It was the only moment of relief in two years of anxiety. In November last year, Yang Lei got confirmation that Alibaba Group Holding’s financial arm, Ant Financial Services, would back his bike sharing start-up Hellobike. It meant nothing less than the continued survival of the company which Yang, a serial entrepreneur, had co-founded two years earlier when he was only 28.
A year on and the anxiety is still there, but Shanghai-based Hellobike has survived a brutal shake out in China’s bike sharing industry, emerging in third spot behind two Beijing-based companies, Ofo and Mobike.
“You need to deal with pressure and anxiety everyday when you are an entrepreneur,” Yang told the South China Morning Post over coffee at the Kempinski Hotel’s cafe in Beijing. “I’m already very satisfied to have experienced that brief moment of exhilaration,” he said, referring to Ant Financial’s investment.
Earlier this year, Hellobike announced that it secured 2 billion yuan (US$288 million) in funding from Ant Financial, a case of a little-known start-up being backed by one of China’s most valuable internet companies. That is when Hellobike got the attention of local and international media.
Yet Yang comes across as media-shy and even modest, declining to answer when asked if he is good at dealing with technical problems. The computer science graduate, who earned the nickname “Da Niu” (expert) at college because he always won playing video games, said he does not like to be portrayed as a tech genius. For this interview with the Post, Yang wore a black down-filled coat and dark blue jeans that day, looking more like a college student than the chief executive of a company employing 3,000 people.
Yang said he does not engage in small talk in the office, preferring to get on with the job while listening to light music with his AirPods. In Hellobike’s open space office in Shanghai, the boss sits next to one of the company’s engineers.
However, as the chief executive of the company, he still has to deliver public speech and give media interviews. Two days before speaking with the Post, Yang gave a public speech at GGV Capital’s annual party in Beijing, telling hundreds of investors and the press that Hellobike has already been profitable in 100 cities in China. GGV was one of Hellobike’s earliest backers.
Hellobike currently operates in 300 cities across the country and processes more than 20 million rides booked every day, according to Yang.
When asked if being profitable in 100 cities means losing money in the other 200, Yang replied: “ You can see it that way,” adding that turning a profit is not a pressing goal for him or his investors.
“I believe a business that can serve a mass of users is able to make a profit sooner or later,” Yang said. The only time a business won’t be profitable is if there is no real demand for its products or services, and it relied solely on huge subsidies to stay in business, he said.
He thinks the brutal competitions in the bike sharing business is because the industry is still at an early stage. “We are prepared to subsidise the bike sharing service in the long run,” he said.
As well as gaining ground in first tier cities like Shanghai, Hellobike is integrating itself more into the transport business by integrating Dida, the ride hailing service, into its app, according to Sun Naiyue, an analyst with market researcher Analysys. “It’s a challenge for the company to improve operating efficiency and maintain the ability to raise capital,” Sun said.
Hellobike is a comparative late comer in China’s bike sharing frenzy, starting out in 2016 when pioneers Ofo and Mobike had already raised billions of dollars in capital, going on to dominate the market in the No 1 and 2 position respectively, with Hellobike climbing its way up the ranks to No 3 earlier this year. However, none of the top three have been able to turn a profit.
From the end of 2016 and through the first half of 2017, most of Yang’s time was spent on accounting, specifically calculating how long Hellobike could last with the money it had. At the end of 2016 the bike sharer had 30 million yuan (US$4.3 million) in cash, and that was spent within a month by ordering the manufacture of tens of thousands of bikes, according to Yang. “It is indeed a heavy-asset business,” Yang said.
Yang became determined to get into the bike sharing industry after he used Mobike for the first time in Shanghai, intrigued by the prospect of a business that could serve tens of millions of people. That was enough to motivate him to devote all his time from early 2017 to late that year to meeting potential investors – a total of 200 in all – or an average of one a day.
“I knew I had to impress the investor in our first meeting. If I didn’t, I would totally miss the chance to raise money from that investor,” Yang said. “During that time, we were close to missing the payroll several times ,” Yang said.
But even during the most difficult times, Yang said he rejected offers from a few investors because “their terms were not acceptable,” declining to elaborate on what those terms were or the names of the investors.
Yang’s passion for technology and the internet originated from a Subor video game console that he begged his father to buy him when he was eight. It cost more than 1,000 yuan, considered a luxury purchase in China in the 1990s.
He played video games throughout his teens and up to college where he was given the nickname “Da Niu” (expert) because he always won. Even today, employees and investors at Hellobike still call him Da Niu.
Yang started his first business when he was still at college. It was tech-related but not considered glamorous – selling electronic components to computer repair shops – but was lucrative and enabled Yang to build up a war chest for future ventures.
His next few ventures were related to the internet, helping people find designated drivers and parking spaces online. “Being an entrepreneur is the best way to spend my life,” he said.
Several Hellobike employees the Post spoke to said Yang is quite frugal. He does not have a personal assistant, does not fly business class, and thought the cost of the celebration on Shanghai’s Bund in September to mark the company’s two-year anniversary was not necessary.
However, Yang said he may make an exception and hire an assistant to help him practice English. “I don’t have a plan to expand overseas yet but if that day comes, I hope I’m able to communicate with foreign investors and users in fluent English,” he said.
Although he does not like talking about himself, Yang likes chatting with job applicants, having personally interviewed around 1,000 of them during his time at Hellobike. Just before this interview, he had been in a meeting with a job recruit for a programming position. “I love to spend time interviewing people,” Yang said. “I hope a lot of talent can be nurtured in the company in the coming years.” With that, it was goodbye as Da Niu rushed off to another meeting.
Alibaba is the parent company of the Post.
This article The shy geek behind Hellobike – the latecomer that battled for survival in China’s bike sharing industry first appeared on South China Morning Post
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