Founded in March 2010, it reached a revenue of 10 billion yuan in 2012 and a revenue of 100 billion yuan in 2017.
Last year, Lei Jun personally revealed that as an Internet company, there are seven words for rapid development - focus, extreme, word-of-mouth, and fast, and its core expression is "efficiency" and "trust".
This article is the first article of the Seven Words Recipe - Focus.
Not only brick-and-mortar enterprises, but also some Internet companies like to separate their eggs in multiple baskets to reduce risks.
This can't be said to be wrong, but it's not the optimal solution, and from a business perspective, focus is about "putting as many eggs in one basket as possible".
At any time, the resources of any business entity are limited, and only by investing limited resources in a sufficiently focused business line can it be possible to form maximum competitiveness and come up with good enough products and services.
When he was in college, Lei Jun started a business with several classmates, with technology, connections, and customer resources, and the probability of success was very large, but in the end he failed.
At the most difficult time, I didn't even have the money to eat, so I sent my partner to play cards with the master in the canteen to win a meal ticket.
Later, Lei Jun concluded that the reason for the failure was "lack of concentration", and he did everything at that time, "installation, software development, hand-over electronic components, and even printing and other work." ”
"Since then, I have understood that for the survival and development of a company, there is nothing without "focus". ”Lei Jun reviewed his first venture.
How to be focused, Lei Jun summarized four core propositions:
1. Clear mission and vision.
2. Deep insight, understand the industry, understand user needs, and find opportunities.
3. Clear and firm goals and the ability to match them.
4. Restrain greed, less is more.
Xiaomi once had an internal discussion, and the topic of discussion was: Is there a boundary in our business?
Some people believe that Xiaomi's business has no boundaries, because Xiaomi's ** is universal, and Xiaomi's user needs are becoming more and more extensive.
Lei Jun resolutely rejected this idea: "This understanding is absolutely wrong. How can a company have no boundaries? Organizations without borders are bound to go blind and chaotic. ”
To be truly focused, you need to do something and not do something, and how to determine what can be done and what cannot be done requires a judgment basis, that is, a very clear mission and vision.
Mission and vision are the most fundamental and core action guidelines of an enterprise organization, which is the focus at the conceptual level and the general boundary line of the focus field.
The mission of many enterprises is to "strive for excellence", "user first", "user-centric", etc., in Lei Jun's view, these are not.
Mission is the purpose and significance of the existence of the enterprise, and the value that the enterprise strives to provide to the society and the public; The vision, on the other hand, is based on such a mission, and the organization ultimately wants to become. ”
Mission and mission is the process of shaping the soul of the enterprise, only after long-term practice, thinking and summary will become clearly visible, as the company grows and thinks deeply, the mission and vision may need to be revised and improved.
It's important to note that missions and visions are not unique to large corporations, and even smaller business entities have their own missions and visions.
In 2014, Xiaomi clarified its mission and vision for the first time. The mission is to make technology accessible to everyone. The vision is: to be the coolest company in the hearts of users.
In 2018, with the increase of categories and the expansion of user groups, after 4 months of discussion, Xiaomi revised its mission and vision. The mission is: always adhere to the "touching people's hearts, the best kind.""so that everyone in the world can enjoy the beautiful life brought by technology. The vision is: insist on making friends with users and be the coolest company in the hearts of users.
Mission and vision is a beacon of the enterprise, which will tell you the answer to the most essential proposition of "where the company has come from and where it will go".
In physics, the formula for calculating pressure is p=f s, where p is the pressure, f is the vertical force (pressure), and s is the area of the force.
The smaller the force area, the greater the pressure. This physical formula is also applicable to business, when making products, the resources that the company has, that is, the pressure, are fixed, and the entry point of the product, that is, the pressure, the smaller the entry point, the more powerful the breakthrough.
So, from laying out the company's business to defining a product, for a specific business goal, based on insights and the basic capabilities we have, what we need to do is to constantly converge and focus on the necessary "smallest incision".
