Today, Lei Jun brought a 2022 annual speech as scheduled. reviewed the moments of his life. This was extremely painful but grateful for the experience. He called it "a gift of setbacks."
failed to make a product. "I have been in seclusion for three years, and everyone has waited for this day. We even arranged a celebration banquet, but no one expected that as soon as the product was launched, the sales volume was terrible, less than 1/10 of the expected..." "I think the company is in an urgent critical moment of life and death."
life is lost and confused, " Kingsoft found the way to survive, but I myself fell into a bigger one. In the confusion. I was trapped in the darkest period of my life. "Anyway, I didn't have any new ways to play at that time, so I often went to the bar with a few friends." The experience of founding Zhuoyue.com, "Zoyue.com was founded after the collapse of the Internet bubble , and fell before the rise of e-commerce. This is really a deep pain." The so-called failures and pains of
made Lei Jun constantly think about new trends and opportunities. "In this particularly painful torture, I saw many opportunities in the mobile Internet later. So I think pain is not a bad thing."
"All the setbacks and failures you experience, even those seemingly meaningless things that waste time, will become your most important and precious wealth."
always believe that good things are about to happen.
In today's speech, Lei Jun reviewed many stories before founding Xiaomi , involving a period of turbulence in the early days of the Internet. Kingsoft fought Microsoft , and China began the first wave of Internet. Zhuoyue.com became the largest B2C e-commerce in China at that time...
So what kind of development context does it have and what role does Lei Jun play in it? How does he keep discovering opportunities and experiencing success and failure? How did start Xiaomi in one fell swoop, and how could he continue to move forward after experiencing many darkest moments?
This article systematically and in detail tells the entrepreneurial history of Lei Jun, a "ruthless character". Combined with Lei Jun's speech today, it can give you a deeper understanding of China's entrepreneurial spirit for more than 20 years.
Edit ｜Zhu Xiaolu Chaos Academy
This article is a collection of Chaos Academy books, compiled from "Winning Forward", first published on August 31, 2020, on the 10th anniversary of Xiaomi's establishment.
The general trend has come
Lei Jun is one of the first generation of Zhongguancun entrepreneurs in China, a genius programmer and a young entrepreneur who became famous.
When he was still studying in the computer department of Wuhan University, he was a geek who surpassed his peers in the eyes of his classmates. His programming skills are the highest in the class. When he was in his junior year, he knew about the underlying assembly, DOS kernel, encryption and decryption, virus autoinfection and other technologies. These were all things his classmates only came into contact with after entering graduate school. After graduating from
, Lei Jun was unable to get any interest in his "iron rice bowl" at that time and joined Kingsoft, which became an important turning point in his life.
Although Xiaomi pushed Lei Jun's fame to the top, without a series of hardships in Kingsoft, such as doing WPS in Kingsoft, fighting against Microsoft, founding Zhuoyue.com, and making antivirus software, there would not be Lei Jun and Xiaomi who will move forward in the future.
Lei Jun’s professional life in Kingsoft can be divided into four stages.
Phase
Lei Jun entered Kingsoft Software Company in the 1990s, and was not afraid of the tiger. Lei Jun once led Kingsoft WPS and multinational giant Microsoft to fight a vigorous battle in the field of desktop word processing software .
996, Microsoft and Kingsoft signed an agreement - both parties read each other's files through the middle layer RTF format of their own software. This move later proved to be a fatal mistake. In this way, Kingsoft opened its "natural monopoly" WPS format to Microsoft "friendly". result, with the release of Microsoft Windows 95, it was transferred to Microsoft's Word office software in large quantities.Kingsoft was defeated, and 1996 became a landmark year for Microsoft to take over the Chinese market.
This is the darkest moment for Lei Jun. That year, he was only 27 years old.
stage
Microsoft is very powerful. Lei Jun decided to open up a second battlefield and make efforts in the market gap that Microsoft does not do. The later "Kingsoft PowerWords" and " Kingsoft Anti-Drugs " are crucial for Kingsoft to get out of the predicament.
stage
China's computer industry ushered in a comprehensive transformation from desktop software to the Internet era. Inspired by Amazon , Lei Jun established an e-commerce website - Zhuoyue.com.
Zhuoyue.com is burning money every day. Lei Jun realized that the level of informatization in China is still relatively low, and it will take at least 5 to 10 years for China's e-commerce to reach its mature level. And Zhuoyue.com needs at least 1 billion yuan.
, but it was born at the wrong time. The establishment of Zhuoyue.com in May 2000 was on the eve of the global Internet bubble bursting. Until September 2004, when Zhuoyue.com was considering selling, the entire industry was still in a low period, and there was no huge financing to support it.
In the end, Lei Jun decided to sell Zhuoyue.com to Amazon in a deep conflict, which made Lei Jun feel pain in selling his children and women.
Phase 4
In the second half of 2004, Lei Jun continued to promote Kingsoft to transform into online games. Through exploration in online games, online games have finally become Kingsoft's continuous cash cow , and Kingsoft has slowly embarked on a path of transformation. This also allowed Kingsoft to eventually escape from the Microsoft curse and have its own way of survival.
's more than ten years of hard work in the market have made Lei Jun no longer the young man who shouted "I want to use the next 10 years to make a big bet with Microsoft" during his speech at Wuhan University's .
After Kingsoft was listed in Hong Kong, Lei Jun chose to give up due to the struggle and contradiction. Turn to angel investment in , so you don’t need to be too affectionate with any company.
suddenly entered the investment field from the field of Internet technology. Where did Lei Jun get the confidence?
Because Lei Jun has super strong learning ability. By investing in Vanke , Lei Jun was able to skillfully talk about e-commerce, clothing cutting, spinning fineness and logistics distribution; when investing in UCWeb, Lei Jun carried several mobile phones in his backpack, and knew the parameters of the mobile phone and discussed the design of the mobile phone interface one by one. Every time he invests in a new business, he will quickly become an expert in this field.
In addition to learning ability, for bigwigs, there is another ability that is more important, that is, the ability to grasp trends, which is the key to dancing with the wind.
One day in 2009, Lei Jun, who has become a famous investor in the angel investment circle, chatted with Liu Qin and . He hoped that Liu Qin would summarize his investment methodology. He thought for a while and said, "I think the most important quality in investing is diligence."
Lei Jun immediately retorted: "What I don't believe the most now is that diligence rewards hard work."
Lei Jun always said that he was "delayed" by diligence rewards hard work. He talked about the core reasons why he did not seize the opportunity at the beginning of the rise of the Internet and what opportunities he missed. He deeply realized one thing: in the field of Internet entrepreneurship, we must act quickly.
Liu Qin and Lei Jun once shared their experience in reading the book "Alien". Now, like Lei Jun, he believes that opportunities and trends are the key factors in success or failure compared to his full diligence.
009, the general trend has come. Globally, smartphone sales in 2009 increased by 33 million units compared with the same period last year. In 2008, Apple had an 8.6% share in the smartphone market, and in 2009, Apple increased this number to 14.4%. Android phones have the largest year-on-year growth in 2009, with a market share increasing by 7 times to 3.9%.
At the beginning of this year, the long-awaited 3G license in the industry was finally issued. Minister of Industry and Information Technology Li Yizhong personally issued the license to three operators, and the industry is full of imagination about the 3G era.
The east wind of the mobile Internet has finally blown into China.
Summoning the Group Team
Lei Jun knew that to start a business, it is not enough to have trends and courage alone. He also needs a mature team with rich industry experience and consistent values and vision. This team must understand the Internet, software, e-commerce, and hardware manufacturing.
Several founding partners of Lei Jun include Lin Bin , Li Wanqiang , Huang Jiangji , Hong Feng and Liu De .
Lin Bin, vice president of Google Engineering and global technical director of Google , has been a senior executive in two American technology giants, Microsoft and Google. Lin Bin has become calm and capable, and has accumulated rich development experience.
In 2009, Google is about to withdraw from the Chinese market. The pressure from Google's headquarters and the various discomforts of foreign companies in China are already hitting Google China at , Tsinghua Science and Technology Park, . Lin Bin also had the idea of starting his own business.
After Lei Jun learned about it, he immediately introduced his entrepreneurial ideas for "hardware + software + Internet" triathlon . There is no doubt that Lin Bin understood Lei Jun’s larger territory and ambitions. After careful consideration, Lin Bin jumped onto Lei Jun's fleet.
Li Wanqiang, a Guangdong native, is a software interface designer at Kingsoft Company. Kingsoft people call him A Li.
A Li has an extraordinary harsh attitude towards aesthetics. Sometimes in order to test the user's feedback on a logo or poster, he can ask the master of the canteen from his colleagues.
A Li had just resigned from Kingsoft and came to say goodbye to Lei Jun. It was almost like God "sent" to Lei Jun a partner. For Lei Jun, Li Wanqiang is the best candidate for user interface design and interaction in mobile operating systems.
A Li said she wanted to open a studio and do commercial photography by herself.
Lei Jun said: "Stop talking nonsense, do it with me."
There was no too much discussion, and A Li chose to follow Lei Jun again and start his entrepreneurial journey.
Huang Jiangji was introduced to Lei Jun by Lin Bin, and everyone called him KK.
