JUMPSTART May/June 2015 1
Issue 06
FEATURED IN THIS ISSUE
FROM THE EDITOR There’s (nearly) nothing more exciting than having your ideas come to life in form of tangible products. You conceived it, created it, and now you hope it makes it big. Somewhere in the middle there are a lot of decisions to be made. How do you communicate your idea to the product developers? What country do you produce them in? How many items should you manufacture to start with? Should you consider environmental aspects? What about packaging? In this issue, we explore some of these items and get inspired by startups that have done it. There’s something exciting happening at Dim Sum Labs, Hong Kong’s small pocket of innovation - there’s a 3D printing school, a choose-your-own electronic paper book, jewelry that lights up and lots of other projects. This “hackerspace” is definitely worth a visit. This summer, grab a ticket to Hushup Cinema, Hong Kong’s creative event company bringing movies to life. Find out how Rachel Frost got started and what’s in store for her business. Get to know the local entrepreneurs! We are featuring 24 must-meet entrepreneurs that are innovating, inspiring and changing Hong Kong’s business landscape. Next time you’re out and about you may even recognize one of them. We are excited to announce Jumpstart’s newest initiative, the launch of Cowork With Baby Day. If you are a parent-entrepreneur like me with a baby (up to 24 months), drop by to CoCoon or The Loft on designated days and enjoy a day of coworking while having your little one nearby. Hong Kong will be the first to try this initiative that we hope will spread internationally. Last but not least, we are thrilled to celebrate the 1-Year Anniversary of Jumpstart Magazine. We appreciate our readers, supporters and the awesome startup community of HK!
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Coworking with Babies Day
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Inside Hushup Cinema
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The 3Doodler Story
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Importing Exporting
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Launch Your Startup This Year!
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Inside Dim Sum Labs
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Manufacturing Jewelry
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Must-Meet Entrepreneurs
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Yana Robbins Editor-In-Chief Editor-In-Chief: Yana Robbins
Website Manager: Rosalyn Smith
Editor: Lucy Banks
Marketing Assistants: Sandra Wu Heather Granruth
Contributors: Matt Slater Rachael MacKenzie Daniel Cowen Paul Lee Michael Michelini Jim Coke Don Tapscott Michelle Yuan Karen Contet Farzam John Teel Mason Ku Craig Michie
General Inquiries: info@jumpstartmag.com Editorial: editors@jumpstartmag.com Advertising: advertise@jumpstartmag.com
Jumpstart is available at over 350 locations, including: Airport Lounges: CNAC Lounge Dynasty Lounge Royal Orchid Lounge Emirates Lounge United Lounge Plaza Premium Lounge EAST Plaza Premium Lounge WEST Morning Calm (Korean Air) SQ Lounge
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Copyright © 2015 Jumpstart. The contents of the magazine are fully protected by copyright and nothing may be reprinted without permission. The publisher and editors accept no responsibility in respect to any products, goods or services that may be advertised or referred to in this issue or for any errors, omissions, or mistakes in any such advertisements or references. The mention of any specific companies or products in articles or advertisements does not imply that they are endorsed or recommended by this magazine or its publisher in preference to others of a similar nature which are not mentioned or advertised. Printed by Magnum Print Company Limited. 11B E-Tat Factory Building, 4 Heung Yip Road, Wong Chuk Hang, Hong Kong
Packaging Products for China
Caption Contest
Cowork with Baby Day Although dozens of cowork spaces have sprung-up in HK in recent years, none have dedicated childcare facilities to support parent-entrepreneurs. Such facilities already exist San Francisco, Tokyo, and London and more are projected to open. We believe this will be a big trend in coming years! While it would be a big undertaking for existing cowork spaces to add on dedicated childcare facilities, we propose just ONE DAY a week for existing coworking spaces to devote a conference room for hosting babies and caretakers while the parent holds meetings, networks, and stays active in the entrepreneurial community, all while having their child nearby.
For up to date information visit: jumpstartmag.com
We are excited to announce the pilot-launch of Cowork With Baby Day in Hong Kong this May!
Starting May 1st, you can take your baby to cowork at the following spaces. Please RSVP in advance. Q: Why can’t the new parent come alone to the cowork space? Many new parents may not want to leave their child with a caretaker for the day. They may prefer to have their babies nearby.
Pass available for members and nonmembers. hkcocoon.org
Q: What age range is this program intended for? Babies ages 3 months to 24 months. This is the hardest time for a new parent because few options are available for daytime childcare.
The Loft: Every Monday, $40 HKD
Q: Are childcare services provided? No, please bring your own caretaker.
CoCoon: Every Friday $300 HKD Day
per hour or daily rate of $180 HKD. theloft.com.hk
We hope this initiative will catch on internationally! If you run a coworking space and are interested in joining, please contact our team: info@jumpstartmag.com
Q: How can a parent book this room? Please contact each cowork space directly to reserve your spot. Q: How many parents/babies can particpate? There’s capacity for about 5 babies+caretakers for each space. Q: How can coworking spaces create the best experience for this initiative? Listen to the feedback of those using your facilities. In the future, you can look to providing extra services for caretakers such as CPR classes, cooking, hygiene or any other classes that can benefit caretakers and their families. Q: How can my cowork space participate? Email Jumpstart to pledge your participation.
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Pitch Perfect, May 9, 2-5PM
HKTDC Entrepreneur Day, May 29-30
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Speed Networking + Movie for Women, May 14
Web Summit, July 31
Jumpstart Magazine is pleased to run a speed networking and movie night. Join us for a fun time! events@thehive.com
Join Web Summit’s first event in Asia. In 4 short years, Web Summit has become Europe’s largest tech conference attracting over 20,000 attendees from around the world.
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Make 2015 the Year You Finally Launch Your Own Startup
2015 will be the time to start a business. Here’s why and how. Around the world we are facing unprecedented unemployment -- even in the developed world. Youth are particularly hard hit. In 2014 more than 1.6 million students graduated from American colleges and universities. Many moved directly into the swollen ranks of the unemployed. After taking on enormous debt to finance their studies, they ended up competing for unpaid internships or low-paying jobs for which their education is irrelevant. This violates the tacit pact made with them: If they were industrious, law-abiding and diligent students, their lives would be prosperous. The U.S. isn’t alone. According to the International Labor Organization, youth unemployment in most of the world is stuck at about 20 percent. “Young people [are] nearly three times as likely as adults to be unemployed,” says the ILO. In Spain more than 50 percent of young people are unemployed, in Italy it’s 35 percent, and in France the rate is more than 25 percent. When considering under-employment, these numbers could be doubled. Such unemployment is corrosive to all societies, no matter what their level of development. All citizens want to play a productive role and contribute to their community. Unemployment gnaws at an individual’s well-being, and makes them feel surplus to society’s needs.
But traditional methods of job creation are stalled. One of the keys to solving this problem is entrepreneurship. Research shows that 80 percent of new jobs come from companies 5 years old or less. So the need for entrepreneurs has never been greater, in both developing and developed countries. When given the right conditions to flourish, entrepreneurs are the foundation of growth, prosperity and even innovation. They bring fresh thinking to the marketplace and fuel the creative destruction that makes market economies prosper. In addition to creating jobs, new companies are the foundation of the economy and the source of much innovation. They also create the new goods and services on which our standard of living is based. The Internet slashes transaction and collaboration costs for almost every institution in an economy. This is leading to a change in how societies orchestrate capability to innovate, create goods, services and public value. With such costs falling precipitously, companies can increasingly source ideas, innovations and uniquely qualified minds from a vast global pool of talent. Many big companies benefit from startup entrepreneurship. They acquire small companies with great innovations rather than relying solely on their research and development departments. As the new saying goes, M&A is the new R&D. Entrepreneurship is also critical to social cohesion and avoiding the radicalization of youth and their recruitment to anti-social and dangerous causes.
“The best thing I ever did in my professional life was to become an entrepreneur. It was tough, but it worked out well for me and I have a life of influence, prosperity and fun beyond anything I ever dreamed..”
Waiting for governments or big companies to solve the problem is not the answer. Necessity is the mother of invention. Is it time to take the bull by the horns and make your own job? The best thing I ever did in my professional life was to become an entrepreneur. It was tough, but it worked out well for me and I have a life of influence, prosperity and fun beyond anything I ever dreamed. Here’s my advice to you.
1. Create a business with customers This may sound silly but so many startups are focused on getting traffic to their site, going viral, or creating something cool with no business model in mind. Peter Drucker said years ago: “The purpose of any business should be to create a customer.” Create some value that a customer would want to pay you for. As for funding listen to Tony Hsieh, the CEO of Zappos, who said: “Chase the vision, not the money; the money will end up following you.”
2. Don’t seek venture capital These days virtually no venture capitalist invests in a business plans or even early-stage companies. Besides, you don’t need them. Fortunately, it is less costly than ever to create a company. Thanks to the Internet, little companies can now have all the capabilities of big companies, without the main liabilities: stifling bureaucracy, legacy culture and processes. Talent can be outside enterprise boundaries and companies can use the new media to market and engage stakeholders in radically new, low-cost ways. One study found that readily available resources such as opensource software, cloud computing, and the rise of virtual office infrastructure
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has driven the cost of launching an Internet venture down from $5 million in 1997 to less than $50,000 in 2008. The best is to have a product or service that generates initial revenue so you don’t have to borrow money or give away equity. Or get a loan or small investment from your family or friends.
