Founder Fan Jun: After the Success of *Surprise*, Wanhe Tianyi Wants to Become Part of Youth Culture

We talked about what kind of company Wanhe Tianyi is now, the problems it has hit since expanding, and what it hopes to become.

Last week we arranged to meet Fan Jun, founder and CEO of Wanhe Tianyi, at the company's Beijing office.

When we arrived, he was in the Monday morning meeting with his department directors. The routine is fixed: each department reports on the previous week, the group discusses problems they share, and the week's plan is set.

A week is the shortest update cycle the company's shows can manage. Several million fans now tune in at a fixed time each week for new episodes of Surprise (《万万没想到》), Report to the Boss, Detective Dee and the company's other hit web series.

So the week has also become Wanhe Tianyi's creative rhythm, and the longest it can afford to go without talking things over. As projects multiply, there is more to discuss each Monday, and the meeting runs longer.

More people attend, too. The meeting now has more people than the whole company had (10) when it started three years ago, and they nearly fill the space ringed by two leather sofas. Over the past year the company's headcount has doubled, to 250.

As the company grows, these meetings matter more to Fan. "It used to be that you could shout and everyone would hear you. Now you have to sit down face to face to get a lot of things across," he said.

A year ago his biggest worry was how to hire enough qualified people. Now he spends more of his energy on these directors. Their average age is under 30; a few years ago some of them were probably dozing through management classes at university. He needs them to help him run a "big" company of 250 people. So at meetings like this one he tries to pass on as much as he can of what he learned about management at the big companies where he used to work, and the meetings stretch longer as a result.

While we waited, two of the company's other partners began arguing: Yi Xiaoxing, known as "Jiaoshou" (a punning nickname, "the Professor"), who runs content, and COO Bai Zhongchun, who runs advertising. The argument was over an advertising deal for the Surprise feature film, the company's top priority this year.

In two years, Surprise, a "low-budget martial arts series," has racked up 2 billion views online. Now Wanhe Tianyi wants to turn it into a 90-minute theatrical film, to prove that the brand's reach extends beyond the internet and that the company can make more than web series.

Fan wants more from the company than that. He describes Wanhe Tianyi as a company that builds and runs content brands, not an outsourcing shop or a contract studio. He also wants it to become part of youth culture itself, gathering and influencing enough young people.

Meanwhile, ever since Surprise took off, outsiders have had plenty of questions about where the company is going. How do you keep audiences used to the Surprise formula coming back? Why develop so many different kinds of web series so quickly? Why spend so much time touring campuses? How does Surprise, built on rapid pacing, dense dialogue and a joke every few seconds, become a complete 90-minute story? We put these questions to Fan Jun.

Who Wanhe Tianyi cares about most

It's been a little over two years since Surprise took off. From your data and your own observation, who is Wanhe Tianyi's audience?

Our target audience is still people aged 15 to 25, and that's basically where we'll stay. Of course we may reach people over 35, or even older. But when we create content, we aim at 15 to 25.

That sounds close to Hunan Satellite TV's target audience.

Yes, it happened naturally. But our content needs to be more varied; we don't only do comedy. Over time other styles will keep growing, and as our creative team becomes more diverse, so will our work. We'll also use different works to attract different groups.

Do the audiences of your current shows differ?

Not in any precise or fine-grained way. Perhaps the biggest difference is gender. Report to the Boss, for example, has more female viewers. Surprise is overwhelmingly male. That's mainly because the directors have different styles, and the different guidance we give them produces different styles and different audiences.

An audience of 15 to 25 means roughly high school and university students. You gave talks at many schools last year. Is it fair to say university students are the group you most want to win over?

First, university students think actively, and they like to speak up and share things online. After 25 people mostly stop sharing; they just watch. Second, they set the trends. The newest things come out of this group. And it's also the group that trends influence. After 25 people are mostly set in their ways, and fashion doesn't affect them much.

So you want to engage with them as much as possible at this stage?

What we see is that this group is the most active, the least constrained, with a very strong sense of independence, and that's when people are at their most creative. If we can unlock that creativity and make work from it, people will love it.