From 2005 to 2009, KK served as the engineering director of Microsoft Windows Mobile.
Microsoft had 2,000 engineers working on Windows Mobile at that time, investing almost double the resources Apple had. But why did Microsoft fail in the end?
KK believes that the reason for Microsoft's failure is the disease of big companies. Microsoft has accumulated decades of demand for commercial users, but has not understood the needs of ordinary users to use mobile phones. At that time, there was an incredible discussion within Microsoft, that is, whether Windows Mobile needs built-in camera functions. Microsoft engineers believe that users can install it themselves when they need it. The first conversation between
KK and Lei Jun lasted for nearly 5 hours. At the end, he already felt his desire to join Lei Jun's team. After all, he had endured Microsoft's tedious development process for too long.
Hong Feng, a senior product manager of Google China, was a subordinate of Lin Bin during his time at Google. Lin Bin thought Hong Feng’s product thinking was quite good, so he invited him to join Xiaomi.
Hong Feng is an extremely taciturn programming expert. He doesn't like to talk, but as long as he speaks, he always hits the key points and has the effect of summarizing the statements.
Hong Feng also introduced Lei Jun a friend who was studying in the United States - Liu De. This is the top talent selected for future mobile phone industry design.
Liu De is an art genius. He has had a strong interest in painting since he was a child. Until today, he can easily draw ink paintings of Qipai. He likes the sense of loss of control the most in some works of art, believing that it is the moment when the real genius appears.
Liu De has a strong ability to learn by himself. Although when he was in college, the industrial design major of Chinese colleges was still in its early stages, and the professional knowledge that the school could impart to students was very limited, through self-study, Liu De won the award in the Osaka Design Competition in Japan with his pioneering design concept with just one sketch.
Then, the founders began to recruit talents within their familiar range. Most of the early employees of
came from Microsoft and Kingsoft. Lin Bin remembered the young engineers who played football with him at the Microsoft Engineering Academy.Xiaomi's No. 6 employee Fan Dian and No. 7 employee Liu Xinyu joined Xiaomi at this time. Both of them had left Microsoft and worked in Alibaba Cloud . They were both the top 30 employees of Alibaba Cloud.
In addition to young colleagues from Microsoft constantly joining new companies, there are also people in the Kingsoft Group that continue to join.
When both software and design talents are in place, the demand for hardware talents becomes even more urgent. Lei Jun urgently needs a person in charge who knows how to make mobile phone hardware to lead the Xiaomi mobile phone project.
However, although Lei Jun's name is almost everyone knows in the software industry, his name is still unfamiliar to everyone in the hardware field. Software and hardware seem to be two worlds that are isolated from each other.
There was once a technical master who was close to the success of the interview. But when the candidate finally agreed to join Xiaomi and the two sides began to discuss salary and benefits, Lei Jun found that the candidate was not only unwilling to give up the salary of a foreign company, but also cared about the number of days he took a year of vacation, and had an indifferent attitude towards stocks and options . This made Lei Jun finally choose to give up.
Lei Jun firmly believes that no matter how good a person is in technology, he is not the person he wants. He needs an entrepreneur who can devote himself to it.
One day in September 2010, Lin Bin told Lei Jun that he recently met a hardware person named Zhou Guangping , which looked very suitable. Zhou Guangping is a technical talent. He has served as a core expert engineer of the core project team of the Motorola headquarters in the United States and senior director of the Motorola Beijing R&D Center. This is an expert who is very familiar with mobile phone research and development and supply chain.
Zhou Guangping agreed to Lin Bin to join Xiaomi, responsible for hardware research and development and BSP (board-level support package) departments. The most surprising thing is that he brought a hardware team of more than a dozen top engineers who will become the golden team to create Xiaomi's first mobile phone product. The addition of Zhou Guangping in
finally brought together the seven earliest founders of Xiaomi. This is a super luxury team described by the outside world as a crouching tiger and hidden dragon. Five of them have engineer backgrounds, two have designer backgrounds, and five are overseas returnees. They come from Microsoft, Kingsoft, Google and Motorola, and most of them have managed a team of hundreds of people.
From now on, these people hope to create a completely different product for the Chinese market, and have a world to display.
Xiaomi is established! The team gathered together and everyone began to think hard about the name of the new company. The names that have been carefully discussed include "Red Star" and "Red Chili Pepper", and were once very obsessed with "black rice". They think black is solemn, mysterious, and cool, and companies with the word "black" such as Black Water and Black Stone are all top companies in the world.
Finally, the name "Black Rice" was denied. Finally, we determined several principles, such as being close to the people, being catchy and impressive to read. It must be in Chinese and not need a strange English translation.
Finally, Lei Jun thought of his favorite sentence - "A grain of rice in Buddha's view is as big as Mount Sumeru ". When someone suggested calling the company "rice", Liu Qin said: "The Internet is born to avoid big and complete. We don't choose big, we just call it Xiaomi."
In this way, Xiaomi was born.
Passionate Years
company started, and Lei Jun plans to start a good start from the software field that he is best at.
At that time, parallel goods in the mobile phone market were generally in English operating systems, and they needed to be converted into Chinese to use. This action was called flashing the machine.
In order to provide a unique operating experience, flashing ROM (system software package) was popular at that time, but many flashing software were made by individuals and small teams, and they did not have the ability to truly do the underlying optimization.
is the best flash ROM, which is the first thing the new Xiaomi team wants to overcome.
With the name Xiaomi, this flash ROM is naturally called MIUI.
In terms of software development and management, Lei Jun, who came from software, has a very good method.
In order to allow the freshmen to quickly train, Lei Jun designed several apps to practice, such as "Driving Xiaomi", "Xiaomi Share", etc.
Young engineers are like a newly formed football team, conducting intensive training. They are of the same age and quickly become familiar with this kind of running-in.
Lei Jun also took the lead and incorporated many innovative ideas into the development process of MIUI.
First of all, Xiaomi’s product managers and engineers communicate directly with users about how to improve and optimize products.
Every Xiaomi employee, whether an engineer, product manager, or designer, must log in to the MIUI forum to communicate with users in real time, get real feedback on usage, and then make targeted modifications.
Lei Jun also has his own account. He lurks in the forum every day and calls himself - Xiao Xiami. The development model of
is due to Lei Jun’s initial idea of the mobile Internet - the mobile operating system must be developed using the Internet model.
This is because the extreme of the Internet is generated in rapid iteration. As early as 2008, Lei Jun summarized the seven-character formula of the Internet: concentration, extreme, reputation, and speed.
During the development of MIUI, the team showed the youthful vitality of a startup. Xu Fei, product manager of
, originally worked at Google China. “Everything at Google is based on monthly and quarterly,” she said. After joining Xiaomi, Xu Fei found that the speed of product iteration here was almost in real time, and there was nothing that once bound her. The enthusiasts she faces are all mobile phone experts, who constantly bring her creativity and inspiration. As a product manager, she is so happy that she takes off.
Jin Fan, who also comes from Google China, also experiences this unprecedented feeling of "spitefulness". At Google, changes to a user interface require approval from an executive at the headquarters, and the limitations of the process are self-evident. As soon as I entered Xiaomi, Jin Fan quickly found a kind of pleasure that could only be felt in electronic games - real-time positive feedback in the process of user feedback - screening pain points - making feedback into products - publishing.
He said: "In the game, if you shoot an apple, the apple will immediately shatter and people's desires will be satisfied. This is the psychological mechanism of people who are addicted to the game. ."
Jin Fan is immersed in this addictive "game".
is like this, engineers, product managers, and designers work together. It was a sunny day in MIUI, with extremely flat organizational structure, extremely open culture, and very explosive atmosphere.
Many times, the product manager thinks it is a good design, but the engineer rejects it because the engineer thinks he understands the product better. Usually everyone will sit down and solve the problem calmly. But occasionally, product managers have to struggle to cross the "contempt chain" between product managers and engineers, and both sides end up being furious.
Sun Peng is responsible for the underlying system and leads the development of the entire underlying system of MIUI. In an atmosphere like Xiaomi, Sun Peng is straightforward and always argues with product managers or even company partners.
He once said a famous saying: "MIUI update release, (code quality issue) Lei Jun said nothing, but I said something." Therefore, Sun Peng was given a beautiful title of "Sun Damou" by his colleagues. How to spread
MIUI?
Lei Jun believes that MIUI should create a mobile operating system Wikipedia , so that everyone can participate, and the spread of products should not rely on advertising, but based on word of mouth.
So, Li Wanqiang had a crazy idea - to build a development team of 100,000 people with the vast majority of members from users.
Li Wanqiang began to spend the world on forums, looking for senior users, pouring water and posting advertisements on some well-known Android forums every day, and after being banned, he would change his account and continue posting. This is how early users were pulled from different mobile forums one by one by Li Wanqiang.
By the time the first MIUI version was released in August 2010, 100 core users had gathered on the forum. They were all top mobile phone players and had unique insights into user experience.They are passionate about new things and constantly put forward their own ideas about the system. In order to express strong feelings for these 100 core users, a designer named Liang Feng even wrote their names on the boot screen, and the MIUI team also gave the name of the boot screen: "Thank you, brave God."
