5 Months in China

It has been about 5 months since I left Washington DC and although I have not written as much as I would have like, it is now time to share some thoughts. I guess I don't really have a good excuse for not writing more. Maybe I was just trying to take it all in, maybe it was due to the fact that I don't really like writing that much, or maybe I am focusing too much time on work and studying Chinese.

When one first arrives in Shanghai, or China for that matter, there is just so much going on. So many hilarious and unbelievable everyday occurrences. At first you want to share them all and become yet another expat amazed at the spitting, lack of personal space, the food, etc. Any poor expat soul that was nice enough to include you in their circle are probably regretting it at this point. My favorites are the people that wear pajamas all day long. Yes, I was told it is a sign of wealth, that someone could just be in PJs all day and not have to do anything else. People go to the store, walk down the streets, etc. all in their pajamas. As the seasons change, the pajamas also change. In the summer, men pretty much stick to loafers and boxers but that changes with the weather. I am eager to find out what the winter lineup will consist of. I am hoping for one piece PJs with built-in feet.

The longer I find myself in Shanghai, the less I feel I can articulate and explain back home what I was experiencing. One friend told me recently, after being in China for a day you can write a book. After being in China for a month, you can write a magazine article. After more than a month, you can't write anything.

I find this to be very true. I have learned a lot about China and the culture but the longer you are here, the more complex it becomes. Each layer you discover leads to more layers and even greater complexity. In addition, there are so many "China hands" that have much more knowledge and experience. Most of my friends have been in Shanghai 2-5 years. I cannot begin to act like I know China. I guess one learns the parts of China they want to explore and are intimately involved with.

Although I would like to have more local contacts, most of my experiences within China has revolved around business. The economic boom in China is amazing but as we all keep hearing, the system is in no way perfect. Although China makes most of our goods these days, this does not come without a whole host of challenges. As one Chinese business leader once stated, "hey, we have only been doing this for 15 years." The Chinese are like teenagers--young and energetic but one cannot assume that they know how it all works. They will act like they know what they are doing, but I have learned the hard way that one must verify and question everything.

Looking back on my time so far, I am most fascinated by China's desire to change from a low-skilled manufacturing country to one of increasing skilled labor. China knows it has to move up the value chain but this will take some time. For better of worse, China still thrives on replication verses innovation. From DVDs, to clothing, to online sites, China lacks innovation. This is obviously a huge generalization but I have experienced it first hand. From getting my web projects sourced in China, to our product innovations, the default is to find someone else that has already made something successful and tailor or copy it directly. The Chinese do not feel guilty about this. It is the way their world works. DVDs are a perfect example. One cannot find a regular DVD store in Shanghai. It is impossible to buy a proper copy of a DVD. With DVDs being sold at around a $1, how will this culture ever accept our pricing structure for these items? Is it cultural sentiments or a lack of regulation and enforcement? Do we feel a different sort of guilt or is it just more difficult for us to find these products? I think it is a little of both with more emphasis on availability.

The problem from a business innovation perspective (ok, one of many), is that once a new idea ever does arrive, usually beginning in the West, tons of Chinese companies try and replicate the concept and therefore none of them get traction. This happens with ideas like Twitter, Facebook, etc. No one can build out a brand or a concept fast enough to gain any traction. In order to be successful, one needs a lot of capital upfront to get the brand way out in front of any competition. We have seen a couple examples of this in China--Alibaba and Baidu--but these are the exceptions. As we hear over and over again, the China market is difficult because even though it has so much potential (yes, yes, over a billion customers), it is by no means a guarantee. I will continue to discuss this and other topics surrounding China in the coming months, stay tuned.

money, money, money

Quick China insight story:

I was visiting office space last week in Shanghai. As I was being given the tour of the very modern and pristine facilities, my guide took pride in pointing out a painting at the end of the hall. The painting was a modern interpretation of the dollar sign, nothing special. What made me laugh, was his comment about the painting. He stated that its place within the facility was there to "remind us what we are all here to do--make money." Although he probably gives that innocent line during every tour, I thought it was particularly appropriate for China, and especially Shanghai. It is a place filled with entrepreneurs and opportunists looking to make something happen in the "wild east."

