Thoughts From a Louisiana CEO Doing Business in China – Part 2

Yellow Jacket China 1

I’m a little more than halfway on a 14.5 hour flight back from my second trip to China in 3 months and I’m writing this article on an iPad wedged in between two other people. But I’m happy. ¬†Happy to be headed back home to what I know as “comfortable” and also happy to have experienced and accomplished so much on my 10 day trip along with my co-founder, Seth. When SBN asked me to write a “diary” style post about my experience abroad I thought it would be a great way to share my experiences and business dealings with others from the Louisiana startup scene. Firstly, I could help others learn without having to deal with 14 hour fights and taxi drives who don’t speak with English (even though this is something you have to experience for yourself at some point to get the whole effect), and second, well, it gives me something to do on this flight because I just finished a 440 page book and 2 movies and I’m feeling restless. I like to simplify things so below are the final 2 takeaways from my most recent China trip which spanned 6 different cities and every form of transportation known to man.

[Click here for the first two takeaways]

3) We take honesty in business, gentleman’s agreements and face to face meetings for granted here in the US. While the small and medium sized companies that we have worked with are quick to cover your lunch or hotel stay, they can’t normally be trusted much farther than the written contacts you have with them. Multiple times now have I left a face to face factory meeting with my Chinese counterparts feeling like a million bucks, only to have an email waiting for me when I get back to the hotel with a “change of heart”. The Chinese save face because honor is everything to them..it’s just what they do. When you meet with them they can make everything you need for a great price and on time too! They save the bad (real) news for more passive forms of communication like email. Now, I’m not going to say this is only a Chinese thing because this happens right here in Louisiana too, but it happens the same way in China like clockwork. Our new venture with a much larger, multinational manufacturing corporation will hopefully bring new business practices that we don’t have to be wary of.

4) You can’t do business via email..a great product takes hands on involvement. We are now about two years into our start-up journey here at Yellow Jacket and we are still learning new things daily about what it takes to produce a world class product. Our trip was mainly set up to end a relationship with an existing manufacturer and start a new relationship with a new, much larger manufacturer that is Apple certified. The level of information that the new manufacturer is requiring from us in order to successfully produce our new iPhone 5 model is about 10x more than our last manufacturer. While this is much more engineering, design and administrative work that is required of us up front, it will end in a more superior and world class product. Developing the relationship with our new manufacturer and even our last manufacturer has required thousands of emails, hundreds of calls and yes, two trips to China! If you want to get serious about production, you’re going to have to meet with your manufacturers in person at least a few times per year.