Fast, Blind and Dense

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Exploring the art of innovation in emerging markets.

山寨创新 Shanzhai-Innovation

A few weeks after I arrived in Shanghai I was given the opportunity to speak at a TEDx Salon event about technology and society where I met David Li, founder of the Shanghai Hackerspace and dedicated to increasing indigenous innovation. So I listened closely when he spoke to me about a concept he called “Shanzhai-Innovation” which turned the ugly idea of copying on its head to empower a new breed of Chinese innovators.

TEDx Salon held in September 2011, Shanghai

Shanzhai (roughly pronounced Shawn-jai) is a controversial term referring to “fakes, or copies” of a well-known branded product. From products like sunglasses to consumer electronics to IKEA to entire Apple stores, it seems nothing is out of reach for Shanzhai these days.

Over lunch, David introduced me to the concept of Shanzhai-Innovation. At its core, Shanzhai-innovation is the copying of a core technology like cell telephony and rapidly iterating it to suit local needs. As David and I spoke, the tremendous power I found in this approach was not the act of copying, for which the Chinese are much maligned, but in the iteration of the technology to meet local needs. When this iteration is coupled with a blistering fast-paced market like China, radical innovation emerges through evolution - innovation that can outstrip the imitated. 

Origins of Shanzhai

A painting depicting the smuggling of goods

Shanzhai (山寨) is a word in Mandarin literally meaning “camp on a mountain” and is loosely rooted in the outlaw’s camp that smuggles or makes fake goods. The closest English translation of Shanzhai today might be the word “tinker”.

G’Five in India

Lately these copies are no longer just cheap knockoffs but are becoming a credible alternative to the original. Over lunch, David Li related to me the remarkable story of G’Five, a Shanzhai phone manufacturer learning to innovate almost by accident - and becoming a global force because of it.

A Chinese G’Five Tablet for India

G’Five is a mobile phone manufacturer that quickly evolves its products for the Indian market (as short as 45 days from idea to launch), producing small runs of phones that contain a new feature in addition to a regular run. By measuring the sales velocity of the experimental run relative to the regular run, G’Five is able to determine which mixture of price and features will work best at that moment. Iterating like this has helped G’Five go from market entry with no marketing or presence into the 2nd largest phone provider in India, gaining market share in the country at a much faster rate than mature brands like Nokia and Sony Ericsson. An interesting interview with their India MD here.

Copying Runs Deep through History

Through copying, cultures are able to transmit knowledge and technical know-how. Of course, without the West copying the East, paper nor gunpowder would have never left China in the 13th century.

Shanzhai IKEA store in Kunming, China

China is not the first country accused of stealing technology and copying its way to success with cheap knockoffs. Japan’s now famed industry quality was considered cheap imitations of the goods made in the USA for years and then held in suspicion for corporate espionage. “Made in Korea” meant junk when I was a kid, but now Samsung leads the world in core technologies like DRAM and LCD panel development, supplying the likes of Apple with their components.

If we look outside technology to the arts we see an even deeper history of copying, or plagiarism. “Good artists borrow, great artists steal”, as Picasso or TS Eliot may have said.

Three Ball Total Equilibrium Tank, 1985 by Jeff Koons

The Physical Impossibility of Death in the Mind of Someone Living, 1991 by Damien Hirst. Inspired by Koons?

The music industry has recently seen an explosion of the remix genre from sampling sound bites to entire mixtapes. When sampling first became popular with Hip-Hop in the 70’s and 80’s, there was a public outcry over the “plagiarism” of music. Over time sampling has become an inspirational part of world culture giving birth to entirely new branches of music. DJ Danger Mouse launched to international fame with his Grey Album, an unauthorized remix of the Beatles’ White album and Jay-Z’s Black album. In the art world, Damien Hirst borrowed from Jeff Koons’ Three Ball Total Equilibrium Tank for his own formaldehyde series. Andy Warhol re-contextualized Campbell’s products to make a new statement. It makes me wonder, can Shanzhai products be seen as re-contextualized products for a new consumer? If products become remixable, what will be their value?


SinaWeibo - The Once and Future Twitter?

To really get a feel for the power of fast markets and rapid evolution of businesses we turn to the phenomenal growth of Sina Weibo. Launched in 2009 as a “copy-cat” of Twitter, the team at Sina Weibo didn’t stop there – they pushed the pace of iterating the design of the site based on Chinese user feedback and learnings in the competitive market.


Sina Weibo’s website evolved into a blend of Facebook and Twitter

140 characters in Chinese is more like 140 words - a richer type of message was being delivered. As a result, Chinese used Sina Weibo more like a place of self-expression than broadcasting very short messages. In response, Sina Weibo quickly added features like rich multimedia posts and the ability to verify your identity with V+. The result is an SNS that combines Facebook behaviors such as games, likes, and apps with a Twitter-type following system. Sina Weibo is no longer copying Twitter but leading by leveraging the unique forces of the Chinese market. Just three years after it was founded, Sina Weibo has 300 million users sending an average 86 million messages a day. As Twitter evolves its service, it is ironically now looking to Weibo for inspiration - it was just announced Twitter has acquired Posterous, a USA based blogging platform with tight iOS integration.

From Breakthrough-Innovation to Evolutionary-Innovation

By thinking about innovation as the rapid evolution of an idea we can free ourselves from having to start over every time. Starting with what already exists and evolving it in the “wild”, we can leverage rapid prototyping and market forces to create human-centered, market-proven innovation. Life itself has evolved by (imperfectly) copying itself over and over in different environments leading to innovations that succeed in new conditions.

An early evolutionary tree of life showing the relationship between life forms

Shanzhai- Innovation can be viewed as a form of this copy/paste/evolve mechanism leading to inspiring new goods and services for the rest of the world.

An evolutionary tree of video game controllers (Via Pop Chart Lab)

We may end up in a co-created world where we literally become part of the products and services we use, with these “service-objects” (to borrow a phrase coined by my colleague Robert Suarez) adapting to our specific needs at any moment. Web and app developers have already embraced an evolutionary approach to innovation. Zynga and other game developers now build their games using live A/B testing as a way of forcing “survival of the fittest” features.

Charles Darwin. Amazing Beard.

The physical world is not far behind the virtual. And when it does catch up, smart designers and organizations will see fast, blind and dense market forces as just another designer on their team. Darwin will be proud.

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