Product Liability and China

By GSS on July 11, 2007 | Category: Current Affairs | Comments Off

If my dog was killed because he ate pet food from China that had toxic chemicals in it, because of poor quality control or lack of production oversight, I would be extremely upset. If I brushed my teeth tomorrow morning and my teeth began to glow green, because chemicals typically found in antifreeze, made their way into the toothpaste manufacturing line in a chinese factory, I’d look funny. But I’d also be pretty concerned and possibly very sick (nobody’s teeth have actually been reported to glow green).

The media is going nuts with all of the product liability issues being raised with Chinese imports. The Wall Street Journal recently published the article Made in China: Sued in the USA. See the article for just a sampling of the recent spats arising from these issues.

The media coverage is both a good and a bad thing. It’s bad, because a number of protectionists in Congress and other industries are using it to voice and push an anti-China agenda in addition to using China as a scapegoat for a number of America’s economic woes.

For more on this, take a look at a recent Economist article published in May, entitled America’s Fear of China, the main points of which can be read here. The article makes some great points in terms of what might be valid and invalid in terms of America’s agenda with China.

Detractors aside, the media coverage of these issues is a good thing because American consumers, and particularly retailers, need to become more aware of where their goods are coming from and in what conditions they are being produced–not in a hysterical and frenzied fashion as some might like us to behave. But we need to raise awareness of these issues and investigate them more thoroughly.

Having personally visited at least 75 factories in China in the last year, I can tell you that factories in China come as varied as food retailers in the United States. You’ve got Mom-n-Pop stores, farmers markets, vending machines, regional grocery chains, roach coaches, national grocery chains, and more. Their setups, services, products, sizes, operations, management styles, locations, and customers come in every variation under the sun. So do factories in China.

Consider the following as an example of the complexity of working with the right Chinese suppliers. Two factories may exist in the city of Chanzhou, China. They both are exactly the same–same number of workers, size of factories, types of machines, and products produced. Let’s say they both produce shirts and jackets–garments. Factory A has a very professional-looking website, someone who speaks decent English with customers, and has purchased a counterfeit ISO 9001 certification to validate their quality systems with customers even though their quality systems are not up to par with U.S. standards. In addition, Factory A does not have a sewing needle detection machine or needle tracking program in place.

A needle detection machine, featured in the picture, is used by passing garment pieces over it to determine if any needles or pieces of needles are stuck in the garment. A needle tracking program provides that every worker must sign in and sign out needles. If a needle is broken during use, it must be taken back to the needle-person and exchanged for a new one.

Factory B does not have a website in English. They do have staff that speaks an intermediate level of English. They do not present any international certifications, but they have been working successfully with foreign customers for over 7 years. They have and use their needle detection system as well as a needle tracking program. A U.S. company emails both factories looking for a supplier. They choose Factory A because Factory A displays the trappings of a good organization and they believe that such a factory would have good quality and safety control. They purchase 10,000 kids jackets, for ages 3 to 5 years, from the factory and sell them in the U.S. market . Eleven of the jackets sold contain sharp needle points. Nine of them don’t cause any harm. One of them pierces a 3 year-old’s neck and the child gets an infection. Another needle gets stuck under the skin of a little boy’s arm and both require hospital attention. The angry parents find Lawyer X, who agrees to help them go after the US company for its negligence and make them pay dearly for the harm done to these children.

Before the media blitz and all of the recent stories about Chinese product liability, my own little hypothetical story here may have seemed a little dramatic and far-fetched. Now, not so much. It doesn’t take much to strike up a conversation with a Chinese vendor these days and send them money to make your product. Spare yourself from becoming a cautionary tale of Chinese product liability in the WallStreet Journal–do your homework and keep on top of quality. Investigate what safety standards your product must live up to. Understand how your products will be inspected: according to what criteria and when. And, for backup protection, carry a product liability insurance policy. This goes for suppliers in China or any low-cost country for that matter. As one client cleverly put it to me in an email, just because Paris Hilton got all the publicity for going to jail, doesn’t mean that she’s the only Hollywood, teenie-starlet out there bending the rules.

Is the Innovation Reaper Coming for You?!!!

By GSS on July 3, 2007 | Category: Product Innovation | Comments Off

Innovate or die! I still remember seeing this sprawled across the cover of an issue of Businessweek magazine in a bookstore in 2003. I generally don’t remember magazine cover titles 3 months prior. But this one is pretty scary, right? After reading this title, I went right home and stared at a blank wall for an hour and muttered to myself about new products I could develop. Thankfully, I’ve staved off the Innovation Reaper that Businessweek warns of, so far…

Many folks have different ideas about how innovation takes place. Generally, it’s perceived to be an "aha" moment or epiphany-like moment. As if, one day three years ago, Steve Jobs was digging through his closet for his old Hari Krisna shrouds, when a pile of old records, some photos of he and Wozniak playing freeze tag, and an old rotary phone fell off the shelves into one pile on his foot and he screamed in pain "Aye! …phone." True story.

