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Our new partner in Brazil, Andrea Martins of OverChina

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I am thrilled to announce that PassageMaker now has sales representation in Brazil. Ms. Andrea Martins, co-founder of OverChina, has joined the team, representing PM, China Quality Focus and SafePassage.

Ms. Martins has more than 25 years experience living in China, and has an impressive academic and professional resume. Here she is discussing the 60th anniversary of the PRC on Brazilian television (in Portuguese). Thankfully for me, she also speaks fluent English.

The PassageMaker web team is working to update our website with bios for our global sales team, something I hope to have up within the next two weeks. Short post tonight – computer trouble. More later…

There’s no General Tso’s Chicken in China

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This is one of Mike Bellamy’s favorite sayings. And there really isn’t any General Tso’s Chicken in China. And conversely, KFC in the USA thankfully, wisely does NOT serve that weird breaded, fried ground shrimp burger thing with the chunks of pepper and kernels of corn with the sweet mayonnaise…ick. And this is an ick from the guy who really, truly loves Chongqing style Pig’s Brain Soup.

This points to the distorted lenses through which different cultures view each other. General Tso’s Chicken is as far from a Hunan dish* as you can get. Yet it is probably the most famous “Chinese” dish in America. Some years ago I was dining at the local “Chinese” restaurant (normally I avoid such places, but my Father enjoys the lunch buffet). This place is owned by a great family from Taiwan, my much beloved second home, and I know they cook the good authentic stuff for themselves, but like every “Chinese” restaurant in small town America, they play to (their perception of) local tastes. Which, sadly, means sweet sauces, deep fried everything, overcooked vegetables**, copious amounts of cornstarch to fatten you up, Uncle Ben’s grade “rice”, “hot” dishes that aren’t, etc. Not the worst stuff in the world, but when you know what the real thing tastes like, it’s always disappointing.

As I was making my way around the buffet the restaurant was suddenly overrun with school aged children, maybe 5th grade. I asked one of the chaperons what was going on. Turned out to be a field trip from one of the local public schools; they were studying China that week and this was part of their education. I reflexively said, “这菜不是中国菜，是美国菜”; she was quite taken aback to hear me speaking Chinese, but even more so when I translated, “this isn’t Chinese food, this is American food”.

These cases of cultural myopia are fun when discussing food, but they can be dangerous when you start throwing money around. I am astounded by some of the assumptions people have about China, ranging from charming naivete to stunning ignorance. I’ll be the first one to admit China is getting easier to work with all the time, but that’s only in comparison to how difficult it was in the past. It is still a very foreign place.

PassageMaker was founded to help foreign companies be successful in their dealings with China. I tell all my clients, if you can satisfy your customers by making the product in your home market, please do. If you don’t have to source in China, don’t. Doing business in China is difficult and slow and never as inexpensive as it is advertised. But the reality is, in many cases, China sourcing is required to succeed in the market. It is still the place where the “world price” gets set.

Our core services – Sourcing Feasibility Studies, Vendor Coordination and Assembly-Inspection-Packaging – are all designed to help our clients access the advantages of China without exposing their intellectual property or otherwise getting ripped off. Mike and I have been doing this a while and we’ve made the mistakes and learned the lessons for you. If your project requires China sourcing, leverage our experience to make it a successful venture.

Notes:

* Hunan cuisine is one of my favorites, and is hot and spicy without the horrendous, toxic heat of Sichuan cuisine. This is one the best Hunan dishes, chili shrimp skewers, and you eat the shells, much like soft-shelled crab. We typically go through 3-4 plates of these at a sitting. Perfect with a cold beer.

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**Vegetable dishes are what I miss most in China. I’ve become reasonably proficient in recreating my favorites at home. Here’s my recipe for Spinach with Garlic and Sesame Seed (it’s my blog and who said we had to talk business all the time?):

8-10 oz spinach leaves (1 big bunch washed and trimmed or 1 bag of baby spinach leaves in the salad section works perfectly)

6-8 cloves of garlic, smashed and chopped coarsely

3 tbsps peanut oil

2 tbsps toasted sesame seeds (toast yourself by dry frying in the wok or buy them pre-toasted at any Asian grocery store)

1/4 tsp kosher salt

Heat the oil in a wok, add salt and garlic when hot, stir fry quickly and don’t burn the garlic. Add spinach (best to rinse and dry as much as possible in a salad spinner) and stir fry until leaves are wilted. Add sesame seeds, toss to mix and serve immediately.

