http://homepage.mac.com/dwbmbeijing/iblog/B509625768 The Nexus of Technology and the World's Largest Market dwbmbeijing@mac.com © David Wolf Sat, 07 May 2005 23:57:33 +0800 Sat, 07 May 2005 23:58:12 +0800 iBlog 1.3.6 The Sniper's Hide
In the Hutong
2240 hours

Trying really hard to look like they're working on this deductible junket, 379 advertising execs at a conference in Bermuda told each other how worried they are about the way the advertising business works.

There was a lot of talk about how to fix the advertising business, but apparently nobody had the cojones to come right out and ask the big question (is advertising doomed?), much less give the right answer (yes) and begin talking about what would take its place.

Hint 1: Stop having these stupid conferences. If you take 379 attendees, multiply by around $6k apiece ($1,700 to attend, 5 nights hotel at an average of $320 a night, airfare, food, entertainment, etc.) and figure $1500 a day in lost work time. Call it an even $4 million that it cost the industry, or commissions on $23 million in billings.

Hint 2: The industry is in love with creativity. Get over it. It's about results, guys, now winning awards for the cleverest or best-looking ads

]]> Sat, 07 May 2005 22:56:35 +0800 The Bunker in the Hutong
2141 hrs

The San Francisco Chronicle, once again earning its sobriquet of "Pravda-by-the-Bay," published an article on tomorrow's Hua Yuan Science and Technology Conference in Santa Clara. As a part of that interview, it published two quotes that a little healthy journalistic skepticism might have questioned, and turned into a better story.

First, the reporter, Vern Kopytoff, couldn't even bother to get the name of the organization right (he spelled it "Hua Yan." Hello? Fact check? As an aside, he also missed the point that Hua Yuan is a modern-day equivalent of a Chinese self-help association that taps U.S. companies with lots of money and big China aspirations for support. Dig a bit there, boy. There's an interesting story here...Is this organization legit and above board, or is there something Masonic happening here?

Second, Mr. Kopytoff dutifully took down every word when Fang Deng, the VP for Strategy of Juniper Networks, regurgitated the standard party-line that:

U.S. firms expanding Into China can't expect immediate success. Rather, it could take a U.S. firm years to turn a profit after learning the Chinese way of doing business.

With respect, wrong on two counts.

Companies don't have to spend years to build a business in China. If they hire smart people and get professional advice they can accomplish a lot it a little time. It's the ones that assume they need to lose money and be stupid for 3-5 years that never seem to get their business in China off the ground. Your average well researched, well-thought out business plan that incorporates the kind of savvy a company SHOULD have before investing a nickel in China should be cash-flow positive within 18 months.

That does NOT mean that there is some special Chinese way of doing business. Now, the locals will try to convince you of that - they've been singing that tune for over a century, and to a culture-shocked executive from San Jose or Dayton, that sounds reasonable. It's also the first step toward disarming you and then taking you for all you've got.

Any U.S. executive (and I count Mr. Deng as one, despite his surname) who tries to convince you otherwise either a) buys into that because he's trying to justify his company's own crappy performance in China, or b) is being disingenuous and saying that in the hopes that his competitors are listening and won't try to come into China. Given Juniper's more than satisfactory performance in China, I would vote for him spreading disinformation.

I don't blame Mr. Kopytoff for that oversight. I blame the Chronicle for sending a reporter who clearly does not have enough knowledge about China to write a decent story. Which of cours assumes the Chronicle even has a reporter who understands that there are differences between Stockton St. and Jianguomenwai Avenue.

It gets worse.

Then we have Charles Zhang, CEO of Sohu.com, who proceeds to dis U.S. Internet firms in China, suggesting they're not doing quite well. One would think that the reporter would hear a voice in his head saying "hmm, but this is a guy talking about his competition. Of COURSE he's going to say that."

No evidence of healthy, journalistic skepticism.

No wonder more people are turning to blogs for information and ignoring traditional media.

