The Short Cut w/ Duane Kennedy | Ep. 187

Duane Kennedy—founder of Dai Biao Consulting and cross-cultural growth strategist—joins David and Gary to talk about what it really takes to succeed in the Chinese market. 

With over 16 years helping international businesses scale in Asia, Duane shares hard-earned lessons on trust, translation (in every sense), and why cultural fluency matters more than flashy decks.

They dig into the real costs of getting market entry wrong, the ROI of meaningful partnerships, and how to lead when you're the outsider. 

From executive coaching to 55% returns on high-impact campaigns, this episode is packed with insights for anyone thinking globally

LINKS:

Duane on LinkedIn

___________________________________

Submit Your Questions to:

hello@thebigpixel.net

OR comment on our YouTube videos! - Big Pixel, LLC - YouTube

Our Hosts

David Baxter - CEO of Big Pixel

Gary Voigt - Creative Director at Big Pixel

The Podcast

David Baxter has been designing, building, and advising startups and businesses for over ten years. His passion, knowledge, and brutal honesty have helped dozens of companies get their start.

In Biz/Dev, David and award-winning Creative Director Gary Voigt talk about current events and how they affect the world of startups, entrepreneurship, software development, and culture.

Contact Us

hello@thebigpixel.net

919-275-0646

www.thebigpixel.net

FB | IG | LI | TW | TT : @bigpixelNC

Big Pixel

1772 Heritage Center Dr

Suite 201

Wake Forest, NC 27587

Music by: BLXRR

Transcript

[00:00:02] Duane: This is China? Everywhere I went, this is China? I expected to see people wearing mouth suits and looking sad because they were communists. That's really what I expected and I was not greeted with that at all.

[00:00:18] David: Hi everyone. Welcome to the Biz Dev Podcast, the podcast about developing your business. I'm David Baxter, your host, and I'm joined per usual by Mr. Gary Voit. I joined you today in black. I felt moody. Thank 

[00:00:31] Gary: No, that's, it's a good look. It's the best color. 

[00:00:33] David: Is it the best color? Yeah. All right. Fair enough. More importantly, we are joined today by Dwayne Kennedy, who is the CEO and founder of Die Beal Consult. Hello sir. Welcome to our little show.

[00:00:45] Duane: Hello gentlemen. Thanks for having me.

[00:00:48] David: So you are the expert in China. That's a pretty good title to have nowadays. 

[00:00:54] Duane: yeah I thought it depends. I'm. I got back here in 2023 after the pandemic and it seems like United States just has a different impression take on China. So it's very interesting. So 

some people are awed by it, some people are repulsed by it. I don't know. 

[00:01:13] David: Were you in China during the pandemic? 

[00:01:15] Duane: Yes, I was, 

That's 

[00:01:18] David: mean, they, they took it serious, right? That's its own 

[00:01:20] Gary: I was, yeah, I was gonna say, we got 

[00:01:22] Duane: yeah, that. 

was, they take it very serious. Not only the government, but society as a whole. You don't come across people that are rebelling against any of the policies or anything that was required, which was interesting to me because I was like, in United States, this 

[00:01:42] Gary: No fights in a seven 11 'cause someone's not wearing a mask. 

[00:01:46] Duane: Oh.

No pro, we were wearing masks in China before the pandemic, 

[00:01:51] David: Well, yeah, 

they've been wearing masks. They wear masks a lot anyway. 

But is it, I've always been told it's for air pollution reasons. Is that true or is did they 

wear okay. 

[00:02:00] Duane: it's true. And you were, as a foreigner first getting there, you laugh what are you people doing? Why are you got a mask on? But China has a way of. Creating certain business models that become adapted eventually in the world is amazing. So mask wearing, I saw it years before the pandemic.

I used to laugh at people when I'd see 'em. Like they were on these people and then, wearing a mask became universal, ubiquitous, right? All over the world, people were wearing masks. So China was just like, yeah, we do. 

[00:02:34] Gary: They do it often as a courtesy if anybody's 

[00:02:38] Duane: Yes. If anybody's sick, that is correct.

[00:02:40] David: so let's back up for a second. How did you an American. Come to become an expert on China. You've been doing this for a long time. 

[00:02:50] Duane: I 

have. 

