Chapter 6 Founded Huawei at the age of 40

In 1982, China carried out a large-scale disarmament, and the entire engineering army was laid off. Ren Zhengfei transferred from the army to the local area, and came to Shenzhen, the forefront of China's reform and opening up, and was introduced to a company under the Nanyou Group as a manager.He recalled: "I stayed in the military camp for 14 years, and suddenly I felt very uncomfortable in running a business. I was not used to the commodity economy, and I didn't have the ability to control it. At the beginning, I stumbled in the electronics company and was deceived. But then I left the electronics company and became unemployed.”

Ren Zhengfei failed repeatedly in his career, but he was a dutiful son, and he wanted to bring his parents, younger siblings to Shenzhen to live together, and his small family eventually disintegrated.Ren Zhengfei once lamented that life is impermanent and love is unpredictable. When he was young, he was full of enthusiasm but frustrated in love. After he became successful and famous, his lover had left him. After losing his job, Ren Zhengfei lost his source of income and his life was in a predicament. The raising of children, mother's care, and daily expenses all made this middle-aged man feel the pressure and helplessness of life.

Maybe people are forced out. In order to survive, in 1988, 43-year-old Ren Zhengfei and a few like-minded middle-aged friends pooled 21,000 yuan to establish Huawei.For most Chinese, 43 years old can already start to think about how to arrange retirement. Ren Zhengfei named the company "Huawei", which means "China is promising".At that time, except for Ren Zhengfei, no one may have thought that this "leather bag" company born in a dilapidated factory building was about to rewrite the competitive landscape of China's and even the world's communication equipment manufacturing industry.

At the beginning of Huawei's establishment, it mainly sold HAX analog program-controlled switches imported from Hong Kong as a consignment, profiting from the price difference.At that time, consignment sales were a risk-free and profitable method. After two years of hard work, Ren Zhengfei obtained the first pot of gold in his life. But unlike others, Ren Zhengfei showed extraordinary foresight in the early days of his business. He found that the technology of program-controlled switches in China was basically blank, and he was keenly aware of China's huge demand for program-controlled switches. Therefore, he Decisively decided to switch from consignment sales to self-developed program-controlled switches, and invested all Huawei's funds in product development.

This desperate "adventure" did not disappoint Ren Zhengfei. In just half a year, Huawei developed the C&C08 switch and filled the gap in the domestic market.Because the price is 2/3 lower than similar foreign products, and the function is similar to it, it is very popular after being introduced to the market.The independent research and development strategy established by Ren Zhengfei has laid the foundation for Huawei's development, and independent research and development has also become a major capital for Huawei to stand out from its peers in the future. In December 1991, Huawei shipped the first batch of three BH-03 switches.By 1992, Huawei's program-controlled switches entered the market in batches, with an output value of 120 million yuan and a profit of over 10 million yuan that year.Since then, Ren Zhengfei has invested huge sums of money in research and development every year, and invests at least 10% of his income in technology research and development every year. This will become the key for Huawei to create its own competitive advantages and achieve an international Huawei brand.

Ren Zhengfei later explained his early transformation by saying: "Foreigners came to China to make money. They will not teach the Chinese the core technology, but expect us to introduce, introduce, and then introduce. In this way, enterprises will never be able to be independent. The market is exchanged for technology, the market is lost, but no technology has been truly mastered. The core competitiveness of enterprises is actually technology.” Ren Zhengfei, who was born in the military, seems to have stronger patriotism and determination to defend the country than ordinary people. At that time, he was able to realize that "technology is the foundation of an enterprise", so he bid farewell to the identity of "agent" and embarked on the road of relying on technology research and development to conquer the world.

However, in the case of insufficient funds, Ren Zhengfei insisted on the policy of tilting investment towards scientific research, investing more than 80 million or even hundreds of millions of research funds in technology development every year, and did not hesitate to take the risk of "putting all eggs in one basket". All human, financial and material resources are invested in the technology-intensive and capital-intensive industry of communication. By 2002, Huawei's operating income reached 22 billion yuan. Among the top 100 Chinese electronic information companies selected by the Ministry of Information Industry, Huawei's sales and profits and taxes have topped the list for many years.

Ren Zhengfei devoted all his money to the research and development of digital switches, using all the company's assets as capital.Facts have proved that this is a milestone in Huawei's development and a correct choice. In August 2003, Huawei India Research Institute officially passed the CMM Level 5 international certification, becoming one of the very few companies that have obtained the CMM Level 5 certification.Huawei has quietly reached the highest level in China in terms of software development process management and quality control.This year, Huawei's sales in the global market exceeded 30 billion yuan, of which overseas sales reached 1 billion US dollars, an increase of about 80%. Such achievements are enough to make Huawei the pride of the national communication industry.

Now looking back at those years, Ren Zhengfei is deeply moved: "Huawei was very naive at the beginning of its establishment and chose communication products. Unexpectedly, it encountered international competition at its doorstep. The competitor is a world-renowned company with tens of billions of dollars in assets. If there is no national policy support, Huawei will be easily destroyed." But with strong national beliefs, Ren Zhengfei embarked on this difficult road without hesitation. Martin Cole said in the book "The Greatest Power": "Everyone has a great and amazing power. It's just that some people are good at digging and exerting this power, and some people dig it all their lives. Not out.” Ren Zhengfei is an entrepreneur who is good at discovering his own power and using it well in his work.Therefore, he pushed Huawei to a height that domestic high-tech companies could not reach.The rise of Huawei has also demonstrated Ren Zhengfei's ability and courage.