In addition to sincerity and love, the newly established company also uses a reasonable salary system to ensure that employees' internal motivation can continue. At the beginning of entering the company, most people chose a salary plan that lowers their salary but strives for as many options as possible. They know that only by truly doing things can we get rich rewards in the future.
This is the best way to make employees become entrepreneurs and have a sense of ownership in the company. Unlike
, which is , Silicon Valley, , startups, which have set aside 10% to 15% options, Lei Jun has left 70% of the equity pool for other partners and employees in terms of initial structure, which has greatly stimulated everyone's subjective initiative.
Later, Lei Jun not only gave employees options, but also accepted the employee's shareholding at the request of the employees. 76 employees invested a total of RMB 10 million.
girl Guan Yingzhi even invested a total of 100,000 yuan in her dowry money to Xiaomi.
Under this self-driven with youthful passion, MIUI has become more and more useful.
Its dialing panel is very humane, and the fast pinyin simple search is embedded in the phone book; different rings make the phone sound selection more; the flashlight function is extremely convenient; the versatile lock screen provides personalized lock screen wallpaper.
has brought together more and more users with excellent performance and beautiful design, and has shown an exponential growth trend. The more feedback the user gives, the more inspiration the product manager gets. MIUI has gradually become the most open, deep and outstanding mobile operating system in Android systems. These forum experts have become the most familiar strangers to product managers. Although they have never met each other, they have a good understanding.
Crisis has erupted
While the software team is working hard, the hardware team and engineering team can only do the simplest preparations.
is the most complex product in the consumer electronics field. The production of mobile phones is not just about purchasing a batch of components and then assembling them like assembling a computer. Instead, mobile phone manufacturers and core component manufacturers such as chips need to do joint research and development and joint debugging.
Therefore, the chip support of Qualcomm is crucial to the new Xiaomi.
In the era of simulation technology, key communication technologies are only in the hands of a few large manufacturers, forming a technology monopoly. If they do not disclose their technology, others will not be able to get involved in this industry.
and the emergence of Qualcomm solves this problem. Unlike companies that regard technology patents as moats, Qualcomm frees technology through professional authorization, providing convenience for new entrants to quickly form competitiveness. As soon as the
hardware team arrived, Xiaomi began to seek cooperation with Qualcomm.
Unexpectedly, Qualcomm sent a thick contract directly, like a heavenly book.
Qualcomm told Lin Bin that every time the contract is modified, they will send it back to the company headquarters for review, and they will need to wait three months to half a year.
Time is passing quietly, and most of the employees in the hardware department are waiting at this time.
Lei Jun and Lin Bin finally realized that for Xiaomi, a newborn baby company, buying time is the right way. Xiaomi does not have the capital to wait for 3 months to six months to negotiate with Qualcomm, they must advance quickly.
realized this, Lei Jun and Lin Bin looked at each other and said, "Stop talking, sign with your eyes closed." The
contract was signed without changing a word.
However, ordering chips is not as simple as putting the purchased chips into hardware to debug and run. It is very difficult for a company to completely digest Qualcomm's intellectual property rights and then stabilize the system by both engineers and technicians.
In order to win as many engineers as possible, Lei Jun invited Qualcomm's global senior vice president and president of Greater China Wang Xiang to Juanshi Tiandi, and talked about why Xiaomi company was established and Xiaomi's business model.
Lei Jun also talked about wanting to reverse the impression that Chinese goods are cheap and inferior, which is the main reason why Xiaomi chooses the highest-end chips. He talked about the rise of Japanese companies and the prosperity of German factories, and the manufacturing industries in these countries have experienced a stage of cheap prices and poor quality. However, since the 1960s, Japan has completely changed the world's impression of Japanese manufacturing through several brands, which requires entrepreneurship and strong execution. All this Lei Jun said resonated with Wang Xiang.
Wang Xiang decided to allocate more engineer resources to Xiaomi. The Qualcomm Snapdragon MSM8260 flagship chip ordered by Xiaomi is the most powerful processor in Qualcomm's history. Wang Xiang believes that such a product is worth doing for people with dreams.
However, at this time, the supply chain crisis is coming again!
Xiaomi mobile phone has more than 800 components, involving not only chips, foundries and other strategic cooperation parties, but also involves bottleneck components such as screens, cameras, touch, etc., and more than 100 suppliers such as wires and screws. Its production model is a "customized on demand" production model. Consumers place orders through the Internet, and the company obtains consumer demand instructions and immediately purchases parts from suppliers to meet production needs.
Generally speaking, the mobile phone supply chain is more complex than the computer supply chain. Many key components lack common standards and are customized parts and need to be booked in advance. However, the time from ordering to shipment of different parts varies.
For example, the purchase time of screen is the longest, generally three months, the battery time is generally two months, the chip is at least two months, and the camera is at least one month.
However, the supply chain relationship of mobile phone manufacturers is far from as simple as the contractual relationship between Party A and Party B. It’s not that you have enough cash in your hands, so you can choose the suppliers you want to cooperate with.
component suppliers often have to invest funds to develop together with the purchaser, so many components are exclusively customized, resulting in suppliers being extremely cautious about cooperating with new purchasers. Suppliers need to choose the right collaborators. Obviously, Xiaomi is not on the "right" list.
This is because many suppliers were deeply suffering from "counterfeit mobile phones" at that time, so they were slightly resistant to the new brand.
Originally, the entire team brought by Dr. Zhou Guangping has rich hardware experience and supplier resources, and is very familiar with mobile phone suppliers. Lei Jun was full of thought that he didn't have to worry about building a mobile phone supply chain.
Until one day, Zhou Guangping told him that even the simplest screw was not willing to cooperate with Xiaomi.
Yan Kesheng is one of the team members who followed Zhou Guangping all the way. He has been immersed in the industry for many years and is familiar with many leading mobile phone suppliers. The suppliers told him bluntly: "Keshen, we have no problem with eating and chatting, but don't negotiate business. Is your company okay? Don't be able to collect the payment in the end." The supplier's rejection of
not only brought about business anxiety, but also brought challenges to employees' self-esteem. Zhu Dan and Liu Anyu , also from Motorola's team, clearly remember that a touch-based supplier sent two representatives, and the two were half-tilted on the sofa and clearly told the two young people: "We know there will be no business here. It's just that the boss asked us to come here, and we are actually just going through the motions." Zhu Dan and Liu Anyu had never encountered such humiliation and even wanted to duel.
parts supplier can still find it slowly if you can't agree, but there is no progress on who is the most important OEM in Xiaomi's mobile phone supply chain.
Zhou Guangping's team made a list of the world's top OEMs including Foxconn , and took turns to talk, but all ended in vain. After counting the list, we found that there was only the last OEM factory that had not completely rejected Xiaomi, that is , Yinghuada , located in Nanjing.
If the OEM factory cannot be negotiated, what's the use of a vendor that has been negotiated?
In addition, in terms of mobile phone screens, Xiaomi finally locked in the world's top screen supplier Sharp at that time. However, Xiaomi's request for meeting through various channels was rejected by Sharp on the grounds that he had no time.
Since Liu De had some entrepreneurial experience in the past, Lei Jun finally asked Liu De to be responsible for the supply chain.
Liu De visited Yinghuada Company with a mentality of fighting against . At this moment, Zhang Feng, general manager of Nanjing Yinghuada, is eager for a partner who has ambitions for the future.
is on a whiteboard wall. Liu De wrote and painted and said, "I know you want to know how large Xiaomi can have in the future. We don't know this at the moment. However, our operating system MIUI already has hundreds of thousands of users. These are our seed users, which will play a huge role in the market transformation of Xiaomi mobile phones."
Zhang Feng had not had a particularly in-depth understanding of Internet thinking before, but after listening to Liu De's words, he vaguely felt that this should be an opportunity for the future. In particular, Xiaomi proposed to pay R&D expenses in advance, which solved Yinghuada's worries. The business of
was finally negotiated. The contract of Invada seems to have ended Xiaomi's bad luck. With the help of the Japanese Mitsui Consortium, Xiaomi made an appointment with Sharp to meet.
However, at this moment, a magnitude 9 earthquake occurred in the Pacific waters east of Sendai Port in Japan, and the tsunami it caused killed more than 15,000 people. Fukushima Daiichi nuclear power plant was destroyed, and the nuclear leak made the originally lively streets empty.
The entire Japan has become a disaster area.
will attend the meeting on the agreed date? In the end, Lei Jun, Lin Bin and Liu De decided to go on schedule.
On that day, the plane from Beijing to Osaka was empty, with only three of them.
In the first conference room of VIP at Sharp headquarters in Japan, Lei Jun, Lin Bin and Liu De finally met Minister Ohashi Yasuhiro of Sharp Company. The atmosphere of negotiations at
is very friendly. Several founders told the business model of Xiaomi mobile phones according to the prior arrangement and begged Sharp to become Xiaomi's screen supplier.
Sharp's screen has the resolution of FWVGA (854×480), which is an advantage that smartphones did not have at the time. But once this screen is adopted, Sharp needs to modify the FPC (flexible circuit board) circuit at the bottom, which means Sharp will make additional cost investments.
The originally scheduled one-hour meeting lasted for three hours. Sharp's engineers studied the feasibility of modifying the circuit on the spot, and people kept coming in and out of the conference room.
Finally, Ohashi Kawai gave a formal conclusion: "It can be done!"