Guy Kawasaki recently interviewed Scott Berkun, author of The Myths of Innovation. Berkun’s innovation resume includes working on the Internet Explorer team at Microsoft back in the 90’s, as well as writing the best-selling book, The Art of Project Management. What I like about Berkun’s points regarding innovation, is the theme that innovation, like many other things, is generally the result of a string of small improvements and consistent effort. In addition, innovation is not just a challenge of conceiving of things never thought of before, but it’s just as much a challenge of convincing others of the worth of your ideas or products. Edison knew both of these things. Berkun explains:

Question: How long does it take in the real world—as opposed to the world of
retroactive journalism—for an “epiphany” to occur?

Answer: An epiphany is the tip of the creative iceberg, and
all epiphanies are grounded in work. If you take any magic moment of
discovery from history and wander
backwards in time you’ll find dozens of smaller observations,
inquiries,
mistakes, and comedies that occured to make the epiphany possible. All
the
great inventors knew this—and typically they downplayed the magic
moments.
But we all love exciting stories—Newton getting hit by an apple or
people
with chocolate and peanut butter colliding in hallways—are just more
fun to
think about. A movie called “watch Einstein stare at his chalkboard for
90
minutes” wouldn’t go over well with most people.
Question: Is progress towards innovation made in a straight line? For example,
transistor to chip to personal computer to web to MySpace.

Answer: Most people want history to explain how we got here, not to teach them how
to change the future. To serve that end, popular histories are told in
heroic, logical narratives: they made a transistor, which led to the chip,
which create the possibility for the PC, and on it goes forever. But of
course if you asked William Shockey (transistor) or Steve Wozniak (PC) how
obvious their ideas and successes were, you’ll hear very different stories
about chaos, uncertainty and feeling the odds were against them.

If we
believe things are uncertain for innovators in the present, we have to
remember things were just as uncertain for people in the past. That’s a big
goal of the book: to use amazing tales of innovation history as tools for
those trying to do it now.
Question: Are innovators born or made?

Answer: Both. Take Mozart. Yes, he had an amazing capacity
for musical composition, but he also was born in a country at the
center of the music world, had a
father who was a music teacher, and was forced to practice for hours
every
day before he started the equivalent of kindergarten. I researched the
history of many geniuses and creators and always find a wide range of
factors, some under their control and some not, that made their
achievements
possible.
Question: What the toughest challenge that an innovator faces?

Answer: It’s different for every innovator, but the one that crushes many is how
bored the rest of the world was by their ideas. Finding support, whether
emotional, financial, or intellectual, for a big new idea is very hard and
depends on skills that have nothing to do with intellectual prowess or
creative ability. That’s a killer for many would-be geniuses: they have to
spend way more time persuading and convincing others as they do inventing,
and they don’t have the skills or emotional endurance for it.
Question: Where do inventors and innovators get their ideas?

Answer: I teach a creative thinking course at the University of Washington, and the
foundation is that ideas are combinations of other ideas. People who earn
the label “creative” are really just people who come up with more
combinations of ideas, find interesting ones faster, and are willing to try
them out. The problem is most schools and
organizations train us out of the habits.
Question: Why do innovators face such rejection and negativity?

Answer: It’s human nature—we protect ourselves from change. We like to think we’re
progressive, but every wave of innovation has been much slower than we’re
told. The telegraph, the telephone, the PC, and the internet all took decades
to develop from ideas into things ordinary people used. As a species we’re
threatened by change and it takes a long time to convince people to change
their behavior, or part with their money.
Question: How do you know if you have a seemingly stupid idea according to the
“experts” that will succeed or a stupid idea that is truly stupid?

Answer: Don’t shoot me, but the answer is we can’t know. Not for certain. That’s
where all the fun and misery comes in. Many stupid ideas have been
successful and many great ideas have died on the vine and that’s because
success hinges on factors outside of our control.

The best bet is to be an
experimenter, a tinkerer—to learn to try out ideas cheaply and quickly and to
get out there with people instead of fantasizing in ivory towers. Experience
with real people trumps expert analysis much of the time. Innovation is a
practice—a set of habits—and it involves making lots of mistakes and being
willing to learn from them.
Question: If you were a venture capitalist, what would your investment thesis be?

Answer: Two parts: neither is original, but they borne out by history. One is
portfolio. Invest knowing most ventures, even good ones, fail, and
distribute risk on some spectrum (e.g. 1/3 very high risk, 1/3 high risk,
1/3 moderate risk). Sometimes seemingly small, low risk/reward innovations
have big impacts and it’s a mistake to only make big bets.

The other idea is
people: I’d invest in people more than ideas or business plans—though those
are important of course. A great entrepreneur who won’t give up and will
keep growing and learning is gold. It’s a tiny percentage of entrepreneurs
who have any real success the first few times out—3M, Ford, Flickr were all
second or third efforts. I’d also give millions of dollars to authors of recent
books on innovation with the word Myth in the title. The future is really
in their hands.
Question: What are the primary determinants of the speed of adoption of innovation?