There’s a lotta stuff you can’t learn from a textbook, because no one ever wrote the textbook

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When Mike Bellamy started PassageMaker, it was a typical trading company. Mike had a relationship with a particular set of factories, and sold their services to customers (like me) at a mark-up, taking ownership of the parts and assuming warranty risk. It worked well for a while, but soon enough, despite all our efforts, things began to falter because if you don’t fully own the factory, you can’t fully control the quality, delivery dates, pricing and services. It only proved to both of us that there was a better way. It was Mike who had the epiphany on the better way.

That better way became The PassageMaker Model of Trust & Transparency. Being honest became the core product. De-coupling the services from the vendors was the eureka moment. The services are inspection and final assembly. The vendors provide the bill of material. In this new method, the inspection and final assembly center is 100% owned by PassageMaker so the customer and PassageMaker are no longer at the mercy of the suppliers to get the quality right at ship it on time.

There was no guidebook for this new way of doing business. We didn’t learn it in school. We were truly working without a net.

Plenty of folks have offered snickering criticism over the years. We don’t charge enough. We should be marking up the product’s BOM with a margin hidden to the client, rather than just invoicing for our services. We should finance our customers. We can’t possibly be serious.

Well, to all our critics, we tried the traditional trading model a few times back in the day and lost our shirt, socks and underwear because the Chinese suppliers let us down, not because of something we did or did not do. We’ve watched our friends do the same thing over and over in their trading companies. They all failed because they left it up to the factories to hold the price, ship on time and manage the quality. If you don’t believe me, put five years of trading in China under your belt and then let’s talk. Running a trading company means assuming astounding risk with minuscule net margins, and because you don’t own the means of production, you are totally at the mercy of your suppliers. It is a great business model in theory; wretched in practice.

There was no textbook for The PassageMaker Model, because no one had gotten around to writing it, because no one had ever even thought of it. Mike is now (quite literally) working on the textbook , but our Sourcing Feasibility Studies, Vendor Coordination and Assembly-Inspection-Packaging services are our philosophy in practice. They are the controlled evolution of an idea.

There are lessons in life you have to learn by doing. Mike and I have the scars to prove we went through the fire, but the critical point is what we did with that learning experience. Anybody can learn from their own mistakes, by a wise person learns from the mistakes of others. We didn’t just learn; we innovated. And now we leverage this knowledge to the benefit of our customers. PassageMaker is unlike any company you will encounter in China, because simply we are unlike any other company in China.

I hope you will give us a chance to show you how different we are.

80% of success is just showing up

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A famous quote from Woody Allen, and 100% true.

When Mike Bellamy started PassageMaker, he was working out of his living room. He had no work force, no infrastructure, just his own willingness to work and work and work until the job was done. He showed up, plain and simple.

PassageMaker made plenty of mistakes in those early days. But Mike kept showing up, over and over, and he learned from his mistakes. He listened when a client (like me) told him what he was doing wrong and how to do it right.

And I listened and learned as well. Mike’s great innovation was to separate the service offerings from a set base of vendors. It was not an easy sell in a world dominated by the trading company model. It took real guts and vision to chart a new path and stick to it.

Since that epiphany, PassageMaker has added our Assembly Center in Buji, including the precision Medical Assembly Center, and has grown from 3-4 people working in the founder’s living room to a company with around 150 employees worldwide. Still small enough to care about the success of each of our clients, but big enough to provide the depth of services our diverse customer base requires.

Mike and I and the rest of the PassageMaker Team showed up and the success of the PassageMaker Model of Trust & Transparency speaks for itself.

Texas Tavern Wisdom

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“WE DON’T CASH CHECKS OR PLAY WITH BUMBLE BEES”, so says the sign next to the cash register at the Roanoke, VA landmark Texas Tavern. It’s been open every day, 24/7 (except Christmas) since 1930. No credit, no checks, all cash. A true money-making machine. I’ll have two small cheeseburgers all the way, a bowl with and a sweet milk, thanks.*

Now, anyone who knows the Texas Tavern might infer that my analogy implies that dealing with PassageMaker will leave a foul taste in your mouth, give you gas and make you reach for the antacids. Not so, though if you choose to visit us in China and have a desire to stretch your culinary boundaries to say, Sichuan cuisine, I am not responsible for the results.

Whether hot dogs, Cheesy Westerns** and chili are to your liking or not, the Texas Tavern serves good honest fair quickly and efficiently, available all hours of the day and night, for affordable prices. The food is cooked directly in front of you, nothing fancy, and all transactions occur at the time of sale, in cash.

