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It is a huge misconception that creativity is confined to “the arts”

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My mother, who passed away 24 years ago today, was a professional artist. Her grave marker says “Artist-Wife-Mother”, and I do not think that is a false order.

I wanted to emulate her when I was younger and even took private lessons from her student, Ann Glover. There was a brief period in my late teens when I would say I was on my way to being a decent artist or illustrator.

Then I lost interest in creative pursuits like “art”. It was not until years later that I realized that creativity is not restricted to the “arts”.

PassageMaker serves a wide variety of companies, many of which were founded by entrepreneurs and inventors, and many of which participate in Fortune 500 supply chains. What I find constant among these clients is the brilliance and originality – the artistry – they bring to their designs and products. Creativity is not limited to the “arts”.

PassageMaker created our network of Endorsed Service Providers and formulated our service offerings – Sourcing Feasibility Studies, Vendor Coordination and Assembly-Inspection-Packaging – to support those companies bringing innovative products to market while protecting their Intellectual Property from the piracy that sadly is all too common in China.

I hope that if you are reading this, you will see clear to entrust your creative product concept to us and let us help you make it a reality.

No, it’s a want to issue

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Cogitating on the 60th anniversary of the PRC, one cannot fail to consider the current state of the USA, and as a microcosm, our domestic automotive industry.

Yesterday, it was announced the deal with Penske to buy Saturn fell through, and so dies another GM marque. In this case, I have a personal interest, as I drive a Saturn. I bought it on one gruesomely hot day years ago. I remember the day quite clearly, as at the time I was traveling quite a bit and had rented a series of then-current Detroit iron to evaluate the offerings. I had settled on a Dodge product (yes…I know), and due to the repairs required to keep my very old Ford running, we could delay no longer. So with pregnant wife and little girl in tow, we went car shopping.

Before you cut in to to ask why Mr. China, Mr. All-Things-Asian here has a problem with foreign brands, just don’t. It’s complicated and irrational bordering on schizophrenic. Just stick with the story.

And before you interrupt again and ask why Mr. Captain-of-Industry drives a Saturn, here’s why – cars, like horses, are for riding. For basic transportation. When one dies, you get another one. If you need to a car to show the world how cool you are, you’re not. If I show off anything in this world, it’s my wife.

But I digress.

Now, I’ve lived in Singapore, Taiwan, and spent considerable time in South China. I grew up working summers in Virginia factories without A/C. I cut my teeth as a manager in a South Carolina metal stamping plant that (surprise) got hot in the summer time. I can handle the heat, but the parking lot of that Dodge dealership reminded me of the scene from Lawrence of Arabia where they have to cross a stretch of desert called “The Anvil of the Sun”. My daughter, not yet 3 if I remember, just wilted. I thought my wife was going to have heat stroke. The BEST part – the part that still informs my concept of customer service to this day – was that I could see the entire sales staff in the air conditioned office, drinking sodas and looking out the window at us – the only customers in the place – in-between telling jokes to one another and calling their girlfriends on the company phones.

After 10 minutes of cooking my family and waiting for someone to bestir themselves to come sell me a car, i.e., do their jobs, I loaded the family into the wife’s Oldsmobile (yes…I know) and drove 300 yards down the road to the Saturn dealership. One (1) hour, several bottles of cold water and snacks to reconstitute the toddler in the A/C, later and I had a Saturn. Yes..I know. It’s not a great car, but it is fast enough, gets decent mileage and is (apparently) invisible to radar. 100k+ miles later, and it is still going strong. In that time, the dealership has always been friendly and professional. I will sincerely mourn seeing these hardworking and decent people lose their jobs. They have done nothing wrong other than sell and service a decent people-mover at a fair price.

And the Dodge dealership? It got its franchise revoked by the Obama administration. Now when you drive by its empty lot, you are greeted with huge banners saying “YES, WE’RE STILL HERE! PARTS DEPARTMENT STILL OPEN!”. I won’t comment on the political or economic wisdom of that move by the government but as far as it applies to this particular dealership?

good.

