Lei Jun's 10,000-word speech: My view on the next 20 years

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This article is the speech of Lei Jun, Chairman of Xiaomi Technology, at the "My View of the Next 20 Years" public lecture. Lei Jun said that Xiaomi has only released six mobile phones in the past three years, and currently ranks third in the global market share. At the same time, he said that the fast-growing "Xiaomi model" can be replicated, and Xiaomi will enter the Fortune Global 500 next year and the year after, and is determined to drive 100 such companies, with at least 20 of them being the world's first.

The best strategy is to do less and do it to the extreme

Four and a half years ago, Xiaomi started its business in Zhongguancun. On that day, about ten of us drank a bowl of millet porridge together and started our business. Later, many people asked me why we called ourselves "Xiaomi Technology". I said that we just wanted to start a new round of entrepreneurship with the spirit of "Xiaomi plus rifle". I still remember when we went to the Industrial and Commercial Bureau to register "Xiaomi Technology", they asked me if we wanted to do new agriculture? We said yes, so we became Xiaomi Technology.

Our products were launched three years ago. In the past three years, we have only released six mobile phones. At the end of October three years ago, we released the Xiaomi 1, two years ago we released the Xiaomi 2, and last year we released the Xiaomi 3. In between, we released the Redmi and Redmi Note, and recently released the Xiaomi 4. To date, we have released six mobile phones in four and a half years, which is equivalent to only making one and a half mobile phones every year. Today, there are only four mobile phones still on the market, Xiaomi 3, Xiaomi 4, Redmi, and Redmi Note. Ordinary consumers may not know what this means. As a mobile phone manufacturer, you know that except for Apple, most of the mobile phone giants make 50 to 100 mobile phones every year. You can never remember the names of the models they launch every year.

Three years ago, I reviewed how many mobile phones I had used in the past 20 years and what models each phone was. I am a mobile phone enthusiast. I thought about it for three or four hours, but I couldn't remember the product models of several mobile phones. Later, I searched on the Internet for a long time and still couldn't remember them. Everyone believes in the "sea of ​​​​machines" strategy - there is always a mobile phone suitable for you. When I was making mobile phones three years ago, I thought like this, can I only make a few mobile phones, and make a mobile phone for 20 to 30-year-old science and engineering boys who care about performance and experience very much, so that they will like this thing from the bottom of their hearts? With this idea, we want to make each mobile phone carefully. Doing less things and doing these things to the extreme is the best strategy. When we released Xiaomi 4, we looked at the first five mobile phones we made, and they were all hits. What does this mean? When you have fewer things to do, you will really have more energy to do it well.

I have every phone I sell in my bag, and I use it almost every day to see what's good and what's not. Redmi was released in July last year, and 25 million units have been sold so far. Not long ago, I took a mass-produced version to see how it feels to use a phone that was made a year and a half ago. It turns out that it's still very good. When you make 50 to 100 phones a year, you can't use your products seriously. If you haven't used your own products, you don't know how consumers feel when you sell them to them.

It is precisely because we focused on making only six mobile phones that we achieved a miracle. We went public at the end of 2011 and achieved RMB 550 million in just two months. In the first half and second half of 2012, we took each half year as a curve, and it was a nearly perfect growth curve. In 2012, the annual revenue was RMB 12.6 billion, and last year, the annual revenue was RMB 33 billion. We became the fastest startup in the world to reach US$1 billion and the fastest company to reach US$10 billion in sales. It was growing like a perfect curve.

Yesterday (30th), several international authoritative research institutions released a number that surprised me. What numbers did several institutions including IDC release? In the third quarter of this year (July-September), Xiaomi surpassed Samsung to become the leader in the Chinese market. Let's think about it today. We have achieved such performance in three or four years by making six mobile phones. And this year we expect sales to be between 75 billion and 80 billion. I think that according to this growth trend, we will have the opportunity to enter the Fortune Global 500 next year or the year after. If we achieve this goal, we will also be the company that enters the Fortune Global 500 in the shortest time in the world.

Where is Xiaomi's innovation?

Many people are concerned about how we achieved this. Well-known business magazines and consulting firms around the world have also published many reports. Yesterday, a report published by BCG (Boston Research Group) showed that Xiaomi has also entered the top 50 most innovative companies in the world.

