Just a few minutes ago I was standing in the middle of a sea of cardboard boxes. They include power supplies for your XXXXXXX. Or new laptops made by XXXXXXXX. Or other consumer electronics goodies from brands you know and love. Sorry, the owner of the supply chain (Liam Casey founder of PCH) forced me to never tell what brands I saw being shipped from his warehouse in Shenzhen, China because he’d lose tons of business if he pissed off the companies who were paying him to build stuff for you.
The brands don’t matter, though, they would distract you from the real disruption that’s happening here.
In just the last year or so there is a total revolution in manufacturing here and it’s so significant that I spent three days getting a detailed look at PCH (Liam was named Ernst and Young’s Entrepreneur of the Year back in 2007 and the Atlantic Monthly wrote a great article about Liam a few years ago). I have never spent three days studying a single company since leaving Microsoft. Thanks to Phil Baker, who was a product manager at Polaroid and also on Apple’s Newton and just wrote an excellent book on how to get products built introduced us (my friend Buzz Bruggeman introduced me to Phil). Later Tim O’Reilly himself Twittered that I had to meet Liam when I went to China. His reputation is so large that people call him “Mr. China.” That’s funny because he was born in Cork, Ireland, but you can read about his background in the Atlantic article so I won’t waste time about that here. Thanks to everyone who got me to meet Liam, it was an incredible trip.
Here’s a photo of Liam and Phil hanging out in Shenzhen yesterday:
This is Liam, on the phone making yet another deal:
The changes that are happening here have deep impacts on all the computer companies you know and love, but also what we are seeing is the obliteration of the middle-man and distributor. Let’s go back to when I used to sell consumer electronics in the mid-1980s. A product back then would be made in a Chinese factory (or, more likely, a Japanese one). Get shipped over in a pallet to a distributor, who would have to keep huge inventories. Then they would ship out to retail stores using their own shipping companies. Very slow, expensive, and as a retailer I had no visibility into where my order was, or how long it would take to get there.
Go foward to two years ago. You’d buy something from a retailer and they would order it from a supply chain manager and it would be shipped to the retailer, like Amazon, and shipped out to you. You had some visibility into how long that would take, but often not much.
Today? A product goes from factory directly to your front door via FedEx through Liam’s supply chain. How long does that take? Four to five days. All trackable via FedEx and other methods.
What’s different today? The Chinese are now cutting out Amazon and are building Websites that you can buy products from directly and they’ll ship right to your door.
Next? We used Twitter to discuss a new product with people around the world, get feedback on what they want, and the designers, who no longer will be in Europe or America, can work with the customers to build something highly customized and that serves their needs exactly. Then a factory gets fired up and the product gets shipped out — all within days of the Twitter storm.
What?
Yes, you heard me right. You can now Twitter with Liam Casey. He doesn’t quite understand yet how to build a new brand with Twitter, but he’s a quick study and he saw how I was able to talk with people around the world within minutes to come up with a new idea.
Yesterday he showed me a new gadget that will get on blogs like Engadget, Gizmodo, Obsessable, GearLive, Gdgt, CrunchGear. It is mind blowing. The engineering is done all in China. The factories are all in China. The website will be hosted in China, or maybe over on one of the new clouds that Amazon, Microsoft, Google, and Rackspace are now opening up. The brand name will be done in China, via Twitter and FriendFeed. The PR is done in China via Twitter and FriendFeed, or maybe via a blogger tour in San Francisco and New York because that’s where most of the gadget bloggers live (last night CNN’s Rick Sanchez Twittered me, which demonstrates that Twitter has a powerful reach now into mainstream media).
This is total ownership of everything. Total disruption of everyone who used to make money along the supply chain. Retailers? Disrupted. Traders and middlemen and distributors? Disrupted. Web designers and developers? Disrupted.
Are you scared yet?
You should be if you are being disrupted.
Now, get over your fears, because there are tons of new jobs in this new world, too, you just need to see how this changes everything and then take advantage of the new opportunities. Where are the high value bits in this whole process?
Not the manufacturing.
The real value and profit is in two places: R&D and coming up with new businesses and new ideas. Take, for instance, the Chumby which was designed at a Tim O’Reilly Foocamp and who’s company still has less than a handful of people. Chumby is the new post disruptive business model. Want a job? This is how to do it. Hang out at Foocamp. Come up with an interesting business. Get funding. Go see PCH. Profit! Well, yes, there are a few details involved there.
Other jobs that’ll open up? Anything involved in building brands. Marketing, PR, blogging/Twittering/FriendFeeding, building web experiences, videos, going to conferences to show off new products to audiences, etc.
That’s it. That’s where our new economy is going to be. And this process will happen to EVERYTHING. The American car industry? Well, they figured out how to sell Buick’s and Chevy’s to the Chinese, so if I were working at GM right now I’d be trying to figure out how to take advantage of this new manufacturing capability and ability to ship custom cars right to your house.
So, to wrap it up, what did I learn?
1. The Chinese no longer are just manufacturers.
2. Those who can build new products and market them will do just fine, but they will face new competition from the Chinese who are doing a ton of R&D now, so are going to come up with their own products and they will figure out how to talk to world-wide markets and will figure out how to build brands (Twitter, blogs, FriendFeed, etc will play into that in a huge way).
3. The days of when Chinese were seen as only copiers/cloners are OVER. I’ve seen some mind blowing stuff developed by the Chinese and we’re just seeing their economic engine sputter to life in the past couple of years.