We go onto campuses for several reasons. One is that we need to understand our audience. Another is that we want to attract talent. At its core, all content creation comes down to talent. Without talent, nothing else gets done.

What problems Wanhe Tianyi ran into over the past year

How would you sum up the past year?

Last year was the first year we really spread ourselves out. We released several new series in a row, and we found that we had to do everything on the content side ourselves, so our headcount grew very fast.

When a company expands quickly and its pace changes, a lot of problems tend to surface. What was the biggest one last year?

There were a great many. For example, the team grew fast but didn't produce enough. That's why our project development hasn't been fast enough. The good side is that even when a project fails, developing it helps the team learn to work together and gain experience.

Another is that as the company grew, the management team quickly turned out to be too thin. We meant for everyone here to treat this place as the start of their own career, but in practice, once the company got big, a lot of things slipped through the cracks. That's something we have to fix next.

What about the shows themselves? You've been trying to attract more female viewers, right?

Yes, both through how we position our own shows and through work with outside partners. But our core writers used to be all men, so the shows we made all leaned male. Now we've signed female directors and writers, and we'll develop some projects aimed specifically at women.

Your games don't seem to have done very well either.

They didn't. At the time our idea was speed: get games out fast. But once they were out, downloads and revenue were both disappointing.

Why?

We were too eager for quick returns. We just put a new skin on existing games. Later we looked into it and found we'd done what many Chinese IP holders do with games: think only about short-term traffic and immediate monetization. Two or three months later it usually can't be sustained.

So we've changed our strategy. We've started talking with some large Chinese game companies, hoping to make games with a long life. Mobile games are moving toward higher quality too, and depth still matters a lot in a game.

Is there a launch timetable now?

Not yet. First we have to find the right partner, one who shares our approach, and then develop the game together. Development alone could take a year.

What kind of company Wanhe Tianyi is now

The company now has 250 people, 60 or 70 more than six months ago. You said before that hiring was your biggest headache. Is the team more or less complete now? Are you past the stage of mass hiring?

Not really. It will keep growing. We want to turn ourselves into a platform for creating content. We need a lot of creative people, but only some of them work out, and they take time to train, because frankly traditional schools don't train people for this.

So our people come from all kinds of backgrounds. After they join, it may take another six months to a year of training before someone can become a head writer who carries a show. And not everyone can do it. Maybe one in five. It takes talent; training alone can't produce it.

What do you care about most when you hire?

We have an order of priorities. First comes character. (How do you test for character?) Honestly, you can't. You ask all kinds of questions, and you go by your gut feeling about the person. The people who have stayed in our management all have good character. Of course everyone has a good side and a bad side. The company's job is to bring out each person's good side and keep the bad side in check.

We also look at whether the person truly loves this work. What we do is really grueling. That's one thing. The second is patience, because you may go six months to a year without a good project, and the question is whether you have the patience to wait for yours. Zhizun Yu (one of Wanhe Tianyi's core creative staff), for example, started out working the clapperboard on set. If he'd said, "Why am I still doing this?" and quit, he'd have been gone.

Most of your staff were born in the 1990s, some after 1995. Are they more impatient about their careers?

Yes. That's why patience matters so much. If you're only here for the money, if you want a quick payout, don't bother coming. You can't keep those people anyway; sooner or later they leave. We definitely want people full of passion. Another thing is that they must learn fast. They may not come from this line of work, but they have the spark to pick it up. Experience actually ranks fourth. Whether you have it doesn't matter much, because we're making something new, and having no experience means having no preconceptions.

Jiaoshou has said that one thing he values in hiring is "net sense," how familiar you are with the internet.

Yes, net sense really is a kind of spark. Do you have that spark? Have you "watched countless films"? In the past, writers had to use literary allusions. Our shows use a huge number of allusions too, and they all come from the internet. So without net sense you can't write them. You can't go looking for them right before you start; they have to come from what you've built up over time.

Is the team still short anywhere?

Creative people are still very short. They're always short, because with more creative people you can develop more projects. Then during development you find that some other idea looks like a good project too and needs developing. So we're constantly short of creative people.