This is also the reason why we have repeatedly emphasized "restraining greed" and trying to pursue "single-point entry".
When making one, don't try to solve too many problems with one product, if you want to solve too many problems, the time spent and the resources required will increase several times, and the final product will have many problems.
The ability to maximize the satisfaction of an urgent need is a great success.
How to choose the incision of the product, Xiaomi's method is "a single point of breakthrough, gradual enlargement".
Lei Jun summarized a set of processes:
First, a product that is clear and urgently needed by users makes it easier to find a clear user base.
Second, the user needs of the selected users should have a certain universality, which determines the future market prospects of the product.
Third, there are few problems to solve, the development speed is fast, and it is easy to control the initial R&D costs and risks.
Fourth, products that solve clear problems are easy to explain to users, and promotion will be relatively simple.
Taking air purifiers as an example, in 2014, Beijing's smog was very serious, and at its most exaggerated, the sky was yellow-brown for a month, and consumers had a strong demand for air purifiers.
However, the air purifiers at that time were generally high, and most of the imported products were more than 5,000 yuan, and the filter element was also several thousand yuan. The ** of domestic products is between 2,000 yuan and 3,000 yuan, and many of them are produced by small factories, and the supply capacity is limited.
As a result, Xiaomi quickly incubated an ecological chain company, without bells and whistles such as "ion fragrance", only focusing on the function of air purification, and finally made a product with performance comparable to imported products, but only 899 yuan.
Developed quickly and in sufficient supply, it was a huge success after its launch, and it also made Xiaomi the number one in the field of air purifiers in China in one fell swoop, which has been maintained to this day.
In 1997, Apple was on the verge of bankruptcy, which brought Jobs back. Jobs went back and saw that there were dozens of product teams, dozens of products, and there were countless versions of the Macintosh computer alone, each with a bunch of confusing numbers.
The product line is too fragmented, resulting in a product with no quality at all. After Jobs talked to each team, he cut 70% of the product.
A few weeks later, at a product strategy meeting, he drew two vertically intersecting straight lines, with "consumer" and "professional" written on both sides of the vertical line, and "desktop" and "portable" written on both ends of the horizontal line, and he told everyone present: "Our job is to make four great products, one for each grid." ”
These two lines of Jobs have achieved the role of turning the tide and bringing the dead back to life. In 1997, Apple lost 10$500 million, and by 1998, a profit of 30.9 billion US dollars.
Here, in fact, Jobs conveyed the idea that deciding what not to do is just as important as deciding what to do.
From this time on, it also made Apple a typical case of "less is more".
Nowadays, whether it is iBook or iPhone, Apple only launches one generation of products every year, although the mobile phone has different versions such as mini, pro, and pro max, it is essentially the same product, maintaining a very small number of SKUs.
It is an extraordinary ability to meet the needs of users with as few products as possible. Less is more, behind which is extremely accurate insight into industry development and user needs, extremely clear product strategy ideas, and extraordinary self-confidence based on strong product strength.
Xiaomi started making mobile phones, and later made power strips, power banks, air purifiers, rice cookers, computers and TVs and other products, some people said that Xiaomi was not focused and became a "grocery store".
In this regard, Lei Jun said that fundamentally, this statement is wrong.
Xiaomi has always firmly adhered to the goal of focus:
From the point of view of the ultimate mission, insist on making good products that "touch people's hearts and are kind", so that everyone in the world can enjoy the beautiful life brought by science and technology;
From the perspective of operating model and industry ambitionsWe have always insisted on exploring and pursuing higher production and circulation efficiency in more industrial environments, and promoted the efficiency revolution in the entire business field.
From the perspective of business layoutWe have always insisted on building a full-scenario intelligent ecology around the consumption needs of users regarding technology applications.
The most important thing is that Xiaomi's main business has always been focused enough, and more categories are to help and support the brother companies of the ecological chain to do it.
Only through the long-term goals, always around the real needs of users, and the core business to form a strong synergy with the business development, can truly drive the flywheel of enterprise development.