4. Americans are being fed only the negative stories about China and that is lulling them into complacency. The largest book store in the world is in Shenzhen. The largest city hall I’ve ever seen is here. The largest library I’ve ever been in is here. This is an increasingly educated workforce that’s just starting to get going. Americans need to come to China and see what’s going on because it is absolutely stunning in its scale.
5. The Chinese, over the next 10 years, will turn from the worst polluters (there was a show on 60 Minutes just on Sunday about the ewaste and horrific environmental problems here) to being the leading producer of environmentally-friendly factories, infrastructure, and products. Already Liam’s database of 800 factories includes tons of environmental data and products built by his supply chain will be tracked for amount of energy and carbon dioxide that they used in the manufacture of them.
6. The speed at which things get built here is stunning. 12 years ago I was in the TV tower in Shanghai. It was the only building on that side of the river. Now there’s an entire set of skyscrapers that put New York to shame.
We’re working on a video of Liam’s company that should be up in about two weeks on FastCompany.tv where we’ll go much more in depth about some of the changes. More to come as we move tomorrow to Guangzhou to meet with Chinese bloggers from around the country (China now has the most Internet users of any country and is growing so fast that the stats are difficult to understand).
I’ve been putting photos up on Flickr. We’ve had several videos up on Kyte.tv. And everything we’re doing is getting wrapped up on my FriendFeed account where I’ve been interacting a lot with tons of people. Hope you’re enjoying what we’re seeing.
Also in China right now are a group of bloggers who are on a separate tour than the one we’ve been on. You can follow them on Twitter at China 2.0. It’s interesting how they are discovering the same things about China while being thousands of miles away in the north. This weekend I’ll join the China 2.0 bloggers and hopefully we’ll be able to do some live video where we share what we learned with you.
Scobleizer 
Wow, that’s really eye opening. The interesting thing about that is I’ve worked for several distribution clients (mail order catalogs turned online distributors) who sell primarily China made goods. And they are millionaires. Hopefully they have a contingency plan.
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Wow, that’s really eye opening. The interesting thing about that is I’ve worked for several distribution clients (mail order catalogs turned online distributors) who sell primarily China made goods. And they are millionaires. Hopefully they have a contingency plan.
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I just listened to a US union worker at GM bitch about all of us not buying US goods so that he could maintain his job. The host aptly stated that those days are over. The Unions have abused the system for too long and this is the collapse that is caused by that excess. Someone always has to pay!
The word on the talk show was how China will be impacting the Japanese now in the car industry. The Chinese are the new Japanese and will put us out of business and land the Japanese where we were for the past few decades.
Markets change and opportunities abound in those changes. It is people like Liam that come out on top and produce jobs and opportunities for the rest of the scared dooms day minded people. Kudos to Liam and China…now I need to figure out where my opportunity is!
GREAT post Scoble. This is on my all-time top 5 lists of blog posts I have read. Substantive, relevant and mind blowing. Thanks.
Troy Malone
Pelotonics
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I just listened to a US union worker at GM bitch about all of us not buying US goods so that he could maintain his job. The host aptly stated that those days are over. The Unions have abused the system for too long and this is the collapse that is caused by that excess. Someone always has to pay!
The word on the talk show was how China will be impacting the Japanese now in the car industry. The Chinese are the new Japanese and will put us out of business and land the Japanese where we were for the past few decades.
Markets change and opportunities abound in those changes. It is people like Liam that come out on top and produce jobs and opportunities for the rest of the scared dooms day minded people. Kudos to Liam and China…now I need to figure out where my opportunity is!
GREAT post Scoble. This is on my all-time top 5 lists of blog posts I have read. Substantive, relevant and mind blowing. Thanks.
Troy Malone
Pelotonics
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RS, you are a god! Okay, maybe more like a cherubim. Still, your Chinese microposting during this trip, has been filtering into the subconscious. Now you’ve posted this. And whether the reader knows it or not, all the answers are right here. Well, at least it appears so to me.
The question I’ve got for you (if you have the time to answer) is how do we, Americans, deal with these revelations as it relates to the concepts of supporting the American worker? Buy American. Buy Local. How does the amazing possibilities you’ve outlined above affect these doctrines?
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RS, you are a god! Okay, maybe more like a cherubim. Still, your Chinese microposting during this trip, has been filtering into the subconscious. Now you’ve posted this. And whether the reader knows it or not, all the answers are right here. Well, at least it appears so to me.
The question I’ve got for you (if you have the time to answer) is how do we, Americans, deal with these revelations as it relates to the concepts of supporting the American worker? Buy American. Buy Local. How does the amazing possibilities you’ve outlined above affect these doctrines?
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James: in my view, it’s over. We need a game change. Here’s what I would do if I were in charge (I’m not, there’s a guy named Obama who is):
1. We need a “moon shot.” Here’s mine: get rid of every coal plant in 20 years. That means we need to get over our fear of nuclear energy and get over it now. We start banging out nuclear plants NOW while ALSO investing in other alternative energy types. We retrain our workers to build them. We build expertise. Then we go to Chinese and say we’ll do the same thing for them (they need nuclear even more than we do).
2. We electrify all of our cars in 30 years. Every single one of them. See a future of Teslas. All powered by nuclear power that we just built.
If we do just those two things we’ll keep a lot of people employed and we’ll build an infrastructure that’ll save us from global warming.
Along with this stuff, though, we need to see that the world is changing and we need to retrain our people.
