How Xiaomi redefined what it means to be a platform
Traditional platform businesses generally fall into one of two categories: Ecosystems, such as Apple’s App Store, which offer limited resources to a wide array of independently-run firms; and Corporate Venture Capital (CVC) companies, such as Intel Capital, which invest heavily into a small number o...
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| Main Authors: | , , |
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2021
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| Subjects: | |
| Online Access: | https://ink.library.smu.edu.sg/lkcsb_research/7299 https://ink.library.smu.edu.sg/context/lkcsb_research/article/8298/viewcontent/Xiaomi_HBR_2021_av.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | Traditional platform businesses generally fall into one of two categories: Ecosystems, such as Apple’s App Store, which offer limited resources to a wide array of independently-run firms; and Corporate Venture Capital (CVC) companies, such as Intel Capital, which invest heavily into a small number of ventures that promise either financial or strategic returns. However, new research into Xiaomi’s growth strategy suggests that the Beijing-based electronics giant has developed a blended approach, borrowing elements of both traditional ecosystem and CVC firms to create a broad ecosystem of strongly-supported partner ventures. Based on a series of in-depth interviews with executives from both Xiaomi and its partner companies, the authors identify three factors that have enabled this novel business model: Xiaomi structures its investments to incentivize innovation and build trust while still ensuring alignment, proactively fosters an ecosystem mindset throughout its organization, and takes a deliberate, measured approach to expanding the scope of its ecosystem over time. |
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