Xiaomi, Fraud and Ancient Chinese Sayings

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May 18, 2015 by ...

There is an ancient Chinese saying which is translated as ‘No businessman trades without fraud’.

The point is that the goal of business is to make profit; by any means possible. 

This ideal runs contrary to many western notions of ‘winning a fair fight’. The Chinese do not see the nobility in such a thing. 

Chairman Mao echoed the words of Sun Tzu by declaring that the winner of a battle need not actually fight it. Mao should know, after all, the communist party hid while the KMT did all of the heavy lifting in fighting off the Japanese. Rather than fight, Mao and his henchmen busied themselves in sit-ins and reciting thoughts soon to be scribbled in the Little Red Book as they hid in the wilds of the west.

To them it would have been foolish to take on the powerful Nipponese. The few times that they actually duked it out with the KMT reinforced the idea that running is not synonymous with cowardice; a thing codified in the ‘Long March’. For those who do not know, what Beijing hails as the party’s most incredible feat- the Ling March, was nothing more than a Mao’ist sprint from conflict in most shapes and sizes.

The strategy worked, as in the end he marched into Beijing uncontested. The KMT had suffered from years of battle and then rejection by the USA and the communists’ claim of governance went uncontested. Mao and the communist party of today, exemplify that letting others do the heavy lifting is not a bad strategy after all.

What’s this have to do with Xiaomi?

Now consider Xiaomi, or most Chinese firms for that matter. They have masters the art of ‘cut, copy and paste’. This business model has proven extremely successful, just as Lei Jun.

By borrowing designs from most everyone, Lei has turned Xiaomi into the world’s most valuable private tech firm. All if that success with little-to-no elbow grease not originality. Xiaomi proves the adage that they ‘do not trade without fraud‘. 

The key to their success lies in lies, which the markets seem to accept. The impunity splashed on the spirit of Xiaomi’s faux-tech a testament to this fact. 

How glorious it must be to be able to claim that fraud is an integral part of one’s business model.


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