10 lessons from Asia’s Businessman of the Year

Success or failure is never permanent, so we all need to work hard, innovate or evaporate. Whether firms or countries, it seems nobody is forever No. 1. Before, the world’s hottest mobile phone brands were Finland’s Nokia, America’s Motorola and Palm, Canada’s BlackBerry and even Japan’s Sony.

Nowadays, the global leaders in mobile phones are South Korea’s Samsung at No. 1 and the USA’s Apple at No. 2, with other Asian successes like Lenovo, Acer, Huawei, and HTC. Who is the new global No. 3 in mobile phones, with sales this year of over 60 millions units, and whose founder personifies innovation?

According to the Dec. 15 issue of Forbes magazine, “Asia’s Businessman of the Year” is not self-made Alibaba.com founder Jack Ma, who pulled off the world’s biggest IPO ever on Wall Street; neither is it Hong Kong’s legendary “rags-to-riches” taipan Li Ka Shing; it is 45-year-old Lei Jun, who founded phone maker Xiaomi just four years ago. Wow!

Under the visionary leadership of Lei Jun, China’s Xiaomi has leapfrogged to become the world’s No. 3 biggest-selling mobile phone, with sales in the first half of 2014 reaching a record $5.5 billion — an amount that eclipses its sales for the whole of 2013.

Taking Asia by storm with a mix of low price and high quality

In citing entrepreneur Lei Jun and his phenomenal Xiaomi phone, Forbes magazine reported: “The smartphone brand Lei Jun founded four years ago was deemed Xiaomi, or ‘small rice’ in Mandarin Chinese. In that short stretch of time its influence has proved to be anything but slight. Its handsets, and in particular their diminishing price, have taken Asia’s vast mobile market by storm.

“In so doing, Xiaomi is now leading a worldwide revolution that is putting powerful digital communication equipment affordably in billions of hands. At a time when Internet companies and various software applications are all the rage in global financial circles for disrupting such fields as merchandising and entertainment, it’s the device that makes possible the explosive growth. For Lei’s role in driving the smartphone’s suddenly commanding presence, he is Forbes Asia’s 2014 Businessman of the Year.”

Here are some success lessons I came up with by studying Xiaomi and its founder, Lei Jun, which I believe entrepreneurs and professionals can learn from:

Think out of the box. “Only Apple with the Apple Stores was able to do this at scale in the technology world, and Xiaomi has even bypassed the need for physical selling infrastructure,” said investment banker Gary Rieschel. Former Apple CEO John Sculley asks about Xiaomi in a new book, Moonshot: “If brand trust is being built by well-informed consumers getting personalized comparative shopping data with referrals, and if they also can expect disruptive flash prices, too, then how can a traditional consumer-electronics giant like Sony with substantial overhead and thousands of products compete [with Xiaomi]? Not easily.”

Xiaomi only sells online with marketing surprises, thus passing on a savings of at least 10-percent retailer or middleman costs directly to its happy buyers. Business analysts praise Xiaomi for being similar to Amazon.com, Apple, discount retail giant Wal-Mart and other business trailblazers.

Create and build up a good brand. Instead of becoming a copycat of Samsung, Apple, Lenovo, Huawi, Acer or HTC, Lei Jun created and built up an iconic brand in Xiaomi. When Apple designer Jony Ive claimed that Xiaomi phones looked similar to his, Lei Jun specifically instructed Xiaomi designers to avoid any similarities. He also said he doesn’t want to be known as the “Steve Jobs of China.”

Succeed in the home market and dream globally. A good role model for our Philippine firms, Xiaomi first built up its fantastic, homegrown success in the highly competitive Chinese market before steadily going to overseas markets. This was also the case with local brands like John Gokongwei’s Jack ‘n’ Jill, Ben Chan’s Bench, Carlos Chan’s Oishi and the pioneering San Miguel beer: build strong footholds in the Philippines and then go abroad.

 4. Innovate on products or services. Xiaomi’s success isn’t built only on its cheaper price compared to the world’s leading brands, because there are many cheap yet inferior-quality mobile phones all over Asia. It has a good-quality case, screen and battery, plus Xiaomi developed its own Android-based OS, which gives users exciting features and other customized options.

Promote your business via social media, traditional media and word of mouth. The meteoric rise of Xiaomi is fuelled in a large part by successful promotions via social media and by word-of-mouth buzz by legions of loyal fans.

Invest in good people. Xiaomi has recruited many of the best technical personnel all over China, including top executives from foreign countries like Brazil, Hong Kong, etc. For example, Lei Jun last year recruited ex-Google vice president, the Brazilian Hugo Barra, to take charge of Xiaomi’s growing international expansion.

Invest in research and development. One of the key success secrets of Xiaomi — similar to Samsung, Huawei, Acer, HTC, Lenovo and others — is its sizable investments in research and development.

Think long-term; do not rush or be too greedy. In the film The Social Network, Mark Zuckerberg didn’t jump on the get-rich-quick bandwagon by quickly selling advertising or doing an IPO for his then growing Facebook venture. Lei Jun also told Forbes magazine that he is not rushing to cash in with an IPO. He said, “The most important thing is to focus, focus, focus. If I have an IPO today, everyone will be rich, sell their shares, buy a house, buy a car and emigrate. How can you manage the company?”

Work hard. Forbes reported that despite becoming “the eighth-richest man in China, worth $9.9 billion, he is said to work 100-hour weeks, even with a wife and two children at home.”

Don’t be complacent. Despite his company success, personal wealth and unprecedented fame, Lei Jun said, “We’re just a young company and in a fragile position.” Although the Xiaomi founder doesn’t like to be compared to Steve Jobs, his humble and competitive mindset reminds me of a quote from the late Apple founder, who once said, “Stay hungry, stay foolish.”

Forbes Philippines

Congratulations to the Philippines’ top magazine publisher, Summit Media, led by humble and hardworking Columbia University graduate Lisa Gokongwei-Cheng, for coming out next year with the Philippine edition of Forbes magazine. Its editor will be the respected former Financial Times correspondent and former Bloomberg News Manila bureau chief Roel Landingin.

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