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The Xiaomi Way Customer Engagement Strategies That Built One of the Largest Smartphone Companies in the World Li Wanqiang full chapter instant download
The Xiaomi Way Customer Engagement Strategies That Built One of the Largest Smartphone Companies in the World Li Wanqiang full chapter instant download
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THE XIAOMI WAY
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THE XIAOMI WAY
Customer Engagement
Strategies that Built One
of the Largest Smartphone
Companies in the World
Li Wanqiang
ISBN: 978-1-25-958454-1
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MHID: 1-25-958453-4.
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in the Rockies.
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CONTENTS
INDEX 251
● v
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FOREWORD
One evening in early July, Li Wanqiang (Alee is his English name) came
in to see me with a manuscript in his arms and said he was ready to hand
over his assignment. He said, “Ten years ago, you asked me to write a
book about the user experience and interface design. Well, it took me
ten years, but I did it.”
In 2000, Alee had just graduated from college and come to work
at Kingsoft. We quickly recognized his talents as a software interface
designer, and we asked him to organize an interface design team at the
company. This was the first team working specifically on user-interface
R&D in the entire industry. The team produced the interface design for
such Kingsoft products as Antivirus and WPS (Writer, Presentation, and
Spreadsheets, a suite of office-related software), which were well received
in the market.
In 2004, I asked him to write a book and share his knowledge about
user interface for the industry at large, so as to push it forward. He began
the work and had finished around one-half when he was transferred to
the Internet business department of Kingsoft. His job there was to launch
the upgrade to a new Internet model, so he became quite busy and had
to put the manuscript aside.
At the end of 2009, when he had quit his job in Kingsoft, he came
to see me and said he was planning to become a commercial photogra-
pher. I in turn told him that I was planning to start a new company, and
I wondered if he might be interested in joining me. He didn’t pretend
to think it over—he immediately agreed. Astonished, I asked him if he
knew what I was going to make. Without hesitation, he said, “You are
going to make smartphones.”
● vii
VIII ● FOREWORD
Alee knew I was crazy about smartphones and that I had my own
ideas about what to do with them.
It is true that I love playing with smartphones. More importantly,
though, I have created software products for more than 20 years, and
I have a lot of ideas about how to combine the two. Whenever I meet
up with someone in a smartphone company, I bounce my ideas off him
or her. Even 10 years ago, I was bouncing ideas off the vice president of
global R&D for Nokia, when that company was at its height. What I have
really wanted to do is create a company that gives the fans or enthusiasts
a sense of engagement with the company as well. It seems to me that any
company with real value in the future has to be this kind of company, in
which users themselves engage in creating products.
Four years ago, when we were founding Xiaomi, the concept was to
make the company feel like a small restaurant, a place where users could
come inside and be a part of the scene. I felt this should be the case no
matter how large the company might become in the future. Meanwhile,
the boss should be a friend of every single customer who comes in to eat.
This friendship model is the only business model that can be sustained
over the long term.
We kept to that concept as we made our first product MIUI based on
the Android system. Strictly speaking, MIUI was a smartphone operating
system that was custom made to a deep degree on top of the Android
system. The operating system was extremely complex. Very few people
could bring it to a stage where you could begin to ask users their opinion
about the results because the R&D cycle was so lengthy.
We realized that we needed to adopt the development model used by
Internet software developers, and do it in phases. We could try putting
out a new generation every week. The main problem with building the
operating system was to understand users’ needs, to understand what
they really wanted, and then turn those things into an actual product.
This also involved the issue of maintaining quality control; plus, there
was the issue of putting something out every week.
Xiaomi put a lot of time and effort into thinking about how to do
this. The company then became the first in the world to create the busi-
ness model of making a new-generation operating system every week.
To test this model, we gathered a group of users and asked them to play
FOREWORD ● IX
with and confirm the usefulness of the model. To figure out whether or
not the business model was a good one, we kept the whole thing secret
in the early period. We did zero publicity and made no sales. Our sole
purpose was to conduct the experiment and see just how much “energy”
we could generate from a model that was being sold based purely on
word-of-mouth reputation.
Some people undoubtedly misunderstand Xiaomi. They think the
company is what it is today because of a tremendous sales system for its
smartphone. In fact, the very first press conference for Xiaomi was on
August 16, 2011, which was one year after the launch of MIUI. By that
time, MIUI already had 500,000 users. During that one-year period,
Xiaomi did not undertake any sales activity at all—people may not be
fully aware of that fact.
If pigs stand at the right place in the typhoon, they can indeed fly.
All things depend on being aligned with the right forces. If you think of
the founders of a start-up company as lucky pigs, the industry trends are
the typhoon, and the engagement is the typhoon too.
The first year in Xiaomi, two things were tested and thoroughly demon-
strated. First, we learned that users engaged in product development could
indeed lead to our making good products. Second, good products could be
sold through the word-of-mouth reputation of users. This corroboration
then taught Xiaomi two important lessons: first, the company needed to
interact with users to produce good products, and second, it needed to rely
on word-of-mouth reputation to carry out the marketing and sales. At the
core of the Xiaomi philosophy is developing the users’ sense of engage-
ment in the process. It is through their sense of engagement that we can
complete the R&D process, accomplish marketing and promotion of the
products, accomplish user servicing, and in the process make Xiaomi into
a very “cool” brand, which brings young people together. In the process
of developing the company, this has been the most important concept. In a
nutshell, it is to “think of users as friends.”
