This means that one-person enterprises can get things made in a factory the way only big companies could before.
This means that one-person enterprises can get things made in a factory the way only big companies could before. Two trends are driving this. First, there’s the maturation and increasing Web-centrism of business practices in China. Now that the Web generation is entering management, Chinese factories increasingly take orders online, communicate with customers by e-mail, and accept payment by credit card or PayPal, a consumer-friendly alternative to traditional bank transfers, letters of credit, and purchase orders. Second, the current economic crisis has driven companies to seek higher-margin custom orders to mitigate the deflationary spiral of commodity goods.
Institute for the Future’s model for “lightweight innovation.”
1. Network your organizations: “The bike vendors in Chongqing hang out in tea houses and shanzhai vendors in Shenzhen have a vast network centered in the large electronics malls.”
2. Reward solution seekers: “Penny-a-unit profits force the shanzhai collaborations to be totally solutions-driven. They don’t make money if they don’t deliver. ‘Not invented here’ is never a problem.”
3. Err on the side of openness: “The wild west of shanzhai is all about openness. Trade secrets of big companies are flowing freely. Everything is ‘open sourced’ by default. If we take the [intellectual property rights] issue aside, it’s really the ultimate openness we in the open-source world are looking for.”
4. Engage actively: “The shanzhai vendors used to produce knockoffs after original vendors had the products on the market. But in the past year I have seen a lot of them act on the latest Web rumor, especially those related to Apple. It was kind of funny that there were several large-size iPhones (seven-inch and ten-inch) being produced by the shanzhai simply on the rumor that the iPad would look like a large iPhone.”
The rise of shanzhai business practices “suggests a new approach to economic recovery as well, one based on small companies well networked with each other,” observes Tom Igoe, a core developer of the open-source Arduino computing platform. “What happens when that approach hits the manufacturing world? We’re about to find out.”
Makers: The New Industrial Revolution by Chris Anderson
“We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side.
— Charles T. Munger”
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