Su Jun: How to innovate products using the "best-seller mentality"
At the Xiaomi & Shunwei Annual Investment Meeting 2019, Su Jun, the founder and CEO of Smartmi, shared his "best-seller mentality".
In particular, he discussed the importance of:
How to innovate products using the "best-seller mentality"
01
Growth comes out of opportunities
Opportunities come out of market gaps
I often locate opportunities by observing people, because the truth resides in our daily lives.
During my observations, I noticed something: Chinese families do not tend to live in a tidy household. This is the case even in many extravagant and very expensive houses that I have visited.
Chinese people have a habit of collecting numerous things but then being reluctant to throw anything away. That's why our houses gradually become the way they are. Nowadays, however, with consumption upgrades, everyone wants to have a house as clean and tidy as the ones they see in IKEA.
Every time I see such a contrast, I get excited. It means that, based on the standards of developed countries, all consumer goods in China should be redone.
There will be three massive opportunities in China's future development. They were mentioned in a lecture by Chen Dongsheng, a man with a grand vision. He said that these three future opportunities are massive consumption, intelligence, and health.
Why massive consumption? The reason is simple: When you have a powerful voice, your consumption will naturally have an influence upon the world. China is currently the second largest economy worldwide, and will soon become the largest. This is a sign.
Here is another interesting contradiction. When it comes to Japan, we think of Sony, Panasonic, Toyota, and Honda. With Germany, it's Mercedes and BMW. With the U.S., it's Apple, Disney, and Coca Cola. However, what products do you think of when it comes to China?
Consumer brands are synonymous with a country's image. They are not just a consumption demand, but a massive 'rigid' demand of an emerging country.
I am particularly fond of the Sony brand. I learned about its development history and read numerous books and writings on it. Ever since 1955, this brand has been enhancing its value by innovating on every single one of its production lines.
One day, I was looking at the electric appliances in my home. I discovered that I spent the most on Sony, far more than any other brand. I kept buying Sony products because I had been emotionally attached to it for nearly 30 years. Their transistor radio and digital CD player, for example, are the results of innovations they made on all of their other products.
Apple is another typical example.
From 1984 to 1988, when Steve Jobs left, Apple lost their way. They did not create any innovative products of note, and their brand value was affected as a result. However, because the company had a good foundation, it rose rapidly when it began innovating once again.
The core value chain of product innovation lies in its ability to shape a brand, produce feedback value, and promote business growth. More importantly, we must continue to innovate our products and lift our brand up into the stratosphere, thereby bolstering the anti-risk capability of our business.
It takes a lot for a plane to take off and land, but when it ascends to a certain altitude, very little force is needed to maintain its position in the stratosphere. Likewise, for a business, when brand beliefs are developed in consumers' minds, the business' anti-risk capabilities are strengthened.
02
Underlying logic of the "best-seller mentality"
From divergence and dissimilarity to convergence and focus
Modern product innovation has undergone enormous changes. Apple has had a significant influence on innovation methods. It did this by moving from divergence and dissimilarity to convergence and focus, thus immeasurably improving their product efficiency.
I used to be an industrial designer. While communicating with clients, I discovered a prevalent phenomenon: I once met with a client from a large manufacturer of traditional phone prototypes. Their boss was proud in telling me they had just gotten a large order to produce 150 prototypes, which amounted to 2 million yuan. However, I was taken aback when I saw various kinds of prototypes scattered across the table. They all looked different. For a designer, this is a very troubling state of affairs.
By contrast, Apple was a different thing altogether. It could secure 100, even 200 million in annual sales using only a few products. In the past, it was unimaginable that a single product could impact the market so profoundly. The thought had never crossed our minds, but we found out through this example that it was feasible. We realized that this convergent and focused way of thinking could significantly improve innovation efficiency.
Since 2004, Mac has been a desirable product for designers, from the perspective of traditional divergent thinking.
But why is it that we see these kinds of products being produced?
It is because Apple sticks to a product. As a desktop productivity tool, a Mac is best if it has a superior display and computing capabilities, with a display that floats above the desktop.
Based on this line of thinking, you will find that the product has a clear, rather than indecisive, sense of direction. It continues to make breakthroughs and advances in this direction in terms of materials, processes, computing power, and heat dissipation.
For another example, MacBooks are becoming thinner and lighter, and have fewer and fewer ports. What is the reasoning behind this? Why are there fewer and fewer port types?
The ports were made Type-C compatible, to the point where modern MacBooks only have a Type-C port. From the very beginning, computers were considered a tool to further human capabilities using computing power. With this being the case, what should that tool do? The tool should not be entangled by numerous cables. Instead, it should be "completely wireless" and "completely digital".