Answer: The classic
research on the topic is Diffusion of Innovation by Rogers, which defines
factors that hold up well today. The surprise to us is that they’re all
sociological: based on people’s perception of value and their fear of
risks—which often has little to do with our view of how amazing a
particular technology is. Smarter innovators know this and pay attention
from day one to who they are designing for and how to design the website or
product in a way that supports their feelings and beliefs.
Question: What’s more important: problem definition or problem solving?

Answer: Problem definition is definitely under-rated, but they’re both important.
New ideas often come from asking new questions and being a creative
question asker. We fixate on solutions and popular literature focuses on
creative people as being solvers, but often the creativity is in
reformulating a problem so that it’s easier to solve. Einstein and Edison
were notorious problem definers: they defined the problem differently than
everyone else and that’s what led to their success.
Question: Why don’t the best ideas win?

Answer: One reason is because the best idea doesn’t exist. Depending on your point
of view, there’s a different best idea or best choice for a particular
problem. I’m certain that they guys who made telegraphs didn’t think the
telephone was all that good an idea, but it ended their livelihood. So many
stories of progress gone wrong are about arrogance of perception: what one
person thinks is the right path—often the path most profitable to them—
isn’t what another, more influential group of people thought.
Question: Is innovation more likely to come from young people or old people? Or is
age
simply not a factor?

Answer: Innovation is difficult, risky work, and the older you are, the greater the odds
you’ll realize this is the case. That explanation works best. Beethoven didn’t write
his nineth symphony until late in his life, so we know many creatives stay
creative no matter how old they are. But their willingness to endure all the
stresses and challenges of bringing an idea to the world diminishes. They
understand the costs better from the life experience. The young don’t know
what there is to fear, have stronger urges to prove themselves, and have
fewer commitments—for example, children and mortgages. These factors that make it easier
to try crazy things.

Product Management with Offshore Manufacturers, Part III

By GSS on June 27, 2007 | Category: Communication | Comments Off

Part III of my cross-post collaboration with Paul Young of the Product Beautiful blog. This is a continuation from Part II of this post. The topic is product management and communication with offshore manufacturers. Paul has made some great points, and I have added my own two cents.

Put your overseas manufacturer in a position where they only have to execute, never think. If they have to think, it means that you didn’t spell something out clearly enough for them, or you assumed something. Every time they have to think, they will get something wrong, which will add 1 month to your schedule as a prototype gets screwed up, and has to be redone.

My thoughts: This point builds off of the last bullet regarding the difference between the ability to work with an MRD (Marketing Requirements Document) and design/engineering specs. An MRD requires extrapolation. The education and cultural foundations of some cultures make them extraordinarily good at copying, memorization, and rote learning. But, this same foundation greatly hamstrings their ability to come up with their own solutions, think outside the box, and be creative. Create the design specs here, then send it overseas for review. It should be noted that some vendors will be able to provide useful advice regarding the manufacturing of your product. Generally speaking, they are experts in their fields and are familiar with the machines, materials, and processes that are available overseas. A product designed domestically may not be designed well for manufacturing overseas, thus their points are worth considering and sometimes changes will improve the product. Nevertheless, the quickest path to accurate manufacturing is to present the overseas vendor with a finalized design package, with the opportunity for slight modifications should they be helpful.

Strongly consider doing rapid prototypes locally. Prototyping is about speed and fast changes to designs, not saving a few bucks overseas. What’s the opportunity cost of your prototype sitting on a container ship for 2-4 weeks? How much do your really save if you have to air freight your prototypes over from China?

My thoughts: Whether you have rapid prototyping done or just build a prototype yourself, it is good to achieve some form of prototype locally. You will be able to present your prototype to a vendor overseas, along with your design package, and this will help you convey information. If pictures speak a thousand words, prototypes speak a million. Sharing this kind of information helps a non-english speaker immediately circumvent the language barrier and gather important knowledge about the look, feel, and function of your product through direct interaction.

Find a manufacturer who has done it before. Very important, especially for decorative items or things with fancy finishes. We are nearly a year late on some decorative metal pieces, and on our 4th manufacturer (who is only barely adequate), because we have not had anyone in our circle of connections that has experience producing decorative metal with fancy finishes.

My thoughts: Often, overseas manufacturer’s will tell you they are capable of products and processes that they really are not competent in because they either want your business, or do not realize they are not capable, or both. It is critical to assess a manufacturer’s capabilities before you begin work with them. This involves inspecting a vendor’s portfolio of existing products, machines, inventory system, labor, factory space, quality control, past references, sub-vendors, and so forth. Doing the due diligence up front to find a sound manufacturing partner will save you money, time, stress, and possibly your business in the long run.

