn't possibly pass up this low-budget game that generated hundreds of millions of dollars in revenue.

This game became a bestseller precisely because of its minimalist design, so Wang Yao didn't make any unnecessary changes in the early stages and stuck with the original settings.

However, since the original game used the Japanese ninja culture IP, Wang Yao naturally had to change it to a style with Chinese cultural elements. Entertainment games are excellent carriers of cultural output, and if the effect is good, they can also get a lot of preferential policies.

The gameplay is the same in the early stages. Later on, a series of skins will be released to increase revenue, such as different special effects for various famous Chinese swords, character kill effects, etc.

Cai Haoyu calculated that if the four of them had a budget of about 300,000 yuan, they could launch the product in five months.

But Wang Yao demanded that it be available within April, at any cost.

Because if nothing unexpected happens, the original team has already started development and launched it in mid-April. It seems that three people worked on it for five or six months. If the budget doubles, it should be able to be completed within two months.

Even if they are released at the same time, Wang Yao is not too worried, because he still has many operational trump cards. Just by finding a large number of YouTube broadcasters to promote the product, he is already ahead of several other promotional versions.

Although Cai Haoyu didn't know why Wang Yao was in such a hurry, as it was the first project to demonstrate its strength to investors, he would definitely go all out.

With the new company established, a decent office location was needed. After considering all options, Wang Yao concluded that both companies were legitimate startups and did not require a prime location in the CBD.

Therefore, the priority for office location should be the office environment and ease of recruitment.

After searching around, he finally settled on a comprehensive community called Thames Town near Songjiang University Town. This community left a deep impression on Wang Yao. In his previous life, a little internet celebrity he was very close to bought a villa in this area. The environment was good, quiet, and the price was not expensive.

This town is quite unique, a community that combines tourism, commerce, leisure, and residence. It's famous for being the filming location for most of the lavish scenes in the movie "Tiny Times." And just across the river is the famous Songjiang University Town, making it convenient to recruit fresh cattle and horses.

Wang Yao inquired and found that housing prices were still quite cheap. Villas were around 30,000 yuan per square meter, starting from 400 square meters, while residential buildings outside were over 10,000 yuan per square meter. At its peak, the price only tripled.

If rented out, a semi-furnished villa, over 400 square meters with a yard of over 100 square meters, would fetch 200,000 yuan a year. It could accommodate about 15 to 20 people for office work, and it would be a comfortable place to work, which would be sufficient for early-stage development.

Based on the rent-to-price ratio, it is about 1.7%, which is considered a medium rent-to-price ratio. There is some bubble and little investment value, but it is very cost-effective as office space. For office buildings of the same size, the price in a medium-sized location will be double, and if it is in the core area of ​​Lujiazui, it will be even more expensive.

With an occupancy rate of less than 30%, the community is perfect for stay-at-home guys like Cai Haoyu. It integrates living and working, with community stores right outside the door, and no one bothers you. If you need programmers, you can just go to the neighboring Shanghai University of Technology and Shanghai Huazhong University of Science and Technology to recruit people. It's economical and affordable.

This town was developed in cooperation with the district government, but because the supporting facilities have not reached the corresponding level, the occupancy rate and commercial value are currently very low, and the property leasing is all under integrated management.

On the same day that a suitable building was selected, a contract was signed with the town's property management company. The land was used as office space for Tianhuo's 'SJ District Company', paid for through the company's public account under the name of Tianhuo Media.

The finance department didn't even ask why we wanted to open a branch office; they just approved it directly.

If you ask, it's because we value the outstanding student body of the Shanghai Visual Arts and Shanghai International Studies University.

The fact that they were working in a villa right from the start, and in a luxury villa area at that, made Cai Haoyu and the others realize what it meant to be valued. Their already high level of enthusiasm became even higher.

In comparison, the office space of [Spark Cooperative] appears rather shabby. Considering the commuting and accommodation costs for employees, Wang Yao could only find an office building closer to the school, with a rent of 500 square meters and 50 yuan per year. He hadn't dared to choose a better one yet, otherwise the price would have soared to 100 million yuan per year. It has to be said that even within Shanghai, prices in different districts have begun to differ drastically.

