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I’m going to introduce you to one of my favorite referral partners, Genimex. It is the coolest company because they are a single source that can help you all the way from prototyping, engineering and design, getting your products on to a shelf, getting it all the way through that process and making sure you can deliver. I’ve got David Chitayat with me. He is one of the founders and one of the two brother-partners.
Tracy, thanks for having me. I’m happy to be here talking with you. I’m not a founder. The company is a family-owned business and was founded by my father 45 years ago. The company is run by us, three brothers, and I’ve been working in Genimex and the group’s CEO for about fifteen years now.
I did an interview with you in one of my articles. You write some great blogs which I refer to all the time and that’s how we got introduced to each other. I’ve been super excited about working with you and sending clients your way because you are like a one-stop shop and there’s so much of the development process that needs to get managed. Can you tell me a little bit about the scope of services of what you provide?
Predominantly, we’re a contract manufacturer. That’s the focus of what we do for our clients. We manufacture products predominantly also in China. We have offices in Taiwan and in Shanghai. We do have a turnkey service in that we support our clients in their product development, engineering and design, bringing those products from concept to manufacturing. Our focus, when it comes to development, is more of the backend side of design and engineering. We call it DFM work, Design For Manufacturer, where we take typically concepts that have an opportunity in the market, we help take those aesthetic designs and execute them through engineering and get them ready for manufacturing.
That’s why we’re great partners because we do more on the aesthetic and product planning side of things. We research about what you should make and then figure out what it should look like. From there, you figure out how to make it cost effective, who should be making it for you, what processes you should use and then dial that in so it’s as good as it can be. That’s such a critical part of the process.
That’s our focus. There are so many places where companies and brands can spend their time growing and developing new products for their business. We add and support those resources when it comes to development where we can tie in the whole manufacturing side of the development process so that you’re not designing in a vacuum, that you’re designing with some knowledge coming from the manufacturing side. Do these concepts make sense? Will they be able to be executed? What are the cost benefits for some of those decisions? You’re taking those into the account that helps reduce risk and increases the speed at which you can then enter the market with that new product.
It’s about speed nowadays in retail. That is what we’re seeing. Whether it’s on the shelf or online, it doesn’t matter. If you’re behind the curve getting to market because you didn’t get the price right, you didn’t get it made right and you’ve got to redo, that puts you at a disadvantage.
Our clients also have a lot of things going on. They’re spending time developing their business, selling their product, and communicating with consumers. They may have very aggressive product development schedules with lots of different products that they plan to bring to market. It’s hard to do everything in-house. You can also outsource to other partners. That’s where we integrate ourselves with our clients. Typically, we have a very long-term relationship with them, we understand their business, and then we cater our services to surround their needs and their category of products.
That category experience was something that I was on the phone with during a strategy call with a potential client. We were talking about how having a category experience is tremendously valuable nowadays because whether or not you’re sharing that exact data, it’s informing your decisions. “If we don’t get that price lower, it’s not going to work. If it doesn’t have this baseline feature functioning extremely well, it’s not going to sell as well.” We provide that information, those of us who have category experience and that’s hugely valuable.
That totally makes sense because you want to know what’s selling, what’s doing well in different markets, and that’s an area that we can help too. We don’t go into the market and understand what consumers are thinking, but we can do backend support where we can go into the factories and say which queues are doing well, what materials are new, what are some new innovative ideas around a product category. They can inform a marketing team or create a team like yourselves in pushing the limits and adding on incremental innovations on those ideas.
You’re big on telling stories because you’ve got a lot of history with stuff that doesn’t work and stuff that does. I’ve told this story before, but I interviewed a company who was making socks. They were brand new to the category. They thought that it was great. They went to this sock manufacturer that they were very confident about in Asia, I’m pretty sure they were in China. Their goal was to make the softest pair of men’s socks. They were cool, pattern-y and have bright colors. They wanted bright colors and soft. This was the only criteria that they gave to the factory. They designed them together and kept refusing samples so they’ve got the ones that were the softest.