Because there is so much attention on China and Chinese manufacturing these days, I have included a few extra points specific to doing business there:

The Three Biggest Challenges In Communicating in China:

1.It is culturally acceptable for a Chinese person to tell you they understand, nod their head, and say "yes" to questions when they actually do not understand what you are saying. Therefore, it’s helpful to ask questions many different ways, including open ended questions which require them to volunteer information back to you and demonstrate their understanding.

2.Patience is essential. Anyone who has ever tried to learn another language and operate in another culture can understand this. You have to have a great deal of patience in working with the Chinese as they often must research the words and meaning behind your statement, or consult with other staff members prior to responding. They may actually spend hours just reading, understanding, and responding to your emails. For this reason, email should be used in addition to speaking on the phone. Most have never conversed with a native english speaker and will have less time to understand what you are saying. Whereas, an email can be analyzed for as long as needs be. Still, they may misunderstand your statements. Thus, see my first point.

3. Develop a feel for the people you are communicating with. You will begin to learn their behaviors when they do and do not understand and can react accordingly.

4. Be polite, persistent, and again, patient.

Product Management with Offshore Manufacturers, Part Deux

By GSS on June 26, 2007 | Category: Communication | Comments Off

I’ve been working with Paul Young of the Product Beautiful blog to do a cross-post collaboration on product management with offshore manufacturers. This is a follow up to my first post, introducing Paul’s blog and containing a video by Berlitz language schools, that I still laugh at when I watch "What Are You Sinking About?".

To create this post, Paul put together his thoughts given his experience managing product development and manufacturing with some of his designers and suppliers overseas. These are the bullet points. I thought he did a great job and covered a lot of ground, so I simply added on some of my own insights to his points. There is a lot of good information, and this is only the second of 3 posts, so without further ado:

If you and your manufacturer are not proficient in the same language, investing in translation is an absolute must. Don’t rely on you understanding "just enough" and they understand "just enough" because your end product will be "just enough" too…

My thoughts: Translators are a must for several reasons:

1) Having someone whose core competency is language and translation will greatly speed the process of communication.

2) A translator can help those in other cultures who are concerned with "saving face", avoid embarrassment when they do not understand. Often, higher-ups in other cultures do not like to admit that they don’t understand or are wrong. A translator helps ease the obviousness of this.

3) Translators are better trained to ask questions when they don’t understand and answer questions that verify their understanding. In many cultures, people will tell you they understand when they really don’t.

4) Language is the tip of the iceberg when it comes to communicating across cultures. For this reason, I would find a translator native to the country I am working in, who has a proficient command of english (usually, this involves a college major in English), who understands the cultural nuances of the culture you are dealing with.

Negotiate EVERY thing up-front.

My thoughts: In our own country, people often fail to take stock of all that is negotiable in transactions in general. Clearly define the terms you agree upon with your vendor and get it in writing. You may even want to take it as far as having the contract translated into their language, to leave no room for excuses of "I didn’t understand". You want to leave as little room as possible for this, because once you begin work, it is very very difficult to change the terms. Also, if the relationship is important,
don’t try to squeeze the people you are working with as hard as possible just to save every penny you can. Often people go to other countries because they hear tales of rock bottom costs and want to take pride in
having procured the lowest costs. Often, you get what you pay for. Make sure there is incentive left in the deal for everyone and sow the seeds for a productive long term relationship. This will save you money in the long run.

If you’re using an overseas design house, make sure you’re clear on who owns the rights to the Intellectual Property when they’re done

For some reason, even though they make horrible margins on manufacturing vs. design, lots of design houses insist on manufacturing rights to at least the first run of a product that they have designed for you. Negotiate the right of first refusal so you can either ask them to match costs with a competitor or you can opt to have your product built elsewhere.

My thoughts: From a manufacturing and sourcing perspective, flexibility is a strategic must. Compare costs whenever possible and never rely only upon a single source. Have alternative options ready if needed.

You can’t communicate with an overseas design house or manufacturer like you would with your in-house Engineering or Development team. Internally, I can give my Development team an MRD, to which they will respond with an Engineering specifications document detailing the "how" they are going to built a product to meet the MRD’s specs, along with proposed schedules, costs, and tradeoffs.

I have yet to see any overseas group (in our price points, we’re a startup) that can handle a MRD. They need to jump directly to the specs document, and they can’t write it.

Employ one of your Engineers to write the specifications, work with the overseas engineers, and communicate tradeoff decision points to Product Management. As a Product Manager, you don’t have the time or skills to chase around your contract manufacturer, when you should be focused on the strategic – what does the market want and how can we best deliver it?

My thoughts: There are several barriers to effective communication when working with a vendor overseas: time, language, culture, distance, technology, and more. If you are going to have design done by an overseas design house, be sure to see a portfolio of work that reflects an understanding
on the designer’s part of your culture and market. Generally speaking, people from non-western countries will not be intimately familiar with the nuances and aesthetics of good western design, and are very unlikely to know your market. Design houses will probably be better in this respect, but contract manufacturers will almost always not be competent in this area.