3. Consider crowdfunding The Internet offers a new solution for companies seeking capital, based on peer-to-peer networks that bring people together to achieve a common goal. New firms can source capital in new ways, and it should be no surprise that young business builders are harnessing the power of mass collaboration to fund their companies. Individuals and new companies have used crowdfunding to raise billions of dollars in debt and equity during the past five years. In 2012, crowdfunding raised almost US $2.7 billion around the world, an 80 percent increase over the year before. Since 2009, Kickstarter has channeled more than $815 million to nearly 50,000 projects. The early success of crowdfunding in the developed world shows how much potential this new way of raising capital has for aspiring entrepreneurs in the developing world. No jobs? Take a page from my daughter and her best friend, who created Knixwear, a company that makes high-performing underwear for women (“Women are multi-taskers, their underwear should be too”). Their crowdfunding campaign not only raised capital, it led to a big deal with one of their most important target retailers. A year later, the company is a rocket.
4. Consider being a social entrepreneur With the rise of social entrepreneurship -- businesses that seek to create social good -- there are vast new opportunities to advance social development, sustainability and justice that supplement the efforts of traditional government and civil society institutions. Governments are increasingly inept at solving societal problems. So increasingly it’s up to us.
I’m constantly inspired as I travel around the world by the new generation who want to do well by doing good.
5. Focus on what you do best Partner to do the rest. Companies such as Amazon are opening up their technology infrastructures to create an open stage where large communities of partners can create value, and in many cases, create new businesses. They set a context for innovation and then invite their customers, partners and other third parties to co-create their products and services.
“Chase the vision, not the money; the money will end up following you.” Tony Hsieh, CEO of Zappos
6. Don’t give up From my experience, the conventional wisdom is correct -- not banal. “Ninety percent of everything is just showing up.” “Success is 90 percent perspiration and 10 percent inspiration.” Or as Winston Churchill said, “If you’re going through Hell, keep going.” It’s a lot of hard work to build a business. But if you’re like me or the women at Knixwear, it’s worth it. Don Tapscott, CEO of The Tapscott Group, and founder and chairman of the international think tank New Paradigm. Tapscott’s new book is “The Digital Economy Anniversary Edition: Rethinking Promise and Peril in the Age of Networked Intelligence”. Tapscott has authored or co-authored fifteen books on the application of technology in business and society. Twitter: @dtapscott
Don Tapscott’s New Book
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Make Some Noise for Hushup Cinema Inside Hong Kong’s Most Creative Events Agency By Rachael MacKenzie
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So mysterious is creative events agency Hushup that I charge straight past its creator, despite being in an almost empty café. Ball of energy Rachel Frost has met me straight from work and is due at an event in thirty minutes. Despite putting in eighty hours last week (and attending yoga in the mornings) she is remarkably chirpy. Over the last three years her company has expanded from a let’s-see-how-this-goes festival on an outlying island, to whimsical madness all over Hong Kong. Free time isn’t really a thing for Rachel right now, but she’s cool with that. “We’re definitely growing really quickly, just in the last six months we have boomed so it’s an exciting time.” As Rachel begins to share the Hushup story she realises that it’s her one-year anniversary with her business partner, Leo. The owner of the events company More Chaos, Leo helps with decision-making and takes the stress off the business management side of things. And now that Hushup is balancing public and private events, they certainly have lots to manage.
The Secret is Out The word about Hushup is spreading and tickets sell out fast. The popular annual Secret Island Party (‘SIP’ in Hushup parlance, attended by ‘sippers’) is hidden away on an idyllic farm and showcases eclectic acts whilst offering campers yoga, meditation and organic food. There are also sporadic pop up parties. Rachel tells me about one of their first, a 1920s speakeasy. Hushup created a functioning hairdresser façade with a thick curtain hiding the revelry, where flapper girls did the foxtrot to live jazz and wannabe gangsters tried their luck on a roulette table with a dapper croupier. (I’m now hoping for a pop up Woodstock.) The most frequent Hushup events are part of their Rooftop Cinema brand, where, and the website sums this up best, one
can “enjoy a unique cinematic experience − under the stars and above the smog, atop unique private rooftops”. Films vary from art-house to new releases, usually with at least one event each month. Rachel gets the licenses through two companies, which is no easy task as she can go through fifty films to get a line up of five. From Rooftop came interactive and secret cinema, where Hushup brings films to life in a flamboyantly interactive way, coaxing the audience from their comfort zones and into the spirit of the film. Their most recent was the Bollywood Bizarre where seventy guests enjoyed live art, dancing, henna tattoos and market stalls, with headphones to watch the classic 3 Idiots. “Rooftop is a nice experience in itself but its nice to do extra twists and turns. To do things that little bit better.” Aside from public events, Hushup is also building up a portfolio of corporate clients including Philips, Sennheiser, Carlsberg and recently Puma. Events often include team building and product placement in the most unique way possible. “With Puma, we actually did acroyoga to help get the point across.” There was also the recent Hushup & Havaianas Feel Good Film Festival, where Havaianas provided a photo booth for the audience to play in and blankets for cosy film viewing. Hushup’s busiest period is from September to December, avoiding the rainy season. Though that’s not to say that the elements don’t occasionally misbehave. Once there was an attempted mass float off of SIP’s alcohol during a storm, as the cardboard boxes they were in disintegrated into mush.
Life and Events Before Hushup The beginnings of Hushup were dreamed up on a houseboat in Aberdeen, where Rachel was working as the governess for a family. She had moved to Hong Kong to take a break from her hectic life in England, which saw her working for an events company as well as taking on managerial roles at several festivals. She also worked tirelessly on her own projects, coordinating
everything from stages in parks to sewing circles. Even in these early days, Rachel had firm ideas of what she wanted to achieve. “The events were interactive and involving, and I’ve followed that through with Hushup. I want people to come away feeling like they’ve been part of something.” Perhaps surprisingly she saw events only as a hobby, dabbling with the idea of teaching. I’m no careers adviser, but clearly this was never going to be the case.
“When I was a teacher it wasn’t really about the planning,” Rachel muses, “it was about how I dealt with crises management like rowdy intense teenagers throwing bins at my head”. Her responsiveness and knack of ad-libbing in a situation meltdown crosses over perfectly to events, and is probably why she has no juicy disaster stories. The wildest she can muster is the time she crept off for “a sneaky bounce to some drum and bass” at a SIP, only to be dragged back into reality by a small hill fire. On the whole, the biggest problem is theft of event mise-en-scène. (Incidentally, if you are holding one of the SIP flamingo flock hostage, please return it. They are missed.) It is unsurprising then that whilst working as a governess, Rachel’s mind began to drift back to the lively world of events. “I pondered the world, in my hammock on my boat, and that’s where Secret Island Party formed in my mind. I thought, I’m going to do a festival in Hong Kong, yep, that’s what I’m going to do!”
Hushups and Downs A few weeks later Rachel and some friends went to a yoga retreat on an island. An abandoned resort greeted them, but Rachel also found the perfect location for her festival, and the lady who owns it. “I looked around and thought that it was the perfect spot for a party. The events part of
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me was triggered. I was articulating to the family ‘party, discotheque, here!’” They agreed, and over the next four months Rachel pulled together her debut SIP, the first festival to have camping in Hong Kong. It was a huge success, and feeling inspired Rachel found a job that gave her enough free time to do events here and there and coordinate a second SIP. It too received an overwhelmingly positive response, and Rachel took the plunge and founded Hushup. “I jump into things feet first and think about it after, which is probably how I got myself into this situation. I thought, well, I’ll just start a company!” She made a business plan with a three-year cash forecast, and bought second-hand outdoor cinema equipment to start Rooftop Cinema, working roundthe-clock to get things going. However, lurking round the corner was the ultimate party pooper − debt. Rachel poured everything she had into her business, but after a while she simply didn’t have the funds to keep going. “It was like someone wrenching my heart out of my body. It wasn’t even about the financial side, Hushup is like my baby, from my soul.” Devastated, she booked flights to go back to England to gather her thoughts, unsure of the future. Luckily, serendipity didn’t take long to step in. Firstly, Rachel’s
credit card transaction for her flights didn’t go through and before she could sort it out she got a call from a client asking Hushup to manage a 600-person event. And the rest, as they say, is history.
Starting Up in Hong Kong So what’s it like starting up a business miles away from home? “Hong Kong is a great environment to start a business in,” Rachel says enthusiastically, “even people who I would consider my competitor in England have supported me as a woman on my own starting a business, which is daunting.” In the early days of Hushup Rachel was surrounded by mentors giving her the dos and don’ts for survival here. Quotes, estimates, profit and loss sheets and hard-faced negotiating were all things she had to learn Hong Kong style. Negotiating
for a $20 discount in Ladies Market is an uncomfortable experience for any British person, never mind Rachel. “In Yorkshire we just want to give everything away!” She also finds Hong Kong more accessible than England because of its small size. It’s less trouble finding host stages, DJs and sound equipment here, and networking and building up relationships is easier. As a result, Rachel has built up an incredible support network. “I have an amazing team behind me. I feel really blessed!” she beams.
So, what’s next? Soon to be launched
is the Secret Brunch, where hungry ticket holders will be taken to secret locations by scouts. Rachel is also working towards taking Hushup abroad, dreaming of big spaces like fields and wearhouses (which are pretty sexy when you’re working in shoebox city). And no matter then what direction Hushup goes in, I’m sure it won’t be a quiet ride.
