Idea: Made FOR China business strategy

RH:

1. This new essay is a rambling mashup and a further development of 3 earlier emails of mine:

A. an article "Homegrown CBHD discs outsell Blu-ray by 3-1 margin in China" at http://arstechnica.com/business/news/2009/08/homegrown-cbhd-discs-outsell-blu-ray-by-3-1-margin-in-china.ars

B. my earlier email on my "Poptimum Effect" which states "If there is such a thing as an optimum pop for industrial success, Japan's 127m pop may be it. It is just big enough for economies of scale and customer size for R&D, product development and improvements, to produce world-beating products, yet small enough to force companies to aggressively market and sell to the rest of the world. America, with 300m, may be too big, being a big enough, often the biggest, market all by itself, to bother exporting and customising its products to sell outside the US. We can call this the Poptimum Effect."

C. the article "For Mozilla and Google, Group Hugs Get Tricky" at http://www.nytimes.com/2009/07/26/technology/companies/26mozilla.html

which include my following comments:
RH:
a. From this article, it seems that while Mozilla and its Firefox will not soon lose Google's funding and shared aims, here is a "In Case Of Fire, Break Glass" idea that may provide Mozilla with alternative funding, programmers and code-writers, and even a new purpose in life should Google's Chrome and other browsers reduce Firefox's current popularity.

b. The idea is simple and in a word : China.

c. China today is beginning to feel confident about its place among the top countries in the world after a successful Olympics, next year's likely successful World Expo in Shanghai, the passing of the crucial 300m internet users mark so now China has more internet users than America has people, some US$2t in the bank, a desire to obtain the latest tech esp IT, and growing use of pcs and the internet in China govt and businesses.

d. All these means a China govt that may be interested in acquiring some ownership and say in a high tech company. Currently, the US has forbidden transfer of high tech to China, essentially regarding China as a potential enemy but Mozilla is not really the kind of sensitive high tech that the US govt may want to restrict. Besides, with >300m internet users, all of whom need a browser, what is more logical than to target and focus more on Chinese users?

e. With regards to funding, if Mozilla ever needs funds, it could approach the China govt and offer some kind of a deal. In return for funding, Mozilla could give China some kind of a seat on the board, some kind of ownership and some kind of say. Here, the China govt is likely to be reasonable and not really want to take over and dictate how the company is run or change policies. Everything will more likely be largely symbolic. Only Mozilla can offer this kind of a deal because the other browser makers are purely American companies, from Microsoft, Google to Apple. So, only Mozilla has a diffused ownership and corporate structure that will arouse no special anti-China sentiments on the part of the US govt or people, while China obtains a seat in a largely diffused company.

f. Also, since Mozilla is open source, there is no transfer of tech. In fact, the bigger problem is that since Mozilla's core techs are open source, what would the China govt get out of it? Here, Mozilla could start looking into the China market for browsers and Chinese users of browsers and see if there are opportunities to produce a Chinese version of Mozilla more suited to China than your current multi-lingual browsers. Here, you can be cunning. You know that the China govt is trying to clamp down on online porn and certain sensitive political websites and search engine results. If you can customise or tweak a China version of Mozilla to achieve these, you could have a deal. There are also peculiarities of the China govt that you can cater to. In short, customise, tweak or create a China version of Firefox for Chinese users. You could, for example, use baidu as the default search engine for this version.

g. Language translation is also important. It would be nice if your browser can translate websites and websearches from English, etc, to Chinese, on the fly. If you are the best in doing this, you should have a deal.

h. China has 55 ethnic minorities numbering >100m or ~10% of the pop. If you can cater to these minority languages, you would also have a strong case, since official China govt policy favours its minorities.

i. The China govt and businesses are using and increasing their number of websites. If Mozilla can create good, open standards for creating websites of various kinds, from news webpages to online retailing, and propagate these to the Chinese, this will also spur adoption of Firefox. Like everywhere, there will be increasing use of videos and audios, including animations, and all these can make Mozilla even more valuable to Chinese users.

j. In short, China is not exactly like a Chinese language version of America. There are distinct differences, in need for control of porn and some political websites and even searches, as well as vast ethnic minorities who need, and can be, catered to, esp language-wise.

k. Once China comes onboard, and Mozilla commits to a Chinese version of say, Firefox, not only would the China govt provide some funds, but also probably encourage China programmers and code-writers to join in the effort. This will be mutually beneficial. The Chinese programmers know better than anybody else what China is and isn't. Or what kind of features are most likely to succeed in China.

l. You probably don't need all this for some time but you never know. In the meantime, start looking at China as a growing market of >300m internet users, and growing, growing, growing...

