I had a meeting yesterday with the CEO of an entrepreneurial hardware venture that is looking for funding from us. The guy recently moved to China to take advantage of the rapid prototyping capabilities to be found in Shenzhen.
I asked him if there was really that much difference between doing the prototyping, say, in Singapore, or doing it in China. What he told me gave me a new perspective on Chinese competitiveness. Here's what he said:
"When I order a PCB (Printed Circuit Board) prototype here in Singapore, the order typically costs $100 and takes three weeks to fulfill. In Shenzhen, the exact same order costs $10 and takes less than three days to turn around. Sometimes it comes back in a day."
According to my calculator, this makes China approximately 70 times more competitive, if you take the cost and time savings at face value. (3 / 21 = 14.2. 14.2 * 10/100 = 1.42857. 100 / 1.42857 = 70x - yeah, I know that's a rough calc, but hey... the numbers work well enough to be illustrative...)
What does a 70x competitive advantage provide you, as the entrepreneur? Simple: the ability to continually iterate and experiment and try new versions of your product and shave years off your dev time...
China isn't all good news - when it comes to raw talent, intellectual property protection, governance, and quality of life, give me Singapore any day.
But rapid hardware prototyping? I'll see you in Shenzhen.
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