 Good evening, ladies, gentlemen. Welcome to another one of Purdue's 150th Festival events. My name's Arnold Chen, and I'm the managing director for the Center for Entrepreneurship here on campus. It's my great honor to be able to spend the next hour chatting with KK Wong. KK is a proud Purdue alumnus who got his bachelor's in computer science in 1996. And upon graduation, he first went to work for Microsoft. After working for Microsoft for 13 years, he and his co-founders started Xiaomi, one of the fastest growing cell phone companies in the world. Today, Xiaomi is the fourth largest cell phone manufacturer right behind Apple. They've experienced the explosive growth that all future entrepreneurs dream of. Please help me welcome KK Wong to the stage. Okay, thank you. So for today's format, we have about an hour, and we won't have time for Q&A, but KK has agreed to make himself available for meeting with students for a few minutes afterwards. Hi, guys. Also, to start, everyone who's got a cell phone, please put it in airplane mode. Thank you. Wow, it's surreal to be here, sitting here with you guys. It's been, you know, too many years. It's been 22 years. It's been more than 22 years. You know, he already told you how old I am, okay? But you know, the last two days, thanks to the, you know, Jero and team, it was exciting to revisit, you know, some place that is so familiar, you know? And, you know, I would say, you know, those were the three, you know, most memorable and, you know, happy years, you know, in my, you know, young life at that time. It also changed my way of thinking a lot. And this afternoon was especially meaningful to me. I got to actually revisit four of the, actually five of the, you know, professors I had in the past. Well, they all look the same, you know, from, yeah. And that's not the scary part. The scary part is they're still working so diligently in their office, you know, when I visit them. I didn't expect to see the old professors, right? So what do you think of campus now that you're back? The campus is, you know, it's the same. You know, I can still find my way, you know? Some things look exactly the same. Yeah, you know, I arrived in Chicago two days ago in Trove Town, right? After, you know, dinner with, you know, our friends here, you know, I actually walk around campus a little bit. The first place I went is Hicks, okay? The library. It's like, you know, I was programmed to do that every night, right? For three years. And the first thing I do is I just walk there, okay? And then I went downstairs. There used to be a study launch, you know, to the right across from the library. It was, it used to be open 24 hours, okay? The library would close at 11.30 or something. But the study launch would remain open for the night, okay? And that's actually where I spent, you know, most of the night, you know, swing those three years. So real, so real. You know, it looked a little bit different, you know? I don't see people delivering Papa John, you know, after 11 anymore in that, in the lounge, in the lounge. Anyway, it's good to be back. So today, you know, I'm very excited, you know, thanks to, you know, Arlo and Tim, you know, let's, you know, have some, you know, conversation to help me, you know, in the last two days, you know, being in the environment, it has helped me to recollect my memory slowly. Just in the old buildings. I almost felt like, you know, someone that had, you know, a memory loss, you know, when I came back. But now I'm actually gradually building my memory. Lots of little funny story, you know, some of them I would share with you, some of them I would never share with anyone. Yeah, came back, came back into mine. So speaking of Purdue, why don't you tell us a little bit about how you heard about Purdue, how you decided to come to Purdue and how you made a giant leap from Hong Kong to West Lafayette. Sure. It was actually a simple, you know, logical decision on my part. My dad was an engineer, okay. He introduced me to, you know, a computer, you know, early on, because I saw him, you know, we didn't have, you know, enough money to buy, you know, the full-blown, you know, latest state-of-the-art computer. So I would see him actually coming home every day, bringing, you know, different parts. And, you know, it took him, you know, a couple months to actually assemble a computer that would work, okay, when I was, you know, much younger. And so I, you know, I was attached to, you know, concept of computer. So I wanted to go to where, you know, the computer, you know, you know, major is actually good, you know, when I look for school. And, you know, Purdue, you know, was actually very high, you know, up in the ranking, you know, for computer, you know, related, you know, subject, like double E and aerospace engineering, of course, right? So that's why I come to Purdue, you know, I'm wanting to study computer. What I didn't plan for is, I was planning to go to double E to learn the hardware side of computer, okay? Of course, you know, later on in my life in Xiaomi, we started doing lots of hardware. But at the time, you know, I discovered the school of computer science, okay? And I don't know if Dr. Dunsmo is here today. Yeah, so this afternoon, I just share with him that, you know, he literally changed my career, you know, by, you know, giving us such a great program, you know, CS180, for those of you that, anyone? There you go. CS180, yeah. So for you, that was the pivotal class. After that class, you know, I realized that, hey, you know, software actually is the career I want to go into, right? So I, you know, stick with computer science, you know, for the next three years. And after that, you know, you know, I just go directly to Microsoft, you know, because Microsoft was doing lots of software. Yeah, yeah. And, but we'll share more with- Absolutely, I was gonna ask- I was gonna ask you, you know, if Dr. Dunsmo, I went to his office this afternoon and I said, Professor, do you remember me? And he said, yes, KK, I remember you vividly. I couldn't believe it, okay? Because he has so many students, he has, you know, like 30 years of teaching CS180, right? How can he remember me? And then, you know, the memory, you know, the memory recovery that I told you about came back, okay? And then I remember, you know, maybe the reason why I left impression on him was because, you know, in the very beginning of the class, I was not doing well. I actually found my first quiz or exam, you know, in his class. And that's, you know, when he was actually, you know, going through the, you know, I was actually missing, you know, on some sort of simple answer, you know, at least, you know, in his opinion, but must be. And then he was, you know, speaking to the class the next day and say that, well, you know, computer sciences might not be for all of you, you know? For some of you that have a hard time, you know, picking up on, you know, the basic concept, you might want to reconsider, okay? So, but he never gave me the, you know, the meaning look, you know, you know how, you know, Dr. Denspo is, you know, he's like the most patient man, you know, in the world. He really, you know, just say that to make sure that we don't, you know, go to the wrong field, okay? But throughout the semester, you know, semester, okay? I was able to, you know, go from, you know, fronking to in the end, you know, I, you know, I like to think that, you know, I was actually, you know, ended up, you know, the top student in his class, you know, during the final grade. And well, you know, he switched his look of, you know, avoiding eye contact with me, you know, from slowly giving me the expression of