Some non-conspicuous consumer electronics categories, such as charging treasures, bracelets, and sweepers, how to release user demand in the shortest possible time, thereby creating hundreds of millions or even billions of values?
These tracks have always been called "ant markets", there are no oligarchs, and huge demand is eaten by small players like ants. The experiment of xiaomi ecological chain began from these tracks. In eight years, these small fragments have now become an important part of Xiaomi's 100 billion commercial map.
The consideration of Xiaomi's earliest development of ecological chain is not complicated, and the ecological chain defined by Lei Jun in the early days has three meanings for Xiaomi:
The first is to maximize the value of traffic: after the release of Xiaomi mobile phones, a large number of rice noodles poured into the online mall, the market share once reached the top of the domestic market, and the ensuing brand traffic also reached its peak, and users can further increase the value of user traffic while buying mobile phones.
The second is to enhance the brand image: with a huge traffic base, the products launched by the ecological chain for different groups of people can create communication opportunities between Xiaomi brands and different users at a lower cost.
The third is to earn some money in addition to ability.
In addition, because Xiaomi's initial fire is too fast, it has always been considered by many people to be a phenomenon-level business, which is not an excellent business model that continues to cycle in a virtuous circle. Lei Jun's solution is also very simple and crude: shouting through the throat is not as good as making a look, using the xiaomi ecological chain to "copy" a hundred small millets. From this point of view, the emergence of the Xiaomi ecological chain is also a social experiment of the "Xiaomi model".
To build an ecology, we must share benefits and snowball with our allies. The difference in Xiaomi's ecology may lie in the fact that the ecological cooperation between Ali and Tencent gives more money and traffic; while Xiaomi's early output to ecological chain companies is the value, finer-grained people, channel support, supply chain and other industrial resources, and even the most basic entrepreneurial direction in the early stage.
The founders of the early days of Xiaomi's ecological chain are almost all from the "circle of friends" of Lei Jun, Liu De, Sun Peng and other early xiaomi product managers. Fan Haitao, the founder of Chuangmi, is from Longqi Group, the main producer of Redmi Redmi; Huang Wang, the founder of Huami, a smartwatch manufacturer that has been listed, was dug up by Sun Peng from the alumni resources of the University of Science and Technology of China; at present, Zhimi, the founder of Zhimi, who has the largest market share of air purifiers, is also pulled by Liu De from the university to start a business.
Although the founders have very different backgrounds, the biggest advantage of acquaintances is: value recognition. People who believe that the "millet model" is an excellent business model get together, and this matter is much easier to do. Since 2014, more "small millets" have emerged, gradually forming a xiaomi ecological chain army of hundreds of today.
In the early days of the Xiaomi ecological chain, one million and ten million level explosions were born. In eight years, the Xiaomi ecological chain has run out of Huami, Stone, No. 9, Yunmi and many other listed companies, of which No. 9 and Shi are already companies with a market value of more than 50 billion and 100 billion. There are also companies running blindfolded, such as the new star companies, which have exceeded 1.5 billion yuan in revenue in the past two years.
According to Lei Jun's original vision, the ideal state of the ecological chain is "the future 3-4 listed companies will be very good", now this number has long been exceeded, the ecological chain companies waiting for listing are also pure rice, fun sleep and so on.....
The Xiaomi ecological chain has risen from Lei Jun's self-certification of the "Xiaomi model" to now becoming an important part of the Xiaomi business model. Even friends around me always talk about the importance of the ecological chain when they talk about Xiaomi's stock price.
01 Nanny incubation
For any start-up hardware company, almost a product is set to die, and Xiaomi's support is light. In the early ecological chain companies, the proportion of engineers in the staff was basically more than 90%, and some even had to recruit employees responsible for parts procurement, not to mention lower prices from the supply chain. How to bridge the information between new entrepreneurs and the supply chain, Xiaomi has played a big role in it.
Wang Ye, the founder of No. 9 Robot, remembers that at that time, Xiaomi product managers often helped them send business cards in the supply chain to "brush their faces" and ask for lower offers. Su Jun, the founder of Zhimi, is also impressed, Xiaomi product managers will help allocate resources, such as which company's technology is good, will organize these weak ecological chain enterprises to learn, ecological chain companies to share resources.
