Book review: The 100 Dollar Startup

The 100 Dollar Startup – Chris Gillebeau

This is an interesting book about micro-entrepreneurship, based on organic growth and patience instead of venture capital and IPOs. It describes the reality of a new group of entrepreneurs, many of whom started by surprise and coincidence. It is also about finding a sustainable size and not focussing blindly on growth.

Gillebeau writes with humour and self-depreciation, illustrating many points through examples of his own successes and failures. His account of joyful exhiliration from a 1.63$ sale is contagious. The significance of the first sale is repeated again and again in the book.

Many passages in the book are strong and authentic, with real-life examples and insights from breakthrough and adversity. However, some parts of the book feel more like recipes, where a certain method or tool is getting all the attention. The introduction to the book is peppered with adversity towards all forms of employment, which feels unbalanced. Maybe the American work situation is more hostile than my European experience? I have had a couple of good managers over the years and many warm and generous colleagues…

The book was a gift to my wife, who is now in a career switch, but I took the opportunity to read it and I like the message alot. The thinking is valuable both as an independent entrepreneur, but also for an “intrapreneur”, starting something new inside an existing organization: Start small, grow organically and always, always keep in mind what customer value you deliver.

It is similar in my job, where we started a product development department from scratch two years ago. Get started, try something and get feedback from (internal) customers and adapt. I will get a copy of the book for my team.

Delivering Happiness – Book and Idea review

I have never purchased shoes online. Nevertheless, this book written by Zappos Inc CEO and co-founder Tony Hsieh is immensly intriguing and inspiring. “Delivering Happiness” is the current motto/slogan/vision of the maildrop shoebox company.

Tony describes his life journey from worm-farm primary school backyard entrepreneur via Harvard to startup ventures and the Zappos adventure. He writes in a very funny and personal way about his peculiar experiences and it seems like it could have been me, in a positive way. (Of course on a smaller scale.) It is this personal connection that drives the book and builds momentum and credibility for Tony’s message that happiness is a perfectly valid business and life goal!
Of course, the next step is to build on the science of positive psychology and happiness to ensure that we create some pleasure/profits, more passion and clear picture of the purpose.

It is the first time that I read a book like this, where the author is a successful entrepreneur. Many other books about “authentic leadership” and positive messaging are based on moral arguments and ideology, written by armchair CEOs. This book is much more believable, because Zappos is there to prove that it actually works.

The book is written from a very American perspective, so I look forward to hearing the comments of my colleagues here in China how they experience the message and ideas in the book. Maybe it helps that Tony Hsieh is an American-born Chinese…

I hope that Mao Yun soon will write a book about creating and running Alibaba and Taobao, the Chinese equivalent to Amazon+Ebay+Zappos+Paypal+DealXtreme. I use Taobao every week, and to me it delivers happiness. I can only guess that Mao Yun follows a similar philosophy…

Mr. China – Book and Idea Review

This book is the fantastic story of Tim Clissold, spending 248 Million Dollars of someone else’s money in corporate industrial Joint Ventures in China in the 1990’s. Most of the money was lost forever.

Clissold narrates his adventures with the legendary Wall Street investor Jack Perkowski during some intense years, just as China was opening up to foreign investment. They got screwed in every possible way and I think that they learned more than anyone else. One of the companies I work with today is a reminiscence from one of the joint ventures in the book, so I feel much sympathy and gratitude towards the entrepreneurs who went in first in China.

The book is a collection of hilarious episodes of improbable encounters and unfathomable opportunities, painted with a backdrop of tragedy because we know that this business will fail too in the end, despite the heroic efforts from the team to make it fly.

He describes in a very personal and revealing way the dream that many of us nurture, to become “Mr. China” – the one who knows the mystic ways of the Middle Kingdom. I was also seduced by the magical characters that turns any street into a mystical land when I walked around in Beijing in 1994. 厕所 looks so much more exciting, promising and spiritual than the sign “WC”. In my eyes, it could just as well be the entrance to a lost Buddhist temple, if it weren’t for the smell of course.

But the point that he makes is that we want China to be special. I think this is very important. We want to be seduced and mystified and to stop thinking. We want to believe that all Chinese are spiritual and long-term-thinkers and different from us.

In the end, we are all humans, and I am deeply convinced that the similarities are larger than the differences.

