Lei June: mobile phone this year shipped over 70 million, the core is to do a good job to improve efficiency (the idea of the heart to speak some)

Collection Micro-Net October 28 report

Today, Lei June publishes a speech article through a personal public account. It is reported that this is the "China Green Company Alliance Round table, Station" activities, visit  Enterprise has more than 60 green companies alliance entrepreneurs, including the New Hope Group chairman Liu Yonghao, the Northern Lights Venture founder, managing director Feng Deng, etc.


In his speech, Lei June first reviewed the course of founding Millet. Lei June said that we were fortunate to have set a series of miracles, most of which were luck, and perhaps 20% of our efforts. By 2014  valuation had reached $45 billion. Why are internet companies so valuable? Lei June Analysis, the answer is because the Internet represents advanced productivity.

Lei June also revealed that  in September reached a single-month mobile phone shipments of 10.6 million units, an increase of 111% yoy. At the beginning of this year, the target of mobile phone shipments is 70 million units, now we have more than 70 million shipments.

In addition, when it comes to the essence of success, Lei June believes that the secret of is to do its best to do its best, to make every effort to improve business efficiency, without any place to be opportunistic. starting point is not how much money I want to make now, but how I'm going to get this thing over-expected.

The following is the full speech:

First of all, welcome to the Green Company Alliance entrepreneurs Friends come to  as a guest! We have limited reception conditions here, but our enthusiasm and reception are full of sincerity. Thank you for coming to today and have a look at the growth of our startup company.

7.5 ago, we were 10 people, seven or eight guns, drank a bowl of millet gruel began to start a business. When started, he put himself in the same conditions as the Zhongguancun entrepreneurial enterprise, starting with the standard of the entrepreneur. Because I think, do not return to entrepreneurial mentality, is absolutely impossible. On the seven anniversary of this year, our seven partners took a walk on the entrepreneurial road, went to the Office of the year, the result is not let us in, I think they really do not do marketing. We can only take a photo of the picture downstairs.

We are fortunate to have set a series of miracles, most of which are luck, and perhaps 20% of our efforts. Mobile phone industry is the world's most competitive industry, a small company of more than 10 people 2.5 time to do China first, the world's third. At the same time, we are the fastest-growing company with revenue exceeding $1 billion, and the fastest-growing company with revenues exceeding $10 billion. We've only spent less than five years on revenue from the start-up to more than $10 billion.

This is hard to explain in economics and management theory, which suggests that innovation is far beyond everyone's imagination, indicating that the Internet methodology we have mastered is ahead of us.

In 2014,  was valued at $45 billion. I've been thinking for a long time, why are internet companies so valuable? The answer is because the Internet represents advanced productivity. In 2015, I was honored to be among the 100 most influential people in the American times, with the help of many millet people and rice noodles.

Then we met with great difficulties and challenges. Why do you encounter difficulties? Also very simple, every home will come to study, we have some basic skills without competitors solid, you only basic skills with him or close to him, your advantage can be very obvious. Because in the champion era, if you have a short board is certainly not. But at the same time, our turnover has been on the rise.

And then what's more upsetting to you? This is the phrase, saying that there is no mobile phone company in the world after the decline in sales, can be successfully reversed. This is true, especially in the mobile phone industry, and once it starts to slide, it's basically the "death channel" that few people can escape.

In the second quarter, we grew by 70%, and the number of mobile phone shipments exceeded 20 million units. In addition, we generally only see the Chinese market, we have entered 60 overseas countries in the past year, in which 12 countries into the top five, basically in the overseas market is full of flowering. As you know, when we entered the Indian market, Samsung accounted for 30% of the market, and it took us only one or two years to compete with Samsung. So I'm proud to be able to reverse the "no one mobile phone company in the world has slipped after sales." "This sentence is followed by four words:" except millet. ”

In September, we achieved a single month mobile phone shipments of 10.6 million units, an increase of 111% yoy. At the beginning of this year, I said that the target of mobile phone shipments is 70 million units, now we have more than 70 million shipments. After the enterprise scale, can achieve high growth is very difficult thing. But what I care about is not how much growth this year, but whether we can achieve a continuous growth rate of more than 50% over the next three years.

Why is able to reverse it successfully? is essentially innovation. Competition in the mobile phone market is fierce, whether it is Apple, Samsung or Huawei, are the world's top technology companies, if the adoption of homogeneous products is difficult to win.

The first is innovation in core technology. At the beginning of 2014, we were thinking about what the future of mobile phones would look like and finally reached a consensus that the future of mobile phones must be all screens. So, our whole design thinking is going in full screen direction. Last year we released  mix full screen concept mobile phone, the first time to lead the world trend.

Mix released a year later, we got the gold medal for Idea, which was issued jointly by the American Association of Industrial Designers and the American Business Week. is mainly to reward innovation in the field of design. In the history of Idea 39, only 12 mobile phone products have been awarded. Apple is also the only first-generation iphone to have won the award. Many people are not mobile phone industry, but also from the mobile phone company's propaganda to see the impact of this event on the whole world. Now Apple, Samsung, Huawei are all promoting a full screen, which is the impact of mix on the entire industry.

