Few weeks ago, Richard and I went to ShenZhen and Beijing to seek cooperation with partners for prototyping and larger scale production. ShenZhen is considered by many as a Silicon Valley of hardware.
Actually, this trip was organized by one of our partners, a company called HWTrek. HWTrek connects startups with big manufacturers. They try to find common interests for both and develop relations between these two very different business models.
To be honest, it turned out to be a really useful visit. It would have taken us at least a year or more to find the suitable partners we now found within a week thanks to HWTrek.
We went to China with a let’s-see-approach and I must say, left the country with amazement and full of ideas. I had never heard of a smartphone manufacturer Xiaomi before. Turned out, this company’s market is only in China and that is enough to be among the top 3 biggest smartphone manufacturers in the world. We will certainly make a stronger effort to reach the Chinese market with SprayPrinter.
When it comes to manufacturing, the rest of the world is, well, lagging behind when compared to China. European companies have a lot to learn.
Chinese factories have realized that the startup scene changes the field of business in general. Due to this, large companies have become very startup friendly. They have departments for prototyping, design, branding, marketing and of course large scale manufacturing. To put it shortly large factories have created full ecosystem to cater small start-ups. The rest of the world is also picking up on this trend but are still behind of China.
The thing that worried me the most was China’s reputation of copying products. In one Chinese factory there are at least 100 engineers who could probably develop SprayPrinter way quicker than us.
But HWTrek has put a lot of effort into hunting down manufacturers who have high standards regarding their customers IP production. Besides, their revenues amount to billions of dollars and they can’t risk an infamous reputation that copying someone else’s product would give them.
What is interesting phenomena about Chinese copycats is the wise way they do it (and I’m not talking about the cheap, poor quality knockoffs). Chinese companies take a product or a service that is working in the western world and basically make it better or more suited to the local market. A good example is Chinese equivalent of Amazon who has built a full ecosystem around itself to service their main business. They have delivery service, hardware accelerator, an in-house crowdfunding platform plus they are partnering with companies like HWTrek which ensures that startups that grow up in their ecosystem are strong and will deliver (this is a big problem in Indiegogo for example, making the platform less trustworthy).
China has been a sub-contracting country for decades because of its cheap labor. But the know-how has also been accumulating. Even if the products manufactured there were patent protected or are not produced anymore, the critical knowledge has been left behind. And Chinese industry, using this, is evolving into high value additive industry.
Going through an accelerator in ShenZhen would have a grand impact and I would definitely suggest that to all new startups.
So what to learn from China? Try to find the thing that works in the Chinese market, add value, make it better and apply it in the Western countries.