01

The Man Who Would Bring Xiaomi to the Market, Even if It Meant No Sleep

In March 2021, at Lei Jun's most difficult moment, Zhou Shouzi left Xiaomi.

Two months earlier, Xiaomi had been labeled a "Chinese military enterprise" by the US Department of Defense. A fierce round of international sanctions targeted Xiaomi's overseas mobile phone business.

At that time, overseas operations accounted for half of Xiaomi's total business and were its main source of growth. From 2020 to 2021, Xiaomi's overseas revenue growth exceeded 33%, driving overall performance.

Leaving with the title of President of International Business, Zhou Shouzi was seen by many Xiaomi fans as a "deserter" or even a "traitor" who stabbed Lei Jun in the back.

In his 2024 annual speech, Lei Jun admitted that "Zhou Shouzi's departure had a significant impact on me," and he was in a particularly bad state at the time.

However, Lei Jun's poor state of mind stemmed more from confusion and anxiety about the future.

The struggling mobile phone business accelerated Xiaomi's strategic shift towards electric vehicle manufacturing.

On March 24th, Lei Jun reported to the board: "Smart electric vehicles are the trend, and Xiaomi must get involved! But only the top five globally can survive, so Xiaomi must invest at least $10 billion."

After intense discussions, the board agreed to move forward with electric vehicle manufacturing, but only if Lei Jun personally led the charge!

At this critical juncture, Lei Jun placed high expectations on Zhou Shouzi, who he had nurtured for many years and was exceptionally capable. Perhaps due to his disapproval of Xiaomi's electric vehicle plans, the March 24th board meeting became Zhou Shouzi's swan song at Xiaomi. Afterward, Xiaomi announced Zhou Shouzi's departure.

Lei Jun expressed sadness, reluctance, and helplessness at Zhou Shouzi's departure, ultimately resorting to understanding and blessings.

Lei Jun, unusually, became the abandoned one. This is a testament to Zhou Shouzi's exceptional abilities and how much Lei Jun valued him.

In June 2010, at 27 years old, Zhou Shouzi joined DST as one of the youngest partners in its history. In 2011, Zhou Shouzi arranged for DST founder Yuri Milner and others to visit Xiaomi, which ultimately received a $500 million investment from DST.

Perhaps it was this experience of investing in Xiaomi that made Lei Jun see the shining gold in Zhou Shouzi. In 2015, Lei Jun recruited Zhou Shouzi to serve as Xiaomi's CFO. It is said that when joining Xiaomi, Zhou Shouzi was determined to take Xiaomi public within three years. To achieve this goal, he told the media he would sacrifice precious sleep time.

In April 2018, Zhou Shouzi was promoted to Senior Vice President and CFO of Xiaomi, as Xiaomi entered the final stage of its IPO.

Zhou Shouzi began working tirelessly. He worked nearly 20 hours a day, with no time for meals or sleep. He recorded every investor he met in an Excel spreadsheet, eventually listing 1,500 rows.

In just three years, Shou Zi Chew accomplished the world's largest IPO of the time and made Xiaomi the first dual-class shareholding company to be listed on the Hong Kong Stock Exchange. During this period, Shou Zi Chew also led Xiaomi to invest in over 200 companies, solidifying Xiaomi's ecosystem.

In 2019, Shou Zi Chew became the President of Xiaomi’s International Department. Following this, he led Xiaomi's expansion overseas, especially making a significant impact in the Indian market. In 2020, Xiaomi shipped 40.7 million smartphones in India, capturing a market share of 28%, which was 8 percentage points higher than the second-place Samsung.

In 2020, Shou Zi Chew became Xiaomi's youngest Group Partner. Lei Jun jokingly referred to Shou Zi Chew as the "second most handsome man at Xiaomi" after himself. He added, "Anyone more handsome than him has been fired."

02

A billion-dollar promise drove Shou Zi Chew away

This joke made it seem like Shou Zi Chew had effectively secured the "second-in-command" position at Xiaomi. Reality indeed moved in that direction. In August 2020, Shou Zi Chew, along with Wang Xiang, the then-President of Xiaomi Group, Lu Weibing, President of Xiaomi China, and Zhang Feng, President of the Large Appliances Department, were all promoted to new partners of Xiaomi.

From both the business importance at the time and future potential, Shou Zi Chew was the standout among the four.

From 2020 to 2021, the international (overseas) business led by Shou Zi Chew achieved revenues of 122.4 billion and 163.6 billion respectively, accounting for 49.8% of Xiaomi’s total revenue for two consecutive years. The strong performance of the international business gave Shou Zi Chew a stronger voice within the company.