Where is Xiaomi's innovation? As of July 1 this year, Xiaomi has sold a large number of mobile phones and has formed a user base of 70 million MIUI users. The benefits of this system are Xiaomi's biggest innovation. It originated from a simple idea. When I participated in the establishment of Kingsoft Software, I had the opportunity to meet the global R&D leaders of Nokia and Motorola. I told them about the inconveniences I felt when using Nokia and Motorola, and proposed modification suggestions. After listening to them, they thought it made sense, but I never saw them make changes. I don't think I am an ordinary enthusiast. I run a software company with thousands of people and do this myself. The suggestions I put forward are definitely not the opinions of an amateur.

So I was thinking, can I make a mobile phone, if you have any opinions, tell me. If I think it makes sense, can I add it to my phone immediately? I started to make MIUI with this idea. I set a requirement for MIUI, we need to release a new version every week, so that as long as your opinions are reasonable, I can make changes within a week. Maybe everyone has no concept of releasing an operating system in a week. For example, Windows releases a new version every 5 years. It is an unprecedented problem to release an operating system version in a week. What is the difficulty? If the operating system is not tested sufficiently, what if there is a bug and it cannot be started? Tens of millions of mobile phone users will not be able to use their mobile phones. Therefore, traditionally, it takes a long time to test the operating system, so the release cycle is very long. Xiaomi's biggest innovation is to release an operating system every week.

What can we do with this technical support? We can call on millions of people to give their opinions online, and then filter out valuable suggestions through various mechanisms and implement them into the product. If you think it is not good, you can keep changing it until you are satisfied.

Some people ask what is so good about this phone? In fact, Xiaomi's design concept is "comprehensive design", and there are many subtle and practical designs in it. Let me give you a small example. When you receive a strange call, the system will tell you whether it is a deliveryman or an agency, a sales call or a harassment call, or a scammer, so you can choose to answer or not. If it is a deliveryman, there is even the deliveryman's name and photo. This feature first appeared on Xiaomi phones.

I once reported to my boss and talked about mobile phones. He said the most troublesome thing was that he had to keep his phone on 24/7. He often couldn't sleep well if he got a harassing call at night. I said it was easy. We can add a function to only answer VIP calls when sleeping at night. A few designated people can call in, and other people can't get through. He thought this function was very good. I once met Han Han, and he asked if you could develop a function to only answer calls in my address book? I said that was good, and I added a function to only answer calls in the address book.

This is how we incorporate various functions little by little, so that your experience when using it will far exceed your imagination.

Maximize the power and wisdom of users

Xiaomi gathered everyone's opinions bit by bit and mobilized everyone's strength and wisdom to make this phone. After we finished it, it quickly became well-known internationally. After our international fans grew, they helped us promote it globally, including making language versions for different countries and even porting the MIUI system to various phones. Now MIUI can support 180 mobile phones, all thanks to these fans.

So we gathered millions of people online to help us do this. Our products are not only the hard work of Xiaomi, but also the work of millions of Mi fans. We call this model "sense of participation". How to pull users to work with you? First, it can help you make a good product. Second, more importantly, because users participate in this matter, they have a great sense of accomplishment. They will willingly help you recommend this phone to their classmates, friends, family, and colleagues, and they will become a part of Xiaomi.

It is a bit like the "mass line", everything is for the masses, everything depends on the masses, come from the masses, go to the masses. If you think in this way, you will understand what the "sense of participation" we have repeatedly talked about is. Why is the "sense of participation" so powerful? Because we are friends with consumers. We were a small company with only ten people three or four years ago. We had nothing, but we had the attitude of being friends with everyone and the willingness to continuously improve and improve quickly. We grew step by step like a rocket.

What was I thinking when I started Xiaomi?

I think dreams are very important to a person, because only with dreams can you persist for decades without wavering and pursue them tirelessly.

I think changing my life is actually a very simple thing. In 1987, when I was a freshman in college, I read a book called "Fire of Silicon Valley". After reading it, I walked around the school playground again and again with excitement. I couldn't suppress my excitement for a long time. The book tells the entrepreneurial stories of Silicon Valley heroes like Jobs. I wondered how to make my life different? Can we Chinese run a world-class great company? From then on, I laid down my own goals, so I set many very demanding goals for myself during college, and then completed them. I participated in the establishment of Kingsoft Software and did a lot of things.