]]> Sat, 07 May 2005 22:10:59 +0800 The Silicon Hutong Suite
Intercontinental Hotel
Singapore
2325 Hours

Massive, an advertising company that focuses on ad and product placement in videogames, is now off the ground in New York with high hopes and some skepticism from the folks at Electronic Arts

If I were to really get into gamer mode on this, I would say "put advertising in my games? Give me games for free."

But if I were to get into business mode, I would say that this might finally, somehow, hold the key to getting paid for all of those pirated copies out there.

If only they could figure out some way to do realtime measurement.

]]> Mon, 11 Apr 2005 23:57:25 +0800 The Silicon Hutong Suite
Intercontinental Hotel
Singapore
2250 hrs

In an article in the Seattle Times, Brier Dudley interviewed Martin Taylor, leader of Microsoft's 18-man A-Team that spends their days publicly spreading Redmond's own brand of disinfo and counter-disinfo against The Penguin and his legions of Linux fans.

Taylor's a very well-spoken guy and makes some remarks that you will either find convincing, bogus, or slightly credible depending on where you stand on Linux.

But it's what he said at the end of the article that was interesting. Now remember, this is a guy who sits at Steve "Monkeyboy" Ballmer's right hand.

"My belief is that open-source software is going to help drive the acquisition cost of software down toward zero" he [Taylor] said, a shift that will require software companies to move "over to a maintenance and support model."

You can see this a couple of ways. First, you can see it as a trial balloon being floated by Microsoft about a movement toward a service model. Personally, given what Taylor does for a living, I'm much more inclined to file this under more disinfo. Microsoft still sees Linux as a bugfart in a typhoon, and there is no way it is going to readily hand over it's massive margins willingly - certainly not on the desktop.

I think what we CAN expect is for Microsoft to start limiting all but highly limited tech support for paid software to those who buy maintenance agreements - say, after 90 days. Hmm. Nice new income stream. And I'm sure that much of that service would be handled not from Redmond, Washington or Lexington, Kentucky, but from Bangalore and Manila.

I can hear the Wipro guys drooling already.

]]> Mon, 11 Apr 2005 23:24:58 +0800 Perched 9 Floors Above the Hutong
1320 hrs

I have hardly in the past to nail the folks at Wharton when I felt they were wrong about issues in China, so in all fairness I need to compliment them when they get something right.

The recent report by the Boston Consulting Group and Knowledge@Wharton on Overcoming Challenges in China Operations has come up with some very poignant conclusions that are worth reviewing in detail. While it pussyfoots around some critical issues in the name of political correctness (they stopped just short of saying that most Chinese managers aren't ready to take the top local job in MNCs, as an example) and there are some notable omissions, they come up with a set of of "uniquely China" observations about MNCs who have succeeded in China.

It's hard to argue with things like:

1. Giving China high visibility at headquarters;
2. Personal CEO involvement and regular visits by the CEO to China;
3. Clear, bold targets;
4. Give China a high priority regardless of what it would be assigned under normal internal systems;
5. Create China-specific products;
6. Bring the entire value chain to China, including R&D;
7. Nurture managers for the long term;
8. Emphasize government relations and public relations;
9. The China operation is given a genuine "value-added" role in the organization; and
10. Make China a global or regional center for key responsibilities.

Clearly, these alone won't make an MNC successful in China, but they're a good start.

]]> Tue, 29 Mar 2005 13:51:14 +0800 9 Floors Above the Hutong
China World Tower 2
1233 hrs

I wish to hell more companies in China would publicly eject dishonest employees. More stories like this one running here might have an impact.

"I lied to my previous employer and falsified company documents while making lots of money for them and myself. Then I wrote a book about it. What's wrong with that?"

"Uh, you're a self-confessed dishonest guy who has no integrity and has committed acts that under the laws of the land could be considered criminal. Hit the road."

Damn, I wish there was more of that here...

Attention all employers in China! If they cannot define "integrity" when you interview them, DON'T HIRE THEM.

If they behave with a lack of integrity, FIRE them.