For more information and upcoming events, visit:
hushup.hk
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Inside Dim Sum Labs By Michelle Yuan
Tucked away in Sheung Wan is Dim Sum Labs, a “hackerspace” that was formed from what originally was a meet up group started by William Liang, who later went on to become one of the cofounders. The group aimed to gather people who like to know more about I.T. related things, hardware, and “hacking.” Hacking, in this sense, doesn’t mean planting viruses in people’s computers or stealing consumer information. It involves experimenting with different technological ideas and putting together hardware parts to see what would happen. Hackerspaces, which have essentially become a global movement, are community-operated spaces that are rented by the hackers themselves. Dim Sum Labs, which is a member of Hacker Worldwide Society, is run in a very “family-style” manner. Hackers who work there pay a membership fee of 500 Hong Kong dollars a month to use the space, build what they want using the resources and supplies around them- and get free beers from the community fridge. The membership money is used for rent, purchasing the equipment, and holding workshops. Dim Sum Labs also has a 100 square meter rooftop area where members hang out and chat. Dim Sum Labs also opens its doors to hackers that come from out of country who only have to pay for the time they spent in the lab. So far the 5-year-old space has around 25 members but continue to expand each year. “Dim Sum Labs is more than a coworking space, it’s like a maker-space where people store equipment and can find a specific set of instruments where they cannot find on the market,” says Michelangelo Guglielmetti, volunteer and spokesperson at Dim Sum Labs. “Although the approach is more on the maker side rather than the startup side, some startups do come out of Dim Sum Labs. Basically people come to build things here for fun and try things that they cannot try when they are in the office. It’s also a great place to prototype any type of hardware idea.”
“What’s so special about Dim Sum Labs is not the place but the collection of people. They have such deep knowledge in their own respective areas,” says William. “It’s a place you can go to look for people who can help you in a specific area.” A common misconception is that Dim Sum Labs is a “super hacker space” where you have to be very experienced in hacking or be an expert in building hardware, says Michelangelo. But that’s the opposite of what the space is trying to achieve. “We welcome anyone who has ideas and a general interest in hacking and learning more.”
Iron-Man-like Oscillators & Haptic Compass Belts When he’s not researching for his Ph.D. in Technoethics at City University, Wilhelm Klein is working on projects like ring oscillator pendants and haptic compass belts. With NOT-Gate simulating transistors, capacitors and resistors, as well as UV LEDs, and a uranium enriched glass marble, Wilhelm has made a sort of Iron-Man style Arc reactor that can shine blue, violet, and green lights. Without the need for any microchips, the completely analog concoction oscillates around the clock and creates the illusion of a spinning radioactive element in the middle. What’s the point of this project? “It fundamentally doesn’t do anything. It just looks cool,” says Wilhelm. “In general, most of the things we do as a community are not going into the commercial direction.” His other project, the haptic compass belt, test the neuro-plasticity of the human brain by trying to add a sixth sense using an array of vibration motors. The belt, mostly built of pieces salvaged from old cellphones and networking equipment, and using the popular Arduino microcontroller platform, tests if one can use technology to add intuitive cardinal orientation to the human range of senses.
“Dim Sum Labs is more than a coworking space, it’s like a makerspace where people store equipment and can find a specific set of instruments where they cannot find on the market.”
Who Ate the Cake Children’s Book After staying with her sisters and nieces a couple of years back, Jacinta Plucinski created a picture book called Who Ate the Cake as a gift of thanks for allowing to relive her childhood memories. It’s a “choose your own adventure” type format that leaves no right or wrong choices as each pathway is a genuine story itself. Jacinta, who has worked in the Tokyo hackerspace before coming to Hong Kong six months ago, wants to create electronics into the storyline for the next edition of the book and uses Dim Sum Labs as a space for prototyping the book. Because of the many resources available at Dim Sum Labs, Jacinta came up with putting a circuit board in the side of the book as well as using conductive ink so that when the child runs his or her hands over the stars, the pictures physically light up.
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Hong Kong’s First 3D Printing Academy 3D printing has definitely made a huge splash in the tech world during the past few years. Now Marc Rogivue wants to teach the skill of creating a 3D printer to everyone. He has created the 3D Printing Academy Hong Kong, the city’s first school dedicated to teaching the construction of your very own 3D printer. The course meets over 3-4 Sundays, consisting of approximately 12-15 hours, and teaches you the operation of the various hardware and software components of building your very own 3D printer. Who signs up to take the course? So far Marc has everyone from students, to designers to professionals. Those who are interested in 3D printing only have to pay 4200 Hong Kong dollars for the course, and that includes all the parts needed to make the printer. Basic assembly skills are required, however, such as previous experience in putting together a car.
“Dim Sum Labs was a really great place for me to start this,” said Marc, “There’s such a diverse group of people there with different talents and different interests. Some people are good at hardware, some at software, and some at 3D related projects. We all come together and share our certain ideas and talents with each other. That’s what’s so great about the place.”
Global Space Balloon Challenge Since Hong Kong has no plans to fund any space program, a group of passionate local residents decided to form a team of their own and participate in the Global Space Balloon Challenge (GSBC), which plans to have 400 cities around the world send balloons during the Easter holiday. The event, which takes place globally, aims to gather people from around the world and have them simultaneously fly high altitude balloons. The Hong Kong team, founded by Dim Sum Labs members, Andy Kong, consists of hardware and software engineers, commercial airline pilots, an architect, a RC plane designer, and even a tank commander. “Since there’s no money involved in creating this kind of project, I needed to find people who were passionate about what I was doing since they would be purely volunteers. It was so difficult to find that in Hong Kong,” said Andy, “I searched everywhere, even
some aviation clubs, such as the remote control plane club in Hong Kong. I couldn’t find people with the open mind and the passion. When I came to Dim Sum Labs, I finally found people who were motivated to do this and was then able to finally form my team.” Although Andy is not sure whether the challenge will continue this year due to the increasing number of drones in the sky, he certainly will be staying in Dim Sum Labs to work on other projects of similar interests. “When we were kids, we all wanted to make something. Dim Sum Labs is a place where people who want to make something can come over, get advice, and find others who can help make it happen.”
Skin Mount Technology
Even fashion has found its way into Dim Sum Labs. Feedface, a project started by Folkert Saathoff, makes “machinery fashion” that uses technology to create its aesthetics. For now, it’s just earring studs that look technologically chic but two to three years down the line, when the battery gets small enough, Folkert plans to make them blink and emit light. “I thought of the idea when I personally found it difficult to buy earrings for guys in Hong Kong. The market is geared more towards females and even when I did find something for men, it was never something I wanted to buy,” says Folkert. At the moment, Folkert only works on ear studs but doesn’t dismiss the idea of branching into other forms of jewelry. He currently sources all his components from Sham Shui Po and builds these fashion pieces in Dim Sum Labs. “Yes, there’s no functionality to it but there doesn’t have to be. That’s why I’m working on it at Dim Sum Labs. People here understand what I am doing and are purely inspirational, always encouraging me. It’s about the social aspect: A bunch of geeks into technology.”
Michelle Yuan is CMO of Luxify, a local, online marketplace for buyers and sellers of preowned, new, and vintage luxury items. Michelle is currently a contributor for Forbes and has a Master’s in Media & Journalism from the University of Hong Kong as well as a Bachelor’s of Economics from Columbia University.
3D Printing Academy Workshops are conducted on a regular basis. Contact: info@hkbay.com. Who Ate The Cake www.whoatethecake.com Skin Mount Technology www.feedface.com The Haptic Compass Belt mail@wilhelmklein.net
The 3Doodler Story
By Daniel Cowen
If necessity is the mother of all invention, then mistakes are the other parent! The 3Doodler shares its origin story with the many innovations that spring from these principles. There was an unforeseen mistake, a need to solve the problem and the birth of a whole new category of invention; one that saw the marriage of tech and creativity in the form of the world’s first 3D printing pen. One fine spring day in 2012 our 3D printer had almost finished a 14-hour print when disaster struck: it had missed a line in the print. A mere 0.4 mm error had destroyed a full day’s work. We were going to have to start again. That’s when inspiration materialised: “what if we just took off the print head and filled in the gap?” “Wait, you mean just take off the extruder head and print by hand???” And there it was: the genesis of the first 3Doodler. A day later Maxwell Bogue and Peter Dilworth were craned over a clumsy looking device fondly called the “teacup” (due to its stout form and robust handle), extruding plastic through a series of gears, a heater unit, and the printer head of their now extinct 3D printer. (RIP.) The words “3Doodler” were etched onto its side and coloured green and red in felt tip pen. The first 3Doodler was born. Fast-forward to February 2013, and the 3Doodler had become an “overnight” phenomenon, raising over 2.3 million dollars on the crowd-funding platform, Kickstarter. With 25,000 pre-orders under our belt, the 3Doodler team now had a daunting but exciting task ahead, take the 3Doodler from hand-made prototype to mass production, and then to the mass market in a small window of time. As well as creating products that inspire and delight our users, we also love helping other inventors and entrepreneurs to realise their own visions. With that in mind, here’s a glimpse into how we got from zero to 25,000 units in six months:
Product Development:
What did we do after we had the initial idea for the 3Doodler?
