How can you become a star without money?

Chapter 78 With so many choices, who should I favor? [2 chapters, please subscribe]

"As you can see, due to investment failures in the past few years, this venture is somewhat of a desperate gamble. However, it's not that we lack funds, but we are indeed a bit strapped for cash. Otherwise, the R&D team wouldn't be so small, and the R&D cycle wouldn't have been so long."

However, what I lack most right now is resources for promotional partnerships and technical talent after the software is launched. Korea's top technical talent has been snapped up by large companies, and even high salaries may not be enough to poach them.

"Those people outside are all old partners who have been with me in this business for over ten years. If Mr. Wang can offer some assistance in this area, we can have a more in-depth discussion." Jin Fanzhu organized his thoughts and extended the invitation.

"Marketing and promotion, right? You mean packaging?" Wang Yao raised an eyebrow slightly. "I'm not very capable, but I run a film and television distribution company in China. May I borrow your computer?"

Kim Bum-joo agreed and watched as Wang Yao visited a Chinese website. Although he couldn't understand Chinese characters very well, he quickly understood what the website was showing with Wang Yao's explanation.

"You mean? You spent a month turning a small-time model into a star with over three million followers? My God, how is that possible? Even Jun Ji-hyun probably doesn't have three million followers." Kim Beom-joo's eyes widened in shock.

Koreans calculate fans differently than Chinese people, but in terms of popularity, Qu Shou can currently crush Jun Ji-hyun.

“Although I haven’t done any promotion or marketing for similar platforms, I think there’s no difference between packaging a platform and packaging a person. It’s all about finding the right fans, retaining them, and ideally getting them to spend money on us. Essentially, the logic is the same, right?” Wang Yao said with a confident smile.

Kim Bum-joo was infected. "Amazing, Mr. Wang is truly a heroic young man."

"I wouldn't dare say that, I'm just a bit more diligent than others." Wang Yao waved his hand modestly. "As for technical talent, my team in China has pretty good capabilities in mobile development. Perhaps we can invest together, conduct joint research and development, and make progress together."

How could there be such a perfect partner?

A moment of suspicion flashed through Kim Bum-joo's mind, because it seemed too much like a carefully orchestrated scheme against him.

But he quickly put it out of his mind.

"Would it be convenient for me to communicate with your technical team first to get to know them better?" Jin Fanzhu rubbed his hands together.

"No problem, I'll make a call." Wang Yao called Cai Haoyu and explained the situation.

Although she found it somewhat inexplicable, Cai Haoyu did not refuse and began a cross-border discussion with Jin Fanzhu.

The discussion lasted for nearly half an hour, during which Kim Beom-joo's emotions fluctuated greatly, and a dispute even broke out.

"Mr. Wang's team members are very insightful," Jin Fanzhu concluded with a fair assessment.

Wang Yao frowned slightly, not expecting a problem to arise during the technical exchange.

But it doesn't matter. This kind of cooperation can't be settled all at once. After all, it's not like a one-off project in the entertainment industry.

“However, he is indeed very impressive, I acknowledge that.” Jin Fanzhu changed the subject.

"Hmm?" Wang Yao raised an eyebrow slightly.

"Mr. Wang, how do you plan to cooperate?" Jin Fanzhu asked with a smile.

"It mainly depends on President Kim's requirements. I'm just cooperating. Whether it's technology or marketing, I certainly don't understand the Korean market as well as President Kim. The only things I can offer are funds, technology, and some creative connections."

However, I plan to invest in some entertainment industries in Korea. If there is an opportunity to promote our software, it will be a long-term boost. At least the endorsement fees will be at cost price.

"Oh, by the way, I'm currently planning to invest in a parent-child variety show and I've already contacted Kang Ho-dong. If we really have the opportunity to collaborate, we can get the main sponsorship for the show and promote our own software on the program. We'll definitely put in a lot more effort, and we certainly won't waste money on publicity." Wang Yao said seriously.

"Huh? They're investing in the entertainment industry? What kind of family-oriented variety show? Who's the PD?" Kim Bum-joo was shocked again.