Tom Friedman: http://macmillan.hosted.panopto.com/CourseCast/Viewer/Default.aspx?id=610215c3-a3c8-429c-9dcd-3f8b72ee8a99 says the same thing.
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James: in my view, it’s over. We need a game change. Here’s what I would do if I were in charge (I’m not, there’s a guy named Obama who is):
1. We need a “moon shot.” Here’s mine: get rid of every coal plant in 20 years. That means we need to get over our fear of nuclear energy and get over it now. We start banging out nuclear plants NOW while ALSO investing in other alternative energy types. We retrain our workers to build them. We build expertise. Then we go to Chinese and say we’ll do the same thing for them (they need nuclear even more than we do).
2. We electrify all of our cars in 30 years. Every single one of them. See a future of Teslas. All powered by nuclear power that we just built.
If we do just those two things we’ll keep a lot of people employed and we’ll build an infrastructure that’ll save us from global warming.
Along with this stuff, though, we need to see that the world is changing and we need to retrain our people.
Tom Friedman: http://macmillan.hosted.panopto.com/CourseCast/Viewer/Default.aspx?id=610215c3-a3c8-429c-9dcd-3f8b72ee8a99 says the same thing.
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There is no doubt that China is a disruptive force, in manufacturing especially but also more and more in all industries. However, you paint a very rosy picture of China and doing business in and from China.
I live full time in China have been working to get a business of the ground here for nearly two years. Take it from me that there is a reality distortion field (and an actual distortion field) here that taints everything you see. First impressions are of thriving businesses, rampant consumerism, and bigger and better everything. Unfortunately, after a period of time the rosy tint of your glasses begins to fade and you are left with an altogether different impression of the place.
China is the most hostile, business unfriendly place on the planet. Businesses are crushed by regulation, a complicated and convoluted tax system, an overly controlled banking system (your money is ours and we’ll decide if you need it), unbelievable bureaucracy, corruption, and a lack of business ethics.
The government is a party in every business deal. The entire system creates an environment where cheating the system is the norm. Here’s where I could talk about how the ingrained “Everyone is trying to screw me so I’m going to screw everybody” attitude here leads to things like lead paint in toys and melamine in milk but that is another lengthy conversation.
All that being said, there is opportunity here. It just isn’t as easy to exploit as you make it seem.
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There is no doubt that China is a disruptive force, in manufacturing especially but also more and more in all industries. However, you paint a very rosy picture of China and doing business in and from China.
I live full time in China have been working to get a business of the ground here for nearly two years. Take it from me that there is a reality distortion field (and an actual distortion field) here that taints everything you see. First impressions are of thriving businesses, rampant consumerism, and bigger and better everything. Unfortunately, after a period of time the rosy tint of your glasses begins to fade and you are left with an altogether different impression of the place.
China is the most hostile, business unfriendly place on the planet. Businesses are crushed by regulation, a complicated and convoluted tax system, an overly controlled banking system (your money is ours and we’ll decide if you need it), unbelievable bureaucracy, corruption, and a lack of business ethics.
The government is a party in every business deal. The entire system creates an environment where cheating the system is the norm. Here’s where I could talk about how the ingrained “Everyone is trying to screw me so I’m going to screw everybody” attitude here leads to things like lead paint in toys and melamine in milk but that is another lengthy conversation.
All that being said, there is opportunity here. It just isn’t as easy to exploit as you make it seem.
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hello,scoble,welcome to Shenzhen!
i am also an ex-msftie and resident and grow up in Shenzhen,i m very glad you have such positive impress of china.
we know we are not doing everything right and everything perfect.but i m very sure we are on the right path….
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hello,scoble,welcome to Shenzhen!
i am also an ex-msftie and resident and grow up in Shenzhen,i m very glad you have such positive impress of china.
we know we are not doing everything right and everything perfect.but i m very sure we are on the right path….
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I love Liam.
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I love Liam.
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China has been engaging in massive marketing efforts to change the world’s perception about them,
They hosted the Olympics with extreme grandeur, as well as last years Miss World contest (which got 2 billion viewers) They have since now hosted 2 other top International beauty pageants
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China has been engaging in massive marketing efforts to change the world’s perception about them,
They hosted the Olympics with extreme grandeur, as well as last years Miss World contest (which got 2 billion viewers) They have since now hosted 2 other top International beauty pageants
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Let’s go back to when I used to sell consumer electronics in the mid-1980s. A product back then would be made in a Chinese factory (or, more likely, a Japanese one).
Ah… those were the times when quality product were made in Japan… things would last and not break after 6 months of use.
Seriously, most consumer products made in China these days seem to last about 1 month past the warranty and then miraculously die.
Those trusty old Japanese product I bought more than 10 years ago on the other are still going strong…
BTW, in some areas people are going back to buying US made products. For example in the windsurf industry there are a couple of manufactures actually manufacturing on US soil. The primary material they use is Carbon… and guess what the prices are on par with what comes out of China. In terms of quality however the US products run circles around the Chinese stuff.
Don’t get me wrong. I am not anti Chinese. However with the increasingly sparse raw materials I rather have a product that lasts 5 years then one which needs to be replaced every 12 months.
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Let’s go back to when I used to sell consumer electronics in the mid-1980s. A product back then would be made in a Chinese factory (or, more likely, a Japanese one).
Ah… those were the times when quality product were made in Japan… things would last and not break after 6 months of use.