“The best way is always the simplest. The attics of the world are cluttered up with complicated failures.” -- Henry Ford Following the first prototype of the 3Doodler, we dove into a focused and deliberate evolution. We went through six iterations of the pen, constantly improving and enhancing the initial design. We started with functionality, moved on to form factor, and finally refined it by taking elements away. The art of creating a great product is not what you put in—its what you take out. We wanted anyone to be able to pick up the 3Doodler and use it within minutes. Great innovations are often defined by their simplicity, and the decisions you make in the early days of your company will shape your product development for years to come. Simplifying your product today will reap untold dividends in the future, particularly when it comes to your manufacturing, assembly, cost of production, and of course the eventual retail price (which is what consumers ultimately care about.) Our most essential tools for this part of the process were CAD and our 3D printer, which, despite its flaws, allowed us to iterate successive generations of the product in days rather than months. Once we were happy with the design, we made five “final” prototypes and put them in the hands of regular people. We can’t emphasis this enough - your best critic will be someone who’s never heard of, never touched, and possibly even has no interest in what you’ve made. If they can pick it up, use it, enjoy it, and perhaps even be inspired by it, then you know you’re onto something! Once we had fine-tuned the device based on this experiment, we were armed with a handful of fully functioning prototypes, 3D files, and a BOM (Build Of Materials.) Now it was time to visit the factories.
Communicating your design (and vision) to your factory: What kind of technical specs and details are needed, and what challenges did we face? “...You put water in a cup, it becomes the cup; You put water into a bottle, it becomes the bottle; You put it in a teapot it becomes the teapot. Now water can flow or it can crash. Be water, my friend.” --Bruce Lee Communicating with factories is an exercise in specificity and due diligence. You will need a BOM, 3D files, prototypes,
an overview document of tech specs, and last but certainly not least, an infinite amount of patience and understanding. You also need to be prepared for the fact that you will get EXACTLY what you ask for—nothing more, nothing less – so make sure you learn how to ask tough questions and communicate what you need clearly! We created everything that they could possibly need—we tried to overwhelm them with information, so that all gaps would be filled and so that both they and we would understand the product better.
“The best way is always the simplest. The attics of the world are cluttered up with complicated failures.” -- Henry Ford
The key point here is that you want to do all your thinking up front; last minute changes can cause catastrophic delays. Hours devoted to this in the beginning can save you weeks or even months at the tail end. Having said that, you can never predict everything and you must remain flexible and prepared to improvise-- to eliminate assumption and leave nothing to chance. Specificity is the name of the game. To that end we added a “secret” test mode to the pen (Dear Users, let us know if you find it!), we specified heating and cooling times, shut off times for safety, how the buttons were meant to feel to the touch, as well as the noise it is meant to make when pressed, the brightness of the LED (measured in lumens!), and much much more... Anything you don’t tell
the factory, they simply won’t do. Assumptions are your greatest enemy. For example: Don’t assume that they’ll put an On/Off switch in, you have to tell them to put an On/Off switch in, or they won’t do it... True story.
Selecting your factory and starting production: How we found our trusty manufacturer, and what the manufacturing process was like. “One sometimes finds what one is not looking for.” --Alexander Fleming, inventor of Penicillin.” We selected a factory based on products that they had already made. In our particular case the factory we chose had been working on shrink-wrap machines-a device which has a motor AND has a heater. As simple as that sounds, you would be surprised how many factories can only do one thing well. While a shrink-wrap machine and a 3Doodler don’t seem to have much in common, it was key that we found a factory that could produce a product that possessed those characteristics. Nobody had every made a 3Doodler. The same may be true of your product. If you can’t find an exact fit, look for the closest possible skill sets and experience. We looked at over ten factories, going to each one, interviewing management, seeing product lines and assembly floors, and checking their QA (quality assurance). This process is guaranteed to be three things—time consuming, arduous, and essential to the success of your company. But absolutely nothing compares to sitting down face-to-face with the people who will be manufacturing your product. And, when you do eventually sit down with potential retailers, there are few possessions as valuable as the ability to look them in the eye and say with complete honesty that you have seen where the product is made and you can guarantee the quality and conditions. The bigger the retailer, the more these things matter, so don’t take shortcuts, it will only come back to bite you later on. What we didn’t do when selecting our factory was go out for karaoke and drinks with our prospective business associates. Your factory is not your friend, they are your partner. You should respect them and they should respect you. Strong bonds are formed by meeting production deadlines and paying bills on time-- not by drinking each other under the table and singing pop songs together.
Packaging design: How did we go about this, and what do you need to keep in mind? “You‘ve got to start with the customer experience and work back toward the technology - not the other way around.” --Steve Jobs
“You‘ve got to start with the customer experience and work back toward the technology - not the other way around.” -- Steve Jobs
When it comes to packaging, it’s key to remember ‘The 0.1 Second Rule’. At any point of sale (i.e. shopping aisle) your most valuable commodity is the one tenth of one second of attention you have as your shopper walks by at 4 km/h. We intentionally didn’t follow that rule with our first design, but we’ve integrated these principles into our DNA over subsequent rollouts. With the 3Doodler v.1, which was primarily aimed at our Kickstarter backers and early adopters, we wanted to create a box that conveyed the journey that we (and they) had collectively undertaken. Bringing a product from dream to reality is a monumental experience and we wanted the box, as well as the unboxing experience, to encompass the notion of taking an invention off the drawing board. With that in mind, the top of the box looked like a blueprint, with basic instructions on the front of the box, so that we were educating our users from the first moment they held the package. The user then lifted the blueprint away to reveal their brand new product. In terms of materials, we made sure that we picked a box that felt like it was premium, because this is not a cheap product. We focused on little features that we know users love—like the texture of the print and the tolerance of the box when lifting the lid. It felt like opening a foot long iPhone box. Fast forward to 3Doodler 2.0 and 2015. After a year of retail and with over 135,000 units sold, it was time for the next generation, tailored for a much wider audience, and (fingers crossed) destined for many more retail aisles. With that in mind, we focussed on creating a box that would compete for your eye’s attention among the visual tumult of products at your local Brookstone-- or any busy point of sale. The 3Doodler 2.0 box is brighter, bigger and aimed at showing the user what the pen does without requiring them to have any prior knowledge of it. We once again upped the quality of materials used, including a paper foam tray that holds the device itself and your plastic filament assortment. It looks good, it feels good,
and immediately upon opening the box you are faced with the stunning 3Doodler 2.0 pen and an awesome array of plastics with which you can start Doodling immediately. Even the process of working with our packaging manufacturers has been an iterative one, with us gradually improving the fit, quality of the materials, and the way the items are arranged in the box-one batch at a time. In doing so, we’ve built a great relationship with our supplier.
Just the beginning We went from prototype to mass production in six months, meeting our shipping deadlines and furnishing all our Kickstarter backers with their pen ON TIME. But, even with all our exhaustive prep work and planning, making our dates still required three staffers to be on hand around the clock, sitting on the production line and packing those first boxes by hand. Since then, we have expanded as a company and continued to refine these practices. We now have the benefit of two years of experience and hundreds of thousands of units shipped, but even with the maturity and accomplishment we have gained there are still daily challenges-and there always will be. You never stop learning, you never stop growing as an entrepreneur (and hopefully as a business), and you never stop fighting for your vision.
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The Maker Movement And The Rise of Crowdfunding From where I sit, Hong Kong has already been crowned a new role and is well on its way to becoming a very important city for product design and manufacturing. In recent years, I believe two world trends have converged to lead to this situation:
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The Maker Movement:
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The Rise of Crowdfunding:
Breeding a new generation of DIY makers and inventors
Allowing small teams to bypass not just the traditional fundraising exercise, but to also allow them to test the market early and prove their product’s demand to potential distributors, retailers and licensees
This brings tantalising possibilities but also a new set of pitfalls. Easy means of prototyping and crowdfunding led entrepreneurs to believe they can prove a concept by
getting funded, and then call China to manufacture their products. Unfortunately, factories measure success in production volume because they make money based on a percentage of the goods produced. This means that a lowtech US$10 iPhone case is much more attractive to factories than a ground-breaking US$200 smart watch. The result is that early crowdfunding success are often plagued with delivery challenges, often leading to the project’s delay or even failure. This is why more innovators are choosing to set up shop in Hong Kong given its well established legal and IP landscape, knowledgeable and ethical workforce, and close proximity to the factories in China. Having just a small team, or even just one individual managing global markets and factories in China can really speed up iteration cycles, reduce risks and miscommunication, as well as raise the overall production
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quality of the manufactured goods. My own campaign is a testimony to this growing trend. We are preparing an Indiegogo launch on May 6th and it is a huge advantage to run it from Hong Kong. The ecosystem is already taking shape and I am getting all the help I need by being ideally situated in this location. For example, I work with IoT accelerator Brinc to line up investors, factories and distributors; designers Alan and Andrea to come up with worldclass design at Hong Kong speed; and my buddy Conrad who is a veteran in manufacturing to ensure these designs get faithfully realised by the factories. All of these factors have allowed me to rapidly test and improve our offering even as we near our launch date. This is an often overlooked yet significant factor in today’s MVP (Minimum Viable Product), Lean Startup world. From where I sit, I can see that Hong Kong will get some much-needed diversity from traditional industries. With a flourishing ecosystem and supportive government, Hong Kong will have an important place in the next wave of entrepreneurship.
