How ‘fan power’ helped Xiaomi write its success story

Before Lei Jun founded Xiaomi, he had one simple dream—he wanted to build a ‘cool’ company. Xiaomi’s stated mission is to ‘be friends with our users. Be the coolest company in the hearts of our users.’ Redeeming the image of China as the country of cheap knock-offs and cheap labour was, of course, part of the larger plan... Xiaomi, as we know, did not start its journey as a smartphone manufacturer. Rather, it entered the business with its own operating system, the MIUI, which, when installed in existing phones, improved their efficiency considerably. MIUI had three central features—it was fast, it was smooth and, most importantly, it was open access. Lei Jun, who had until then worked at Kingsoft for a good part of his professional career, was used to spending months developing a product. With smartphones and operating systems, though, he realized that the turnaround time for product updates had to be a lot quicker. Recalling those days, Li Wanqiang wrote, ‘R&D on the user experience was no longer a matter of monthly or quarterly meetings but rather a matter of daily communications with users.’ MIUI’s bulletin boards allowed users to post reviews, comments and suggestions to regular software updates, which were then quickly incorporated into the operating system and made available in the next week’s roll-out. Xiaomi kept in touch with its users on a bulletin board system (BBS) where user demands would bubble up to the top. Following this, small two- to three-member teams would work round the clock through the week to build features that had received the highest number of votes from users.

Every Friday, known as Orange Friday, Xiaomi would ship a new version of MIUI. The urgency around product delivery in effect helped Xiaomi create a deeper bond with its users. Imagine being in ‘daily communication’ with your consumers; given the frequency of communication, Xiaomi’s relationship with its users became intimate, organic and dialogue-based. The MIUI was fundamentally a great product, but the incorporation of user feedback made it even better. Indeed, within a year of launch, its subscribers shot up from 100 to 500,000. Xiaomi had successfully made them feel like they were an integral part of the development process. This was a very different approach from what Samsung and others had been pursuing. Instead of surprising its users with new products like everyone else, Xiaomi showed that it was, in fact, paying close attention to users’ needs and building its products accordingly. This proved to be a foolproof way to secure the loyalty of fans...

The fans felt vested in seeing Xiaomi succeed. In industry parlance, this phenomenon is known as participatory consumption, where users are not merely passive consumers but instead take on the role of direct participants. Outside the realm of smartphones and technology, the company that started thinking seriously about participatory consumption was the Swedish furniture company Ikea.

Founded in 1943, Ikea’s strength lies in its philosophy of integrating the consumer’s labour directly into the furniture-building process. Ikea products do not come pre-assembled; they arrive in flat packs instead. This not only allows the company to save on packaging costs, but the flat packs also make it easier to transport the products. Over time, Ikea has built a reputation as a consumer-friendly company that sells ready-to-assemble pieces, allowing families and friends to come together, turning the mundane chore of assembling furniture into a fun do-it-yourself activity. In fact, Ikea is a great example of a participatory consumption model that has not only helped the company save on additional labour costs, but by letting consumers take part in the final assembly, they have, in effect, enabled consumers to own their products at a deep and emotional level—would-be parents setting up a crib for their child, or the first-time office goer furnishing her living room with friends.

Excerpted from Xiaomi: How A Start-up Disrupted The Market And Created A Cult Following with permission from HarperCollins.

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