Last time we talked, I remember you said you'd signed about 30 writers and directors. How many now?

I don't know the exact number, but it's already 50 to 60.

Have you worked out how many people it takes to develop a new project?

Usually two or three writers write first. Then a producer develops it into a show. Honestly, the whole process at the end is quite painful, and many projects get killed.

At your stage, when revenue and fame have gone up, some people on a team usually start getting ideas, and either leave or get poached. I've heard plenty of people are trying to poach your core staff, yet your core team is all still here and still working as hard as they did at the start. How do you keep the team stable and morale high? Do you have special incentives?

We have deliberately built a company that doesn't try to control people. You're not a cog that just does whatever task the company hands you at your post. We want each person to be a small creative hub, doing their own creative work within a larger environment.

So whether you're in management or a director or a writer, if you have a new project, do it; if there's a project you love, do it. Don't worry about other people; just go after what you're after. Once it's made, the rewards will be greater on every front, and things will work out. As for management, the partners and the core team set the general direction together, and the specifics are up to the people doing the work.

Since last year, Jiaoshou and Bai Ke have been showing up at film premieres and in ads, appearing on variety shows and making cameos in films. What's the purpose?

To raise their profile. We don't want them to be only internet stars. The internet today is like television in its early years: film always looked down on TV. Gradually TV built an audience. Not long ago internet celebrities also seemed second-rate. Today the internet gives people a chance to break through, but only on the internet. So we want them to branch out across fields and into all kinds of settings.

Like YouTube stars who influence Hollywood and the fashion industry.

Yes, but in China the opportunity is actually bigger. Hollywood is a very mature system, and YouTube stars can't squeeze in because it's already so complete. In China the field is almost entirely empty. There are huge opportunities. So starting on the internet and working your way up is entirely feasible.

So you've also set up your own talent management department and started promoting some newcomers.

Yes, talent management is another focus for us. One focus is content, the other is people.

When film companies look at Wanhe Tianyi, what they value most is its influence on new media and the internet, most directly the number of Weibo followers Jiaoshou and the others have. Have you thought about how to make the most of that?

We still want to keep it natural. Some things can't be forced. Each person's personality stays their own. We want them to remain vivid, real people. (They can't come across like marketing accounts, right?) Marketing is only occasional. Personality matters most.

Which companies and products do you see as competitors?

I actually think we have a great many competitors, but none working at our scale. There's competition from every direction. Even small teams can compete with your content, but there's an upside: everyone is making the market bigger.

Then there are TV drama companies from the traditional film and TV industry making web series. Any TV drama that goes online is effectively a competitor, because (different shows) split the audience's attention. So we really do have many competitors, but I think few of them think the way we do, with the step-by-step plan that follows.

How do you see your relationship with the video sites?

It's a partnership. Neither side can do without the other. They need good content, we need good distribution platforms, and we can also work together on spin-offs, including our film partnership with Youku.

But the balance of power is different now. You may have started out dependent on one platform, but now you work with several.

It isn't really about who has more say. They're a platform, and a platform should do a good job of providing its services. For any single piece of content, we have more say. But they run the whole platform, and their say lies not in any one show but in the rules they set for the whole platform.

How Wanhe Tianyi makes money

This year you launched a new series, Detective Dee, and for the first time, with some fanfare, released it on two platforms (Tencent and Youku Tudou). How has that worked?

Judging by the Baidu Index, it's doing better than Surprise. The two-platform release is indeed an experiment for us. Tencent's users weren't our original audience; people who watch our shows basically watched them on Youku. Now we've moved into new territory, and Tencent has a lot of promotional muscle.

Tencent has lots of young users, which matches your target audience quite well, doesn't it?

Actually those people are also on Youku, so there's overlap. They go to Tencent for HBO shows, because Tencent paid for a lot of American series, and they go to Youku for Wanhe Tianyi shows. So what we're really doing is giving them one more option.

Two platforms should also bring in more advertising. How much ad revenue did this series earn?

