Eleven years ago, Lei Jun took a start-up team of seven people including Lin Bin, Zhou Guangping, and Hong Feng to drink a bowl of millet porridge, and a company called "Xiaomi" was founded in the Baofu Temple Bridge Silver Valley Building. It opened quietly; today, this company, which Lei Jun calls "the last entrepreneurial venture", is already an existence with annual revenue exceeding 240 billion yuan (2020). The rapid development has attracted the attention of the entire industry.
However, at the age of 51, Lei Jun, who struggled constantly, finally broke his own flag of "treating Xiaomi as his last business venture".
At the end of March, Lei Jun took the stage with the confidence of Xiaomi Group’s 108 billion yuan cash reserve, and decided to regard car building as his “true and last entrepreneurial venture” in life. He said that night: This will be the fourth and last time I start a business in my life. I know very well what this decision means. I am willing to risk all my reputation in life to go into battle again and fight for Xiaomi Auto.
Xiaomi follows the trend in building cars. Nowadays, peripheral capital is constantly pouring into new forces to build cars, such as Apple, which makes mobile phones, Baidu, which makes engines, Wuliangye, which makes wine, Baoneng, which engages in finance, and Evergrande, which makes real estate... The span of their fields is jaw-dropping. It once again proves that the future of the automobile industry is bright, and the future of new energy vehicles has unlimited prospects.
There is no doubt that new energy vehicles are the general trend, whether from the perspective of national policy or actual energy development. This is why heroes in various fields have coincided with each other to spearhead development. Point to car building.
Under the tide, Lei Jun chose to eat the "meat in a bowl" of the mobile phone market and was thinking about the "food in the pot" of the car manufacturing industry. He also wanted to leverage Qingyun to realize Xiaomi's car manufacturing dream, thereby creating a more complete Xiaomi ecosystem.
But building a car is no easy task. So what preparations is Lei Jun making for building a car?
Learn from experience, keep learning from experience
"Over the years, at Xiaomi executive meetings, we have occasionally discussed building cars several times. Until January 15 this year, the board of directors asked us Let’s take a serious look at the electric vehicle industry. To be honest, I was reluctant at first. But the tree is still and the wind is blowing. Facing the tide of the times, where will we go? ”
Faced with the problem of car manufacturing? At this time, Lei Jun shared his mental journey with the public. From being unwilling to build a car to proactively joining the trend and embracing the times, Lei Jun did what he said in the 75 days between Xiaomi's decision to build a car and its announcement. He participated in 85 visits and communications and had in-depth exchanges with 200 people in the automotive industry. , and held 4 internal management discussions and 2 formal board meetings.
On the third day after the official announcement of the car, Lei Jun took the lead in organizing a Chinese Alumni Association, which together with Taishan Association, Jiangnan Association, and China Entrepreneurs Club, is known as the "four top wealthy circles" At the party, almost half of China's new energy market gathered. Li Bin, Ideal, He Xiaopeng, Wang Chuanfu, etc. were all present. No matter how you look at it, this is a swearing-in meeting about Xiaomi's car-making.
This is not over yet. Lei Jun’s trip became more intensive and he successively visited relevant car companies and supply chain companies.
In early April, Lei Jun visited Wang Chuanfu. Some people speculated that Xiaomi was looking for BYD to manufacture cars. Some people speculated that Lei Jun wanted to use BYD's battery electronic control. Although the content of the conversation was not revealed, Wang Chuanfu once publicly stated: Indeed Negotiating related projects; then, Lei Jun visited CATL and faced two battery manufacturers with different technical routes. If Lei Jun’s trip was to choose a battery, then the ternary lithium battery with higher energy density or the safer iron phosphate Battery, I don’t know who can catch Mr. Lei’s eye.
Next, Chongqing netizens broke the news and took screenshots that Xiaomi founder Lei Jun visited the Chang'an factory to visit the second factory area of ??Liangjiang factory. After the news broke, it instantly detonated the local network in Chongqing. Judging from the picture, the sightseeing bus that Mr. Lei took for two yuan a trip at the entrance of Yuhuazhai was an important means of transportation for him during his trip. Having said that, if the news is true, Changan will become one of the car companies that Xiaomi intends to cooperate with. Even if it is not true, Chongqing can use this to negotiate with Huawei and gain some say.
In May, the day after Xiaomi’s first-quarter financial report was released, Lei Jun showed up at the GM-Wuling Liuzhou production base, visited the Wuling Hongguang MINI EV production model, and discussed cooperation matters.
As we all know, in the new energy vehicle market, there are two types (or two types) of models that have been popular for a long time. One is "Tesla" and the other is "Hongguang MINIEV". The former relies on brand influence. and intelligence first, quickly occupying the Chinese market, while the latter seized the number one sales position with its affordable price and market grasp.
