Has a ton of patents that produces money by suing everyone for rights to those patents.

Don't even have inventors, you have lawyers making money off of buying intellectual property and trading it.

That's weird, right?

It's kind of weird that you produce nothing but make a lot of money.

The idea that you can take an idea in a world that's this big and say exactly one person owns the right to it globally.

Like Apple has the right to the phone with rounded rectangles.

They're the only people who can produce that really.

Like seriously this is the way we're going to live in.

Like we just give people monopolies through the eyepiece system for 20 years for stupid ideas because they were first to file that made sense back in the day when there were fewer people, less innovators, the less connected world now we have like this network of people where like we're empowered to do our things and we can almost trade our creativity and china's ecosystem.

Is this network ecosystem of an idea for an idea.

Like let's let's trade, you know, you realize you're placing ecosystems, I need other people around me.

You can't be a dick to like all the other guys around you just because you have the pat monopoly on this thing someday you're gonna be on the bottom side of the chain and you're going to need other people's help.

And so you build networks of collaborations with people by sharing in this open source philosophy.

Oh yeah, we have our first copycat.

Ah Well that's not, let's say it's a fan.

So the guy reversed engineered from the video.

We've seen The plan of the three D.

models you can download and print your own.

What do we want to do is we want to read it.

All the hardware companies that come in here.

Of course we encourage them to pattern all of their technology but we don't expect them to fight anybody who's copying them.

We expect them to be moving much faster than anybody who's copying them and coming up with the next thing the whole time and building a brand.

And then eventually those patents may get used when they get into a patent tradeoff.

That's the use of the pattern's not not not to stop people copying.

The way to stop people copying you is to make whatever they're copying relevant because you've come up with something much better.

A huge barrier.

I think too small company in the United States is like the patent system and the copyrights and just like left and right.

Just legal challenges and you spend a huge portion of your money on lawyers and I.

P.

Filings and all sort of stuff.

It's a drag.

It really is.

If you want to be making stuff you want to be actually working with people and sharing ideas openly and getting things going like this one is called.

You can trust me this is my latest invention.

It's called our tracks.

Yeah.

The whole board story is very interesting example of somebody in America who came up with the intellectual property and then spent a long time fighting manufacturers who were actually creating something which was similar.

That's a great example of a case where I would have encouraged somebody not to start like fighting around I.

P.

Protection.

It's better just to build a brand around a really great product.

Make sure that you've got you know the leading product in the area.

This is really the first time we have a technology product which become widely popular which become a cultural icon but we don't have a name for it.

It just emerged.

More people come in, evolving, triggered, evolved triggered.

Eventually it will get to a form which will go viral.

This is kind of point to the future of how things could happen.

So in what Bombay you still find shanghai, there are basically fixed.

There are reproductions of established brands.

I'll give you an example because this is a contemporary sort of shanghai smartwatch running on an android system.

The reproductions were really the items that were sought after by people who could not afford.

The real thing.

My understanding is that the early Shanxi were people who worked for the bigger corporations here like Nokia Motorola, Foxconn and there were some very smart engineers who got sick of the management and they're like look I can build a phone cheaper better faster than these guys.

Can I understand why they have all this process, I can make it for half the price.

If we just cut cut the fat and they would quit.

Talk to their friends who they knew all those upstream suppliers and they would get together parts and they would build, you know what?

We're effectively copycat phones.

The key innovations are able to do it much, much lower costs.

Just learning how to walk before they could run essentially the most similar things to the ideas of SAN die in the west.

It's the idea of Robin Hood, they try to empower the pool with the latest advancements in technology sans II and the maker movement and startups.

They have very unlike.

They have very much shared the same spirit even though they are not from becoming they feel powerful.

Mhm mhm.

When they talk about people who left the factories and copied the phone, Well that was kind of like the open source stuff that wasn't open source, they just sort of like, oh the schematics are on the desk.

I will conveniently help myself to them make a photocopy and then leave the factory with them.

Right.

You know, was that stealing or is it open source?

Right in in the west.

It's called theft.

Right and out here.

It's called sharing some of the devices that it was a hall from the market and you can see it as a number of markings on it.

This one was the higher grade version.

It was 70, 80 bucks us When you power it on.

You see that it's running a very well skinned flavor of android iconography is actually pretty good.

And then the great thing is this one supports two sim cards, replaceable memory card and a replaceable battery.

And it comes with two batteries, which is actually a feature that many local people really want to have their, their unhappy about a having no memory card slot and be having not a replaceable battery.

The companies were able to access very easily.

The two basic components that you need to make a phone.

One is the gum ban which is basically a printed circuit board and the other one is the google memo which is basically the shell.

So there were companies specializing in making gum ban and gummo that had slots for those printed circuit boards that were very easily accessible by companies, you know, people from the west who are used to sort of month long development cycles.

Like I mean, how do you do this is amazing.

Like this capability came out of nowhere overnight.

But actually it's been honed over like a decade or two out of those roots of people, you know, coming out of the big factories and figuring this all out themselves shanghai that is something that is still going on now.

