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Lei Jun Looks Back on 11 Years of Entrepreneurial History

At the 2020 Zhongguancun Forum, Lei Jun, Chairman and CEO of Xiaomi Group, reviewed Xiaomi’s 11 years of entrepreneurial history. He said that Xiaomi is a startup company born and raised in Zhongguancun. In the soil of Zhongguancun, almost any kind of talent can be found. The density of talents here is very high.

Xiaomi's history

10 years ago, Xiaomi had a great dream to make the world’s best smartphone, but only sell for half the price. ‘In fact, this sentence is easy to say but difficult to do, especially for people who have done software for 20 years and have never done hardware.’

Also Read: Xiaomi’s Ten Years, Lei Jun’s ‘Three Iron Laws’

Lei Jun mentioned that at that time a small company in Zhongguancun, faced with the competitive environment of Apple, Samsung, ZTE, Huawei, Lenovo and other giants. There is no sign that this company will be able to beat them. So Xiaomi needed to innovate and decided to use the Internet to do it.

When Xiaomi first started its business, the team consisted of 8 people (both local and overseas) – 5 entrepreneurs returned from abroad and 3 local entrepreneurs. ‘For domestic smartphones 10 years ago, the most important feature was the design.’

MIUI Was The Key

At that time, Xiaomi treated the operating system as an Internet App, simplifying it to the four functions of making phone calls, texting, address book and desktop. They were focusing on the Internet and on user experience when development the operating system.

In fact, Xiaomi became popular due to its software. No one can deny this. And the number of MIUI users was growing hourly.

‘This is also the beginning of Xiaomi’s internationalization. Today, Xiaomi’s international revenue accounts for more than half of the revenue because it planted this kind of fire 10 years ago.’ When Xiaomi’s UI gained more than 300,000 fans worldwide, Xiaomi began to make hardware. ‘Our idea of ​​hardware making is completely different from other domestic smartphone brands. We are positioned to be the most high-end smartphones when we come up.’

For a small company in Zhongguancun, the biggest obstacle is the problem of the supply chain. But obtaining the cooperation of large companies in the supply chain, and the foundation laid by UI before has helped Xiaomi take this step.

How Xiaomi is Going To Develop?

‘When Xiaomi’s first-generation smartphone was out, it was at 1999 yuan ($295). This happens 10 years ago.’ Lei Jun said that not long ago, at the 10th anniversary of Xiaomi, the sales volume of Xiaomi’s first-generation smartphone was 7.9 million units.

Looking back on the growth of Xiaomi in the past 10 years, Lei Jun believes that everyone has high expectations for Xiaomi. And Xiaomi has also made great efforts in technological innovation. Xiaomi has invested more than 10 billion yuan ($1.48 billion) in scientific research this year. This is half of the total R&D costs of all listed companies on the Science and Technology Innovation Board.

With this R&D cost of 10 billion yuan, Xiaomi’s core strategy for the next 10 years is to use smartphones as the core and connect to AIoT.

Three years ago, Xiaomi proposed to do manufacturing and chose to do high-end equipment as a breakthrough. It invested and incubated more than 100 smart device companies and established a 12 billion yuan ($1.77 billion) industrial fund. Lei Jun said that he is most proud of the first phase of the Xiaomi Smart Factory in Yizhuang.

Speaking of why the Xiaomi smart factory should be built, he said that there are three reasons. One is that Xiaomi wants to be a fully automated factory; the second is that for Xiaomi, this is essentially an ultra-large-scale laboratory; the third is to help Xiaomi develop enough equipment.

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