[00:02:51] David: how did that love affair begin? Because that's the only way I could describe it pro, if you've done this that long, is there's, that's the only way to describe it. You must love that country. 

[00:02:58] Gary: And clarify what David means by expert on China, not the history of China or anything like that. You're 

[00:03:05] Duane: No, just youth marketing youth. My, my focus and specialty dealt with the youth, consumer in China, 

[00:03:13] David: Okay. 

[00:03:14] Duane: youth marketing, youth branding youth consumer, long story. I didn't know anything about China before I went. My background was with Wall Street and in Telecom as well. And what made me want to go take a look in China was Warren Buffett.

'cause I believe, and I need to check this, I believe in 96 or 97 or maybe 98, Warren Buffet said, if you are. A decent sized US company and you don't have a China story in 20 years, you'll regret it. And that comment always stuck with me. Wow, why would this guy say that? Because at that point in time, China just wasn't really on the radar screen for many people, at least in the United States.

And it made me curious. So I was living in LA at the time and I had a couple of friends that were Chinese and Taiwanese that were born in LA and subsequently after college got jobs in China and keeping in touch with them. They're like, yeah, come out if you're interested. Come out, take a look.

I think you'll be surprised at what so that started the process visiting a couple of good friends. And that first initial trip, which took place in August of 2004 was mind blowing, 

absolutely mind boarded, 

[00:04:49] David: putting that in in perspective. That was relatively early days in their economic explosion. 

[00:04:56] Duane: correct. I couldn't have time getting to China any better because It had developed enough so it was comfortable for someone like me to come in and experience it, but still there was a lot of growth that. was, left to be done 

and,

[00:05:16] Gary: It Was that 

Was that also during the time where the, like Hong Kong was incorporating more into 

[00:05:22] David: That was 1999. 

[00:05:23] Gary: it comes to this? That's when the deal was 

[00:05:26] Duane: That's when 

[00:05:27] Gary: took a while 

[00:05:28] Duane: the handover you're talking about The handover. 

[00:05:30] Gary: Yeah.

[00:05:31] Duane: handover in 97. At this time when I got to China, Hong Kong was still the big stick, right? Everything still went through Hong Kong, the baking. A lot of the manufacturing was still going on through Hong Kong. Most of the business element of China was Hong Kong back when I got there.

Now, of course it had developed into Shanghai, Beijing, and whatnot, but Hong Kong still was the hub I used. Still wanted to, experience Hong Kong, check out Hong Kong, do business in Hong Kong. My bank accounts were in Hong Kong. Then that of course, shifted during the time that I was in China.

[00:06:14] Gary: Yeah.

that's what I was

[00:06:15] David: As an American, as business owner, right? I mean, this is a business focused podcast 

as entrepreneurship and all of that. What do Americans have wrong about China?

[00:06:33] Duane: From a business perspective, I can answer this question two ways, but from a business perspective, what Americas have wrong about China is feeling what works in America will work in China. Totally different culture. I'll give you an example of a well-known company so resonates with you.

The culture is different. The visuals are different in China, the cadence, the tone, everything is different. So what American companies or foreign companies make the mistake, as I see coming into China, is not studying the market extensively. What they do, is we've got a product that's been successful internationally,

of course the China market wants it. That's the attitude that they come in with, and a lot of times they fail. Because what resonates with Americans or Europeans, does not resonate in China.

[00:07:33] Duane: So the first mistake that I see companies make is not understanding who their marketing to or what their product is.

They need to adjust and how to adjust it. They just don't take that seriously. There's an arrogance coming into the market. That's number one me. Go ahead.

[00:07:54] David: Well, so I, I'm on that point. So I'm thinking of Coca-Cola, 

right? Coca-Cola is one of those companies, probably one of the very few in the, in the world that you can go anywhere in the world and you can buy a Coke. 

What is it that they're doing right, that allow, I mean, it's still Coke. It's the same product.

I don't think that they have Chinese Coke. Maybe I'm wrong, but I mean, for all I understand, it's always Coke. Um, they might have, you know, subsidiaries that are different things, but there's Coke, right? It how did, did they, as an example, did they just market it better and say, Hey, we understand the Chinese market.

Clearly they're successful, we understand the Chinese market. We're gonna figure out a way to sell this same beverage to a new market. Or did they have to adjust the beverage to the market? 