Leading Sourcing and Manufacturing in China Event with Inventors Alliance

By GSS on June 22, 2007 | Category: News | Comments Off

I apologize for the late notice. For anyone in the Sacramento or Bay Area of California, I will be giving a seminar with the Sacramento Chapter of the Inventors Alliance this Saturday on the Basics of Manufacturing in China.

During the seminar, I will be covering the issues related to small businesses and inventors manufacturing in China. I will cover aspects of product design, product development, obtaining price quotes from manufacturers, sourcing, the manufacturing process, quality control, IP protection, and all through the use of many slides loaded with interesting pictures, images, and few bullet points. I’ll also show some video of some factory facilities and processes from our recent trip to China.

The event is from 2pm to 4pm in Sacramento, June 23rd (this Saturday). The address is 925 3rd street, Sacramento, CA. The event fee is $20 at the door. The presentation will be worth your while. I look forward to seeing those of you in the area and interested at the event.

Retail Sell-Through Tips for Small Businesses

By GSS on June 21, 2007 | Category: Product Marketing | Comments Off

Most inventors and small businesses I talk to about their products have goals of selling through Walmart, Target, Walgreens, Home Depot, and the other major retailers out there. "If I could just get my product into Walmart, then…" Maybe. It can be a tough road onto the shelves of these stores and I rarely find information out on the web that offer some explanation or tips.

Alas, during one of the many Google searches I did throughout yesterday, I stumbled upon an errant result (or perhaps the blogging gods knew this article needed to have a blog post on it). Startupnation, a resource website for entrepreneurs and small businesses posted: Savvy Sell-Through Tips to Keep Customers Coming Back for More—Part’s One and Two. This is an informational article for those small businesses, start-ups, and inventors looking to take their retail channel to the next level and get their products some shelf space in a major retailer. Those new to this game often believe the key to their problems is having the best product in the world. If only…

There is a lot more that goes into getting a product on the shelf in these big box gatekeepers to America’s wallets, let alone successfully selling through them. See my last post on Thomas Edison–prolific inventor AND marketer.

The article’s main points in bullets, with my comments beneath:

Repeat after Us: Positioning, positioning, positioning…

Indeed. Where is your product going to be in the store? Endcap? Aisle? What category? What product’s will it be next to? Does your packaging pop in comparison to your competitor’s products? These are things you can start considering early on if sell-through in major retailers is a key business move.

Give retailers a sell-through tool kit

Last time I went shopping at Best Buy, I counted 39 "I don’t know’s" and 17 blank stares with head scratching in response to my questions about products. Ok, not really. But, it feels that way almost every time I go into stores like that, unless I stumble upon the superstar, diamond in the Western Region of stores, employee. Give these folks the ammo to sell your product and explain why it’s cool and the benefits of buying it.

Show why your product is better than the other guys

Packaging and pricing are two ways the article points out to accomplish this. I very much like the first one because you have so much control over it and you can see what your competitor’s product packaging is like beforehand and design your packaging to triumph. The second strategy, price, is ok. But, be careful with this one. It should be wielded only with good data analysis to support it and it’s important to remember that once you go low, it is very hard to climb back up. Limited time promotions can be a way to achieve this, but you’ll pay a premium for this.

Their bottom line:

You
have to do a lot more than just fulfill your retailers’ orders – you
have to help them sell your products through to consumers. If you come
up with good ideas to place and support them, retailers can be
persuaded to go along.

Part Two:

Get all exclusive with your major retailers

Yup. Exclusivity is a negotiation point, right along with almost everything else. Sometimes this works.

Mix it up–extend your product line

Another good strategy. Don’t do it blindly. Brainstorm all the different products you could develop. Draw a roadmap according to which ones makes sense to develop when, targeted to who, etc. Think strategically about which products to develop when and how, in order to maximize the entire product line. The key is to maximize the return of your portfolio of products, not have each one developed in silos.

Spread your product’s backstory

Packaging. With about half or more of purchasing decisions made right there in the aisle, you want to give all you’ve got to help people make the right decision.

No ad budget–go to grass roots

I like this one. It forces people to think and act creatively rather than just try and throw money at problems. It certainly helps and can be a negotiating point if you are rolling out a nationwide marketing and PR campaign to sell your product. But not everyone has this option, and these days, creativity, buzz, viral ideas, and word-of-mouth, are more potent and easy to create than ever.

Part Two’s Bottom Line:

Landing
those first retail deals is only the start. From then on, it takes
innovation, imagination and work to get the sell-through that keeps
your retail partners coming back for more – while you watch your
company grow.

Check out the article.

Thomas Edison vs. Inventoritis: A Heavy-Weight Product Development Match for the Ages

By GSS on June 18, 2007 | Category: Product Development | Comments Off

Inventoritis… Sounds like Gingivitis. But without the bad breath. Or, so I hear.