Lei Jun revealed in an interview that in terms of model positioning, Xiaomi had already decided on its first model. However, because the models with higher votes from netizens were SUVs and sedans, Xiaomi changed the first model to To be determined; in terms of pricing, Lei Jun said that the price is between 100,000 and 300,000 yuan. Also due to voting considerations by rice fans, the most popular range is still within 100,000 yuan.
Therefore, this visit to the Hongguang MINIEV production base was probably for Mr. Lei to learn from Wuling’s experience in the new energy market. We shouldn’t be too surprised if Xiaomi launches a low-priced micro-electric model similar to Redmi phones in the future.
Immediately afterwards, Lei Jun flew from Liuzhou to Wuhan. This native of Hubei, who once studied at Wuhan University, has not forgotten Hubei in his footsteps after announcing the car manufacturing. Although Dongfeng denied Lei Jun's visit, Wuhan Mayor Cheng Yongwen also attended the "informal meeting" that day, making the statement that "Xiaomi cars are developed in Beijing and manufactured in Wuhan" more factual.
The following June 8, Lei Jun paid a night visit to the Great Wall Motors R&D Center in Baoding. In fact, there were reports as early as March that Xiaomi was negotiating with Great Wall Motors to use its factories to produce electric vehicles. Although the report was denied by both parties, Great Wall Motors responded on the interactive platform that the report was not true, but the company remained open to new cooperation with Internet companies.
Xiaomi is a "layman" when it comes to building cars. Therefore, Lei Jun, who has staked all his reputation, naturally has to be more proactive and cannot stop. From BYD to CATL, from Liuzhou to Baoding, who can be sure whether Xiaomi cars will be equipped with batteries from CATL and BYD’s electronic controls, which are assembled in Wuhan and Xiaomi is responsible for the channels.
Lei Jun was running around non-stop to learn from the experience. This scene was exactly the same as the running around before he decided to build a mobile phone.
Two entrepreneurships, one model
Even before he decided to make mobile phones himself, Lei Jun had taken a fancy to the development space of smartphones, so he wanted to invest in a mobile phone company with his own funds. enterprise. Therefore, Meizu became Lei Jun’s choice. He believed that Meizu was a company that really made mobile phones with heart.
Of course, about the grudges between Lei Jun and Huang Zhang, Meizu and Xiaomi, that is a story for later.
At that time, Lei Jun was already a veteran in the Internet industry for decades. When Kingsoft anti-virus software was killed by Zhou Hongyi’s “free” slogan, Lei Jun was depressed for a long time, but he He has not been idle either. In the past five years, he has extensively and seriously laid out the mobile phone market in the name of investment. From hardware to software, traces of his investment can be seen. IT Orange data shows that before 2016, Lei Jun had More than 40 investments.
Therefore, even if Xiaomi, which started with a thousand-yuan mobile phone, fails to make money on mobile phones, it can still make a lot of money from other segments of the mobile phone industry (such as the application market). It is not difficult to see from this how Lei Jun builds mobile phones: not because the track is large enough, but because of the years of accumulation behind it, he has created a successful ecosystem and won by scale. From this, the so-called "Xiaomi model" was born - providing cost-effective hardware products. The hardware itself does not need to make money, but it can make money through Internet business after it reaches scale.
Now it’s our turn to build cars. If we don’t make money from building cars in the future, under the same logic, Xiaomi can also make money in other segments of the automotive industry: Xiaomi phones can do it, and Xiaomi cars also have opportunities. .
According to data released by 36Krwhale, before 2013, Lei Jun had only invested in two automobile-related companies, one was Zhuhai Guanyu Group, which made lithium batteries, and the other was an automobile e-commerce car products company. However, after visiting Elon Musk, Lei Jun led Shunwei Capital to invest in a number of new energy vehicle-related companies in seven years, from auto insurance to autonomous driving, lidar; from automotive semiconductors, From sensor chips to artificial intelligence vision and in-vehicle entertainment audio, the funding even exceeds 3 billion.
Xiaomi’s choice to build cars is not only the final word for Lei Jun’s car gambling, but also his official declaration of war against his idol Elon Musk.
The current electric vehicle market can be divided into three categories: Internet-based vehicles, cross-border players and traditional enterprise manufacturers. Xiaomi is the second category. As a newcomer to an unfamiliar field, Xiaomi must have higher requirements for products, marketing, channels, etc., but it is also Rebus's masterpiece. Can the success of Xiaomi mobile phones be copied to Xiaomi's cars?
Fear is the driving force for progress
Breaking the flag of his "last entrepreneurial venture" and resolutely betting 108 billion yuan in cash reserves, why did Rebus build a car? In the final analysis, it is due to concerns about the future prospects of the company.
For quite some time, Xiaomi mobile phones have been gradually showing decline.