But it is a very small percentage of what is produced in the market.

There is a very strong emerging middle class in china that has the purchase power to afford original items that may be more expensive than the reproductions.

It is not possible to target new markets just with imitating the established brands.

There is a limit to what can be achieved in that sense.

Once they kind of got in a position where they could now build a copy of a phone pretty well, they can now start innovating, they'll take like an android phone and iphone and mash them together and come up with this weird thing that is pretty cool and is different in some way.

You know if you go in in the market in Jambi you will find that many people distributing this type of advertisements for company that are called white brand companies that will make it for you assembling very, very different components and then you can add your your own brand, your own name or whatever you want and distribute it as your on items.

Yeah, these are these are all white label ideas and it's an empty sample and all of these are different empty samples so they can go ahead and build it for you on the spot and then order you know however many you want and later on you can actually ask them to go ahead and put your your graphic on the front, you know for example or uh maybe you know these logos over here in the west kind of philosophy is that we come up with something really fantastically knew that nobody's done before become the market leader and we're really successful.

The chinese mentality is slightly different.

They look at something that's already on the market and then they create a much better version of it much quicker.

It's not copying its evolution of products which becomes much better than what was out there before we grabbed another one on the market there it looks like a smartwatch but you'll notice that it only has a single button and the graphics are made for Children.

So this is a phone Plus GPS module that you can use this sort of report kids location.

If the kid is in trouble they can dial their parents.

You can see it has like S.

O.

S.

Call features.

I would bet that probably 80 to 90% of the design material in here is borrowed from other vendors who use these previously and other smartwatch designs.

But people are sharing the I.

P.

The guy who probably shared that to them was someone who could sell them chips or motherboards or circuit boards.

And so there was some factory backing up that sharing process.

They want people to use these things and that lets these guys try try try like there's many models of this.

In fact when we're buying this woman next to us was asking for these and then left on the table he said this one's too thick.

Let's go find one that's that's that's thinner than this one over here.

We'll probably have less features or less battery life or whatever it is.

But the market here can build these different variants and services because of the phenomenal ecosystem.

Mm hmm.

Mhm.

Yeah, something is really happening.

Companies are realizing the importance of having new ideas and being different.

So many companies who were involved in the shanghai before are now looking at design.

They are now looking at how to develop innovation in their own companies.

The model that is being developed in Shenzhen can actually be quite threatening in other parts of the world.

And it's not surprising that many american companies are now looking at models that are developed in china to see how they can adjust themselves.

So those are some of the product that we make electronic stuff.

This is President Obama wearing my headphone with my business partner mitch Richmond.

These people has been here a calm what I am.

The justice picture.

My partner venus Brown this year is signed by venus Browne.

What I am.

I forgot who signed this.

There's somebody famous.

I forgot.

Thank you.

This is my office.

That's something I can't live without is my cigar.

Like I can't do ship without my cigar.

Sorry just cost we are not your traditional like a manufacturer right?

Which is you know give me a product and manufacturer and we manufacturers of like a monster and all that harman kardon and Creative Altec Lansing JBl all all the biggest industry we actually dominate anywhere between 8 to 12% of the U.

S.

Market on audio side.

But what we're doing so different is we we have our own design house.

We're able to create some really cool incredible products.

So here's like design house some inspiration about what we can do.

We have like some instruments through the printing, rapid prototyping.

This team is designing some characters in three D.

This is a game, it's interactive learning in china.

A lot of factories are very traditional.

So this is also very a new model.

The Ceo he tried to break this model and since uh since 2000 and five they are producing now for 45 brands mostly international and mostly in us you know most people don't realize that There's at least 26 of the technology from Silicon Valley actually come from Shenzhen.

So what they do is they hire kind of like a headhunter so to speak because there's so much innovation we are about minimum of a month or a year.

Events when it comes to technology for example we have a this incredible bed, you can sleep on there and the moment you wake up in the morning it will give you steps how many times you roll over how much sleep, how much rest you have and then also can read your blood pressure can kind of tell you if you have any problems to be identified and this is technology existing already today.

And we've done this almost two years ago.

Number one The way like one won't do the teaching for We said like 25% of innovation created in Shenzhen By, by the American.

They buy it, they go to us and then they sell it here 100 times more expensive China.

Feel a little bit bored.

I think about this business model.

We made it here.

But all the credit is for somebody else.

His name is everybody is looking for the chinese startup made in china.

I want the proof to show to the world like look, we innovate, we have a lot of opportunity here.

I think our focus should be let's create a quality product and you can be proud and say this is made in china.

So if you can just focus on that new technology to focus on a branding and to focus on the quality and I think within the next five years people have different perspective of Made in china.

I think that will happen.

The reason why the city has embraced this notion new technology, it's trying to reinvent itself.

My concern is that in this reinvention, it wants to very quickly rid of its past.

You definitely see like a gentrification happening and I can't say if it's for better or for worse data transfer.

We're going to create this innovation and this.

you know, the startup world that had never been seen before.

Okay, mm hmm.

Yeah.