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>> Employees will attempt to steal IP and copy the business.

> This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley.

Its much different. Mechanical drawings, materials processes, and electrical designs that might have taken thousands of man-hours to develop, test, and refine are actually valuable, unlike "this great app idea I came up with in the shower."

> If you are relying on security through obscurity to protect your business' viability, you're doing it wrong.

Security through obscurity refers to computer security processes. "Business by obscurity" is the industry standard, unless you think Apple, Microsoft, Coca Cola, and Wall Street traders are doing it wrong.

Mechanical drawings, materials processes, and electrical designs that might have taken thousands of man-hours to develop, test, and refine are actually valuable

Sure, but even these things are not valuable unless you can actually use them to start a successful rival business within a reasonable amount of time. In other words, if there are 10 idle factories tooled to copy your product for the same price or less and your only security is "nobody else has produced the same ballpark product yet" then you are walking on thin ice (even without internal bad actors), since market demand, reverse engineering and technological change will ensure your current sales run is short-lived. This was my point. Technology businesses often need a combination of reasonable speed product evolution, good client/partner relationships, adequate capital and good name and legal standing to effect a greater sense of business security. A single rogue employee is unlikely to have all of these, and thus appeal to clients.

To look at it another way, if your perspective of evil rogue employees duplicating products was correct, how do you think https://en.wikipedia.org/wiki/YKK_Group survive? There's no crown jewels to walk away with, and there is significant anti-Japanese sentiment from the Chinese government.

Security through obscurity refers to computer security processes

Much knowledge is transferable between different types of complex systems... apologies for not appealing your terminological preference.

I think this is missing the forest for the trees. It is totally fine to tell people in China your idea. But the point is, your local employees might steal the execution as well. That is, they'll steal blueprints, designs, code. They'll poach other employees. They'll take with them knowledge of your suppliers, your buyers, your customers. And so on.

In SV the common wisdom is that it's fine to tell people your ideas. But nobody is suggesting you give out your code or your blueprints and designs, and put up a spreadsheet on your website of the contact info for all your suppliers and buyers, and all your customer data.

Where did you get the idea "Evil Chinese want to steal all your goodies"? I am sitting here on the ground in China with actual experience getting things done, and you are someplace else making some ridiculous hand-waving assertions about the character of 1.4 billion people you've never met, and I am getting downvoted ridiculously. Thank god I don't live in the US: the arrogance, introversion and ignorance is absurd.

I was restating / clarifying what the person you were replying to was saying. I think I was overly dismissive (can't edit my comment now), but my response was more in response to my perception that you were being overly dismissive of the parent's ideas ("This sounds a lot like the unfounded", "Sure, but even these things are not valuable", etc.)

Let's say you are making a computer game. You've hired a team of 10 people. That team will work for you until you have a finished game, and then copy all of the source code, assets, etc and go sell the same game you just paid them to make. And it would be the majority of the staff. Maybe they'll swap out a name and few art assets to make it 'different'. And you can do shit all about it in china.

This story came from a coworker who worked in china trying to make a games business there for a year. I don't know if it was him or someone he knew.

If you managed the staff differently, nobody would have a complete enough view of the system to walk away with anything functional. This is how they do it in the defense industry, and it's fair management policy in unknown environments with unknown staff. There is a saying "trust is the availability of effective recourse"... if you have none, act accordingly.

That is exactly how they deal with that. They make them use offline non-admin computers with all the ports burnt off. If they need to look something up, then only a few trusted people can go to the 'internet' computer, where everything is recorded. For good measure, the offline employees are recorded too.

But it's also incredibly inefficient compared to the average 10 person game studio. In the USA, nobody has to do that to make a computer game.

You also missed the part of %80 of the staff walking away to start their own venture.

I bought a cat exercise wheel off kickstarter. There were a lot of problems shipping the product, but eventually they shipped. The fascinating part is explanations given by the company. They said they paid 50K+ for a master injection mold which was tested extensively and shipped over seas. The parts that were shipped back didn't quite have the tolerances they were expecting and the wheels didn't fit together very well.

It turns out the supplier they were working with in China cloned their product and were selling similar cat exercise wheels in China. A second mold was made and used to ship parts back to the US, and that mold was not made to the same quality as the first. At least, that's their story.