After Kingsoft went public in 2007, I basically "retired" because it was extremely hard to start a business at Kingsoft for so many years. After Kingsoft went public, I felt that my responsibility and mission had reached a stage, and I wanted to rest for a while. After resting for a few years, many people advised me whether I could do something else, but I never made up my mind. When I was 40 years old, I woke up from a dream one day and asked myself if I still had the courage to pursue my inner dream. What was the heaviest burden on me at that time? It was that my career had achieved some success, and I also led a group of brothers to do well. What if I failed to start my own business? It was a bit embarrassing, because the longer I started a business, the more I was in awe of it. I felt that 90% of the startups would close down, and I felt that I was no exception. It would be so embarrassing if I couldn't do it and closed down. At that time, many media gave me the title of "entrepreneurship mentor". In fact, I hate the term "entrepreneurship mentor" the most. How can you start a business if you are given the title of mentor? So I felt very burdened at that time.

Later, I thought of a small method and trick to relieve my inner pressure. I thought, why not keep a low profile and start a small company? No one will tell anyone, even if they kill me. I will do it secretly. When it is almost done, I will say that this company is mine. So Xiaomi was born. In the first year and a half, few people knew what Xiaomi Technology did, nor who did it. It was extremely low-key. In the early days, we were all R&D teams, and we only believed in word of mouth.

I remember when the first version of MIUI was released, we only found 100 people on the Internet who were willing to try it. Many people know the history of Xiaomi after the release of the Xiaomi mobile phone. In fact, four and a half years ago, we were just like an ordinary startup in Zhongguancun. No one paid attention to the products we made. At the beginning, only 100 people used it. I said, "There are only 100 people using it. Can we serve these 100 people well, make them feel that this product is good, make them feel that it is easy to use, and let their friends use it and spread it by word of mouth?" As a result, 200 people used it in the second week, 400 people in the third week, and 800 people in the fourth week. When the Xiaomi mobile phone was released, 500,000 people around the world were using it. In other words, Xiaomi mobile phones already had 500,000 die-hard fans before they were released. Many people ignore what Xiaomi did in the first year and a half. This is why we care so much about word of mouth, constantly listen to opinions, iterate and improve continuously, take it slow, do it step by step, and get to where we are today.

The inspiration I got from the century-old enterprise Tongrentang

When I was running Xiaomi, I wondered if we had a chance to make it a world-class company. In other words, is it possible for us to become a century-old company or a century-old business? Many entrepreneurs are talking about century-old businesses. Kingsoft has been in business for 25 years. I know that it is very difficult to build a century-old business, especially in China. I don’t even believe that anyone in China can last for more than a century. I did some research on this question and found that there are actually several companies that have been in business for a century. Do you know which companies they are? There are three or four, and the most famous one is called "Tong Ren Tang". It didn't matter that I did this research. I found that Tong Ren Tang was not 100 years old, but 340 years old. It spanned several dynasties and experienced many rounds of wars, but it still survived. I was very curious about why?

I think the most important thing that has kept Tong Ren Tang going for a century is the words of its founder: "No matter how expensive the product is, we must not cut corners; no matter how complicated the preparation is, we must not save labor." The first sentence is not to cut corners, and the second sentence is not to be lazy at work. These two sentences together mean "genuine goods and fair prices." In today's society, it is not easy to get genuine goods and fair prices. How are these problems caused? I think the core issue is whether we can firmly believe in "genuine goods and fair prices."

I believe that most entrepreneurs and businessmen want to make products authentic and at fair prices, so why can't their companies last a hundred years, and why can't their cultural heritage be passed down? Tong Ren Tang has a second saying: "No one sees the preparation, but the intention is known by heaven." It means that no one knows what you do, but heaven knows. So this kind of restraint allows Tong Ren Tang to be passed down from generation to generation, adhering to the business philosophy of "authentic products at fair prices." This is the company I thought about the most before starting Xiaomi, and it gave me a lot of inspiration.

Good quality is made by spending money and effort to find the best talents

Why do our Chinese products seem to be of poor quality when they are cheap? Can we try our best to make good products?

When I was making Xiaomi phones, I used the most expensive raw materials, the most expensive suppliers, and the most expensive assembly plants. Even the Redmi, which is now sold for 699 yuan, is produced by Foxconn. You may not know what Foxconn production means, but at least for me, the processing cost is twice as expensive. Why? In fact, the rule is that expensive things are most likely to be of much better quality.