He felt that his communication with Wang Yao was like unpacking a nested doll.

The boy in front of him seemed to hold endless surprises waiting for him.

Just when he thought he had fully understood, he would bring out something new.

This damn mystery.

It's so addictive, damn it!
Wang Yao gave a brief introduction to the parent-child reality show "The Return of Superman" that he discussed with Li Rongyu.

"Could you invite Sung Dong-il? I know him very well, and his child is just four or five years old, which would be perfect for your program!" Kim Beom-joo immediately became excited.

He is also very interested in the entertainment industry. When he is under a lot of pressure, he likes to watch variety shows and Korean dramas, and occasionally he also follows girl groups, all in order to become one of the biggest entertainment assets in Korea.

"If it really is us as the title sponsor, it's definitely a minor issue," Wang Yao said with a calm smile.

Sung Dong-il is considered a powerful actor in Korea, best known for his role as the father in "Reply 1998." He was also a guest on the first season of "Dad! Where Are We Going?", which makes him a suitable fit for the role.

Wang Yao was originally considering where to find a suitable title sponsor for this collaboration, but he didn't expect Jin Fanzhu to be so proactive. If this variety show is successful, the ratings will definitely not be a problem.

If it becomes popular, it can be directly transferred back to China. Whether it's selling the copyright or producing it themselves, the profits are expected to be considerable. Milk powder brands are currently the biggest money-makers.

“Title sponsorship is a must, but Mr. Wang, the production cost of a top-tier variety show is around 40 billion Korean won (300 million US dollars), so exclusive title sponsorship is indeed a bit too expensive.” Kim Bum-joo regained his composure.

“The TV station probably won’t allow us to have an exclusive contract. Our advantage lies in the product placement within the program, which is definitely the most cost-effective option,” Wang Yao smiled.

“Yes, yes, the purpose is product placement and promotion, not for variety shows.” Kim Bum-joo scratched his head, suppressing his excitement. “Then I’ll be frank, the original valuation of this project was 1000 million US dollars.”

His personal investment budget was 5 million, and the angel round premium of 100% is actually a bit high; normally it's around 30%.

Wang Yao didn't know how much investment Jin Fanzhu's project involved, but he could sense that the valuation was highly inflated. After a moment of contemplation, he said...

"Last year, Facebook gained 2 million users, with marketing costs of around $1.2 million, which translates to a customer acquisition cost of $0.6 per user. Advertising revenue reached $7.7 million, and the total number of users reached 3.5 million, with each user valued at around $2.3 per user."

However, our software doesn't have the same user engagement and content virality as Facebook. Currently, its functionality is limited to a communication tool, making it difficult to match customer acquisition costs with user value.
However, there is no doubt that the customer acquisition cost will not be less than $5 per user, because Korea's user base is only less than 20 million, and the customer acquisition cost will increase in the future.

Although we are very optimistic about this product and have a lot of confidence in it, the product hasn't been launched yet, and the profit model is unclear. Based on this valuation, we'd need at least 100 million core users.

KakaoTalk has low customer acquisition costs because it has no competitors in the short term, but Myspace is different. In China, Weibo and Tencent have almost monopolized all users, so the cost of poaching users from them would naturally double.

Jin Fanzhu felt a chill in his heart after hearing this. He felt that he had already taken Wang Yao seriously enough, but he still underestimated him. If he could reach 100 million users, even with a low customer acquisition cost, the operating cost would definitely exceed 500 million US dollars. 50 users would be more reasonable.

He felt like he was communicating with a Wall Street investment banker who was actually young in appearance.

This level of business acumen is impossible for a young man in his early twenties; there must be a think tank behind him. It seems that Wang Yao's family has been studying the internet industry for a long time.

Difficult.

Kim Fan-joo fell silent.

Wang Yao stared at the other party. In fact, he knew in his heart that Jin Fanzhu's premium was justified. As one of the first communication software of its kind in the world, it would definitely cause a sensation after its launch. The free text messages and calls alone would be enough to compete with traditional communication.

