Lei Jun on Internet Thinking

When Lei Jun, Chairman of Xiaomi Technology, gave a speech at the 2014 Shenzhen IT Leaders Summit recently, he once again expounded Xiaomi's "Internet thinking". In his view, Internet thinking is the seven-character formula of "focus, extremeness, reputation, and speed".

Lei Jun believes that in the Internet era, it is necessary to streamline product lines, make products to the extreme, and then update and iterate at a faster speed, and quickly put them on the market at low prices, resulting in an "avalanche effect" in the market, and then gaining word of mouth. Lei Jun believes that the key to word-of-mouth communication is not high quality and low price, but "exceeding expectations". If you can provide consumers with products and services that exceed their expectations, word-of-mouth communication will emerge naturally.

The following is the transcript of Lei Jun's speech:

Hello everyone! We are all immersed in the wonderful speech made by the academician just now. Jack Ma's evaluation is a stand-up comedy. Academician Wu gave a few examples of Xiaomi, and I will briefly report the situation of Xiaomi. Not for advertising, but because many leaders do not understand Xiaomi's progress.

Xiaomi is a very, very new company. It was founded four years ago. About 10 people, with 7 or 8 **, followed Xiaomi to make a revolution. Choosing to make mobile phones, mobile phones are indeed a red ocean market, Apple and Samsung made 110% of the profits, and other companies lost 10%. At the beginning of the interview, none of the Google engineers joined Xiaomi. But even so, we have assembled the best team in the industry. They mainly come from Motorcycle, Google, Microsoft, Kingsoft.

I would like to introduce a few of them. The average age of these 8 people is 45 years old. There are 5 returnees, 3 native turtles, and a combination of native and foreign. Entrepreneurship of the elderly. We think that it is Ren Zhengfei who founded Huawei at the age of 42. Do you think you can do it? In fact, like young people, we started working 6 days a week, 11 hours a day. We are very, very lucky that our products entered the market at the end of 2011, with 12.6 billion in the first year and 31.6 billion last year. A year-on-year increase of 150%.

The first quarter is coming to an end, and the first quarter is 150% higher than last year. If the annual growth rate is 150%, there is a chance to reach 80 billion this year. I think 70 billion is more certain. If the same growth method is used, it should be seen that it will exceed 100 billion next year. Last year, 18.7 million units were sold. This year, at least 40 million units were shipped. In the first quarter, 11 million units have been shipped. I expect 40 million units this year to be just a passing level. about.

Xiaomi has just entered the market and has a very strong influence in the market. In addition to Apple and Samsung, Xiaomi mobile phones have the greatest influence. The Xiaomi user base is very active. Here I report two points, what exactly is Xiaomi's model. I think Xiaomi is a triathlon.

To put it simply, everyone thinks we are a mobile phone company, but what model do we actually use? That is, we do our best to use the best materials to make the best mobile phone hardware, and build our system on the basis of Android through the Internet, and iterate every week, so that the internal experience of Xiaomi phones far exceeds that of its peers. Recently we released a small application, more than 20,000 cafes, restaurants, airports, railway stations, those free and secure wifi Xiaomi can be connected with one click. This is our cooperation with free WIFI service providers. You do not need to enter an account number and password, and you will be asked if you want to access. It is safe and reliable, which greatly improves the user experience. This kind of experience has been optimized in at least 10,000 places on Xiaomi mobile phones. After you use it, you will understand why so many users like Xiaomi mobile phones.

Our entire Xiaomi has inherited the integration of design, R&D, supply chain management, marketing, channels, sales, and services, and has greatly optimized Xiaomi with the e-commerce model. In this way, Xiaomi is close to cost price retailing and builds a mobile Internet platform.

The second important reason is how we use the Internet to make mobile phones. The term Internet thinking is very popular recently, why? Let me tell you this. The first company I participated in was Kingsoft, which was founded in 1988. The Internet became popular in China in 1999. We were the first generation to be revolutionized by the Internet.

The Internet was the first to eat up the industry closest to him, the software industry. After being revolutionized, we began to wonder what the Internet is? In fact, we use the Internet ourselves, but why has the software industry been hit so hard? Later, I understood step by step that the Internet is actually a brand new methodology. The way of thinking about the problem is completely different. Through step-by-step thinking, including practice, one day I think it is a complete set of things. If we use this set of things to make any product industry, I think it can produce a nuclear explosion. So in 2010 I used this method to make a mobile phone. Did you come up with this method for many people? The whole method is mature before doing millet. Therefore, in the past 10 years of Internet enterprise practice, in fact, many methods have been explored. What is the most important thing about this picture? It's word of mouth.

I remember back in the 80s when IBM talked about user satisfaction. In the 1990s Microsoft talked about user experience. In fact, today's Internet companies all talk about user word of mouth. We believe that no form of promotion is more important than word of mouth. When the Xiaomi mobile phone was released, my colleague showed me a 35 million advertising budget, and I tore up the budget table. To become a Chinese and even global company, we use this method to restrain ourselves from promoting.