When we visited the factory and supply chain, we found that the quality management, processing details, and workmanship were far ahead. When we first started making mobile phones, we bought the most expensive processors from Qualcomm, including the highest-end configurations. At that time, most domestic mobile phone companies made mobile phones for a few hundred yuan, and many people tried to make them as cheap as possible. When we entered this market, because every mobile phone was made for myself, I must make it easy to use. So I thought that only by learning from Apple and Samsung and using the best supply chain, the best raw materials, and the best factories in the world can we have the opportunity to make the best mobile phones. I can expand on this sentence and say that only by using the best suppliers, the best raw materials, and the best processing plants can we have the opportunity to make the best mobile phones.

Many people say that you all use the best, but your phones are far inferior to iPhones. This is true. Last year, I also conducted a survey at a conference. How many people have used Xiaomi phones? Only three or four people raised their hands. How many people have used Apple phones? In the end, most people have used them. What is the problem? The gap between us and Apple is really far. We need to make progress generation by generation. Three years ago, we released the Xiaomi 1 phone, and a few months ago, we released the Xiaomi 4 phone. I think the Xiaomi 4 phone is close to the international top level, and I have enough confidence to tell you that I believe the next generation of Xiaomi will take a big step forward.

Therefore, I believe that good quality can only be achieved by spending money and effort to find the best talents.

Why does Haidilao make me so amazed?

Who is my second reference company?

I once bought a book at the airport called "You Can't Learn to Cook Haidilao". I thought I had learned it, and to verify whether I had learned it, I went to Haidilao a few times. I was really amazed after going there.

What shocked me the most?

Haidilao's decoration is very ordinary, and the location is also ordinary, but it has a very different feeling. Its waiters are very enthusiastic and friendly, making you feel that the whole restaurant is very good. Once when I was eating, I asked the waiter, why are you so happy all day? Aren't you just a waiter? As a result, he gave me a lecture. People said that I was a laid-off female worker in my 40s who couldn't find a job. Haidilao paid me more than 4,000 yuan a month. I would laugh in my dreams.

That sentence really shocked me. Haidilao treats its employees very well. When employees feel good about the company, they treat customers completely differently. The most important thing about Haidilao is that its reputation is very strong. How strong is it?

There is a joke on the Internet that says that when I went to Haidilao for dinner, they served me a fruit plate with sliced ​​watermelon. When I paid the bill, I asked the waiter if I could take it away, but the waiter said no. In fact, many restaurants say that you can’t take it away. After paying the bill, the waiter gave me a whole watermelon, saying that it’s unhygienic to take a sliced ​​watermelon home, so I’ll give you the whole watermelon. So every time I go to Haidilao for dinner, I want to take a watermelon away.

In fact, it is about exceeding expectations. All you want is a few pieces of leftover watermelon, but someone gives you the whole watermelon. Isn’t that far beyond your expectations?

Therefore, the core of word-of-mouth is not simply that good products have word-of-mouth, or that good and cheap products have word-of-mouth. Word-of-mouth actually means exceeding consumers' expectations! Haidilao is making friends with users and exceeding their expectations.

The secret of anti-counterfeiting

We just talked about genuine goods and fair prices. The most difficult thing for China is to solve the problem of fakes. Now there are Xiaomi power banks sold on trains, in university dormitories, and in stalls in the square. They are all fake! Some time ago, CCTV also reported the problem of poor quality of Xiaomi power banks. As a result, we went to CCTV and the General Administration of Quality Supervision, Inspection and Quarantine and found that they were all fake. That's it. Zimi Technology uses the best batteries and the best technology to make power banks. This year's sales are expected to be about 1.5 billion yuan (zero in August last year). As for Xiaomi headphones, the company that makes headphones was founded in March last year and went public in October last year. This year's sales are about 1 billion.

Only by focusing and doing your best can you have the chance to be the best in the world.

What else needs to be done now? Anti-counterfeiting. How can users detect whether it is real or fake? In fact, it is all about focus and perfection.

Xiaomi's dream: To drive Chinese companies to become the world's number one in their respective fields

Xiaomi uses the highest quality products from China at the cost price of production in China to benefit the whole world and all mankind. So Xiaomi alone is not enough. We should make all Chinese products even better, just like Sony led the entire Japanese industry. So, I had this plan at the beginning of last year.