In the early days of the ecological chain, there were not many tracks and companies were not crowded, and Xiaomi did have the ability to export paternalistic management of these ecological chain companies. The ecological chain is like a big family, Xiaomi is the parent, and the ecological chain company is a brother who has not separated the family. An ecological chain enterprise executive said that the ecological chain holds executive meetings four times a year, and every time the executives stay in the hotel, two people live in the same standard room. There are ecological chain entrepreneurs, the product has been directly reviewed by Lei Jun, and it has been put on the shelves after several major changes. Even in the early days, Xiaomi even carton suppliers of products needed to accept the designation, "the color of the packaging box will be refunded if there is a deviation", and some companies will even be questioned for invoices.
Of course, in the ecological chain, each founder is good at different abilities, some know more about ID design, and some know more about marketing channels. Xiaomi can quickly pull together a huge ecological chain team in the early stage and quickly output the same set of standards, which is not a simple thing, which is inseparable from the far-sighted decisions of Xiaomi's early product managers.
Qu Heng, the current general manager of Xiaomi Ecological Chain, told 36Kr that the ecological chain pursues communication and execution efficiency, and 5-6 big product managers hold great power: Liu De, the head of the ecological chain, the professional director is industrial design, the xiaomi ecological chain product director Liu Xinyu and Sun Peng are two and called the second of miUI's early troika, Li Ningning is the ID director, graduated from the art center of the most authoritative college in the field of design. Product managers even have the power to decide whether Xiaomi will invest in this company or not, and whether it will do this category or not. Several product managers with extremely high product requirements and extremely accurate vision can be said to be the most precious wealth in the early days of Xiaomi's ecological chain.
With Xiaomi's nanny incubation from people, to money, to the supply chain, and the strategizing of product managers, the growth rate of early ecological chain companies is extremely fast. Su Jun's initial vision was to "use three years to make a company with revenue of more than 100 million", which proved that he was still too conservative, and the company's final three years of revenue was ten times that of expectations. At that time, Zhimi was a billion-dollar company with a total number of employees of no more than 100.
In the stage of rapid expansion, millet seems to point out the golden hand, point to which category, which category will blossom. Ecological chain companies default to each other with revenue ranking seniority, revenue of more than 100 million yuan, in order to enter the "billion yuan club", Liu De often these ecological chain CEOs called in the hotel room "open a small stove", and to the second year of the beginning of the millet ecological chain, in 2014, the CEOs of the "billion yuan club" filled Liu De's room, and in order to control the number of people, can only adjust the "billion yuan" threshold step by step to "billion".
02 A kind of idealism
Xiaomi's group of product managers is the most core figure in the ecological chain system. "It's a bunch of people with engineers or designer idealism," Wang Ye said.
Wang Ye also remembers that the early balance car did not attach great importance to the link of novice teaching, the finished product was sent to Xiaomi Company, several product managers who were not familiar with the balance car had no scruples when trying out the product, and the result was broken, and Sun Peng almost hit the table. This bad experience also triggered a fierce complaint from several product managers, and Wang Yecai let the team rewrite a lot of programs later, such as teaching new users how to turn, stand steady, move forward and backward, and so on.
Xiaomi's product control of the ecological chain is strict, and how to quickly create a burst product to the card slot industry is the core task of Xiaomi ecological chain companies at the beginning of their entrepreneurship. Therefore, within Xiaomi, there is often a saying that "the first battle is a decisive battle".
But the first battle to play a wonderful battle is a challenge for every ecological chain company. Some ecological chain companies privately laughed that in the millet system, they must not be able to make good products without forcing themselves to die.
ID design director Li Ningning is a "female devil" who makes all enterprises afraid, she has extremely high requirements for the industrial design of products, and even a product modification hundreds of times, wasting several sets of molds with millions of yuan to open molds are common. What she often does is that at some ecological chain CEO conferences, in front of dozens of industry leaders, she boldly strafees various products when she speaks, leaving no trace of affection.
"Paranoia" is an extreme pursuit of products in the early days of Xiaomi's ecological chain. Qu Heng remembered that the interior once made a cylindrical table lamp, which looked good, but it was extremely difficult - the cylindrical shape of straight up and down, it was easy to scratch in the film removal, so the yield rate was very low, and the internal mold was made of dozens of versions, and it has always felt that it is not good enough, dragging it out.
But this "paranoia" of product managers has almost made many projects yellow. A common product polished for two years or more is not uncommon in the Xiaomi ecological chain.
03 Explosive products stir the market
Pulling the timeline, there is a very interesting coincidence - the word explosive has been frequently used since 2014, and this year is also the first year of Xiaomi's ecological chain. Xiaomi ecological chain has been in love with the word explosive since it was born.