Generally, one of the most difficult challenges in developing a successful product or business is getting out of our own way. I struggle with this daily. I watch others struggle with it daily. We all do–from corporate innovators to independent inventors. I am certain that my own success as a business person and product developer is largely impacted by my own ability to train myself to get out of my own way.

How do we get in our own way in the first place?

Peter Paul Roosen and Tatsuya Nakagawa, two product marketing gurus, have co-authored a white paper, Inventoritis Exposed, which gives a name to the phenomenon of getting in our own way when it comes to innovation and new product development. I previously wrote a blog post on the authors’ concept of "Inventoritis", which they have incorporated into the paper. In terms of product development, Inventoritis, is a condition that prevents market-driven innovation, or design for the user experience. Because it’s a challenge, that I believe, one can only control and perhaps eliminate through sustained effort over many years, decades, and perhaps a lifetime, it’s worth continually refreshing my awareness and knowledge of it. "Inventoritis Exposed" offers an interesting perspective on the issue, by analyzing the methods of America’s most prolific inventor, Thomas Edison, who the authors assert exemplified the optimal path for commercializing innovative products.

Before reading the paper, I have to admit, i did not know much about Thomas Edison beyond his invention of the light bulb and a few other items (which I am sure I will use today, but cannot name them). But, Roosen’s and Nakagawa’s interesting stories of Edison (much of which is told through the first hand experience of Henry Ford) and analysis of his methods, create a vision of a person who was adamant about his own process of inventing and entrepreneurship, not just his own ideas and assumptions. Edison’s most famous quote:

“Genius is one percent inspiration and 99% perspiration. As a result, a genius is often a talented person who has simply done all of his homework.”

The point that Roosen and Nakagawa make, is that "…all of his homework" does not just entail perfecting the product for perfection’s sake, ego’s sake, or science’s sake. The authors note:

What is not as well known, perhaps, is that his penchant for invention was rivaled only by his effectiveness as a marketer. Edison was in the habit of working backward from the market and doing whatever was needed to most expeditiously fill what he found to be the real or actual need. He was known to always be actively researching what everyone else was doing and had done. He sometimes bought and, on occasion, stole technology from others.

Few people today know or appreciate that Edison did not invent the light bulb. Joseph Swan was installing them in homes and landmarks in England before Edison’s first successful test was completed on October 21, 1879, when Edison’s carbon filament lamp successfully operated for only 13.5 hours. Additionally, Edison had bought the Canadian and US patent rights filed in 1874 for a carbon filament lamp by a Canadian medical electrician named Henry Woodward and his colleague Mathew Evans. What Edison did was to create the first commercially viable filament lamp which incidentally did not occur until more than six months after Edison filed his patent.

Henry Ford, a big fan and friend of Edison, offers his perspective:

Not the least among the many remarkable qualities of the Edison mind is its ability constantly to maintain a perspective. He never has any blind enthusiasms. An inventor frequently wastes his time and his money trying to extend his invention to uses for which it is not at all suitable. Edison has never done this. He rides no hobbies. He views each problem that comes up as a thing of itself, to be solved in exactly the right way. His approach is no more that of an electrician than that of a chemist. His knowledge is so nearly universal that he cannot be classed as an electrician or a chemist. In fact, Mr. Edison cannot be classified. He knows instinctively what things can be used for and what they cannot be used for.

It seems to me, Edison was a master of a process that helped him stay out of his own way. He did this in terms of his assumptions of how things should be, and let the market guide him in terms of what products and product features to pursue. In addition, he was very adept at implementing a rigorous process that led him, technologically and commercially, to exceptional success.

The white paper offers much more. And I believe the book, "Overcoming Inventoritis", by these authors covering this subject in much more depth has just become available.

Small Businesses Sourcing in China: What Wave Are You Riding?

By GSS on June 14, 2007 | Category: Product Sourcing and Strategy | Comments Off

A fairly recent article featured in Businessweek online, released by Boston Consulting Group’s Jim Hemerling, pointed out the rapid evolution of US companies’ sourcing operations in China. Hemerling notes what he sees to be, three waves of sourcing in China, through which multinational companies are progressing. I thought to myself, "as mid-size and small businesses follow suit in sourcing globally, what wave are they riding? Paddling for? Sitting on the beach watching?

Wave 1.0, or the first wave, involved the beginning of sourcing in China by western companies’ competitive search for low costs. Hemerling writes:

Numerous U.S., Japanese, and European companies established corporate
beachheads in China to implement their low-cost strategies. Stand-alone
sourcing offices sprang up in Shenzhen, then Shanghai and other
locations, and anyone with even a few years of sourcing experience
became a hot commodity. During this initial phase, Western
multinationals looking to source from China faced two significant
hurdles: a dearth of qualified suppliers and a dearth of qualified
sourcing people.