What is our future goal? Since the beginning of last year, our goal has been to lead 100 such companies to grow together, grow bigger in China, and sail abroad to become global companies.

In July this year, we talked about our dream when we founded Xiaomi. We didn't dare to talk about this dream four years ago. So what is our dream? Our dream is "the stars and the sea" - we want to see the world as our market, and we hope to drive Chinese companies to become the world's number one in their respective fields. This is our goal.

I really didn't expect that we would become the world's top three in just three years. I thought we would be in the top three next year, but I really believe that in five to ten years, Xiaomi smartphones will have the opportunity to become the world's number one. And with the peripheral partners driven by Xiaomi, we will have at least 20 world's number one.

I hope that this wave of entrepreneurship of Xiaomi will have the same impact on China as Samsung has on South Korea and Sony has on Japan. I hope that Xiaomi's dream will become China's future, and that more and more Chinese companies will rise around the world and become synonymous with "high quality and low prices". Let the world enjoy the power of China's technological innovation. I think this is where I hope to help society a little bit as a Xiaomi.

How does Xiaomi seize the European and American markets?

The third company I refer to is Wal-Mart in the United States in 1962. Other stores earn 45% on each item, but Wal-Mart earns half of that. Its prices are low every day, and it has remained the same for decades. It finds old warehouses for renovation and places them on the edge of the city. Because such large warehouses are very remote, the rent is very cheap, which in turn makes its costs very low, making it very competitive. After more than 40 years, Wal-Mart has become the world's largest company in terms of turnover.

Costco is a company that is even more powerful than Wal-Mart. Our retail stores generally have a gross profit margin of about 30%. Costco said that they only make 1-14% on any item. If it exceeds 14%, they need to seek approval from the CEO and the board of directors. The profit margin of all Costco products is between 1-14%. We make an average of 7%, which just breaks even. It is understandable that Costco basically does not make money from you. Costco has two or three brands of everything, all of which are the best. They only make a little profit, which is almost equivalent to their purchase price. So if you see that the item is good and you think it is good, you can just take it and leave without looking at the price. Some people who come back from abroad buy almost everything at Costco. So in a place like the United States where costs are so high, they can sell things so cheaply. I think it is because of efficiency.

How can we make a good product that the Chinese people can afford? Where exactly does the cost of our mobile phone industry come from? When I go to a mobile phone store to buy a mobile phone, there are only a few customers, but there are eight or nine promoters. Isn't rent a cost? Isn't the promoter a cost? For every mobile phone you buy, an average of 100 yuan is probably spent on promoters and stores. Can we do without channels, stores, and promoters? Can we sell directly at cost price, and open a small store by ourselves? Can we sell as much as we can and keep the cost very low? So after launching the Xiaomi mobile phone, we set up mi.com and sold it on our own website. Our products of the same quality are 1/3 of the price of international brands and less than half of the price of domestic brands. Our success is achieved through a lot of model innovation. The next step is to make Xiaomi.com available all over the world, so that everyone in the world, regardless of country, ethnicity, or skin color, can enjoy the technological innovation from China. If I can accomplish this, I can fulfill my 18-year-old dream of building a world-class great company.

We first tried this method in a few markets and found that it worked. Which markets did we find? In fact, they were all developed regions. After we went there, our mobile phones became the most popular in the local areas. After we gained confidence, we began to attack India three months ago. Because India may not look down on Chinese companies, they have never heard of Xiaomi, which is very painful. I discussed with President Lin Bin and Vice President Hugo Barra in charge of international business, saying that we can only win by taking root in India. The next day, Hugo Barra was stationed in India. When he went to India, I told him to start over according to Xiaomi's model three years ago. There is no need for fame, because good products, cheap products, and products that exceed expectations do not need advertising or fame. Start from scratch and build a tall building on flat ground.