At that time, all the enterprises that dipped a little bit of consumer electronics were analyzing and studying the "millet model", but only the internal of the millet ecological chain clearly recognized that the explosive products were not a symbol of the success of the ecological chain, but the lifeline of the early ecological chain - the discovery of new user demand, explosive products just happened to be the best screening of the authenticity of the new needs of users. For the ecological chain company, the explosive product determines whether the track can support itself and whether it can have the right to speak in the upstream supply chain of the track.
Wang Ye remembers that when he first started working with Xiaomi, the balance car category had no traffic in China, the price was not low, and the sales were limited. When he reported the project to Xiaomi, Liu Deyi made a decision, "You can't do this price of 2000? This pricing, which did not leave any room for the opponent, made Wang Ye play drums in his heart - at that time, the balance car was basically about 10,000 in China, and even Wang Ye himself did not have the confidence to do it.
But he knows that only by riding on Xiaomi's traffic express can this category really explode in China. With the help of Xiaomi's supply chain, coupled with the continuous optimization of product structure and cost reduction with Xiaomi, the first balance car with a price of 1999 yuan was finally available. And Wang Ye is also ready to not make money in the first year of cooperation with Xiaomi.
The balance car won the first battle. When Lei Jun first released the balance car product at the press conference, he sold 20,000 balance cars on the same day, almost the shipment of the ninth company in the past year, and bought 500,000 units in the following year, which was twice as much as he expected.
Similar cases appear in other categories.
The Xiaomi ecological chain company, which was frequently explosive in the early days, is a catfish that stirs up the market and supply chain for the market. After Xiaomi's balance car was fired, Wang Ye found that since then, many new brands similar to the design of Xiaomi balance car have appeared in China. Stimulated by the new brand, the domestic supply chain manufacturers related to the balance car have exploded, even 20 times in the past.
The founder of a Xiaomi ecological chain company vaguely remembers that at a conference, an entrepreneur who made a charging treasure suddenly lost control of his emotions when he took the stage to speak, and his voice gradually choked: "Xiaomi recently released a charging treasure, and its price is lower than my cost." The founder had just received an investment request from the Xiaomi ecological chain at that time, which made him feel nervous, and it was a challenge to take over, and the pressure was even greater. Xiaomi kills chickens in various fields with cattle knives, releases user demand in a short period of time, and the volume of some ant markets increases rapidly, leaving some small players who have no desires and no needs in the original field at a loss.
A new ecological chain company has a clear goal, and after rejecting dozens of other investment olive branches, it resolutely joined the Xiaomi ecological chain. In the past few years, relying on the tens of millions of shipments brought by Xiaomi's dozens of crowdfunding projects, after running through the supply chain and training the team, it has turned around and opened up new channels such as Tmall, Pinduoduo, and overseas markets to develop its own brands. In their segments, even some companies have spent a decade without running through the supply chain. They think very clearly that Xiaomi's project "has to go up without making money" in the early stage.
From 2014 to 2016, it was a period of rapid growth of the Xiaomi ecological chain system, and it could basically record 100% or even 200% growth every year. But on the back side of the rapid growth, hidden worries have emerged. Qu Heng remembered that at that time, Lei Jun and Liu De had already said many times internally: "Behind the explosive products of the ecological chain, there is a short-term outbreak of user demand that has been stored for a long time." These long-stored needs are the gifts of the times to every entrepreneur, but Xiaomi has used the "ecological chain" model to better seize the opportunity. "But in this process, there will be various hidden dangers, after the dividend period, how can the millet ecological chain become a moat for millet."
The "ecological chain deceleration meeting" is a characteristic product of that period. At the meeting, the topics that everyone will discuss are slightly pessimistic - what bottlenecks will be encountered in the ecological chain, what is the life gate, how to continue to maintain the first-mover advantage of the ecological chain, what is the business model of Xiaomi's new retail, and how the ecological chain can play the greatest value in Xiaomi's new retail.
04 Bottleneck arrived as promised
In 2018, when Qu Heng really took over the ecological chain, although the scale of all enterprises has been two or three tens of billions, although placed in Xiaomi's overall business of 200 billion, it is still not the male number one, but if the volume of two or three tens of billion is placed in China's small household appliance brands, it has left a number of domestic old small household appliance brands such as Suber, Galanz, and Jiuyang behind. What followed was that the Xiaomi ecological chain entered the envisaged platform period. A fact that everyone can see is that many categories in the ecological chain have peaked in growth, and the expansion of categories has almost reached the upper limit - in the first three years of the establishment of the ecological chain, Xiaomi has invested in more than half of the companies in the current ecological chain.
