Xiaomi became the world’s most valuable startup following astraightforward plan. “We noticed a trend of switching from feature phones to smartphones in China,” says Liu De, who co-founded the company in 2010. “We thought, ‘Hey, there could be a big opportunity there.’” So Xiaomi made good phones, stirred up excitement for them online, and sold them at a good price. By 2014, itwas the fifth-largest seller of smartphones on the planet and worth $46 billion.
Instead of just making and selling smartphones, Xiaomi wants to make and sell just about everything.
It didn’t last. Fellow Chinese upstarts Oppo and Vivo now outsell Xiaomi, which has seen its Chinese market share drop by more than a third. Users are now buying their second or third phones, andare willing to pay more to get more. Even as the average price fora smartphone droppedworldwide, itspiked in China as people embraced flagships like the Huawei P9 and Oppo R9. Xiaomi may be worth a fraction of what it once was, and faces the question that’s plagued the likes ofBlackBerry andApple: You had one good idea. Now what?
For Xiaomi, the answer is build the coolest, most desirable phone anyone’s ever seen, and move into any marketthatisn’t already saturated. Oh, and instead of making and selling smartphones, make and sell just about everything.