 

 

Larger Desk is Better

Larger Desk is Better

We are starting up the R&D center in temporary offices inside of one of our factories, while waiting for the new building to be ready. Due to the expansion, we needed to set up some new cubicles etc, to pack as many as possible into the new space. One in my team was leading the layouting and communicating with the suppliers of cubicle furniture and office equipment, and I was following up regularly.

All of a sudden, the four-seat cubicle, where I had marked my desk as one of the twenty or so similar ones, was transformed into a larger three person cubicle, where two of the seats were traded in for a large woodden desk.

“This is better for us”, was the response. “Then the people from the other departments see who is the boss.” And the larger the desk, the more important the boss. And that makes many things easier for my team.

This is something I have to get used to…

Starting to Work in China

Shellshocked after two weeks of frenzy at the office and home I am now starting to get back on the ground. Fortunately I have two more experienced guys from the European organization in my team whom I can lean on when things get strange.

First thing that happened was that our office was full, so we need to move to another location in the same building. Fortunately, due to other circumstances, we could only start the moving after four weeks, so there was a few days of slack to do layouting of our new premises. We have a completely cubiclized floorplan, and I would take a seat like everybody else. However, all of a sudden, the proposed layout from the cubicle-carpenter’s side included a broad dark desk instead of a cubicle seat where I had indicated that I would sit, occupying at least two seats, maybe three.
As my Chinese colleagues put it: “Otherwise the people from the other departments do not know who is the boss. It is better this way.”

I trust them. They know what works and what does not here in the land of influence. The crab has his ways and the shrimp has his, as one of my colleagues put it, while explaining why a certain procedure did not work as expected. There is a positive and a negative side of this flexibility, I guess, but so far I have mainly seen the plus side.

There are lots of things to fix both at the office and at home, one thing at a time. Our hot water stinks, for instance. It smells of glue. There have been five people watching, checking, tasting, discussing and not doing anything. I need to find an expert, but it is not so easy. I am sure there are hundreds of qualified people who could fix it, but there are twenty five million other people in town who cannot. Fortunately, I often have good help from my local colleagues, among others to get supplies via Taobao, 360buy and Newegg. Mother’s Day is better with a new Saeco Espresso Machine, directly delivered to our home (Well, to be honest I ordered it late and it was not really on time…). I hope my colleagues can also find a suitable plumber to fix the hot water. In the meantime we smell of glue after every shower.

Factory Girls – Book Review

At the job-market in Dongguan

This is an extended reportage book about the migrant population in south China. Leslie Cheng ventures south on business from Wall Street Journal writing articles and collecting memories which are later used to build the story of this book. It is a compelling mix of autobiography, where Cheng searches for her own Chinese-American roots, modern history account and intimate portraits of the lives of some random individuals turning friends over the years.

It is hard enough to understand the staggering numbers of migrant workers: Each year 10 million move from the countryside into the hundreds of swelling million-count cities across the coastal provinces of China. The last 30 years it adds up to 300 million. Even more difficult is to imagine what it means to the individuals in such a malstroem of new jobs, houses, foods, purchase possibilities.
The timescale of a career is measured in years, not decades. Education and specific professional training is hard currency and payback time is counted in months. The teachers today were novices a year ago. The building where the training is held did not exist last year.

Chang shares her encounters and reflections upon what it means both for the individual and for society. The incidental individual experiences are recounted with a backdrop of research about the bigger picture. It is deeply enjoyable to read, I could not help but laughing out loud while reading the chapter about the English-teaching machine. At the same time I learned a lot about contemporary China. One of the books that Chang describes, “Square and Round”, was referenced yesterday by a Chinese colleague, and it helped me a lot to understand some office politics thanks to the introduction given in this book.

The lemming trek from the Chinese rural plains into the exploding mega-cities will continue for years, so the book is likely to stay relevant for a long time.

