Yu Pengkun: Why can't a Chinese company that invented the USB drive grow into a giant?
[Copy link]
【Text/ Yu Pengkun, a columnist of Science and Technology Power】 Since the Sino-US dispute broke out, "choking" China in the manufacturing field has become the main means for the United States to try to "balance" China. Many people who didn't pay much attention to domestic manufacturing in the past suddenly discovered that there are so many things that my country cannot make, and they are often products that seem to be relatively important. Trump's crazy behavior has made us more clearly aware of the huge gap between China and the United States in the field of technology. Faced with the grim situation, some people have lost their ambition and feel hopeless. And a few people who have long lost their ambition are keen on publishing articles with a relatively low tone. There are also a few people who suddenly want to make everything and can make everything. And there are more people with hope who try to understand what China can make and what China has made. No wonder questions like "What inventions is China proud of?", "What creations were created by the Chinese and are widely used around the world?", "What inventions has modern China made that were not inspired by the Soviet Union or the United States but were instead developed on its own?" have suddenly become popular again in the past month. The author supports such a "review" because it helps people build confidence from a historical perspective and helps them learn from experience and lessons to take a good path in the future. One of the most interesting answers that appeared in all the above questions is the example of Netac inventing the USB flash drive. Who is Netac? Why did Netac create a USB flash drive that is known as "the only hardware invention of significance in China during the informationization wave"? Why is Netac not well-known after its heyday and is not widely known today? The main focus of Netac's invention of the USB flash drive was model innovation. Lanco President Deng Guoshun was born in an ordinary bamboo craftsman family in Shimen County, Changde City, Hunan Province. He studied hard when he was young and eventually entered the Department of Computer Science at Sun Yat-sen University. After graduating from university, he entered the Chinese Academy of Sciences for further study of computer expertise. He studied computer parallel processing, which was very advanced at the time, which laid the technical foundation for his later invention of the USB flash drive. Later, Deng Guoshun was recruited by a multimedia company in Singapore to do software development in Singapore. A few years later, he went it alone and established an outsourcing software company. Due to business needs, the company needs to frequently exchange data with customers. At that time, the mainstream storage method was still 3.5-inch floppy disks, which had a capacity of only 1.44MB and were often damaged in tropical climates like Singapore. Deng Guoshun wanted to invent a new mobile storage device to replace the difficult-to-use floppy disks. His good friend Cheng Xiaohua, who was working in Singapore, also thought that the market in this area was huge and worth taking a risk. So the two of them each raised 150,000 yuan and returned to China in 1999 to start a business and established Longco Computer Technology Co., Ltd. After less than a year of hard research and development by the two, a USB flash drive similar to the one we use now was launched. On August 23, 1999, the two applied to the State Trademark Office for the registration of "USB flash drive" as a trademark, and on November 14 of the same year, they applied to the State Intellectual Property Office for invention patents and utility model patents. Netac then began to look for investors, but the process was not smooth. More than 300 domestic institutions had little idea that flash drives would have huge commercial value, and the US investment put forward very harsh conditions. ![]()
[font=P ingFangSC-Regular, STXihei, Verdana, In October 1999, Shenzhen held the first China International High-Tech Achievements Fair. At the exhibition, USB flash drives that did not require a driver and could be hung directly around the neck performed "unique tricks" such as falling from a height of three meters and hot-plugging USB interfaces, which caused a sensation. After the meeting, Shenzhen Municipal Government provided 120,000 yuan of start-up funds and 2.5 million yuan of research funds to support the development of Netac. In March 2000, Netac replicated this success at the CeBIT Electronics Show in Germany. Netac was completely confirmed as the inventor of the world's USB flash drive. Under the historical conditions at that time, Netac did very well. However, we must also be realistic and see that Netac's success was mainly due to the founder's business vision and successful strategy, and technological progress was only a secondary aspect. One of the reasons for Netac's success is their bold vision. They are not the inventors of flash memory technology or USB technology, but they targeted market needs and combined them together. Second, they seized the opportunity of the technology exhibition and dared to promote themselves face to face. Almost at the same time, an Israeli team made almost the same product, but the Israeli team was not good at promoting themselves and was too slow and academic in responding to the market. Third, it has a very valuable awareness of patent layout and has applied for patents in many countries. Because of the short R&D time, limited R&D funds and commercial promotion considerations, Netac uses mature USB channels and directly purchases flash memory chips from abroad. It can be said that Netac's USB flash drive is a model innovation, that is, combining mature technologies to meet market demand. From this perspective, Netac's innovation is quite ordinary now. Business models such as shared bicycles, online express, and online food delivery are all the results of model innovation. BAT and other latecomers are actually not inferior to Netac in terms of technological innovation. Of course, this