More than any of our previous series. I can't disclose the figure, but I can say it sold better than the first two seasons of Surprise, and this is only its first season. (Surprise season two brought in more than 30 million yuan.)

Has the form of the ads changed?

Not really. Once a format is set, we want it to stay consistent for a while. Otherwise advertisers would go mad. They've just gotten used to one format, the boss finally understands it, and suddenly there's a new one and the boss has to learn all over again.

So we want to keep things fairly stable while also finding new approaches. For example, we'll do more licensing from now on. Licensing isn't new, of course. Take JD.com's "Men's Gang" campaign: it licensed those characters, and they could be used in JD.com's ads.

We want to expand beyond the shows themselves. We're in talks now and nothing is settled, but that's where the company is headed. Our sales department is called the brand partnerships department. Advertising is only the first layer; there are also partnerships on products and on licensing.

Your advertisers used to be mostly game companies. Now bigger consumer brands such as Meizu and Ganji.com are putting money into Hanging by a Thread and Detective Dee. Did you go after them?

Basically they all came to us. What they value is the shows' influence among young people.

These are still mostly deals for individual projects, right?

Yes. We haven't been around that long, and strategic partnerships are only gradually taking shape. With some advertisers we now also work together on product lines. I can't talk about it yet, but once it's confirmed there will be product-line partnerships, and some fixed partnerships every year.

Are your investors happy with your current revenue?

Money, I think, is a result. If you make good work, the money comes. What we need to think about is this: once we've drawn young people in, how do we keep them together and offer them more services? If you give them value, you'll naturally make money.

You closed a funding round in the second half of last year. What is the money mainly for?

Mainly the film. And this year we'll build a community. Community is our focus this year. Our priorities can be summed up as content, community and commerce. We're already doing content and will do it even better, using it to attract people and build a community around it. This year we want to get the community right, and next year we may start on e-commerce, games and so on, working out how to make money through the community.

Before, there seemed to be no middle step. You wanted to go straight from content to (money). Why add community now? Did you find the direct leap too hard?

You can go straight from content to (money), but the foundation still isn't solid enough. When all your users are Youku and Tencent users, you have no direct contact with them and can't attract them yourself, so you build a community to keep them. Of course we're not trying to replace the distribution platforms; they still have very strong distribution power. Whether it's a fan community or some other kind, the idea is for the two to reinforce each other.

Can you describe your community project?

Our Wanxingren Channel WeChat official account is the prototype of a community. A community is basically infrastructure. First you need a product, built for mobile internet. Second, you need an editorial team to run it and decide what content to post to attract which groups. Third, you need production. We're putting all of these in place. On the product side we started with the WeChat official account. In four or five months it has gained about 500,000 followers.

You once said you hoped to build an internet channel like AwesomenessTV. As I understand it, your thinking has changed, right?

Yes. Channels have limits. You're providing features on someone else's platform, so the platform constrains you. You can only do what its infrastructure allows. So we'll keep running channels, but they'll be a bit like our experience stores, while we build our own flagship store, which is the community project.

How to manage a bigger company

The company now has 250 people. Do you worry it's getting too heavy?

Actually, we made it heavy on purpose. Why? Because this industry is still immature, unlike traditional film and TV, which is relatively mature. There, as long as you're a production company, or a producer or production manager, you can basically get everything done without keeping anyone on your payroll.

That isn't our situation. In new media film and TV there's nothing in place for us, so we have to do everything in-house and train people ourselves. We also need to respond fast, and outsourcing each stage can't give us that speed. We now shoot and air at the same time. The biggest advantage of shooting while airing online is that you can keep improving your product as you go. That means squeezing the production cycle in between very tightly, which you could never do by outsourcing.

So shooting while airing is itself a barrier to competitors.

Yes, it's a barrier, but getting there is very hard. If you crack it before others and gain experience, that experience becomes our advantage. When you shoot while airing, audience feedback comes very fast. If viewers today can't stand a character, we write him out by killing him off; then tomorrow viewers like him again, so we write him back to life.

Like Kong Lianshun and Zi Mo dressing in women's clothes.

We didn't plan that at first, but as we kept writing, he just turned into a woman. That's what makes the internet fun.

