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So why can't China sell direct and take out the middleman (us)?

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Jet123

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Hey everyone,

So I got into a discussion with a friend of mine and talking about Millionaire Fastlane and the ideas around it.

Basically my friend is sold on the notion that whatever product you create / manufacture, it will get copied and aggressively competed with to eventually where the profits gets competed away (perfect competition). I quote: "Their factories and people are hungrier and will take lower margins than you. They have huge scale and can deliver way faster to market and beat you at your own game. Patents / copyrights enforcement don't exist (which we all agree). As such, why bother in the first place on these low tech type of businesses."

Instead, he gave me the advice to further develop my intrinsic value and double down on my job and emerging skills (5G / AI / blockchain) within my field (I'm in old school traditional professional services, think law, finance). From there, his advice was to identify and develop meaningful relationships with some ultra wealthy individuals and be their advisor on these matters and profit (slowlane mindset?).

Based on what I've learned so far (first week here), I countered with points such as: 1) products may get copied but brands / customer service is hard to replicate especially in western markets, and 2) you are targeting something just as competitive with relationship building with the ultra rich which may not even pay dividend down the road (especially given the time investment).

Thought I would bring this topic to the forum to discuss and see what you guys think. Also, excluding China's own domestic market, do you guys think we from the west still have an edge? Even outside of the US or your home market?


TL;DR: Friend says you can't compete with China and it's rising class of entrepreneurs which are poor and hungrier, so why bother. Discuss.
 

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Digamma

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I started typing an answer, but I gave up because I can't make it not offensive.

This is all I have:

 
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Jet123

Jet123

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I started typing an answer, but I gave up because I can't make it not offensive.

This is all I have:

I agree in general that internationally its still a ways away but have to say that I do see a rising class of entrepreneurs there (I live in the region) with the likes of DJI and some other local brands that are domestic but branching out regionally. (Shenzhen and Chengdu are pretty amazing and vibrant cities to check out as examples)

Then again, China is a pretty big place and the middle class as they define it, is still only ~20% of their population. But that's like 2-300 million people already...
 

alexkuzmov

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Hey everyone,

So I got into a discussion with a friend of mine and talking about Millionaire Fastlane and the ideas around it.

Basically my friend is sold on the notion that whatever product you create / manufacture, it will get copied and aggressively competed with to eventually where the profits gets competed away (perfect competition). I quote: "Their factories and people are hungrier and will take lower margins than you. They have huge scale and can deliver way faster to market and beat you at your own game. Patents / copyrights enforcement don't exist (which we all agree). As such, why bother in the first place on these low tech type of businesses."

Instead, he gave me the advice to further develop my intrinsic value and double down on my job and emerging skills (5G / AI / blockchain) within my field (I'm in old school traditional professional services, think law, finance). From there, his advice was to identify and develop meaningful relationships with some ultra wealthy individuals and be their advisor on these matters and profit (slowlane mindset?).

Based on what I've learned so far (first week here), I countered with points such as: 1) products may get copied but brands / customer service is hard to replicate especially in western markets, and 2) you are targeting something just as competitive with relationship building with the ultra rich which may not even pay dividend down the road (especially given the time investment).

Thought I would bring this topic to the forum to discuss and see what you guys think. Also, excluding China's own domestic market, do you guys think we from the west still have an edge? Even outside of the US or your home market?


TL;DR: Friend says you can't compete with China and it's rising class of entrepreneurs which are poor and hungrier, so why bother. Discuss.
I think you are missing the point of entrepreneurship.
Its about solving problems and making life easier for people.
It doesnt matter that your product/service will be copied, there are tons of ways to skew value and overwhelm the competition.
You cant compete much with China, only if you are providing the same old stuff that they are.
Seriously, people have SO MANY wants and needs.
Do you think Chinese people can satisfy them all?
Do you think they manufacture each and every product on the planet?
What your friends speaks of is not a slowlane mindset, but a bystander mindset.
"Other people witll do it, so why bother."
Really? Thats the extent of your amibition?
 

1step

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Your friend has a losers mindset. If you want to argue you can point to any successful company and say what about them?
 

WabiSabi

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Competition exists everywhere, You can't avoid it. If you sell low quality/ easily copied crap expect copycats. Just be better.

You don't HAVE to import/ create products in china to make money.
 

Raoul Duke

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I started typing an answer, but I gave up because I can't make it not offensive.

This is all I have:

Believe it or not, George isn't at home

Please leave a message after the beep

I must be out or I'd pick up the phone

Where could I be?

Believe it or not, I'm not home​
 

Kevin88660

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Feb 8, 2019
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Hey everyone,

So I got into a discussion with a friend of mine and talking about Millionaire Fastlane and the ideas around it.

Basically my friend is sold on the notion that whatever product you create / manufacture, it will get copied and aggressively competed with to eventually where the profits gets competed away (perfect competition). I quote: "Their factories and people are hungrier and will take lower margins than you. They have huge scale and can deliver way faster to market and beat you at your own game. Patents / copyrights enforcement don't exist (which we all agree). As such, why bother in the first place on these low tech type of businesses."

Instead, he gave me the advice to further develop my intrinsic value and double down on my job and emerging skills (5G / AI / blockchain) within my field (I'm in old school traditional professional services, think law, finance). From there, his advice was to identify and develop meaningful relationships with some ultra wealthy individuals and be their advisor on these matters and profit (slowlane mindset?).

