With the rapid expansion of mobile technology worldwide and its greatest potential coming from developing economies, this morning’s kick-off GMICSV Fireside Chat between Russian investment tycoon Yuri Milner and Chinese tech icon and entrepreneur Lei Jun is a testament to the disruptive nature of mobile Internet and the way it is globalizing at an incredible rate.
Lei Jun, who has been described as China’s Steve Jobs, is an early entrepreneur in China’s Internet space who has built his company Xiaomi on what has become China’s most beloved smartphone, the M1 handset. Since then, Xiaomi has become the fastest company to reach a $4 billion dollar valuation in China. Xiaomi is releasing its newest model the M2 this month, and its rerelease of the M1 sold out of 300,000 preorders in four minutes last month.
Xiaomi’s investment partner, the sober, well-spoken character of Yuri Milner, balanced well with the upbeat character of Lei Jun during the discussion. As a significant investor in technology companies worldwide, Yuri described Lei Jun as a “phone man,” the way a woman first described him in a restaurant where Yuri and Lei Jun first met.
Lei Jun says that his strategy for investing has always been to first invest in the “greatest” and most “innovative people” and second to make sure that the company outlooks continue to look “better and better.” Lei Jun has “worn many hats,” says Yuri. Starting out with investments in the Internet field, Lei Jun has since become a major figure in the smartphone sector.
Yuri mentions also that Lei Jun has always said that the Internet business model “can disrupt traditional hardware manufacturers.” Lei Jun explains that this is because of the nature of the Internet. Using the Internet, his company can provide software and firmware updates every week for their phones, and the process builds a more cost-effective supply chain while streamlining marketing through social channels. Xiaomi combines software, hardware and service together in this way to make for a much better product.
One reason why his company can be very transparent, says Lei Jun, is because phones are much like PCs. Lei Jun explains that you can do almost anything on the phone, therefore it is much more effective to be open and available to customers at all times. Xiaomi readily displays supply information and availability and even runs auctions for its fans when there are limited supplies of new models. They have no retail stores.
Despite these irregularities, the business model seems to be working incredibly well. Xiaomi has already managed to grab approximately 5% of the market in China, and they have plans to eventually expand worldwide. Lei Jun says that they set out in the beginning to be a “global company,” and he believes that mobile Internet holds incredible potential for the future. In his last comment, Lei Jun tells investors and developers that even though China is difficult, the opportunities in China’s mobile Internet are very promising. He tells them to invest in China, though he warns them to pay attention to how well companies are innovating.
It looks to be an exciting next few years for investors and developers alike in China’s mobile Internet industry, and Xiaomi looks like it will play quite a big role in this movement.