He gave up napping in school lest his classmates outperformed him. He dabbled in computer programming in the dot-com era, pursuing dreams and fortune. In his quest to seek out new things, his ambitions propelled him to switch gears again and again.
Lei Jun, it seems, is always looking for the next breakthrough.
Eight years ago, when he was 40, the founder of Xiaomi could have retired. He worked his way up at Kingsoft, a software provider, and led the company for 16 years. With his wealth estimated at US$45 million, he got Kingsoft listed, sold a few others, and invested in a dozen or so companies. In many ways, he was already a success story in the Chinese tech world.
But it did not take long before he started dreaming again. His goal? Create a company that could rival Alibaba and Baidu in market capitalization.
Alibaba’s Jack Ma built an ecommerce empire that was valued at US$20 billion. Pony Ma of Tencent launched an initial public offering in Hong Kong just five years after starting his QQ messaging service.
Kingsoft paled in comparison to these tech behemoths. Its value stood at only US$90 million when the company went public.
Little wonder that Lei has always been trying to catch up.
A huge blow
Born in a village in southern China, Lei obtained a computer science degree from China’s Wuhan University in the late ’80s. After graduation, he followed in the footsteps of many IT professionals who believed that working as a programmer offered a pathway to success.
But harsh realities set in after Windows entered the Chinese market in 1994, dealing a huge blow to WPS, a flagship word-processing software product by Kingsoft. The taste of failure took a toll on Lei – he would while away by sleeping on a sofa all day until dawn.
Luckily, he soon had an epiphany that helped turn the company around. Products, he realized, were at the heart of a company’s success.
Equally important, he thought, was a thorough understanding of market demand. Switching gears to focus more on marketing, Lei and his team at Kingsoft began selling products with a strong market appeal, including a video player and an online dictionary.
After four weeks of rest, I still felt burned out.
But it was gaming that allowed the company to go public. In order to keep the gaming business afloat, Lei sold Kingsoft’s ecommerce business Joyo to Amazon for US$75 million. In the course of five years, Kingsoft sought a public listing eight times and finally succeeded in 2007 in Hong Kong.
But the move did not bring Lei much joy. “When we completed the listing, I was quite tired. But after four weeks of rest, I still felt burned out.”
He soon resigned. But it turned out that Lei had something else in mind.
He has always had an interest in the internet’s potential, exemplified by his creation of Joyo where Kingsoft’s products were sold. He watched with envy as some of his peers – including Pony Ma of Tencent and Zhang Chaoyang of Sohu – shot to fame with their hugely successful companies.
Chasing Pony Ma
He zoomed in on a niche market: the mobile web. He first invested in Meizu before creating Xiaomi, after studying models of other Chinese Internet giants.
In building his new company, Lei is trying to pair the mobile internet with hardware. It’s creating an “ecosystem” – now a buzzword in the tech world – by bundling mobile phones with PC applications and the MiTalk messenger. Lei said that Xiaomi’s model was quite new in the country.
The success of the company was due in no small part to the extensive network Lei had built over his long career. He hired talents from Microsoft, Google, and Motorola. Xiaomi soon became a household brand in China, gaining a big market share and expanding its overseas market.
Lei sent a rosy 1,300-word internal memo with 11 exclamation marks.
Still, questions have been raised about its quick success. Some said the company’s model was “abnormal.” Others called its strategy “hunger marketing.”
Xiaomi’s momentum took a hit in 2016 following a decline in sales. Since then, Lei has engineered a leadership shakeup and installed reforms to prop up sales.
In July 2017, Lei sent a rosy 1,300-word internal memo with 11 exclamation marks. He announced that Xiaomi has hit a new high: 23 million phones sold in the second quarter.
Eight months later, Lei reintroduced Xiaomi’s model and announced that two co-founders were leaving in another memo. That fueled expectations that Xiaomi was seeking an initial public offering.
As the IPO speculation intensifies, so have questions about Xiaomi.
Among them: How does the company position itself amid increasing competition from phone makers like Huawei, Oppo and Vivo? What plans does Xiaomi have regarding mobile phone chips? What new ventures can be developed after the company launched products from bracelets to towels? Where can it turn to for new growth?
People will be watching as Xiaomi tests its business model. With the launch of Xiaomi’s IPO, will Lei Jun finally have a taste of success?
Photo Credit: Lei Jun launched Xiaomi’s first phone in 2012. Photo credit: Xiaomi.