Please Don't Send in the Clones
By Lisa Bergson
I try not to let suspicion impede business. I know all too well how debilitating unfounded fears can be. As he aged, my father suffered from increasingly severe clinical paranoia. It got to the point that he trusted no one, including me. By then, his illness had already ruined his life and nearly ruined his business.
Among my father's many obsessions were Japanese copyists. Indeed, in his 50s, this phobia led my father to jettison his last opportunity for companionship. An adoring Japanese nurse he met while recovering from a broken hip wanted to help my father any way she could. The unfortunate woman made the mistake of suggesting that her brother back home distribute his product line in Asia. Sayonara, baby.
Having seen the wreckage, I try to resist such tendencies. I prefer to imagine that good things are going on behind the scenes. But, my equanimity was severely tested at the recent Semicon Japan trade show outside of Tokyo. Dr. Wen-Bin Yan, Tiger Optics' director of laser research, and I are here to exhibit our new electro-optic gas analyzers, based on breakthrough technology.
Despite the widely publicized semiconductor industry uptick, we equipment vendors are only beginning to see improvement after the market's deepest, longest downturn. Still few and far between, orders are hotly contested, with major price-cutting and maneuvering underway. But, with Tiger's new technology, we're well positioned to ride the coming wave. Many high-level decision makers stop by our Japanese representative's booth, where our units are prominently displayed.
SUFFERING FROM EXPOSURE.
Some of the visitors are less savory, however. Potential competitors flock, asking questions about pricing and specifications. Like a fool, I answer, until our Japanese rep warns: "Japanese big companies like to copy other good techniques." I begin to regret our display featuring a clear plexiglass box revealing the core of our technology. We wanted to show off the design, but we may be giving away too much. (It's not an exact rendering, but suggestive enough.)
"How can we stop them?" I ask, peering about with growing alarm.
"Don't talk to them," he says. "Better not to give them too much information." Normally, I know better. But here it's hard to tell foe from potential partner. Come to think of it, the guy I spoke to from one of the big Japanese analytical-equipment companies did seem rather furtive. With all the intrigue, our booth number (2-A007) hardly seems like a coincidence.
The irony is that I almost didn't sign our present rep firm because I didn't quite trust their motives. My hesitation not only cost us a year of representation in Japan, but it got the relationship off to a pretty rocky start. Among my goals when leaving for Japan was trying to improve our business relationship. (To succeed in any region, your rep must be your biggest ally.)
After a favorable preshow meeting with the rep's brass, I consider revealing the basis for my initial suspicion. On one hand, there's a risk that they may well find the reason for my misgivings offensive. On the other, the senior managers were clearly puzzled by what they perceived as our (my) "instability."
The first day of the show is slow, and I head out with two rep's execs for a long lunch at a fancy Chinese restaurant (I've had some very good Chinese meals here.). The mood is so leisurely and affable that, as we savor our tea, I volunteer: "I was uncomfortable in the beginning because the representatives you sent to our plant were not sales and marketing people, but technical people."
They lean forward as I continue, "The technical people asked very probing questions -- not about how the instruments work, but about how we make them work. This made me wonder whether your real goal was to copy our technology." I mention prior experiences with an Italian rep and a French one, each of which copied my earlier instruments.
"That is understandable," said one of my lunch companions, a suave and articulate general manager of sales. He explained the visit to my factory coincided with the end of the fiscal year, requiring all the sales people to stay in Japan and concentrate on orders -- an imperative I can appreciate. Of course, what I really want him to say is, "I'll write it in blood, you have my word, we will never ever copy your products."
Back at the exhibition, Wen-Bin joins me to walk the halls. I attended my first Semicon Japan four years ago, before the tech downturn. At the time, I was beguiled by the unusually colorful, whimsical booths displaying equipment from companies large and small, hither and thon. Today, the joy is gone. The industry's survivors are mostly big multinationals, with homogenous blue and gray, data-laden displays. When we return to our booth, I find two Americans avidly studying our plexiglass enclosure.
Turns out they're from a maker of electro-polished stainless-steel connectors, admiring their components in our highly exposed device. "We use the best," I say.
"There are a lot of cheap copies here," one tells me, unbidden. "You see them running around with their cameras, and the next thing you have cheap copies everywhere."
"How do you compete against them?" I ask.
"We compete on quality, innovation, and experience," he replies. I can do that. But, I want to keep the lock on our new technology long enough, at the minimum, to make a profit after all the time and effort that went into its development. My father's answer was to avoid marketing his products to all but a chosen few, and to sell replacement parts to no one.
Even so, when I took over, I ran into a near-carbon copy of father's equipment from an outfit out of Texas. I remember it was my first industry trade show in 1983. "We figured you would be out of business in six months, so we might as well step in," the Texan sales manager drawled when I confronted him. Not to sound paranoid, but in my experience, imitators know no bounds.
Lisa Bergson is President and CEO of both MEECO and Tiger Optics. Before joining MEECO in 1983, Lisa Bergson worked as a business journalist at BusinessWeek and freelanced for many business publications. You can visit her companies' Web sites at www.meeco.com and www.tigeroptics.com, or contact her at firstname.lastname@example.org