In 2011, the M1 suddenly emerged with its high configuration and relatively low price; in 2013, the Redmi series started a trend of cost-effective smartphones with an extremely low price of 799 yuan. . The three words "cost-effectiveness" can be said to be the foundation of Xiaomi's rise.
Xiaomi's "success" relies on the three words "cost-effectiveness". I hope it will never fail in these three words...
At the lowest price Achieving the best performance and seizing the market with the ultimate cost-effectiveness are the foundation for Xiaomi's rise and growth. In order to prove his high quality and low price, Lei Jun even publicly promised that the "hardware comprehensive net profit margin of Xiaomi mobile phones will never exceed 5%."
Lei Jun said this yourself...
It has achieved the low price of a "cottage phone" in the feature phone era, but it does not compromise on performance, and it has more MIU attaches great importance to user experience. These are the keys to the Xiaomi brand's development and growth into a global brand in a short period of time.
However, on the other side of "cost-effectiveness", it also implies the meaning of "cheap goods". Ten years after the birth of the Xiaomi brand, this has become a curse that the brand cannot stop. Even in all the fields that Xiaomi has entered: smart home appliances, flying cameras, smart toys, etc., there are similar problems.
Whether mobile phones, electrical appliances, or other smart devices, high-end products have higher profit margins and can bring better reputation to the brand. It is not that Lei Jun has made no efforts in recent years, but how can the market perception he has created since his birth be so easy to break?
The most typical consequence of this situation is that after Huawei was sanctioned by the US Entity List, most of the high-end mobile phone market share it was forced to give up due to the cutoff of chip supply was captured by Apple. Taking the second quarter 2021 financial report as an example, Apple's Greater China revenue surged by as much as 87% year-on-year. Other domestic brands, including Xiaomi, can only stare blankly.
Looking at the domestic and even global markets, there are only a handful of brands in the mobile phone industry that can compete with the Apple brand, and among them the only one that belongs to China is Huawei
< p> Since it has been unable to improve its brand image in the field of mobile phones, which can be called its old profession, and the golden period of growth of smartphones globally has ended, how to consider finding a new development opportunity for Xiaomi has become The top priority for Lei Jun at the helm. After all, the history of the past 20 years has repeatedly proved that in this rapidly changing era, the survival competition of international enterprises is like sailing against the current. The result of not striving for the upper reaches can only be a collapse.In view of the fact that automobiles have become the mass consumer goods with the greatest growth potential in my country, and it coincides with an era of drastic changes in the automobile industry that has not been seen in a century.
Based on worries about the future of the company that he worked so hard to build, it is not surprising that a savvy person like Rebus would choose the direction of automobiles as his new goal.
(For an in-depth analysis of the reasons why Xiaomi builds cars, please refer to the article "A tailor who doesn’t want to be a cook is not a good driver, and Xiaomi’s unwillingness to build cars is the problem | C Dimension" on our official account Automobile Company)
Of course, cars are not that easy to build.
The automobile industry has always been known as "the crown jewel of modern industry". A civilian fuel vehicle usually integrates 20,000 parts, and even the length of the industrial chain of an assembly on the vehicle is longer than that of an entire mobile phone. The traditional car companies in the world that can survive today are all giants that have accumulated decades of development and hold hundreds of patented technologies.
Some automobile analysts once calculated that based on the production capacity of 150,000 self-owned brand passenger cars, the cost of developing a model in the early stage is about 3.4 billion yuan. Plus other links, The normal operation of a passenger car project requires at least 3 billion yuan.
The new energy automobile era and the trend of automobile intelligence have changed the industrial structure to a certain extent and gave birth to the barbarians at the door - the emergence of new car-making forces. However, compared with the mobile phone and even home appliance industries, the automotive industry is very different in terms of industrial chain/supply chain length, durability/reliability requirements, sales channels, etc.
Of course, Xiaomi is not without its advantages. In addition to the "money power" of holding 103 billion in cash, Rebus has another advantage in entering the game now - it coincides with the full rollout of 5G networks and the Internet of Vehicles is moving from concept to reality, which gives human-machine This is a rare opportunity for Xiaomi, who is good at interactive interface design and has strong software development capabilities.
Because of deep worries about the future, in this era of unprecedented changes, a company "born for fever" is based on "making the most suitable mobile phone system for Chinese people". Electronic product providers are not only deeply involved in the field of smart home appliances, but are now turning their attention to electric vehicles in the future. This is really normal.
In order to avoid "no guarantee at the late festival", to be shocked by his trip to Silicon Valley eight years ago, and to build a stronger Xiaomi ecosystem, 51-year-old Lei Jun chose to be busy, from Shenzhen to Wuhan, measuring Xiaomi with his pace. The distance from car-making, from Wuling to Great Wall, explore Xiaomi's logic of car-making with attitude.