Dai Wei
ofo founder, pioneer and failure narrative protagonist of shared bikes, a defining case of the capital bubble era
Dai Wei is one of the most representative young entrepreneurs of China's 80s-born startup wave, founding ofo at Peking University in 2014 as an initial free shared bike service within campus. After multiple funding rounds, ofo at its 2017-2018 peak had 20 million bikes covering 200 global cities with a valuation of $3 billion. However, due to fundamentally flawed business model (unprofitable low pricing), overly aggressive expansion, burn-rate competition with Mobike, and strategic disagreements with investor Didi, ofo fell into a severe liquidity crisis at the end of 2018. About 15 million users' RMB 99 deposits could not be refunded; Dai Wei personally faced high-consumption restrictions; ofo ultimately concluded in near-total failure. This case became the defining lesson of China's sharing economy bubble and startup governance failure.
Methodologies
- Heavy-Asset Sharing Economy Business Model Validation Method - Before investing in heavy-asset sharing economy, validate through unit economics whether each asset unit can achieve positive cash flow within its lifecycle, rather than relying on scale effect assumptions.
- Startup Equity and Control Balance Method - During multiple funding rounds, founders must design clear boundaries between capital needs and control retention to prevent investor strategic conflicts from paralyzing company decision-making during crises.
Key decisions and timeline
- 1993 Born in Xichang, Sichuan; Later Attended Peking University - The best entrepreneurial opportunities often come from scenarios the entrepreneur deeply understands and pain points they have personally experienced
- 2014 Founded ofo at Peking University, Launched Campus Stationless Shared Bike Service - Validating product demand in a closed scenario (campus) before pushing to open markets is an effective path for reducing startup risk, but may also lead to underestimating the complexity of open markets
- 2015 Received Angel Investment from Zhu Xiaohu (GSR Ventures); ofo Began Leaving Campus - Accepting venture capital means entering a capital-driven growth model; if the business model itself cannot achieve positive cash flow, capital dependency will be fatal
Beliefs and mental models
- The Sharing Economy Can Disrupt Traditional Transportation Modes - Connecting idle bike resources through the internet to achieve low-cost, barrier-free short-distance urban transportation is a natural application of the sharing economy in mobility, capable of solving the 'last mile' problem in Chinese cities.
- Persisting in Mission Even When Facing Failure Means No Compromise - When ofo was in its deepest crisis, Dai Wei rejected multiple acquisition or merger opportunities, insisting on independent operations. He believed persisting in original intent and mission is an entrepreneur's bottom line, even if it means the company ultimately fails—he was unwilling to place users and employees at greater risk. (Note: This belief was later seen as an important factor that aggravated the crisis)
- Scale Is the Moat; Grow Big First Then Think About Profitability - During the fiercest competition in 2017, Dai Wei adhered to the internet platform economy's scale-first logic: seize as many cities and users as possible first, build scale barriers, then monetize through data and traffic. However, this logic did not hold in the shared bike's heavy-asset model, and was one of the core cognitive errors of the ofo tragedy.
- Heavy-Asset Trap in Sharing Economy - Incorrectly applying the light-asset platform model to a heavy-asset business, causing scale expansion to actually accelerate capital consumption, creating a death spiral where the bigger you grow, the more you lose.
- Capital Dependency Death Loop - When a business model itself cannot generate positive cash flow, relying on financing to sustain operations leads to a death loop of needing to raise more and more, with collapse when financing cannot be secured.
- Founder Control Loss and Governance Failure - When entrepreneurs excessively dilute control through multiple funding rounds while strategic conflicts exist between investors, company decision-making falls into deadlock, making rapid integration and rapid sale impossible when a crisis arrives.