All this was put into sharp focus by this brilliant piece by the Autoextremist.com about Cadillac’s attempts to return to the top of the heap. As the article points out, Cadillac’s recent product offerings are excellent, but after so many years mediocrity interspersed with chunks of mind-blowing awfulness, the recent successes only get you back in the game. You have to maintain this level and build on it for at least a decade or more before you have a chance of getting back on top. And the author, Peter M. De Lorenzo, fears as I do that Cadillac won’t. Here are the key paragraphs:

Because it will take an all-consuming passion of total commitment – a relentlesswant to, if you will – on the part of the entire organization, something that currently only appears sporadically and only in some quarters of the division.

It will take a clear understanding of who they are and a clear vision as to where they want to go (an idea that perhaps sounds a bit too simplistic, that is until you’ve been inside some of these organizations and realize how difficult it is to get everyone on the same page and pulling in the same direction).

It will take a focused consistency in their design and engineering regimens and particularly in their product execution. What does that mean? If Cadillac is to be Cadillac again, the people toiling in it need to understand that the division’s recent resurrection to respectability is only that, respectability. It’s not a ticket to “the club” yet. Yes, the CTS-V is an incredibly outstanding machine, but it shouldn’t be the culmination of where Cadillac wants to be, because it’s just the beginning. Every single new Cadillac must bristle with the kind of creativity and executional excellence that’s evident in the CTS-V if the division is to attain real greatness.

If Cadillac wants to get back – all the way back – to the reputation it once enjoyed and thrived upon then it has to put its stake in the ground and understand that the raison d’etre that once propelled it to greatness, that brand image that was seared in the consciousness of consumers for decades has to not only be renewed, it must be embellished and enhanced for this new age.

Laughable? Not from where I sit. This isn’t a technology issue or a talent issue, because Cadillac has everything it needs to succeed as a luxury-performance automaker.

No, it’s a want to issue.

China was once the top of the heap. 1000 years ago, anyone visiting this planet would have taken one look at the Middle Kingdom and decided that was the place to be. And then they stumbled, became complacent and fell far behind. Now they are charging back. And there is no question in my mind that they have the want to part of the equation figured out. Frankly, sadly, I’m not so sure about America anymore.

As I’ve said before, China is back, and saying so isn’t anti-American or pro-Chinese. Mike and I saw this coming more than 15 years ago and planned accordingly. We realized then, as I cautioned students at my alma mater last month, there are easily 3 billion people on this planet who want your job. The world is an intensely competitive place. If you want to succeed you have to get the want to part down.

PassageMaker has grown in 10 years from one guy with one customer to a company of 150 people with customers around the world. Mike and I and the rest of the PassageMaker team have the bricks-and-mortar and the technical capabilities, either in-house or through our Endorsed Service Providers to make your project a success if China sourcing is required. But most importantly, for us, want to is not an issue.

Nothing is harder than simple

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I loved this saying when I first read it a few months ago, and it is my motto now. My dearly departed Mother, a professional artist, used to tell me simplicity is the key to design. Quite true of course, but there is something more visceral about nothing is harder than simple. As an example, watch this video (if it doesn’t play, you can find it here or here) – hat tip to Instapundit:

Pomplamoose – Single Ladies

Whether you like the song or not is immaterial. The arrangement and performance are brilliant in their stark simplicity. Compared to the heavily produced original, it is elegant and beautiful.

Nothing is harder than simple guides all our efforts at PassageMaker. Doing business in China is frustrating, difficult, infuriating, aging, expensive, complicated…pick your adjective. It is anything but simple.

Thus the innovation of The PassageMaker Model of Trust & Transparency. Nothing is simpler than the truth. It may not be fun to hear, it may be unpleasant to deliver, but telling the truth is not complicated.

Trading companies exist by keeping customers in the dark. As middlemen, they add no value if all is out in the open. Maybe they are not actually lying, but maintaining the wall of secrecy between client and vendors is a form of deception that only adds complexity. In our experience, operating as a trading company is always more work and stress than it is worth.

All of PassageMaker’s services are built around the concept of being straight with the customer. Sourcing Feasibility Studies provide the client with all the vendor quotes and contact information, nothing is hidden. Vendor Coordination contracts are billed as a monthly fee – this is what our time is worth, take it or leave it. And if you choose to leave it, no hard feelings. We wish you well, and stop by if you are ever in town. Assembly-Inspection-Packaging contracts are billed on a per unit basis, but the same logic applies – it is a straight line item on the invoice, no hidden margins built into the materials, no kickbacks from vendors.