At the dinner, Ohashi Kawai told several reasons why he was willing to cooperate with Xiaomi. In addition to endorsement of by Mitsui Trading Club , another reason was that the founders of Xiaomi took the risk of visiting on schedule shortly after the earthquake, which made them a little unexpected, and the conclusion of all transactions must rely on interviews.
Sharp brought an endorsement effect to Xiaomi, and Xiaomi's entire supply chain system was slowly running. The hot working atmosphere of the
MIUI team was quickly transmitted to the hardware and engineering team. The hardware team, which had been in a two-month period, was as refreshing as if they were opening the gate to drain the water. Liu Anyu, who is in charge of mobile phone system software, still clearly remembers the way the entire team looked like they had won the treasure when they got the Qualcomm authorization contract. Everyone studied the English terms word by word, as if they wanted to eat them into their stomachs.
emerged from noon on April 20, 2011. Zhang Guoquan, the engineer in charge of the phone module, still remembers it.
"Ding Lingling..." When this imperfect circuit board sounded, Zhang Guoquan, who had been working in the mobile phone industry for 10 years, could not describe his inner surging, because this is a mobile phone he really wanted to make.
Everyone excitedly greeted Lei Jun to his desk.Lei Jun bent over and pressed his ears tightly against the edge of the table like listening to the baby's crying to capture this wonderful sound. At this moment, it was captured by Xiaomi's employees and became a historical moment worth remembering in Xiaomi's process. The
mobile phone was made. At first, Lei Jun hoped to set the price of Xiaomi mobile phone 1 at 1,499 yuan. Because around 2011, the starting price of domestic high-end flagship mobile phones was 1,500 yuan, and Xiaomi hopes to provide users with the most extreme price.
However, when the Xiaomi mobile phone 1 R&D plan was close to finalization in November 2010, Zhou Guangping told the founding team that since Xiaomi's company is too small and it is the first time to make a mobile phone, the prices required by suppliers are relatively expensive, and the cost of Xiaomi mobile phone 1 alone reaches 2,000 yuan.
Lei Jun calculated that if Xiaomi mobile phone 1 is mass-produced 300,000 units according to the plan, and the price is set at 1,499 yuan, it means that the company will lose 150 million yuan as soon as it comes out. After repeated thinking, Lei Jun realized that such excessive pricing was not healthy and it may bring disaster to the company's subsequent operations and long-term development.
At the company's management meeting, Lei Jun corrected his previous pricing with dark eyes and changed the final price to this price closer to the cost - 1,999 yuan, which is exactly one yuan lower than the cost. While thinking about pricing, Lei Jun was also preparing for Xiaomi's first product launch conference.
He firmly believes that the key to the success of a press conference lies in the content. He decided to use PPT to introduce product information in a centralized manner, so that users can see the birth of this new species in the most transparent way.
visual effect is Lei Jun's strength. He requires all designs to meet the most beautiful standards as much as possible, and every word and every punctuation mark must pursue the ultimate, which put Liang Feng and Diao Meiling, who are responsible for making PPT, into an unprecedented crazy state.
The small team in charge of product launches occupied a conference room and was busy every day for a whole month and a half. Someone posted an A4 printing paper on the door of that conference room with three big words written on it - "Crazy Asylum".
There are also many voices of dissatisfaction on the Internet. People have begun to predict the fate of Xiaomi, and the most optimistic observers have only given sales expectations of 50,000 to 100,000 units.
No one in the "mad asylum" has time to pay attention to the doubts from the outside world. The ideas that Liang Feng, Diao Meiling and Lei Jun have emerged in the brainstorming are being repeatedly polished, which sets the tone of Xiaomi’s press conference - Information is king. Diao Meiling found that the most extreme thing in this regard was Apple. She looked back at Apple's early press conferences many times, and even slowed down one frame after another. The beauty of the image presentation and the conciseness of information refining have touched her many times.
Finally, on August 6, 2011, the day of the Xiaomi 1st generation mobile phone launch conference.
The 78-minute press conference is still an unforgettable memory for many people. The 300,000 MIUI fans who had never met online seemed to be activated by a very sincere productist spirit in an instant. This feeling of blending the online and offline spiritual worlds creates a huge happiness energy field. The press conference was accompanied by people's screams almost throughout.
Lei Jun told his business model to all the audience. He provided people with two best gifts: First, the best Android system mobile hardware - the first dual-core 1.5GHz main frequency mobile phone in China, with the fastest main frequency in the world. Second, the first mobile operating system MIUI developed in the Internet model, the ever-changing theme and the first ever-changing lock screen.
At the press conference of Xiaomi Mobile 1, the four mobile phones that Xiaomi mobile phones are benchmarked on PPT. The parallel stock price of HTC Sensation is 3,575 yuan, the Samsung Galaxy S2 is 4,999 yuan, the MOTO Atrix ME860 is 4,298 yuan, and the parallel stock price of LG Optimus 2X is 2,575 yuan. The climax of the entire press conference of
has been carefully designed - after detailed parameters comparison with these four phones, a big golden question mark fell on the large black screen. Lei Jun asked a simple question: What will the final price of such a mobile phone with various parameters, software and hardware? People stared at the big screen as if they were waiting for the last magician to stare at the magician.
, which almost fills the entire screen, lands like a meteorite in the night sky - the golden words "1999" are displayed with huge sound effects. This effect was designed by Lei Jun himself. When the price of mobile phones with the same configuration is around 4,000 yuan, Xiaomi phones directly cut the price by half.
almost burst out screams and applause of overturning the roof, lasting for nearly half a minute.
Many Xiaomi employees on the center console don’t care about their work and they all shed tears. At this moment, Xiaomi people and Mi fans are in the same mood. They dedicated their most sincere love to this unparalleled magic company and to this moment that is destined to be recorded in history.
After the Xiaomi 1st generation mobile phone debuted in a high-profile manner, enthusiastic users are looking forward to the sales of "Xiaomi" real phones on social media.
has been accepted for pre-orders starting from September 5, 2011, and Xiaomi mobile phones have received orders of more than 300,000 units in a very short time. On December 18, Xiaomi mobile phones sold in large quantities for three hours through its official website, and more than 100,000 users ordered. Xiaomi phones have been ordered for 400,000 units.
Xiaomi proves its epoch-making innovation with sales numbers.
Xiaomi created the concept of Internet mobile phones, so naturally we have to sell mobile phones through the Internet. But in fact, the e-commerce team is facing unprecedented pressure.
Li Wanqiang's life is also going to have a difficult cross-border at this time, and enter a field he has never entered before - e-commerce.
Fortunately, Li Wanqiang and his subordinate Wang Haizhou received unreserved gifts from Li Yong, CTO of Letao.com, an e-commerce company invested by Lei Jun.
This may be one of Lei Jun’s biggest advantages in entrepreneurship. He can use a large amount of corporate resources he gathered when he was an "angel" before to allow Xiaomi to gain unconditional trust and strong support. Is the newly built Xiaomi e-commerce process feasible in
?
In order to verify the feasibility, the e-commerce team conducted a "selling coke in a big store". Within Xiaomi, employees place orders on the newly established Xiaomi e-commerce platform page, purchase Coke with a price of 0.1 yuan, and then wait for delivery at their own stations.
system errors occur from time to time. Sometimes one order is delivered twice, and sometimes money is received online, but the goods are not delivered. During the period when the sales outlet was launched, Xiaomi.com's technicians tested many problems through the 10% discount on selling Coke, which were solved before the e-commerce company was officially launched.
"This is equivalent to digging out all the thunder in advance." Wang Haizhou said.
e-commerce was successfully built, and Xiaomi's release also successfully aroused the public's curiosity and interest in the company Xiaomi. However, this enthusiasm has also aggravated the anxiety of Xiaomi fans, and Xiaomi has been labeled as "hunger marketing" time and again.
is inside Xiaomi and the anxiety is even more serious. For the first time, they realized that after so many hardships, their exploration of the hardware world has just begun. What they want to learn comprehensively and make up for lessons is called supply chain management.
After the National Day holiday, a supplier told Xiaomi that there was no way to deliver the goods normally, which made Yan Kesheng, the hardware R&D team, feel very strange. The mold had been certified before the festival, so why is there still no way to deliver the goods? The person in charge of this supplier could only confess: "We changed an engineering manager before the holiday. He felt that the mold in the past was not good enough, so he worked overtime during the National Day holiday to modify the mold. But after the modification, he found that it could not be installed."
Yan Kesheng recalled that he heard this sentence at that time, and it was thunderous.
In order to remedy this problem, Yan Kesheng stayed in the factory for three days and two nights without leaving. He led his team to all his efforts on this project, like a group of firefighters, devoted all his energy to extinguishing the burning fire in front of him, completely forgot about himself. On the other side of
, engineers need to manually put the battery into the battery compartment and then package it. At this time, Yan Kesheng found that the batteries provided by battery suppliers are large and small, and the size is not uniform.The delivery quality of
battery made Yan Kesheng very angry, and he questioned the person in charge of the battery manufacturer. The other party actually threw the battery circuit board to the ground in the seat and said, "You see, it didn't explode, right? I think this is great." The implication is that it's already good if you have batteries. This reaction from the battery supplier of
made Yan Kesheng very angry. He decided that after the project was completed, he must clean up the supplier and never reuse it. Later he really did this. No matter how the supplier requested it, he never made it to the Xiaomi supplier list again.