They brought it out to market. I interviewed them and they sent me some samples for review. My husband wore them for two days, washed them a couple of times over the course of a week, and they fell apart. I took one look at it, but not that much because the sock was in a pack. I just handed it to him and said, “Try this out and tell me what you think.” I have category expertise in knitting. When I pulled the sock and looked at it I went, “I see why there’s a whole, it’s because your yarn length is too long in the areas of which there’s the greatest wear. You also have a little seam, which creates an abrasion point.” I looked at that and went, “Why didn’t your factory tell you?” Unless you have that collaborative relationship you have with your factories like we have with ours when we work with them, you don’t get to that point at which you have the conversation where they’re going to come back to you and say, “I don’t think that’s a good idea.” You’re not having those conversations where they say, “The customer’s right.” The customer said they want it this way so we’re going to make it that way. You and I know that we have to open up that dialogue because our factories will tell us, “This isn’t a good idea,” but they won’t tell everyone.
It’s interesting what you’ve said about focusing on just one feature and not thinking about the entirety of the product and its actual functional use. That problem comes up all the time especially with clients who have less experience. I’m pretty sure that client won’t do the same thing again. It can be an expensive or at least time-consuming error. It can be inexpensive if it wasn’t such an obvious problem and was something that was related to high levels and heavy usage. If you were to go into production and only to find out from consumers three months down the road or whatever the timeline is, that there was a disaster.
Especially to electronics or some battery issues as we’ve heard big companies make mistakes with batteries all the time. It can be costly and time-consuming. In this particular case, it was about a $20,000 issue for them because they were like, “We can’t sell what we have or we’re going to end up with bad reviews.” They had to pull out their inventory and it was almost like re-launching again by the time they got it. They were lucky that they hadn’t gone full launch.Do not rush to the market without testing your product before launch. Click To Tweet
I didn’t know that they went into production. I am sorry that they had to learn at that point. This stresses the need for not rushing to market without testing your product before you launch. It’s one of the critical steps in bringing new products into the market. With people like yourself and Genimex, one of the things that we do is we help guide our clients into good product or project management practices and processes. Those things sometimes are so simple, however, they have immense consequences that if you don’t do them, if you don’t test your product adequately before you go into production, you are going to have a problem.
You were talking about brand growth before and that got me thinking about how important the systems, processes and documentation are. You’ve been doing this so long, you have sample review documentation and sample requests documentation. I’m sure you’ve got a whole set of forums so you’re in a way setting in good practices. Eventually, if your team is building a team in-house for a client as well in the future, you’ve set up these good practices along the way of what the paperwork and what the system should look like. Some of the development they can take on, on their own. We do that as well.
We do have those that good practice in-house when it comes to stuff like sample reviews but it extends to the general product project execution, to launch a project correctly. Our clients come from different levels of expertise. We work with Fortune 500 companies, down to single-person startups that are just entering the market.
You have a lot of kickstarters.
We work with clients with different levels of infrastructure and expertise. Sometimes we’re working within our client system. Sometimes we’re managing up and helping our clients. We manage the projects with them and we encourage certain types of project management techniques. We tell them when to come to China and review things. We work with them on the process of setting up standards. As what we see with those clients, they are typically entrepreneurial, they are great learners, they develop quickly, and their business matures and their needs change over time. We move into less of managing up situation and more into expanding the line rapidly or helping them grow their business.
We’re here about the right things in the right order with the right resources and it’s that order of process that is different in every trajectory of the growth plan. At the startup stage, it has a different order than it does when you are at that advanced Fortune 500 brand stage. Having the capability of scaling from the way that you work is great, but at the same time what you have that I appreciate are these fabulous practices for quality control or design for manufacturing. You’re doing all of these things so that they don’t have to be redone later. That’s why that right order matters.
Our attitude towards quality is a simple idea but it makes a lot of sense in our experiences, that quality is not one step. It starts from the beginning of when you’re designing the product and when you’re selecting that manufacturer. That’s probably the most important part of it, which is determining that you have quality goods at the end. You have to think about setting up very clearly established standards and good communication of those standards throughout the supply chain. Those are very clear requirements that everyone’s working towards on the same page and then you eliminate 95% of the issues. There are still going to be 5% of problems that you couldn’t anticipate or more. Then you are finding those things that are harder to find but still very important and you are solving for them and you’re not dealing with a disaster scenario.