Based on what I've learned so far (first week here), I countered with points such as: 1) products may get copied but brands / customer service is hard to replicate especially in western markets, and 2) you are targeting something just as competitive with relationship building with the ultra rich which may not even pay dividend down the road (especially given the time investment).

Thought I would bring this topic to the forum to discuss and see what you guys think. Also, excluding China's own domestic market, do you guys think we from the west still have an edge? Even outside of the US or your home market?


TL;DR: Friend says you can't compete with China and it's rising class of entrepreneurs which are poor and hungrier, so why bother. Discuss.
I don’t get the first part and your title. There is a huge difference between being a middleman or directly competing with China on manufacture. The manufacturer has no interest in wholeselling and retail and fulfilling a small order. The brick mortar retailer took up the inventory risk and pay their rental. But I think I would agree that just being middle man alone for standard products is hard for a business to have upside.

I am in financial products sale in Singapore. Regarding your friend’s proposition that you should start with advisory on HNW clients well it is a good choice if you already have a network of relationships you can farm on. But again trying to start from scratch focusing on HNW ONLY will be a tall order and not a stable path. Because there is only a small pool of HNW everywhere and there will be private bankers Knocking on their door everyday. Having a large quantity of customers from all walks of life is a much more reliable way.

But of course I was referring to Traditional sales. If you are working on something new (blockchain...), you could pioneer into a new market. But it depends what kind of business you are doing and there will be huge regulatory risk. If some people figure out using cryptocurrency to pay less tax or hide money from debtor..the governments could quickly declare all related transactions as illegal.
 

MrTrash757

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May 31, 2020
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Hey everyone,

So I got into a discussion with a friend of mine and talking about Millionaire Fastlane and the ideas around it.

Basically my friend is sold on the notion that whatever product you create / manufacture, it will get copied and aggressively competed with to eventually where the profits gets competed away (perfect competition). I quote: "Their factories and people are hungrier and will take lower margins than you. They have huge scale and can deliver way faster to market and beat you at your own game. Patents / copyrights enforcement don't exist (which we all agree). As such, why bother in the first place on these low tech type of businesses."

Instead, he gave me the advice to further develop my intrinsic value and double down on my job and emerging skills (5G / AI / blockchain) within my field (I'm in old school traditional professional services, think law, finance). From there, his advice was to identify and develop meaningful relationships with some ultra wealthy individuals and be their advisor on these matters and profit (slowlane mindset?).

Based on what I've learned so far (first week here), I countered with points such as: 1) products may get copied but brands / customer service is hard to replicate especially in western markets, and 2) you are targeting something just as competitive with relationship building with the ultra rich which may not even pay dividend down the road (especially given the time investment).

Thought I would bring this topic to the forum to discuss and see what you guys think. Also, excluding China's own domestic market, do you guys think we from the west still have an edge? Even outside of the US or your home market?


TL;DR: Friend says you can't compete with China and it's rising class of entrepreneurs which are poor and hungrier, so why bother. Discuss.
I love using the example of CRMs to show case how copying a common idea doesn't lead to ruin.

Look at Salesforce. Yes, it sucks in someways and is a behemoth that is hard to use sometimes (this is due to PEOPLE over the software though), but the value it offers OVER over CRMs is massive.
  1. Well known brand and culture.
  2. TONS of third party and native integrations.
  3. Wide support interms of customer service and consultants (the value they provide is questionable in some cases though :rofl: )
  4. Tons of resources to learn how to adminster it, less on how to use it though.
  5. While there is tons of competition, none of it can match all of these areas.
Your points are spot on, its easy to copy a product, but the CS/brand backing it is hard to copy.

Your friend needs to open his mindset. I think there are massive opportunities here in the West still, especially around some of those emerging markets you mentioned (5G/AI/blockchain), along with providing solutions to developing nations. Defaulting to defeat because of China is a losing strategy.
 

Kevin88660

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Regarding competition with Chinese entrepreneurs, avoid competition their strength
-manufacturing
-internet business like e-commerce and Social networking.

The average employee in a Chinese internet company works 996. 9am to 9pm for 6 days a week. The owners of course much more.

Eventually the Chinese will dominate in technology field because they have millions of science and engineering graduates every year.

But when it comes to legal and financial service the Chinese are still largely inexperienced. The bank of China trader just screwed up big time on their product replicating crude oil price movement a month ago. They are more likely to be your clients if you operate in related fields.
 

Kevin88660

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Being successful sometimes has to do with doing the right thing at the right time, but no body can see the future..and a lot of times is luck.

Regarding your friend’s advice, it really depends on what exactly you are doing.
But I also do not agree with your view that you could defend a higher margin through branding and customer service..I speculate that as a losing proposition in the long run.

My fundamental thesis is that “higher premium” products will have a tough time for a long time for the following.

-Most consumers (In developed economies) are to different extent facing tougher economic situations. There are long term underlying economic forces at work. They will tend to prefer cheaper products for functional purposes only over others when cash strapped.

-The young people today who grow up with internet and cell phone, are going to form a bigger part of the spending force adopt a very much “functional view” towards manufactured products. The 45 year old today see expensive car as a status symbol and a personal item not meant to be shared (Who wants to share their toothbrush?”) The 25 year old today sees cars as machine that moves a person from point A to point B. They are fall less likely to develop emotional attachment to physical objects.
 

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