Mike and I have plenty scars from doing business in China, and I’m not going to say your project is going to be perfect and headache free. It’s China, after all. But PassageMaker will not add to those troubles and we will help make your life as simple as possible.

The 60th anniversary of the PRC

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I still have my Deng Xiao Ping commemorative pocket watch celebrating the 50th anniversary. I remember I bought it in Beijing the day my lovely wife and I found out she was going to have our first child. A blessing she used later that evening to get out of a drinking contest she’d accidentally started by saying “gan bei“, literally “dry glass” or bottoms up, to one of our friends without understanding the full reciprocal connotations of the toast. The ensuing row over violated etiquette, amped up by her joyous announcement, meant that the celebratory burden fell on me. Fell rather hard as I remember. Nothing like being lost in Beijing at 3 AM, hammered on tequila and baijiu in the dead of winter. Again, guys, appreciate you leaving me like that. No hard feelings, really. 10 years later and I’ve almost moved on. Thankfully, my wizened little guardian angel in the Mao hat helped me flag a cab – the coal smoke was so bad, visibility was maybe 100 ft, not ideal cab-flagging conditions – and so my daughter has her daddy around today to tell her to stay in school and avoid such ludicrous situations.

There will be many, many, many, many articles written about this historic event. The transformation of the People’s Republic over the last 30 years has been particularly extraordinary; indeed it is unprecedented in human history. 30 years ago the GDP of the PRC ranked it as one of the poorest countries in the world. In the last 30 years, the PRC has industrialized and urbanized with astonishing speed. Roughly the population of South America moved from the countryside into brand new cities all over the country. Shenzhen, our corporate hometown, has grown from a fishing village to a city of 14 million souls.

I am not a panda-hugger, nor am I am dragon-slayer. People are people the world over. I became fascinated with Asia in general and China in particular nearly 20 years ago, because such change and dynamism is…fascinating. How could you not be amazed by so many people rousing themselves after centuries of enforced slumber?

Napoleon wrote, “when China wakes up the world will tremble”. I have certainly seen and felt the earth move during my lifetime, and was lucky enough to guess early on which way the ground was shifting. Mike Bellamy and I went to Asia at the same time; he to Japan, I went to Singapore. But from those separate vantage points we both saw the same thing and acted on that new-found knowledge.

China is here to stay. It is not anti-American or pro-Chinese to say so. PassageMaker’s goal is to help foreign companies successfully do business in China. Let us show you how we can make your project a success.

When you’re one-in-a-million in China, there are 1300 people just like you

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This link to extraordinary photos of Saturn really puts your life in perspective. Infinitesimal doesn’t come close. Visiting China for the first time is a similar experience. Holy mess, are there a lot of people!

The same problem exists when trying to locate a capable set of vendors for your project. China has built so much manufacturing overcapacity in the last 30 years, there are literally factories on every corner. It can be bewildering trying to find the right supply chain partners.

Sourcing websites are like dating sites, some better than others, but all are only the barest of starting points. You might find true love, but there is considerable due diligence required to find the perfect mate. PassageMaker’s Sourcing Feasibility Study was developed to perform this research and present our customers with a set of capable vendors to choose from by essentially playing the role of a match-maker.

If you have a complete design database and are ready to start exploring your options in China, let us use our expertise to make the process as painless and productive for you as possible.

A ship is safe in a harbor, but a harbor is not what a ship is for

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The title of this post is one of my favorite sayings. As an entrepreneur, it reminds me to keep trying, even when it is hard; especially when it is hard.

These days the world economy is a tempestuous sea, but PassageMaker is growing and thriving. A “passagemaker” is a small motor boat capable of crossing the open ocean; I think Mike Bellamy chose an appropriate name for the company.

Even in this time of chaos, new clients contact us daily. Even though budgets are tight and the margin for error is far smaller than just a year ago, those entrepreneurial passagemakers know that if they ride out the storm they will be in a much better position to prosper when the storm ends. And they won’t be smashed to bits tied up to the docks.

Harbors are over-rated. There is no such thing as a safe job anymore. The closest thing to a job for life is the value you create for yourself as an entrepreneur.

