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One day in May 2015, Luo Qi came to a coffee shop on Zhongguancun Entrepreneurship Street. The investor was surprised to find that the coffee shop, which used to be bustling with people, was surprisingly empty today.

Two months ago, the government work report pointed out that we should promote mass entrepreneurship and innovation, and support will be given in terms of public services, financial support, investment and financing mechanisms, etc.

Entrepreneurship has entered its best era in China.

A year earlier, Haidian Book City in Zhongguancun was transformed into an entrepreneurial street. Relying on Haidian's scientific research resources, it quickly became a hotbed for Internet entrepreneurship.

There are a large number of incubators concentrated on Startup Street. Entrepreneurs and investors from all over the country gather here, coffee shops are crowded, people are doing roadshows and raising funds here, everyone wants to be:

Pig on the vent.

The person in charge of the cafe saw Luo Qi's confusion and whispered to her that a leader would come to inspect the place tomorrow, so the area had to be cleared.

The next day, the news spread throughout the streets and alleys that the leader appeared in Zhongguancun Entrepreneurship Street to inspect the situation of innovation and entrepreneurship. The first stop he inspected was the coffee shop where Luo Qi worked:

3W coffee.

Luo Qi last heard about 3W Coffee at the end of July 2024. The operating status of "Beijing 3W Coffee Co., Ltd." was changed from existing to cancelled.

At that moment she was startled, as if she were in another world.

1

The founder of 3W Coffee is Xu Dandan. In the five years since he graduated from Peking University, he has changed jobs several times, from an Internet employee to an analyst, and even worked as the agent of the first generation of Internet celebrity Sister Furong.

In 2011, he opened a 3W Coffee on Chuangye Street. At first, 3W Coffee was not doing well and was on the verge of bankruptcy.

Two years later, Xu Dandan founded Lagou.com, focusing on Internet recruitment.

Lagou.com quickly received financing. With the rise of mobile Internet, 3W Coffee invited many well-known investors such as Shen Nanpeng, Xu Xiaoping, Xue Manzi, Wang Xiao, and Ni Zhengdong to invest in it and focus on being an entrepreneurial incubator.

This quickly made 3W Coffee famous. When it was at its peak, 3W Coffee occupied the three floors of a store along Chuangye Street. The first floor sold coffee, the second floor had a small studio used for press conferences and roadshows, and the third floor was a shared office.

Every cup of coffee produced here will have a fancy "3W" pattern. Luo Qi said that a cup of coffee costing more than 30 yuan is not only expensive, but also:

Not tasty.

But consumers don’t come for the coffee.

This was once the most vibrant place on the planet. People who came here to drink coffee worked day and night, grabbing every passerby to sell their business plans. They had no money in their pockets, but their eyes were full of light.

The cafe has a huge photo wall filled with photos of entrepreneurial mentors. As long as you can impress one of them, you will have a chance to soar to the sky. An investor recalled:

As soon as you open the door of the bathroom, someone will stuff a few business plans in your hand.

The makerspace in 3W Cafe also charges a lot of money. At its most expensive, a workstation costs more than 2,000 yuan a month, which is more than twice the price of an office building in the same area.

However, with the added resources of the mentor team, the place is also overcrowded. The operator has specially designed a clearance mechanism to leave room for newcomers.

At its peak, there were more than 20 similar startup service agencies on the 220-meter-long Startup Street. In addition to 3W Coffee, there were also Garage Coffee, Bingo Coffee, 36Kr, Entrepreneur, Lenovo Star, Black Horse Club, etc.

But entrepreneurs continue to come in. They not only occupy all the workstations in the cafe, but also fill up the surrounding office buildings.

CBRE has done a statistics and found that since 2010, the vacancy rate of office buildings in Zhongguancun area has remained below 2%, which is basically fully occupied.

In 2015, the rent of high-quality office buildings in Zhongguancun was about 10 yuan per square meter per day. Three years later, it rose to 13 yuan, but the vacancy rate was still as low as:

0.3%。

One month before the leadership inspection, 3W Coffee received a round A financing led by JD.com, with participation from Oriental Hongdao and Tsinghua Holdings, with a financing scale of tens of millions.

At the end of that year, 3W Coffee co-founder and CEO Song Yongcheng said in an interview:

Starbucks equals petty bourgeoisie, 3W coffee equals chasing dreams.

2

In May 2015, a brilliant entrepreneur appeared in 3W Cafe. He brought more than 10 technological inventions:

Including foldable grain loader, aircraft search and rescue, bridge collision avoidance, hydraulic lifting platform...

Later everyone found out that he was actually an ordinary farmer from Donghai County, Jiangsu Province.

After the leaders’ inspection, the popularity of 3W Coffee increased rapidly, and Entrepreneurship Street also welcomed more and more dream chasers.

In the era of hot money, many people realized their dreams for a time.

In the five years since its opening, Startup Street has incubated 3,451 entrepreneurial teams, of which 1,181 received financing totaling 73.1 billion yuan.

But time will soon give the answer to whether they can keep their dreams for long.

Financial writer Ling Zhijun has done statistics and found that 77% of Zhongguancun's technology startups do not survive for more than three years, and 90% do not survive for more than five years:

99% will not survive more than 10 years.

This is data from the early days of Internet startups. In the era of mobile Internet, the mortality rate of startups is even higher.

In a documentary called "Burning Sun", an entrepreneur said that in 2013, it was easy to find the startup team you met in a cafe a month ago, but starting in the second half of 2014:

You'd be hard pressed to find anyone who worked here a week ago.

Many are just passers-by, just like the Jiangsu farmer who was looking for investment and never heard from again.