But what he was betting on was the uncertainty surrounding Jin Fanzhu's monetization and profit model.

Unlike social media platforms, social communication software cannot generate stable and substantial advertising revenue through hard-sell advertising. After all, it's unacceptable to watch a 30-second ad before making a 10-minute call, and for the call to be interrupted if the ad isn't watched, that would be too disheartening for customers.

Therefore, as a pure communication tool in its early stages, even with a social networking label, it was difficult to monetize. Its logic was to first build up its user base, and then advertisers would naturally come to it. Even if advertisers didn't come, investors would. At worst, it could keep burning money to maintain its operation until it found a way to monetize.

If they can't find a partner, they'll declare bankruptcy and fail. But for an angel round collaboration, this premium is indeed too high.

Kim Bum-joo himself felt a little guilty, and the situation reached a stalemate.

“However, I agree with this valuation. But how about we compromise?” Wang Yao spoke first.

Jin Fanzhu was taken aback.

“Kakao’s technology shouldn’t be too difficult to get started with, but there will still be costs involved in the subsequent research and development. Why don’t we share all of Kakao’s technology with me, and then develop all the technology together as a joint venture, with each of us contributing 5% of the shares?” Wang Yao proposed his first suggestion.

"That's equivalent to $50 in technology development costs?" Kim Bum-joo frowned; this number really bothered him.

Kakao's current technology cost is approximately $10, but developing more features in the future will definitely require additional investment, which may exceed $50, or it may not reach that level, since the cost of the real core technology is immeasurable.

Wang Yao clearly wanted to use human and technical costs to offset the technical costs of sharing Kakao.

"Mr. Wang wants to create a similar software in China?" Jin Fanzhu raised an eyebrow slightly.

“I don’t have that ability. There’s a terrifying social media tycoon in China. Any technology is meaningless in its eyes. I just want to use manual labor to spread out the costs. Maybe in the future, Kakao’s technology can be sold to recoup some of the losses.” Wang Yao smiled.

In fact, Wang Yao also made a profit from the price difference. The cost of domestic programmers is much lower than that in Korea. The labor cost of 50 in Korea is less than 25 in China. Since [Star Tour] already has to support a lot of employees, this cost can be spread out.

However, it's true that they'll sell the technology later. Once Tencent sees Kakao's rise, they might want to learn from it. At that time, Wang Yao can just sell it to them as a package, saving them the trouble of copying it themselves.

However you look at it, it's a win-win situation. It's like exchanging the $5000 in labor costs that would have been incurred for shares worth $50 million or even $5 million in the future.

"It should be possible, but some core technologies that I developed myself will not be shared," Jin Fanzhu said in a deep voice.

“No problem,” Wang Yao readily agreed.

“Under the principle of equal voting rights for equal shares, I will give up a maximum of 25% of the shares, at a discount of US$250 million,” Jin Fanzhu said in a deep voice.

“I don’t need equity. We can sign a permanent nominee agreement. Unless there are extreme circumstances such as bankruptcy, all my shares will be handed over to President Kim in the future.” Wang Yao said with a warm smile.

Equity generally includes two types: self-interest rights and public interest rights. Only equity can influence the company's operations. Most founders have a strong desire for control over equity, fearing that their hard-earned company will be ousted due to equity struggles and maneuvering.

Jin Fanzhu was stunned. Looking into Wang Yao's clear, innocent eyes, he felt a deep sense of guilt.

He felt as if he had truly seen an angel.

Investors who don't want any equity and completely trust the founders!

They actually charged such a high premium.

Damn it!

Having been mired in the mire of capital for too long, the idea that all investors are vampires has become ingrained in their bones!

I'm so ashamed, utterly ashamed!
Kim Bum-joo felt a ray of intense sunlight shining into his dark and desolate world.

“Mr. Wang, equity is actually quite important.” Jin Fanzhu opened his mouth to explain the importance of equity, but was interrupted by Wang Yao’s wave of his hand.