Even now, Apple products are evolving toward the ultimate goal of being "portless", by providing features such as all-weather prolonged battery life and minimal ports. If entangled by cables, the tool will be restrained. That's why Apple sticks to a product and views problems from the "essence" of the product. That is why designers do not have to struggle, and instead keep reinventing the product.
Let's take the Mi Air Purifier, a best seller, for example.
This product has done well. After 5 million units were sold, we chose to reinvent it.
First, the craftsmanship behind the internal parts of the product are superlative in that it conveys the intrinsic value of the product. Our laser particle sensor represents a huge step forward, providing users with highly accurate PM 2.5 readings that are comparable to those from professional instruments.
Although you may not notice any external changes, we are actually reinventing this product every year. Every small detail has been optimized as we introduce the latest generation. We are optimizing underlying technologies to make the Purifier more compact and quieter. We also want to strengthen the purification functions and enhance overall performance.
When it comes down to the small details, this product shines. For example, its air duct is built using the finest polishing processes in order to reduce noise produced by air friction on the interior wall.
When you upgrade a product based on the concepts of conciseness, precision, power and user-friendliness, once a best-selling product appears, you won't struggle with your but instead will remain focused on a fixed evolutionary path.
A focused product innovation approach results in more than just best sellers. It also optimizes the capabilities of your workforce and is well-suited to helping further develop talented employees.
If we have a clear vision from the very beginning, and develop products in a converged way with laser-like focus on specific areas, we are very likely to receive positive dividends such as: impressive product sales, large-scale production, smooth operations across the entire system, and a greater sense of achievement amongst employees. This will subsequently cause us to become even more focused and produce even better products.
In the past, we developed products in a divergent way. We would, for example, propose that 10 design solutions be verified through trial and error. This would inevitably result in negative feedback. Under this system, you can't expect to develop a best seller, receive positive market feedback, or evoke a sense of achievement amongst employees.
Furthermore, undesirable market feedback may cause you to take greater risks. For example if the initial proposed solutions are unsatisfactory, why not just propose 20 or 30 additional ones? This will cause your employees to work with a negative state-of-mind and be unable to focus, resulting in a drastic drop in labor efficiency.
Imagine a focused team and a non-focused team. After five years, employees from these two teams would be astonishingly different.
One key piece of information is while Apple's industrial design team only consists of 21 employees, they are all the best engineers in the world. By focusing on positive feedback, they have honed their team into a well-oiled machine.
Looking closer, we can discuss this issue from the perspective of biological positive feedback. An essential rule of biology is the positive rule. If you satisfy simple demands through supply, and keep doing so only when new demands appear, what we will eventually see is a "survival" scenario.
But as you all know, in the long process of biological evolution, creatures did not stop where they had started. Instead, they evolved from monads to multi-cellular organisms, mammals, and amphibians. This is driven by a certain type of motivation or mutation. These factors for success provide a positive impetus for the entire system, from which we can then move ahead toward greater success. This illustrates a cycle of "success" and "motivation", i.e. the so-called biological positive feedback which ultimately makes "evolution" possible.
From the perspective of biological positive feedback, the focus-oriented approach of product innovation provides businesses with positive feedback, which is a top priority.
In terms of the essence of product innovation, a typical example of failure is the Apple III, a most interesting product for Apple. Steve Jobs initially suggested that this product should not be equipped with a fan, but instead should dissipate heat naturally. Since the fan was noisy and consumed a significant amount of energy, he felt they should remove it to make the product as streamlined, elegant, and compact as possible; a work of art in everyday life.
First, the product ended up with a prohibitively expensive price tag of USD 3,500. Second, disks had melted by the time they were taken out. This was due to poor heat dissipation, and the inability of technology at the time to support natural heat dissipation. The product was, without a doubt, a resounding failure.
Now let's look at the 12-inch MacBook. It used a chip-scale package for the motherboard and its capacity was maximized by multilayered and irregularly shaped batteries, thus permitting an entire day's worth of power consumption. This MacBook was expected to have no additional parts. For example, it was expected to be capable of dissipating heat on its own without any fan. As with the Apple III, it was to be an elegant, compact, and silent tool that furthered human intelligence.
However, this product was very controversial. The MacBook 12 is also considered a failure, as it has already been discontinued. However, the innovative thinking embedded in the MacBook 12 has been a large influence and inspiration for the modern MacBook Air and MacBook Pro.
But why are they so obsessed with this product, despite all these repeated failures? It's because they know the correct direction for this product. That's why they stick to it and continue to make new discoveries. I believe the real core of innovation is grasping the essence of a product and remaining firm in asking the question: What exactly do we want? What is the ultimate result that we want?
In conclusion, a best seller can be developed if we seek out the essence of a product by sticking to a simple, clear, and focused mentality.
