The Chinese man behind the world’s most valuable start-up
But,what backdoors do they have?
T
hey call him the Steve Jobs of China, and at first glance it seems a fitting tribute for the man behind the smartphone maker that last week became the most valuable start-up in the world.
Every year, dressed in jeans, trainers and an open-necked black shirt, Lei Jun stands before a cheering crowd to unveil the latest product of the company he founded half a decade ago. He certainly looks the part, framed by huge photographs of whatever he is peddling as he reels off the specifications. Once, just when the assembled fans thought the show was over, the words “One more thing” appeared in slender white letters on the looming black screen. Jobs used to use the same catchphrase when he made a final announcement to surprise the crowd.
A graduate of Wuhan university, one of the first in China to have a school of computer engineering, Mr Lei has lived and breathed technology all his adult life. He spent the early part of his career at Kingsoft, a Chinese software company that produced productivity software similar to Microsoft Office.
He earned a reputation as a hard worker, and after five years was appointed chief executive. It was a tough ride but in 2007, after four failed attempts, the company finally succeeded in listing on the Hong Kong Stock Exchange. Mr Lei promptly quit, saying he felt “exhausted”.
In the following years he dabbled with investments, for instance in the browser maker UCWeb, acquired by Alibaba last year. But it was with Xiaomi that he would take his place at the top of China’s technology scene.
One of the first investors Mr Lei consulted when he was considering striking out in mobile phones was Richard Liu.
“You are already considered successful and accomplished,” the managing director of Morningside Group, a Shanghai-based venture capital firm, replied. “Is it necessary to throw yourself into the fighting ring again?”
Mr Lei said it was, and assembled a team. Among his early recruits was Lin Bin, the former head of Google’s operations in China. Over long nights and steaming pots of chrysanthemum tea, Mr Lei and his partners began hammering out the new venture.
China already had dozens of smartphone makers. This one would be different: it would spend next to nothing on advertising; it would sell direct, to avoid having to give retailers a cut; and it would rely on a loyal band of customers to spread the word on social media.
The fledgling company began gaining a foothold in 2010 when it released a version of the Android operating system that, with a bit of fiddling, could be used to replace the software that came with other manufacturers’ phones. It was a shrewd way of gaining a following among enthusiasts before beginning the expensive work of designing phones.
When the gadgets finally arrived the following year, they quickly seduced Chinese consumers. Offering sleek, high-spec kit at low prices, Xiaomi has overtaken more venerable rivals to become the country’s most popular smartphone brand. Its models sell for hundreds of dollars less than the latest Apple or Samsung phones, yet on the streets of Beijing or Shanghai they have become objects of lust.
In a country where foreign products are often perceived as being more sophisticated and of better quality than homegrown versions, this is perhaps the first indigenous technology brand to be seen as truly aspirational.
“Lei Jun got it on a deep level”, says Phillip Lisio, a Shanghai-based consultant who has previously worked with Xiaomi. “He is among the first to realise that Chinese consumers need a brand they can believe in.”
The 45-year-old Mr Lei might seem to be going out of his way to invite comparison with the visionary Californian technologist behind America’s top computer brand. But in fact he bristles at the idea. Last year he told CNN that he was tired of being compared to Jobs.
Some who insist on drawing the parallel are paying Mr Lei a backhanded compliment, implying that Xiaomi’s success is the work not of a visionary but merely of a meticulous imitator. Jony Ive, one of Jobs’s closest collaborators, was asked last year whether he was “flattered” when Xiaomi and other Asian rivals appeared to imitate Apple’s products. “I think it’s theft, and it’s lazy,” replied the US company’s design chief. (Xiaomi vehemently denies that its products, such as the Mi phone and Mi pad, are copies of other companies’ products, such as Apple’s iPhone and iPad.)
Last week some of the world’s leading investors paid Mr Lei an unmistakably straight compliment, giving his company a $1.1bn infusion of capital. The deal values Xiaomi at $45bn — more than any other technology start-up in the world — and further enlarges Mr Lei’s personal fortune, which Forbes last year put at $9.1bn.
The money will come in handy as the company chases its ambitions, which extend beyond China (Xiaomi now sells phones in India) and beyond smartphones. A tablet computer was launched last May and other new products range from televisions to air purifiers to cloud computing.
But Xiaomi’s founder seems to thrive on criticism as much as praise. Kingsoft was often written off because its competitors were much younger companies; Mr Lei was unperturbed. “Even a pig will fly when it is hit by a tornado,” he is fond of saying. Pig or not, Xiaomi has been caught in the whirlwind.
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