2. From para 1 above, taking the article on the stunning success of CBHD, then allowing for some Poptimum Effect, and then taking my comments for Mozilla, what would be the way forward for both China and those orgs like Mozilla that may learn to do business with China such that both win-win?

3. To illustrate what I am trying to say, we all know that Toshiba developed the rival to Sony's Blu-Ray DVD [BD] that was known as HD-DVD. It lost to BD and prob lost much money. Whereas now it seems that CBHD, which the article says used some tech from HD-DVD, may well succeed and maybe even dethrone BD ultimately. Or force Sony to reduce prices so much that it will be little profitable. Is there a lesson to be learned? What if Toshiba had gone in with the China developers of CBHD from the very start? Would Toshiba then have won and beaten Sony? Here, we may see the Poptimum Effect having a very big effect. China is so huge that it can create any standard or format it wants and it will have enough users to make it viable and even profitable. I remember buying a cheap little Chinese mp3 player that also played video -- not in any popular format but its own Chinese format. A video-playing watch I bought online from China played mp3 and videos in the China .mtv format, not any of the popular formats used in the West. An American who also bought a China player also asked in a forum about getting a converter program to convert videos to .mtv to play on his player. In other words, given China's huge Poptimum Effect and its still-growing mass of users of everything, companies like Toshiba may well find success BY DEVELOPING FOR THE CHINA MARKET FIRST BEFORE TAKING IT WORLDWIDE. If Toshiba had done that for its HD-DVD, it may have beaten Sony today.

4. In other words, whatever you are thinking of developing, you had better consider developing it FOR and maybe also IN China. This is not new, in a way. For the last few decades, The Market was the US. Every product was designed with the US in mind. It was not only the biggest market but also the richest, able to afford the best. If Jeffrey Sachs on CCTV-9 last night is correct, that free-spending American market is gone, at least for years, maybe forever. Another sign that free-spending, 'money is no object', kind of American buying of all manner of goods is at an end is the low [~8%] penetration rate of Sony's BD players in the US. That is now threatened by China's CBHD, which seems likely to succeed and even displace BD. Of course, developing a product FOR China and maybe IN China means being price-conscious, since the Chinese buyers are not the free-spending Americans but it means that IF YOUR PRODUCT CAN SELL IN CHINA, IT CAN SELL EVERYWHERE ELSE IN THE WORLD. Even in the US and other rich countries. We are seeing a huge economy of scale never seen before in history, that can take even a technically inferior standard like .mtv and still make it a success. Just like prob CBHD is inferior to BD but may still triumph in the end. This huge economy of scale will increasingly dictate how companies develop and sell their products. If companies continue to focus on the free-spending American consumer like before, they may well find that their new products, while technically superior, may still lose in the end to cheaper China products, developed either by Chinese companies or in joint ventures with foreign companies. This happened before, to Sony, when its Betamax lost to VHS. In other words, it is not enough to develop something that is technically better, to win. It has to be a hybrid of price-features that may not be the best technically but at such a price point that products sell furiously. If Sony's BD loses out to CBHD, it will be the Betamax war all over again. This time, the decider will be the 1.3b people in China. And the hungry Chinese companies that are furiously developing everything for them and the rest of the world.

5. There is another phenomenon that bears on my essay : many new products are far better than they have to be or need to be. Every week or so, I walk into Best Denki and the most eye-catching displays are the huge flat tvs. Every few months, their specs get better and better and once in a while, noticeably sharper and more brilliant picture. Yet I don't buy. Why? My few years old 37" flat panel plasma tv is good enough. Besides, the tv channels I watch are not HD anyway. So the phenomenon is that new products are far too good. True, they start off expensive but get cheaper quickly, especially when the even newer, even better replacements come on stream. Unless you are an increasingly extinct American 'money no object' kind of spender, everybody else needs to calculate price-features equations and would settle for something not as sharp and brilliant, not as elegantly thin, but much cheaper tv. This is where China will make most of its breakthroughs.

6. This Made FOR China business thinking will soon be alongside the Made In China business thinking, which is already so well established it needs no elaboration. Made For China business thinking is prob best exemplified by the success story of CBHD. I had in a dim way, anticipated this with my essay on how Mozilla can produce a custom version for China's >300m internet users. Mozilla, like every other maker of hardware or software in every field from blue ray laser disc players to Linux operating system, can profit from a focussed and deliberate Made For China business strategy. For example, Linux has languished behind Windows. What if Linux were to develop a version specially targetted at China's >300m users? It could take off like a rocket. And because China is quite like Taiwan, Hongkong, Japan and Korea in language and culture, and further, to most of Asia, a Linux success in China could mean success in the whole of Asia. Thus, a Made For China success could be extended to Taiwan, Hongkong, Japan, Korea and the rest of Asia. This implies somewhat that its present failure, if it can be called that, is due to its focus on Made For USA or at least, Made For The West. That could be the limiting factor that has denied Linux the explosive success of sheer numbers, which could in turn translate into bigger successes in features and usage.