Now, Indians also line up to buy Xiaomi every day, and they sell it out every week, just like in China. Maybe everyone will accuse us of hunger marketing at this point. Except for a few products, most of our products are sold on the shelves. It is indeed difficult to beat Xiaomi 4. Why? Because industrial products need to debug the production line and climb up step by step. This is the law of industrial products. When our production capacity is increased, we will sell it on the shelves, so we hope to be the number one in the Indian market in one or two years. Then we will go to Indonesia and Brazil, make a big detour around the world, and finally do Europe and the United States, "surrounding the city from the countryside" in the world. Many people ask why you don't go straight to Huanglong. I think everyone knows the reason. We still need to train our troops in the global market. In the end, we will definitely take over Europe and the United States, because Europe and the United States cannot be missing in this world environment. They are also big consumers. This is actually our layout.

In fact, Xiaomi has borrowed the word-of-mouth model of Haidilao, insisted on making genuine products like Tongrentang, and then achieved high quality and low prices through process optimization and model innovation like Costco and Walmart. These are several core models of Xiaomi, which are almost the seven-word formula of our Internet: sense of participation, making friends with users, and word-of-mouth marketing. These are the results of the reference of these three companies.

The Xiaomi model is to transform traditional industries with Internet thinking and promote the transformation and upgrading of traditional industries. I believe that the Xiaomi model is replicable and can greatly improve market competitiveness.

I have just finished my introduction. I have mainly talked about the following topics today:

First, I think the core of Xiaomi's model is the "Tongrentang-style" genuine goods and fair prices, the "Haidilao-style" reputation that exceeds expectations, and the highly efficient model innovation of Walmart and Costco. I think the core of Xiaomi's model is these three points.

Second, this model can help traditional industries transform and upgrade. We have already started. The Chinese market does not lack products, but it lacks good products, good and cheap products, and products with high customer experience. These are extremely scarce. I firmly believe that we can drive sufficient market demand. In short, we make life better.

I think Internet thinking can help China's traditional industries transform and upgrade. The most important thing is the concept. We need to make high-quality products and world-class products. I think through the practice in China over the past three years, if Xiaomi's model is expanded to all over the world, Xiaomi has the opportunity to become a national brand in China and represent China!

Q: In addition to mobile phone functions, how will Xiaomi gain an advantage in the fierce competition in the future?

Lei Jun: Xiaomi's most important advantage is to be friends with users, listen to their voices, and improve according to their requirements. I think as long as we stick to this feature, Xiaomi will definitely win worldwide. Being friends with users, inviting them to participate, and making rapid improvements are the most critical.

Q: From the industrial revolution to the information revolution, I think the third wave should be the emotional revolution. All our products are not mechanical, but emotional. Future products should have an emotional core. I hope Xiaomi phones are "mobile works of art."

Lei Jun: Two of the eight founders of Xiaomi have a design background. When I was designing mobile phones, mobile phone industrial design was different from general product industrial design. Today, it is in the era of technological explosion, and technical limitations have a very large impact on mobile phone design. What is the biggest difficulty we encounter? You think of it but can't do it, because the technical content is very high. For example, everyone likes metal materials, but what is its biggest problem? Antenna signal. We all want to be thin, and the problem is how to make the phone flat. Domestic mobile phones are very thin, but the battery capacity is less than 2000 mAh, which can only be used for half a day. It looks beautiful, but it is not practical. Battery technology belongs to the field of chemistry. The entire IT industry is progressing very fast, but the battery progress is very slow, so we are subject to huge restrictions. Of course, under such restrictions, I think Xiaomi, as a startup company, attaches great importance to design. I hope everyone can see our progress and development step by step.

Keywords: Double Eleven

Lei Jun: Last year, Alibaba invited us to participate in the Double 11 Shopping Festival. They even let us open half an hour later to avoid the peak sales. However, we were still the fastest to reach 100 million, with sales of 550 million throughout the day. The second place was 340 million, far ahead. Xiaomi ranked first to fourth on the best-selling list. I believe that Xiaomi's performance will not be bad this year.

Keywords: scalpers

Lei Jun: Any Xiaomi employee who privately sells products to scalpers will be severely punished by the company. Three years ago, one of our employees sold F codes and was immediately fired. We are absolutely unwilling to sell products to scalpers. However, the scalper problem is also a very complicated problem in China. They find many people to line up. We have a special team to prevent scalpers, and almost every week is a battle. We are the same as all Mi fans. We have been doing our best, but I think the most important two tricks to fight scalpers are: First, speed up the ramp-up progress and meet market demand as soon as possible; second, I also hope that everyone will help us refuse to buy scalper products. If everyone refuses to buy scalper products, there will be no market for scalper products, and they will not charge you 500 yuan. In order to prevent scalpers, we have also opened a pre-sale system, and you can receive it in three or four weeks. We are recently discussing how to solve the problem of the purchase experience of Xiaomi.com and make it easier to buy. I have been talking about expanding production. We produce six or seven million mobile phones every month, and everyone is still complaining. We also feel very wronged.