"President Kim, there's no need for further words. I completely trust you." Wang Yao's sincere and warm smile almost made him feel ashamed of himself.

I have complete trust in President Kim.
How long has it been since anyone said that to him?
So many years of ups and downs have long since eroded his trust and appreciation for the beauty of human relationships.

Language can lie, but nominee shareholding cannot.

Kim Beom-joo felt that he believed in the light again.

“Alright.” Jin Fanzhu’s eyes darkened. “Since Mr. Wang trusts me, I will certainly not let him down. With 44% plus the 5% technology exchange, I can give you a maximum of 49% of the shares. However, if Mr. Wang wants to withdraw his shares in the future, I have the sole right to acquire them.”

The sole acquisition right is completely different from the preemptive right, meaning that this portion of the shares can only be sold to Jin Fanzhu.

How cunning you are, you old fox.

Can't this move you?
Capitalists are indeed wolves that can't be tamed.

Wang Yao maintained a smile on his face, but inwardly he was cursing, "Of course, I will always be President Kim's most trusted partner, and I also hope that if President Kim ever wants to sell his shares, I will be the sole buyer, because I hope that when you can't hold on any longer, you'll look back and know that I'm still supporting you."

Is this what mutual trust looks like?!

Jin Fanzhu was deeply moved and grasped Wang Yao's hand, saying, "I will not let you down!"

“However, this valuation…” Wang Yao looked troubled.

“Let’s estimate it at 600 million. 44% is 264 million US dollars. Mr. Wang’s trust is invaluable.” Jin Fanzhu laughed heartily, bringing the price back to a normal premium range.

He cashed out 264 million yuan directly from the angel round and also has a technical team that he can use at will, which is definitely a good deal for him.

Because he had always harbored a secret pessimistic view about this project.

Once this product has more than 100 million users, it will inevitably face resistance from the traditional telecommunications conglomerate SK Group.

At that point, let alone 264 million shares, you might not even be able to cash out 2.6.

Future valuations are always bubbles until they are realized; this is the lesson he learned from his years of failures.

The collaboration with Wang Yao was merely to see if the external forces behind Wang Yao could lend a hand at a crucial moment. He had already figured out that the media group behind Deng Wendi could be utilized.

Only by withstanding the encroachment of local conglomerates and surviving can one have the opportunity to earn more money. Shares are important, but they are far less important than equity.

However, what Jin Fanzhu didn't know was that all his worries were insignificant in Wang Yao's eyes. He was more than happy that Jin Fanzhu would be defeated by the conglomerate so that he could get all the shares, because the trend of the Internet was an irreversible process of the times.

Traditional telecommunications is difficult for even conglomerates to shake, and now that an opportunity to rise up has finally presented itself, neither Korea nor international capital will let such an opportunity to erode Korea's telecommunications market pass by.

Thus, after initial communication that satisfied both parties, a preliminary agreement on cooperation was reached. Naturally, more details would need to be discussed later, since this investment was not like investing in Li Rongyu's small company.

With an investment totaling nearly $300 million, Wang Yao still hasn't figured out where to get the money.

Should we take out another loan from Tianhuo Media?
Or could we use the promotional fees from the variety show to offset part of the cost?

Or find some kind-hearted people to sponsor a sum of money.
With so many choices, which one should you choose?

　感谢天使魔鬼、※720※、@点点@、随便、河南坏小子、美丽的星星心、蒙着眼睛会很强、星雨泪、一山一水一神仙、夺命的爱、忍耐力、米闲、贺长歌、5斗米、隐士2016、倒头就睡了、大数据总给我推送美女、ld123、baosha、蓝海的左岸、水粉誓言、all4u、好大一颗、哈喽了恶心、大气自律果敢、，墨鱼ol、记忆、袅袅婷婷袅袅、空尘、1919、风往北吹司隶校尉、妒海wyc、书友20190521193312522、书友20220129234202104、书友20210301106571728236、书友20190522091626772、书友20240516761_CA、书友20230710000201660的推荐票支持~万分感谢！

(End of this chapter)