[00:08:39] Duane: No, Coca-Cola didn't adjust the beverage to the market. What they did not do was switch to fructose. When Coca-Cola switched over from real sugar to fructose, because Coca-Cola is a lot sweeter in Shauna than it is here in the us, 

[00:08:58] David: They're like, it's like Mexican Coke is it's full sugar. Is that, 

I call it Mexican coke 'cause I'm Texan. That's, sorry. That's what we call it there. But it's full sugar. Yeah, 

[00:09:08] Duane: Yes. Yes. Correct. What I think Coca-Cola. Coca-Cola is like unique. It's hard to utilize that as an example 

[00:09:17] David: that's fair. 

[00:09:18] Duane: because they got in early. Yeah, they got in the early 19 hundreds when nobody really knew what marketing was about. It's hard to say. You've gotta use another example for, success in China in terms of a brand, a large international brand like Coca-Cola, Coco, Coca-Cola's, a one-off man, that's,

[00:09:41] David: That's fair. 

[00:09:42] Duane: I was gonna give you an example of a brand that failed. 

[00:09:45] David: Hey, that works too. 

[00:09:46] Duane: I put this international I, I hope I such a ous time now. I hope I don't get sued, but I'll give you an example. Mattel. Mattel is pretty much a global brand. 

The Barbie doll, it's all over the world, and I do believe that a lot of the Mattel product is manufacturing China.

So Mattel decided to open a flagship store in Shanghai, and this thing was incredible. It was five stories. It had, a large cafe. It had, of course retail, it had a museum or history of the, the Barbie doll. It had a rooftop bar dining area. It was incredible. Mattel pulled a lot of money in this flags flagship store.

Very expensive. Had a grand opening that I attended and you felt, you are just looking at, okay, Mattel, they've got this doll, they're doing, this huge amount of marketing with this building. Of course it'll be successful flopped. That's door was closed within two

[00:10:57] David: So what was it that they did wrong? Was it they just didn't want Barbie at all? Did they just, what was it 

[00:11:07] Duane: I think that to me, I think that Mattel came in saying, we're Mattel, so we got a product successful internationally. Of course, you're gonna want a cha. You are gonna want this product shot. We know that you want it. So that was an arrogance that. They didn't do their homework on how to adjust their product, their messaging, their visuals for the China market.

There had to be an adjustment there. Now, what exactly that would be? I'm not sure. I don't know if you would build, I don't think it would be cost effective to build a China Barbie doll for the China market. I don't think that was the way to approach it, but the way to approach it was.

Better understanding how this Barbie doll would resonate in the China market from a retail perspective, as well as a perspective of building a flagship store that tourist coming in are gonna want to go to, as well as the local market. And it was just, is mind barking to see this, to fail so quickly. And I'll say two years of the stretch.

I think it lasted maybe 14 months, to be quite 

honest with you. Yeah,

 no, I just think that when I got there, like I said, I got there since oh four and I noticed whether it's American companies that came and were not successful, or Europeans, European firms the problem is with was not. Effectively understanding the local market well enough, not doing that homework. They always relied on the strength of their product or their reputation in the international world, and felt that was enough to come in and launch.

And they would we bring it here, you'll come And that's not what happened.

[00:13:07] David: So going back to you and dive you out, 

[00:13:11] Duane: Yeah. 

[00:13:11] David: more insight as to what you specifically do. I, from what I'm understanding is I am a, I'm assuming an American company. If I have a product, I want to target Chinese youth. You're my guy. Is that it? 

[00:13:26] Duane: Yeah. Quite frankly I came, again, I came during a period where China was coming into this. Incredible growth period. So there were lots of spaces and blanks in how to do things in terms of marketing, brand positioning, product positioning, right? All those things weren't fully baked in into China yet.

So when I first went there and looked around first of all, I was blown away because China was very international. I did not expect. The infrastructure to be what it was, the roads, the bridges, that were building fast trains and metro. I wasn't expecting all that. I kept going around saying the same stupid question over again.

This is China? Everywhere I went, this is China? I expected to see people wearing mouth suits and looking sad because they were communists. That's really what I expected and I was not greeted with that at all. 