Seriously, most consumer products made in China these days seem to last about 1 month past the warranty and then miraculously die.
Those trusty old Japanese product I bought more than 10 years ago on the other are still going strong…
BTW, in some areas people are going back to buying US made products. For example in the windsurf industry there are a couple of manufactures actually manufacturing on US soil. The primary material they use is Carbon… and guess what the prices are on par with what comes out of China. In terms of quality however the US products run circles around the Chinese stuff.
Don’t get me wrong. I am not anti Chinese. However with the increasingly sparse raw materials I rather have a product that lasts 5 years then one which needs to be replaced every 12 months.
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Something I heard about fifteen years ago when both the (former) Soviet Union and China were undergoing big upheavals: “In Russia, everything is for Politics. In China, everything is for Money. That is why China will win.”
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Something I heard about fifteen years ago when both the (former) Soviet Union and China were undergoing big upheavals: “In Russia, everything is for Politics. In China, everything is for Money. That is why China will win.”
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Very informative post.
When I bought my ipod touch it was shipped directly from China to me.
I’m looking forward to the video.
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Very informative post.
When I bought my ipod touch it was shipped directly from China to me.
I’m looking forward to the video.
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Every major empire over the past several hundred years has undergone a predictable cycle of collapse, usually within 10 to 20 years of its peak power.
The indications are always the same:
– The financialization of the economy, moving from manufacturing to speculation;
– Very high levels of debt;
– Extreme economic inequality;
– And costly military overreaching.
American has peaked, and is going down.
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Every major empire over the past several hundred years has undergone a predictable cycle of collapse, usually within 10 to 20 years of its peak power.
The indications are always the same:
– The financialization of the economy, moving from manufacturing to speculation;
– Very high levels of debt;
– Extreme economic inequality;
– And costly military overreaching.
American has peaked, and is going down.
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I think it’s interesting what you’re saying about the product life cycle changes and supply chain changes in China. I don’t agree that this will happen with everything. Shipping everything via Fedex is inefficient and expensive, unless Fedex plans on having high speed container ships. I guess DHL doesn’t want to be part of that express delivery boom you’re predicting.
There are exciting things happening in places outside of China though. I’m in Edmonton, Alberta, Canada, and the only thing Americans seem to hear about us is oil sands. What they don’t know about is the exciting and growing Edmonton tech community.
I heard it probably third-hand at a recent DemoCamp in Edmonton that this city has the second highest number of VC presentations after Toronto, which is far bigger than Edmonton.
Energy is always going to be a big part of Alberta’s economy but the Edmonton tech community is going to be the next wave here. Alberta’s economy is likely to be the strongest in North America through this recession too. Employment grew here last month.
The price of oil might be low now, but it will go back up. That’s where I wonder about whether delivering every product by courier will work. Will be interesting to see how it all pans out.
And in the U.S., the wrench in China’s works will be protectionism. Interesting times! Tony’s comment about the contamination issue is also very relevant.
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I think it’s interesting what you’re saying about the product life cycle changes and supply chain changes in China. I don’t agree that this will happen with everything. Shipping everything via Fedex is inefficient and expensive, unless Fedex plans on having high speed container ships. I guess DHL doesn’t want to be part of that express delivery boom you’re predicting.
There are exciting things happening in places outside of China though. I’m in Edmonton, Alberta, Canada, and the only thing Americans seem to hear about us is oil sands. What they don’t know about is the exciting and growing Edmonton tech community.
I heard it probably third-hand at a recent DemoCamp in Edmonton that this city has the second highest number of VC presentations after Toronto, which is far bigger than Edmonton.
Energy is always going to be a big part of Alberta’s economy but the Edmonton tech community is going to be the next wave here. Alberta’s economy is likely to be the strongest in North America through this recession too. Employment grew here last month.
The price of oil might be low now, but it will go back up. That’s where I wonder about whether delivering every product by courier will work. Will be interesting to see how it all pans out.
And in the U.S., the wrench in China’s works will be protectionism. Interesting times! Tony’s comment about the contamination issue is also very relevant.
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Could we do what chinese do? That is the question…
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Could we do what chinese do? That is the question…
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> The Unions have abused the system for too long
That’s right. Making products no one wants is the fault of the unions. Look to management if you want to know where the incompetence lies.
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> The Unions have abused the system for too long
That’s right. Making products no one wants is the fault of the unions. Look to management if you want to know where the incompetence lies.
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“I just want to say one word to you: ‘Marketing’.”
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“I just want to say one word to you: ‘Marketing’.”
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Groan. “Websites that you can buy products from directly”…you do know, yes, that click never beat out brick? You recall that whole dot.com crash thing, yes? What makes you think American consumers are going to flock to some Chinese website, when most of what they need is at the Big Box and Costco’s? Even when that formula works, such only applies to niche specialty markets, like Japanese gadget sites. Even Dell is pulling back on the direct model.
People don’t want direct, so much as right now, immediate gratification. And FedEx is very expensive way to ship. The death of the VAR and Channel has long been predicted, but never happens. And best of luck with any form of support, RMAs to Chinese factories, please. There is a reason big companies have dealer networks, support being a chief concern.
Total ownership of everything was tried in the States, half a century ago, the IBM, develop/make, channel/distro and market everything ourselves. But that fell by the wayside, cheaper to let specialty vendors make best of breed and assemble into the needed form, i.e. the Caterpillar model. And manufacturers are the worst marketers, reason why tons of Don Drapers remain employed.