7. To ramble on, suppose Linux and FireFox were to adopt the strategy of Made For China. It could start by customising a version for Chinese users, cunningly tailoring features for the China internet and its peculiarities. When customised enough, Linux and FireFox could consider going [backwards?] from open source to proprietary. In other words, Linux and FireFox's China version could very well be sold to a China company or the China govt, which will then develop it further to whatever they want. The advantage for the China company or govt is that it doesn't have to develop from scratch, which is not only difficult but almost impossible to catch up with the leaders as even the mighty Google will find with its Chrome operating system when it appears, just like its Chrome browser is lagging far behind the leaders. When the leaders are not standing still, but running hard, and you start from scratch, it is almost impossible to catch up. Thus, for the China company or govt, to develop a China Linux and FireFox version from scratch will be difficult but to buy over a version together with the key people involved, will be far easier. There are legal implications of who should get the money since many developers contribute code to open source softwares but nothing that cannot be thrashed out. All those who contributed code should get some money; more for the bigger contributors. If the practice is established of open source being bought over to become proprietary, and all those who contributed getting some money, the open source movement will benefit because then, more people will be willing to contribute, in the hope that if it goes proprietary one day, they might get paid.

8. I would hesitate to call this Made For China strategy new. It is already prob practised by many firms operating in China, from foreign firms to of course, domestic firms producing for their local market. What I hope to do is to crystallise the thought that firstly, most big firms have consciously or unconsciously, declared or undeclared, had a policy of Made For America as their core business strategy. This now has to change to Made For China AS A CONSCIOUS, DECLARED STRATEGY. If you believe my arguments above, and your own further thinking, then you will profit from this new business strategy, whether you are an American firm like Mozilla, a Japanese firm like Toshiba, or from any other part of the world. China, on the other hand, has to think through all the ramifications if many companies adopt this strategy, in other to encourage and support it if it is considered beneficial to China and its companies. There is much work to be done but most of it thinking. I have merely fired the starter's gun.

--
RH: ME ON VIDEO DESCRIBING lky lhl wks NUMEROUS ELECTION RIGGINGS:

http://i-came-i-saw-i-solved-it.blogspot.com/search/label/Video%20RH%20on%20LKY%20LHL%20WKS%20cheating%20elections

MY ACQUAINTANCE, MR DAVID DUCLOS, A FORMER POLICE INSPECTOR, AND HIS LAWYER FRIEND, EYEWITNESSED LEE KUAN YEW RIGGING THE 1997 CHENG SAN GRC ELECTION. READ MORE AT MY BLOG ENTITLED "I CAME, I SAW, I SOLVED IT" :

http://i-came-i-saw-i-solved-it.blogspot.com/

MY ONLINE POLICE REPORT ON LKY LHL WKS CHEATING ELECTIONS:

http://i-came-i-saw-i-solved-it.blogspot.com/2009/06/police-report-lee-ky-lhl-wks-cheating_02.html

THE MOST COMPLETE RUBBISHING OF LEEconomics EVER:

http://i-came-i-saw-i-wrote-it.blogspot.com/2009/06/most-complete-rubbishing-of-leeconomics.html

[ALSO AT THE ABOVE BLOG, LIE KUAN YEW's LIES, CORRUPTION, WRONGFUL JAILING, TORTURE AND BEATING TO DEATH OF INNOCENT POLITICAL PRISONERS LIKE MR CHAN HOCK HUA]

READ ALSO MARTYN SEE's INTERVIEW WITH ME AT:

http://singaporerebel.blogspot.com/

ALSO AT:

http://i-came-i-saw-i-wrote-it.blogspot.com/2007/03/filmmaker-martyn-see-interviews-robert.html

FOR QUICK, IRREVERENT REASONS WHY LIE KY DESERVES A NOBEL:

http://i-came-i-saw-i-solved-it.blogspot.com/search/label/Not%20nominated%20for%20a%20Nobel%20so%20LIE%20KY%20gives%20himself%20many%20others

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PHOTOS OF LIE KY SCRATCHING MY WIFE's NEW CAR:

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NOT GUILTY BUT TORTURED, DEGRADED 15 YEARS FOR PUBLICITY, FUN

http://i-came-i-saw-i-solved-it.blogspot.com/2009/05/not-guilty-but-tortured-degraded-15.html
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