Moreover, each new business expansion is based on the solid development model and expectations of the previous business, so as to ensure that each stage of development can focus on developing a business.
Xiaomi does exactly that. The rise of the ecological chain business is that the mobile phone business once stood in front of the world.
Third, on the basis of China's first, the outbreak of IoT business is standing on the shoulders of the rapid advancement of the ecological chain.
But in terms of implementation, Xiaomi has indeed had problems with focus in the past few years. The lack of restraint and business focus in some businesses not only wastes the company's resources, but also consumes the company's brand equity for no reason, drags down the focus and promotion of the company's strategy, and also harms the user experience.
The key to solving this problem is to "match the table", unify the idea from top to bottom, not only have a unified focus goal, but also carry out "verification", and always check to ensure that it does not deviate.
Restrain greed, less is more", these 8 words are very simple to say, sound easy to understand, but it is difficult to do, the slightest mistake, will deviate from the "route", especially the company in the period of business expansion.
So how can you stay focused while expanding your business rapidly? Lei Jun summarized four judgment criteria:
1.Alignment with the company's mission, vision, and strategy.
2.Whether it can form a significant strong synergy with the company's core business and form a closed loop.
3.Whether it can provide users with consistent value and experience.
4.Whether the company's resources support it.
There is an axiom in the field of management, that is, once an organization is established, there is an irrepressible impulse and demand for self-growth.
This is true for a company, and it is true for any team within that company.
The growth of an organization usually stems from the various projects set up, as well as the requirements of various resources such as manpower and capital to match the project, and the most important point: the growth of turnover or profit. A rise in turnover and profit often immediately drives a "local positive cycle" of the organization's desire to grow.
But,Allowing such a "local positive cycle" and "wild growth" often does not bring about a "global positive cycle", but will point to a state that is almost out of control.
The key question here is whether the direction of action of the local organization is strictly aligned with the direction of the company as a whole. If you allow deviations, even if they are only a small miss, they will definitely end up being wrong.
In 2019, Xiaomi proposed a new strategy internally: "mobile phone + AIoT dual engine". At that time, it not only reflected the company's two value clusters, but also reflected the strategic expression of the two to jointly promote the company's growth.
However, after a year and a half of implementation, Xiaomi found that this strategy was wrong, and the essence of the mistake was that the "dual business core structure" connected by plus signs made the company's strategy execution out of focus.
"Mobile phone" and "AIoT" together constitute the core goal of "smart life", but "+" seems to have become two things, AIOT-related business groups are more inclined to increase the number of independent users and connections, as well as the increase in transaction amount.
For example, in order to achieve rapid scale growth, the team made a traditional washing machine priced at 799 yuan, although the materials are a little better than those of peers, and a little cheaper than peers, but it does not enhance the user experience and does not provide value for the goal of "smart life".
Moreover, in the case of limited total resources of the company, the effort is spent on products that are not obvious to the "user value gain", which not only increases the inventory unit, but also increases the development cost, market cost, customer service after-sales cost, warehousing and logistics cost, sales operation and management cost, etc., which is also a dilution and waste for the company's brand equity.
In August 2020, after internal review, reflection, research and deduction, Xiaomi upgraded "mobile phone + AIoT" to "mobile phone x AIoT", making it clear that smartphones are still the core business, and other businesses need to revolve around smartphones to build a strong ecosystem of smart life.
Changing the "+" to "x" also emphasizes the fact that it is not a simple addition, but a multiplier effect.
At the same time, we also need to understandNo matter at what stage, the company's core business, core direction, and core goal must be unified, not binary or diversified.
Lei Jun proposed that for each business, we should repeatedly ask ourselves three questions:
1.What value does my business growth contribute to the company's core strategy?
2.Has the growth of my business led to the continued growth of the company's other businesses, including the core business?
3.What resources are my business consuming?
Note: The material of this article is ** in "Xiaomi Entrepreneurial Thinking", dictated by Lei Jun, compiled by Xu Jieyun, CITIC Publishing Group.