encouragement. Every time I actually get better and better, I told him, you know, you helped me to fix my, you know, not just teaching me programming, okay? We did C++ at the time, okay? What he truly gave me was, you know, the experience of all for coming, my, you know, confidence problem, okay? I told him, wow, you know, that was, you know, a really meaningful semester because I came in, you know, actually not knowing enough about programming than many other students, but in the proper, you know, learning environment, I was able to, you know, meet the expectation and excel. I told him that the same thing happened to me, you know, again and again, you know, down the road. When I graduated from Purdue, okay, I, you know, I thought I was, you know, pretty good because I actually, you know, get all A's on CS and, you know, A's on my class. And then when I go to Microsoft, guess what, the same thing happened again, right? I wasn't seeing all these talented people from everywhere. And the same process, you know, basically occurred where I have to, you know, in the beginning, you know, feeling that, feeling a little bit inferior, but, you know, with, you know, more diligent working and the right way of posing problem, able to catch up, you know, to, you know, how other people are doing. And in the end, you know, excel. So that pattern, you know, happened again and again, you know, throughout the years. And this afternoon, I personally thank him for that. Yeah. That's why, you know, he was the first professor I need to, you know, seek out and pay my respects. That's an amazing story. So what kind of student were you, what was KK like as an 18 or 20 year olds here at West Lafayette? Right. So, well, I told you already that, you know, I literally came out in, you know, a study launch, okay? I don't know why I do that, because, you know, we actually had the habit of not sleeping through the night, okay? That's actually what many of the computer science, you know, students actually like, you know, we tend to be more productive. The classes were tough. In the evening, okay? We tend to think clear, you know, when we don't see the sun. And, but of course it has, you know, so we basically just, you know, you know, pull all nighters, you know, me and my classmates in a study launch, okay? We know how to order the, you know, pizza with the most discount. I don't know if you still do that. I think they do. You do, okay? So you still, you know, like, you know, pick the first table, you know, closest to the door. And during midnight, you know, you would be actually, you know, placing, people would be placing order for Papa John, right? But when the delivery guy come, you know, they would ask Peter, and Peter probably has gone already. Didn't wait for the pizza. And then he would say, okay, have price, you know, preferably. And then we would be the first one to pick it up. Yeah, that's how we get, you know, affordable pizza, yeah. But so what kind of student was I, okay? I like to see myself as a diligent student, okay? I, at the high point, I concurrently work for free professors, okay? As an undergraduate, okay? And that's also why, you know, I had to, you know, pull all nighters, you know, in the study launch. There's a drawback, though, you know, it may be really hard to get up in the morning to attend the classes, you know. You can imagine morning classes much tougher for you and your friends. But it turned out to be okay, because I was working for the professors, they were teaching me. So they know that I was actually working, you know? And I was up to speed on the material. Didn't give me a hard time, you know, not going to, you know, their classes all the time. It was unusual, you know, in a sense that, you know, undergraduate student got to actually work for these, you know, great professors, right? Because they usually take grad students, okay? I still remember the tactics. I talked to get the job, okay? I would go to a professor and I said, professor, you know, do you need someone to call out your algorithm? And they said, sorry, I only take grad students. And I would say, can I work for you? For free, okay? And if I fail, you know, in two weeks, fire me. Otherwise, you know, let me do that for you, okay? Well, I don't think they actually, you know, took me on for the fact that they didn't have to pay me because all of them ended up paying me after one month, okay? I think they actually, you know, took me in because they were, you know, feeling my, you know, passion, you know, to learn from them, right? My initiative actually, you know, moved them, you know, to some degree. But that's how I, you know, get my, you know, first jobs. Yeah. So those three years were, you know, super fun years for me. When I was chatting with, you know, Arlo, he asked me, you know, is there, if there's one thing that I would do differently, you know, back then, what would I do? I said, you know, I would have, you know, party more, okay? Because after start working, you know, time just flies, you know. Before you know it, you actually, back to your school, you know, after 22 years telling, you know, the students how diligent you were. Yeah, there you go. That's a very sad, you know, young life, yeah. So KK was kind enough to put together a few photos. So if you can take a look at here, KK, you just want to talk us through these two. Can you tell which one I was? Have I changed that much? The yellow, yeah, yeah. And then what about the, what kind of clubs you were involved with while at campus? Yeah, so the guy, you know, next to me, the shorter guy, you know, was my roommate. And, you know, we had a lot of fun together. And, you know, he's the kind of guy that always go to party, you know. Not you though. And he was the president of the Hong Kong Student Association, you know, for two years, you know, during our stay here. We still, you know, stay in touch closely. He's in Hong Kong. Yeah, two of the other, you know, students that were not graduated yet, they're working in California. So after this trip, you know, I'm going to, you know, stop by California. And I've taken a lot of the pictures of the new campus. Okay, I'm going to share with them. Do you remember where the picture was taken? That's in the EE building. Hall, next to the fountain. Is that right? The double E is along the engineering mall. Yes, yeah. Is that right? I don't know. I can't tell. I can't tell. Discurious. Anybody? Yeah. They haven't, the building probably changed since. Yeah, yeah. But you can still see the, you know, the, the color tone remains the same, you know, for all buildings in Purdue. Yeah, yeah. That theme. Yeah. And, you know, the right hand side is, you know, some old, you know, newsletter. You can see that, you know, we were still, you know, doing those, you know, you know, handwritten form and then make copies, you know, with the further copy. Yeah. Very old school. Very old school. Brings back a lot of memories, right? So then after you left Purdue, you went to work for Microsoft. Why don't you tell us about your experience there? Yeah. So I actually did an internship with Microsoft, you know, before my last semester. It was really impressive, truly impressive, you know, for a computer science student to go to, at the time, you know, the biggest software company in the world. I learned a whole lot, you know, from Microsoft. The first, you know, five or six years, you know, I had the most fun, you know, being a, you know, young programmer, okay? I mean, you know, even if you don't pay me, you know, I would be home, you know, programming, you know, every night anyway, right? So I was shocked that, you know, anyone would actually pay me to