This money will have to come out of the public account of [Spark Cooperative] and can no longer go through the accounts of Tianhuo Online Media. However, with the revenue from the online store, this amount of money is nothing.

After seeing the villa office area first and then the dilapidated office building, the difference was definitely huge. However, Wang Yao comforted Ni Ni, saying that once the company made money, he would design and build an office building himself, leaving her five floors to do as she pleased and experience the atmosphere of running a business.

Ni Ni accepted the boss's promise and began designing the functional layout of the office space. Initially, the space would primarily be used for e-commerce delivery, with one half serving as a warehouse and the other half as a space for customer service, operations, and other execution positions. It could accommodate approximately 80 people, all of whom were selected through campus recruitment and would be assigned to outsourced operations in the future, working in teams.

After spending a day and a half handling the initial matters and plans for the two companies, Wang Yao received another invitation from Ren Quan.

"Brother Quan is really something, quick and decisive, acquiring it so fast?" Wang Yao was stunned when he heard the news that Ren Quan had acquired Guevara.

I thought that for a project that was already showing promise, the founder would hold off for a while, or perhaps Ren Quan's offer was too high.

“We got 95% of the shares because you said the offline team was also quite important, but just like you said, they really do rely mainly on manual ticket sales.” Ren Quan scratched his head.

There's an absurd feeling of discovering that there really is a person hiding inside the vending machine.

Ren Quan did not disclose the acquisition amount, but Wang Yao estimated that the maximum valuation would be around 200 to 300 million yuan, because Gewara currently only has two to three thousand members. Although a monetization model has been discovered, it only covers less than 10 cinemas, and the annual revenue is at most around one million yuan.

The founding team probably saw that someone like Ren Quan had his eye on this sector, and thought it would be better to cash out early to avoid being crushed. After all, they were well aware that their model didn't have any moat.

"All technological developments are extensions of human tools and functions, which is normal. Perhaps in the near future, we will be able to achieve true online ticketing," Wang Yao smiled.

“This project is something I did with Director Hu and Sister Juan. After discussing it, we’d like to hear your opinion on cooperation. How much equity do you want, little brother?” Ren Quan asked bluntly.

"What are Quan-ge's expectations for the company's valuation?" Wang Yao asked.

“1000 million.” Ren Quan held up one finger.

Wang Yao frowned and fell silent. Ren Quan's valuation was quite high.

"Brother, don't misunderstand. I'm not asking you to give me money. You can contribute your technology as equity, or you can subscribe to the shares if you wish. But even if you do subscribe, I can only give you a maximum of 20% of the shares. However, you will be responsible for the company's initial development, especially the online part. I can also entrust you with the shares I hold, and you will have equal rights as shareholders," Ren Quan said in a deep voice, the implication being clear.

They don't need management authority in the company, but they do need decision-making power.

However, because Ren Quan trusted Wang Yao, he was willing to entrust Wang Yao with more decision-making power.

From a logical and reasonable standpoint, this shows a great deal of sincerity.

But Wang Yao doesn't like overly complicated companies, so he has another plan.

“I can’t accept something for nothing. Let’s not talk about the technology investment, Brother Quan. But the fact that you dared to make such a big bet because of my words shows that you recognize me. I will not sit idly by. I have a suggestion: let’s make a bet.” Wang Yao chuckled.

Ren Quan thought Wang Yao would refuse because he was dissatisfied with the small number of shares, but unexpectedly, he changed the subject and proposed a bet.

The term "betting" has been appearing more and more frequently in the entertainment industry in recent years.

Ren Quan himself also has a performance-based agreement. He knows very well that those who are willing to take a performance-based agreement are basically confident that they can do things well. This kind of cooperation is actually more stable for investors. The returns may be smaller, but it is safe.

"Tell me, brother," Ren Quan said in a deep voice.

