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How to make a BLT

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Years ago I saw a cookbook in Taiwan, written in Chinese, that taught our intrepid Taiwanese housewives how to make such standard American fare as the BLT (that’s Bacon, Lettuce and Tomato sandwiches for the non-Americans) and the PB&J (Peanut Butter & Jelly sandwiches). It had never occurred to me that anyone in Taiwan would (A) require instructions for such basic American fare or (B) want to cook it. I can’t really remember why I didn’t buy it – probably my student budget – but I regret that decision often.

Regular readers of this blog know I study food. Cuisine is the most basic cultural art form. Every culture, no matter how primitive, develops its own distinct cuisine. You learn a lot about someone by trying their food.

Asking an American how to make a BLT provokes a guffaw, but I’ve had exactly the same experience in reverse when I ask Chinese folks how to make the core dishes in their cuisine. BLT is every bit as literal as my favorite Chinese dish, 拍黄瓜, “banged up cucumbers”, which describes how you use the flat of the knife to lightly crush the cucumbers*.

Cultural assumptions greatly complicate international business. Foreign expectations of how things are in China are nearly always wrong. PassageMaker has studied the culture in China for more than an decade and our company exists to help our clients be successful in China.

We developed the Sourcing Feasibility Study to identify a wide range of capable vendors. Our Vendor Coordination services can be customized to support almost any task the client requires. Our Assembly Center was started to bring the critical Assembly-Inspection-Packaging functions in-house where they could be managed exactly to the client’s requirements, as documented in the Product Quality Manual.

While exploring foreign cultures – especially through cuisine – is one of the great adventures in life, it is a bad idea to try to learn the business culture of a foreign country on the fly. When your money is on the line, you need an experienced guide like PassageMaker.

* – Pai Huang Gua – “Banged Up Cucumbers”

4 small pickling cucumbers, washed and chilled – make sure to use fresh, crisp cucumbers

6 cloves garlic, finely chopped

1/4 tsp pickling salt

3 tbsps black vinegar (available at Asian markets, substitute white vinegar if unavailable)

2 tbsps sesame oil (3 tbsps if no hot sesame oil)

1 tbsps hot sesame oil (optional – available at Asian markets)

1tsp hot sauce, preferably Chili Garlic sauce or Sambal Oelek (optional – available at Asian markets)

Wrap cucumbers in plastic wrap and using fist, cutting board, rolling pin, flat of a cleaver, etc., smack the the cucumbers until they split. Unwrap and coarsely chop into large chunks. Salt the cucumbers and garlic in a bowl, drizzle liquid ingredients one at a time in order over the cucumbers and gently mix with a spoon. Do NOT cover and shake or otherwise try to completely blend liquid ingredients. You do not want to create an emulsion, but rather a layered sauce. Serve immediately as a cold appetizer.

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.

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.

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.

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.

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.