do the things that I would do for free anyway, right? So I still remember in the first five years, six years, I'm sure Arnold, you know, probably did the same thing. You know, my wife, you know, who was, you know, still my girlfriend at the time, you know, would tell you that, you know, I never go home before 2 a.m. And Microsoft? In the morning, every day, right? I would be, you know, in the office, you know, programming alongside with not just me, my manager, and my manager's manager, okay? It was a very, you know, hardcore, you know, age for Microsoft. It was still very, it was already very big, but the environment was very startup-like, okay? This is the late 90s. This is, we're talking about 97, 98, 99, right? Yeah, before 2000, right? So I started working in the MSN group, okay? And then I, you know, moved on to work on the, you know, BizTalk project, okay? There was, okay, for those of you that doesn't know, you know, this team, the young product unit manager at the time overseeing this project was Satya, okay? The current CEO of Microsoft, okay? So it was a startup, you know, project within Microsoft, okay? We had to do, you know, a e-commerce platform, you know, this when I actually worked on Data Warehouse, okay, project. My first test was to analyze the log, the web traffic log for MSN. It was the, you know, number three, you know, biggest site at the time. And yeah, I just, you know, we've refreshed this part of the memory with a professor this afternoon. The project was so fun, you know. When I first joined the group, it took them more than 24 hours of processing to handle, you know, their daily log, which means they cannot catch up with their daily log, right? Okay, 24 hours to catch, you know, 24 hours worth of log. So my task was to optimize the performance to make it run faster, okay? So you go from 24, more than 24 hours to 15 hours, to 10 hours, to eight hours, to five hours. In the end, I remember we actually get it down to 1.5 hours, okay? From 24. From 24 hours. So, you know, I would say that was really, you know, that little story actually captured the fun of being a programmer, okay? Nothing actually was more thrilling than seeing how you, you know, trim off, you know, seconds, seconds, you know, with better algorithm, better programming, you know, better, you know, way of, smarter way of, you know, dealing with your code to get to that point. So, well, you know, for those of you who are not in a computer science, you might be thinking, oh my God, so boring. But if you are in computer science, you know what I mean. So work on that project for a little bit and then work in Windows team, you know, work on the messaging platform, and many of the things I learned from the book of Douglas Comer, you know, help, you know, the internet working with TCP IP, you probably have those. Yeah. And so work on messaging. And then, you know, I actually took, you know, pre-bick change, you know, by doing an internal transfer to Microsoft China in Beijing. As I do that change, I also took on a completely different field. You know, I was working on, I was tasked to, you know, build up the Windows Mobile team in China, you know, for the Windows Mobile team in Redmond. So in the end, I actually get, you know, get, you know, close to 150 very talented, you know, people working on, you know, various features for Windows Mobile. And during that four years, that's also when I, you know, once I get into that area, I realize, you know, how fast the China market is moving and how big the China market, you know, was, and how fast the, you know, mobile internet, you know, wave is actually, you know, coming along, right? And of course, you know, that's also why, you know, I decided to, you know, move on to the next phase of my life, to co-found, you know, a new startup at the time, you know, Xiaomi, by leaving Microsoft. It was a natural move because I felt I cannot miss that wave, okay? I've already missed the internet wave, okay? Yeah. Going back in perspective, we, I graduated in 96, okay? So if I was super smart, okay, I would have gone into the internet field right away, okay? I should be the one that have, you know, co-founded, you know, you know, Facebook or, you know, Zoto or Netscape, Netscape, you know. But I completely missed, you know, the internet wave. You know, I, you know, we had access to the internet, of course, but we were just using internet to do fun things, you know, to, you know, to do free downloads, yeah? Download the wrong content, yeah? But didn't come to, you know, the idea of, hey, why can't we do e-commerce? You know, if we did e-commerce, we would, you know, have a chance to, you know. Be Amazon. To be Amazon, right? So we completely missed the internet wave, okay? You know, for no good reason, okay? But, you know, when the mobile internet, you know, wave came and I was in a position to see this is coming, I just had a good feeling that we cannot miss this again. Okay. So was it a difficult decision leaving a big, kind of safe company, especially later in your career, to start something completely new, particularly in China? Yeah. So it's really interesting, you know, people, you know, around me all think that it was such a big decision that I had to make, right? Leaving the, you know, cumbersome, you know, leaving, you know, behind the good pay, okay? Microsoft was, you know, paying me, you know, very generously already, you know, as I, you know, move up the rank, but at the same time, you know, I had this, you know, concept of safety net, okay? You know, I spent 15 years with Microsoft already and I have done, you know, pretty well inside, you know. My review in Microsoft was, you know, as good as my CPA in Purdue, okay? So I would like to call that my safety net, right? If I don't use my safety net, I'm actually wasting my safety net, right? I knew that, you know, if I were to take a venture out, you know, if I fail, I can still always come back and, you know, Microsoft would take me gladly, you know. I still could call it, you know, like when I was young. But when I was, you know, observing this huge opportunity that I just mentioned, the China market, you know, the booming China market, the booming mobile internet market, this perfect storm, you know, was hitting, you know, in a very obvious way, you know, in my mind. It was really obvious, you know, to take the leap of faith to capture this opportunity. So to me, it was actually not a very... Not difficult. Difficult decision. You saw the opportunity at all, right? The last, so I've been thinking about, you know, capturing that wave, you know, for a while, right? And the last war to break down the camel was, you know, meeting, you know, our CEO, late CEO in Xiaomi, Lei Jun, you know. I don't know how many of you know about Lei Jun. He was, you know, he was already a well-known serial entrepreneur, you know, before Xiaomi, okay? So he did multiple style-ups and all of them actually, you know, they did fairly successful. Okay, not just scope of Xiaomi, okay, but fairly successful. I met him, you know, via, you know, the second partner of, you know, Xiaomi, my ex-curator in Microsoft. I met him in a coffee shop, you know, and we basically sat there for, you know, five and a half hours. We chatted for five and a half hours. What did we talk about? Okay, we basically talked about products for five and a half hours. Okay, he would be, you know, carrying with him, you know, a bag, okay, which contains like six or seven, you know, smartphones at the time, you know, from different makers, from Apple, from, you know, Motorola, Samsung, you know, from, he didn't have Huawei. Huawei at that time, you know, was actually shipping