[00:14:24] David: That reminds me when I was growing up in Texas a lot of the big. Uh, CEOs and, and companies were moving down. JC Penney's when I was a kid, moved down to 

North Dallas and a lot of the people from New York thought we all were rode horses everywhere 

in, in Dallas, like a massive city. So but now in, in China, is that true everywhere or is that just the major cities?

From what I, in my ignorance, I see China as a few or several, I'm not sure how many massive cities, and then. Large swaths of rural relative poverty. Is that not accurate? Is that an incorrect view? 

[00:15:02] Duane: Best accurate to a limited grade. 

[00:15:06] David: Okay. 

[00:15:06] Duane: it was a lot more accurate when I first got there, but it's not now. Tell me what you feel the population of New York City is.

[00:15:14] David: Oh, I, it's like 9 million and. 

[00:15:17] Duane: Okay. Eight 9 million. That's a tier two slash tier three city in 

[00:15:23] David: Yeah I've heard that. 

What is it? Is it Shanghai is like 25 million. 

[00:15:27] Duane: No, sir. Shanghai is 35 million.

[00:15:30] David: Whew. Now, okay, so put that in perspective, how, and New York is unusual in that it physically is pretty small, right? It's a 

ton of people stacked on top of each other. Are the Chinese cities similar to that where there's tons of people stacked or are they geographically 

large cities. 

[00:15:49] Duane: they're lar. They're geographically large cities. There's space, there's room. Yeah, there's sprawl. Trust me, 

there's a lot of 

[00:15:57] David: now. Is it, is it, like a Amer now? It's hard to say 'cause we don't have any, even no city is close to that in America. In our world, we have very commonly the hub and spoke right of our cities, right? Big inner city, massive sprawl. to smaller suburbs. Now, obviously with the numbers like that, but do they follow something similar with just, I mean the suburbs would still be in the millions, but do they have that concept and it's just 

the sprawl is just in forever? 

[00:16:25] Duane: No. You have a city center. Typically with your Chinese cities, you have a hub, 

right? Where your banking now your tech companies, your insurance companies where your, the business center is, you have that, and then the sprawl really leads out to residential. But you also have businesses out there as well.

You have buildings and business and commerce out that way. It's, I don't know any, I've never seen anything else like it.

[00:17:07] AD: BigPixel builds world class custom software and amazing apps. Our team of pros puts passion into every one of our projects. Our design infused development leans heavily on delivering a great experience for our clients and their clients. From startups to enterprises, we can help craft your ideas into real world products that help your business do better business. 

[00:17:35] David: what would you say if I was 

one of those?

Companies relatively, and probably not

small company, not international in that case. But let's say I'm a smaller 

side and I'm trying to 

get into China, into that

youth market specifically, 

would be your advice?

[00:17:49] Duane: Know your customer before you make a move. Number one, you have to do that. You've got to do your study. When I first came to China and looked around, I came out to China twice in oh four. Um, the first time I was there, I stayed two and a half weeks. The second time I went to China, I stayed two months. Then I was in first quarter of oh five and I stayed three just doing ground market research, ground, you know, on the ground looking around, having meetings with brands, uh, trying to understand.

Um, and I knew those trips weren't enough. So when I decided, yeah, I really want to do something in China, the first thing I thought about was. Who will my client be? Who am I trying to sell and I saw that the youth market, I felt was underserved because what was China was going through a process of becoming or building a. Middle class When I got there, and this was still somewhat very you know, because in China, before you had the Havenots And the Havenots, then it began to shift. you began to have wealthy and then the havenots, and there wasn't really a. Middle the middle class was beginning, was burgeoning just a bit.

And then you have these kids that are like, okay, well we've got access to disposable income now, you know, allowance from our parents. Our parents give us money, but there's really nobody developing anything for us. And that's where I saw my Opportunity Service app. So to answer your question. I figured, I need to start 

having not Sure. um, but I think it's something that I can develop a business around, so let me make sure I'm correct about that. So I did several focus group studies before I even created the business and went into the marketplace. think that made all the difference because I thought, I was like, okay, I, now versus me bringing a product or a widget it, isn't this great?

Don't you, don't you want 

this? Nah, I didn't, I didn't do it that way. 

[00:20:01] David: but you're the shortcut, right? If I'm the new, the new brand trying to get over to China for the first time, I hire you as the shortcut. 

'cause it's 

[00:20:09] Duane: I'm the shortcut now. 

