One of my favourite TV shows is HBO’s Silicon Valley, a parody (and an exceptionally accurate one) of the madness that is Silicon Valley and the technology industry generally. In one of the later episodes of the show, Jin Yang, one of the show’s characters, is seen simultaneously starting multiple companies, all of which have, as a business model, copying a successful existing company at their core. Basically, append “new” to the name of the most successful tech businesses and you have the thrust of Jin Yang’s strategy.
It was pretty funny to watch, but I hadn’t spent a lot of time thinking about the impacts of this model of business development on the companies that were being copied – all their investment, hard work and missteps would be ripped off at a lower cost basis. Pretty distressing, really.
I’ve been thinking about Jin Yang this week, not in the context of technology, but rather in the context of R&D, or what we’ve seen constituting R&D of late, rip off and duplicate. This relates to my workwear and outdoor equipment brand, Cactus Outdoor. I was talking to an acquaintance on the phone the other day. That person was after some advice after having been offered a role with another outdoor equipment company.
During the interview, my acquittance was told that said company has a very clear product development strategy – they purchase an existing product that is doing well in the market and send it to a low-cost factory in China with one instruction – to copy it. The product comes back, ripped off and duplicated, and is sold to consumers as a good option.
On top of that, said company has the gall to say on their website that their entire operation is here in New Zealand, apart from the manufacturing which just happens to be done in China. It’s like Fonterra’s South American salespeople saying that Fonterra is a South American company, oh apart from the fact that the dairy products actually come from New Zealand! Provenance matters.
If you come and visit our factory in Christchurch, I can introduce you to Tina. Tina has more decades of experience in the apparel sector than even she would like to admit. She was part of the management team of our largest ever apparel interest, the long-gone Lane Walker Rudkin. Tina is beyond proud of the product that comes off the line she supervises, which happens to produce Cactus’ down jacket, the very product that our unethical protagonist in this article has most recently copied.
Now there are a couple of ways to look at this. I can point you in the direction of a video we made when we designed the product – a video that shows the product will stand up to barbed wire, vicious plants and a spot of innovative entertainment for the kids. I can tell you that entire quality and longevity piece and I’d be accurate in doing so.
But there’s another side, and one which is equally (maybe even more) important to tell. That’s one of keeping an industry vibrant, of leveraging the incredible skills of someone like Tina, of increasing the resilience of our economy, of de-risking an already crazily precarious supply chain. Heck, given Rod Carr only recently presented the final report from the Climate Change Commission to the Government, I can tell you all about how sourcing closer to home has a positive impact on your carbon footprint and that using a product that lasts many times longer than other options does more for the planet than purchasing your new Audi e-tron.
But this isn’t about buying our thing versus someone else’s thing. it’s about playing fair. If your business model involves sourcing product from factories that pay people a few dollars a month and discharges toxic waste into their local river, then have at it. If you care about nothing more than making a buck whatever the cost to people or the planet, do your best. But if your model is ripping off the hard work and investment of people like Tina, that’s crossing a line and I’m pretty certain that one day Karma will come back to bite you.