very, very shitty, you know, handset, you know. Yeah, they didn't improve until we came, but. So, you know, and Android's G1, you know, the first Android phone. Made by Google. So, he would tell me that, you know, he has taken apart all these phones, you know, the hardware, right? He would be telling me, hey, you know, what is the, you know, you know, things that he would have done differently for different products, right? For hardware, for software, for the design and all that. We just talked about products for five and a half hours. And, you know, to me, it was actually very unusual. You know, I, you know, when I was in Microsoft, you know, during my last couple years, I had, you know, reviews, I had meetings with the senior VP, you know, of Microsoft, you know, on regular basis, okay? None of them would actually talk to me about, you know, products like that. None of them would actually have, you know, show me their passions, you know, for products like that, okay? And I felt it was actually the core of building a startup, okay? The core of a startup is really to create good product, okay? And so that was the last draw, you know, on the cameo back, you know, I realized that the two of them were about to, you know, form a company. And, you know, toward the end of the coffee, okay? Which is probably the most important coffee I've ever had in my life, right? I just said to them, you know, okay, whenever you guys are up to, come in, okay? So I was the first co-founder to join this startup. And yeah, so it was a natural, you know, logical steps of- So tell me how the seven co-founders- We have, we eventually, you know, banded, you know, seven old men together, you know, myself included. So how did that, tell us about that process. How did you recruit or find that co-founding team? Yeah, so, you know, the same process of how, you know, late June actually recruited me, actually worked really well for the other co-founder. But we realized, you know, how complicated this startup is. But by the way, you know, can I assume that you all, at least know Xiaomi, you know, to some degree, okay? So in one sentence, you know, Xiaomi is a company that actually, you know, does hardware products, you know, do software and internet services. You know, the goal for the company was to bring the, you know, cutting-edge technology, the premium of the premium, you know, products to a mass market at very affordable pricing, okay? That's basically what the team was trying to do. So kind of take the iPhone that was way too expensive for everybody and make it available for the masses. Exactly. Just to give you an idea, you know, at the time, you know, when, when, if you want to get by, you know, flagship phone from Motorola or, you know, Samsung or Apple, it would cost about, you know, $6,000, R&B, okay? Not very affordable to most of the, you know, people, okay? But when we launched our first phone, we actually used all the top components from all the, you know, maker that were providing component to these, you know, you know, giant, you know, manufacturer I just mentioned, okay? If Motorola is using, you know, the latest, you know, CPU from, you know, Quad-Cal, we use the same, you know, CPU, we use the same, you know, top-end component for everything, right? And when we launched the first phone, when they were selling their phone for $6,000, we sell our phone at below $2,000, R&B. So that is what actually, you know, brought us to the map, okay? That is what caused, you know, even the journalists, actually, wow, you know, in our, you know, our press release. They literally, you know, jumped out of the chair, you know, and couldn't believe that we're actually selling for that price. In the beginning, you know, nobody, you know, people actually were skeptical, you know, that, you know, we were actually, you know, cutting, you know, costs, you know, by using, you know, inferior component and all that. So I still remember, you know, when we first launched the first phone, when we launched the first phone, okay, people would actually take apart the phone to make sure we indeed use the component that we claim we are using, okay? They do it for many, many, you know, products, you know, for Xiaomi, to the point, you know, that eventually we decided to actually, you know, put so much focus in designing the interior of the hardware, knowing that they would take it apart. We want them to feel impressed by opening up the hardware. Wow, the inside looks better than the outside, okay? Yeah, but after a while, you know, they believe that, you know, we mean what we said, okay? So I won't go into too much detail of, you know, how do we achieve, you know, that, okay? It is, it could take easily, you know, two hours, three hours, but knowing that that was what we set out to do in the beginning, we realized, you know, how complicated, you know, this, building this startup was, okay? That's why we had to find, you know, seven co-founders. If we could, we would be, you know, finding 70 co-founders, you know, knowing how complicated this was, but we couldn't find that many people, okay? So one of us, you know, came from a hardware background. Me and another co-founder came from software, okay? Two co-founders came from design, one from industrial design, another from, you know, software design, you know, the look and feel. One came from, you know, program management, okay? PM, and Adrian was the ringleader, you know, he knows everything, right? Based on his, you know, previous, you know, experience, you know, doing management, doing, you know, product development, everything. So that's what, what, the 7-1-2- So you almost looked at, okay, if we're building a hardware phone, these are the people we need, and just recruited them as your co-founding team. That's what we, you know, plan in the beginning, that's right. So if you would have told, if anyone would have asked, even back in 2010, and you told someone, I want to create a cell phone, I want to create a startup that's going to make cell phones, I mean, that's crazy when you think about the cost for hardware, as well as you're going to go against these big people, I mean, you're going to get crushed. There was the best way to push, you know, the VC away, if you tell them the truth. If you tell the VC that you were building a phone, you know, they will think you're crazy because, you know, all your competitors, you know, we're talking about, all of them are Fortune 500 level, you know, giants, right? But, you know, fortunate for us, we actually, you know, well, Leijun was actually very well connected in the VC world, okay? He was, you know, a very, you know, renowned angel investor in the industry, okay? So people actually, you know, pay a lot of credit, give a lot of credit to our background, okay? They actually, you know, take a leap of faith, you know? So they don't even want to hear about our, you know, business plan, you know, because if we tell them, you know, they might have a hard time convincing themselves this is the right thing. They would just say, okay, whatever you guys do, we'll just, you know, blindly, you know, throw in the money for the angel round and go with you. And of course, now they're actually, you know, are very happy they have made that decision. But at the time, you know, I would think, I would say the thing we set out to do was so impossible that, you know, gave us actually the best chance of success. Let me explain what I just said, okay? If you actually go out and do things that, you know, everybody agreed that, of course, that would be successful. Well, if the logic is so, you know, tight and, you know, the reasoning is so convincing, you know, that's something