"What is Xiaomi's next generation?"
"I don't know, to be honest, we may have once again approached the imagination of the ultimate mobile phone."
In the face of questions from members, May 13th, Liu De, the co-founder and vice president of Xiaomi, and the head of Xiaomi’s ecological chain, responded in the chaos workshop.
Liu De said that there are two things to do in a company. On the one hand, you must know your own strengths, and on the other you must imagine the future. If the two circles do not intersect, change quickly. If the two circles have intersections, it is necessary to quickly enlarge the intersection, which may be the future.
April 2017 was the 7th anniversary of the establishment of Xiaomi.
I shared my feelings in this 7-year period and summed it up as "three did not expect": First, I did not expect this to be so big; second, I did not expect such a long time; Third, I did not expect to be so painful. .
How to start a business from 0 to 100 billion market value?
First, I did not expect this battle to be so big. This year, according to the target of Lei, if nothing unexpected happens, Xiaomi should have a steady revenue of 100 billion yuan. I did not expect such a large scale.
Seven years ago, when Lei always assembled everyone together, Lei always used mobilization of “can't make a company with a market value of US$10 billion in four yearsâ€. We feel very good. Four years ago, 10 billion U.S. dollars was already big for us engineers.
What is the most important factor in persuading a person to start a business? Flicker this thing a little bigger, because when something is big enough, it can attract people.
When we sold the first 300,000 mobile phones, it took less than three hours. We quickly revised this goal. We think that this is not just a company with a market value of US$10 billion, but a company that is likely to be a company with a market value of US$100 billion.
Second, I didn't think so long. Four years as a listed company, everyone divides the money, and you don't delay it. Suddenly in the seventh year, we found that the road was still growing.
Third, I did not expect such pain. All entrepreneurial people should feel that when you really start a business, it is far more painful than you think. I see a little baby, at most a year old. Today's entrepreneurial environment in China is so good, and entrepreneurs are getting younger and younger.
I think entrepreneurship is very much like falling in love in college. Short-term memory is painful. Long-term memories are good. Entrepreneurship is like this, and every day in the process of entrepreneurship is painful. Only when you are retired and you are sitting at home and thinking about it, you have done something that you really want to do. This is something that makes sense for society. It is a good memory. It is entrepreneurship.
Someone also asked me if Xiaomi will be listed in the future. What else do you do? This is actually very painful, because the great opportunity of any era is limited, and for me, I find it hard to find something more exciting than Xiaomi.
You agree, we have spent seven years, starting from scratch, and achieving 100 billion revenues. There is nothing more exciting than this, so this is also very painful.
What can I do with quit millet? I am very willing to share this kind of words with my team's people because I hope they understand that the ability to do this thing is not bad, and don't have any other ideas. Everyone should do a good job of Xiaomi.
When we can't give them more wages and options, we can only fool them. I give you a feeling and experience. In this world, young people in their twenties and thirties have the opportunity to witness the process of a company from zero to 100 billion. There are not many such people. In Xiaomi, it will give you this opportunity to let you practice in the first place and let you feel the process from zero to one hundred billion.
On one occasion, I visited a veteran of the corporate world. He actually handled the 100 billion yuan process twice. So I asked him if you had two experiences of this kind of trading. Can you share with me exactly what factors can enable a company to achieve 100 billion market value from zero? Everyone knows that the external factors are opportunities, but I just want to know what internal factors are. His answer was two words - loss.
As a result, I suddenly remembered an article I read a long time ago. Others asked Li Ka-shing, how did your business do so much? The core thing he said is that when you can earn ten, you earn eight.
These two principles are exactly the same as today's Xiaomi's cost-effective logic. The price-performance ratio is very important.
Did millet grow too fast?
In the first three years of its establishment, Xiaomi made 12.6 billion in the first year, 31.4 billion in the second year, and 74.3 billion in the third year. It may be 78 billion in the future and 100 billion in this year. It basically grew at such a speed.
So people often ask me if the growth of Xiaomi is too fast. Because a company grows too fast, it's not a good sign. Like people, growing too fast can be unhealthy, but the speed of Internet companies is different from that of traditional companies.
A traditional company, like a pine tree, may take 30 years or 50 years to grow up slowly. A hundred years grows into a tall tree, but pine trees often fall down when they are prosperous. Today's Motorola and Nokia's mobile phone business is like that. Everyone doesn't know where the problem is. It crashes and it's not saved.
The Internet companies are more like bamboo, and the bamboo shoots after the rain can grow up. If the environment matures, three years can quickly grow into a towering bamboo. But the problem with bamboo is that it has a short life cycle and it requires constant metabolism.
Therefore, the model of Xiaomi's ecological chain is to build Xiaomi into a bamboo-like company, not a pine-like company. We found our bamboo shoots through investment and turned them into a bamboo forest.
Bamboo Forest is more stable and safe than Pine, because it can complete its own metabolism and expand without borders. I want to expand any one area, just invest in a company and get up. This is the bamboo effect.
7 years of venture, millet harvest what?
We have summed up what happened to Xiaomi in the past 7 years. Because Xiaomi had a valuation of US$46 billion in the fourth year. I think it is not important for the company to add value or not to increase value. What is important is that a company has fought for a few years and what has it gained? I sum up the following 8 points.
The first harvest is the team.
At that time we worked 12 hours a day, six days a week. These young people in their twenties have been beaten and beaten up. They have gained a lot of experience and lessons and they have gained self-improvement and growth. We have trained a strong and hard-working team. This is our first harvest.
The second gain is the brand popularity.
As you can recall, in the past decade or even two decades, China's TOC technology has actually failed to create several hot brands.
There are many brands in the world, but it is not easy to have heat. Envy and hate every day, staring at you every day, this is the brand's popularity. A hot brand is a big achievement for Xiaomi.
