"Xiaomi Entrepreneurship Thinking", first published in 2022. It is an entrepreneurship and management tool book based on "methodology supplemented by case practice", and it is also an important document for people from all walks of life to deeply understand the Xiaomi model and methodological practice.
Lei Jun was born in Xiantao, Hubei Province in 1969. He is the founder, chairman and CEO of Xiaomi Technology Co., Ltd. Lei Jun graduated from Wuhan University in 1991 and was later assigned to work in a research institute of the Beijing Aerospace Department. In January 1992, he joined Kingsoft Software Company and in August, he became the manager of Kingsoft's Beijing Development Department. In 1994, he became the general manager of Beijing Kingsoft Software Company. In November 1996, he led the team to develop WPS 97, formulated new tactics for Kingsoft, and successively launched products such as Kingsoft Video Player, Kingsoft PowerWord, and the game "Swordsman Love", solving the survival crisis. In 1998, he became the chief executive officer (CEO) of Kingsoft. At the end of 2000, he became the president of Beijing Kingsoft Software Co., Ltd. In December 2007, he resigned as the CEO of Kingsoft Software and devoted himself to the angel investment industry.
On April 6, 2010, he founded Xiaomi. In July 2011, he returned to Kingsoft after three and a half years and became the chairman of Kingsoft Software Co., Ltd. Since April 2015, he has served as the chairman of Kingsoft Cloud Holdings Co., Ltd. On May 17, 2016, he took over the Xiaomi mobile phone department, responsible for the mobile phone business and made large-scale adjustments to the organizational structure. On May 17, 2019, he also served as the president of China, fully responsible for the business development and team management in China. On March 30, 2021, he became the CEO of Xiaomi's smart electric vehicle business.
Lei Jun was named China's Economic Person of the Year in December 2013. In February 2014, he was selected as China's Internet Person of the Year. In 2018, he was selected as one of the 100 Outstanding Private Entrepreneurs in the 40 Years of Reform and Opening Up. In 2021, he was selected as the Best CEO in China by Forbes (No. 1). In 2022, he was selected as one of the 50 Most Influential Business Leaders in China by Fortune.
Table of Contents Part 1 Xiaomi's entrepreneurial journey Chapter 1 The Age of Miracles Chapter 2 Lows Chapter 3 Return to Growth Part 2 Xiaomi Methodology Chapter 5 My understanding of Internet thinking Chapter 6 Seven Tips for the Internet Part 3: Practice of Xiaomi Methodology Chapter 7 Technology-based Chapter 8 Making Friends with Users Chapter 9: Hot Product Model Part 4: Xiaomi Methodology and Industrial Ecosystem Chapter 12 Ecological Chain Model Chapter 13 Intelligent Manufacturing Part 5: Thoughts on the Evolution of Xiaomi’s Methodology Chapter 14: Thoughts on the Evolution of Xiaomi’s Methodology
Recently I watched a video of Lei Jun discussing Xiaomi Auto, in which he particularly emphasized the importance of the female user group to Xiaomi Auto. The reason is simple: in most families, female roles such as wives, girlfriends or mothers often have "veto power". They may not spend too much time doing detailed research, but they often have the final say in such major family decisions. This reminds me of an interesting phenomenon: many products that successfully capture female users are often founded by men. If men want to make products that are truly popular with women, beauty and aesthetics play an extremely important role in it, and how to understand women's needs and preferences becomes the key that male founders need to think deeply about. Lei Jun also mentioned that he did a lot of research and experiments to make Xiaomi Auto, and he personally test-drove various models. If you want others to like your product, you must first like it from the bottom of your heart. If you don't like it yourself, it will be too difficult to make others like it. Looking back at Lei Jun's entrepreneurial experience: he was successful in Kingsoft, then founded Xiaomi mobile phone and achieved great success, and now he has entered the automotive field. Judging from the current situation, Xiaomi Auto is very likely to succeed. A person's success once may be due to luck, but success twice is worth further study. If you can succeed three times in a row, it cannot be explained by the environment or luck alone. You must have done something right at the key link. "Those who learn from me live, and those who imitate me die." We can learn from the success or failure of others, but we cannot simply copy them. The most important thing is to extract useful action guidelines from other people's experiences - otherwise, it is meaningless to read more success stories. As for why Lei Jun started a business to start Xiaomi after becoming financially free. The answer he gave was that he wanted to be a great company, contribute to society, and promote the transformation and upgrading of China's manufacturing industry. Whether it is a company or an individual, doing things is inseparable from "intention". The so-called "intention" is the original intention and purpose of doing something. From an outsider's perspective, perhaps different intentions may not make much difference in the short term, but as time goes by, those seemingly small differences at first will eventually produce huge differences in paths and results. For example, if you want to write novels, want to make visual novel games, or even hope that one day you can create interesting stories with our country's historical, cultural and aesthetic characteristics through your works like Disney . Maybe it will just be through games that we make money at first, but we hope that in the future we can expand into movies, animation, and even build physical theme parks, just like Disneyland or Legoland. We would like to do many things, but there are probably only a few that can really be called "careers".