The Finnish National Design Museum presents a collection of this work, and the reason for their collection is: Millet mix, which indicates the direction of the future mobile phone design, is a milestone work. We were also contacted by three or four of the world's top museums. This year swept the world's top four design awards gold, we have been the first to do, this is our seven years of time all the designers together to achieve the result is to the Chinese design level all mentioned a very high height.

We invited the Philippe Starck of the industrial design world to do the millet mix design. Our company's designers told me that when they were a child in the design of the textbook used in the case is Philippe Starck works, he is the originator of the Design Master. This year we made a unibody full ceramic in the second generation of mix, flawless, like Joan Jade.

We are also challenging the world's strongest communications capabilities, MIX2 Global band support for 226 countries and regions of the network, is to support the world's most popular mobile phones.

Just now I used a mobile phone case to tell you how we are in technology innovation, product innovation and design innovation up and down the kung fu. Next, let me introduce how we innovate in the business model.

The core of the entire business model is to do its best to do the product well, then systematically reduce the overall cost, rather than reduce manufacturing costs. Many people do products when the idea is wrong, the user to buy is a product, not to buy the promoter, not to buy ads. The first step in mode is how to get the product done.

For example, rice cooker, rice cooker This problem I have specifically studied. Japanese rice cookers are good because their technology ahead of us for several generations, mainly three aspects of technology: IH electromagnetic heating, 1.2 times times the atmospheric pressure, gray cast iron 360 degrees heating.

Rice Home Pressure IH Rice Cooker just released when I searched, at that time the domestic ordinary rice cooker has 965 kinds, to do IH rice cooker has 69 kinds, to do pressure ih a kind also did not. So, many domestic claims to be high-end rice cookers, technically speaking, may have just evolved into Japan's first generation.

Why can we solve this problem? Find the most powerful people around the world. After retrieving a lot of patents, we found that Ivy Yi was the inventor of the pressure IH technology, and we invited him to China to make a rice cooker, and the old gentleman said he wanted to do better than Japan and sell to Japan. So, my point of view is to find the best people in the world to understand this thing to do, the team is also the best team.

We are better than the Japanese rice cooker, we have done every place and each rice species adaptation, and very accurate. Big data results show that Hainan people cook the most soft, Qinghai people cook the most hard rice. Interestingly, our rice home pressure ih rice Cooker is also on the shelves in Japan, the price is much more expensive than the domestic, but still the cheapest in Japan.

Many people think that the consumption upgrade is more and more expensive, I think this is a non-return, we can in the existing situation to improve efficiency and provide better service, so that you can survive in the future competition. I remember when Mobile power release, the peer told me is the whole charging treasure industry sleepless nights. Today, the entire charging treasure industry level has come up. Therefore, the consumption upgrade is not to sell more and more expensive, but the same price can buy more high-quality products.

In doing the product, I think that in addition to functionality, has also put the design and quality into the category. We originally talk about quality is something bad not bad, we now not only care about it bad, but also care about it good-looking, easy to use. Our understanding of the product is not the same as the traditional industrial age, every product of  is beautifully designed. Our focus on design and user experience is beyond our imagination.

Our products really do very carefully, attitude is absolutely very serious. In the production of products, are trying at all costs to achieve the ultimate product, and then through large-scale sales to reduce costs. When you are large enough, you find that the cost of research and development has also dropped. The total cost of my research and development is very high, but my model quantity is small, the quantity that sells is big, the research and development cost that share to each product will be very low. Reducing the number of models will result in all aspects of savings, such as maintenance costs, warehousing costs, marketing costs and so on will all fall sharply. When you go to our  store, you will find that there are only one or two models for every kind of product.

I once told a leader that I am willing to take five years to drive 100 companies to make a model of manufacturing transformation and upgrading. After came in, the entire Chinese mobile phone industry has progressed. Don't think we came in to rob the business, no, if you do well I will not do it.

When a phone is done, if it is 2000 dollars cost, how to sell the price also to do more than 2000 yuan? So I opened a my own e-commerce platform-network, 0 channel cost, and 0 advertising costs. I firmly believe that if the product is not good, a large number of costs will be wasted in the intermediate links, good products have a very strong penetrating force. It is with this determination, we built a sales platform, the online Millet Mall and a product mall, the line has a millet home and shop. We are the third largest e-commerce platform in China and a new retail company. This is what I am talking about in the internet thinking is very important point: the Ultimate.

This is not enough, there is no suitable profit, the shareholder is unhappy, the investor is unhappy, the staff is not happy, the boss is more unhappy. Therefore, for us, the Internet value-added services and revenue is our key. The core of the entire internet is cross-border integration, user-centric, I have users, as long as this user needs, how we cross-border integration, this is the key to the entire business model.

 business model is very difficult, how is the implementation of it? We make a focus every six months, focusing on one thing every six months. The whole business model rotates like a whirlwind, and the more it spins, the stronger the power, and everything that is done is added to this pattern. We are not allowed to do anything minus the points. Therefore, we are using a whirlwind diagram to explain our business model, each business unit must be user-centric, we must give the Millet brand points.