The third gain is active users.
We have created a group of precise users, these are 17-35-year-old Polytechnic men. With the emergence of Mijia products, this age is 45 years old, but the most classic user is still between 29 and 39 years old. We have created 200 million active users, and the age of the user base is on the rise. This is very important.
I remember that for the first time to the United States, Fang always said that there are 300 million users in the United States, and the user's phone number is remembered. In fact, the phone number is worthless. The most important is that there are active users.
What is the difference between an active user and a traditional user? I give an example of an image. Active users mean that they are all sitting in the living room of your home. He is boring. What products you have, he will see that the cost of getting users is very low. The traditional users are equally scattered on the street, and the cost of acquiring users is very high. Therefore, it is very important to maintain user activity.
The fourth harvest is the e-commerce platform.
In the rice flour festival in 2015, Xiaomi.com also mobilized 20 million people to go shopping. This year's rice noodles festival, while 5000 people buy things online, this is a very efficient e-commerce.
No e-commerce company in the world does not burn money, even though JD.com has huge investment. But Xiaomi did not burn money. Because six years ago, we invested a sum of money and made a Xiaomi mobile phone. Xiaomi's mobile phone was only sold on Xiaomi's e-commerce platform. Therefore, this product has led to a by-product called e-commerce.
Millet e-commerce may be one of the few e-commerce companies in the world brought by the pulling force of products. This is why after we started to do the ecological chain, we asked the ecological chain products to do those products that have their own traffic.
Because when the product and the channel game, if the product is more powerful, when a single product automatically becomes a drainage product, all channels find you say, brothers, I help you sell it. But when a product does not have a strong pull, begging for these channels, can it help me sell it? The channel said no problem, giving me half the profit.
The world's channels and products are always in the game. In the consumer goods category, this phenomenon is not highlighted. I will give you an example of a movie.
In the movie field, movies and channels must be a game. When the film was bad, the producer asked the channel to say that you were to release it for me; when the film was a cow, the channel sought exclusive license from the producer.
Why do we catch up with the good times? Because in this era, the channel is not as powerful as it was in history, and it is an interesting phenomenon that products with traffic flow are eligible to jump out and bargain with the channels.
The fifth harvest is the supply chain.
When a company has passed more than 10 billion yuan, the supply chain must be streamlined.
It is better for the Xiaomi ecological chain to do hardware product cost control.
Some of the traditional companies visited by Xiaomi said that he saw the price of Xiaomi's products. I want to cry, and my cost is even higher than the retail price of Xiaomi's products.
Hardware is a test of the supply chain. I remember that in the United States, there was a team that was doing hot wheels, buying millet's mobile power in batches, and using it as a battery because it was cheap.
The sixth harvest is capital.
When a company grows at a high speed, capital boosting is essential. So Xiaomi’s commitment to investors over the past few years has been achieved.
In other words, we help these big men earn money, so when we do eco-chains, these big brothers believe in us and are willing to invest in us.
Today around the millet ecological chain, there are 60 large and small funds to follow Xiaomi's ecological chain. Therefore, in the process of rapid growth of a company, as long as it can solve the problem of money, it must quickly solve the problem. The cash in any company is not a good sign because the Chinese stock market is not healthy.
The U.S. stock market is very interesting. Some big companies made their financial statements. Professionals saw a lot of cash and the stock market fell immediately. The Chinese are very strange. How could so much money fall? Because investors think that you take so much money, but nothing happens.
Give another small example. Two days ago, the boss of our rice cooker company told me that Dege was rich and I now have 100 million in cash. I said, brother, you have to spend hundreds of millions of cash quickly, immediately recruit more people, expand broader channels, develop better products, and don’t take too much cash on hand.
The seventh harvest is credibility.
A rice noodle uses our product to encounter problems. We will send someone to help him solve it immediately. We have a very good reputation at the user end. Our commitment to investors and banks is achieved.
So whether it is in the banking system, the capital system or the user end, we all have a very good reputation. This is what Xiaomi got again.
Methodology
The last is the methodology.
For so many years since we started our business, we have accumulated a large number of methodologies on how to be a company and how to make products. I think that Xiaomi has been working for a few years. It's just that he really got valuable things.
We want to make millet a platform and use it to help these eco-chain companies. When he was relatively young, he gave him an 8-point advantage like Xiaomi, helped him grow rapidly, quickly grew from a small company to a medium-sized company, and flew to The stratosphere goes up.
Interactive question and answer
Chaos Workshop Member:
One of the big brothers said that learning successful cases is useless, and failure is useful. Did the case of Xiaomi's success we learn today be useful?
Liu De:
I answer in four dimensions.
First, today's Chinese clamoring is all about eyeballing, so you must multiply it by 0.8 and don't believe it.
Second, there are reference values ​​for both successful cases and failed cases. This is just like we learn chess, we need to go back to the game, we must have a reference value.
Third, all the business cases that have occurred are in the same place. The most beautiful thing about business is change. There are timelines. You must know that the environment is changing.
It is certainly important to study and learn from the past, but the timeline cannot be copied. Just like the millet experience, many people ask, Deco, can you tell a successful approach? This is impossible. Although there are many successful books at the airport, few people succeed.
Fourth, the case of the companies you see and the media are not completely true.
When I was doing Xiaomi, there were various interpretations of Xiaomi's strategic layout and success or failure. However, when I went deep into it, I found that it was not exactly the same as what I said. Perhaps one of our correct strategic decisions is not a result of careful consideration, but is entirely due to mistaken luck.
Sometimes luck does take up a lot of elements. The so-called cases of success and failure in the past are not necessarily the most real part. Shared experiences like me are more valuable.
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