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JUMPSTART
Manufacturing Jewelry The creation of “Pretty Dangerous” Manufacturing jewelry isn’t as hard as you think. You just need to know the in’s and out’s of the process. First of all, here’s a little secret: You don’t have to know how to sketch or draw to create jewelry. Yes, it does help but it’s not crucial. Drawing out the design is just the process of putting your thoughts onto paper so the manufacturers can understand your vision. All you have to do is have the visualisation of the jewelry design in your mind and then you’ll be able to go from there. After you pass your drawings over to a designer or an artisan, they will review the various details and look closely at the dimensions and materials. From there, they may advise you of any risks that go with the design. For example, the usage of certain materials might not go with certain stones or the jewelry pieces as a whole may not sit well on a particular body part. They will tell you all of that. As the creator of the jewelry, you’ll have to work with them to come up with the best way to create the jewelry piece. Once you get to the manufacturing stage, you should determine who your target market is as this will determine whether you go with a large manufacturer or an artisan producer. If you go with the larger manufacturer, they’ll ask you what your target price is per piece. From there, they
will give you a minimum order that you’ll need to fulfill. Usually, this comes to about $2,000 to $3,000 U.S. dollars for the total order. If you’re making more than one style of jewelry, you’ll need as much clarification during this part of the process as possible. Sometimes, this minimum order is only limited to one style so you’ll have to ask the manufacturer how many styles this quote pertains to. Artisan producers charge by piece so the cost per item will be much higher. By using a larger factory as opposed to an artisan, you’ll be asked for a higher minimum order but you’ll most likely be able to get a one-stop shop for all your manufacturing needs. For example, if you want to use precious metals, insert stones, engrave letters, or add a coating, they’ll be able to add that in as part of their service. Smaller workshops and artisans will most likely not be able to do the same. They might have a cheaper price per gram of silver or gold but they’ll only tend to focus on one area of expertise. For example, they’ll be able to only help you with crafting the silver, providing the stones, or adding the coatings- rarely all three. Even if the main workshop can help you with all these services they will most likely be outsourcing it to other workshops and the lead-time will take much longer since the other workshops will probably place your piece at the back of the queue.
By Michelle Yuan
So how do you find these manufacturers in Asia? A quick search on the Internet or a visit to any trade show will show you that there is no shortage of manufacturers in this part of the world. After narrowing down those that fit your needs, you’ll have to go and visit the factories personally to see what they are all about. If you and the manufacturer end up getting along, there is a good chance that they may waive their preconditions. Usually, a reputable manufacturer will welcome you to visit their factory and won’t mind signing any confidentiality agreements with you. They’ll also have policies in place to prevent their workers from taking away their customers’ designs. Logically, it is always in the factory’s best interest to safeguard their clients’ designs. However, don’t be surprised if there are no formally written contracts presented to you. Usually a formally written contract should come from your side. In terms of product consistency, don’t be surprised if you get small variations between different batches of production. It happens. However, if there are any large differences or something is not done to specification, a reputable manufacturer will take ownership and reproduce that particular batch as those who don’t won’t survive very long. Jewelry manufacturers all need to protect their reputation to get more customers like you.
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IMPORTING EXPORTING ADVICE By Jim Coke
From Hong Kong’s Coffee and Beer Importing Guy
While it’s true that many new startups popping up in Hong Kong are tech-oriented, Hong Kong’s is built upon traditional commerce, and almost every other day somebody starts a new import/ export company. Often times, these aren’t considered “start-ups” in the way we’ve come to think about the concept, but they certainly are and deserve as much attention and recognition as those in the technology field. Listen to the Market I’ve heard of many business ideas and seen several import/export businesses fail in Hong Kong. I cannot tell you for certainty what caused their demise but I know what is crucial: listening to the market. Many business people think something is a good product and that may be so in their own country, but the reality is that the Hong Kong market is a different beast. Talk to the distributors and managers, read market reports and finally test the market with a small sample before even committing yourself to an idea or product. The classic Hong Kong mistake is to order a container of a product and then try and sell it. Please do not do that. Relationships that evolve into buyers usually take 6-12 months. You need to get a lot of rejections before you get a nod from somebody. The rejections are the market talking to you. Listen to the market and hear what they are saying.
Carry Trade Now that you have listened to the market and conducted a small test sample, what do you need to get your import/ export or manufacturing business off the ground in HK? My first advice is to identify a specific “carry trade” you like and are comfortable with. By carry trade, I mean a specific trading opportunity that allows you to buy something for x dollars, add y value and sell it for z dollars. In my case I bought coffee beans from Jamaica, roasted and packed them in Hong Kong and then sold to ParknShop. My margins were clear and simple. Minus my fixed, variable and unforeseen costs, I could see that being single-minded and repeating the process 100 times would make a decent chunk of change. It’s not always easy to find that perfect arbitrage position but when you do, my advice would be to lock it in.
JUMPSTART
“Don’t begin trading before you’ve locked in your competitive advantage. This town is full of sharks and if you have not taken control of your products, you will see competitors all over the place. “
Take Control By locking it in, I mean take ownership by either owning the rights to the product or having a licence to import, sell, distribute the product. I’ve experienced both and taking control has made all the difference. For my coffee business, I waited a whole year to get my Trademark User Licence and the Foreign Importers Certificate from the Coffee Industry Board of Jamaica before I could trade Jamaica Blue Mountain® coffee. At the time, the patient waiting paid off and I was one of only two authorised importers and distributers in Hong Kong and mainland China. As for my beer business, I spent 6 months negotiating an exclusivity agreement with the world’s largest alcoholic beverages manufacturer before obtaining the rights to Red Stripe beer in Hong Kong, Macau and mainland China. Don’t begin trading before you’ve locked in your competitive advantage. This town is full of sharks and if you have not taken control of your products, you will see competitors all over the place. An angel investor I know calls it the broken mirror syndrome; break a mirror and you’ll find a hundred reflections of you. That is what business is like in Hong Kong; lock it in before you trade.
Cross your T’s and dot your I’s Setting up your business is relatively straight-forward. It is not necessary to set up a company and my advice would be to weigh up the costs before doing so. Registering a business at the 4th floor of Revenue Tower in Wan Chai (next to Immigration Tower) takes 40 minutes and currently costs HK$2,250. Contrary to a popular misconception, you can use your home address. The only difficulty will be getting some particular licences (see below). Financial transactions will be crucial to your business so open an account immediately and get a secretarial organization to handle your registered office, government mail, etc. My office is with my accountant and she handles everything including being my secretary, using her office as my registered address, answering calls
in English and Chinese, opening all my government mail and sending me a WhatsApp when I need to get down to her office to sign documents, managing my accounts, etc. Apart from the accounts, it costs me HK$180 per month for all these services. There is no need to get a fancy office until you are making fancy profits!
Licences Hong Kong is a free port so you don’t need licenses to import or export most goods. However, there are exceptions. You can find them on the Trade and Industry Department website (www. tid.gov.hk). Licenses in Hong Kong are relatively straightforward to get. I obtained a Rough Diamond licence for my company within 24 hours for under HK$800. The paper work was straight forward. I also obtained a Food Import//Export/Distribution Licence for under HK$300. It took 2 weeks. I recommend that whenever you are given an application form, fill in or tick every box. Don’t be selective. My current food import licence allows me to bring everything from sushi, to kola nuts (something I added in miscellaneous), beer, pork, you name it. Of course I didn’t need nearly all of them but it does not cost any extra to have them so why not. For your information, if you apply for the Dutiable Commodities Licence, you cannot use a co-working space or anywhere you are not on the Land Registry.
Your first shipment and storage Never bring in a big shipment without a willing and confirmed buyer. You will thank me for it. My first shipment was a 40lb sample from my exporter in Jamaica. Since then, my first shipment of any product has always been samples. Only when I have a purchase order (PO) do I then start to talk about containers. You can use shipping agents and they come at a princely price. Estimate about HK$5,000 for a full 40 ft container. I discovered that this amount can be reduced significantly if you don’t use Chinese shipping agents. I employed Pakistani/Indian agents and it was incredibly much cheaper. Storage is a big issue in Hong Kong. I would suggest getting a warehouse somewhere cheap like Kwai Hing/Kwai Cheong. Prices are roughly HK$10 per square foot and you will have to pay 4 months up front for a unit. For this, I would recommend getting a Chinese agent and if you bargain hard enough, the agent can forfeit his commission. Mine did. Mind you, he did not speak a word of English. Interesting conversation. I kid you not.
Logistics To be honest, I did all my logistics at the beginning. I took 5 cases of beer to every ParknShop store with my trolley. Costs were down to HK$20 per delivery. A bit embarrassing but I reduced my costs significantly. It paid off as I eventually got ParknShop to accept delivery in their Kwai Cheong warehouse. It only took trips on mini buses, MTR, GoGoVans and taxis for 2 months before I moved up the pecking order and landed their elusive POs for beer. What I am saying is start small and do what you can before committing huge amounts on logistics. It will eat up your revenue if you don’t control it. Use GoGoVan or any other similar app service and you will be surprised how little it costs. Use Pakistani/Indian logistics companies to get the same service for considerably less.
Cultural Context If you are a foreigner/expat, it’s important to note that the import/ export world is a Chinese world. From the security guard at your warehouse to the CEO of the shipping carrier, you will be interacting with Chinese culture and language. Adapt to survive and eventually succeed. If you can’t adapt to their culture and way of doing business; the writing is on the wall.
Jim Coke started Hilmann Reinier Brands Asia Ltd just over 3 years ago from his dining table importing Jamaica Blue Mountain coffee into Hong Kong. Without partners, backers, investors or bank loans, he has grown the business to include Red Stripe beer and has become a renowned purveyor of Jamaica’s finest products in Asia. His distribution channels include ParknShop as well as CitySuper.