Additionally, at that time, three of Xiaomi’s early eight partners (Lei Jun, Lin Bin, Wang Chuan, Liu De, Li Wanqiang, Huang Jiangji, Zhou Guangping, Hong Feng) had left, and several veterans had stepped down. Consequently, Shou Zi Chew naturally became the brightest star.

A month after his promotion to partner, Lei Jun personally presented a generous gift to Shou Zi Chew: an option to purchase 100 million shares. However, unexpectedly, this marked the beginning of Shou Zi Chew's departure.。

Specifically, Shou Zi Chew was granted the right to purchase 100 million Xiaomi shares at a future price of 24.5 HKD per share. In other words, as long as Xiaomi's stock price exceeded 24.5 HKD, Shou Zi Chew could make a profit; if Xiaomi's performance faltered and the stock traded below this price, it would be a worthless option.

Lei Jun further imposed a stricter time restriction on this stock option, stipulating that it could only be exercised after 10 years. By tying a 10-year outlook on Xiaomi's growth to this option, Lei Jun was effectively betting on Shou Zi Chew's loyalty and hard work over the next decade.

The principle of shared success and growth with the company is fundamentally sound. However, the principle of balancing equity and fairness is more practical.

On the same day Shou Zi Chew was granted the option to purchase 100 million shares, Lei Jun also awarded stocks worth 440 million HKD to the other three executives in total.

According to WIND data, Shou Zi Chew owned only 68,986,200 Xiaomi shares at the time. Although these shares were worth nearly 1.7 billion HKD, Shou Zi Chew remained one of the least shareholder among Xiaomi’s board members.

A month earlier, netizens who had once seen Shou Zi Chew as Lei Jun’s successor suddenly began to have different opinions.

Half a year after the 100 million stock options were offered, Shou Zi Chew made his decision by leaving Xiaomi.

Whether Shou Zi Chew betrayed Lei Jun or Lei Jun undervalued Shou Zi Chew, we cannot judge. Perhaps neither; Shou Zi Chew and Lei Jun were simply finding their own paths under different circumstances.

03

TikTok Ban, Xiaomi’s Car Manufacturing Without a Partner

Zhang Yiming acquiring Shou Zi Chew from Lei Jun was not exactly a case of taking advantage.

Similar to investing in Xiaomi, in 2013, Shou Zi Chew played a crucial role in DST leading the Series B financing round for Toutiao (now ByteDance). At that time, the similarly-aged Shou Zi Chew and Zhang Yiming hit it off and appreciated each other.

However, in its early startup phase, Toutiao couldn’t afford to hire a high-caliber executive like Shou Zi Chew. Eight years later, as short video platforms soared, ByteDance secured a leading position in China's internet industry.

At this juncture, facing U.S. sanctions, Shou Zi Chew, who had already fulfilled his duties by helping Xiaomi go public, was clearly not in a position to weather the storm alongside Lei Jun.

Shou Zi Chew found a larger stage than Xiaomi. Before Shou Zi Chew joined, TikTok had already seen five CEOs in four years due to cultural differences between China and the United States.

In March 2021, Shou Zi Chew left Xiaomi and shortly thereafter took on the role of CFO at TikTok. A month later, he also assumed the position of TikTok’s CEO.

TikTok soon gave him the opportunity to showcase his ambitions. The subsequent story is well-known: TikTok swept across the globe, and Shou Zi Chew faced a grilling by the U.S. Congress...

Whether it was a matter of fate or not, Shou Zi Chew managed to avoid U.S. sanctions against Xiaomi, only to confront even larger and more comprehensive bans against TikTok by the U.S. government.

On March 13, 2024, the U.S. House of Representatives passed a bill targeting TikTok, requiring ByteDance, the Chinese parent company, to divest its control over TikTok within 165 days of the bill's enactment, or TikTok would be removed from U.S. app stores.

TikTok found itself in a deep crisis.

Some media outlets suggested that TikTok's predicament was partly due to Shou Zi Chew's misjudgment. Before the ban, he had optimistically stated: "Everything is normal; I don't see any unforeseen events that could hinder our development."

At TikTok, Shou Zi Chew experienced a trajectory that started high but ended low. In contrast, Lei Jun, through Xiaomi's venture into car manufacturing, demonstrated what it means to be reborn from the ashes.

Lei Jun's car manufacturing endeavor was an all-out, do-or-die effort, undertaken without even a single partner.

In 2020, Lei Jun announced a restart of his decade-long entrepreneurial journey with the original five partners (Lei Jun, Lin Bin, Hong Feng, Wang Chuan, and Liu De) along with four new partners. Over the subsequent three years, all the original members except Lei Jun withdrew from frontline operations, and three out of the four new partners also left.

Just over a year after Shou Zi Chew's departure, Xiaomi's former president Wang Xiang left in 2022. Another year later, Zhang Feng, who had made significant contributions to reshaping Xiaomi's supply chain, also departed.

