Born on the 16th of December 1969; Lei Jun is the lesser known founder of the 4th largest smartphone maker in the world – Xiaomi Inc.
Currently, with an estimated net worth of $13.3 Billion, Lei acts as the CEO and Chairman of the of the $45 billion valuation company, and after making several world changing and innovation driven companies, Lei is often referred to as the ‘Steve Jobs’ of China as well.
Xiaomi was cofounded by Lei along with Lin Bin (Ex Googler) in 2010, which has gone on to become largely famous amongst the masses globally, due to its high power phones which are at par with Samsung and Apple, yet are available at really cheap prices.
A Bachelor in Arts specializing in Computer Science, Lei also sits on the board of Wuhan University, from where he had earned this degree. Talking about his family, he is married to Zhang Tong and has two children.
Lei Jun is that man who in a matter of just three years since the formation of Xiaomi, has gone on to grow it from nothing to the 4th largest smartphone brand in China. He has also managed to successfully dominate the software markets, with the creation of the most popular Android custom ROMs Worldwide.
And it is high time the world learned about his achievements as well!
How Were The Early Stages of His Life like?
A man, who rose literally from the scratch, obviously would have a whole book of struggles that he might have seen in his early days. But being a man of great honour, Lei is someone who doesn’t speak about his struggles, rather he likes to show the world what he upto today.
Nevertheless, let’s give you a short brief into the past of Lei Jun!
Lei was born in Xiantao, Hubei in China. His childhood days were passed near a rough industrial city in central China called Wuhan, and later also went on to complete his BA in Computer Science from the Wuhan University in 1991 as well.
During his time at the university, he happened to read the book about Mr. Steve Jobs, and become like him some day. He was highly mesmerised by the book and wanted to establish his own business that would be first class. Hence, to achieve this dream, he decided to get through college fast.
After completing his studies, Lei began working at Kingsoft, a Chinese software company (a start-up then) as an Engineer in 1992. For all those who aren’t aware, similar to Microsoft; Kingsoft is a company that does word processing (just like MS Word), antivirus software, gaming distribution, and even ecommerce.
With his sheer skills and talent, in a matter of no time, the man managed to quickly rise up the ladder and became the President and CEO of the company in 1998. Now, while he was at it, he had also founded Joyo.com, an online bookstore in 2000 as well. His talent was such that, in just a matter of 4 years, he grew his bookstore so great that it was bought by Amazon.com $75 million in 2004.
During this time, Around the early 2000’s, he as an angel investor also went on to invest in many successful start-up companies like YY, UC and Vancl and oversaw a total of over 70 funding rounds for his portfolio companies as well.
Leaving all that behind, three years later, after spending 16 years with the software maker and after successfully completing their IPO in 2007, Lei on account of “health reasons” resigned from the position of the President and CEO of Kingsoft and became Vice Chairman at Kingsoft. Thus moving out of the day-to-day functioning!
But soon after that it was announced that he had invested an (X) amount in Vancl.com and UCWeb, subsequent to which, he also became the Chairman of UCWeb as well. UCWeb is a browser that now has over 500 million users and has been recently acquired by Alibaba.
Anyway, finally two years after, in an attempt to fulfil his dream of getting into the fast growing Mobile space, Lei founded Xiaomi Inc in 2010.
And this is where it all actually began!!!
What Is The Story of Xiaomi?
Now around the year 2010 and since a while, Lei was hoping to start a business which could get him the desired entry into the fast-rising mobile phone world. But to do so he needed a team. He often is told to partner with people you know, but with an otherwise belief, he prefers to partner with the best people. Hence, he turned to the Ex-Googler – Bin Lin for help. With an affirmative agreement from Lin, he confidently moved ahead.
The Start, The Rise, And the Growth…!
The next step was funds. The Hong Kong billionaire Chan that controls Hang Lung Properties that backed Morningside Ventures, had been regular investors in Lei since years. And maintaining the faith, they decided to back him again too! Apart from the Chans, Lei also received capital from, venture firms Qiming, Ceyuan, IDG Capital Partners, etc
And with that Xiaomi along with eight cofounders including Liu De, Hong Feng, Zhou Guangping, Chuan Wang, Li Wanqiang, and Kong-Kat Wong was officially founded on the 6th of April 2010.
In the next three months, after aggressive hardwork Xiaomi also launched their first Android-based firmware called ‘MIUI‘. To simplify it more, a firmware is nothing but a software that in sync with the applications and operating system controls the operations of a cell phone. This was similar to ‘TouchWiz’ on Samsung phones.
Soon after that, a year later in August 2011, the company also announced their first Smartphone – ‘Xiaomi Mi1‘. This smartphone would be shipped using MIUI firmware. And the next version in line was Xiaomi Mi2 smartphone. Mi2 was powered by Qualcomm’s Snapdragon S4 Pro and was announced in the next year.
Now so far, Lei had only worked with companies worth about $1 billion, and having that figure in mind, he thought Xiaomi also held a maximum value of $10 billion. but that was a mistake. This was cleared by Russian Investor Yuri Milner of DST that, Xiaomi easily had the potential to become a $100 billion company. As much as this was a shock to him, it also made him realise that he was on to something huge. Hence, keeping this in mind, he decided to accordingly move ahead!
With the humongous success of the first version, Mi-2 smartphones were sold in an even more wider range, and with the help of wireless phone vendor Mobicity, the company went on to capture the Western market including – United States, Europe, United Kingdom, Australia and New Zealand.