In July 2015, Xu Xiaoping, the founder of Zhen Fund, held an entrepreneurial event at 3W Coffee. During the event, two people brought out a 3D printer and printed out a pancake with Xu Xiaoping's face on it.

Xu Xiaoping exclaimed "Awesome" on the spot and then ate the pancake.

Later, one of them received 3 million yuan in financing, and the other received 8.2 million yuan in financing in two installments. The two recruited many Tsinghua graduates and planned to use the funds to conduct research on 3D printing technology. They also opened a store specializing in:

3D printed pancakes.

Unfortunately, they did not shake up the market of Shouye's pancake stall. Apart from Professor Xu Xiaoping, few people have tasted the taste of technology pancakes.

In those years, Luo Qi listened to many roadshows on Entrepreneurship Street. She felt that most of the projects were unreliable:

Even the purpose is not pure.

Some startups progress very slowly, but their members get new cars very quickly. Some startups die in the ever-changing "trend".

In mid-2015, flyers for O2O projects were everywhere on the entrepreneurial street, and anyone passing by would be stopped and asked to scan the code. By the end of the year, O2O had made many investors cry because of the high "mortality rate".

In 2016, VC and PE financing in China's mobile Internet industry shrank significantly. After the crazy money-spending, most projects failed to bear fruit, which hurt investors.

Ni Zhengdong, founder of Zero2IPO Group, said at a forum:

The unicorn turned into a unicorn pig. After raising A, B, and C rounds of financing, it suddenly found that the company was about to close.

At that time, there were only a few projects that could survive three rounds of financing, and industries such as O2O and smart hardware were experiencing a "collective death." Before the capital had time to exit, it was found that it had become cannon fodder.

By 2018, concepts such as blockchain, P2P, and sharing economy are no longer popular.

One day, Luo Qi heard an investor say on the phone, "Stop talking about 'sharing'. I'm tired of hearing this word."

At the end of 2019, the company that made 3D printed pancakes was deregistered. The two partners had already gone their separate ways. Now it seems that their brand name has a double meaning:

The third brother is making empty promises.

3

At the end of 2018, 3W Coffee received a fine.

Because it published advertisements containing the words "Same Coffee as the Prime Minister" in its business premises, which violated the Advertising Law, the Haidian Branch of the Beijing Municipal Administration for Industry and Commerce fined it 200,000 yuan.

But no matter how it is marketed, coffee on Entrepreneurship Street is not selling well.

Changes in the internal and external environment, coupled with the reality that entrepreneurial projects were dying out, quickly woke up investors.

During those years, the number and amount of fundraising in the venture capital field continued to decline.

Since 2016, every year people have said that the capital winter is coming.

Lagou.com, founded by Xu Dandan, also failed to survive.

Since its official launch in July 2013, Lagou.com has quickly completed three rounds of financing. However, during this process, the recruitment industry has also entered a red ocean, and various recruitment platforms have rapidly emerged. Lagou.com has difficulty breaking through, and the D round of financing has not yet arrived.

“C round looks at the model, D round looks at profitability” is the default rule in the venture capital circle. In those years, many entrepreneurs failed at the “profitability” stage.

In 2017, Lagou.com was acquired by 51Job. At the time of the acquisition, Xu Dandan’s bold words are still fresh in our minds:

From the first day I started Lagou.com, I knew it would become a unicorn.

3W Coffee is no longer crowded with customers. The photo wall is still there, but the investors have withdrawn one after another. More and more seats in the makerspace in the coffee shop are vacant.

In October 2019, Matrix Partners partner Zhang Ying posted on Weibo that the external financing environment is relatively poor and financing difficulties are increasing infinitely:

I hope that everyone can strike the right rhythm, use every penny in the account efficiently, and not run out of food due to carelessness or misjudgment.

The cold winter is really here.

At the end of the year, the COVID-19 pandemic broke out. 3W Coffee, along with many incubators and small and micro businesses on Startup Street, enjoyed rent reductions. Some people joked that these institutions that have been empowering others:

Also needs to be empowered.

During the epidemic, the entrepreneurial street became even more depressed. As the surrounding universities were closed, some cafes began to host lectures and salons, but most of these activities had nothing to do with entrepreneurship.

Besides that, we sell coffee.

In June 2022, someone visited 3W Coffee and found that only four of the seven tables in the room were occupied by customers. There were people chatting at two tables, but no one was talking about investing in a business. Instead, someone mentioned:

Layoffs.

Last year, 3W Coffee published several advertisements for venue rental. One of them said that the coffee shop can undertake large-scale press conferences, cocktail parties, banquets, annual meetings, salons, lectures, etc., and during the venue rental period:

Free unlimited drinks.

At the beginning of this year, someone discovered that 3W Coffee’s lease had expired and it had officially withdrawn.

This is just a microcosm. The decline of mobile Internet venture capital has also profoundly affected the commercial real estate market in the Zhongguancun area.

Since 2019, the vacancy rate of Zhongguancun office buildings has continued to rise, approaching 20% ​​this year. The rent has dropped to 6 yuan per square meter per day, half of the highest level.

On the entrepreneurial street, some maker spaces are still looking for rentals. The agent recommended a project in Haohai Building, where a 30-square-meter room for 8 people only costs more than 8,000 yuan per month. If converted into a workstation price, it is only half of the previous price.

But he said that the price was definitely inflated and could be discussed.

In an office building on Suzhou Street, a similar makerspace can be acquired for more than 5,000 yuan per month. Although it is very cheap, it is still difficult to do business. The agent said:

There are very few people renting offices or starting businesses these days.

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