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October 15, 2015

Jack Covert Selects: Little Rice: Smartphones, Xiaomi, and the Chinese Dream

By: Dylan Schleicher @ 12:45 PM – Filed under: Biography & Narrative, Current Events & Public Affairs, Innovation & Creativity, Management & Workplace Culture, Marketing & Sales

Littlerice

Little Rice: Smartphones, Xiaomi, and the Chinese Dream by Clay Shirky, Columbia Global Reports, 128 pages, $12.99, October 2015, ISBN 9780990976325

Mobile phones have become nearly ubiquitous, and not just in America and other developed countries, but across the world. Phone networks in sub-Saharan Africa are more widespread and accessible than the electrical grid, “leaving it,” as Clay Shirky, author of Little Rice: Smartphones, Xiaomi, and the Chinese Dream, tells us, “to small-business people to sell phone-charging services using car batteries.” Even in the poorest regions of the world, mobile phone penetration is at 58 percent.

And phones are extremely personal items in ways most products are not.

 

Jan Chipcase, an ethnographer who has studied the use of mobile phones worldwide, points out there are only three universally personal items that someone will carry with them no matter where they live. The first two are money and keys; the third is the mobile phone, making it the first new invention added to that short list in three thousand years.

In fact, mobile phones are beginning to replace even our keys and money. In the developing world, they are connecting people to one another and new markets, and to information that was previously inaccessible to them in a way that is literally life-altering. As Shirky puts it:

 

American teenagers have long insisted they couldn’t live without their phones, but this phrase has real meaning in the developing world, where the kind of information you get from a phone can have a profound effect on the quality of life.

And, of course, this story of commerce, connection, and globalization has to start its life somewhere. Or, in other words:

 

All these phones have to be made someplace, and that place is China.

Up until now, China has been seen as the manufacturer for the world, developing parts and putting together an increasing share of the products we all use everyday, but not very good at designing them. Mobile phones have mostly followed that formula:

 

Mobile phones … have mostly been just another Chinese export—the cheap products for poorer markets are thrown together at minimal cost, while expensive products for the increasingly global group of well-heeled customers are designed elsewhere, whether in Seoul or San Jose, the pattern that led Apple to add the phrase “Designed in California” to its packaging in the first place.

A company called Xiaomi (“little rice” in mandarin) is beginning to change all that, and Clay Shirky documents their rise and its effect (past, present, and potential) in Little Rice. Founded as a software company in 2010 that built a modified version of Android for phones (the only thing they worked on for their first year) they continually improved their offering by partnering closely with their users:

 

For the first year of the company’s life, their only users were people interested enough to download a copy of MIUI and install it on their existing phones, replacing whatever flavor of Android had come with the phone. These users were pioneering (and geeky), and Xiaomi paid close attention to what they wanted and how they used their phones.

Just four years later, Xiaomi is a full-blown manufacturer, and was the “the number one phone vendor in the largest market in the world in 2014.” As they have grown, they have stayed close to their customers in very smart, and varying, ways:

 

As the user base has grown from the initial hundred recruits to over a hundred million today, Xiaomi began separating its users into two categories—“fever” fans who are the most eager for new features and the most technically savvy, and “flood” fans, ordinary users who like Xiaomi’s products but can’t provide detailed feedback. Fever fans are consulted early, given access to products and services while they are still in the initial testing stages. (Some fever fans have proven so valuable that they have been brought on as consultants.) Flood fans are the ones who get the ordinary Friday updates, and post their comments in the Mi forums. Their opinions are generally less technical, but with hundreds of thousands of them active on the forums and discussing the company on social media, their aggregate opinions are useful to Xiami, both as research and marketing.

The thing that struck me is what the company and its astronomical growth can teach the rest of us about business. They spend next to nothing on traditional advertising, instead putting their efforts into events they know the press will cover and giving users the tools to spread the word on social media. When Shirky took a tour of the company, he noted that the people he was told were working on advertising “weren’t graphic designers or photographers, they were programmers.” They were building platforms for user outreach and communication, and tools that let users advertise for them in the form of social media notifications—such as a confirmation screen that allowed them to notify their friends on social media they had just upgraded their software.

But as Shirky points out, Xiaomi wouldn’t be where they are today, making the leap from software startup to manufacturing powerhouse, “without having direct access to the greatest manufacturing base in the world.”

And this all ties back into globalization, planning, and politics. And that brings us to back to the nature of mobile phones, because phones are no longer just phones, they are networked computers, and “China is now both the largest producer and consumer of these networked computers we still call phones.” And therein lies the rub in China. Smartphones aren’t just economic tools, they’re potentially political ones, too, as clearly demonstrated in the Arab Spring—a movement that Shirky tells us scared the Chinese government all the more because it eventually coalesced around public squares, much like Tiananmen. Shirky smartly notes that “Public communications is—always—political.” Explaining why this is "a special class of problem for the Chinese government," he writes:

 

The government simultaneously recognizes that you can’t be a modern economy if your citizens don’t have a networked computer in their pocket and that you can’t keep political coordination amongst your people at bay unless you can keep coordination at bay, full stop.

The Cyberspace Agency of China takes this problem so seriously that they operate under a guiding principle of “‘cybersovereignty,’ the idea that the internet should have borders and controls for information just as it has customs and passports for people." Shirky notes that commerce and money have always moved more freely and easily than people, but assumed that information would behave/move more like money. China is attempting to build a system in which it moves more like people. And yet, in spite of these limitations, The Chinese Dream looks very much like the American one. It is:

 

A faith on the part of middle-class citizens that their efforts will be rewarded, and faith that they will be able to keep most of those rewards for themselves. … The second part of that dream, the part that is in the background of the American dream but the foreground of many places here, is the link between personal success and national greatness.

With that link of the personal to the public, and a high degree of economic and personal freedom paired with almost no political freedom, developments are extremely uncertain and predictions futile, but what Shirky can tell you with no uncertainty about the rise of Xiaomi and the nature of smartphones in general is:

 

If you want to understand hardware in China, you have to understand how intimate that country’s relationship is with the machines that run our lives.

Shirky accomplishes more in 128 pages than most books would in 1000. Little Rice is a company profile, industry narrative, country history lesson, political dissection (sometimes bordering on polemic), a review of the current state of globalization, and discussion of its future.

 


About Dylan Schleicher


Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.