Friday, April 15, 2011

Using Competitors as Suppliers

Not that long ago, a PCB designer posted an interesting question on one of the LinkedIn discussion groups. The question was this:

"How do you feel about using a fabricator that also offers design services?"

I responded to the discussion directly but for the benefit of those who may not be members of the group, I wanted to share my thoughts more broadly because it shows how building connected devices can actually help defend against suppliers who might also be competitors.

It's a really interesting question that you are posing but I think it points to a bigger issue.
I use a mechanic in my local area to service my car. The service he offers (in terms of tuning my car up and changing the oil) can not be differentiated from any other mechanic I might choose to use, but over time, I have become loyal to this one mechanic because the service he offers goes beyond the oil he puts in my car. Sitting at the back of our transactions is a relationship and the history of that relationship is not something that a competitor could replace by simply undercutting the price.
So when it comes to creating an electronics product, I think designers really need to ask themselves whether the sole basis of their business is built on the secret sauce they add to their boards in the form of IP, or does it extend to an ongoing relationship.
I know the Apple example is overused but it really highlights the point. They don't make the cheapest MP3 players, but they have changed the game so that it's actually not an MP3 player that I'm buying from Apple; its a relationship and ability to seamlessly connect into their eco-system of content. In effect, the player is almost ancillary to my real requirement which is to have good quality music / entertainment on the run.
So the best defence against would-be IP thieves is to build products that develop an ongoing relationship and provide a reason for customers to remain connected to you... and then service those customers as if your life depended on it (because it does)!

Wednesday, April 13, 2011

China, here we come

It seems ironic that my last post dealt with the issues that foreigners have in grasping command of the English language. And now, it seems, I am to become a foreigner too.
I haven't been on the air much over the past 6 months because I've been backwards and forwards to China several times while working pretty solidly on the launch of a brand new training facility at our office in Shanghai. I'm thrilled with what has come together around that project and the fact that this week marks the launch of our first public course.
While "paid for" training might be a relatively new thing in China, the appetite is very high for quality courses that lift designers to a new level of skill and provide them with a deeper understanding of the methodology driving the creation of Altium's solutions. Our new facility will allow us to help customers better than ever before while also feeding the huge demand for skilled electronics designers as China continues on its massive growth surge.

In other news, you no doubt would have read the news that Altium is relocating its headquarters to Shanghai, China. This has been met with a huge range of responses from customers and industry commentators. Some have suggested that it makes perfect logical sense given the huge investment being made in China in technology areas that are in absolute alignment with Altium's vision to create a "copper to cloud" design tool. But others have been slightly less rational. At the extreme end they've insinuated that Altium's move can only mean that we have lost our way and have been hijacked by Communist antagonists who are planning on overthrowing Western military installations by using Altium Designer as a back door window into the inner sanctums of top-secret design houses.
In all honesty, I've got little time for xenophobic tirades but I do understand the depth of emotion that news such as this can evoke. It is very hard for designers in the West to not feel threatened by Altium's decision. Western designers have been the fortunate benefactors of over a century of manufacturing fueled growth that has led to great relative prosperity. But Altium's decision to locate its headquarters in Shanghai rather than Silicon Valley makes a very strong statement about where it sees the next wave of prosperity coming from. And that statement challenges several assumptions that many in the West have become accustomed to making. But on reflection, do we really believe that the West has some sort of monopoly on innovative design and quality? Do we really believe that our political system somehow gives us the absolute right to create better products?
Now before anyone starts sending volleys of political abuse at me, please take a moment to consider what I'm saying. The way I see it is this: when 1.4 billion people start becoming upwardly mobile, you can choose to stand at the shore and yell at the encroaching tide. Or you can jump right in and ride the wave of your life.
I, for one, am a surfer and my family and I are currently preparing for a move to China.