In Xiaomi's early supply chain system, various problems were truly exposed. The biggest problem Xiaomi encountered at that time was not the lack of design capabilities, but the limited support for the entire supply chain.
"Every day, I am urging the goods to make the goods crazy, asking the supplier to finish what I want according to time. After finishing, it still has to be what I want. Some things have problems, and the supplier has to go to the site to do maintenance." Yan Kesheng said.
After overcoming these difficulties, Xiaomi finally ushered in a difficult stage of production capacity. At first, I could only produce 500 pieces a day, but later I could produce 1,000 pieces. But at this time, a flood in Thailand interrupted the newly started supply, and overwhelming curses began to appear in the Xiaomi community.
Li Wanqiang, who was in charge of e-commerce during this period, was under great pressure. One day after working until two o'clock in the morning, he parked his car on the side of the road in a daze, and a pressure like a mountain pressing on him was hit. In the darkness, his phone lit up and opened it and saw a private message on Weibo.
Li Wanqiang opened the link and found that it was a carefully crafted video. Xiaomi users from all over the country shouted four words on the screen: "Come on Xiaomi!" At this moment, Li Wanqiang burst into tears.
makes lovely products, and users will repay love. The love of users will continue to motivate the team.
The flood in Thailand finally passed, and the battery was finally manually adapted by engineers one by one. Xiaomi mobile phone production capacity has finally begun to gradually increase.
Dark Forest
In fact, before Xiaomi's mobile phone was born, Xiaomi tried to make the instant messaging software "miTalk" around 2010, but MiTalk inevitably encountered WeChat that appeared almost at the same time. In the end, because of insufficient engineering resources and insufficient technical reserves, MiTalk's stability was not good enough, Xiaomi gradually became weak in competition with Tencent.
After the mobile phone strategy was successful, Lei Jun made a strategic decision to shrink MiTalk.
Although there are some choices about the business, the founders of Xiaomi are still very emotional about the background of the era when they started their business. Facts have proved that instant messaging is a career of 100 billion yuan, and the direction of Xiaomi driver evolution is later Didi, and finally smartphones are added.
Lei Jun sighed during a private chat in 2019: "We have really caught up with a good era. None of the directions we like are small. As soon as God went out, he gave us three good cards. If it were today, it would be difficult to find three directions with huge potential.
Chinese entrepreneurial talents continue to emerge, and wave after wave of venture capital has also entered the market. Lei Jun, who has been immersed in the venture capital field for several years, also wants to set up a local fund to help those trendsetters continue to do so. Continue to practice ideals and become their friends on the road to entrepreneurship.
Under the premise that Xiaomi has been established, Lei Jun deeply feels that a mature company cannot exist in isolation, but needs to establish a comprehensive ecosystem in the upstream and downstream of the industry, so as to complete his own industrial layout from point to surface.
"Working with the trend is my life experience after the age of 40. Our funds must follow the trend. At any time, we must respect and understand entrepreneurs and help more entrepreneurs follow the trend. "Lei Jun said. The name "Shunwei" in
was finalized in Yingu Building, and a bamboo forest was incubated in the future. One year after the release of
Xiaomi 1st generation mobile phone, in August 2012, Xiaomi 2 and 1S were released one after another. A year later, the counterfeit phone terminator - Redmi Mobile was released again.
Lei Jun had long noticed the erosion of counterfeit phones on the market.
In 2008, the shipments of counterfeit mobile phones in China had reached 101 million units; by 2009, this number reached 145 million. However, domestic brand mobile phones received very little attention during the same period.
Redmi is a new brand of Xiaomi. It is positioned completely different from the flagship phone. It will be a mobile phone for ordinary consumers and positioned at around 1,000 yuan.
mobile phones with the same level of configuration at that time were generally sold at around 1,500 yuan on the market. As the main force entering the 1,000 yuan mobile phone market, Lei Jun’s final price for Redmi was 799 yuan. This price once again made the entire industry boil.
Redmi started a domestic thousand-yuan machine market war, adding fire to the elimination of counterfeit machines that were rampant across the country, and becoming the last straw that broke the latter.
Time has come to 2015. Just as Xiaomi is making rapid progress, the external environment in which Xiaomi survives has begun to become more severe.
On the one hand, offline, traditional mobile phone manufacturers such as Huawei and Meizu are frequently making moves. LeTV mobile phones are also brewing in the undercurrent and are preparing to use an unconventional price system to crack down on the market.
also cannot be ignored. The growth of the two brands OPPO and vivo.
After Redmi ended the counterfeit market, OPPO and vivo laid a large number of stores offline carpet-style floors, and the brand has dropped from third-tier cities to fifth- and sixth-tier cities, seizing the share that was once occupied by counterfeit machines.
On the other hand, Alibaba has also begun offline exploration and layout in new retail. Meituan has stood out in the cruel battle between Thousand Groups because Meituan has huge commercial capacity offline.
When large online e-commerce companies start to make offline layouts, they have already sent a certain business signal to the outside world - the online market is becoming saturated, and the traffic dividend on the Internet is gradually decreasing.
However, Xiaomi was unaware of all these changes and was still immersed in the joy of rapid development.
Xiaomi's growth trend has also caused a small boil in investors' hearts. Star investors from DST, All-Stars, Yunfeng Fund, Houpu, GIC and other fields are constantly asking about the possibility of investment, hoping to seize the opportunity to enter Xiaomi's team.
On December 29, 2014, Lei Jun issued an open letter, officially announcing that Xiaomi raised US$1.1 billion and its valuation reached US$45 billion. Just like a thunder in the night sky, it shocked the entire venture capital and industry.
"Everyone is inflated, including me." Lei Jun commented this when reviewing the matter. A month later, Lei Jun suddenly realized that this round of financing worth $45 billion was actually a huge mistake driven by vanity, which triggered capital's fanatical pursuit of Internet mobile phones and allowed hot money to blindly enter this field.
At the same time, it also brought Xiaomi to a position where everyone is watching and everyone is jealous. Xiaomi actually did not raise enough funds to fight against its opponents without restrictions.
Lei Jun believes that this financing is the only strategic mistake he, a veteran of entrepreneurs, has made since the founding of Xiaomi. If you want to give some warnings to future entrepreneurs, you must keep your calm to the greatest extent when the market is optimistic about you.
either restrains vanity, does not raise funds, and solves problems with speed; or raises endless money to win and uses the advantages of capital to win the market.
However, Xiaomi destroyed the laws of the dark forest as described in the science fiction novel "The Three-Body Problem", awakened all competitors, and began to encounter a "group fight".
capable competitors are growing rapidly and fiercely gaining market share of mobile phones.
Huawei Honor has achieved its annual sales target of US$5 billion in October 2015, and its sales doubled year-on-year compared with the previous year.
Meizu also achieved sales of 20 million mobile phones this year.
, LeTV is even more crazy with the fuel of capital, selling at a price lower than the cost. For every mobile phone sold, LeTV will lose about 200 yuan.
In the crazy market, Xiaomi is in a difficult situation.
is getting rainy all the time, from Xiaomi Mobile 4 to Xiaomi Note, the supply chain has been repeatedly and problems.
Qualcomm's order also delayed delivery, making Xiaomi, which was already out of stock.Finally, it was discovered that the root cause was that Xiaomi and Qualcomm's systems were not connected.
Not only that, there is no complete information system inside Xiaomi. At the most core ordering meeting every week, the three departments of supply chain, production and sales respectively hold three computers and open their respective Excel forms for comparison. Industry insiders cannot believe their ears. Is Xiaomi’s annual shipment volume of tens of millions of units managed by this method? Although it seems to be accidental, Lei Jun realized the essence of the problem, that is, the capabilities of the mobile phone team are no longer in line with Xiaomi's size. At this moment, a more difficult problem arose.
The supply chain team was too strong in the process of Xiaomi's growth and growth, and finally even Xiaomi's most important supplier, Samsung, offended it.
Samsung is the overlord of the supply chain field, and AMOLED screen is also a product that Samsung has trademarks and patents, and is the first choice for many flagship mobile phones. From the moment Samsung refused to cooperate with Xiaomi, Xiaomi could no longer use this hot screen. There are almost no alternative products, which delays the planned Xiaomi Note 2 release by one year.
Xiaomi's early supply chain was established by Lei Jun himself. He knew that every supplier was hard-won and had been instilling in the company's employees the relationship between mobile phone manufacturers and suppliers.
One morning, Lei Jun couldn't contain his mood and picked up the phone and dialed it to this past friend, saying, "When do you have time? I'll fly to Shenzhen to apologize to you."
drank 5 bottles of red wine, and Samsung executives retelled the humiliated scene excitedly, restoring all the conversations at that time. Lei Jun felt very sad after listening to it. He patted the other party's shoulder and said, "We did something wrong, we did something wrong, this attitude cannot represent Xiaomi."
For the first time in so many years, he felt so angry.
In order to show sincerity, Lei Jun contacted four heavyweight friends in the mobile phone industry to apologize to this Samsung executive. Lei Jun flew to the Samsung headquarters in South Korea several times to apologize.