In the same year i.e. 2013, the company made another huge move and hired the Vice President of product management for the Android platform for Google – Hugo Barra. They got him on board as their new Vice President to expand the company outside of mainland China. He was in-charge of Xiaomi’s Global Division, to manage all the products and operations of the company in markets outside of Mainland China.
This year also saw quite a few other developments. This included the launch of their new Smart TV. This was followed by the launch of their new and improvised 3rd version – Mi3 phone. And later, the company also announced that it was in preparations to their first ever service center in Beijing.
Due to such huge introductions and developments; by the end of the year Xiaomi had become the fifth most-used smartphone brand in China.
Being such a young company, the company had reached to point where they had more than 30 million MIUI users worldwide! Additionally, they had sold more than 18.7 million smartphones in that year itself.
Their reach and demand was such that the company had sold over 26 million smartphones in the first half of 2014 and by the year 2014 in just a matter of 4 years, the company with its innovation had taken over Samsung to become China’s leading smartphone vendor in the second quarter of 2014. With a net worth of $9.9 billion, Lei had now become the 8th richest person in China.
Later, around the mid of 2014, Xiaomi also entered the vast untapped market of Indian. He entered the market by exclusively tying up with India’s largest E-commerce site – Flipkart. Their impact in India was such that, they were sold out in the first 24 seconds itself. They sold 40,000 smartphones in total. That is when, the company decided to expanded rapidly in India and eventually also partnered with other E-commerce leaders like Amazon.com and Snapdeal as well.
And with the end of year, after receiving $1.1 billion in funding and Xiaomi became the world’s most valuable technology start-up with a valuation more than $46 billion.
But even after reaching to such a high point, Lei was very hesitant to launch an IPO. He believed that, yes of course the IPO would scale the company to $100 billion, yes everyone will be rich, sell their shares and make a lot of money, but with the launch of an IPO, it becomes equally difficult to manage a company, who would that? Hence, he wanted to wait another 5 years before he could do that.
But while at it, he had also added another goal to his kitty. He aimed at scaling the company to become the world leader in the smartphones market in the next five to ten years.
The Business, Revenue & Marketing Strategies…!
In selling a smartphone, Xiaomi uses a unique strategy that unlike the market trend. The company has set the prices of their phones nearly at the cost price, that too without compromising the quality and performance.
And to make a profit from this narrow margin, unlike its competitors who sell a model for not more than 6 months, the company sells their model for up to 18 months. Other than that, their phone-related peripheral devices, smart home gadgetry, apps, online videos, themes, etc also add on to their business.
To further reduce their costs, Xiaomi uses the online medium exclusively to sell its products and unlike its competitors does not own a single physical store. What’s more is that, to keeping a strict control over its stock, Xiaomi offers limited availability flash sales which makes sure that supply never crosses the demand, and keeps the market buzz on an all time high.
Now on the other hand; Xiaomi has also given away with the old traditional marketing or advertising techniques and relies mainly on social networking services along with its own customers to help advertise its products a.k.a. Word of Mouth.
And to build and maintain their strong and loyal customer base, Xiaomi makes sure to listen closely to their customer’s feedback. In practice, the company’s product managers put in a great amount of time on company’s user forums, to check for suggestions and once a suggestion is picked up, it is quickly transferred to the engineers.
The features then potentially turn from mere concept to shipping products in a span of a week, after which they are shipped every week in the new batch of phones. Xiaomi calls this process “Design as you Build“!
If you look at it broadly, Xiaomi combines and uses Apple tactics with Amazon’s strategy!
It is famously known that, when Apple had released their iPhone exclusively with AT&T, they had actually forced all the carriers to bend down and go by the rules laid down by Apple.
Going by the similar strategy, Xiaomi too uses flash sales to manage their stock, generate a hype of their product and company, and increase their demand. Clearly, this also shows that Xiaomi wants to call the shots as well.
Now on the other hand; Amazon as most of us know uses most of its profits to expand their business. Similarly, Xiaomi too acquires and invests most of their earned money, but in software companies in key areas with an aim of wide expansion. Basically, Amazon constantly reinvests into its own market which magnifies into massive growth. Xiaomi does somewhat the same.
Their Present & Future…!
Since its launch in just a matter of 5 years, Xiaomi has grown on to become world’s 4th largest smartphone maker, which now also designs, develops, and sells smartphones, mobile apps, and related consumer electronics.
Some of their products include the Mi series, Redmi Series, MIUI (operating system), MiWiFi (network router), MiTV (Smart TV line), MiBox (set-top box), MiCloud (cloud storage service), MiTalk (messaging service), MiPower Bank (external battery), Mi Band (fitness monitor & sleep tracker), and many other Smart Home Products.
With more than 8,000 employees and revenues worth $12 Billion (2014), Xiaomi mainly holds a presence in Mainland China, Malaysia, and Singapore, and is also seen to be aggressively expanding to other countries like India, Indonesia, Philippines and Brazil.
Because Xiaomi has managed to break the world record for “most mobile phones sold on a single online platform in 24 hours”, their expansion into the untapped Indian market has also become pretty unique and aggressive.
So far Xiaomi has invested in a 20 start-up companies and plans on investing in 100 more so as to help Xiaomi Inc expand and grow exponentially. Some of these include: – Jimubox (2015), Ninebot (2015), Lizhi (2015), 21viaNet (2014), iQiyi (2014), Xunlei (2014), Misfit Wearables (2014), etc and many more.
Lastly, talking about their funding rounds; at a valuation of roughly $45 Billion Xiaomi has raised a total of $1.45 Billion in 6 Rounds from 11 Investors which include our very own Ratan Tata, Morningside Group, DST Global, IDG Capital Partners, Qualcomm Ventures, Temasek Holdings and a few others.