Quality and price are designed in. That’s our motto in it, that if we don’t do a good job from the beginning, understanding how it’s going to be made, understanding how it needs to be priced then it’s hard to be great at quality and great at price. The only thing you can do is to redo later and that is a costly, expensive, and time-consuming proposition. You repay it and in the end, it costs you more.
I’ve spent a lot of my time thinking about how we reduce the risk of projects. What prototypes can we make? What questions should we be asking? Which technical issue should we be digging into in order to check boxes that reduce the risk for a product? Our team spends a lot of time thinking about that. We try to encourage our clients to think that way as well. What ends up happening is that we might sometimes stay longer to start the project, but then we deliver earlier.
It accelerates later. Better planning, faster delivery is how I always look at it too. One of the things that I enjoyed so much about the conversation we had, we did an article on the Chinese New Year and the timing issues of things. It’s like having a sense of what’s going to impact your timing is a direct impact to budget as well. This is not the best time of year for you to be doing this product, just knowing that from the get-go, you’re always proactively thinking for your clients, for the project, and advising them and saying, “You’ve got to get your orders in now because if you don’t get them in, you’re not going to get them and you’re going to be out until spring.” How do you keep on top of that? You are not a giant organization but you are big compared to my small team. Tell a little bit about how that works for you.
The first thing we focus on is trying to understand what our client’s requirements are and what their needs are. We have to work back from that. We try to ask those questions up front. When do you need to launch? What’s your goal? Is that set in stone and why do you have that goal? For us, it’s always about trying to understand why you want to do that. Sometimes people have arbitrary goals so then it’s maybe not so important. Maybe they’re planning a huge event, they must have the product ready for that event, a trade show or some other event and therefore, that is fixed in stone. There’s no way to work around it. We understand the requirements and that’s the most important thing.Quality and price must be designed in. Click To Tweet
We assess what you want to do and there are more requirements, but that’s not schedule, it’s just a product. What are the things that you want to do? If that’s not clear, we try to help them and guide them through establishing that and putting that down in writing. Sometimes we get instructions orally and things like that and it’s like, “Everything’s clear, right?” I’m like, “It’s clear, but is it going to be clear three months from now?” We go back and say, “I thought you said this, but I’m not sure.” We put it all in writing and we have a big team. We’ve got to make sure that everyone on the team has access to this information. We don’t want messages to be passed between people and then to suppliers or quality control personnel where maybe it gets lost in translation and literally is translated too.
We focus on understanding exactly what they want to achieve then we’d go and manage expectations and say, “Based on our experiences, these things that you want to achieve is possible or not in the time that you have it validated. This one, maybe it’s possible but there’s a risk of this and it might delay the product. Maybe we should reconsider some of these requirements or your schedule, one of those two things. You have to understand where the risks are and what we think was 100% confident we can do or we may have a chance to do and we for sure can do.” We try to set those expectations clear. It’s very hard for us because we don’t always know what’s going to happen. It’s not fully defined yet and I’m sure it’s your experience too. There are always unexpected issues that are going to come up, unintended consequences for decisions that we can anticipate what’s coming. We have to build in buffers and we’d have to be conservative.
It’s in not rushing the process though and having those buffers in there that give you that comfort level that we can accomplish this and accomplish it right because through rushing you add too much risk in the process.
For example, one of the things we do for projects that are extremely time-sensitive or have a high risk of failure, I like to take the approach of parallel path problem solving which doesn’t require more resources and it takes up more time so we have backup suppliers. Typically, we may set different techniques for the manufacturer, parallel prototyping with multiple suppliers. When we do that, it’s more expensive. We obviously always judge the cost to do it versus the risk. I would like to err on the side of caution because there’s a saying, if something could go wrong, it will. That’s our everyday experience. We have to have backup plans and we have to be adaptable and be able to pivot quickly when something’s not going right.
