PassageMaker’s founder (Mike Bellamy) was interviewed by the Financial Times about his professional and personal life in a special segment on how East intersects with West.

Visit www.FT.com for the full article entitled “A foot in both cultures”. Below are some highlights.

Blackbox assembly in China explained using Mike’s desk as a case study.

Multicultural Business and Family

The American founder of PassageMaker, a sourcing company that acts as a go-between for midsized western companies that supply retailers from factories in China, laughs when he describes how his teenage daughter symbolises this cultural ambidexterity. She picks “the eyeball out of a fish-head with chopsticks with one hand while helping herself to mashed potatoes” with the other.

Blackbox Assembly Explained

…while everyone wants the China price – ie the low costs associated with sourcing from the country’s factories – clients are just as concerned about being copied by suppliers who quickly become competitors. “We are a buyer-appointed firewall. Buyers don’t want the sub-suppliers to see too far up the supply chain,” he says.

The process used to manufacture his exercise bike-enabled desk is a case in point. Its steel legs are made by one manufacturer, the plastic table-top at another. The unit is then assembled at a factory owned by PassageMaker and shipped directly to Amazon – without even the middleman client in the US seeing the finished product.

The manufacturer of the steel legs could have been used to make the whole product but breaking up the process allows the company to protect its intellectual property. The company’s shift a few years ago from a sole focus on sourcing to protecting IP – what Mr Bellamy dubs a “black box” approach to manufacturing “to give clients a physical infrastructure to protect their IP when the IP laws don’t”

Small town USA to Shenzhen China: Learning the language

He first moved to Asia in 1993 and has been a resident of Shenzhen, southern China since 1999. Mr Bellamy jokes that more people live in his apartment building in Shenzhen than in the small Upstate NY town where he grew up. Studying Chinese was not easy. Back in the 90’s, his roommate, a Chinese engineering student, returned to their hostel with a second-hand television. “He said, ‘This is how you turn it on’,” Mr Bellamy says. “I thought, I have to learn this language otherwise people will think I am stupid.” Mr Bellamy now reads, writes and speaks Chinese.

Mike Bellamy received his double degrees in diplomacy and economics at the American University in Washington DC and later received an MBA from the University of South Carolina.  As part of his program, he took a year of graduate level courses at the Harbin Institute of Technology in north-east China and at the University of International Business and Economics in Beijing.

Starting PassageMaker: Honest business in a corrupt system

In 2002, he founded PassageMaker with two employees; the company would later grow to over 200 employees.

Mr Bellamy jokes that he has sourced everything from church pews and sex toys to iPod accessories. Today, the company sources $200m worth of products for clients in the US, Europe and Australia.

Unlike many large supply-chain companies in Asia, PassageMaker does not ask for a commission from the factory supplying the product as well as from the buyers. “Our compensation is 100 per cent from the clients. As soon as you take a percentage from the supplier, there’s a conflict of interest,” he says.

If this sounds like the business equivalent of being a Boy Scout in China, it is probably because Mr Bellamy’s mission for his company is based on the Rotary Club’s guiding principles. On the walls of his company’s Shenzhen offices are questions employees are supposed to ask themselves as they do business, taken from Rotary’s Four-Way Test. “Is it fair to all concerned?” and “Will it build goodwill and better friendship?” are two of the maxims on its website and walls.

Visit www.FT.com for the full article.