Among the old and new partners, only Lu Weibing remained, steadily rising through the ranks. After Shou Zi Chew's departure, Lu Weibing began overseeing the international division. Following Wang Xiang's resignation from the presidency, Lu Weibing was promoted to the new president of Xiaomi. After Lei Jun dedicated himself fully to the car manufacturing venture, Lu Weibing also took on the role of general manager of the Xiaomi brand.

However, regardless of Lu Weibing's promotions, he never ventured into the car manufacturing domain. Car manufacturing became Lei Jun's own critical project. On May 8, 2024, Lei Jun announced that Xu Fei was promoted to Group Vice President and Group CMO, while also serving as General Manager of the Group's Strategic Marketing Department and General Manager of China Region Marketing Department.

Simultaneously, Xiaomi announced that the General Manager of the Automobile Marketing Department, Li Xiaoshuang, would report to both the President of the Automobile Department, Lei Jun, and the Group CMO, Xu Fei.

It is evident that, unlike the early days of Xiaomi where the eight partners co-governed, Lei Jun's car manufacturing organizational structure is much more vertical: from bottom to top, it essentially forms a high-level management hierarchy of Li Xiaoshuang - Xu Fei - Lei Jun.

04

Fighting alone, Xiaomi no longer has partners.

In fact, Lei Jun rarely mentions partners in public, especially in his extremely sensitive annual speeches.

After all, early partners like Zhou Guangping left Xiaomi under less than favorable circumstances.

To this day, we can still see media reports mentioning "conflict between Zhou Guangping and Lei Jun," "Zhou Guangping openly embarrassing Lei Jun," and "Lei Jun forcing Zhou Guangping into seclusion." The most direct trigger for these reports was the incident where "the team led by Zhou Guangping offended Samsung, leading to a direct collapse of Xiaomi's supply chain."

The root cause of this major crisis for Xiaomi began with a small story. It is said that in February 2016, Guo Jun (a subordinate of Zhou Guangping) from Xiaomi's supply chain team had an unpleasant exchange with senior executives from Samsung Semiconductor China. During the meeting, a disagreement broke out between Xiaomi and Samsung employees, with someone even banging the table, causing the Samsung executive to leave in anger.

Soon after, Samsung Semiconductor unilaterally stopped supplying AMOLED screens to Xiaomi. This employee-level conflict ultimately escalated into a unilateral production capacity crisis for Xiaomi smartphones. As a result, partner Zhou Guangping was ousted.

On April 6, 2017, Xiaomi's 7th anniversary, Xiaomi co-founder Li Wanqiang posted a recent photo of the founding team on social media. In the photo, the founding team had shrunk from eight members to seven, with Zhou Guangping being the one missing.

If Zhou Guangping's departure signified the gradual loosening of Xiaomi's partner system, then Shou Zi Chew's departure accelerated its demise.

After Shou Zi Chew left, Xiaomi was left without a so-called successor, and there was no executive who could "compete in charisma" with Lei Jun.

Entering the car manufacturing phase, Xiaomi's partner system became entirely nominal.

From a personnel perspective, apart from Lei Jun, only Lu Weibing remained active on the frontline. From an organizational mechanism standpoint, in January 2023, Xiaomi established two key corporate governance committees—the Group Operational Management Committee and the Human Resources Committee. The former manages operations, while the latter manages personnel. In these two major committees, the only true partners are Lei Jun and Lu Weibing.

Xiaomi's car manufacturing does not require partners, but the Xiaomi automotive team still primarily employs personnel from within the Xiaomi system. This approach starkly contrasts with NIO's preference for hiring executives from General Motors and Chery, or XPeng's appointment of Wang Fengying from Great Wall Motors as president.

Many statements by entrepreneurs are often carefully thought out. Three years later, when Lei Jun mentioned Shou Zi Chew, it was not only out of appreciation for his talent but possibly for other reasons as well. After all, while Xiaomi's car manufacturing is currently thriving, TikTok is struggling.

The starkly different circumstances underscore a certain victory for Lei Jun. At a TikTok annual meeting, an American employee once asked Shou Zi Chew, "Why did you leave Xiaomi back then?"

Shou Zi Chew replied, "Because at Xiaomi, no one is allowed to be more charismatic than Lei Jun. If I didn't leave, he would always be second."

Similar to Lei Jun's appreciation for Shou Zi Chew's talent, Shou Zi Chew's answer also leaves much to the imagination.

Whether it was the original "Eight Great Kings" or the later "New Four," Lei Jun always seemed able to gather a group of partners with extraordinary resumes and outstanding personal capabilities. They willingly brought their personal resources and technologies to join Xiaomi, and many of them were capable of taking charge in their respective areas.

However, in the end, they all chose to leave one by one, leaving Lei Jun to fight alone...