Wave 2.0, involved chinese suppliers’ step up the value chain into R&D functions:

As sourcing matured, so did the suppliers. In a wide range of
industries, from consumer electronics and IT equipment to automotive
manufacturing, many Chinese suppliers moved far beyond being arm’s
length suppliers. They started to innovate and collaborate with their
customers on component and product design, marking the transition to
sourcing 2.0. Today, many of these same Chinese suppliers are designing
new products for global markets as part of supply chains that are
integrated into global procurement processes.

The report notes that, according to the OECD (Organization for Economic Cooperation and Development) China became the second highest investor in R&D in the world at US$ 136 billion (the US is about double this).

In Wave 3.0, Hemerling cites what he believes to be China becoming a global center for procurement:

Today’s China is the center of an economic maelstrom that grows larger
and more powerful (and increasingly complex) every day. R&D centers
originally set up to support product localization for the Chinese
market are now going full force in developing new products for the
global market.

These rapid changes, which will continue to accelerate, mean that
many Western companies have to rethink their global procurement
operations. The announcement that IBM is moving its global procurement
headquarters to Shenzhen is the most visible sign that sourcing wave
3.0 is underway—with China becoming the global center for procurement.

Hemerling notes that, although other major multinational companies like GM are relocating procurement offices in China, this is not a move for everyone to follow. In fact, many companies appear to be still struggling with Wave 2.0.

Multinational behemoths aside, where do the rest of small to mid-size businesses fall along this range? I would argue that those with the utmost experience in China are steeped in Wave 2.0. These small and mid-size businesses have discovered the benefits of close partnerships with key Chinese suppliers, through which they foster low level R&D on their projects by outsourcing the lower-end R&D functions to their suppliers. Many of these companies might still be trying to optimize, or simply contain, their supply chain challenges. But most are still in Wave 1.0. Some have begun in China, but are now seeking even lower costs in other countries. Some have developed a solid supplier base in China and are reaping the benefits of the cost-savings. Some are still sitting on the fence in terms of whether to go, how to go, or how much to commit.

Wave 1.0 is now filled with start-ups, entrepreneurs, inventors, and the smallest of businesses. Global Sourcing Specialists is occasionally contacted by stay-at-home mothers looking to develop products, and these mom-entrepreneurs know that to make the numbers work and have their product compete with larger companies’ products on the store shelves, they need to begin overseas. Venture Capital firms now frequently require the start-ups they fund to have a global operations plan, global market mindset, or overseas sourcing strategy right out of the gate. China, for good reason, is often the first place many of these companies look. Does that mean that these small and new businesses will be eventually moving through Waves 2.0 and 3.0? Yes and no. It seems to me that the next stages of sourcing are primarily reserved for companies of a certain size, particularly Wave 3.0. But, if we are working on a new product with a client and our supplier proposes a design change that they have developed to add value, is this not a hint of an innovation or R&D contribution on their part? I would say so.

However, for those small companies that stay relatively small, I see them slowly moving on to Wave 2.0, but perhaps not in as grand or focused a fashion. What I do see happening, is R&D and design services in other Asian countries, other countries in general for that matter, not only becoming accessible to these businesses, but feasible. I know great product designers in Singapore. The rapid evolution and impact of technology on communication, and the emergence of increasingly competitive resources in other countries, is only going to flatten and open the playing field more. I also see multinationals paving the way in other low-cost countries to mitigate their risks and continue to cut costs, and small businesses will eventually have a menu of country options in the next decade in terms of what countries to source from. These changes will certainly take time, at least a decade or more to transpire. But as one who has paddled for and ridden many waves in the ocean, I can tell you, if you’re not looking out towards the horizon to see what’s coming, chances are you’ll miss the whole thing, or worse, have something crash down on top of you from behind.

Prototyping Your Product: You Ain’t Seen Nothin’ Yet!

By GSS on June 12, 2007 | Category: Product Development | Comments Off

Do we live in an age in which we can draw with a pen, in thin air, an object we would like to create, and have the data captured by a machine and churned out in the form of a 3D prototype? Or, perhaps we can take a 3D prototype, and just by touching, squeezing, pushing, and pulling on it, we could manipulate and mold the object into the dimensions we want to get a look at, and then change them to something else in seconds? I am not on drugs. These possibilities for Rapid Prototyping and Claytronics are beginning to become a reality, as the growth of new technologies is allowing for entirely new ways of creating and interacting with the 3D world.

Take a look at the sketch furniture of Front Design, a design group from Sweden. They have devised a method of materializing free hand sketches in air by combining two technologies: motion capture and rapid prototyping. Thus, what one draws in thin air comes out of a rapid prototyping machine hours later as a hard object. What’s that? Aunt Mildred will be coming to dinner tomorrow night as well and we need an extra chair? Ok…let me draw one. Ikea…watch out.