Build it into company policies. Use YOUR definition of proper behavior and clear it with local counsel. Then enforce it.

]]> Tue, 29 Mar 2005 12:50:28 +0800 Somewhere on the Third Ring Road
Beijing
0725 hrs

Looking to be another long day. Possibly some interesting news later. I'm a half-hour early for my first appointment of the day, and the skies are clear if hazy above Beijing. There is promise in the air.

Great iPod shuffle billboard along 3rd Ring near the Zhaolong hotel. ¥990 is a bit more expensive than the $99 the thing goes for in the states, but it's brilliant. In a country where there price is a mostly subjective thing, simply smacking a price on a billboard is a bold statement. Go Apple.

Huge double-decker bus ads for 7-Eleven, stores which are just starting to pop up in China. Why does China need more convenience retail? It doesn't. It needs more cost-effective convenience retail, and 7-Eleven's inventory and supply-chain management technology are what is going to revolutionize small retail here. It will become increasingly difficult in China to run a retail operation with an abacus and a cash box.

]]> Tue, 29 Mar 2005 07:34:49 +0800 In The Hutong
2324 hrs

Check this out on Chinatechnews.com.

]]> Tue, 29 Mar 2005 00:14:49 +0800 Somewhere on the Airport Expressway
Beijing
2149 hrs

Heading home after an exceptionally long day (global CEO in town) passing a 1/4 ton truck half filled with leaves and five guys with dirty orange coveralls crapped out on top of the pile humming along at 120 kilometers an hour, I am reminded once again that for all of the advancement in this country, human life remains an exceptionally cheap commodity.

To an economist that's not surprising: in a country with 1.3 billion people, human life is plentiful, and thus inexpensive. The marginal value of each individual is to the state and its economy is, depending on which expert you ask, not only tiny, but indeed perhaps negative. China has too many people, we are told. Take this logic an extra step, and the question then becomes "so, how do we shave a few hundred million off of the total."

A repugnant thought to anyone raised in a tradition that teaches that the value of an individual life is equal to the value of the entire world.

Okay. So say it's "culture." Say that China is different from the West. Accept it. Deal with it.

You start making compromises with your humanity like that, and sure as hell, you will find yourself justifying injustice all day long in China.

The challenge is to sustain and constructively channel that just outrage without allowing it to consume you, to neither apologize for this place nor to hurl yourself bodily against the system in protest, but to find a way to create change a little bit a day.

I smile a lot. I salute the guards back when they salute me. I tip. I say thank you. It's not much, but dammit, if more people would do it, I guarantee you this would be a lot nicer place to live and work.

]]> Mon, 28 Mar 2005 22:05:57 +0800 Headquarters
Silicon Hutong
Beijing

Those of you not terribly enamored with Bill Gates and the Legion of Hate, check out the Microsoft Eradication Society, a great site focused on resources to help you expunge Macrohard from your life.

]]> Sun, 20 Mar 2005 21:25:07 +0800 Headquarters
Silicon Hutong
Beijing

So the United States Air Force wants to take a big step toward retiring the $2 million pilots flying $100 million jets, replacing them with smart kids sitting in air conditioned trailers outside of Las Vegas flying $4 million recon drones.

The pilot of the future is the video gamer of today. Technology changing air combat.

Now, how long before the PLA figures out they can stop buying Su-27s and Su-30s from the Russians at $34 million a pop, then deal with spares, then deal with the headaches they're having integrating them into the force, and start buying projectable power on the cheap?

]]> Sun, 20 Mar 2005 21:11:15 +0800 Hangover Recovery Unit
Silicon Hutong Clinic
Beijing

Watching The Devil's Own on HBO Asia. There's this one spooky moment when the Irish terrorist arrives in New York, and his U.S. sympathizer is driving him over the Brooklyn Bridge. He looks at the World Trade Center towers and says "and there it is."

Hair rises on back of neck.