that's going to be successful. I can bet you, you know, 10 other people have already done that before, okay? You have to assume that, you know, this world is filled with smart people, you know, smarter than- So if it sounds easy, everybody's gonna do it. If that's, you know, easy and, you know, so, it sounds so logical, so, you know, possible. People have done that already, okay? You know, the kind of startup that would be successful is the kind that actually would seem impossible at the beginning. So a little bit crazy. To scare away, you know, the skeptics, right? To push away, you know, the big guys too, okay? Because the big guys, right? I imagine if we were to pitch, if I were to pitch this idea inside Microsoft at a time, you know, it would be shut down because, you know, it was crazy. But, you know, these are the kind of, you know, ideas that actually turn out to be, actually the most likely to be successful, assuming we can actually execute it, right? According to the plan, right? Assuming we were lucky enough, you know, it takes a lot of luck, you know, to build a startup, okay? But I think the, sometimes, you know, having the conviction, you know, to believe that what you're building, you know? Okay, if you fail, you know, you fail. But if you were to succeed, it's going to, you know, make a positive impact, you know? Big enough to make you, you know, not only proud, but willing to work on that problem, you know, 24 hours a day, you know, seven days a week, okay? That's literally what we have done, you know, in the last eight or nine years, right? Especially in the early days, right? You really have to believe in enough to go through those suffering. You know, comparing to my days in Microsoft, you know, I just told you I never go home before, too. The startup is like, you know, 10 times tougher. So what was some of the days, like, what was the typical day like in the early days of Xiaomi? You lose all your friends, basically, yeah. Yeah. And only time you get to spend is probably with your family in the weekend, okay? But every day, you know, it's basically you woke up and then you would be, you know, working. Fortunately, we didn't, you know, we have enough funding that we didn't have to work in a garage, okay? Okay. But, you know, we basically have to, you know, work. And in the beginning, it was tough because, you know, although we could actually find some, you know, gutsy, you know, VC to support us, it was hard to actually recruit, right? You know, because when you actually try to recruit, you know, employees, they would think you're crazy too, right? So each recruit, you know, talk so much time, okay? We would be, you know, talking to the candidate we really wanted to get, you know, one whole evening, okay? Another evening, another evening, to the point that they are so tired that they feel guilty of refusing to come. Then they reluctantly, you know, agree, okay? And you move on to the next candidate, okay? But sometimes that's good because that's a high barrier to really find the people who believe in your vision. Exactly. And hey, I want to try to do the impossible as well. Yeah, you really have to find, you know, people that's, you know, semi-crazy at that time. Also, yeah. To want to, you know, take the leap of faith, right? Just like, you know, read it. So, but thinking back, you know, the time really, you know, was awesome. You know, it was, you know, very productive, you know, I personally have, you know, learned a lot, you know, in this phase of, you know, my career, you know, now I'm in my, you know, third phase of career. So before we get there, I want to show a picture. So, do you remember these two? Yeah. So the one you were talking to me earlier on the left, why don't you explain that one? Yeah, so the left picture, you know, was taken in the first day, you know, of our, you know, So Xiaomi day one, okay? You see the rice cooker in the middle. Okay, for those of you that don't understand Chinese, Xiaomi means little rice, literally, in Chinese, okay? So as a symbol of the name of the company, we actually brought in, you know, rice cooker of, you know, little rice. Each of us, you know, basically, you know, top one, you know, set the, do the toasting and then get right to work. So unfortunately, that was the only picture we have taken in that day. And, you know, by some, actually, this is one of the two. I actually gave you two, right? But apparently, you know, we didn't think, you know, this will become his historical moment at the time, okay? So, you know, we really just, you know, did that in a casual way, none of us, you know, did our hair right, you know? We didn't dress properly, you know, taking the picture against the light, right? You didn't know you were changing the world on that day. We knew, but we didn't think the picture mattered that much. Yeah, but now every time, you know, when we celebrate our anniversary, you know, people would actually share, circulate this picture around, you know, we all wish we had taken a proper picture. So now, you know, I do a lot of, you know, investment, individual investment. I sometimes attended their first day of work, okay? And I always, you know, remind them, take good picture today. And then tell us a little about the name. How did the name? Oh, Xiaomi. So, you know, we wanted, you know, to find something that's, you know, personable, okay? And we, we, top notes, you know, from our companies that were successful usually have very simple, you know, but very, you know, personable name, okay? You think Apple, Apple is like, you know, something that everyone eats, right? In the world, right? It's the healthy fruit, right? So we were thinking, hey, what, what do people in China, you know, eat every day? Rice, right? And originally we thought of, you know, Dami, okay? Last week, okay? But then, you know, as a rule of thumb for, coming up with names for internet company, you don't want names that is, you know, seemingly powerful, large, or, you know, strong, because that's actually very impersonal, you know, far away from the, from the users, okay? People like names that's actually very, you know, down to earth, okay? Particularly because that's the market segment that you're going after. Then Xiaomi, okay? Nothing is actually smaller than a small rice, right? You know, nothing is more humble than that, right? And that's stick, basically, you know, we like the name, okay? And after we started, you know, using that name, after we become, you know, we successfully, we see a bunch of, you know, start up, you know, using, you know, different variation of the word me, in their company name, yeah. Second picture was the first offsite. The guy in the middle is our CEO, okay? I can't remember what we were looking at, you know, we, yeah, it was the first, you know, offsite, you know, we had maybe 15, 16 people. That was the original, you know, core of the company, yeah. So we, for the entrepreneurs on campus, a lot of times we talk about like the three main things you need are obviously you need a product value proposition. You kind of talked about what you're doing there. You need the team, and then you've talked about that. What about the finance and funding part? Can you talk a little bit about how that went for Xiaomi and your team? Okay, so, well, before I answer the question, I have to, you know, call that, you know, Xiaomi was not a typical startup, okay? By the time we started Xiaomi, you know, each of us was already, you know, carrying with us, you know, 15 to 20 years of, you know, work experience, okay? So you can say that, you know, Xiaomi was founded by, you know, seven old men, okay? The average age of the, you