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10 Tips for First-Time Importers Global import opportunities have seen a growing number of first-time importers test the market. While the rewards can be lucrative, there are traps that many first-time importers fall into. Scottish Pacific Tradeline has assisted many start-ups and small businesses to smooth the way for importing, and given our clients’ experiences we’ve come up with these top ten tips for first-timers.
1. Research suppliers Compare and contrast as many suppliers as possible. It’s important to understand whom you are dealing with. Is it the actual manufacturer or a trading company? Sometimes it can be difficult to tell the difference. Complete a factory visit for your top choices. Make sure the factory name is consistent with the name of the company that has quoted you. Know who you are dealing with and whether your supplier will be the actual exporter or if they will be using an export agent or trading company.
2. Understand the quote components Ensure that the various quotes you receive are broken down to include individual component costs, labour and any other charges. This will make it easier to compare quotes and also to control potential future price increases. For example, if the cost of materials that go into the product have increased 30 percent, the supplier could request a 30 percent price increase. However if materials account for 50 percent of the quote then an increase of just 15 percent would be justified.
3. Understand when goods become your responsibility Insist on the appropriate Incoterm (an Incoterm determines the tasks, costs and risks for the buyer and seller for transportation and delivery of goods). Incoterms determine when the importer is responsible for the goods and what insurances are required. Get familiar with terms such as FOB – Free On Board, CIF – Cost Insurance Freight and EXW – Ex Works.
4. Understand the freight and logistics process Too often deadlines are missed because of mismanaged logistics. Research your freight and logistics provider. Make sure they can demonstrate experience in cargo management from the area in which the supplier is located. Take the time to understand each phase of the process, including inland transit, container storage and consolidation (if required), shipping and clearing the goods once landed. Make sure you understand the full cost of landing the goods including government duties in your jurisdiction.
5. Local relationships are key The process of importing goods does not always go smoothly. The chances are that you won’t be around when a problem occurs. For this reason it can be important to have a relationship with a party aside from your supplier. This party, who could be a sourcing firm, inspection organisation or an export agent, will be somebody who is experienced and who can quickly assist to get the process back on track.
6. Complete a pre-shipment inspection Once the goods are shipped, it is extremely hard to organise for goods to be returned. Getting a credit or a refund can be just as difficult. Ideally, you should be completing an inspection of goods on all shipments. This process is even more important when you are dealing with a new supplier.
7. Insist on adequate insurance Once the importer knows when they are responsible for the goods (via the Incoterm), it is vital to have the cargo insured. Many importers mistakenly believe insurance will be covered by the freight forwarder who facilitates the import. This is not so, and it’s an unfortunate fact that marine shipping containers do get lost. One notable example was in February 2014, when 520 shipping containers were unaccounted for as the vessel Svendborg Maersk was struck by high wind and waves off the coast of France.
8. Hedge currency risk US dollars is the key currency for most import transactions with China and the surrounding region. Value fluctuations in local currency against the US dollar can seriously impact gross profit margins. One way for importers to avoid this risk is to liaise with currency providers to set up Forward Exchange Contracts that lock in an exchange rate.
9. Minimise deposits Most suppliers insist on an upfront deposit before they start manufacturing. Deposits impact cash flow and increase the risk of the transaction. Keep in mind deposits can be very difficult to recover if there are any unforeseen complications. Many suppliers try to avoid letters of credit (LCs), but really they should form part of any importer’s conversation with suppliers. LCs can be used instead of deposits to minimise risk and the impact on your cash flow.
10. Take measures so your cash flow isn’t under pressure
Craig Michie is Head of Trade Finance and a director of Scottish Pacific Trade Limited. A qualified accountant and Fellow of the Institute of Public Accountants, Craig has more than 25 years experience in banking and finance and is one of Australia’s most experienced specialist working capital lenders. He has headed businesses for major banks as well as founding a specialist trade finance business that was acquired by a bank. Craig has extensive experience in Asia having established businesses in China and Hong Kong. He has travelled extensively throughout China developing relationships with key suppliers to buyers from across the globe.
The upside for importers is that buying goods from overseas suppliers can often deliver exceptionally strong gross margins. The downside can be the negative impact on cash flow (more so than buying from domestic suppliers) as importing involves significantly longer cash cycles, meaning businesses need much greater levels of working capital. Trade finance can help buffer an importer’s cash flow. At Tradeline, credit limits are available from USD $5,000 to $2,000,000, with larger requests considered. Security such as a mortgage or a charge over your company is not required, and as releases from your bank are not required there is no impact on your bank facilities. Up to 90 percent of the purchase price can be provided and the maximum term is 90 days from shipping date or invoice date.
“Living” packaging for Fruits and Vegetables A student in UK has developed an innovative form of food packaging that incorporates the living roots of fruit and vegetables to allow them to continue ripening until they are ready to eat. The packaging takes the form of a bowl made of organic material woven with the roots of plants bearing fruits such as tomatoes, cherries or figs. By keeping the bowl moist, the plants can continue to live even while being transported.
Ethical Manufacturing Creating the “Baby Hero” Line On November 24th, 2012, a short-circuit led to a fire at the Tazreen Fashions Factory in Dhaka, Bangladesh. Amid the rising smoke and ringing fire alarm, supervisors prevented employees from leaving their sewing machines. When they tried to escape, they found padlocked doors, meant to shut them in during the work-day. Flammable fabric, stored illegally in the ground floor courtyard fuelled the fire as employees, working overtime creating clothes destined for big box American retailers, struggled to get out. 117 people, mostly young women, died that day, all preventable deaths if their employers and the retailers who hired them had followed regulations for safe working conditions. Three weeks after the Tazreen fire, my business partner, Allie Wieser, and I were having our first sourcing discussions for Baby Hero, an organic baby clothing company we had recently incorporated. Our company’s philosophy centers on our Giving Model. For every item a customer buys, we donate a life-saving Neonatal Survival Kit to a mother and her infant in the developing world. With the unimaginably sad images of Tazreen and the many such preventable tragedies before it fresh in our minds, we focused on creating a supply chain that would be ethical from seed to shelf.
Starting at the Seed We committed to using organic cotton, an environmentally friendly fabric which is best for the skin and health of the babies we are clothing. Regular cotton is one of the most pesticide-filled crops in the world, polluting the earth and bringing both those who cultivate it, and
those who wear it, in contact with harsh chemicals. We also chose to only use fair-trade cotton, meaning the farmers who produce the cotton will receive a guaranteed price for their crop, generally 30% higher than conventional cotton. Sadly, many cotton farmers in India (the world’s second largest cotton exporter) have found they could not recoup input costs, leading to a rash of farmer suicides in despair. By choosing a fair-trade and organic crop, we are ensuring that farmers work chemical-free and are paid a living wage, enriching their families and communities.
factories she has seen in her entire career. Not only were conditions safe, clean and pleasant, workers were paid higher overtime than industry standard and the employees she spoke to were very happy. A few weeks after we chose this manufacturer, the deadliest garment-factory accident in history killed over a thousand garment workers in Bangladesh when the 8-storey Rana Plaza Factory collapsed. It was clear to us that supporting the best kind of manufacturer was one of the most important decisions of our young company.
Ethical Manufacturing
While there is no doubt that it takes more effort to create an ethical supply chain, the rewards are tremendous. Our customers know that a purchase made for their loved baby is free from harmful chemicals, reducing the pollutants to our planet and positively impacting farmers, garment workers, and women and their infants in the developing world. We also think it makes good business sense – our ethical decisions were not expensive – they just took determination and research. If a small startup like ours can do it, we know larger, more established companies could potentially change the face of their respective industries by insisting on eco-friendly source materials, fair labor conditions and wages, and be rewarded for it by their customers.
Of utmost importance to us, as a company dedicated to helping women and children, we refuse to source our products from suppliers who exploit those very same women and their families. The greatest challenge we faced in building our company was finding a garment factory that met our high ethical and environmental standards while meeting our production goals. We took a list of hundreds of organic and fair trade certified factories and cold-called all of them to find ones making baby clothes under ethical labor practices. The exhaustive process paid off when we found a supplier in South India which not only manufactures highquality, fair-trade, organic products in a fair-labor certified factory, it is itself a social enterprise, employing disadvantaged women and disabled people from the area as well as donating a portion of its profits to run its own local hospitals. To be sure the factory was as excellent as they claimed to be, we hired a professional to visit and report her findings. She said it was one of the best-run
Recycling Packages into Something New Joolz, a Dutch baby stroller company has hit upon a way to encourage customers to turn cardboard packaging into a new item. From the large boxes that come with their strollers down to the smaller ones that protect baby accessories, the company has added printed directions inside each, instructing customers on how to make useable chairs, birdhouses and light bulb holders using just the cardboard packaging. http://my-joolz.com
Do Customers Care?
Business has been the primary driver of innovation in our world, and there is no doubt it can have the same exceedingly positive impact tackling issues of poverty and society as well.
By Samar Shaheyar Co-Founder of babyhe.ro Baby Hero is one of the 11 Finalists of the Sustainable Brands Innovation Open and will be competing in San Diego for the final in June ‘15.
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Things to KNOW when working with factories
Looking to place your first order from a Chinese factory? Or maybe you’re currently doing it and still crossing your fingers that it is going along well. Here are some tips learned from my own experience (importing Kitchen and Bar products) as well as experts in the field. 1. Make Clear Specifications If you want to avoid problems with a Chinese factory, then look professional from the beginning. If you come to them looking like an amateur, then they will treat you like an amateur. Do as much upfront research as possible on your product before approaching a factory. Is it a pre-existing product, an enhancement, or a brand new innovation? Each one of these requires different levels of specifications, but the more homework you do the better. The goal is to have a sample of the product in your hands before sending it off to the factory where they can look at it and give a full and complete estimate. However, be very careful and do as much research as before to make sure this factory is trustworthy and reliable before sending over your work.
