Name: Xiaomi Is the World’s Most Successful Hardware Incubator
Uploaded: 2017-01-11
Duration: 2 min 26 s

Now, I've noticed that you guys have made a big push into smart home products. You have a lot of interesting looking prototypes and products pout there. Which one are you most excited about? The whole smart home ecosystem that we have is actually a very innovative business model. Mm- hm. We have 77 companies that we have invested already so far. [ COUGH ] Mm- hm. And one of the things that may not be as well understood Is that we are actually an incubator. In fact we are the most successful hardware incubator in the world today. Mm- hm, so you're basically helping to create these companies within [ UNKNOWN ] and then investing in them and spinning them off. Or do you keep them underneath your corporate umbrella? So we are never the largest shareholder in these companies. We want the entrepreneurs to be the largest shareholders in the company. We provide more than money. We provide money. We provide our supply chain sort of experience. We provide our distribution channel because [ UNKNOWN ] today runs the third or fourth- largest e- commerce company in China. And we have a very significant and growing offline presence as well. Mm- hm. We have a team of roughly 200 people, mainly engineers. They help look after all sorts of things within the company as they are growing including design. What's an example of one of the innovations that's come out of this program? There are many of them. I think our wrist band is a product that has very quickly become the largest Wearable company in China and the second largest wearables company in the world. And you remain a minority shareholder in that business? Minority in the sense that we want the team to be the largest shareholder. Would you ever bring that capability in house and kind of own it entirely? This is where innovation takes place. In order, there are two ways to approach the problem. One, you can Contain the pie and take as much of the pie as you want. And the other is you're willing to give up pieces of the pie to everybody in order to grow the pie, and we have chosen the second approach. And as far as we know, we are the only company in the world that have taken this approach and therefore the only company in the world to hit this kind of growth rates. Just to give you a sense Today we have 77 companies under the belt. We have crossed over $ 2 billion in revenue in 2016 just from our ecosystem. Mm- hm. And this growth rate has more than doubled from the year before. That's not technically your revenue, though, because it's your investment's revenue, correct? We own the distribution channel. Okay. So, actually, we purchase the products. So, it's kind of a partnership that, got it, got it, okay. Exactly, you can think about us as a shareholder, and an incubator, and a distributor. [ BLANK_AUDIO ]