With more people and projects, there are more and more meetings, and they eat up a lot of time.

Yes, there's no avoiding it, because communication matters. Before, everyone sat in one room and you could shout and everyone would hear. Now everyone has to sit down face to face, so that we actually get things across.

I'm curious. Why do you write in English on the whiteboard during meetings?

(Laughs) Actually, I've told them that every director in management should do an MBA. Our HR director has just started, and he'll train the whole management team, with a course schedule.

When a company grows this fast, management problems multiply too. We used to be able to talk with everyone directly. That's no longer true, and not everyone is good at talking with their director. But I want everyone to speak openly and frankly, and when we hit a problem, to solve it together.

Our HR director has worked at Citibank, Standard Chartered, Nike and IBM. He has a lot of tools he can teach everyone, which can take our management up a level.

So, as I understand it, you need more people with big-company management experience to raise the whole team's management ability?

Yes. A company of 250 is already heavy. Our finance director used to be finance director at Tudou. Our CFO came from J.P. Morgan. In these two areas we really need professionals. They can't work the way they used to, but they'll bring us something new: rules that still let everyone stay flexible, a kind of controlled chaos. Chaos is a good thing, but you can't let it get out of control.

How Wanhe Tianyi plans to make a film

This year's most important project is still the Surprise feature film. You announced it at the Hong Kong film festival last month. Where does it stand?

We're refining the script. Jiaoshou (Yi Xiaoxing, one of Wanhe Tianyi's three partners) has already gone through more than 20 drafts and is still making changes. It's a really painful process. At the same time, we're meeting different investors. Shooting should start around May or June, with release at the end of this year or early next year.

That seems slower than originally expected. Have you run into serious trouble?

No. We just want to make a film properly, a real comedy, not a string of internet sketches. So there's no rush to get it out fast. We also have to choose our investors carefully and look at what resources each could bring to help the film. All of that takes time to think through.

At the start of the year, Surprise: Hanging by a Thread stretched the story to 30 minutes, which was really a rehearsal for the film. But audience response seems to have been lukewarm. Did you discuss that internally?

That was because we were short of time. The time from writing the script to the final cut was very short. Of course Jiaoshou also deliberately tried all sorts of things to see how far the audience's attention would stretch, so a lot of experimentation was built into it.

What do you think audiences really want to see, the "points" they care about?

We've done fairly well online because our lead creative team understands audiences very well. Where does that understanding come from? Partly from data, partly from instinct. I think our creators have been through a lot of tough practice, and it has given them this insight and the ability to read data and draw conclusions from it. Then they get to work, and follow the rules of feature films.

But with film, a lot is different. The pacing is different, the story form is different, and audiences want different things from web series and films and watch them differently. That's why we brought in Huang Jianxin (supervising producer of Bodyguards and Assassins and The Taking of Tiger Mountain) as supervising producer, to be our gatekeeper. He has seen a huge number of films and worked out a great many rules from them.

Speaking of supervising producers, I heard you also turned down Chen Kuo-fu. Did you feel he would have too much control over the film?

I wouldn't call it turning him down. It was a choice on both sides. We never got that far; it was only preliminary talks, though we had many rounds. There were reasons on all sides why it didn't work out. In the end these things depend on chemistry.

Some say choosing the right investors may matter even more than choosing the right supervising producer. How are you choosing them, and besides yourselves and Youku, which investors are confirmed?

Yes, Youku certainly is. I can't name the others yet. But one thing is certain: every investor we bring in must offer more than money. They must have resources in some area and be able to protect the film in some way. That is essential.

The film's total budget shouldn't be too high, under 50 million yuan?

It won't be too high.

Huang Jianxin said in an earlier interview that the Surprise series has 2 billion views, and if everyone came to see the film at 35 yuan a ticket, imagine the box office. That sounds like high expectations. How do you judge the film's commercial prospects?

We don't actually calculate it that way. Our core fan base is only about 1 million people. You have to make an excellent comedy, so that people who've never heard of Surprise want to see it. We think success or failure depends on whether we can draw those people in. At the same time, we can't have our original fans complaining that it isn't Surprise anymore. So there has to be a balance.