After a long period of time, Samsung finally agreed to supply Xiaomi two years later, because "the production capacity within two years has indeed been fully loaded."
During this period, the siege of public opinion made Lei Jun feel heartbroken for the first time.
In fact, the public opinion is not completely unfounded. In the consumer electronics hardware industry, no company has historically been able to reverse after its performance declines, except for Apple. In the mobile phone industry alone, Sony Ericsson, Nokia, HTC, etc., once shining names, either disappear in the long river of history or stay in a perpetual state, and it is difficult for them to appear in the public's sight again.
The reason is that the decline in mobile phone performance will shake the confidence of suppliers, and will no longer support advanced process technology, and will no longer provide sufficient spare parts and production capacity.
In the first quarter of 2016, Xiaomi smartphones sold 14.8 million units worldwide. If we compare Xiaomi's sales of 14.98 million units in the first quarter of 2015 vertically, this number is not ugly. However, in the horizontal coordinates of the industry, Xiaomi's situation is worrying. Xiaomi has already slipped out of the top five smartphone sales in the world, replaced by OPPO and vivo.
This is the real pain Xiaomi and Lei Jun faced in the first few months of 2016. Ben Horowitz, the author of "Entrepreneurship Difficult", once felt that loneliness. He said: "No excuse is helpful. The only choice I face is to either survive or completely destroy. Most things can be done with others. However, the most basic question is how the company survives. This question is left to me alone, and only I can answer this question."
Lei Jun understood this mood at this moment.
Xiaomi Evolution
At a regular executive meeting in May 2016, the first and only face-to-face fierce quarrel in Xiaomi's history occurred. The head of the mobile phone department began to blame the marketing department under pressure on Xiaomi 5's sales, which angered Li Wanqiang.The anger that Li Wanqiang had accumulated for a long time finally erupted, and the two of them started arguing one by one at the regular meeting.
This is the first time that Lei Jun has not been able to finish the regular meeting in more than five years since he founded Xiaomi.
Lei Jun walked out of the conference room. At that moment, his heart was filled with a sense of peace falling from the sky. He knew that some things must be made.
Mobile phone industry is a decathlon industry, and its capabilities cannot be weak in any link.
At this time, Xiaomi obviously had problems with its hardware.
personnel adjustments to the person in charge of the mobile phone department must be made at this moment.
On May 15, 2016, Lei Jun held an internal founder meeting. Everyone voted and unanimously passed the decision to remove the head of the mobile phone department.
Mobile Department is a very closed territory within the company. Most of the team members are old Motorola's subordinates. If a mutiny occurs, it will have a significant impact on the company.
Some terrible thoughts once appeared in Lei Jun's mind. Will there be a mutiny in the entire team? If the person in charge of the mobile phone department that can be taken over cannot be found, who will be ultimately responsible for this department?
At the last moment, Lei Jun figured out this problem: the only person who can untie this knot is himself.
At this time, the past 20 years of management experience helped Lei Jun. He instinctively knew that there were two things that were most important now. The first was to gain the trust of the entire team, and the second was to understand and grasp the core of the business. He decided to do two things at the same time.
Since taking over the mobile phone department, he has had one-on-one conversations with 200 colleagues in the mobile phone department.
What he needs to do is, first, quickly understand a person’s job responsibilities within the department. Second, sort out the biggest difficulties and problems that the company is facing now. Third, let the team vote democratically to elect the most capable business leaders in each department.
After having a one-on-one conversation with 200 team members, Lei Jun couldn't help but sigh: Xiaomi actually went to war with such a fragile organizational structure and severely insufficient human resources, and it also reached the forefront of the world. It has to be said that Xiaomi’s early success relies on everyone’s common dream and the tacit understanding between mature teams. In particular, the Internet's option incentive system has played a great role in uniting people's hearts. In terms of
business, before Lei Jun took over, the mobile phone department operated as a project team. After the overall product planning is completed, several departments will complete their work separately. After some modules are completed, they will then move to the next module to continue to promote. The biggest problem with
forming departments according to modules is that the entire mobile phone R&D end does not connect with each other, which leads to the serious problem of various departments competing for their own voice and snatching territory. What is more important is that the mobile phone department lacks product groups and project management groups in its organizational structure, and all product definitions rely too much on intuition and department heads. In the words of Zhang Guoquan of the Mobile Phone Department: At that time, the operation of the mobile phone department did not rely on processes, but on rule by man.
After gaining recognition from team members, Lei Jun started a large-scale organizational structure adjustment. The overall idea is that Xiaomi should benchmark against the best companies in the market, regroup according to the R&D functions, straighten out the internal structure of the entire mobile phone department, and adjust the original project team structure into four major modules: product, R&D, supply chain and quality.
In the R&D module, Lei Jun adjusted the mobile phone design department, thus changing the separation of the two departments.
Lei Jun also established a core device department to increase key investments in the fields of cameras, screens, batteries and chargers.
Lei Jun also realized that the testing department must be a neutral first-level department so that the quality of the product can be guaranteed and the purpose of research and development can be tested. Testing can maximize its effect only when the R&D department and the testing department form a check and balance relationship. The work of promoting cadres within
has also been put on the agenda.
The newly promoted cadres were trained by Lei Jun himself. In the absence of cadres in the mobile phone department at that time, these newcomers still seemed very immature. If Lei Jun needed these young people to become leaders, he would need to tell them how to show leadership. This kind of cultivation of the middle level starts with how to dress, how to speak, and how to make a powerful PPT.
At the same time, Lei Jun began to promote the optimization of the entire supply chain. This work is very complicated, involving hundreds of parts.
In order to understand the real situation, Lei Jun invited his old friend Zhang Feng to help him do a cost analysis of Xiaomi's procurement data cable. Zhang Feng found that although Xiaomi has always required the highest quality, its business capabilities are not strong, and the prices given to Xiaomi by suppliers are usually not the best.
In addition to investigating the real costs, Lei Jun also found that Xiaomi has had an incredible waste of resources in the past few years.
A screw supplier gave Xiaomi 5 times the price that other manufacturers have. Such a high offer made Lei Jun feel incredible, but the other party proudly introduced: "The quality of our screws is really good, and we keep striving for excellence. It's so good that even Apple can't afford it." Lei Jun couldn't laugh or cry.
He found the company's purchasing department to communicate and found that everyone thought that screws were small items, but only a matter of a few dollars, so there was no need to be too fine. Lei Jun was very surprised by this view. Xiaomi mobile phones shipped tens of millions in a year. If a mobile phone is expensive, multiplied by tens of millions is an astronomical figure, and the waste of resources is simply unimaginable.
Lei Jun also found that in order to easily change the content of Xiaomi's original product manual was not designed as a folded piece of paper, but designed four separate sheets of paper. However, this design leads to high printing costs, requiring four pages of paper to be printed separately and placed in order, and if you are not careful, you will put it incorrectly.
Lei Jun sighed: "This is a typical result of no connection between departments. Everyone just designed according to their own ideas. They wanted to save costs, but they spent several times more money on the implementation of the design." During that period, he discovered a lot of such waste and corrected it. Lei Jun later felt glad: "If a founder himself cannot figure out the basic rules of the core business, how could he expect other people to know better than you?"
At such an especially special turn of spring and summer, Xiaomi embarked on its path of refined operations and systematic growth.
offline expansion
Global smartphone shipments in 2016 were 1.4706 billion units. Compared with the growth rate of 10.4% in 2015, the growth rate in 2016 was single digits, and the market was close to stagnation. The trend of rapid growth of Internet traffic to peak is already very clear.
In China, the demand for smartphones for users in first- and second-tier cities is becoming increasingly saturated, while the third- and fourth-tier and more vast rural markets have just begun to enter the stage of large-scale popularization of smartphones. Therefore, OPPO and vivo's market share continued to rise at this stage. In the fourth quarter of 2016, OPPO won the championship with an overwhelming advantage. In contrast, Xiaomi's sales showed a plunge trend.
Xiaomi had no chance to enter the downward offline market at that time, which made it difficult for Xiaomi to display its strengths in this field.
In this case, on October 25, 2016, Xiaomi Note 2 and Xiaomi MIX full-screen phones were released against the trend.
Xiaomi MIX is the world's first full-screen phone. Its release has brought a boost of morale to Xiaomi, which is plagued by negative news, and also sent positive signals to suppliers.
As the tide of mobile Internet O2O fades, a new direction has gradually emerged, that is, Internet companies have moved from online to offline, further combining the virtual economy with the real economy, and some innovative ecology has begun to emerge, making the virtual economy more dependent on offline resources and operations.
This means that if the expansion is not offline, the fundamentals of Xiaomi's market will not continue to grow and the offline market share will not be able to obtain.
's work of opening an offline retail store seems to be naturally prepared for Zhang Jianhui, who is step by step to expand the offline market for Xiaomi.
In 2015, Xiaomi mobile phone sales were strong.Zhang Jianhui, who has always been in charge of after-sales service, has emerged a new idea, hoping to add some sales functions.
With strong internal opposition, Zhang Jianhui reported her thoughts to Lei Jun through MiTalk, and was affirmed by Lei Jun. This made Zhang Jianhui very excited.