know, founding team, you know, was 40 years old, you know. I was not 40 at that time, but, you know. You were pulling down the average. I helped to, you know, keep the average, you know, down. So each of us were already, you know, fairly senior in each of our field at the time, okay? That's what make the funding, you know, interesting. We could have, you know, funded the early run on our own, okay? Expressively leaching, okay? But we insisted, you know, we should actually, you know, take some, we did invest, you know, on our own a little bit, but we insist to take outside funding. Why? Because we wanted to give us the extra pressure by taking other people's money, okay? If you were to actually do a project, out of your own pocket, okay? If you fail, you actually, you know, you can accept that because you're actually losing your own money, but if you have taken your best friend's money, or if you have taken money from your, you know, relative, okay? You couldn't sleep, you know, if you're going to lose his money, you know, it's going to keep you, you know, give you that, you know, extra, you know, pressure to do well, okay? So that's, that was the reasoning, seriously. You know, for us to take the, you know, angel money. No, it makes you accountable to somebody else. Yes, and the other reason is you want to take their money so that, you know, the valuation is a fair valuation, okay? If we were to invest our own money, you know, the valuation is actually, you know, according to our, you know, it could be a false sense of, you know, reality about the company's valuation. But when you take, you know, money from outside, believe me, you know, nobody's smarter than those VC. They will not, you know, give you more than what you're worth, okay? So from then on, you know, each run is actually based on, you know, the company's performance and projection. You know, we rapidly, you know, grow, you know, in terms of, you know, our, you know, revenue. And as a result, you know, the market valuation. So we were really fast in reaching, you know, the billion dollar, you know. I think we have, let's skip that one for now. Yeah, so. These are incredible numbers. So, you know, those three numbers, you know, I think we have broken, you know, the record, right? Two years after launch of our first phone, you know, we reached, you know, one billion US dollars in revenue in sales, you know, for that year. Four years after launch, we actually reached, you know, 10 billion US dollars. Do you know how, how, how? You know, we have no idea. You probably have no idea, because when I was in school, you know, I don't really know what, you know, one billion means, okay? A million was a lot already. But if you compared this, no, this one, this one. Yeah. This puts it in perspective. So this put that in perspective, right? It took Xiaomi seven years, you know, to, you know, get to 10 billion, actually, sorry. 100 billion in R&B. Oh, that would be roughly 15 billion, you know, in US. So it took Xiaomi seven years when, you know, some of the most successful company in this planet, you know, for Google, it took nine years, okay? Facebook, 12 years, Apple, 20 years, Alibaba, 17 years. Same for Tencent, Huawei, 21 years, you know, that's what actually made it so, you know, incredible. If you could go back to the previous slide. This one, yeah. So you talk about funding, right? So if you're doing well, actually the funding, actually you will come, you know, locking on your door, okay? So we actually reached, you know, 45 billion valuation, you know, you know, in 2014, okay? So it was unbelievable. No company have ever reached that, you know, valuation, which is actually roughly the same valuation as what we are in the market today, okay? So, you know, we actually, you know, get to that point, you know, really fast. And of course, you know, we, later we will talk about, you know, ups and downs of, you know, a company and how they have to, you know, navigate through it, right? We have some, you know, tough years, you know, growing pain, you know, after that. But, you know, the 45 billion valuation at the point, at that point really, you know, made history, yeah. So I guess I didn't answer your question in terms of the funding because, you know, for most of the startup, actually, even getting the angel round is difficult, could be difficult, okay? But that's a very important process, you know, for a startup because you might have a brilliant idea, okay? But if you cannot convince, you know, people other than your parents that your idea is good, that's a very high chance that your idea is actually not that good, right? That's actually, you know, the important aspect of, you know, having the smartest people in the earth, you know, the VCs, you know, these guys are sharks, okay? You know, they're actually smart. They won't, you know, throw away their money into a bad project, okay? You know, they're actually a very good judge of, you know, whether your idea is good, whether your direction is good, whether your strategy is good, okay? So I encourage you to, if you ever, you know, needed to, you know, get the funding, you know, to do your own entrepreneurship project, think of the, you know, funding part, you know, as a very positive, you know, process, you know, for validating your idea, you know, because many people actually think of that as the painful part, okay? They get so frustrated when they cannot get the funding, but think of the process as a very good, you know, process to help you not waste your time in doing, you know, working on bad ideas, yeah. So you had alluded to this a little bit earlier, is that you hear a lot about these successful companies, the Apple, the Netflix of the world, and everything seems great, but when you are behind the scenes, you don't realize that they were in the history of the company, there are multiple times where they were six weeks from running out of cash, two weeks, one bad decision from actually going out of business. I presumably, Xiaomi had similar ups and downs. Can you share any of those? Yeah. So, you know, Xiaomi is actually in a funny position where, you know, ever since we launched our first form, we have been on the map, you know, for the media, you know, for the press and everyone actually, many people know about Xiaomi, you know, since its early days, right? So it's almost like, you know, building this startup, you know, under spotlight, you know, or in microscope, okay? So we are really used to the voice that, you know, either think that, you know, Xiaomi can do anything, you know, they would actually ask us to build, you know, houses or to build cars, okay? To the other spectrum where, you know, people are very, you know, pessimistic about the future of Xiaomi, do you think that you would be dead, you know, by the end of this year? You know, they think of, they said things like that every year, okay? You know, sometimes they're right, sometimes they're wrong, okay? But what Arnold just pointed out is actually very truthful. I cannot speak for all companies, okay? But, you know, for, I can imagine, I cannot imagine, you know, Xiaomi being alone, you know, in, constantly, you know, have this sense of urgency that, you know, if we don't, you know, overcome this problem, if we don't, you know, fix this challenge, we'll be dead, you know, in three months, you know, or less, okay? So, especially, you know, when actually we're dealing with, you know, we're in the hardware business, right? We're in the business where we have to, you know, make very accurate estimate about how much inventory do we need to incur, okay? What if, just imagine, you know, what if we actually ship a shitty product, okay? But