This is in fact a perfect analogy for The PassageMaker Model of Trust & Transparency in China. There are no smoke and mirrors and our success is dependent on our performance in full view of the client. Our three basic service offerings – Sourcing Feasibility Studies, Vendor Coordination and Assembly-Inspection-Packaging – were formulated to provide a simple honest solution to the typical problems people faced doing business in China.

“Now if it’s so darned honest, why demand all payments in advance? Don’t you trust me?”, you ask.

Whether I trust you or not is immaterial. We insist on cash-for-services for very simple two reasons:

Reason #1 is that China as a whole operates on cash. You want me to be open tomorrow? Then pay me cash today. Chinese vendors actually use your deposit to buy the raw material for your order. It is the credit trap that contributed mightily to the death spiral of the US automotive industry – when you have to finance your customers for 3-6 months, the system is broken and the relationships are poisoned. PassageMaker, like all China vendors, requires at least partial payment in advance. Having seen both systems up close and personal, cash in advance is far more direct and far more honest an approach.

So Reason #2 is to maintain the honesty. If we don’t allow the moral hazard of credit, everyone stays happy. Expectations are clearly defined and can be easily met. The debtor is not slave to the lender. And I’m not up at night angry because you owe me money.

PassageMaker can introduce you to banks, to venture capitalists, or to angel investors. But we’ve found that being the low cost source of China services does not mix with playing the deep pockets. It crosses the streams, if you will. Just like the Texas Tavern will not alter its menu or offer credit, we offer our simple and elegant service, take it or leave it. And if you want ketchup with that, please get out now.***

Translations for the uninitiated:

* Two small (biscuit sized patties) cheeseburgers with raw white onions, pickle relish and mustard, a bowl of chili (beans mostly) with (chopped raw onions) and a sweet milk (as opposed to the default buttermilk). Heaven for around $5 (and for around 30 minutes before you need the aforementioned antacid).

** Cheesy Western = large cheeseburger with fried egg, over easy on top, all the way of course. Health food is wildly overrated.

*** No ketchup is ever served at the Texas Tavern. May it always be thus.

Brett Favre = It’s Awesome Time

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Short post tonight.

I am a Packers stockholder. I love the Packers and I hate the way the divorce with Brett Favre went down two years ago.

Tonight, in his 19th season in the NFL, he put the smackdown on his old team. One week from his 40th birthday, he showed the whole world how it’s done.

Brett Favre on a football field = Awesome Time. Aaron Rodgers and the Packers played one hell of a game, and but for a bogus “interference” call in the 1st half that cost them a touchdown, it would have been a game. But at the end of it all, there is nothing to say but that Favre schooled them.

I hope that 9 years from now, Mike Bellamy and I can look back on our career and say we were even half as good.

At this point, I’m supposed to give you a bunch of links on how PassageMaker can help you with your project. Tonight, I won’t. You can find them on the website if you want. Instead, let me just say congratulations to Brett Favre. He’s beaten all 32 teams in the NFL, something no one in the entire history of the NFL has done.

A legend walking the earth deserves nothing less than my complete respect.

BRETT FAVRE IS THE MAN.

Who Dares Wins

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This is the motto of the British Special Air Service. It is also great advice for any entrepreneur.

I had my first job at 14 running a lathe in a machine shop. I am sure I did a horrible job that first summer. I’ve worked in factories many times since then, and all those experiences taught me two major lessons:

  1. Respect the people who work in the factories, farms, restaurants and shops around you. If you can’t show respect and honor to the person serving you food, you don’t deserve any respect yourself.
  2. I was not cut out for corporate life.

Now #1 above needs no explanation. Or it shouldn’t. Shame on you if it does.

But #2…I never really considered going to work for anyone else after those summers in the factory. As I write this, it is 2:24 AM EDT, I’ve been at work since 7:30 AM EDT the previous morning. I should be burned out, but instead I am energized. This is my company and my passion.

What I love most about being in charge of global sales for PassageMaker and China Quality Focus are the entrepreneurs I meet. It is a huge misconception that creativity is confined to “the arts”. These are fiercely creative people who bring astounding ideas to the world. They deserve the support that PassageMaker provides through our Sourcing Feasibility Studies, Vendor Coordination and Assembly-Inspection-Packaging services.

Through our network of Endorsed Service Providers, we strive to offer service at every stage of a project’s life. Mike and I are entrepreneurs; we have taken these risks and we believe in the motto “Who Dares Wins”. More than anything we want to see our clients win.

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.