Why do so many people source in China? Because tooling prices are 10%-25% of USA. Because component prices are 25%-50% of USA. Those are great enticements, but a Chinese supply chain takes far more time and effort to establish than an American one. In this economy, budgets are tighter and risks are higher, and you can’t afford the learning curve to figure out China on your own. Now more than ever entrepreneurs need a real PassageMaker to help them navigate the storm successfully. Contact us and let us show you how our Sourcing Feasibility Study, Vendor Coordination and Assembly-Inspection-Packaging services help our clients achieve success in China.

The end of the dollar and the rise of the Chinese consumer

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When Mike Bellamy and I chose the China track at the University of South Carolina in 1997, it was still an avante garde career move. Both of us had been to Asia and knew China was going to play a key role in the 21st century. Neither of us thought we’d be reading articles like this only 9 years after graduating:

From the Telegraph (UK), “The dollar is dead – long live the renminbi”

I try to stay away from politics in this blog, but regardless of your party affiliation, you can’t honestly avoid the conclusion that Washington (and London) have spent too much money in the last decade. This profligacy was matched by most individual Americans, as the country went on a credit-fueled bender. I remember feeling the odd man out for not having a $400k mortgage. But while individual Americans seem to have learned their lessons, and are now saving and investing at record rates, the US government has not learned and continues to issue debt at an astounding clip – $7 trillion in debt in 2009 alone.

This is not about politics, but simple math. The USA cannot afford to spend this money, and the political class is failing the polity by not acting responsibly to control this accumulation of debt.

To date, the producing nations – Germany, Japan and most importantly, China – have underwritten our debt to keep the USA consuming to fuel their export-driven growth strategies. But reality is going to force a brutal readjustment and a change in behavior for both the producing and the consumer nations:

A seminal shift in behaviour is being forced on the deficit nations [i.e., USA, UK, Spain – ed.] where, despite massive fiscal, monetary and financial system support, there is a continuing scarcity of credit and a growing propensity to save. Neither of these two constraints on demand will reverse any time soon.

This, in turn, is forcing change on surplus countries, whether they like it or not. Export-orientated nations [i.e., China, Japan, Germany – ed.] can no longer rely on once profligate neighbours to buy their goods. Against all instinct, they are having to stimulate their own domestic demand.

The most startling results are evident in China, where retail sales grew an astonishing 15.4 per cent in August. Fiscal action has succeeded in boosting consumption in Germany, too, despite mistrust of what one German politician has dubbed “crass Keynesianism”. [emphasis added – ed.]

So what does this mean for PassageMaker and those wishing to do business in China? From the sourcing point of view, there will likely be inflation in the renminbi, but I expect that to be outpaced by dollar inflation. No matter how you slice it, China is here to stay as a manufacturing center. And the Chinese are in much better position to enforce sound monetary policy with so much cash on hand. In this inflationary environment, PassageMaker’s services – Sourcing Feasibility Studies, Vendor Coordination and Assembly-Inspection-Packaging – are more valuable than ever. Think of them as an insurance policy or a hedge; you simply cannot afford the risk of a China learning curve any longer.

Though there will be increased wages for Chinese workers, especially in coastal zones, the reservoir of inexpensive labor is too vast to be exhausted for decades. China will retain the edge on cost of labor. And with the US government beholden to the Chinese, don’t expect any protectionist measures to last long. I do not expect a broad resurgence of US manufacturing.

BUT…for producers of unique products, especially agricultural products, like wine or coffee, this could be a grand time to start selling to China. As the Chinese middle class begins to consume to fill the gap, there is a huge opportunity for foreign firms to provide those goods. PassageMakercan help with just this, helping clients identify, establish and manage sales and distribution networks in China.

The future is as clear as mud, but I know we are all in for an interesting ride. In these times especially, you need to work with a company with solid experience in China. I hope you will consider PassageMaker and SafePassage as your business partners in an increasingly uncertain world.

I go to China all the time!

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I’ve heard this from a number of American businessmen over the years. Then when you start sharing “China stories” they are as shocked as the folks around the table who’ve never left the USA.

“What do you mean you’ve never eaten pig’s stomach noodle soup at a road side stand in the pouring rain? How in all those trips to China did you miss the duck’s blood? And you’ve never experienced the intestinal torture of trying to hold in last night’s Sichuan hotpot while stuck behind a smoke-belching Dong Feng truck in 100 F heat in bumper-to-bumper traffic for hours on end? Where in China did you go?”, I ask.

“Oh, I always stay at the Peninsula Hotel in Hong Kong and have all my meetings there”, they say.