On one hand you have to keep what makes Surprise itself; comedy, for example, is our signature. On the other, we want to expand the brand to a much broader audience.

Because when you've spent that much money and effort on a film, you have to expect a commercial return. For a return that big, you have to break out of your fan base, and the film has to be a truly excellent comedy. People should fall in love with it because it's a comedy, not come because they're Surprise fans. Fans may be only a small part of the audience.

Plenty of good online content has been turned into films before, under what is now a hot industry buzzword, IP, and the results mostly weren't great. What lessons can Surprise learn for its film?

I think the most important thing is the question I mentioned earlier: how do you balance your fans against the need to attract new people?

100,000 Bad Jokes, for example, found a good path, but it only reached 100 million yuan. Our view is that their fans saw it and that was about it. Casual moviegoers didn't come. The problem we need to solve is bringing casual moviegoers in without diluting what our core (fans) love.

There's another approach: just make a proper, big film. If you're an animation, make a good animated film. The internet is only leverage, borrowing the strength of the earlier IP; it isn't as if the film grew entirely out of the earlier work.

The internet stresses democracy, openness, and making and improving products quickly, which seems to clash with how traditional film and TV are made. How do you reconcile the two?

Yes, every content industry faces this. So in fact the key isn't speed but (understanding the audience). Don't overstate the role of the internet, big data and so on. Don't overstate the role of data; data is just a reference. The core is understanding your audience, and whether you can move them.

One hallmark of your web series is the playful way ads are worked in. Will you carry that over into the film?

Films and web series are still different. The business models are different, so what works in a web series won't necessarily work in a film. Audiences have already paid to go to the cinema, and if you throw ads at them, they'll get annoyed. So we'll use different methods. There will be advertising and so on, but not necessarily inside the film. We're still working it out.

What else Wanhe Tianyi will do this year besides the film

Besides the feature film, what other projects will you do this year?

One is new seasons of earlier series, Report to the Boss and Surprise. We'll also make a new series about Wong Fei-hung, set in the Republican era, but not a very serious Wong Fei-hung history. It will feel something like Detective Dee, with all kinds of anachronistic crossovers. It's also an anthology series, but with storylines that carry over. Again with new directors and new writers. We keep giving new writers and directors a chance to come through.

You said community is the second step. How will you get from there to the third step, e-commerce and games?

Whatever service you offer these young people, virtual goods or physical goods, there's a lot you can do. Leaving aside how good the goods or games themselves are, what e-commerce lacks most right now is traffic. It needs customers coming through the door. Physical stores need that, online stores need it, and they spend money buying traffic. If we get our community and content right, we'll have a lot of traffic, and that traffic can be turned into money. We want that money-making to add to the brand as a whole, not just selling meat floss pastries or the like.

What shape do you imagine the community taking? A WeChat official account is still mostly one-way.

Frankly, we haven't figured it out, but we feel we need one. We've been slow to start and have stayed on WeChat. We haven't really worked out what core value to offer the audience.

You develop all your content yourselves. Will you try buying the rights to popular works?

No, we won't play those money games. If everyone just focuses on price, there's no fun in it. Everyone recognizes a golden egg, and you can't outbid Alibaba or the other big companies for it. We sign the hens that lay eggs. Maybe their next egg won't be golden. It's a matter of luck, but what if they do lay a golden egg? We'll nurture young people, ones just starting to show what they can do.

But that could take a long time.

We don't really want to do anything short-term. If we think something creates long-term value, we do it. We're a company that makes content and community, and that's all long-term work; you can't build it by throwing money at it. Our moat has to be one money can't buy. If money can wash it away, it isn't a moat. Once BAT (Baidu, Alibaba and Tencent) put up the money, they could sweep you away with ease.

QDaily will keep following companies like this: ones that may have been around for a while and earned a solid reputation with users and a voice in their industry, but can't yet be called big companies. These companies keep a startup spirit while starting to reach real scale. We'll look at what they plan to do next and what they are thinking about now.

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