[ars]

A copy to make it easier to read:

Project Update #27: The Storm

For backers only, Posted by cw&t

Hi backers!

First, for those of you still waiting for your pen(s), we're still on schedule. The schedule was posted a few updates ago (update #22). The 3 remaining batches are shipped from our manufacturer in China on

July 7th (480 pens)

July 23rd (480)

August 7th (494)

In the last couple months, we fought hard to speed up production. We advanced more money and were promised ship dates by our manufacturer and none were met. In their eyes, delays were caused by us because we were so picky about the details, but the truth is we weren't asking for anything out of the ordinary. All we asked for was for them to follow the specifications in our drawings they agreed to on day one. They weren't able to meet the specifications, so they blamed production delays on little changes made during production to help make the pen more manufacturable.

To try to move things forward faster, we proposed to place a new order with our manufacturer in exchange for ramping up production. Instead, they countered our offer and demanded we sign an exclusive 4 year contract, place a new order immediately and pay an additional engineering fee, or they would stop production of the current order.

We weren't interested in a 4 year exclusive contract with a manufacturer that hadn't proved itself, so we didn't sign. On top of that, they took our olive branch (the proposal to place a new order), sharpened it into a shank and started stabbing us with it (metaphorically, of course, with lawyers).

They stopped shipping us pens. We lost some sleep. Lawyers got involved. There was yelling over email, in person, and on phone calls. After many weeks, we arrived at a compromise. We lost a lot of time, some money, and our faith in Chinese manufacturing, but we're still moving forward. They won't be ramping up, but they are completing this order and making pens (that we are super excited about!) without changing the shipping schedule.

We're not placing any future orders with them or any manufacturer in China ever again. It's an unfortunate conclusion, we can't even begin to tell you how pissed off we are with them. It's the first and hopefully last time we'll yell in a business relationship. It's not how we like to do things.

This all happened at the beginning of May. We have been aching to share this, but we had to wait until the storm settled. We were mislead, and in turn, we mislead you. We thought we would finish fulfilling all 5.5k pens in a timely manner. Many of you are understandably frustrated and upset that a project you backed is taking a year to complete. We are too, and we sincerely apologize. We've made poor business decisions and we only have ourselves to blame.

We learned our lesson. We're now setting up to manufacture our next order of pens in Vermont, USA. We won't be able to sell the pen for $50, but we're happy to be out of China. Vermont lacks the charm of smoggy skies and broken english, but when Vermont says they can do it, they mean it.

lots of love,

cw&t

PS. your drawings from us are coming soon! (2 of them are at the bottom) we have about 110 so far and many more to go.

PPS We get butterflies every time we see your drawings. Keep them coming! http://pentype-a.tumblr.com/submit

Check out some of the latest drawings (and some great pen hacks!) http://pentype-a.tumblr.com/

[nsns]

The problems might have been due to your (mis)communication with your Chinese partner, I wouldn't rush into accusing the entire Chinese manufacturing sector for your problems. In fact, an accusation like this proves you have problems of perception and prejudice on your side which might have contributed to it.

[yaix]

Its always "due to translation problems". That's usually the next step after the "yelling" part. The yelling part is to make the customer give in a little more. After that, blame all the yelling on misunderstandings due to language problems, so both sides save their face, and go back to negotiate.

[noibl]

How's this for broken english: due diligence.

Now you can take your naive, tarbrush, self-adoring brand of racism, sandblast it, polish it and and stick it up your ass.

(Thanks for reposting, ars!)

[masukomi]

I suspect you haven't heard the earlier installments of this story in which they were absolutely lied to about physical and volume capabilities. They found someone in china they could trust who led them to this manufacturer who appears capable of doing the job, but uninterested in matching their high quality requirements which they were quite aware of up front.

[noibl]

You're wrong. I've been hearing about this unfolding trainwreck for at least six months. All this talk about trust and lies is exactly what you always hear from people who are out of their depth. Fine. No problem with that. It's the 'China's shit, America's ace' rubbish that's unnecessary and unfair.

[malandrew]

I'll provide a counterpoint that doesn't involve America at all. When I lived in Beijing, I had a French friend of mine that lived in Shanghai and was responsible for all the sourcing of clothing for a high end French fashion label that had decided to move production to China. These are just two of many stories he told me:

(1) He signed a contract with a manufacturer. During the signing of the contract, the company intentially sealed the contract with a red stamp that looked official, but was not that companies legal red stamp. They did this so that if anything happened they would have an out if there were a dispute. A dispute eventually arose and my friend found out the hard way to always have those stamps double-checked to make sure they are legit and represent the business with whom they were doing business. Had my friend been literate in Chinese, he probably would have caught this, but the Chinese manufacturer intentionally exploited his illiteracy in Chinese to produce a contract that could not be enforced.

(2) On more than one occasion he would be called by a manufacturer to be informed that the clothes had been produced and were ready to be shipped and that all he had to do was deposit the rest of the money and they would ship the clothes. After once discovering that the manufacturer had not even begun production, but was lying to him to cover a cash flow problem he made it a point of always flying out to the manufacture's plant the very next morning to personally inspect the entire shipment before depositing money in the account. After he started doing this, he repeatedly came across many manufacturers that were caught completely unprepared by his unannounced trip and when he arrived he discovered that no work had been done. This tactic to solve cash flow issues is apparently a semi-common occurrence.

Ask any foreign national that has ever worked (not just lived as a student) and you'll come across many many stories like the two above. I have my own stories from the times I taught public speaking to Phds in China.

TBH, I personally don't attribute it to race or nationality. It's just that many businesses in China have yet to move beyond a "caveat emptor" approach to business to a trust based system. A "pareto optimality" mindset prevails there. So many businesses transactions are negotiated on the Chinese side as "A dollar they get in this is a dollar lost for me" while the foreigners (depending on the country they are from, of course) are negotiating with the intention of long term continued business and that the long-term relationship will be far more profitable for both sides than trying to maximize short term returns. If there is any miscommunication, it's not because of language, but because the Chinese business is looking at it as a short term deal and the foreign side is looking at it as a long term relationship.

Just to be fair, most markets at one point in their development have been "caveat emptor markets". Europe and the US included. At some point a market eventually gets past that mindset once trust becomes a competitive advantage. In China, trust isn't yet seen as a competitive advantage because there are still many naive foreigners coming to China to manufacture things without knowing any better. Once the supply of naive business men going to China to manufacture stuff dries up, I reckon you'll see more competition based on trust.

[yannickmahe]

Exactly. Every Apple, Samsung and HTC product is produced in China. It's not hard to get things done right there, as long as you cover your bases.

[mikeash]

Does the fact that large companies successfully manufacture in China by investing literally billions of dollars and no doubt having many full-time staff to smooth the process really show that "it's not hard"?

[ktizo]

Reading through this, my sympathies are definitely with the manufacturer.