Then, my friends, you have not been to China.

Look, the Peninsula Hotel is one of the finest in the world, and I don’t begrudge anyone the experience of staying there. You should. It’s awesome. But I am too blue-collar to spoil myself that way. I want to be in the Chinese neighborhoods where the yang rou chaun’r is served on the street at 3 AM and having a beer with the clerk at the all-night convenience store is the cure for jet lag.

Come to China, but if you are going to make the effort, come to China. Leave the hotel once in a while and experience the culture. All the foreign managers of PassageMaker have lived in China for years and they will make sure you get a taste of China with a proper guide. We enjoy entertaining our customers, and you’ll have a 5-star amount of fun while getting out into the exhilarating swirl that is modern urban China. We hope to see you soon.

Oh, I want to go to China with you!

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I get this all the time from the folks I meet. My response? “No, you don’t. You might want to go to China, but you don’t want to go with me.” Don’t get me wrong, I think China is great in many ways. It is no exaggeration that I love China, even when I hate it. I encourage everyone to go at least once in your life. But the people who say this to me want to visit the Great Wall, the Forbidden City, the Winter Palace, the Temple of Heaven, etc. So do I, since I’ve only crossed the first two off my list in 15 years of travel to the PRC.

“My China” is the industrial south, Guangdong Province, the ‘workshop of the world’. Miles and miles of factories, awful pollution, with precious little else. I grew up in a factory, so to me this is second nature, but it is not the typical haunt of tourists. In a sense this is a shame, as I think people need to see more of how things get made in order to appreciate the world they live in. Factories should be part of the tourist agenda for visitors to China. China’s transformation over the last 30 years is truly miraculous, and the factories of Dongguan are as much a monument as the Great Wall.

Mike Bellamy and I have been privileged to play a microscopic part in China’s development over the last 10 years with PassageMaker, and we are looking forward to the next decade and beyond.

The importance of food (and drink); or learning to love Pig Brain Soup

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Business books aplenty have been written on the importance of guanxi or relationships in China. And most of them are boring, so I won’t add to the pile.

From my personal experiences over the last 15 years in Asia, as a round-eye you build relationships by eating anything put in front of you and drinking too much. And bringing Purchase Orders.

Thankfully, I like nearly everything I’ve eaten in China. I’d traveled extensively in the USA, Mexico, Europe and Africa before I ever set foot in Asia, but my first night in Singapore in 1994 changed my whole life. And the food was what really hooked me. Prawn mee soup, jumbo prawns cooked in a banana leaf and Tiger beer at 2 AM in Newton Circus. I’d never seen any of this food before, didn’t know it existed, never seen a Chinese spoon, never used chopsticks, yet it was all like mother’s milk. I learned to use chopsticks in about 30 seconds, and to this day I eat noodle soup for lunch at least 3-4 days a week. Tiger is still my favorite beer.

From this experience, I’ve become a more adventurous eater (and drinker) than you’d expect for someone raised in Salem, VA. That adventurousness has served me well in China. When you visit a supplier, it is de rigour that you be hosted for a lunch or dinner banquet. Chinese street food is generally light and nutritious (oh, how I miss the vegetable dishes at the little restaurant around the corner from our office), but the banquet dishes are lavish, heavy and designed to show off and feel you out. Oh, and get you blind drunk in the middle of the day. The Chinese eat darned near anything, especially the Cantonese, so get ready for offal, strange ingredients and powerful flavors and scary textures.

If you hold up under this onslaught of unfamiliar cuisine and frankly toxic baijiu, you pass the test and provide your hosts with some entertainment. If you wind up in the hospital from food or alcohol poisoning, it is even more entertaining for them. But if you flat refuse to partake for anything other than religious reasons, you establish yourself as a wet blanket not to be taken seriously.

So what to do if you just cannot summon the courage to drink snake wine or eat pig brain soup? Option 1 – stay home and let the PassageMaker team deal with the vendors. Option 2 – come to China but let us arrange your trip and we’ll make sure you are not exposed to the scarier fringes of Chinese cuisine.

PassageMaker wants to make sure you enjoy your experience dealing with China, even if you never visit. And I frankly want to keep my record for days on an IV and days hungover after a banquet (4 and 5 respectively) intact.

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P.S. – It’s really delicious. One of my favorite dishes. I’m serious.