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On January 25, 1992, the chief designer visited a company in Zhuhai that made nuclear power plant simulators. Looking at the young engineers busy at work in the company, the chief designer turned to the chairman, Dr. You Jingyu, and asked, "Do you think the statement that science and technology are the primary productive force is tenable?"

Dr. You was not a doctor at the time. She had a background in automation and electricity. She went to the United States in the 1980s to study simulation technology and returned to China. In 1992, she was admitted to the doctoral program in economics at Wuhan University.

In response to the chief designer's question, she said that the answer should be based on practice. I think this statement is completely tenable.

The chief designer was a fitter by profession and liked strong handshakes between colleagues. When taking a group photo with company employees, he saw some young people in the back row. After taking the photo, he walked around and shook hands with each of the young people one by one, saying that we should love our country and make our country prosperous:

China has been poor for thousands of years. Now is the time to change this situation.

Before leaving the laboratory and getting in the car, the chief designer held You Jingyu's hand again and said that if you can stand firm, you must persist in doing it. You will definitely encounter many difficulties, so you must persist, be humble, and do things well.

At that time, You Jingyu's senior from Wuhan University, Lei Jun, was interning at Kingsoft's R&D department in Zhuhai. Everyone knows what happened later. 32 years later, Lei Jun, who is 1.8 meters tall, is worth hundreds of billions of yuan, has thick black hair and is not nearsighted. People say that he would sigh when he casually reads a good article on the Internet.

Lei Jun has expressed on many occasions that he dislikes being called the hero of cool stories. In his annual speech some time ago, he said that life has never been a cool story.

Young friends like to abstract and short-video the development of Xiaomi and even Chinese technology. They are still young and don’t know what price a company and a nation must pay to change their destiny and break through the siege.

1

At the 2017 Wuzhen Internet Conference, Lenovo CEO Yang Yuanqing posted a Weibo:

Ma Huateng is the best at drinking and also the best at persuading people to drink.

The big guys all have a hobby in private. It is said that in addition to drinking, Xiao Ma can smoke two packs of cigarettes a day. No one invited Mr. Ma to the Wuzhen dinner, and the media hyped it up. I saw someone explain that it was because Mr. Ma does not drink.

This is a huge misunderstanding. Don’t you know that Mr. Ma has the title of “Vice President of the National Liquor Moutai Culture Research Association”?

I remember that in the group photo of the dinner, Lei Jun was the only one who worked on hardware, while the other big guys were either investors or model innovators. Everyone else had a glass of white wine in front of them, but Lei Jun had a glass of brown liquid in front of him.

At the launch of Xiaomi SU7, Lei Jun said that he had driven some electric cars with refrigerators. If there was only a bottle of Coke in it, he would shake around inside, so Xiaomi's refrigerator is equipped with an anti-roll pad.

Young friends may find it strange that they should just talk about cars, not Coke. You may not know that Mr. Lei loves Coke so much that some of his friends have to keep a small refrigerator in the office in case Mr. Lei asks if there is any iced Coke.

Li Xiang, a friend of mine who loves to do interviews, recently did a four-hour interview with Lei Jun. During the conversation, Lei Jun said that he still maintains an overload of work and reinvents himself again and again.

So drinking Coke is probably one of his few hobbies besides work.

Starting from 2020, Lei Jun will give an annual speech every summer. I went to the 2020 speech at Oyster Nap, where Lei Jun defined "technology-based, cost-effective, and making the coolest products" as "Xiaomi's three iron laws". A friend of Oyster Nap who loves to make pancakes gave it an abbreviation:

Tsunamoto is the coolest.

Each generation of engineers has its own historical process. I don’t know whether Lei Jun wanted to shift the company from model innovation to technological innovation at the time because Huawei was in a desperate situation after being sanctioned by the United States.

The theme of Lei Jun's annual speech this year is "Courage". He talked about why Xiaomi wanted to build cars. At about 7 o'clock in the morning on January 15, 2021, Lei Jun received a call from a friend and was told that Xiaomi was sanctioned by the United States.