2. Don’t Focus on Price Alone If a factory can tell that you are only considering them on the basis of price (and price alone) then, in my experience, the good factories will step away and the lower quality, more desperate factories will step forward. I’m sure you want the best quality product with a top supplier, so don’t show them that you are a cheap buyer. I can speak from firsthand experience. In my early days in China, I kept pushing down the price of a wine corkscrew, and the factory finally “broke” and agreed to my price. Unfortunately for me, the metal was a cheaper one that would rust quicker and I had many returns on my e-commerce website for the next year or so.
3. Be Patient
7. Use Third-Party Services
If it’s your first time to buy from China, don’t rush it. I’d say give it at least six months to do your first order. Between finding the supplier, shipping samples back and forth, negotiating, making a sales contract, sending a deposit, inspecting for quality, and finally shipping to your facility, the process will definitely take more than six months.
Similar to potentially using a trading company, there is a wide range of third-party service providers out there that you should be aware of. From quality control, CAD design, sourcing, to logistics, the more of these you use yourself, the better control you will have of the entire process. Normally, the factory will tell you not to worry about these things. They will tell you that they have their own partners they work with or that they don’t do these services at all. But, of course, if you pick your own third party vendors you can be rest assured that they will help make sure that the factory you work with is doing things in your best interest.
4. Do a Test Order You might want to buy lower quantities from a couple of factories. The best way to get to know a factory is to do a practice run with them. After all, this is when their true colors come out and now is the time to see if they can execute.
5. Always Get a Production Sample! This is where people get impatient and rush. They get one sample that is kind of close to what they want. These people are typically based in USA and Europe and tired of spending the $80 U.S. dollars for UPS to ship the samples back and forth each time, so the factory convinces them that they know what the client wants. Afterwards, the factory will charge whatever they want and make it how they (not the client) wants it. In conclusion, get them to make the sample and send it back! Yes, it is exhausting and a bit costly but if you cut corners in the beginning, it will cause a lot bigger headaches later on.
6. Consider a Trading Company Many people always talk about going “factory direct” and “cutting out the middleman.” Yes, while you can save more money doing this, there are sometimes a few extra value-add services that the trading company can do. Another reason to use a trading company is that they have a network of factories, so you can do lower quantities across multiple product categories. Factories, on the other hand, have higher minimum order requirements and you would need to coordinate with all of the factories yourself.
8. Location Matters I remember when I was first searching for a factory back home in the US. I had no idea where these factories were located, and I thought they were all in the same vicinity. I didn’t comprehend at the time that China is a massive place, and various “clusters” of factories form in certain cities. For example, Ningbo is where a lot of gifts and home decor is made, Shantou for toys, and Shenzhen for electronics. Learn where all these clusters are and then determine if you can source all your various products and components in that area. Why? This will reduce a lot of problems in the long term when consolidating shipments and doing just in time (JIT) scrambles for unexpected situations.
9. It’s Better To Lose / Waste Money At The Beginning Than At The End When many people evaluate the necessity of research and development (R&D), they think that it’s a worthwhile cost to design a new product. But, in
my experience, they tend to not classify things correctly which is a big mistake. I put a ton of money into R&D, such as flying to the factory, sampling shipments, and buying samples from various potential factories. You can’t cut corners on these upfront investments and you need to look at them as investments- not expenses. As with any investment, the value increases over time, and the knowledge, awareness, and correct suppliers you choose in the beginning will save you countless of hours and dollars in the long term. Sadly, it’s harder to notice our right decisions than our wrong ones. Remember that if you’re not facing troubles in the years ahead, count your blessings then and thank yourself for making the right investments and decisions during the early stages.
10. Make a Contract in English and Chinese This one I wish I knew when I first started buying from Chinese factories. You can’t just find a contract on a Google and tweak it as this is something that will be with you for years to come. Find a qualified lawyer. On my podcast, GlobalFromAsia.com/episode71 we have Mike Bellamy sharing some of his legal contacts there to use. Another option, of course, is to use the recommendations in your own network. If you’re a smaller buyer, a contract may be hard to enforce. However, it does set the rules of engagement from the very beginning and reduces miscommunication later. Michael Michelini is an American Internet entrepreneur in South China. He has a blog and podcast at GlobalFromAsia. com and also hosts training via ChinaBusinessWorkshop.com
7 Factory visits are an essential part of safe China sourcing, but it can be easy to waste the opportunities they offer by making some common blunders. A factory visit, audit or inspection is your chance as a buyer to gain much deeper insight into a potential supplier, so it’s important not to waste it. It’s quite likely you’ll be employing a third-party inspector to visit and assess the factory for you, in which case this will be less applicable. If you are visiting the factory yourself though (which can often be very useful), watch out for these mistakes. Taking documents at face value Documentation is a wonderful concept for backing up claims made by suppliers, but it tends to lead many buyers astray by creating a false sense of security. Bits of paper are worthless on their own. To be meaningful, they need to be backed up with evidence and/or verification with the certifying authority. Official registration and validation documents can be verified. For documentation of other data about the factory, ask questions to get at the data behind the documentation. Always probe deeper, and ask to be shown real evidence that can’t be put together with Photoshop and an inkjet. Forgetting about the warehouse Many staff on China factory visits focus all of their efforts on the production areas and the factory offices. This seems to make sense because that way you’re covering the all-important production process and the management and audit systems in place to ensure quality. However, checking out a factory’s warehouse can also provide valuable insight. Looking at the warehouse has the following advantages: •
The factory staff may not have expected you to go there, so there’s some chance you’ll get to see ‘real’ conditions.
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Mistakes to AVOID
when visiting with a factory •
•
•
•
The state of the warehouse can reveal a lot about the factory’s organisation and process management. You can often get a rough idea of what other orders and customers the factory currently has on its books. You may be able to assess the volume of production based on what’s stored in the warehouse. You get to see how your products and the materials for your order are treated before production and shipping.
Anjoran gives some good advice for protecting yourself against this kind of behaviour: •
•
•
Have someone who speaks Chinese arrive at the location beforehand and ask the (hopefully unassuming) security guard what company is there. Compare names and logos from management at the site with what you have seen previously. Get a background check done and assess if the company could really own the premises.
Don’t be surprised if the tour of the premises that the factory staff have organised for you does not include their warehouse. That’s no reason not to go there, though; the factory should not offer resistance to legitimate requests from potential customers or their representatives.
This is part of the wider point about taking things at face value and not applying a high enough level of skepticism to what you are shown. Asking yourself how you would fake what you are being shown can be a good starting point.
Focusing on quality over quantity
Spending too long drinking tea
The obvious metric to be assessed on a factory visit is quality. The processes are called QA, QC and QI, after all. However, it’s also important to confirm that a factory is really capable of the output volume it claims to have. If the factory tells you they produce one million units a month, but you see during your visit that a unit comes off the production line only once a minute, you’ve just made the factory visit worthwhile.
If you haven’t made a factory visit in China before, this may sound bizarre, but it’s a reference to the sort of thing that commonly occurs during such visits in China. Management staff may be very keen to spend social time with you, which often means drinking tea and nearly always involves a meal at a restaurant.
Assuming you’re actually at the right factory. Believe it or not, there’s quite a high possibility of being shown round a completely different factory to the one that will produce your order. A company might show you a different, betterlooking factory that they own, or even use a factory that has nothing to do with them. Signage can easily be changed just for your visit (or they may assume that you can’t read Chinese signage anyway). This would of course make any assessment you make during the visit totally irrelevant. In the article linked to above, Renaud
The wider point is that many business people who come to China have heard about ‘guanxi‘ and believe that participating in all these activities is the most important part of their deal. It isn’t. You don’t need guanxi; you need a professional business relationship with clearly set out requirements and expectations from both sides.
Only looking at what you’re shown We’ve alluded to this point throughout this article, because it’s worth repeating. There is very likely to be a plan for your visit made by the factory staff, one that will carefully steer you around the premises showing you what they can achieve with advanced notice and time to prepare. The same applies to documentation, samples, materials, staff, etc. To really get value from the visit, you must go off this pre-planned course and try to find the weak spots and missing links in what the factory has prepared for you. This doesn’t mean that all staff should be rudely interrogated, but you too should have your own plan that doesn’t conform with that of the factory. Spending all day on the road And finally, a practical note about visiting factories in China. It can be easy to arrange accommodation and transport without being aware of just how vast China is. What seems close by name or on a map may actually be several hours drive from the factory. You should also be wary of addresses and claims from the factory that they are ‘in’ a particular location. They could still be very far away. This is of course simply avoided by using maps more carefully, but be careful with Google Maps as it can be unreliable in China. Try DDMap and Baidu Ditu to make sure you’re getting the right results. Matt Slater has been inspecting factories in China and East Asia since 2009 and is happy to admit that personal experiences played a large part in creating this article. Seeking a more convenient way to check Chinese companies led him to create China Checkup, the online company verification service. Visit his website: chinacheckup.com
of Hong Kong
Must-Meet Entrepreneurs As the startup community keeps growing in Hong Kong, Jumpstart and W Hub gathered a list of inspiring, interesting, successful or influential entrepreneurs. Some are challenging the way it has always been done, some are doing work that makes a difference, work they are passionate about. Some make an impact on society, create a product from scratch and will be tomorrow’s leaders. *This list is in no particular order, and we all have our opinions on who should be on it...just get inspired.