Finally, Zhang Jianhui was assigned to 2,000 Xiaomi Note top-end mobile phones, and launched the first offline sales of Xiaomi Home on May 12, 2015.
was a successful offline sales this time, and 2,000 mobile phones were sold out in one go.
On August 2015, Lei Jun and Zhang Jianhui had a meeting. The two talked about the offline sales exploration in May 2015, asked Zhang Jianhui about her understanding of the offline market, and talked about the bottlenecks that Xiaomi has encountered at present. Lei Jun talked about the first time that Xiaomi had no position offline. He said: "If Xiaomi's offline market did not sink, it would not be able to reach some consumers."
In Zhang Jianhui's impression, this is the first time that Lei Jun mentioned to her that Xiaomi hopes to explore offline. She vaguely felt some pressure in the room.
Qi Yan, who was the senior vice president of Xiaomi at that time, helped Xiaomi discuss an offline store - the Contemporary Mall Store.
Contemporary Mall Store is just regarded as a pilot within Xiaomi, and no one has too high expectations.
However, in addition to Xiaomi mobile phones, Xiaomi stores also sell ecological chain products such as air purifiers and mobile power supplies, which gives consumers a feeling of shopping, and the daily traffic has been very large since the opening.
is like this, and the contemporary mall store quickly made a profit, proving that Xiaomi can run offline. As long as the product flow is fast and the efficiency is guaranteed, offline stores can make profits, which gives Xiaomi great confidence to continue to enter offline.
However, just when Lei Jun and Zhang Jianhui were planning to expand offline retail, she became pregnant.
or not? This usually makes many people very confused. Zhang Jianhui, who has always been a strong woman, customized two plans for herself that night.
After the meeting of one day, Zhang Jianhui said to Lin Bin: "Leader, I am pregnant now, but I know that Xiaomi Home is very urgent now. I currently have two plans. First, I will take Xiaomi Home with me first, and you can find someone to take over as soon as possible. The second plan, if you can't find someone to take over for the time being, the normal maternity leave is four months, I will only take two months off, and I will come back in two months."
Lin Bin pondered for half a minute and said, "Plan 2 is the second."
In this way, Xiaomi Home's comprehensive expansion has begun. Zhang Jianhui also began to conduct comprehensive inspections of offline stores, and she often forgot that she was a pregnant woman.
She recalled that she stopped traveling until she was 7 months pregnant. In order to learn to design the best experience store in the world, she became a regular customer of the Apple experience store. She almost went through all 42 Apple experience stores nationwide. In her words, "I had already entered a state of fascination when I saw the store."
Finally, with the efforts of Lin Bin and Zhang Jianhui, the offline retail store of Xiaomi Home China Resources Wucaicheng Store was opened. Its system is connected to Xiaomi.com, and the price system is completely consistent. If Xiaomi Network adjusts its price, offline prices will also be adjusted. Offline stores have to bear the expenses such as store rent, decoration costs, employee salaries, etc., and the profit will be very low. If offline stores want to keep running under this situation, product selection strategies will become the key to whether they can make a profit.
According to Lei Jun's idea, Xiaomi Home's product selection strategy should be to sell products that come with their own traffic and can create huge conversion rates. The bamboo seedlings planted by the Shunwei Fund have now grown into bamboo forests. By bringing the product portfolio of the ecological chain to Xiaomi Home, you can turn the inefficient traffic that doesn’t have much to buy into the store to the efficient traffic that can always buy several interesting products when you enter the store.
At the beginning, Lei Jun suggested that the ecological chain company must start from the peripherals of mobile phones. After all, mobile phones are currently the core of Xiaomi, and the peripheral products of mobile phones and the core business of the company are naturally connected.
The first hardware Lei Jun wants to make is a mobile power supply. As people use mobile phones for longer and longer, the power consumption of mobile phones will increase, and the demand for charging will also rise sharply.
But the seemingly simple mobile power supply is not simple at the request of Xiaomi. In addition to the extremely demanding appearance design, the internal structure of the power supply must also be innovative. In particular, Lei Jun has very clear requirements for the performance and pricing of mobile batteries: 10,000mAh, only sold for 69 yuan. This was almost 1/2 or even 1/3 of the same standard mobile power supply price on the market at that time.
These design and production teams say are unprecedented challenges. Finally, after repeated experiments on the verge of despair, Xiaomi power supply was made.
Xiaomi Power Supply was released and shipped 600,000 yuan on Xiaomi Network in the first month, shipments reached 1.5 million yuan in the second month, and shipments soared to 3 million yuan in the third month. It turns out that mobile power can indeed become a big business.
There are only two types of mobile power supply in China's mobile power supply market, one is called Xiaomi and the other is called the others. Xiaomi Power Supply is firmly at the top of the category and is the world's number one.
The most important thing is that Xiaomi power supply can make profits through large-scale shipments, and the cost continues to be reduced.
This once again verifies the magical effect of Xiaomi's business model - extreme industrial design, extremely high product performance, and extremely lethal price, using e-commerce to solve the problem of business efficiency.
armed China's manufacturing industry with Xiaomi's model, which is just the beginning. Lei Jun’s deployment of the ecological chain is: incubate 100 enterprises within 5 years and change 100 traditional industries.
In 2014, the ecological chain department achieved remarkable results. Once the
Huami bracelet was released, 1 million were shipped in three months.
's first smart light bulb was sold within one day.
htmlOn November 9, Xiaomi smart air purifier, which costs only 899 yuan, was launched. Its simple appearance, high-quality performance, and extremely lethal price accounted for 20% of the market share in the second year., and Zimi Power Supply's sales are still improving. As of December 2014, Zimi's sales volume reached 10 million yuan, maintaining the world's number one sales. What is more important than sales is that while Xiaomi is invested in companies to achieve breakthroughs in their respective fields, the IoT modules developed by Xiaomi are becoming increasingly favored by companies, and the companies in Xiaomi's ecological chain are getting closer and closer to the Internet of Things.
By 2017, Xiaomi's goal of "investing 100 ecological chain companies in 5 years and affecting 100 traditional industries" has been achieved in advance.
can only become a reality with the prosperous ecological chain as a backing. The daily passenger flow of Wucaicheng Store reaches nearly 3,000 people.
In addition to Xiaomi mobile phones, air purifiers, wiring boards, Xiaomi TVs and even balance bikes have become the best supplement to Xiaomi Home's category at this time.
Some core business districts have also actively extended olive branches to Xiaomi because they found that Xiaomi has its own customer flow and introducing Xiaomi Home can help the shopping center generate new value.
By the end of 2016, Xiaomi opened 50 Xiaomi homes across the country.
Xiaomi Home's continuous expansion represents the success of Xiaomi's self-operated channels. However, Xiaomi Home can only cover the market at the municipal and county level. If the brand wants to continue to sink, it still needs to work hard through multiple channels.
However, just as various offline experiments were going smoothly, Lin Bin encountered the biggest crisis since he took over the sales operation.
A common practice in the industry at that time was that in addition to the traditional national and provincial packages, manufacturers also cooperated with core retailers through capital logistics platforms. While taking over the manufacturer's goods, the capital logistics platform provides retailers with working capital to earn service fees for logistics and funds.
When Xiaomi's customer relationship and customer service capabilities were not enough in 2017, it became a natural choice to find a nationally renowned capital logistics platform to cooperate with Xiaomi for sales cooperation.
Xiaomi 5X became a hit online, and more customers are looking for cooperation. Soon, Xiaomi's cooperative retailers expanded from 68 to 120, and many retailers were still in talks.
No one expected that it was in such a "highlight moment" that a disaster had come.
One night, the partner's fund logistics platform told the head of Xiaomi sales department Yu Peng: You can't cooperate with Xiaomi in the future.
What Yu Peng is most worried about finally happened.
In the early stages of cooperation, Yu Peng had a vague concern that the capital logistics platform did not only serve Xiaomi, but also serves all mobile phone manufacturers, and of course, it also includes Xiaomi's competitors. Since Xiaomi started late, the total cooperation with the capital logistics platform is much less than that of its competitors. Once other friendly companies make requests that they cannot cooperate with Xiaomi, it will be difficult for the capital logistics platform to withstand the pressure.
Even if you change to another capital logistics platform, the same plot may continue to be repeated. Xiaomi can only think of a way to win the final battle and jump out of the opponent's siege and blockade.
After several days of thinking, Lin Bin brought Xiaomi an unprecedented solution, that is - full direct supply. Xiaomi will remove intermediaries and cooperate with retailers one-on-one. This will not only avoid competition, but also eliminate the need to pay for intermediaries' profit points.
In the retail industry, this idea is unprecedented, which will bring unprecedented management pressure to the entire team.
The so-called innovation is mostly forced.
has only been one month since it proposed a full direct supply to the release of the next generation of products. Xiaomi must use this period to directly sign contracts with all core retailers, and the work to be done is massive.
Reality quickly aroused everyone's combat effectiveness, and everyone was excited and started the battle with a winning mentality. In the end, the team completed negotiations and system entry work for more than 400 retailers, which only took 7 days in total.