Xiaomi’s situation was not good at that time. There was some market resistance to the high-end product transformation, profit growth was halved, Zhou Shouzi was sent to the United States by Zhang Yiming, the most capable poacher in Zhongguancun, and the company was hesitant about whether to build a car...

The board asked him:

If mobile phones can no longer be manufactured, what will happen to your 30,000 to 40,000 employees?

It is obvious that this kind of question is not asked by an engineer. A real engineer will never ask what to do.

2

When Lei Jun explained what had happened to Xiaomi in recent years in his annual speech, he said that it was a lesson to focus on integration and software first when making mobile phones, and he had been making up for it since 2016.

That was the most prosperous year for China's Internet. AlphaGo defeated Lee Sedol, the live broadcast track was crowded with unicorns, and everyone was talking about Bitcoin and blockchain.

That year, not only did the Xiaomi Note equipped with Snapdragon 810 have a bad reputation, but core supplier Samsung refused to continue supplying AMOLED screens to Xiaomi. Lei Jun flew to Samsung headquarters in South Korea four times to apologize in person. On one occasion, he drank 5 bottles of red wine in a row.

This is probably the kind of drinking party that no one likes. Huang Gongshao summed it up a thousand years ago: no one picks the flowers, no one offers wine, and no one cares if you get drunk.

When the chief designer was in the south in 1992, whenever he met young people, he would tell them to focus on technology, the higher the better, the newer the better, otherwise they would be bullied.

Many people understand these words, but few can do them.

In 2016, Xiaomi invested 2.1 billion yuan in research and development and had revenue of 68.4 billion yuan.

There is a clear dividing line between consumer product companies and technology companies - the proportion of R&D expenses to revenue. Huawei, ZTE, and DJI all have this figure of around 15%, Baidu is close to 20%, while Lenovo, TCL, and Xiaomi are all around 3% to 5%.

As far as I can remember, Lei Jun rarely argues about something repeatedly. He will only explain it repeatedly when outsiders criticize Xiaomi's technology.

Lei Jun said he was going to make up for the lost time, and he really was making up for it. R&D investment has soared from 2.1 billion yuan in 2016 to 19.1 billion yuan in 2023, and the proportion of R&D expenses to revenue has increased to 7%. If we compare R&D investment to net profit, the figure is even more frightening - 109%.

A few years ago, when Lei Jun said that Xiaomi would compete with Apple, the audience always laughed. In recent years, the laughter has become smaller because Apple's R&D expenses account for 6% of its revenue.

With one month left before the release of Xiaomi SU7, Apple announced that it would no longer build cars.

Lei Jun said he was shocked that all the mobile phone makers in China were fans of Jobs, not to mention Lei Jun who couldn't sleep at night because of watching "Fire in Silicon Valley" back then.

Apple’s car-making started more than a decade ago when Steve Jobs was still around. After talking with people in the automotive industry, he realized that they could not make traditional cars, but had to make pure electric ones.

Unfortunately, on October 5, 2011, Jobs passed away and Cook took over Apple.

In the following years, Apple was like a headless fly in the car manufacturing industry. In 2013, they wanted to acquire Tesla at a price of $240 per share; in 2014, Apple established the "Titan" project department, set up a secret base, and recruited a team of hundreds of people.

The following 10 years were indisputable garbage time. Hardware was prioritized for two years, software was prioritized for three years, and then it took another four years to develop neither hardware nor software, spending a total of several billion dollars.

A friend in Silicon Valley told me that Apple has been investigating the supply chain for car manufacturing for a long time and found that they cannot produce a product that is far ahead of its peers in hardware and makes everyone shine. A large company like Apple with a historical mythical aura is not afraid of not making a product, but is afraid that after making a product, people will think it is just so-so.

in other words:

God cannot bleed.