My only comment was that it might be more appropriate to replace the dollar sign with the RMB...

The rise of Jonathan Coulton

I have been following Jonathan Coulton for a few months now after hearing about him on Merlin Mann's (43 Folders) new podcast. Impressive to see him featured in NY Times Magazine and the quasi "poster child" now for independent musicians trying to make it on their own through the use of the Internet. Coulton sells most of his music through his website and iTunes without the middleman record label.

He quit his day job as a programmer back in 2005 to pursue his online music career. His popularity rose out of his "thing a week" series where he would write a new song, some becoming very popular, each week for I believe a whole year.

Although I had heard of Coulton previously, one thing really struck a cord with me--his fan base. The article recalls countless stories of fans helping Coulton with everything from graphic design to song lyrics. He receives hundreds of emails a day and countless myspace friend requests. But why? People love a good story. His popularity is largely based on the exciting idea of a fledgling musician trying to make it on the Internet--no less with a girlfriend and kid to support. Who doesn't like the idea of someone sticking it to the man by quiting the day job and sticking it to the music industry by going out on his own. No royalties to the big labels here. And throughout history we keep falling for this same great tale.

We all love this story and cheer for Coulton because we are all living vicariously through him. Who doesn't want to quit the day job and be a musician or artist? Although Coulton will argue that it is not that simple and I could only imagine so but still, lets keep it simple, he is the underdog that we all want to see succeed. A modern day seabiscuit or the current Golden State Warriors

The Internet is clearly a major force in leveling the playing field and changing the way we can access art, music, news, and information. Call it Music 2.0, Art 2.0, or whatever, either way it changes the game. This honesty and transparency is awesome and we are seeing it more from governments to major corporations. I can only hope to have the same results as we continue to push forward with our efforts in bringing our crazy idea to the masses.

Technology and Small Businesses

As you may know the new family business, Nankeen, is making huge strides as we get set to launch the new website and product line. I have been assisting in various capacities over the past year mostly on the business and technology side.

Currently, I am up in Rhode Island and have been spending my days at the new factory with our mascot (left). Mostly I have working to get the new business applications to work on the back end of the new site. Right now the trick is to get the shopping cart to talk with our order processing center in Rhode Island. In an ideal world, the order comes in, we process it through the web interface, print out the shipping label, invoices, and send it to the packaging group (right now my mother). These web application are both remarkedably smart but also very complex. You can do almost everything from the web control panel from changing product descriptions, to cross-selling, to tracking inventory. Now once this is all up and running it will be awesome and so efficient, getting there is another story.

I find this a lot when developing business processes and applications both at Booz Allen and in this environment. The "bells and whistles" solution is only as good as the ease of use, training, and user capability. The ultimate solution may appear to solve every problem but if your employees cannot even figure out half the functions it can be a waste. That is why smooth and simple user interfaces are so important. I believe this is why Google has been so successful. They make it simple but also include advanced features hidden in shortcuts to allow the more advanced user to really dig in.

As I continue down this journey, helping get the family business off the ground, will report back. The new site will soon be up at www.nankeenstyle.com so start spreading the word.

A Whole New Mind

I just finished Daniel Pink’s book titled A Whole New Mind: Why Right-Brainers Will Rule the Future. In short, the author states that due to “Asia, Abundance, and Automation” we are moving from the Information Age to the Conceptual Age and therefore we must refocus our current mental and professional state. He contends that our past expertise in knowledge work, such as computer programming, accounting, and banking, can now easily be done on the cheap in China or India. What we now need to focus on perfecting is the more right brain aspects of the creator and the empathizer. He argues that we need to move from high tech to high concept and high touch. Once we develop this whole new mind, we can have an economy and society that are built on the inventive, empathic, and big-picture capabilities.

I found this book very thought provoking as someone who is questioning the value of an MBA at this point in my career. While I do not think it is time to toss all application in the trash and become an artist, I think he makes some good points on what we need to focus on to be competitive in the future. In the end, however, I believe that market favors the most unique and talented of a class and not one whole class of worker.

Worth the read and you can also get a glimpse based on his article in Wired.