Corruption as norm, information control serious, over-regulation, deal-dipping, slave/child labor, heavy taxation, police state governments, poor infrastructure, horrible workplaces that would make OHSA faint. But in ten years, all the killer pollution will be gone, yeah yeah. And R&D only works in ‘risk and reward’ capitalistic structures, least in the entire sweep of human history. Boy, did you get a whitewash, “discovering the same things”, indeed. Scared? Only by your monumental cluelessness.
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Groan. “Websites that you can buy products from directly”…you do know, yes, that click never beat out brick? You recall that whole dot.com crash thing, yes? What makes you think American consumers are going to flock to some Chinese website, when most of what they need is at the Big Box and Costco’s? Even when that formula works, such only applies to niche specialty markets, like Japanese gadget sites. Even Dell is pulling back on the direct model.
People don’t want direct, so much as right now, immediate gratification. And FedEx is very expensive way to ship. The death of the VAR and Channel has long been predicted, but never happens. And best of luck with any form of support, RMAs to Chinese factories, please. There is a reason big companies have dealer networks, support being a chief concern.
Total ownership of everything was tried in the States, half a century ago, the IBM, develop/make, channel/distro and market everything ourselves. But that fell by the wayside, cheaper to let specialty vendors make best of breed and assemble into the needed form, i.e. the Caterpillar model. And manufacturers are the worst marketers, reason why tons of Don Drapers remain employed.
Corruption as norm, information control serious, over-regulation, deal-dipping, slave/child labor, heavy taxation, police state governments, poor infrastructure, horrible workplaces that would make OHSA faint. But in ten years, all the killer pollution will be gone, yeah yeah. And R&D only works in ‘risk and reward’ capitalistic structures, least in the entire sweep of human history. Boy, did you get a whitewash, “discovering the same things”, indeed. Scared? Only by your monumental cluelessness.
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…from factory directly to your front door?
No more retailers, no more small shops?
Think of other things than consumer electronics. When I start ordering my sports shoes via the manufacturer’s website directly from the factory and don’t go to a local store to buy them, and the store doesn’t see the need to sell them anymore, imagine how this will change the look of a city, when the retail shops close down.
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…from factory directly to your front door?
No more retailers, no more small shops?
Think of other things than consumer electronics. When I start ordering my sports shoes via the manufacturer’s website directly from the factory and don’t go to a local store to buy them, and the store doesn’t see the need to sell them anymore, imagine how this will change the look of a city, when the retail shops close down.
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PCH is the link between China’s productive capacity (this is much more than cheap manufacturing) and the market. The refinements to the supply chain are the revolution, as everyone is a winner – the branded goods supplier, which doesn’t need to finance inventory or work-in-progress, or in distribution hubs; the manufacturer, which sees a much quicker return on investment, and can avoid costly investment in raw materials; the customer, who gets the product he/she wants delivered timeously and at the right spec/price. Who suffers? Wholesalers, retailers – and who cares? Great analysis, and well done for highlighting a genuine 2st century business.
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PCH is the link between China’s productive capacity (this is much more than cheap manufacturing) and the market. The refinements to the supply chain are the revolution, as everyone is a winner – the branded goods supplier, which doesn’t need to finance inventory or work-in-progress, or in distribution hubs; the manufacturer, which sees a much quicker return on investment, and can avoid costly investment in raw materials; the customer, who gets the product he/she wants delivered timeously and at the right spec/price. Who suffers? Wholesalers, retailers – and who cares? Great analysis, and well done for highlighting a genuine 2st century business.
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This article about china is really eye-opening. Globalization keeps making the world a very small village. I am very exited to see what inovative ideas could spring up next. Thanks for the blog abd doing informing us.
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This article about china is really eye-opening. Globalization keeps making the world a very small village. I am very exited to see what inovative ideas could spring up next. Thanks for the blog abd doing informing us.
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THIS IS GOING TO BE BIGGER THAN THAT GOOGLE EARTH SPACE SOFTWARE!!$!#@!@!!!
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THIS IS GOING TO BE BIGGER THAN THAT GOOGLE EARTH SPACE SOFTWARE!!$!#@!@!!!
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During the recession of 1873 that lasted 20 years in Europe, the financial power and the manufacturing powers shifted to the west: from Europe to US.
During the recession of 1929, nothing really changed as it was a recession due to overproduction by the US.
During the recession of 2008 that lasted .. years, the financial and production power shifted to the west from US to China and Korea.
Just like between 1900-1920 in the US (FORD model), the workers in China obtained higher salaries allowing to open the internal market of China to their own products.
Next China got competition from Vietnam, Cambodja and Pakistan supplying low cost and low quality products.
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During the recession of 1873 that lasted 20 years in Europe, the financial power and the manufacturing powers shifted to the west: from Europe to US.
During the recession of 1929, nothing really changed as it was a recession due to overproduction by the US.
During the recession of 2008 that lasted .. years, the financial and production power shifted to the west from US to China and Korea.
Just like between 1900-1920 in the US (FORD model), the workers in China obtained higher salaries allowing to open the internal market of China to their own products.
Next China got competition from Vietnam, Cambodja and Pakistan supplying low cost and low quality products.
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You just the let the panda out of the bag! Liam and PCH are one of the best kept secrets for developing new products and turbocharging companies into production. I launched our product start-up (ASTROgaming.com) with PCH as our total development partner and we’d done things faster and more effectively that we ever could have with traditional paths in China or elsewhere.