Alee was one of the cofounders of Xiaomi. In the early period, he was
responsible for R&D on the MIUI, and then later he became responsible
for the Xiaomi network called mi.com. I deeply appreciate the way he has
found time in his busy schedule to write this book, The Xiaomi Way. It
pulls together the experiences and shares them with everyone. I feel that
X ● FOREWORD
A SENSE OF ENGAGEMENT
was forced to think mainly about how to fund its existing busi-
ness. It could not make long-term decisions about generational
shift.
2. In founding Xiaomi, Lei Jun asked us to focus on just one thing:
word-of-mouth reputation. This change in the way of thinking about
products and markets was like asking everyone to erase the operating
system in his or her brain and start over. We put out a new genera-
tion every week instead of every year. Now, we all were asked to
be involved in customer service instead of being involved in all-out
battle. R&D on the user experience was no longer a matter of monthly
or quarterly meetings but rather a matter of daily communications
with users. The “storm attack” mode of sales and promotion was
now transformed into “penetrating interaction.” Each function added
to the phone was to permeate the users’ daily activities soundlessly.
Marketing strategy no longer pursued a highpoint, and instead, we
spoke plainly and directly.
In 2008, Lei Jun brought forth what we called the four-word formula
for the Internet. In Chinese, this used seven words to describe four con-
cepts: focus, ultimate excellence, word-of-mouth reputation, and speed.
The first two of these were product goals. The last, word-of-mouth repu-
tation, was the absolute core idea behind the whole Internet. Speed was
the principle applied to action. The traditional approach had always been
to do things slowly so as to do them right, as encapsulated in the phrase
“Slow work yields fine products.” In contrast, the “extremist style” of
the Internet was generated in the midst of fast-speed generational shift.
Internet technology changes by the day, and this forces an extremely
fast pace of “rebooting” the entire industry. In just 20 years, China has
been through three stages of technological change: portals, Web 2.0, and
mobile Internet.
The age of mobile Internet forces us to be fast. Companies that
are not fast will be washed out of the market. This term fast, however,
also refers to a method. It is not a goal in itself, but rather it is the
necessary result of the logic of a new industry that incorporates the
psychology of consumers. In the past, after handing a product over to
6 ● THE XIAOMI WAY
users, a company generally felt that its contact with those users was
finished. Now, handing over the product is seen as just the beginning.
In what follows, the company has to have constant interaction with
users and enable them to engage in the ongoing process of improving
the product.
The reason “word-of-mouth reputation” is king on the Internet is
that today’s users select products mostly by the word-of-mouth reputa-
tion of those products.
Google has incorporated this wisdom into their operations. When
Google released Gmail in 2004, it relied exclusively on word-of-mouth
promotion. It issued just a few thousand beta-test user accounts. If
anyone else wanted to use the system, they had to be invited by one of
these people. The number of “invitee codes” was limited, and the codes
soon became highly sought after around the globe. People were trading
all kinds of things to get them. The asking price for a Gmail account
even got to 75 pounds sterling on eBay. I myself went to a lot of trouble
at the time to get a Gmail invitee code. This was the first time I really
understood the way that word-of-mouth reputation was being used
by Google.
Quite a few products that have emerged on the Taobao site (part
of the Alibaba Group) have also relied on word-of-mouth promotion.
A SENSE OF ENGAGEMENT ● 7
For example, the Handu Group brand relies on being fast in following
up on fashion design, and it has become the key site female users rec-
ommend in many of the online buying communities. Another product,
Yunifang, sells mainly by claiming to be made of only natural products and
minerals, and so it has become the number one skincare product on
Taobao. A third example is the brand Three Squirrels nut products
on Taobao. I and many of my friends have personally witnessed the
phenomenon that the more something starts selling, the hotter it gets if
one is using word-of-mouth promotion.
Of course we have always used the recommendations of friends or
authorities to make decisions about what to buy. Such recommendations
were not, however, what drove mainstream buying. Today, behind this
idea that word-of-mouth is king is the fact that information transmission
as we now know it has gone through several major changes:
1. Engine: products
2. Accelerator: social media
3. Transmission: customer relations
*****
Jos asia olisi koskenut yksin minua ja jos olisin ollut täysin
riippumaton, en olisi siihen kiinnittänyt mitään huomiota, mutta tiesin,
että vanha ystävyys yhdisti setääni ja hra Gérardia. Tahdoin estää
tämän suhteen katkeamista. Päähäni pälkähti uskoa huoleni rouva
Marboylle, joka voisi tarvittaessa pidättää ystävätärtään tekemästä
tuhmuuksia.
Kello oli viisi. Setäni ei tulisi kotiin ennen päivällistä. Otin ajurin ja
käskin ajamaan Rue Pergolèselle.
— Niin, hän näyttää olevan niitä ihmisiä, joita onni suosii. Olen
lukenut hänen runojaan; aavistan, että hänessä piilee suuri runoilija.
— Todellakin, ja kenelle?
— Lancelot'lle siis?
— Juuri hänelle.
Genesvrier hymyili:
— Minä en puolestani tahdo levittää huhua herra Lancelot'n
epäonnistuneesta kosinnasta, sanoi hän, mutta minä tunnen tämän
nuoren miehen teokset ja olisin hyvin kummastellut, jos teidän
luonteisenne henkilö olisi joutunut tuontapaisen kirjallisuuden
pauloihin.