In the first year and a half of Xiaomi's establishment, Xiaomi was extremely low-key, did not do any advertising, and did not have any PR. No one even knows what we do. When we built the system in 2010, the first version was released and only 100 people used it. 200 people used it the second week. In the third week, 400 people used it, and in less than a year, 300,000 people around the world used it. I said no advertising, only by not advertising can you really test whether your product has enough word of mouth.

Speaking of this, what do people say about word of mouth? Many people think that good products have word-of-mouth, and some people think that cheap products have word-of-mouth. I want to tell you that this is not the case. In this world, there are many good products, many cheap products, and many good and cheap products. The spread of word of mouth is beyond expectations.

If you open the browser with your iPhone* in a coffee shop and enter the account password on such a small screen, don't you feel pain? When you ask the waiter for a password, the first time you ask for it is wrong, and the second time you ask for it, you take out your Xiaomi phone, and he automatically asks you if you are connected. If you say yes, you will be connected.

I believe everyone has experienced it, especially when it's painful in a hotel. Xiaomi impresses you with such details. Regarding word of mouth, Haidilao has done a very good job in this regard. There is a satin on the Internet. I have never tried it. It said that I went to Haidilao to eat, but the fruit was not finished. I asked the waiter if I could take it away. The watermelon is unsanitary. If you want to pack it, I will send you a watermelon.

The core of Haidilao is word of mouth, and the core of word of mouth is to exceed expectations. We put a lot of emphasis on focus, why? Because of inattentiveness, you will definitely not be able to make a phone well. The average traditional mobile phone company makes at least 50 models. In fact, when I made 50 models, I was wondering if their bosses really used these 50 models? I do not believe. Because you don't have to test a phone for months, you don't know if the phone is good or not.

Our color TV company produces at least 50 color TVs every year. When I was making a color TV, I searched for 49 inches, no matter which company there were more than a dozen models, the codes had 20, 30 digits, numbers plus pinyin plus numbers, ghosts can't remember. For the 57 mobile phones I used in the past, only if you are very focused and the product is very simple, when a product is astronomical, it can really be done well. With focus, we also emphasize the extreme. Either you don't do it, or you do it to the limit. Why do you think so? Because to go from company A to company B on the Internet, it only needs to move the mouse. It's that simple. So leading to Internet competition is winner-take-all. Basically in the U.S. and globally it's winner-take-all.

The Internet is the most competitive in all fields. In such a brutal competition, you can only do your best. Traditional enterprises fight price wars, but the Internet never fights price wars, because they are free as soon as they come up. Xiaomi is also a company that never engages in price wars. As soon as it comes up, it only sells directly at cost. Straight to half the price. Almost every industry in this model will cause an avalanche effect.

So that's why, it's because we've grown up in an internet environment that assumes the other side is completely helpless. When the road meets, the brave wins. Internet culture, one is better than the other. We were just chatting about Didi Taxi and Kuaidi. We hope this competition will continue.

There is another word called fast. When everyone reminds me whether Xiaomi is very fast, in fact, in Internet companies, especially companies that cannot achieve 100% growth in the early stage, all of them are poor. Multiple growth is the most basic principle of Internet companies. Not only business growth, but also the response to user services is particularly fast. Your opinion is adopted by Xiaomi, and it only takes a week to publish it, which is unimaginable in traditional mobile phone companies.

In the Nokia era, the system was not updated every three to five years. Apple releases it once a year, Google releases it once a quarter, and Xiaomi updates it once a week. We use this efficiency. This is the methodology we emphasize, focus, extreme, word-of-mouth, and speed. Internet Seven Words.

Next, Xiaomi encourages users to participate. User engagement is the biggest element, his identity and emotion are completely different. We encourage 4 million, 5 million users to participate in the entire mobile phone design together, and even global users. There is a very core element here, treating users as friends. Anyone who talks about users as gods is a lie. Because few Chinese believe in God. Treat your users as friends and you can be a great company.

Although Xiaomi is not perfect, it is a very, very young company, but Xiaomi upholds the spirit of the Internet and treats users as friends. I believe it will become bigger step by step. All Xiaomi service centers are as beautiful as Apple stores. The repair shop may be a bright spot for everyone. You go in to fix your phone, and we ask that it be done in 60 minutes from the time you enter the door. If it's not good, I will pay you 20 yuan per hour. Under such a step-by-step improvement situation, I think the entire Internet company pushes the user experience and user reputation to the extreme step by step. This is the most important idea that the Internet brings to traditional industries.

I made a very important point in these speeches at the National People's Congress, which is to rearm our traditional industries with Internet thinking. I think the transformation and upgrading of traditional industries will be of great significance. Here I give a small example, there is a small company founded in August last year, with 20 people, doing mobile power. Xiaomi gave him some money, and his product was released at the end of December last year. Three months later, it is now more than 2 billion, and this year, it will be about 2 billion. I estimate that it will exceed half a billion in three years, and he will use the Xiaomi model to copy.

The power bank he made used 4 1860, the best batteries. The aluminum alloy shell like the iPad, more than 10,000 mAh, is priced at 69 yuan. It's $9 after tax. It is very easy to make 2 billion in the first year. It is expected to exceed 10 billion in three years. No matter what happens to Xiaomi in the future, after the Internet culture and Internet spirit advocated by Xiaomi are combined with industry, a number of large enterprises will be brewed. thank you all!