The hardest thing for us and for our clients to do is run into a challenge. We run into a problem, but do we keep trying to just power through it and solve it or do we say, “This is not a good path. We need to change the path?” That’s such a hard decision to make sometimes. Sometimes it seems it’s costlier time-wise or resource-wise to change direction. Sometimes that is the best. Cut your losses, change direction and solve it for good. That’s a hard decision to make and one that you gain it with experience.Rushing adds too much risk in the process. Click To Tweet
The amount of experience you have is amazing. You said you’re one of three brothers who run it. What do your other brothers do? Is one of them over in China all the time?
Jonathan Chitayat is in Shanghai. He’s our China CEO. He runs the operations for China and Taiwan. He’s managing the team from the day-to-day and interacting with clients, factories, and the whole operational side of the business. He’s the brother that’s on the ground. In addition to him, of course in China, we have a strong team of senior staff there. He’s in charge with the operation. Our little brother, Tal Chitayat, is in New York. He doesn’t have a direct operational role in Genimex. He used to many years ago. He started an internal startup with some consumer brands and he’s managing that business.
He’s got a little side project. That’s valuable because now you’ve got information on what it’s like to be a startup. It’s very different in what those issues are and what they’re surrounding. What makes a good client for you, David? Do you just take phone calls with anyone? How do you evaluate them? There’s going to be some people out there going, “Am I right for Genimex? I like David. Everything sounds good, but am I right?” How can they evaluate themselves or how can you evaluate them?
That’s a tough question to answer because there is a broad range of clients that we do work with and we are very happy working with. We look at the long-term viability and the relationship with a client, the potential there. That’s the most important thing for us. We don’t work one-off with clients very much. If we do, that’s not our model and not what we’re interested in. We’re in high-volume, low-margin business. We need volume and we need repeat business for our model to work.
Are you looking for brand builders and brand growth?
Ideally, we’re looking for clients where we add a lot of value. If we don’t add value to a client supply chain, then it doesn’t make sense long-term. We look for clients who value development support and they value the high quality of service. Maybe they have complexity in their product, therefore they need more management. They have complex supply chains or they buy different types of products and they need one point of contact to consolidate the supply chain. Those requirements of speed to market, things that basically say like, “There’s a lot of work to be done here and you are going to add a lot of value to our supply chain. We’re going to have a long-term relationship. That’s where there’s a lot of potentials.” Where we don’t add a lot of value is when someone says, “I have this plastic-injected bucket. I need ten in a box. I need it to be as cheap as possible. There’s no complexity. It’s just a total commodity. There’s nothing to it.” We can do it. We can be very competitive, but it’s just a price game. There’s not a lot of risks and not a lot of service involved. We don’t add that much value.
We don’t have a lot of those on this Product Launch platform. To the readers out there, you are inventors and you are entrepreneurs building brands. You are Amazon sellers who said, “Enough with this wholesaling stuff, let’s start making our own brand, let’s start making our own products.” You’ve already got that sales growth underneath you. You’re great at marketing. You just need somebody to help you amp up that product development and get great products in. That’s the people we have right here on our platform and we’re proud of all of that. They’re right for you, most of them. You do an intake evaluation and that’s all available.
Anna Pappas is on our platform and you can contact her directly. You’ll be able to just go straight through her. Send her an email, see what they think. She’ll be happy to help you and look at that and see if it’s a fit. David, you’ve got to have a great story of the hazards of product launching. You’ve got to have a great story there of some of the things that have gone wrong
We have a lot of stories. I can tell you ones that ended well and I can tell you ones that didn’t end well. Most of the stories didn’t end well but the ones that didn’t end well were the ones I have learned the most from. This has to do with a factory situation. It was a vacuum cleaner that we were doing for the automotive industry, for a brand that sells into major retailers like Walmart. It was an auto vac for cleaning cars and we had a good supplier that was making the product. We’ve been doing it for a while with them. We’ve got news that they’re a part of a group in China and it came under some financial trouble. They had too much debt with some of their other companies. I don’t really know the nature or all the exact details.
