American Shanzhai?

Bunnie has written an extensive and illuminating post about the Shanzhai – a group of Chinese hackers that make all kinds of beautiful and strange devices – and that are making good money doing it. (The photos here are stolen from the PDF he posted. Yup, that’s an apparently working cigarette-pack-cum-phone.)

In summary, the Shanzhai – which means something like ‘mountain bandit’ – are creating soup-to-nuts shops for designing, building and selling consumer electronics, chiefly mobile phones.  They are not interested in participating in the so-called “white markets” (as opposed to black and gray markets) that dominate Western sales channels for electronic and technology goods.  Indeed, much of the world is just fine with gray market electronics – they’re cheaper.  And in lots of places, all you’ve got to do is stick a SIM card in the phone and it will go – the carriers don’t control the device market like they do in the US.

But in forsaking the white markets – and their associated cost – the Shanzhai are embodying a real hacker spirit of getting stuff done quickly and creatively, and with the sort of anti-authority attitude that characterizes Western software hackers.

So I am wondering, where are the American Shanzhai?

I think the answer right now is “Nowhere.” Sadly.

Dave Merrill and I had coffee with Liam Casey, CEO of PCH on Saturday – he is in town for a few presentations/meetings at Cal and Stanford.  We were discussing the Shanzhai, and I sketched out the following quasi-histogram.

On the X axis is a product’s cost.  I see folks in the US covering the far right high-end of high-tech products – smart phones, rack mount servers, fancy lasers and flying killbots.  We Americans, through the recent surge in DIY culture, are also making loads of interesting electronic hacks at the low end (I don’t mean that pejoratively) – things that are not that difficult or expensive to make.  (See Instructables, Evil Mad Scientist and Sparkfun, among many others).

But the middle of the graph – products that can be built at a reasonable scale and that are relatively complex – like an average mobile phone – seem out of reach of the individual American hacker/entrepreneur, and even out of the reach of a group of such people.  We just do not have the means and connections to get this sort of thing made at a reasonable price.  (We either have to be hobbyists or $50M companies.)  The Chinese generally and the Shanzhai in particular own this space, because they have access to the expertise, cheap labor, and markets of Shenzhen.

Liam makes the good point that there is so much creative technical talent in the US (and in the Bay Area in particular), that the smart money is in connecting this talent to the manufacturing capabilities of China – to get close to the same access the Shanzhai enjoy.

We may not ever be able to make things cheaply enough in the US, but if we can bridge the informational and geographical gap between Silicon Valley and Shenzhen, who knows what is possible?