"In the 'CEO performance-based model,' I serve as CEO and am responsible for the company's operations. All revenue I generate is settled monthly."
For revenue up to 1000 million, I want 30% commission; for revenue exceeding 1000 million, I want 50% commission. This is for a one-year term, with no salary.

"In addition, if I achieve revenue of over 1000 million, I need 25% of the company's shares as a reward," Wang Yao said with a light laugh.

"1000 million in revenue? Does that refer to commissions?" Ren Quan was taken aback.

“Of course, Brother Quan should know that I am a very honest person.” Wang Yao nodded.

"At a 10% commission, that's 1 million yuan in box office revenue for the cinema, and that's 7000 tickets sold every day." Ren Quan swallowed hard, his heart pounding with excitement.

He originally had confidence in Wang Yao, thinking that if he could generate 1000 million in sales and 100 million in commission revenue a year, that would be amazing. But he didn't expect Wang Yao to not only be honest, but also multiply that by ten!

He has almost finished calculating the accounts in the past two days. According to the current model of Gewara, a small to medium-sized cinema in Shanghai has a total box office of 200 million RMB per year. (A medium to large cinema has a total box office of 500 million to 1500 million RMB per year, but they are all chains with a stable source of audience and do not need additional traffic. Initial cooperation is difficult.) Therefore, he only calculates the small to medium-sized cinemas. If online ticket sales account for 50%, the online box office will be 100 million RMB per year.

With a 10% commission rate, the revenue is 10 RMB per year per company. After deducting operating costs, the gross profit margin is close to 60%.

If Wang Yao wants to achieve 1000 million in revenue, he needs to expand to 100 medium and large cinemas, or have 50 cinemas with an online ticketing rate close to 100%.

Even if Wang Yao takes 75% of the revenue, the company will actually lose 15-20% based on the gross profit margin.

Startups don't need to calculate the details in the early stages, but if they lose one or two million a year but actually achieve sales of 1000 million, the company's valuation can inflate more than tenfold! For these shareholders, market value is the truly valuable and profitable part.

Because the users retained by the website have additional value, over a year, at least a million users should have been accumulated, right?
Hupu also has millions of users. Those sports-focused community websites can now be valued at tens of millions. The valuation of high-net-worth users in film and entertainment should only be higher.

Ren Quan knew that the internet industry was inherently a money-burning industry. He had already found out that if he could lose a few million every year to build a community website with a million users, the return would be ten or twenty times.

What does this small loss matter?

The losses from the movie "Confucius" are enough for Wang Yao to live off for three years!

"Don't worry, brother. Even if I have to give you my own shares, I definitely won't treat you unfairly. I'll go back and discuss this with Sister Juan. There won't be any problems."
"But there's another thing. Thanks to you, 'Confucius' achieved 5000 million in its opening week, which is a great start and much better than predicted. However, it has clearly lost momentum in the last two days, and the reviews are not very objective (they're full of insults). So, Director Hu, I'd like to ask if you have any other ideas." Ren Quan said with a wry smile.

The box office performance of a movie can usually be seen in its opening week. Even with the huge popularity of Ma Ruo and numerous celebrity-sponsored screenings, the opening week box office was still barely 5000 million, indicating that a loss was inevitable.

That's why Ren Quancai is so invested in the new project—because the movie made him sad.

You have to be good yourself to succeed. If the film quality is poor, no matter how good the marketing is, it's all in vain. It's no wonder that viewers will complain after paying to watch it. Wang Yao isn't a god.

"I can't do anything about the box office. I can only hope that Qu Shou's popularity can boost it. As for the negative reviews, I don't have any particularly good solutions. I can only try to divert attention," Wang Yao sighed.

Director Hu must have been so upset by the criticism that he wouldn't have swallowed his pride and approached him at this time.

"How do you divert attention?" Ren Quan was taken aback.

"Go find President Chi and ask her to find two experts in Korea to express their views, saying that Confucius was actually Korean, and then have a few mainstream media outlets in China reprint it," Wang Yao said thoughtfully.

Ren Quan was stunned.

what?
Can you do this?

(End of this chapter)