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BW Businessworld

‘I Will Create A Tech Team In India’

Oneplus, the Shenzhen-based consumer electronics company, has drawn rave reviews for its first product, OnePlus One. Founders Pete Lau and Carl Pei remain in the background while their smartphone is gaining popularity globally. Lau, the CEO, was in India recently to ink an agreement with the Andhra Pradesh government to manufacture OnePlus devices locally.

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Oneplus, the Shenzhen-based consumer electronics company, has drawn rave reviews for its first product, OnePlus One. Founders Pete Lau and Carl Pei remain in the background while their smartphone is gaining popularity globally. Lau, the CEO, was in India recently to ink an agreement with the Andhra Pradesh government to manufacture OnePlus devices locally. The company sold one million devices last year and is set to end 2015 with double the number. Like many Chinese businessmen who have set up an office in the Indian market, Lau is keen to tap into the software talent of this country. His philosophy is simple; no matter what the background of a person, she should go after what she believes in to do something significant. Edited excerpts:

You are considered a technologist and have created a very popular device. What’s the secret to your success?
The difference is the hardware and the time I spent in making the device with my team. During my stint with Oppo, I realised that a great product needs to have a global appeal, and not just be popular in one or two countries. One can always aspire for differentiation, which is possible through great design and technology — these things are respected in the global market. This is not always easy though. But the belief and the premise was on using the best hardware, software, and technology at a competitive price. Remember, in the Internet age you are not limited by nationalities. I started my career in 1998 in the DVD section of Oppo, and there I realised that to build great products you need to be focused on building technology. What I am saying is that the founder has to put his heart and soul into the product that he creates. Learning came naturally to me. Science was very important and I was not tied down by any superstition or beliefs. My only concern when I was younger was to keep learning. I believed in the power of ideas and that they could be realised through technology. I have learnt to listen to learn to people who know more than me, and I have also learned the art of implementing my ideas.

How has the world changed because of smartphones? What impact has it had on China?
Over the past three years, there has been a rapid change in how society consumes from smartphones. For everything, from hailing taxis to buying vegetables to cleaning houses, the Chinese people have become dependent on mobile consumption. Apps have become the source of everything. The same is going to happen in India. The Chinese market, like India, will grow faster than many other countries. To all those people who keep saying that the founders are more important than the product, after the company becomes popular I must tell them that without a product there is no company. It is like an old Chinese proverb — If you like the egg that you eat, you cannot go searching for the hen. All businesses have to focus on what they are good at and that is what I learned while working at Oppo.

What are your thoughts on the insane valuations that startups like yours have been offered by funds?
The device is at the centre of our lives; businesses will evolve around it. This will continue for the next 30 years. This is why everyone is coming up with such high valuations. Businesses will use apps to deliver services and customers will benefit in the long run. My philosophy is that if you offer great product and services, money and customers will follow in this disruptive world of devices. I have a long-term view and am not worried about valuations. Over the past two years, we have used our own money to expand operations. Yes, we need money for growth and we will have investors, but that will not change my philosophy. I am a firm believer that we need to hone our craft and skills before we start asking people to invest with us. OnePlus is all about the product. Carl Pei, the co-founder, and I keep a low profile. If today, the technical world gives us a thumbs up for a great product, then it is because our team believes in good engineering and design. You cannot throw money to find a solution. Also, when you work with investors, you need to work with those that you are comfortable with.

When Carl and you started, how difficult it was to create a business plan without marketing spends?
When I met Carl, through an Internet forum, I liked his ideas about the Internet generation. We met and took six months to build the product. We had a difficult time setting up the company, initially, purely from the high standards that we set ourselves. For us the product had to be different from whatever that was out there. We delayed the product launch by three months because we wanted to get the right specifications and design of the rear camera into the hardware. We were a six-member team at the time, and there was also difficulty in finding talent. The young team did not think about money. The first product became popular through invites. It was done so because we did not have the production capacity at the time. However, we borrowed from Google’s strategy of giving out invites for Gmail before the website became popular, which worked for us in the US. This was how we kept the marketing costs low. The phone obviously was showcased in forums and it was the engineering community that spread the good word about it. We also organised a contest where we gave away phones for $1 to 100 participants. The primary aim of our business is to bring costs down. We cut the 25 per cent that is taken by retailers, distributors and agents. This directly benefits the consumer who gets the best out of the phone’s technology.

How do you feel now that the product is widely accepted in India?
After tying up with Amazon the company has been getting good traction. Also, Indians are the first to pick up global trends. The sales are growing steadily. So we are focused on service and using forums to market our product. The tie up with the Andhra Pradesh government to manufacture the phone locally will further bring down the prices. I will eventually create an engineering team here. But that is sometime away, because, the product needs to pick up scale. The other reason why I like India is the growth of startups. This is a positive development and the people are dynamic here. India is truly a global country because of its English speaking skills. In fact, Indians had a lot to do with the popularity of our phones. There were Indians asking their friends in the US to buy the phone and ship it to India.

When will OnePlus start making profits? And what advice do you give to young entrepreneurs?
The company has a clear strategy towards turning profitable. At the moment we are not making profits. We are focused on building the product. Entrepreneurship is a journey of learning. You have to learn the craft of your business and also continue to learn more about the things that you are passionate about. I am interested in industrial design and I keep learning that everyday. Making mistakes are a part of life. But you cannot stutter regularly. Life is certainly not easy. But you can be passionate about it. I survived many months only on one bowl of rice and salt per day. My parents were farmers and they spent their lives working hard for me. I succeed because I want to. While I respect the changing times, investors’ pressure and family life, I am clear about what I want to achieve. That is the only way one can do something significant in a lifetime.

[email protected];
@vishalskrishna

(This story was published in BW | Businessworld Issue Dated 30-11-2015)