>Yes, domestic infrastructure is usually necessary due to poor international reliability and speed

Real funny how that international reliability and speed go way up when I have a proxy on. It's almost as if foreign websites are throttled cough cough

> > Employees will attempt to steal IP and copy the business.

> This sounds a lot like the unfounded "don't tell anyone your idea, it might be stolen!" fear in Silicon Valley. If you are relying on security through obscurity to protect your business' viability, you're doing it wrong.

This is completely different. An idea itself doesn't have a lot of value without the business plan and capital to make it happen. The SV narrative is ridiculous because it has people asking for NDAs to tell you about their idea that hasn't even been incorporated yet.

What this person is referring to is the fact that employees and partner companies will take source code, blueprints and other confidential documents and attempt to sell it off or directly start competition. Your secret server sauce could show up at another company with source code, documentation, comments and everything. Many times they'll even use your logos and deliver a lesser product based on your brand name.

Flash memory is a good indicator of this - many chinese manufacturing companies have staff running off-hours manufacturing or pocketing wares that didn't pass QA for later sales. Microcontrollers also deal with this - there are several popular chips (like the FTDI usb<->serial interface chips) that have cheap clones made. Same with basic electronics - think back to all the replacement cables and laptop adapters you've seen with shortcuts taken in the components. There is simply no legal protection against this, and no legal recourse when it's a full company or a former staff member that does it. Especially if your partner is the nephew of a local government official. You wouldn't think it was possible, but corruption is actually worse over there.

This sort of thing happened a lot earlier in US history before corporate and industrial espionage became a thing you could legally sue over. There's actually a sort of industry built around sharing NDA'd spec sheets and documentation over there. Stealing IP is a fact of life. And you can nearly guarantee that the person who does it has a better stable of local contacts than you do.

We're also ignoring the fact that you can't even promise that the work from partner companies meets contractual obligations. Many western companies had manufacturing deals with Chinese electronics manufacturers who delivered inferior (or virus-infected) products. The Chinese milk scandal of 2008 is another sobering story of corruption covering multiple levels. Despite hundreds of thousands of victims, they just tried to ignore it and then buy their way out of it, initially.

> > You need locals to handle staff. You're just a foreigner to be taken advantage of.

> In my experience if you speak basic Chinese, personally hire and manage employees and pay and treat them fairly and offer income security, they will see you working hard and personally work hard and be extremely loyal to you, especially if you offer new skills and challenges.

With some industries, yes. Others no. There's some cultural differences that can cause a lot of friction. Public reputation (face) means a lot to people. But it's more important that others think you're honest than actually being honest. If a person with a strong reputation starts moving against you, in many cases locals and officials will side with them against you in order to curry favor. Favor trading is actually very important when doing major business over there.

It's a market that has a lot of opportunities, but the environment is so different that most attempts at an entrance just end up being swallowed up. Any attempts at redress can easily die an insignificant death mired in bureaucracy.

Your secret server sauce could show up at another company with source code, documentation, comments and everything.

If you rely on "secret server sauce", you are probably sunk anyway, since a half-decent reverse engineer can probably replicate your business just by looking at it as a black box system from a client's perspective.

Many times they'll even use your logos and deliver a lesser product based on your brand name.

You really can't see a difference between needing to reverse engineer something and just getting the source with no strings attached?

"a half-decent reverse engineer can probably replicate your business just by looking at it as a black box system "

Think of a program with business logic spanning millions of lines, with intricate detail spent on lots of domain specific automation steps.

I'm actually at a bit of a loss for words that somebody thinks a business can be reverse engineered just by looking at it as a black box system. There are so many intricacies with cash flow forecasting and management alone, requiring deep understanding of each market's nuance and settlement mechanisms, simply to pay the bills. That's not even to get revenue in the door. Sorry, but most businesses aren't software programs, they're social systems and local contracts that were socially agreed upon to get something done in a politically acceptable way.

Or even relatively small secret sauce that took thousands of iterations by geniuses. This guy seems to be asserting that Google may as well just give up because they need their algorithms to be secret.

At this point I can't help but think that he made an assertion based on a misconception (someone stealing your source code == someone stealing your idea) early in the thread and is just digging himself deeper trying to stick with it.