Chapter 2 begins to talk about the low point of Xiaomi's development. The book does not describe this experience in detail, but only briefly mentions that the company was in trouble due to the decline in mobile phone shipments at the time. It was only after two years of adjustment that it returned to the track of rapid development. In fact, even if we have not personally experienced the downturn in starting a business, it is inevitable to encounter a low point in personal development. Getting out of the trough is often a long and painful process, but if we can grit our teeth and persevere and finally get through it, when we look back, we will find that this period is often the time of reflection and growth. During high-speed growth, both individuals and companies often have the illusion that "my decisions and ideas are correct" because of significant results. It's like a person who is proud of his career and love. The external manifestation of success can easily make us ignore internal reflection and mistakenly think that everything we get is what we deserve. But once we hit a wall and fall headfirst, we will really stop and ask ourselves: "Did I do something wrong? Is there something wrong? Am I really worthy of the position?" Only in this situation of setbacks can we more deeply recognize the shortcomings of the past. Therefore, when we encounter setbacks, our first reaction is often to escape and use various methods to reduce pain, such as drinking to drown our sorrows or simply avoiding the problem. But perhaps it is in these most difficult moments that we can gain the most precious growth opportunities in life if we can face the problems and learn from them.
In May 2018, at the critical moment when Xiaomi was about to go public, Lei Jun made a "permanent commitment" to users: Xiaomi's comprehensive net profit margin for hardware will never exceed 5%. Once it exceeds, the excess will be returned to users. You can imagine how much effort is needed behind such a decision. Because if I set a target for myself, no one may care, but there are many investors behind Xiaomi, and it must be difficult to convince them to accept this "self-binding" commitment together. And this is not just empty "painting the pie", but a real promise, similar to a bet agreement between the founder and the investor, or a strict limit on personal income. It's like a country promising to achieve a certain economic growth target or increase the per capita income level at all costs: for those who really value credibility, this public declaration is actually a kind of self-restraint. After all, human nature often cannot stand the test, but when we want to overcome human weaknesses, we need to rely on public opinion or external forces to help us continue to supervise and restrain ourselves.
Ten years after its founding, Xiaomi spent a lot of time discussing the company's vision, culture and mission, and finally determined three "iron laws that will never change": 1. Technology-based; 2. Cost-effectiveness-based; 3. Make the coolest products. First: Technology-based. In an interview a few months ago, Lei Jun mentioned that he did not agree with the so-called "God of Marketing" in the outside world, because he hoped that people would see Xiaomi's strength in technology and products, rather than attribute Xiaomi's success to its marketing ability. Second: Cost-effectiveness-based. The reason why Xiaomi was able to quickly open up the market in the early days was largely due to the route of "surrounding the city with the countryside", that is, winning price-sensitive users with high cost-effectiveness. However, if the product profit margin is too low, the company's investment in research and development will be limited. In contrast, companies with higher profit margins such as Apple can invest a lot of money in research and development, thereby attracting the world's best talents and leading industry innovation. This shows that it is important to insist on high cost-effectiveness, but if the company does not have enough profit space, it will not be able to achieve a higher level of breakthrough in technology. Third: Make the coolest products. Just like how we evaluate whether a person is interesting: when material things are relatively scarce, people care more about whether the product can meet basic needs and whether the price is low; when material conditions are abundant, consumers are willing to pay for their own preferences and experiences. At this time, the product is not just a collection of functions but also needs to impress people emotionally and aesthetically to be truly "cool " or "interesting."
In 1969, the world's first computer network, ARPANET, was born, connecting only four nodes. Now, in just over 50 years, the Internet has changed the face of the world at an astonishing speed and depth. Lei Jun was very active in major forums in the 1990s, and perhaps he was initially attracted by the potential of the Internet. But whether it is for individuals, enterprises or even society, whether this "possibility" can be turned into a "reality" achievement still depends on many factors. We often envy the good luck of a certain generation and think that they have caught up with the "good times". However, even in the same era, there are always only a few who can really seize opportunities and turn them into actual results. From a longer-term perspective, opportunities will appear once. Just like the Internet boom that year, we are now in the era of the rise of AI, and perhaps there will be new major opportunities in another ten years. The key is not whether we have missed a certain opportunity, but whether we have enough vision, ability and perseverance to identify and grasp it when the opportunity comes again. Lei Jun's success at Kingsoft was inseparable from his earlier insights and beliefs about the Internet; similarly, Xiaomi's success was also based on his experience at Kingsoft. The current and future Xiaomi cars are Lei Jun's further extension of Xiaomi mobile phones and the ecosystem. Behind every success, you need to prepare for the next "opportunity" at an earlier stage.