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Tech Development: Shanzhai « bunnie’s weblog

Tech Development: Shanzhai « bunnie’s weblog

2024-01-24 17:47:02

The shanzhai of China are a tech pattern to regulate. Usually dismissed by widespread press as merely the “copycat barons from China”, I feel they could have one thing in frequent with Hewlett and Packard or Jobs and Wozniak again once they had been understanding of garages. I’ve heard fairly a couple of tales in regards to the shanzhai whereas on my most up-to-date journey to China, a few of which I’ll share right here.

First, let’s attempt to perceive the cultural context of the phrase shanzhai. Shanzhai (山寨) comes from the Chinese language phrases “mountain fortress”. The literal translation is a bit deceptive. The English time period “fortress” connotes a fortified construction or stronghold that’s massive, maybe conjuring imagery of chateau turrets and moats. Then again, the denotation merely states that it’s merely a fortified place. This latter denotation is nearer to the unique that means from Chinese language; in truth, the fortress they’re referring to is nearer to a cave or guerrilla-style hideout. In its modern context, shanzhai is a historic allusion to the legends that dwelled inside. One such legend is the Twelfth-century story of the 108 bandits of Song Jiang. It’s nonetheless a preferred story immediately; my father acknowledged it immediately once I requested him about it. A pal of mine described Track Jiang as a kind of Robin Hood meets Che Guevara; Track Jiang was a insurgent and a soldier of fortune, but selfless and sort to these in want.

The modern shanzhai are rebellious, individualistic, underground, and self-empowered innovators. They’re rebellious within the sense that the shanzhai are celebrated for his or her copycat merchandise; they’re the producers of the infamous knock-offs of the iPhone and so forth. They individualistic within the sense that they’ve a visceral dislike for the massive corporations; most of the shanzhai themselves was staff of enormous corporations (each US and Asian) who departed as a result of they had been annoyed on the inefficiency of their former employers. They’re underground within the sense that after a shanzhai “goes legit” and begins doing enterprise by conventional retail channels, they’re not thought of to be within the fraternity of the shanzai. They’re self-empowered within the sense that they’re universally tiny operations, bootstrapped on minimal capital, and so they run with the angle of “if you can do it, then I can as well”.

An estimate I heard locations 300 shanzhai organizations working in Shenzhen. These shanzai consist of outlets starting from only a couple of us to some hundred staff; some simply concentrate on issues like tooling, PCB design, PCB meeting, mobile phone skinning, whereas others are a little bit bit broader in functionality. The shanzai are environment friendly: one store of beneath 250 staff churns out over 200,000 cellphones monthly with a excessive mixture of merchandise (runs as brief as a couple of hundred models is feasible); collectively an estimate I heard locations shanzhai within the Shenzhen space producing round 20 million telephones monthly. That’s an financial system approaching a billion {dollars} a month. Most of those telephones promote into third-world and rising markets: India, Africa, Russia, and southeast Asia; I think about if this mannequin had been prolonged to the PC house the shanzhai would simply accomplish what the OLPC did not do. Considerably, the shanzai are virtually universally bootstrapped on minimal capital with virtually no further financing — I heard that typical startup prices are beneath a couple of hundred thousand for an operation which will ultimately scale to over 50 million income per 12 months inside a pair years.

Considerably, they don’t simply produce copycat telephones. They make authentic design telephones as effectively, as documented in this PDF (it’s in Chinese language, however the footage are cool; the collage above is ganked from the PDF). These authentic telephones combine wacky options like 7.1 stereo sound, twin SIM playing cards, a purposeful cigarette holder, a high-zoom lens, or a built-in UV LED for counterfeit cash detection. Their capacity to not simply copy, however to innovate and riff off of designs may be very important. They’re doing to {hardware} what the net did for rip/combine/burn or mashup compilations. The Ferrari toy automobile meets cell phone, or the watch blended with a telephone (full with digicam!) are good examples of mashup: they don’t seem to be a copies of any single concept however they combine IP from a number of sources to create a brand new heterogeneous composition, such that the unique supply materials continues to be distinctly recognizable within the ultimate product. Additionally, like many net mashups, the ultimate end result might sound nonsensical to a mass-market (just like the Ferrari telephone) however extraordinarily related to a choose long-tail market. Curiously, the shanzhai make use of an idea known as the “open BOM” — they share their invoice of supplies and different design supplies with one another, and so they share any enhancements made; these guidelines are policed by neighborhood word-of-mouth, to the extent that if somebody is discovered dishonest they’re ostracized by the shanzhai ecosystem.

To offer a taste of how that is considered in China, I heard an area remark about how nice it was that the shanzhai couldn’t solely make an iPhone clone, they might enhance it by giving the clone a user-replaceable battery. US regulation would come down on the aspect of this exercise being unlawful and infringing, however given the fecundity of mashup on the net, I can’t assist however surprise out loud if mashup in {hardware} is all that unhealthy. I really feel there’s positively a bias within the US that “if it’s unusual and it occurs in China it have to be unhealthy”, which casts an extended shadow over goal analysis of recent cultural phenomenon that would ultimately be very related to the US.

In a way, I really feel just like the shanzhai are brethren of the basic western notion of hacker-entrepreneurs, however with a distinctly Chinese language twist to them. My private favourite shanzhai story is of the chap who owns a home that I’m terribly envious of. His home has three flooring: on the highest, is his bed room; on the center ground is a whole SMT manufacturing line; on the underside ground is a retail outlet, promoting the merchandise produced a ground above and designed two flooring above. How cool would it not be to have your very personal SMT line proper in your house! It could definitely be a disruptive change to the best way I innovate to personal infrastructure like that — not solely would I save on manufacturing prices, scale back my prototyping time, and switch stock aggressively (thereby lowering stock capital necessities), I might be capable of reduce out the 20-50% minimal retail margin sometimes required by US retailers, assuming my retail retailer is in a heavy-traffic city location.

Those that learn this weblog have in all probability seen my posts about the markets in Shenzhen. I all the time had a principle that sooner or later, the quantity of data and the dimensions of the markets within the space would attain a important mass the place the Chinese language would cease being merely staff or copiers, and would take management of their very own future and turn out to be creators and finally innovation leaders. I feel it has begun — these tales I’m listening to of the shanzhai and the mashup they produce are only the start of a hockey stick that has the potential to vary the best way enterprise is completed, maybe not within the US, however definitely in that large, untapped market also known as the “remainder of the world”.

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