Stuff like that happens all the time, Product Launchers. I’ve had it happened in chair industry and other industries.
We’ve got that news from our guys on the ground that were in the factory that we’re doing some inspections of some products that we’re shipping out. We’ve got some wind through the grapevine that something was going on. Our account manager and I basically dug into it. We were like, “These guys are in trouble. There are some serious issues here.” They were not owner-managed. This was a pretty big company that was professionally managed. They got a lot more honest information in a professional manner because they’re doing their job at the same time. We went into the factory and worked with them to pull the tooling out for this project so that they wouldn’t go bankrupt and then go into receivership, bankruptcy court and therefore we would have everything locked down by the local government.
We had to negotiate with them and also with their sub-suppliers because not all the tooling was in their actual factory. Some of the components were outsourced. We had to go through the other stuff and negotiate with everyone, find an alternative supply chain, another factory that we could then move everything to and quickly move into production there. It was pretty tough because we were dealing with people who had to agree to do things that maybe weren’t in their company’s necessarily best interest. If they were to move all the tooling out, they’d lose all their business and they’d be in a more desperate financial condition situation. We were able to manage it. We had to pay new bills that came up that didn’t exist prior to this discussion. The people there were overall good and were honest. We moved the tooling out and we moved the production to a new facility. We quickly ramped things up, went through some of the approval and testing that we had to do. We air freighted a couple of containers for our client and paid for that. The promotion that we were working on for them was the Costco Promotion, it was a test order.If you miss your timing, then you will not get back in. Click To Tweet
Product Launchers, you cannot miss your timing. If you miss your timing, you will not get back in.
The great thing was that the test went well. It could have been like we did all this stuff, spend all this money, and it didn’t go well. It went well, they followed up with 150,000 units that we produced for Costco. We ended up getting a chance to make back some of that money that we lost in that whole process. We still work with the client. That one ended well.
You touched on things that happen all the time. Ownership of tooling needs to be clear. Even still, it will be a negotiation when the time comes, how to quickly be pickup and see the tool if you need to. There are so many little things that having someone who’s been there and done that again, is so valuable and that’s why you are one of our right resources here on Product Launch Hazzards. We’re really happy to be in partnership with you on that. Thank you so much for joining us, David. We really appreciate it and we’re so glad to be partners with Genimex.
Tracy, thank you so much for having me and thank you for all of your support.
Product Launchers, you can find all about Genimex. You can meet David and Anna right on our platform. Thanks again, Product Launchers. I’ll talk to you soon.
- David Chitayat
- Tracy’s Inc. articles interview with David Chitayat
- Jonathan Chitayat
- Tal Chitayat
- Anna Pappas
About David Chitayat
David Chitayat has held the position of Chief Executive Officer and principal at Genimex since 2001.
With over 10 years of experience in manufacturing and product design, David has a client base in over 20 countries. His role as CEO has been instrumental in transforming Genimex from a traditional trading company 40 years ago, into the multinational organization it is today.
The service model of Genimex is built around manufacturing, design and support. By incorporating a vision of creativity and innovation into the mix, David has shifted the company’s focus from mainly marketing products, to helping customers design and develop new product lines.
With a regional presence in Shanghai and New York, Genimex offers a range of diverse solutions which starts from product concept design, engineering, manufacturing, logistics and supply chain services, all centralized within China. Partnered with a network of world-class manufacturers across multiple categories, the team at Genimex ensures products are delivered to clients on time, with decreased risk at a competitive price.
In addition to his managerial role, David is directly involved in the development and production of new products, many of which he holds personal patents on. Under his leadership, one of these products received the Red Dot Award for design.
On a personal front, David has a rather multicultural background. A New Zealand citizen, born and raised in Taiwan, he lived in the US for a number of years while studying as an undergrad. Later, David pursued his MBA in Hong Kong under the Kellogg program. David has lived in Shanghai with his family for over a decade, where Genimex is based.
David also has a passion for endurance sports and is responsible for organizing a Shanghai 24 hour relay for charity which has been successfully running for the past 4 years. He is a Board member at Surgeons of Hope since 2017 and is actively involved in fundraising.