Want to take this a step further? Welcome Claytronics, a synthetic reality project undertaken at Carnegie Mellon University:

The goal of the claytronics project is to
understand and develop the hardware and software neccesary to create a
material which can be programmed to form dynamic three dimensional
shapes which can interact in the physical world and visually take on
an arbitrary appearance. Claytronics refers to an ensemble of
individual components, called catoms—for claytronic
atoms—that can move in three dimensions (in relation to other catoms),
adhere to other catoms to maintain a 3D shape, and compute state
information (with possible assistance from other catoms in the
ensemble). Each catom contains a CPU, an energy store, a network
device, a video output device, one or more sensors, a means of
locomotion, and a mechanism for adhering to other catoms.

Front Design’s methods, while currently possible, are not necessarily available to those who don’t have a motion sensor pen and rapid prototyping machine in the garage. Looks like Ikea is safe for now. Claytronics, and its various applications, are still a ways out from general use. Researchers on the project have made noteworthy progress and are confident they will be able to manufacture their clay robots, but aren’t quite sure whether it will be 5 or 20 years before they will accomplish what they hope for. While these technologies are still largely coming down the pipeline, it’s a sign of prototyping and so much more to come. The possible applications are endless, but one that jumps right out at me is that companies and designers will be able to move through prototype iterations much more quickly and easily. The length of time and work involved, for an idea to go from your head to a physical object, will be drastically reduced.

Product Management with Offshore Manufacturers: What Are You Sinking About?, Part I

By GSS on June 6, 2007 | Category: Communication | Comments Off

If I had a video recorder strapped to my head 24/7, I would be able to show you at least 300 clips of situations I have been in where cross-cultural communication went in a downward spiral to awkwardness, misunderstanding, and killed productivity. I wasn’t on a sinking ship in any of them, thankfully. But I have ordered some bizarre dishes of various animals’ anatomical parts when I thought I asked for peanuts. This entertaining commercial for language lessons by Berlitz is an example of the tip of the iceberg in terms of communicating across geography, culture, language, through different mediums like email, phone, etc. It could be ordering food. It could be explaining major and minor quality defects. It could be conveying the reasons behind a product’s engineering. Product management is tricky. Product management with global team members, offshore manufacturers, and 3rd parties is trickier.

Paul Young, author of the Product Beautiful blog (I like that name), writes great posts focusing on the ins-n-outs of product management and life as a product manager. To introduce his blog, I have highlighted this post, in which he outlines The Most Important Trait a Product Manager Needs. In it, he posts 7 traits highlighted from the Michael on Product Management blog:

Communications Skills

Leading without Authority

Learning Skills

Business Acumen

Love for Products

Eye for Details

Routing Product Management Skills

Notice that communication is at the top. I don’t think you can communicate too much in the product management process. But, I like what Paul Young adds to this in terms of what he sees as the #1 trait in a product manager: curiosity.

The #1 trait I look for in people who would make good Product Managers is an extreme sense of curiosity. Curious people are wonderful – they ask the most powerful question in the World: “why?”
Curious people read a lot and tend to self-teach valuable skills. Most
importantly, curious people aren’t satisfied with what people tell
them, they stay awake at night wondering what they’re missing and love
the process of discovery. Some skills can be taught; curiosity is a
character trait.

I think this can be extended to cross-cultural communication as well. Many might cite an affinity for foreign languages as the foremost useful trait. I don’t believe so. I have seen many jerks speak a language fluently while they step all over the customs and ignore the culture of the country they are in. In the end, people won’t like interacting with this individual and that can slow productivity. I have to second Paul here, and propose that an attitude of curiosity, and asking questions, is the best trait that will lead you to success in communicating and developing relationships across cultures. Here are my reasons why:

Curiosity and asking questions shows a basic respect that someone and something else is worth learning about.

These gestures go a long way when doing business in other countries. Many countries do not move as quickly into business matters the way Americans do. They like to get to know each other and get a feel for the person and company they are dealing with. Business is much more relationship driven, so you better put some effort into driving relationships with the people you need help from to get things done.

As a non-native, you are going to make mistakes (and so will they). But curiosity and asking questions will begin to teach you why you did not get the result you expected.

I always chuckle at those guys who have spent a couple weeks in a country and like to act as if they are now ‘one’ with the culture. Horse puckey. This takes years, perhaps decades, if even possible. And most people who have spent that kind of time, would be too humble about the challenge to ever claim something like that. I digress…

Your efforts are important, but you will be making mistakes no matter what. Asking questions about why you didn’t get the results you expected will help you understand the deeper contexts and perspectives your counterparts are coming from. You’ll never stop making mistakes or making statements out of context, but you can cut down on it dramatically.

For product management, and this is essential, asking questions several different ways, through several mediums, can help ensure that your message gets across effectively and you are on the same page with everyone. This is critical. Days and weeks can be wasted when you think someone understands what you said, goes off to work on the issue for a week, and comes back with an entirely different result. Your mad. They don’t understand and might be embarrassed. You’ve lost time. And yelling "what were you sinking about when you made this change?!", will do you no good.

Global Sourcing Specialists