model innovation ignores the construction of deep supporting technology, which also laid the groundwork for Netac's subsequent obscurity. To innovate, we should not be satisfied with the remaining ears of corn in the fields. The previous article reviewed how Netac made the USB flash drive. It is not difficult to find that the success of this "only significant hardware invention in China" was accidental, which depended on the joint effect of many factors. The first problem was that the competitors were not strong enough. There were many high-capacity and small-volume mobile storage solutions at the same time as the USB flash drive, and their prices and volumes were not inferior to the USB flash drive. This is why investors were not optimistic about Netac's USB flash drive at the beginning. At that time, it was believed that the mainstream mobile storage would be storage sticks similar to SD cards, and micro hard drives were also widely used. However, the characteristics of the interfaces of these products were not uniform, which was not welcomed by motherboard and chassis suppliers. ![]()
（Memory sticks and micro hard disks were once powerful rivals of USB flash drives, with micro hard disks from IBM and Hitachi shown in the figure） The second is that the USB standard-setting organization is too powerful. With a small increase in licensing fees, the speed has increased many times while ensuring compatibility. The bandwidth of mainstream CPUs has also increased exponentially, which allows computers to provide more USB interfaces. Therefore, I think it is very accidental that Netac became the inventor of one of the mainstream computer hardware. And it is not difficult to explain Netac's subsequent decline. The immediate challenge facing Netac is the business model: should it sell patent licenses or products? Netac initially sold mainly products. In 2002, Netac sold 1.38 million flash drives and realized revenue of 250 million yuan. In 2003, it also cooperated with IBM, bundling Netac's flash drives with IBM desktop computers. However, the main factors that play a role in making products are upstream production and downstream markets, both of which Netac does not have. Netac does not produce chips, and cannot pick out the chips with lower speeds to directly make USB flash drives to save costs. Without cost advantages, it is difficult to open up the largest market for USB flash drives - the United States. In fact, Netac's USB flash drives were even more expensive than similar products from Tsinghua Unigroup and Tsinghua Tongfang at the time, and their market share in the domestic market was not high. So Netac began to rely on collecting patent fees and conducting international patent lawsuits to obtain compensation. For a long time, international giants (Kingston, SanDisk, etc.) had to pay patent fees to Netac. Huaqi, Sony, and PNY, who were unwilling to pay patent fees, also lost in the patent war. Among them, the story of suing and eventually winning the lawsuit against PNY, a major American USB flash drive brand, in the United States was talked about for quite a long time. ![]()
(Lanco holds press conference to announce the success of its rights protection in the United States) Patent fees are a reliable way to make money, and it is quite comfortable. Qualcomm even caused a lot of trouble in the 3G era because of its unreasonable patent licensing method. Compared with the role played by USB flash drives in life, the licensing fee is pitifully small. This is mainly due to its close connection with the USB standard. The licensing fee of USB flash drives can't be more expensive than that of USB, right? You should know that the price and size of SD cards, which are also flash memory products, have always been superior to USB flash drives. What Netac can earn is just a small part of the difference between the price of USB flash drives and SD cards + card readers with USB cables. As a small company, Netac has done very well. As for why the formulation of flash memory and USB standards is not in its own hands, it can only be said that this is really not something Netac can do. The only pity is that although Netac later actively developed storage controller chips, it still lost in the competition for solid-state storage controllers. As a result, Netac, which once invented the USB flash drive, finally became unknown. In fact, it is not only Netac. Any company that does not have basic technology in its own hands, even if it combines popular products with extraordinary creativity, will eventually eat up the patents. Although the Japanese invented instant noodles, Japanese companies do not have an advantage in the cheap raw materials, freeze-drying and irradiation technologies for making instant noodles, and ultimately Japanese companies do not have a large share of the instant noodles market. This model innovation is like birds picking up the millet that falls on the fields after the farmers harvest. It can support the dreams of individuals or small companies, but it cannot support the rise of larger companies. The most terrifying thing is that the birds that have stored a tree hole full of millet in late autumn will laugh at the farmers in the spring of the following year: "We have much more millet than you do now." They can't see the rice and noodles in the farmers' warehouses, nor can they see the seeds in the fields, which are the farmers' endless source of millet. China is a big country. We cannot become rich by “picking up grains”, but we can sow seeds and open up new areas on this great land, and allow generations to thrive there. All the past is gone, but we can only look at the heroes of today. China is a big country. We cannot become rich by picking up grains, but we can sow seeds and open up new lands on this great land, and let generations live and thrive there. The past is gone, but the heroes of today are still to be seen. China is a big country. We cannot become rich by picking up grains, but we can sow seeds and open up new lands on this great land, and let generations live and thrive there. The past is gone, but the heroes of today are still to be seen.
| 
提升卡
变色卡
千斤顶
京公网安备 11010802033920号