Keywords: listing

Lei Jun: I know the pros and cons of being a listed company. I think its disadvantage is that it makes managers only consider the immediate revenue and have no time to consider long-term plans. Xiaomi is growing rapidly. I have always told Xiaomi internally and externally that we will not consider going public within five years. We have said this for more than four years and we still say it today. We want to make Xiaomi a great company. Going public is just a step or a process. Don’t you still need to continue to run a business after going public? And going public requires raising money, which Xiaomi can easily do with its financing capabilities, whether it is equity financing or debt financing. This is related to the investments I have made over the years. I have a special understanding of what investors and investment institutions think, and I also know how to build a good company that can be favored by capital. If Xiaomi can go public like Alibaba 14 years later, I think it can become a great company.

Q: Alibaba has been around for 14 years, but it has already gone public. Aren’t you worried?

Lei Jun: We can wait another 10 years to reach 14 years.

Q: Aren’t you worried that management might complain about you?

Lei Jun: Even without going public, we can still provide strong incentive mechanisms and benefits to management and employees. We advocate happy work. Xiaomi's working atmosphere is very pleasant and the reward mechanism is also very good. If you are interested in joining Xiaomi, we can talk privately. Our vice president Hugo Barra, such a world-class star, is willing to choose Xiaomi. Would he come if Xiaomi did not have favorable conditions? Especially leaving Silicon Valley and coming to Beijing, which is full of smog, how much attraction does it take?

Keywords: 1 billion bet

Gree Group Chairman Dong Mingzhu and Lei Jun bet 1 billion on whether Xiaomi can surpass Gree in 5 years

Lei Jun: Let's take it easy. If we win and I receive any money, I won't take a single cent. I have already promised to divide the money equally among Xiaomi employees and all users who have bought Xiaomi products.

Keywords: physical store

Lei Jun: We are very conflicted, but we are sure that we will not adopt the traditional channel model and the traditional store model. We are considering whether to open a flagship store like Apple to showcase our image and experience the product, but I don’t want to run a traditional retail store. If we run a traditional retail store, Xiaomi’s current retail price will probably increase by 30-40%. No matter how we optimize the process, our price will increase by 30-40%. I believe this is not what everyone wants. So in retrospect, we should still expand production capacity and encourage everyone to place orders directly online. Now, as long as we have the goods, more than 90% of the orders can be fulfilled within 24 hours. If you order today, it will be delivered tomorrow.

Keywords: true love

In August this year, Lei joined the Ice Bucket Challenge, becoming the first Chinese tech giant to do so. After successfully completing the challenge, Lei named three runners--Andy Lau, Terry Gou, and Robin Li. As we all know, Lei and Terry Gou are business partners, so the question is: Are Lei, Andy Lau, and Robin Li "true love"?

Lei Jun: I think Xiaomi believes in an independent and incompatible strategy, because after the formation of the "BAT" pattern today, everyone has to take sides, but Xiaomi does not take sides. Xiaomi hopes to make more friends and fewer enemies, so it tries to form alliances with as many partners as possible. We are willing to cooperate with Foxconn, we are willing to cooperate with Baidu, and we are also willing to cooperate with Alibaba and Tencent, and cooperate with the world's strong companies to provide users with high-quality products. This is what I care about most.

Keywords: ecological model

What is Xiaomi’s production chain and ecological model?

Lei Jun: I hope that one day you take out your Xiaomi phone, and all the smart devices in your house are connected together, and everything is in control, making your life easier. You don’t have to take out the key when you go home. The door is open, the lights are on, and the music is ringing, and life becomes very comfortable. This is our ecological chain plan. We will hold a special press conference to introduce Xiaomi’s smart life. It is difficult for everyone to understand without videos or product demonstrations. This is exactly what we are trying our best to solve. We think that mobile phones are computers that you carry with you. How to use this computer to manage your life and your work, and make life and work very easy. This is what we are pursuing.