To customers and partners of Mingdao Cloud:
After six years of transition, md is finally completely leave collaboration SaaS track of cloud, and in the field of new APaaS reached a preliminary market success, and recently completed from the Asia (Asia) SIG susquehanna nearly RMB one hundred million financing, established the md in zero code/low cloud application platform track leading position.
We don’t even know if it’s Series A or Series B or Series C anymore. The last very grudging round of financing was six years ago. Since then, we’ve been locked in an uphill battle with the giants in the collaborative SaaS space. Saying is the competition, in fact, even the chance to fight, because no matter it is nail, or enterprise WeChat, and later admission of the fly book have invested a huge amount of money, and provide completely free products for enterprise customers. For a startup, this is a battle that almost determines the outcome from the start. Most of the collaborative products that first entered the SaaS market have all but disappeared.
Around 2017, Mingdao nearly ran out of money and faced a choice between life and death. We can either end this business or we can continue to look for ways to transform it. For whatever reason, we chose the latter. I had to take on debt and get funding from my previous company, Plum Blossom Information. What I didn’t expect was that this low level of survival would last for four years. During this period, we faced continued customer loss, customer acquisition difficulties, staff loss and a series of inevitable accompanying economic pressures. But, in any case, we kept the core product development team because that was our only hope for a successful transformation.
The transformation choice of Mingdao is not smooth. We have tried the application of enterprise human resources, and also tried the application of vertical industry. Finally, we chose the direction of Mingdao Cloud today in the balance of gains and losses. When we started, we called it “building block enterprise software.” Because we see a better choice between new forms of SaaS applications and traditional custom OP development that allows enterprise software to achieve both high levels of usability and flexibility, this choice allows enterprise applications to be built with virtually zero code and continue to provide flexibility for users after delivery.
After more than two years of development, we released the Mingdao Cloud in May 2019, becoming a new racer at this track. After two or three additional iterations, the conversion rate and customer price of new users were proved to be far higher than that of the previous collaboration products. Most of the users had very positive comments on Mingdao Cloud, and even quickly generated word-of-mouth customers. Here, I would like to express my special thanks to the early support and approval of Mingdao Cloud users.
Around the same time, the market suddenly started paying attention to the low code/zero code space. Enterprise users, the ISV market, and investors all started to delved into this space, and Ming Dao Cloud’s good fortune finally arrived. A year after launching the product, the company broke even after acquiring hundreds of new customers. The pace of business growth continued to accelerate following the launch of the Container Cloud version in March 2020. Another year later, we achieved a threefold business growth, acquired more than 100 benchmark corporate customers, accumulated more than 1000 new customers, ranked the first echelon in the track in terms of revenue, and the company entered a stable and profitable state.
Behind the rapid business growth of Mingdao Cloud, there is another important force, that is our unique partnership. Mingdao cloud is a very high degree of universal application platform. The integration with industry depends on a variety of domain knowledge and industry customer relationships. We realized early on that in order for this new form of enterprise software to take root and successfully land in end-user enterprises, we had to build a partnership based on value-added processes. Mingdao Cloud focuses on the development and operation of core products, and partners design and develop vertical applications that understand the industry through their own proprietary knowledge. The latter gets 100% of the value-added revenue, while mainstream customers enjoy better service and convenience out of the box.
The market has responded positively to this strategy. After more than a year’s efforts, Mingdao Cloud has acquired more than 100 partners, with an effective rate of 70%. As of last month, more than 60% of Mingdao Cloud’s revenue is brought by partners. More importantly, this partnership has a strong long-term health, we do not compete with partner enterprises, the pursuit of equality and mutual benefit of cooperation, and through our partner network operation work, simultaneously improve the customer acquisition and service capabilities of each partner.
After the smooth development of the business, financing is a natural thing. We ultimately chose Haina Asia Ventures because of their expertise and commitment to investing in corporate services. Mr. Lu Guo, our new director and partner in Haina Asia, is also a veteran of the enterprise software industry.
Looking back on our six years of difficult transformation and looking forward to our confident future, I summarize the motivation of Mingdaoyun to reach today as the following important aspects.
1) Strong market demand and guiding government policies for the digital transformation of enterprises in the Chinese market. In a long time to come, all sectors of the social economy will become participants in this wave, whether it is government agencies, state-owned enterprises, or small and medium-sized enterprises. The huge demand brought by this wave needs to be different from the traditional IT service mode. A hundredfold of the demand cannot be stacked by a hundredfold of the number of people serving, but by a hundredfold of the efficiency of tools and operations. Zero code, reducing the amount of code that IT projects need to write, is the key and is the core reason why Ming Dao chose to enter this market.
2) China’s software industry also needs to change the revenue model from software product circulation and development labor export. Neither has unleashed the tech industry’s value-creating energy. Therefore, Mingdao Cloud practices the channel model with value-added as the key word, so that each side of the partnership can obtain the main benefits from the value created by itself, and return the partnership to the theme of equality and mutual benefit, instead of taking the road of centralized isolation ecology. This strategy has been a key part of our transformation. We believe it represents better business ideas.
3) High quality products are still scarce in the software industry. Building a fully functional, easy-to-use software product is the foundation of everything, and it’s easier said than done. Looking back on the transformation process of Mingdao Cloud, we believe that it was born in a transparent communication, flat collaboration, automatic management environment. In the tech industry, we believe that the best management comes from trust. The only thing we did right during the most difficult, transformational early stages of product development was not to put unnecessary pressure on the product team, not to stay up late, not to meet deadlines, but to keep the team free and let good things happen naturally. We are starting from the management software industry, so we always try our best to make the cloud products can drive such management and collaborative actions, so that the organization can always be full of vitality, so that the software products can be a powerful assistant to achieve the strategic goals of the enterprise.
This letter to clients and partners is not meant to be a declaration of success when the financing is completed. We have only stabilised after years of turmoil and clarity of purpose, and it is just the beginning. Compared with other industries in China, the enterprise software industry is still very backward, and the gap with Europe and the United States is so obvious, which makes our driving force is also very strong. With this financing, Mingdao Cloud will be able to provide better products and services to customers and partners in the near future. Thank you for your company all the way. The journey together will be even more exciting.
Ren Xianghui, founder of Mingdao Cloud
2021.7.19