We’ll see what the future holds, but PCH like companies may be the next evolution and a great model for others to follow….EVEN a model for the US to mimic and develop as we retool our manufacturing base.
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You just the let the panda out of the bag! Liam and PCH are one of the best kept secrets for developing new products and turbocharging companies into production. I launched our product start-up (ASTROgaming.com) with PCH as our total development partner and we’d done things faster and more effectively that we ever could have with traditional paths in China or elsewhere.
We’ll see what the future holds, but PCH like companies may be the next evolution and a great model for others to follow….EVEN a model for the US to mimic and develop as we retool our manufacturing base.
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Totally agree and so good to have my china insights reaffirmed.
I have just spent a week in Shanghai on holidays and I have had a complete paradigm shift on China. Ok I understand Shanghai is not China but nonetheless it is an example of what is possible.
I’m still trying to capture and digest the trip but 3 things stand out:
1. The Affluence! I had no idea but when you think 20m people in Shanghai – all they need is 10% affluence and that’s my whole town buying premium. So I guess what this really brings home is the impact of millions of people.
2. The level of aspiration is contagious! Everyone appears motivated to better themselves.
3. Just do it! Says more about China than perhaps US these days. Driving on the Central Yan highway … we saw 2 guys holding a guy up a 12 foot single ladder fixing the power lines….oh and what made it more interesting was that the ladder was on the top of a truck.
Like others, I have come away rethinking all my china stereotypes and dreaming the future may be brighter as we seek a “fusion of the east and west”.
Sounds like the “one to one” future maybe possible with Liam in China
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Totally agree and so good to have my china insights reaffirmed.
I have just spent a week in Shanghai on holidays and I have had a complete paradigm shift on China. Ok I understand Shanghai is not China but nonetheless it is an example of what is possible.
I’m still trying to capture and digest the trip but 3 things stand out:
1. The Affluence! I had no idea but when you think 20m people in Shanghai – all they need is 10% affluence and that’s my whole town buying premium. So I guess what this really brings home is the impact of millions of people.
2. The level of aspiration is contagious! Everyone appears motivated to better themselves.
3. Just do it! Says more about China than perhaps US these days. Driving on the Central Yan highway … we saw 2 guys holding a guy up a 12 foot single ladder fixing the power lines….oh and what made it more interesting was that the ladder was on the top of a truck.
Like others, I have come away rethinking all my china stereotypes and dreaming the future may be brighter as we seek a “fusion of the east and west”.
Sounds like the “one to one” future maybe possible with Liam in China
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Yes, I also predicted that.
As a student in south east asia(Malaysia), I have a lot of chinese friends in my college. Their parent send their son to study overseas and then back when they are finish.
Some wealthy families choose Malaysia because its cheap and have a good quality. But some very wealthy families choose australia and US.
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Yes, I also predicted that.
As a student in south east asia(Malaysia), I have a lot of chinese friends in my college. Their parent send their son to study overseas and then back when they are finish.
Some wealthy families choose Malaysia because its cheap and have a good quality. But some very wealthy families choose australia and US.
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Great article Robert, I love this sort of stuff – I wish more people in the West could wake-up and see the potential of what’s being done overseas.
Liam seems to be a visionary with his head screwed-on (yes, the ‘Scobleizer effect’ kicked-in: I’m now following Liam on twitter!)
Look forward to seeing that video of Liam’s company in due course.
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Great article Robert, I love this sort of stuff – I wish more people in the West could wake-up and see the potential of what’s being done overseas.
Liam seems to be a visionary with his head screwed-on (yes, the ‘Scobleizer effect’ kicked-in: I’m now following Liam on twitter!)
Look forward to seeing that video of Liam’s company in due course.
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Excellent article Robert. Reading it reminded me of what a friend(Chairman of a Japanese Conglomerate) said to me 20 years ago which was “If you think Japan disrupted the manufacturing process wait until you see what China does with the knowledge process in about 25 years”
Ironically we are only five years away from what my friend told me 20 years ago. When I read you article and put what you said into the perspective of all the economic changes we are about to experience globally my mind thought even more disruptive changes will be accelerated by the kind of innovation you witnessed.
The big difference between China, Japan and the USA is they think lng term and we don’t think past the quarterly return or the next tweet.
I don’t know about you but I love disruption 🙂
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Excellent article Robert. Reading it reminded me of what a friend(Chairman of a Japanese Conglomerate) said to me 20 years ago which was “If you think Japan disrupted the manufacturing process wait until you see what China does with the knowledge process in about 25 years”
Ironically we are only five years away from what my friend told me 20 years ago. When I read you article and put what you said into the perspective of all the economic changes we are about to experience globally my mind thought even more disruptive changes will be accelerated by the kind of innovation you witnessed.
The big difference between China, Japan and the USA is they think lng term and we don’t think past the quarterly return or the next tweet.
I don’t know about you but I love disruption 🙂
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“What’s different today? The Chinese are now cutting out Amazon and are building Websites that you can buy products from directly and they’ll ship right to your door.”
As for doing QA and surveys via flickr and blog comments, that’s total incompetence.
Most people don’t give feedback because it’s too hard for them.
And you are forgetting tariffs. Governments do not want foreign companies to ship items to their citizens without paying a heavy tax. Especially if they are set on getting rid of the national distributor. The distributors who have power in the local and federal governments are going to use that power to get this manufacturer shut down from importing into the country. Start investigations and cause damage that they will not recover from.