Idea and book review – Cost Innovation

Dragons at Your Door - Cost Innovation in China

Ming Zeng and Peter Williamson have researched the phenomenon of Chinese low-cost high-performance products. Twenty years ago, that was a paradox, almost a joke. However, not many are laughing at Maytag Refrigerators when the Chinese Haier delivers superior quality and broader product range to a lower price. The same goes with upcoming world players like Huawei, the world leader sea-container producer CMCI etc. They wrote an intriguing book about it: “Dragons at Your Door”.
The recurring pattern is that these Chinese companies are able to manage products and production in a flexible way to achieve mass-production costs (low cost) with a broad range (low volume per product type). Zeng calls it “Cost Innovation”. Part of the cost advantage is of course the lower salaries and lower taxation in China, but after comprehensive research, the authors conclude that this is of minor importance. More important is that the manufacturing system is designed for flexibility and low capital investment. Furthermore, the product development is fully adapted to the manufacturing capabilities: The standard question is “what variants can we make with no change of machinery?” In a sense, most innovation has been in manufacturing and in organization structure.

[As a contrast, at my company, we are setting up a product development center thousands of kilometers away from the nearest factory. The research center is in a different country far away from any manufacturing site. The interaction between product and production is minimized, which sometimes leads to miscommunication and delays. We have some things to learn from our Chinese competitors! ]

Zeng shows in a convincing way that the Chinese companies have been able to catch up quickly thanks to modularization and standardization of components and technologies. A key question is what happens right now when these companies take the lead in their respective niches? One of the recurring newslights in the last year have been acquisitions of medium sized European technology companies by cash-heavy Chinese competitors, to get access to brands, technologies and market channels. Is this incidental or will it continue to increase? We will see…

CIMC - Container Innovation at Low Cost

Thanks to the authors unique insights in the researched companies, the book is full of concrete examples how specific problems have been resolved in innovative ways – very inspiring!

The Gas Station in China

Gas Station Sinopec

Look at the picture and see what is different from any gas station you are used to from Europe or the US or most places in the world. Of course the Chinese characters are different, but that is mere cosmetics.

I think the most interesting visual item of the gas station as a roadside landmark is the absence of price. It is nowhere written how much the gas costs. Because it is the same everywhere.

In Sweden, where I grew up, the gas price varies around 5-10% between different gas stations, and it is a convenience trade-off, whether to take the full-service gas station along the highway with it’s cozy shoplet, or to stand in the wind at the JET station with no human being in sight. Convenience for cash, as the universal trade-off.

Not in China.

The ministry sets the price for each type of fuel, and that is that. No matter if it is a Sinopec, CNOOC, or any other “branded” gas station, the price is not theirs to determine. Therefore, neither for the customer or the gas station owner, there is any interest in displaying the current gasoline price.

One Billion Customers – Book and Idea review

The wet dream of every retailer – a single market with one billion craving customers – is shredded to pieces by McGregor in his witty account of his own adventures during twenty years as journalist and business leader in China. The concept of a “market” as it is traditionally used implies that it is easy to move goods around at a low cost and that the customers are a somewhat homogeneous group. China is more like a continent with vast cultural, legal and physical differences which makes the unity of the market an illusion – a fata morgana luring at the horizon with uncountable riches.

McGregor experienced from the frontier the intense power struggle between government agencies, the party, market actors and local chiefs. All scrambling to get ahead and to increase their influence. His accounts of his own experiences are the most hilarious and warmhearted parts of the book. However, the many likely hiccups are not explored in great detail. I think it is a difficult dilemma while writing a book like this. On the one hand, including personal weaknesses and failures makes the book more interesting. On the other hand, the author wants to look like a leading expert and resourceful adviser – the book serves as advertisement for his own consultancy services. We all want to believe that the advisers we hire are fault-free and perfect, after all the fees are substantial…

I wonder what I would choose to present in an account of my own adventures near and far? Would I dare to include the intimate shameful moments of my own weaknesses? The mistakes and fiasco’s? Wasted money and time and naivety? I am not so sure. Probably I would pretend that everything was well planned and went smoothly.

One million Chinese visitors at the World Expo in Shanghai the same day as we went.

McGregor weaves into the story the larger sweeps of modern China and a handful of illustrious examples of winners and losers in the wild-east era of the last decades. The story behind famous (in China) brands like Wahaha and Unicom gives a wonderful account how government relations can help and hinder but that the market pull is the real force today. It also shows that the organizational maturity of most companies today are in a similar position as the companies in the west were fifty years ago – completey dependent on the founder/leader. It is a lean and fast way of running a company, but with a single-point-of-failure, it is not robust. It is the startup-model.

An inspiring book and I am excited to experience first hand collisions with bureaucracy and government activities in Shanghai!