Millet is really a new species, you say  is a mobile phone company, it certainly is, but also is a mobile internet company, is also a new retail company. Furthermore, the volume of entire internet business, including the Internet financial sector, is already very large, and we are investing very high. As a whole, we are a new species of cross-border integration that organically integrates hardware, new retail and the Internet, and we call this model "triathlon."

When it comes to new retail, I think  core competency is how to sell things the most efficiently. Without this one, it is impossible for you to do the product well. Because of raw material manufacturing costs, research and development cost, market costs, advertising costs, sales channel costs and so on, each layer is a fixed cost. Only the manufacturing costs you can control, want to keep profitable, it is necessary to compress manufacturing costs, products will become worse.

Then I introduce the millet home How to do, we have now more than a year to open 219 millet home, plan to open to 1000 stores in three years, November 5, located in Shenzhen, Nanshan District, Vientiane Tiandi Shopping Center, the flagship store will be grand opening, with 2 floors total 650 square meters of area. Suggest you go to Shenzhen when you can go to see, a layman to do what the retail store is like.

At the beginning of the development of millet home, we are basically selected in the relatively cheap rents, and then we step by step to add confidence, the future of our stores will be more and more good location, now shopping malls to the Millet brand recognition is also more and more high.

Home has two business indicators let me very proud: The first indicator is the ping effect, we each square meter to achieve 270,000 RMB sales, ping efficiency is the second in the world; the second indicator is the cost rate, we have been controlled within 8%, that is, sell 100 dollars of things as long as the cost of 8 dollars. Many friends have been to the home of millet, with my opinion, said there is only one shortcoming, too many people. Many people ask why fire? Actually very simple, is the product is good.

In the past year,  has also done a lot of innovation in management. I experimented with a highly exaggerated approach to management six years ago. We call the KPI, go to the title, to manage. I used to tube the company for almost 30 years, extremely complex management methods have been used, strong KPI management side effects are very obvious.

When I started and wanted to try management innovation, we had to see what the best way to manage it was. So, I think further: what kind of people do not need management?

First of all, this man has to be capable. Secondly, this person should have a high sense of responsibility, do not need you to manage. There is another, the heart to have infinite power, is he wants to like me, wants to change this society, wants to make the product well. You don't have to clap for him, you don't need to cheer up, and you don't need to stimulate him. If you can find such a group of people, your product must be able to do very well, do not need to take care of them. Then our interest distribution mechanism is reasonable, so I tried such a set of completely only the problem of the essence of the management model, is to find a capable, responsible, self-motivated talent.

Last May, I started to direct the phone department. Before we basically do not comb the structure of the Organization, how to do how to do. I first straightened out the organizational structure and then the people were all aligned. Then this year clear three key tasks. The first one is to start to pay attention to quality. We attach great importance to quality. The user buys a thing on the net, in case the flaw, what will they do? Traditional sales model as long as there is a problem, consumers return to the store for one is finished. And we have a problem here, users will choose on Weibo, in the circle of friends to say a circle after the complaint. Therefore, the whole millet demand for quality is much higher than the traditional. Since the beginning of this year, we have made great determination to set the quality standards and objectives very high. We have a lecture in the interior, is to use the quality of the Iron fist to defeat the opponent. This year we have a very rapid improvement in quality, and even several mobile phones are close to 0 rework.

The second key task is delivery, we are often out of stock, and even be said to be hunger marketing. I really don't know what is hunger Marketing, a product popular users will queue up, if a product is not popular, can not do hunger marketing. We have made great progress in delivery this year, but there are still some serious problems. With so much market today, we are still complaining about the shortage of goods in various regions.
The last task is to continue to maintain the engineer culture and innovation ability,is now learning how to be able to do supply integration, how can the quality do exceed the user's expectations.

In short, I think before the management of innovation go a little too, today in the recycling, looking for a balance point. It is too early to talk about success, and  entrepreneurial path has only just begun. The whole refinement of the management of the idea and adjustment began last year, I think it will be a further two years to find a best balance point.

I used to do software, Internet, e-commerce and investment, I have never done hardware. At the age of 40, I felt that our domestic things did not do well, I belong to the kind of perfectionist, I said I can do the product well, I do show you. I think it would be a great contribution to the transformation and upgrading of China's manufacturing industry if one thing could be made into art.

In my opinion, the secret of Millet is to make every effort to do our best to improve business efficiency, without any place to be opportunistic.  starting point is not how much money I want to make now, but how I'm going to get this thing over-expected. This and other people's ideas are not the same, maybe a lot of products are done for the user, or for the dealer to do, in order to do the turnover, in order to do the profits, I am doing for myself, I hope to do more than expected, then I thought how to improve efficiency, can sell more than the user expectations.

My introduction is here, thank you.

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Lei June:  mobile phone this year shipped over 70 million, the core is to do a good job to improve the efficiency (the heart of the idea said some)