That’s probably why those companies don’t want their names mentioned.
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“What’s different today? The Chinese are now cutting out Amazon and are building Websites that you can buy products from directly and they’ll ship right to your door.”
As for doing QA and surveys via flickr and blog comments, that’s total incompetence.
Most people don’t give feedback because it’s too hard for them.
And you are forgetting tariffs. Governments do not want foreign companies to ship items to their citizens without paying a heavy tax. Especially if they are set on getting rid of the national distributor. The distributors who have power in the local and federal governments are going to use that power to get this manufacturer shut down from importing into the country. Start investigations and cause damage that they will not recover from.
That’s probably why those companies don’t want their names mentioned.
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Never heard of PCH International (and BTW their URL is awful). Not to mention that they don’t even have a Wikipedia entry.
But the company is interesting, I agree. It provides an even simpler logistics solution – maybe this type of companies will generate the next revolution in logistics (as UPS/Fedex did a while back by allowing corporation to outsource parts of supply chain mgmt to them)
I am wondering how profitable is this company. Probably not with a huge profit margin as it is piggybacking Fedex …
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Never heard of PCH International (and BTW their URL is awful). Not to mention that they don’t even have a Wikipedia entry.
But the company is interesting, I agree. It provides an even simpler logistics solution – maybe this type of companies will generate the next revolution in logistics (as UPS/Fedex did a while back by allowing corporation to outsource parts of supply chain mgmt to them)
I am wondering how profitable is this company. Probably not with a huge profit margin as it is piggybacking Fedex …
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Rob,
Great article and coverage on your China journey! I blogged about it here
http://www.justindriscoll.net/blog/2008/11/17/the-china-americans-need-to-know/
Justin
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Rob,
Great article and coverage on your China journey! I blogged about it here
http://www.justindriscoll.net/blog/2008/11/17/the-china-americans-need-to-know/
Justin
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Consumers don’t CARE about Supply-Chain Hula-Hoop Tricks, just have it here now, good quality and great value, with a company that has a reputation to back that up.
Playing direct make-believe games with middlemen setup guys, running on VC fumes, who only rely on exorbitant international FedEx rates as a “supply chain solution”, is hardly an answer, esp. in this market where all the big boys at Omnicom, PG S&S and McCann are going serious price-consciousness pitching.
Direct to Consumer is a farce, and you will need a marketing budget worthy of a Fortune 500 just to get the word out, even then people won’t care. Direct to Store is also a farce, as stores have their own internal quality, contract and procurement needs.
If China wasn’t such a corrupt godforsaken Communist wasteland, you wouldn’t need an army of consultants like PCH just to get things done and provide for even the simplest of infrastructure. If the “direct model” requires a middle layer of confidencemen to make it work and finagle the supply chain, how exactly is that direct? Treat the root cause, sending in a Mayo Clinics worth of Supply Chain Doctors for any ailment, can get very very expensive.
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Consumers don’t CARE about Supply-Chain Hula-Hoop Tricks, just have it here now, good quality and great value, with a company that has a reputation to back that up.
Playing direct make-believe games with middlemen setup guys, running on VC fumes, who only rely on exorbitant international FedEx rates as a “supply chain solution”, is hardly an answer, esp. in this market where all the big boys at Omnicom, PG S&S and McCann are going serious price-consciousness pitching.
Direct to Consumer is a farce, and you will need a marketing budget worthy of a Fortune 500 just to get the word out, even then people won’t care. Direct to Store is also a farce, as stores have their own internal quality, contract and procurement needs.
If China wasn’t such a corrupt godforsaken Communist wasteland, you wouldn’t need an army of consultants like PCH just to get things done and provide for even the simplest of infrastructure. If the “direct model” requires a middle layer of confidencemen to make it work and finagle the supply chain, how exactly is that direct? Treat the root cause, sending in a Mayo Clinics worth of Supply Chain Doctors for any ailment, can get very very expensive.
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Agree with this Christopher.
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Agree with this Christopher.
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Very well written Robert. It’ll be interesting to see where things go from here. I agree, as things begin to get simpler, and the buying public constantly demands knowledge and faster service, that this gives them that. I agree with #31 Adi above, that this will spark a healthy competition and perhaps innovation, in both the products, and the buying experience.
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Very well written Robert. It’ll be interesting to see where things go from here. I agree, as things begin to get simpler, and the buying public constantly demands knowledge and faster service, that this gives them that. I agree with #31 Adi above, that this will spark a healthy competition and perhaps innovation, in both the products, and the buying experience.
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China is a race-against-time in progress. You can’t beat autocratic societies when their innovators get efficient access to the right autocrat/mentor stream. The political machine in China, at all levels, is impressive at identifying and fast-tracking clever innovative youths, whatever their field or city. But it needs a payback, which may impose the softening of innovative tendencies over time. Worse, with breakneck growth all around them, many clever youths have greedily sought easier payoffs in low-innovation sectors like real estate, cheapo manufacturing and services.
Because of this, China today is massively under-performing its innovative capacities which, contrary to some legacy Western clichés, are formidable.
Are there still enough innovators (10m ?) to feed the remaining (1.5bn ?) population, plus beat the West’s innovators (every day more prolific), plus build China’s long-awaited endogenous growth engine, plus survive the un-consumer societal model the West may launch to overcome the current rape-and-pillage hangover ?
Probably not, unless there’s some systemic strategic shift. What could move ? Many of China’s bad fundamentals such as distance, water, energy, can be cured but over time.
