To the layperson, Huawei is best known as one of the world’s top three smartphone makers. But Huawei is firstly a world leader in telecommunications - its industry-leading equipment, connecting developed and developing countries, is present in 170 countries.
The company’s origins, however, are far humbler.
The story of Huawei and its founding father, Ren Zhengfei, is one born out of need and circumstance. It’s a 30-year journey, marked with many setbacks and culminating in the company’s transformation into the behemoth it is today.
Ren Zhengfei himself embodies that journey to success, born into a time where Chinese people were enduring mass hardships, including famine and the fallout from the Cultural Revolution. Hard work and suffering were commonplace, and basic items such as cooking oil and salt were considered a luxury.
“We survived on cheap cereal crops throughout the year. We were slightly better off than our neighbours, because my parents were teachers. By better off, I mean we could add salt when we cooked,” remarks Ren.
He was the only member of his family lucky enough to receive higher education,
for which he attended Chongqing Institute of Civil Engineering and Architecture. This distinction led him to a position in the army as a lab technician in 1974, under harsh conditions in a factory in rural Liaoyang.
“Our unit was part of the tens of thousands of troops that took up a construction task in the northern wilderness. We built our simple houses on our own. They were built during the winter, and the walls sank and cracked, so cold winds would blow through,” remembers Ren.
While the conditions were harsh, it gave him the opportunity to develop his fascination with mechanical innovation at a time when China was not highly focused on education, earning him the nickname ‘Ren–Tech’.
“Despite these difficult living conditions, our engineering work was actually pretty advanced and highly automated, and we had a rare opportunity to learn. So despite the difficult living conditions, we were very happy. The factory was like an oasis in the desert,” recalls Ren.
The time in the factory saw Ren constantly experimenting with available machinery.
He used his knowledge of mathematics to develop schematics for equipment that made headlines in the Chinese press. It was the beginning of a lifetime of innovation.
In the 1980s, China downsized its army. As with many ex-army personnel, Ren found it hard to integrate into normal working life after his dismissal from the army, and did not do well – he was soon fired. This struggle to survive in a new, commercial world gave him the motivation he needed to start Huawei at the age of 44. He had no real experience working in a company, let alone running one.
In its first iteration, Huawei wasn’t the global innovator we know today. It was a simple reseller of the technology created by a company in Hong Kong, and it was operated out of a small apartment in Shenzhen. They resold affordable telecoms switches to small city hotels.
Founding a startup at that time was no easy feat, even without the complications of product development and innovation. People at that time in China trusted only state-run organisations, so trying to break through customer mistrust of new and unknown companies was an uphill battle. Huawei tackled this through a radically customer-centric approach, putting in extra effort, time and dedication to their client servicing.
“History has determined the existence of Huawei. If China didn’t open up, Huawei would not exist; if private companies would not be allowed, Huawei would not exist. It fit perfectly the bill what was needed at that time for China’s entrepreneur to give the push towards what would become one of the biggest telecom companies in the world,” remarks Professor De Cremer from National University of Singapore Business School.
Just as Huawei started to break through to achieve small success in this niche in China, the company for which they were a reseller revoked their license, leaving Huawei in a precarious position. They had no choice but to innovate or close their doors.
“At that time, we had no other options. We didn't think about what would happen if we failed; we were quite confident that we could succeed,” Ren says.
And succeed they did, by careful iteration and experimentation, and a lot of hard work. They also prioritised innovation, pouring all of their earnings back into product development. It was an ethos that became foundational to Huawei’s operations and later success.
“We started out by making small analogue switches for small hotels, gradually working to make larger analogue switches. We didn't begin to make digital switches until we already had many years of experience,” comments Ren. “We didn't spend the money ourselves; we invested it in our services and systems to create even more value for our customers,” he adds.
In addition to Huawei’s early business strategy, there was an element of being in the right place at the right time that helped Huawei survive the many complications of its infancy, and set the scene for it to blossom into the global company we know today.