Lei Jun doesn't think he and Xiaomi are gods. He wants to get on the table first and develop motors, die-casting, autonomous driving, etc. He has said many times that Xiaomi's R&D investment will be 100 billion in the next five years.

I looked through the financial reports of other companies and felt that Mr. Lei was really stupid. Most of the peers combined R&D expenses and administrative expenses, but only Xiaomi calculated them separately.

Everyone says that they attach importance to R&D, but the proportion of R&D personnel to employees is only about 20%. Xiaomi reached 53% last year, which is very close to Huawei's 54.8%.

Spending a lot of money on engineers is a real value investment, and it is also about being friends with time. At the beginning of the SU7 press conference, Lei Jun said that he did not expect that a company as big as Apple could not operate anymore, and his expression was very subtle. The car that Apple failed to build in 13 years was built in 3 years by him and his engineers.

It's not that he didn't hesitate. Among all Xiaomi's executives, he was the most cautious about whether to build cars. In a video during the Spring Festival this year, when the issue of building cars was discussed, he kept scratching his hands nervously.

Xiaomi is probably the last private enterprise to enter the field of car manufacturing, not because it is difficult to manufacture cars, but because there are more and more "smart" CEOs like Cook.

3

In addition to Lei Jun, Buffett is also a Coke lover and he can drink 5 cans a day.

Speaking of Buffett, he has recently been reducing his holdings in BYD. Since he got on board in 2008, the stock god held BYD for 14 years until he began to reduce his holdings in 2022. In two years, his shareholding ratio dropped from nearly 20% to less than 5%.

Oyster Belly roughly calculated that the stock god made more than 20 billion, not including dividends.

The media interpreted a lot from the financial and industrial perspectives, but missed a sentence the old man said at this year's shareholders' meeting. He said that if Berkshire insists on investing in the United States, it is unlikely to make major mistakes.

Translated into plain language, the stock god has started to gamble on the fate of the country. He doesn't believe that we can survive the various tricks that strangle us in his motherland.

No matter how cunning the Americans are, they will never understand how obsessed the Chinese are with the idea that "if you fall behind you will be beaten."

The U.S. Congress previously issued a report saying that at the beginning of this century, China had only 37 warships over 1,000 tons, but now has at least 350. This is despite the fact that they have built nearly two-thirds of the world's civilian ships. It is preliminarily estimated that China's current shipbuilding capacity is that of the United States:

230 times.

They analyzed many reasons, but missed a very important one.

Before the Third Plenary Session of the Eleventh Central Committee, there was controversy over whether science and technology were the primary productive forces and whether scientific researchers were part of the working class.

At that time, China had a population of 960 million, but the total number of engineering and technical personnel, agricultural technicians, scientific researchers, health technicians and teaching staff was only 5.37 million.

At the National Science and Technology Conference in the spring of that year, the chief designer made the final decision and eliminated all the noise. Today, China can train 1.6 million engineers each year, accounting for a quarter of the world's total, equivalent to the total of the United States, Europe, Japan and India.

Wang Chuanfu is an engineer, Ren Zhengfei is an engineer, and Lei Jun is also an engineer. These people are proud of their identity as engineers and treat the technical talents in the company as their treasures.

Earlier this year, Lei Jun awarded the "Integrated Large Die Casting Technology" and "Xiaomi Pengpai OS" teams with a million-dollar technology award. Lei Jun has been giving out this award for five years, and rewards engineering teams with less than 10 people with a stock RSU worth $1 million.

I took a look at the photos taken at the scene and saw Lei Jun standing at the very edge.

Lei Jun said that he used to think that making mobile phones was very hard, but after making cars, he found that making mobile phones was quite happy. Because the factories are all in the remote suburbs where no one lives, and the income is not high, many people in the automotive industry persist with their passion and pride, and he plans to practice Luohanquan with them for 15 years.

Although I don't know what they are proud of, I feel inexplicably reassured when I see so many people who like to wear sneakers and wrinkled jeans to tighten screws and hammer steel plates.

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