Xiaomi Entrepreneurial Thinking
Reflections on engineering culture, focus, the internet mindset, and Xiaomi’s efficiency revolution.
This was the first book in Zhou Zuoluo’s book club this year. I had heard of it long ago but never thought of reading it. Following the book club, I finally did. As a Xiaomi fan, I found it exciting. While reading, I kept imagining Lei Jun, especially his distinctive Mandarin accent. The whole book was easy to read, and I never felt sleepy.
I. Overview
In this book, Lei Jun systematically reviews thirty years of entrepreneurial thinking and business philosophy and takes an in-depth look at the “Xiaomi model.” He argues that sustained success comes down to one thing: sticking to internet-driven manufacturing, revolutionizing efficiency, and maximizing user benefits and economic efficiency.
For the first time, he comprehensively reveals Xiaomi’s three iron rules, seven-character formula, high-efficiency model, blockbuster-product model, and ecosystem elements. Drawing on management, investment, work, and other experience, the book offers guidance for founders and managers and leading ways of thinking that ordinary people can use to keep improving.
II. Important Ideas
2.1 Engineering Culture
- From university until now, I have gone through three entrepreneurial ventures and changing roles, but being an engineer remains my favorite. As a programmer, my heroes are entrepreneurs with engineering backgrounds such as Jobs, Musk, and Lei Jun. Our company’s vice president has said something similar. Every year, when presenting the Outstanding Engineer awards, he says: “I have been a soldier and a teacher, and now I am a manager, but engineer is my favorite title.” Our company also encourages innovation: it is the first of our core values, and Innovation Stars are selected in the first quarter each year. I strongly identify with engineering culture.
More than half of Xiaomi’s founders came from engineering backgrounds. Kingsoft is known as the software industry’s “Whampoa Military Academy,” and most of its senior leaders were also engineers.
- Writing code is like writing poetry: it requires imagination, concise expression, and the ability to construct a worldview. An interviewer once asked Lei Jun how good his code was. With a very humblebragging answer, he said he did not know, but his colleagues said his code was like poetry. Compared with poetic code, a small fry like me sees much more code that resembles garbage—often garbage piled on an already terrible codebase. That makes me admire Lei Jun even more.
2.2 Great Companies
- Good companies earn profits; great companies win people’s hearts! Before Xiaomi’s listing, Lei Jun made an important decision: to put the rule “hardware profit must not exceed five percent; any excess will be returned to users” into legal documents. Shareholders did not understand, so he persuaded them one by one and delivered this memorable line.
Value for money is central to the Xiaomi model. It can beat premium-pricing models because its margins are low enough.
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A great company must have a great undertaking that solves major problems for society.
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A great company keeps making things better and cheaper. Xiaomi desk lamps, Xiao Ai assistants, power banks, power strips—just among the things I have used, Xiaomi has disrupted traditional industries, solving the problems of unattractive, hard-to-use devices while making them ever cheaper. Xiaomi deserves to be called a great company.
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Without focus, a company’s survival and growth have nothing to stand on.
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Deciding what not to do is as important as deciding what to do.
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Without boundaries, there is no focus. Focus matters. In this age of information overload, temptations are everywhere. While exploring side businesses, I often chased fresh, interesting trends and ended up accomplishing nothing. Now I am concentrating on just one thing: websites for overseas markets.
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When entering new fields and seeking opportunities, stay humble and learn. Work hard, but also seize the right moment and go with the trend. Learn by doing, get involved, and get your hands dirty. Learn from excellent, like-minded people, seize opportunities, and publish more of your own work.
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Do not waste precious resources on self-indulgence; use them where they genuinely help users. Any technology or model that cannot win in competition is empty talk. This is the trap technical people fall into most easily. I was the same in the first few years after graduation. But technology is not as important now. With AI-assisted coding, we should broaden our view.
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Making money from information asymmetry is inefficient and cannot last. Information spreads so quickly online now that these gaps soon disappear.
2.3 The Internet Mindset
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The internet’s greatest feature is direct contact with users, making real-time feedback easier and deeper. Fast feedback makes it easier to adjust products, respond to users sooner, improve satisfaction, and increase user stickiness.
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In an internet mindset, speed is a principle, not the goal.
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Move quickly in tactical execution while keeping strategy steady. Do not move fast merely for speed’s sake. You must have solid capabilities yourself.
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One or two hit products may come down to luck; consistently producing hits requires a complete model and system.
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Every industry and product around us deserves to be remade using the blockbuster-product model. Learning from others is the same: learn their complete models and systems.
AI empowerment means remaking every industry and every product using an AI model.
- Every platform’s traffic dividend eventually fades, and customer-acquisition costs keep rising.
III. Conclusion
The most important idea I learned is focus: deciding what not to do matters as much as deciding what to do. Next is the internet mindset. Small, quick steps and rapid iteration are the rhythm I aspire to. With AI, I can implement a requirement in half a day. What we need to do is publish it and validate it quickly.
Reading is worthwhile. I hope Lei Jun gives us another moving, passionate speech this year. Yesterday I saw his Weibo update and felt he was gradually recovering and finding the courage and confidence to move forward again. As a Xiaomi fan, I am genuinely happy. I hope Xiaomi keeps being the coolest company and bringing us inspiring products at honest prices!