before we, you know, release it, you know, you basically have to, it's not like software, okay? For software, you know, you just put it out in the web and people just download it and install it, okay? For hardware, you have to pre-order all the parts three months before, okay? You're basically paying for the phones. You're basically pre-paying for the phone, okay? And if you actually, you know, release a very bad product, nobody buys it, you end up with, you know, three months of, you know, very expensive inventory, okay? And one failure like that, you know, could easily kill a company, you know? You know, when Xiaomi was smaller in scope, one bad product like that could kill the company, right? Now, you know, we're a little bit bigger, you know? Maybe two products would kill the company, okay? For companies like Apple, maybe, you know, one bad product won't kill them, okay? Two products, you know, is enough to, you know, really, really destroy the company, okay? They're not as robust as you think they are, okay? So those are the operational, you know, part of it. The other risk, you know, that we constantly remind us of not to, you know, fail to address this. Never forget, you know, what we set out to do, okay? At the beginning, I already told you, you know, Xiaomi set out to, you know, we wanted to, you know, bring the best product, you know? By best product, I mean, you know, product that, you know, is excellent in design, that's excellent in user experience, that is, you know, excellent in quality, but have the price, you know, one for the price, affordable, you know, to everyone, right? Do not, you know, over gain, you know, from your beloved, you know, customers. Do not, you know, take the margin just because you can, okay? That is the fundamental principle of, you know, what we build Xiaomi on. I, so, you know, I have, you know, a lot of faith, you know, in Xiaomi, because if they can uphold, if we can uphold this principle, you know, forever, I think we actually can be very sustainable, just like Walmart, just like Costco, you know? You know, those great companies, you know, at the company, that actually, you know, do not overcharge, do not over, you know, marginalize, you know, take too much margin, you know, from their users. That's why they remain competitive, you know, against, you know, their competitors. The moment when Xiaomi stopped doing that, that would be the end of Xiaomi, okay? That could end, you know, very fast, okay? So, you know, that's basically, you know, what keeps us, you know, awake at night, you know? Knowing that, you know, hey, we, you know, the big company, you know, could die, you know, actually faster than the small companies, okay? For those of you, you know, that have used, you know, all the phones, how many of you actually, you know, remember, you know, Nokia in its prime day? Okay. How many of you remember Motorola? You know, Palm? Oh yeah, I had one of those too. So, it didn't take long for them to collapse, you know? You know, for Motorola, it actually died literally, you know, within, you know, one and a half years. Nokia, they died just overnight. It's so scary. It's so scary, okay? Especially for our industry. But you guys are more than just a cell phone manufacturer. I think you've always seen more than, I'm not just selling the cheapest phone, I'm not a commodity cell phone manufacturer. You guys are much more than that with the internet users and... Yeah, so because we had that, you know, original goal, you know, going into the market, cell phone was really just the first, you know, product, you know, we used to test out, you know, our model. And because this model actually worked really powerful, okay, you know, just to give you an idea, you know, how powerful this idea was. When we launched our phone, okay, it took us, you know, less than one and a half, one and a half years to become number one in China, okay? That's how powerful this model was, okay? Now we are number three, you know, actually two or three, you know, around that, you know, second only to, you know, Huawei, okay? But, you know, the model actually works really well, even for the most competitive, you know, product, you know, in the industry. Once we have proven this model works, we have taken this model to do other things, like TV, we do router, we do, you know, smart speakers, we do, you know, we gradually grow our, you know, portfolio, you know, to cover- To be much more, I mean, Xiaomi is not a cell, even though I introduced you as a cell phone manufacturer, you are much more than that today. So now, you know, we actually, you know, have, you know, I would say, you know, so today, you know, we have over 120 millions IoT devices connected, not including the phones. Okay? You probably don't have an idea how big that number is. 120 million IoT devices, you know, connected, you know, that's actually the largest, you know, IoT platform in the world, not even Apple, not even Samsung, not even Huawei, have that number of connected devices, okay? So, that's just to tell you how, you know, how powerful this, you know, you know, Xiaomi model was, you know, in going into each field, right? When we take the same model, you know, in going into, let's say, you know, the purifier, you know, you know, the Beijing Air was, you know, polluted, you know, a lot of pollution, right? Well, guess what, you know, before we go into the purifier market, people will have to pay, you know, 7,000, 8,000, okay? For a decent, you know, air purifier, if you have to change the filter, it takes another 1,000 per filter, you know? This was a filter, okay? When we go into the market, okay, you know, the cost of building a very, very good purifier costs less than 1,000, come on, you know? Those are just machines that have very big fans and filters. So, it goes back to your thought of companies are charging margin because they... They overcharge, okay? So, you know, we managed to actually sell the, you know, air purifier for $799, one-tenth of their pricing. The, you know, the competitor we measure against, right? With the same level of purifying, you know, quality performance. We literally, you know, give it to a third party and, you know, when they do the test, you know, we are on pie, if not, you know, better than these, you know, overcharging company. We're talking about one-tenth of the difference, right? Now, you know, with that, you can understand why, you know, we quickly become the number one, you know, air purifier, you know, manufacturer in the world, you know? It took only, you know, less than two years, okay? When we do, you know, other devices, TV, router, we do the same thing, you know? Years later, we finally released our rice cooker. We wish we had that, you know, in the first day of our, you know? Then we would be actually, you know, doing, you know, marketing for our own rice cooker, okay? But we do the same thing, you know? We take this approach. So that's why, you know, people are starting to see Xiaomi as, you know, more than just, you know, cell phone company. They're actually CSS, you know, IOT companies now. It's really exciting, you know? And we're also very fortunate, you know? When we, you know, build a company, you know, we come across the wave of mobile internet, we come across the wave of IOT, we come across the wave of AI, right? Just imagine, you know, now that we have this, you know, many connected devices, this many devices are generating, you know, tremendous amount of useful data every second, okay? With AI, with machine learning, you know, many of you actually, you know, are studying, you know, data science now, you know, in school. That's wonderful, okay? Because, you