In September 2017, Xiaomi MIX 2 and Xiaomi Note 3 were launched as scheduled. Xiaomi's direct supply system received a prepayment of 700 million to 800 million a week before its first sale. This result verifies the influence of the Xiaomi brand among retailers and also proves the feasibility of this strategic adjustment made due to the situation. After completing this breakthrough in channel blockade, "full direct supply" has become a label for Xiaomi's channel innovation, which brings the most "bold" efficiency revolution in offline retail systems.
In 2017, Xiaomi company returned to the pace of rapid progress.
By the second half of the year, with the company's performance return and growth in the first three quarters, and the rhythm of good weather is felt. In Lei Jun's mind, the window period for listing has arrived, and it will become the starting point of Xiaomi's new journey.
is making various preparations for listing, while Lei Jun is thinking about a serious question: If one day Lei Jun will no longer be CEO, can his successor continue to adhere to Xiaomi's values?
This is related to the original intention of Xiaomi when it was founded. When she first founded Xiaomi, Lei Jun once asked himself how to start a century-old company? In order to find the answer, the first thing he thought of was, which company has been in China for a hundred years?
The first company that Lei Jun thought of was Tongrentang. In the process of studying the Tongrentang enterprise, he found that the most important principle of Tongrentang is its training: "Even if the taste is expensive, you will not dare to reduce material resources, and if the fabrication is complicated, you will not dare to save labor." In other words, when making products, you need real materials.
This shocked Lei Jun. He firmly believed that he had found the password to allow the company to operate for a long time - real material.
After the listing procedure was launched, Lei Jun hopes to promote the future path of Xiaomi in the form of legal documents. His goal is to write the net profit ratio into the company's articles of association.
This is a tribute to the opening customers of the company he respects.
He hopes to make a regulation: Xiaomi’s hardware products’ after-tax net profit margin will never exceed 3%, and once it exceeds, it will be returned to users.
shareholders finally approved the board of directors' resolution and made a numerical modification. Finally, this number was locked at 5%.
This is the premise that Xiaomi can go public with confidence.
On July 9, 2018, Xiaomi was officially listed on the Hong Kong Stock Exchange with a valuation of US$53.9 billion. After
was launched, Xiaomi continued to make great strides while cultivating its internal strength.
htmlOn September 13, Xiaomi carried out the most in-depth organizational structure adjustment since the company was established, and established the Organization Department and the General Staff Department at the group level.In November 2018, at the Wuzhen World Internet Conference, Lei Jun announced the strategy of Xiaomi AI to empower the Internet of Everything for the first time. He said: "The past 10 years have been the era of mobile Internet, and the future is the era of smart Internet of everything. Therefore, AI+IoT=AIoT."
Xiaomi has invested and incubated 220 ecological chain companies, of which more than 100 focus on smart hardware and consumer products in life. Brands such as Huami and Yunmi have been independently listed. In consumer categories such as sports bracelets, air purifiers and balance bikes, Xiaomi's ecological chain has created many world firsts.
On July 23, 2019, Fortune magazine released the list of the top 500 companies in the world that year. Xiaomi entered this list for the first time and set a record--Xiaomi became the youngest top 500 in history in just 9 years.
Going forward
Why can Lei Jun create a miracle of entrepreneurship?
Two keywords that have been running through Xiaomi’s ten years and going with the flow and overcoming fear are the best footnotes to this problem.
In Malcolm Gladwell's "Alien", the author found a series of coincidences between successful people: most of the Premier League players were born from September to November, Bill Gates and Steve Jobs were both born in 1955, and many famous law firms in New York were actually Jewish descendants, and their ancestors were all engaged in clothing business in New York.
result is surprising, but when you see the story behind it, you will suddenly realize it. Premier League players were registered in September. Among the players of the same period, those born in September were actually almost one year older than those born in August. The one-year gap has an uninferential impact on their careers. Both Jobs and Bill Gates were born in 1955, and the personal computer industry was just beginning to develop when they graduated from college or dropped out of school. Born too early to have a personal computer, and being born too late, the opportunity for the computer revolution was seized by others.
After all, heterogeneity is never heterogeneity. Successful people are the products of history and the environment, and the crystallization of opportunities and accumulation.
After reading "Alien", Liu Qin discovered that domestic PC Internet entrepreneurs also had this coincidence. Lei Jun, Ding Lei, Li Yanhong, and Ma Huateng were all born in the late 1960s and early 1970s. When the Internet emerged in China, it was about two years since this group of people graduated from university.
Xiaomi's golden 10 years of growth is also a 10-year dividend period for the booming development of China's mobile Internet.
Starting from Xiaomi's creation of Internet mobile phones in 2011, the explosion of Internet mobile phone growth dividends coincides with the popularization of Chinese smartphones. In 2011, China's mobile phone penetration rate reached 73.6 per 100 people. In 2012, the penetration rate of 3G in China reached 25%.
First, in terms of talent, the arrival of the era of engineer dividends has inspired this simple and honest group to be inspired by infinite light and heat, and also gives entrepreneurs like Lei Jun a huge space to play.
Second, in terms of business formats, such as the development of e-commerce in China after 2003, it also laid the background of the times for Xiaomi's direct sales model. For example, the rise of Weibo in 2009 brought revolution to popular communication. While mobile payment is booming, WeChat Pay and Alipay have exceeded VISA's annual order volume based on the number of single data orders.
These are the soil that creates millet.
Third, venture capital is mature and
Venture capital represented by "shunwei" and the innovative business model of prosperity have been enthusiastically integrated, allowing technology and capital to play the role of a dual engine, and have given birth to the 10-year venture capital boom in the mobile Internet.
China has become the country with the largest number of venture capital funds in the world.
Fourth, China's national strength has grown over the past 10 years.
Whether it is artificial intelligence or the Internet of Things revolution, technological progress is accelerating iteration. For the world economic structure, China's rise has become the biggest variable. From 1978 to 2018, China's GDP increased from 367.9 billion yuan to more than 90 trillion yuan, an increase of 243 times, and the average GDP growth rate reached 9.8%.After surpassing Japan in 2010, China's total economic output began to look one. In 2018, China's total GDP accounted for 16.1% of the world.
The huge advantage of netizens supports the trend of "Internet +". China has the world's largest e-commerce market, accounting for more than 40% of the total e-commerce transactions in the world. And 10 years ago, this proportion was less than 1%.
Harvard Business School professor Clayton Christensen stated in "The Dilemma of the Innovator": "Real disruptive innovations may be selectively ignored by the original giants, and then these innovations will suddenly explode at a certain node and change the entire industry structure." A company that used to have an advantage in the market is in a weak position in terms of disruptive innovation.
Whether it is Lei Jun or Xiaomi’s employees, to achieve tear-like growth and disruptive innovation, they must overcome their fear and be a cruel person.
Lei Jun has always pursued the ultimate in doing things. When he was in college, Lei Jun's skills were far beyond his peers and he was at the level of hacker at that time. He took two years to complete the courses for four years, and when he had time, he went to Wuhan Computer Street to work as a part-time job and consult.
Moreover, Lei Jun never admits defeat in playing chess.
As an investor, whether it is e-books, e-commerce, or mobile phones, Lei Jun can always break up the invested products and study them to a professional level. Relying on his experience as an investor, Lei Jun has cultivated a keen insight into the trend and accumulated the connections and brand endorsement needed to build the Xiaomi ecosystem in the future.
In Xiaomi, Lei Jun is often the last person to leave the office. Once at a product meeting, Lei Jun caught a cold. He was wearing a down jacket to explain the product details, and he was snot and tears, and he also had a box of tissues on his hand.
Faced with crisis again and again, Lei Jun can always remain tenacious and bravely cross the border.
In Kingsoft, Lei Jun was broken by Microsoft and swallowed his stomach. Through Kingsoft Anti-Japanese and Pixels, he stubbornly survived in the cracks of Microsoft. Through the transformation of Zhuoyue.com and online games, he finally led Kingsoft to explore a path of survival.
When supply chain management is in danger, Lei Jun finally overcame all kinds of softness in his heart, decisively made decisions, personally took over Xiaomi's hardware department, adjusted the organizational structure when Xiaomi was in danger, introduced internal refined management, and pulled Xiaomi back from the edge of the cliff.
And this experience allows Lei Jun to have a deep understanding of the supply chain and master the core knowledge of the hardware business, which will also have a profound impact on the future support of Xiaomi's ecological chain.
Lei Jun is cruel to himself and others.
In the mobile phone industry, Redmi has hit the counterfeit machine dimensionality reduction with high performance and prices far lower than the branded machine competitors, directly ending the once wildly growing counterfeit machine market.
In the ecological chain, when establishing Zimi mobile power supply, Lei Jun set a high standard of beautiful design and outstanding performance, and then used extremely low prices to leverage the market. Once and once, Xiaomi's ecological chain cooperates with the upgraded Chinese manufacturing industry to launch a shattering competition against other manufacturers.
There are ruthless bosses, and there are ruthless employees.
Lin Bin crossed the border to conduct legal affairs and offline sales. When the retailer system was disintegrated and the capital logistics platform was cut off, it was decisively proposed to provide a comprehensive direct supply, and it was made under pressure in a short period of time.
Zhang Jianhui only gave herself two months of maternity leave. She established Xiaomi's offline sales system step by step from the after-sales service.
In Ali's words, with the development of Xiaomi, everyone has experienced tear-out growth.
All the past is the prologue.