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Steven Lam Co-Founder and CEO of GoGoVan, an app that connects van drivers and users.
Lori Granito Co-Founder of Kitchen Sync, a Culinary Incubator for food startups lori.granito@gmail.com
Raymond Yip Co-Founder and CEO of Shopline, a DIY E-commerce Platform.
Gimmy Chu Co-Founder and CEO of Nanoleaf, world’s first dimming light bulb. @thenanoleaf gimmy@nanoleaf.me
Lisa Christensen Founder and CEO of The Hong Kong Cleanup and Ecozine, Asia’s premiere magazine on modern green living. lisa@ecozine.com
Timothy Yu Founder of Snapask, a private tutor platform. www.appedu.co
Teddy Chan Co-Founder and CEO of Aftership, a shipment tracking application for online retailers.
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Doris Leung CEO of Diamond Cab, transportation services for wheelchair users. diamondcab.com.hk
Add your profile to Jumpstart’s Entrepreneurs Directory
jumpstartmag.com
Ben Cheng Co-Founder of Oursky, a software development company. @chpapa
David Zhu Co-Founder and CTO of Divide, a mobile productivity app (acquired by Google).
Aurelien Menant Co-Founder and CEO of Gate Coin, an exchange platform for digital currencies like Bitcoin.
Paul Lee CEO, Aumeo Audio, a hearing enhancement technology.
Ray Chan Co-Founder and CEO of 9GAG, a platform for digital humor.
Catherine Tan Co-Founder of Notey, a topic-focused blog directory. @cathnotey
Elaine Tsung Co-Founder of the Garage Society, a collaborative co-working space.
Gene Soo Co-Founder of StartupsHK, Hong Kong’s Tech Startup Community. @genesoo
Daniel Cowen Co-Founder of the 3Doodler, world’s first 3D printing pen. @3Doodler
Simon Loong Founder and CEO of WeLab, an online lending platform.
Julian Lee Founder and CEO of Ambi Labs, an add-on device for your air conditioner. @julianshlee
Cesar Harada CEO of MakerBay, a crosssectoral makerspace for innovation and Scoutbots, open hardware technologies to explore and protect the ocean.
Jah Ying Chung Founder of Launchpilots, a campus influencer platform connecting college students and brands across China. @jahying
Raphael Cohen Co-Founder of Hotel Quickly, a last-minute travel site for Asia Pacific.
Michelle Sun CEO, First Code Academy, coding courses for kids. @michellelsun
Mikaal Abdulla CEO of 8 Securities, an online trading and investing service for individual investors. @mikaalabdulla
Packaging Your Startup’s New Product
JUMPSTART
How you package your product may be as important as the product itself. You must first and foremost grab the attention of your customers. Once a customer has picked up your package, they need to easily understand three things: what the product is, how it works, and why they should buy it. A good place to start is go to the store and look at how similar products are packaged. This will give you a starting point for choosing your own package design. Do similar products come packaged in self contained, cardboard boxes? Or are they packaged in plastic clamshells? Are they shrink wrapped? Or packaged in plastic bags adhered to cardboard? An important question to ask yourself is where will your product sell inside a store? Products sold at the front register may require peg holes in your packaging for hanging. If your product is going to sit on a flat surface near the cash register, it may require a cardboard display box that holds your products upright– in essence a second package for your packaged product. There are many other considerations when choosing packaging. Products sold on the shelf may need to stack easily so as not to waste retail space. High dollar, smaller products such as electronics are often packaged in hard to open, plastic clam shells to deter shop lifting. Is your product fragile, requiring packaging that will minimize damage? Is it essential for the customer to see the actual product, or will a photo of the product printed on the box be sufficient? A major consideration is whether you will need custom packaging. Custom packaging is shaped to fit your specific product, and is
the most expensive route because it requires a custom-manufacturing mold to be created. Ask yourself if there are ways to get around the need for custom-shaped packaging. Will your product fit inside a stock size clamshell, so that you only require custom printing for the graphics? While designing your new package graphics, consider doing A/B testing to see which package design best grabs the attention of your target customers. You can use Crowd Picker, a website that allows you to post a simple question such as “which package design is most likely to make you purchase this product”? You then can display images of several package designs and let the respondents make their choice. Another great website is called Design Crowd. This website allows you to submit a project, say for a package’s graphic design, and have multiple graphic artists submit their initial design entry. You can then choose the one that you like best, and work with that designer to fine-tune it. You only pay for the winning design that you select. This service works great in conjunction with Crowd Picker. For example, you can use Design Crowd to get several draft designs, and then use Crowd Picker to select the best one. By John Teel, President at Teel Engineering, a company which helps entrepreneurs bring new products to market. He was formerly a senior design engineer for Texas Instruments where he created electronic designs now used in millions of portable devices (including some from Apple). He is also a successful entrepreneur who developed his own product, had it manufactured in Asia, and sold in over 500 retail locations in three countries.
Is your business launching this year? Contact our team about a special opportunity to showcase your newlylaunched or soon-to-launch HK business. launch@jumpstartmag.com
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JUMPSTART
Packaging Your Product for the China Market
Even though you may have a useful or extraordinary product, this does not guarantee that a consumer will pick it up from the store shelves. This is especially the case when similar products of your competitors look more appealing. The quality of the product is not insufficient, but in many circumstances, it is the product packaging that determines a consumer’s purchasing preference. For any product, the packaging serves the following three main purposes – Basic Functions, Attraction and Differentiation. The basic functions of packaging are to protect the product from damage and give consumers basic information about the product. At the same time, packaging itself can also attract consumers to take a look at the product as it sits on store shelves as well as to differentiate the product of one brand from another.
Product Packaging in China In recent years, China is deeply influenced by Western culture and the market has become more “Westernized,” and in tune with this change is a rising demand for products and groceries with more Western elements. However, when it comes to a design-related topic, China is still regarded as a “unique” market which is different from other Asian countries. A brand which aims to target the China market should consider the following factors if it is ready to create packaging for a product or planning to change the packaging of an existing product:
Color Choosing the right color palette for packaging is half the challenge for a brand. In fact, the color plays a crucial role in the consumer purchase decision. In traditional Chinese culture, red is chosen for good luck, while yellow or gold is seen as a royal color. It is important for brands to take account of these symbolic colors, but ultimately, the most crucial step is to choose a color which matches the properties of the product or the distinctive brand image. It is not always necessary to exploit a particular color, for example red, to package the
By Mason Ku
Image, Pattern and Shape
product with a hint of Chinese essence in order to attract local consumers.
Visuals, in the form of image, pattern and shape, play a primary role in catching consumers’ attention. In China, it is quite common for brands to put cartoon designs on their products to make them more appealing to local consumers.
In general, bright and vivid colors are generally applied to food and beverage products, while pastel or white shades are preferred for household items and personal care products.
There are also some Chinese brands which have created special shapes of packaging for their products. For instance, a dried plum brand has uniquely designed a package which mimics the shape of a fresh plum.
Logo and Typeface Both the logo and typeface are the soul of a brand as well as indispensable features on the product package. An eye-catching logo not only propels your brand to stand out from the crowd, but can also constantly remind consumers about its products and set a quick standard for a recognisable brand and its attached quality. For example, the logo for Apple is easily recognised and subconsciously the consumer knows about its quality, price, features, and place within the market from viewing the logo alone. Chinese consumers cling to brands that closely interact with their lives. To achieve this, the simplest thing a brand can do is to provide a Chinese translation of the brand name which they can easily pronounce and remember. Many international brands have already adopted Chinese brand names, followed by Chinese typeface as part of the logo, to better communicate to the market.
Packaging Material The packaging material needs to be carefully selected based on the nature of the product and the preferences and trends of target consumers. According to the report Latest Trends and Key Issues in the Chinese Retail Packaging Market, there is a growing trend in the use of flexible, glass, rigid plastic, rigid metal, and paper & board packaging materials. Nowadays, there is an expanding segment of Chinese consumers who prefer buying products with environmental-friendly packaging material. Some brands have started using recyclable materials for their package, but in this case, the production cost will be relatively higher. Product packaging has a huge influence on what people buy, and it is a mission for every brand to create a package that best communicates to their target consumers.
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CAR T OON CA P T ION CO N T E ST
Contest #3, April 2015. Illustrated by Christoph Niemann.
“YOUR CAPTION HERE” We provide the image. You provide a funny caption! Email blueprint@swireproperties.com with the subject line ‘Jumpstart caption contest’.
The prize for the winning entry this issue is
A Weekend Brunch for 2 at Café Gray Deluxe at The Upper House
Deadline for submission: noon on May 22nd, 2015. The winning caption will be announced in the next issue and on www.blueprinthk.com
Previous Winning Entry: “Timmy now had to stomach more than just the drones of his parents.” - Charlie Morris Previous Runners Up: “Lazy Susan really took that self help book seriously!” - Carolyn Bishop “Wow, the xiaolongbao is great here, but I kinda feel the waiter is constantly "hovering” over our conversations.” - Mads Westendahl Contest #2, February 2015
“Don’t playa hate, conveyor belt sushi got nothing on me!'” - James Kwan
blueprint_hk Please read the article entitled “Cartoon Caption Contest in Jumpstart Magazine” on the News page of www.blueprinthk.com for terms and conditions of the contest. By submitting a caption to blueprint@swireproperties.com, all entrants agree to these terms.