Meet The CEO Of Fen Da, A Chinese Q&A Site Valued At $100 Million After Launching Site

There is nothing new about launching a Q&A website where users can submit inquiries to celebrities and experts from all walks of life, but a Chinese startup recently came up with a twist on the idea that has helped it gain a valuation of $100 million in just 24 days.

Fen Da, developed by Beijing-based science news site Guokr.com, is an app that took its cue from networking platform Reddit’s “Ask Me Anything” (or AMA), where users post questions to a featured guest in a live, interactive online interview. Guests of the popular format have included public figures like President Barack Obama, Bill Gates, and Snoop Dogg, to lesser known characters such as former religious cult members or mafia bosses.

Ji Xiaohua, founder of science news site Guokr.com, says his new Q&A site Fen Da raised $25 million at a valuation of $100 million just 24 days after going online(photo courtesy of the company).

Ji Xiaohua, founder of science news site Guokr.com, says his new Q&A site Fen Da raised $25 million at a valuation of $100 million just 24 days after going online(photo courtesy of the company).

On Fen Da, users can post their questions directly to experts, scientists, entertainment stars as well as other public figures, but must pay a fee set by the respondents before receiving their answers that come in the form of 60-second voice messages. An additional bonus: Fen Da offers a sneak peak listen function, where other curious users can pay 1 yuan ($0.15) to replay the answer. That 1 yuan will be split between the original poster and the respondent. This, in theory, earns the original poster money which could recoup their upfront cost, possibly even turning a profit.

Users can post questions to celebrities and experts through Fen Da, but they must pay a fee set by the respondents before receiving 60-second voice answers.

Users can post questions to celebrities and experts through Fen Da, but they must pay a fee set by the respondents before receiving 60-second voice answers.

For example, Wang Sicong, famous as the son of China’s richest person Wang Jianlin as well as a Chinese internet celebrity known for his blunt and fiery comments, charged 3,000 yuan ($450) for answering a single question. A user named Zhang Yu paid that amount to ask Wang about his ex-girlfriend. The answer was replayed more than 17,000 times, earning Zhang Yu 8,500 yuan ($1200) for her efforts. Fen Da, meanwhile, receives a 10% commission fee from the respondents’ total income.

The idea that one can make money from asking the right question is unheard of in China, and has catapulted the app’s popularity to levels that surprised even founder Ji Xiaohua (also known as Ji Shisan). Fen Da saw more than five million registrants just 24 days after going online in May, according to the 38-year-old Ji, who says the app processed 18 million yuan($2.7 million) in total transactions so far.

Investors are swooping in. Ji announced on Monday that Fen Da attracted $25 million in funding at a valuation of $100 million in a round led by Sequoia Capital China and Hangzhou-based Vision Plus Capital, a venture capital firm co-founded by formerAlibaba executive Wu Yongming. Wang Sicong’s Prometheus Capital also participated in this round. Earlier investors include Chinese billionaire Zhou Yahui, who chairs the Beijing-based gaming company Kunlun Tech, and Li Wanqiang, a co-founder of Chinese smartphone maker Xiaomi. The company plans to use the proceeds for hiring, marketing and product development.

“It is hard to get people to pay for written answers, but voice messages are more personal and intimate,” Ji says in a recent interview at Guokr’s Beijing headquarters. “Chinese internet companies used to attract users by offering cheap or free products, but now it seems people’s views can be directly monetized as well.”

Ji wants Fen Da to evolve into a professional consulting platform where users can find quick access to experts from all walks of life. That is a big step forward as much of its current popularity is driven by curiosity of celebrities’ private lives. The app was virtually unknown in its first two weeks until Wang Sicong started to take questions, and users certainly aren’t visiting it as frequently now that Wang has gone silent, says Ma Shicong, an analyst at Beijing-based research group Analysys International.

Ji, however, is confident that Fen Da will not become a gossip platform. He points to the hundreds of thousands of experts who are appearing on Fen Da for free. Among them are doctors, professors, psychiatrists, and private equity investors, who on average answer more than half of the questions they receive, he says.

These professionals came to Fen Da because it offers a simple way for them to share thoughts and earn additional income, Ji says. The inherent satisfaction in getting paid for one’s ideas is also a driver, he says. Celebrities like Wang Sicong are also attracting people’s interest. After he signed on, more professionals are keen to try Fen Da out.

“So many people share their thoughts through the internet and I have been thinking if there is a good way to monetize their knowledge,” he said during the Monday press event. “If you have some loyal fans and you are willing to spend a few minutes a day answering questions, then you can make money on Fen Da.”

Commission fees from respondents’ total income make up the majority of Fen Da’s revenues. Ji also plans to link the app to his other product Zai Hang, which is a site allowing users to book consulting sessions with industry professionals such as artists, photographers, nutritionists and private equity investors. For example, Meng Ke, a Baidu executive in the company’s online-to-offline business unit, charges 260 yuan for an hour-long meeting to talk about O2O business proposals.

But keeping them hooked onto Fen Da is no small task, says Vision Plus Capital founding partner James Wang. Central to the app’s sustainability is having respondents who are willing to answer several times a day instead of an occasional login, and that requires more product updates and investments in user maintenance.

“Celebrities are good fish baits in user acquisition,” he says. “But any real value Fen Da has lies in sharing professional knowledge.”

Realizing Ji’s vision will not be easy, says Ken Xu, a partner at Shanghai-based venture capital Gobi Partners. Unlike other sharing apps such as ride-hailing platforms, Fen Da is not necessarily a high-frequency business that people turn to for several times a week. When competition ratchets up, it requires a lot of investment to grow the app’s user base, he says.

On the bright side, competition – for now – is limited. A major rival is an app developed by Chinese Q&A site Zhihu. Ji, however, says he foresees a plethora of similar platforms later this year and by then, user acquisition costs will definitely have shot up.

“There will certainly be problems in the future,” he says. “All we can do now is try to solve them along the way.”

Forbes

Leave a Reply

Your email address will not be published. Required fields are marked *