So any urgently required change will need to be human-induced. Gulp.
I often recall a chat with an 80 year old China Space Agency director, at a 1999 banquet in Beijing. His forecast was simple… “If you forget appearances, no two peoples are more similar than Chinese and Americans. But to survive, both desperately need some things the other has. Expect the two to merge.”
So let’s get on with it.
Cheers
@harropmike
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China is a race-against-time in progress. You can’t beat autocratic societies when their innovators get efficient access to the right autocrat/mentor stream. The political machine in China, at all levels, is impressive at identifying and fast-tracking clever innovative youths, whatever their field or city. But it needs a payback, which may impose the softening of innovative tendencies over time. Worse, with breakneck growth all around them, many clever youths have greedily sought easier payoffs in low-innovation sectors like real estate, cheapo manufacturing and services.
Because of this, China today is massively under-performing its innovative capacities which, contrary to some legacy Western clichés, are formidable.
Are there still enough innovators (10m ?) to feed the remaining (1.5bn ?) population, plus beat the West’s innovators (every day more prolific), plus build China’s long-awaited endogenous growth engine, plus survive the un-consumer societal model the West may launch to overcome the current rape-and-pillage hangover ?
Probably not, unless there’s some systemic strategic shift. What could move ? Many of China’s bad fundamentals such as distance, water, energy, can be cured but over time.
So any urgently required change will need to be human-induced. Gulp.
I often recall a chat with an 80 year old China Space Agency director, at a 1999 banquet in Beijing. His forecast was simple… “If you forget appearances, no two peoples are more similar than Chinese and Americans. But to survive, both desperately need some things the other has. Expect the two to merge.”
So let’s get on with it.
Cheers
@harropmike
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F*ck the Chinese. They “look” cheap because they ignore enevironmental and labor standards. The day our Gov’t levels the playing field is the day China crashes hard.
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F*ck the Chinese. They “look” cheap because they ignore enevironmental and labor standards. The day our Gov’t levels the playing field is the day China crashes hard.
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Why the blind hate, tom ?
How many months have you spent in the Chinese provinces ?
Nothing is what it seems, neither in the US nor in China.
Both are far from perfect.
Almost no country in the world can safely occupy the moral high ground on any subject.
There are factories in parts of the US that would probably have been closed in China, not to mention the captive sub-contractors one prefers not to look at too closely in Latin America.
And pollution ? Have you compared per capita garbage production in the US and China ? It’s an enlightening number.
If China crashes, to where does the US export its goods and financial wizardry ? Certainly not to any oil-producing country – they’re all underwater with oil at $50. And certainly not to Europe where everyone’s hunkering down for a few years of frugal living.
China and the US are married, for better or for worse. Many countries can invent stuff (Europe, India) or supply resources (Russia, Iran/k, Gulf), but only two can really execute – China and the US.
The rest of the world can only watch and hope the marriage works.
Cheers
Mike
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Why the blind hate, tom ?
How many months have you spent in the Chinese provinces ?
Nothing is what it seems, neither in the US nor in China.
Both are far from perfect.
Almost no country in the world can safely occupy the moral high ground on any subject.
There are factories in parts of the US that would probably have been closed in China, not to mention the captive sub-contractors one prefers not to look at too closely in Latin America.
And pollution ? Have you compared per capita garbage production in the US and China ? It’s an enlightening number.
If China crashes, to where does the US export its goods and financial wizardry ? Certainly not to any oil-producing country – they’re all underwater with oil at $50. And certainly not to Europe where everyone’s hunkering down for a few years of frugal living.
China and the US are married, for better or for worse. Many countries can invent stuff (Europe, India) or supply resources (Russia, Iran/k, Gulf), but only two can really execute – China and the US.
The rest of the world can only watch and hope the marriage works.
Cheers
Mike
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“Never heard of PCH International ”
http://www.pchchinasolutions.com/people.aspx
“PCH presently employ over 800 people in Ireland, China, Taiwan, Singapore, UK, USA”
Copy: PCH, 800 streamliners, 0 QA. You save!
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“Never heard of PCH International ”
http://www.pchchinasolutions.com/people.aspx
“PCH presently employ over 800 people in Ireland, China, Taiwan, Singapore, UK, USA”
Copy: PCH, 800 streamliners, 0 QA. You save!
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This is very interesting. No doubt that the kinks will get worked out to some extent — but for the moment the system is not perfect. I just ordered some iPhone 3g accessories from a store hosted on Yahoo – the goods were shipped directly to me from Hong Kong, and pretty quickly I might add. However, several of them turned out to not be compatible with the iPhone 3g (they were older iPod products, displayed incorrectly on the website). What I am supposed do? Ship them back to Hong Kong for as much shipping cost as the product cost? And with bigger ticket items, how will they be returned / supported etc. In any case though, this is probably the most interesting new item I have read this year.
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This is very interesting. No doubt that the kinks will get worked out to some extent — but for the moment the system is not perfect. I just ordered some iPhone 3g accessories from a store hosted on Yahoo – the goods were shipped directly to me from Hong Kong, and pretty quickly I might add. However, several of them turned out to not be compatible with the iPhone 3g (they were older iPod products, displayed incorrectly on the website). What I am supposed do? Ship them back to Hong Kong for as much shipping cost as the product cost? And with bigger ticket items, how will they be returned / supported etc. In any case though, this is probably the most interesting new item I have read this year.
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