The chances of new players entering the ecological chain have been significantly tightened. In terms of investment logic, from the initial "incubation" of the Xiaomi ecological chain to "amplification", the Xiaomi team will be more inclined to choose the team that has been formed and has supply chain resources, because it is faster and safer. For listed companies, this shift is understandable.
Some investors once found Liu De with a number of entrepreneurial ideas in 2018, and "Dege" waved his hand to refuse, giving a simple and rude reply: the project is too early, and the market can't wait for such a long time.
The "inner volume" followed. An ecological chain company employee told 36Kr that at that time, the Xiaomi ecological chain department would use the "market economy" method of "than the plan" to allocate projects, negotiate prices with multiple companies, and then decide who to spend the project.
In order to grab the new ecological chain order, some companies will inquire about the quotation of competing products and constantly explore the bottom price bottom line when reporting. Occasionally, this happens: when the ecological chain company squeezes its head to grab the project, it finds that according to Xiaomi's requirements and its own strength, this price point is likely to lose money. But the project in hand can not not do, can only be forced to the right to run through the supply chain to pay tuition.
Ecological chain projects generally need to go through the "three halls of review", after the project reporting plan, but also need to go through the product meeting, design meeting, and finally need to proof the product, handed over to a number of Xiaomi Mall core department representatives to score, three rounds of review through the product to be online.
At the time of product meeting, the ecological chain enterprise needs to report the product pricing at the same time. The biggest value of the ecological chain is the product manager who is crawling in the commercial sea, and several well-known product managers in the early ecological chain can roughly know the product cost geometry as long as they touch the product sample, and the profits hidden when the ecological chain company quotes cannot be hidden.
An employee who has operated nearly ten Xiaomi crowdfunding projects remembers that the scene that often occurs in the product reporting process is price reduction.
"2999 yuan? Too expensive", the representative of the Xiaomi ecological chain department patted the table, "2599 yuan!" "The ecological chain company reported on the opposite side of the report is temporarily blocked, reducing the price, which means that it is necessary to raise the sales forecast, and continue to desperately reduce the price of the supply chain, if the cost reduction fails, it means that the project can either not get it, or can only eat a small profit, or even a small loss."
To achieve ultra-low prices, it is necessary to improve the comprehensive integration of the supply chain, or it is necessary to sacrifice quality.
The former does not seem to be too difficult for some ecological chain companies, and the logic of Xiaomi's ecological chain investment advocates "cattle knife killing chicken", allowing more experienced founders to do these inconspicuous home hardware. But sacrificing quality for the sake of price, the nature of the problem is different.
A new ecological chain company launched a private brand furniture explosion crowdfunding project in Xiaomi Youpin. They then found that after the product exploded, several other companies in the ecological chain and other head players in the industry heard the wind and went to many parties to find their foundry. In front of the factory, the bidders each held a crowdfunding sample on the product, and asked if they could recreate several "lower price models". "When you have some achievements, others will see you, and then surround you and rob you of your traffic."
But the most solid basic skill of Internet companies is speed: it doesn't matter if they are encircled and suppressed, it is good to go to the anti-encirclement and suppression. The manufacturer's new product originally planned to take the high-end route, but because it heard that the competitors also had similar product plans, they had to significantly reduce the expected price to be consistent with the competition, but at the same time they still filled the design and materials and tried to overtake.
Malicious competition is also inevitable. The CEO of an ecological chain company with medium-term revenue found that when the company opened a new project, the internal plan was cut off by an old company in the ecological chain before the project was established. In the face of the efficiency and supply chain discourse of large companies, coupled with the fact that this company had provided help for the company's supply chain in the early days, it could only "break the teeth and swallow in the stomach". "Ecological chain companies generally lack jobs, everyone is grabbing, for their own survival and development, can also understand."
In a complete ecosystem, internal competition is an unavoidable factor, which is also the reason for keeping the ecological chain company active.
"Brotherhood" has also undergone a subtle change of flavor. Another ecological chain CEO told 36Kr that the large companies in the ecological chain had been unhappy because they had poached the core employees of another company, and were publicly questioned by the CEO of the other company in the WeChat group. After watching the farce, some CEOs began to remind their own companies of HR — "People who would rather dig up millet than touch employees of brother companies." ”
In fact, whether it is an upward game or a horizontal competition, the private relationship between the CEOs of Xiaomi Ecological Chain Company may not be bad, but once it involves the business world, it may be ruthless. Whether in the ecology of giants or in all business relations, there are no eternal enemies and no eternal allies. (Source: 36 Krypton Wen | Qiu Xiaofen, Deng Yongyi)
To be continued