know, when you graduate, you're ready to, you know, solve some real-world problem, you know, for, you know, outside. Just imagine how much, you know, intelligence we could build into these IOT devices, you know? Finally, we can actually turn your home into a smart home, okay? So, Stingy, that actually was my next question of, you hear a lot of buzzwords about deep learning, 5G, IOT, you know, not so much blockchain anymore, but, but where do you see the next wave? The next, or the next opportunity? I see, well, well, there's a lot of opportunity outside of, you know, this field, but within this field, I think the 5G is going to, you know, be a big deal, okay? You might think that, you know, your phone's connection, the connectivity, the data is already fast enough. No, you know, it's fast enough, you know, for the experience that we are giving you today, right? And, and, and program is actually, you know, deliberately, you know, make sure that they operate decently, you know, given the current network bandwidth, right? If you give them 5G, they are going to give you something, you know, that has, you know, even richer experience, you know? Finally, you know, the AR, the VR, you know, all those, you know, high-performance streaming, you know, you know, experience is going to be everywhere in the application, okay? So, I think the 5G is going to be a big deal. Well, AI, you know, this time around, you know, you know, we talk about this, AI, you know, dude, you know, in the past 40 years, it goes up and down, up and down, up and down. You know, it goes up as hype, and then, you know, people disappoint it, and then it goes down, okay? This time, you know, we have- This time is here for good. This time we have strong, you know, reason to believe that, you know, it's going to, you know, to be a, you know, I don't think it's going to, you know, achieve, you know, what we have seen in movie, like Skylet or things like that. But it is, you know, powerful enough to, you know, to turn a lot of the, you know, dumb devices into intelligent devices, you know, with very, you know, little programming that we have to hardcore into them, okay? No more decision tree we have to do, okay? We could actually give them enough data so that, you know, they can, you know, become smarter. Outside of this industry, I think biotech is going to be a big deal. Yeah, I think, you know, the four pillars that Purdue have picked for the 150 years, you know, I think you spot on, right? Space exploration, biotech, AI, sustainability of the earth. I think, you know, these four fields, you know, have tremendous, you know, future. You know, I'm personally, you know, actively, you know, investing in fields outside of, you know, just the field I was familiar with. Yeah. So it's hard to imagine we're almost out of time already and we've barely seen that scratch the surface in our conversation, but just as a last comment, it's like, what advice would you give the young entrepreneurs out here given your experience today? Okay. Well, too many, you know, do I have another two hours? Yeah. Okay, so my first, or give them the time limit, okay? I will tell you what I think is the most important thing first, okay? Do not rush into entrepreneurship, you know, too fast, okay? Make sure, you know, you accumulate enough experience, okay, make sure you have, you know, accumulate, you know, the fundamental strength before embarking on a, you know, entrepreneurship project because it's really hard, you know, it's really hard. Even if you have a brilliant idea, if you don't have the right fundamental or experience or the, yeah, you know, common sense, you know, common sense usually come after you fail 20 times, okay? If you don't have enough of that, you're just going to, you know, work on a good idea and see it fail, okay? You would be seeing, you know, other people doing the same thing, but, you know, just because their execution is actually much more, you know, well-planned, more mature, they would, you know, get to the finish line, you know, way before you do. So number one is, you know, do not rush into entrepreneurship, you know? It took me 15, 14 years before I finally have the confidence to, you know, feel it's ready, okay? So that would be number one, okay? The second is, I shared that with, you know, someone over lunch today, they asked me this question. I tell him, okay, just remember these two things, okay? Do not underestimate, oh, that's because you're going to go through, you know, difficult time, you know, for sure, okay? Even for the luckiest, you know, start-up in the world, you know? They go through, you know, many, many tough time. During the downtime, do not underestimate your caliber and your team's caliber, okay? But at the same time, never overestimate your understanding of what the customers really need, okay? I have seen so many entrepreneurs fail because they have a pipe dream to think that, you know, hey, you know, this is a problem that needs solving, you know, that's the perfect opportunity for my start-up to solve this problem. They believe that this problem is needed, you know, for everyone, only when they find out later that that's a very narrow problem. Only very few people actually, you know, have that problem, okay? I've seen so many, you know, entrepreneurs overestimating on their ability to truly understand the true demand of the market, of the customer need. And, you know, how do we address that in Xiaomi? You know, because we were old enough, right, in not overestimating our understanding explicitly about the need of the younger generation, you know? Now, you know, I cannot imagine myself understanding, you know, the needs of teenagers anymore, you know? That's not my day-to-day life anymore. I don't know what they need, right? So, in day one, you know, we try everything we could to be closer to the customer, okay? To listen to their feedback, okay? Example of that, you know, you know, our regular release of the OS, you know, every time they upgrade, we'll actually, you know, pop up a survey and ask them, hey, tell us, you know, the top three things you like about this build. Also, tell us about the three things you hate the most about this build, okay? We'll be asking them, you know, to give us feedback. And you guys do it weekly, if I recall. We did weekly updates on the OS, okay? Can you imagine, you know, flashing your phone every year? I mean, every week, you know? But that's also where you get the feedback from your customers. Yes, and we will give them, you know, okay, you know, among these, you know, five features. Rang them, you know, which one you think, you know, is the most useful. Rang them, okay? That's very helpful. They actually, you know, help us to spend our very limited resource on the most important problem. Because all startups, it doesn't matter how, actually, not just startup, any company, doesn't matter how many engineers you have, you always have limited resource, right? So we realized this was the way to, you know, make sure we actually are, you know, spending our, you know, very limited resource wisely on where it matters, okay? So I would, you know, live with, you know, stop at that, you know, that's a lot to learn, you know, in entrepreneurship and non-entrepreneurship. You're, you know, very young, you know, and you know, I wish, you know, I really wish, you know, when I was, you know, your age, sitting in this room, someone actually, you know, with the experience of, you know, Arnold and myself, were here to actually warn you of the things not to do or to do. So hopefully this is useful. All right. That's a lot of time. Thank you, everybody. Thank you. Thank you. Thank you. Thank you.