]]> Sun, 20 Mar 2005 20:50:49 +0800 Hangover Recovery Unit
Silicon Hutong Clinic
Beijing

Irish Ball in Beijing last night, Sunny and I there courtesy of Cyril and the gang at I.T. United. Still getting over it, but a good time had by all. Cyril is one of those guys who is plugged into a whole lot of fascinating people, and we shared the table with some deeply fascinating people. And anyway, any table with senior executives from Airbus, BMW, Panalpina, and the Beijing city government can't help but be really interesting.

One of the wonderful things about living in Beijing - ball season. Ran into a bunch of people I haven't seen in a while, including Greg from Sun. Sun is up for taking a chunk of the open source war over here, and Greg is leading the charge with regional governments in Northeast Asia. That's a tough battle, given that the Asianux folks have a long lead and have something of a home court advantage.

]]> Sun, 20 Mar 2005 20:41:04 +0800 Command Center
Silicon Hutong Plaza
Beijing

Among the avalanche of information pouring out of CTIA 2005 comes this piece in Engadget that suggests Bluetooth is blossoming.

Respects to Ross Rubin, who I think is a very switched-on and entertaining writer, this comes across as a badly disguised piece of sponsored PR dreck from the heart of the Bluetooth SIG. The entry is long on declaration ("CTIA made a convincing case that this is Bluetooth's moment to shine") and very short on supporting evidence. Wow - half a dozen high-end phones have Bluetooth, there are some Bluetooth enabled GPS devices, a couple of peripherals, and an MIT-designed Bluetooth stuffed animal.

WIth respect, this is the sort of uptake and support that befits a new technology, not one that's been around for several years. Ross makes the point in the article that Bluetooth is hardly ubiquitous, and he's right. It may not be a novelty, but if it isn't ubiquitous now, it never will be. There are a lot of little reasons for this, but to me, there are really only three that matter:

1. Muddled Positioning: The industry is still operating under the misconception that Bluetooth would act as what Ross calls an "Internet Gateway" for personal area networks. I'm sorry - isn't that what WiFi does? My understanding of Bluetooth was that it would replace the serial cable, IRdA, and other hookups between devices, accessories, and peripherals, NOT create an Internet hookup. If the industry hasn't figured out the positioning of the Bluetooth relative to the other technologies out there, how are users to understand how to use it?

2. Unclear Value: Following on from the positioning problem, neither the Bluetooth SIG nor the industry has made sufficiently clear the advantages of using Bluetooth to your average. What IS a personal area network, and how does making it wireless make my life better. By failing to communicate the basic, simple advantages of eliminating half of the cords in ones laptop bag or on ones desktop, the SIG and manufacturers have insured that mainstream users cannot but fail to get it, and visionaries - who understand the value of the technology - think that because it's not being pushed, maybe the technology doesn't live up to its promise.

3. Impending Obsolescence: The standards groups around what has been called Ultra Wideband (UWB) and is now being called Wireless USB are just coalescing, and we are certainly some ways away from real product. But the positioning - starting with the new name - has begun in earnest, and the advantages are clear - eliminate your USB wires. Period. Awesome. Fast. Cool. I'm there. And thanks very much, Bluetooth, but I'm waiting.

Nowhere are these failures more a pity than in Asia, where consumers have proven willing to experiment with these kinds of technologies and implement them into their lifestyles, and where the mobile phone plays a role far greater than anywhere else in the world.

Ericsson did a great thing creating Bluetooth, and it has given a lot of us a chance to tinker and play with he idea of unplugging cables. Unfortunately, it's really clear that Bluetooth has fallen into Gordon Moore's chasm and will eventually land in the Graveyard of Technologies with Unrealized Potential.

]]> Thu, 17 Mar 2005 12:42:23 +0800 Silicon Hutong Plaza
Beijing

Adelphia, AIG, Boeing, Disney, Enron, Hewlett-Packard, Riggs Bank, Sony, Tyco, WorldCom - the list of companies shedding their CEOs continues to grow.

Who's next?

Send your entries to siliconhutong@mac.com.

]]> Wed, 16 Mar 2005 15:54:33 +0800