[00:20:10] David: Now. Sure. Yeah. yeah. Yeah.

[00:20:11] Duane: I there. I'm the shortcut now because why? '

I went through the trial and tribulation and trying to get it right. I mean, I failed right? I into the China market. I still had bumps and bruises, and based on that, I'm the shortcut now because of what I had to go through and the lessons that I had to learn in which I can impart upon you. That's the difference. Yes, that's it. It took fashion. Yes, of course, fashion, music, and entertainment. Not as much because those areas. heavily government. Again, something that I didn't realize when I was coming there. Um, when I first came to China. my first launch of a company was, was a media company Ion Media, um, which dealt with happened was I was able to convince several of the major record us major record companies to give me access to sell into China, on a online platform. Um, and in support of that, I was in touch with recording artists that were interested in coming to China creating concerts and things of that nature to help support what I was doing as give visibility to who they their brand, their music, their product, everything.

I'm like, I'm pitching, I can get you access to China. China does operate like the us You know, China has a ministry of culture that ministry of culture, uh, can either green light or not green light a concert or, or that artist that you want to position for that concert. Western influences.

So, on the profanity, background as they have a criminal history.

I mean, by being you know? 

Oh, okay. Rude. Mm-hmm. um, yeah, I have what's called, uh, um, for example. The first thing I wanna determine is, okay, what is your product? Okay. Um, if it's not anything incendiary, it's not porn or something like that, then I feel that if it's anything around fashion, um, if it's anything around food those things are relatively safe.

Now it's just about how to position your park, your product. Accurate accurately marketplace. Even, um, something like, um, when Bitcoin took off in China, was tenuous because the Chinese government.

wasn't so allowing that. But I had a good sense of depending on the, what the product was, sense if it legally without lot of government.

Issues could come I was, I was, I had a sense of that from being on the ground well enough. So again, your question is, if you with a product, um, off hand, okay, I can, that's workable. You, you wanna do t-shirts, you wanna do tennis shoes, even though you got a lot of competition, you wanna bring a toy, um, that's workable.

And so from that um, I would look at. Second thing I would look at is how do you want your, your corporate makeup to be or your, your background? Because China, you know, when you, you come in, you have to determine are you going to be a JV with a Chinese company are you going to be able to be able to be what's called a wfi, a wholly foreign enterprise.

Where you have a hundred IP And it's you, and you don't have to share your information within a other company. I mean, I saw so many foreign companies which the way to do it. But they would have issues with their local partner, the JV partner, because that partner has access to their product. And that's the scary thing in China because you don't know what they're doing or it creates headaches or. They're gonna take your product and market another Uh, lots of horror stories around that So I would determine, you know, I would say, oh, you're gonna want to go the wolfie route, you know, wholly on for an Enter to figure out could work with. That's thing. really going would allow me immediately particular client that wants to come into the China market. Yeah, coming in in China, uh, yeah, I can, um, number one. Understand it's, yeah. No, no, no. I would this, this is, this is transferrable in China, outside of China.

[00:26:13] Duane: Know your customer, KYC. Inside and out. That means not focus on your product, know who you're trying to sell your product to. That's what's most important. As I said, foreign companies

seem to have an arrogance. We've got this great product. China is a third world country, which is really not, and the market they're gonna go nuts for it. So know your customer, number one. Number two, patience. It takes time to build relationships in a foreign market.

It takes time to not only build the relationships, but it takes time to understand the tone, the cadence, the feel of the local market. It's gonna be completely different from where you're coming from. Then number three is be ready to reinvent yourself.

Business models change overnight in China. What was popular last week is out this week. So you would see companies come in and have short term success do really well, and then the model changes so quickly.

[00:27:33] Duane: And that company wasn't keeping up with where the trend lines were going, then they were just out. and that's, that's a Guys, I tell you, I, I'm sorry if I'm a little many stories inside of me about China, around business, around about just everything. I mean, it's, I'm like, 

[00:27:55] David: Yeah, 

[00:27:55] Duane: yeah, prompt me and then something comes out. They can reach me on LinkedIn. And all my information is there. I usually do a post weekly, it's business, whether it's culture, whether it's I try to stay away from politics because I do want to be able to return China with no not 'cause or get back to the United States.

Now, I mean, God, my goodness, both, both LinkedIn is a way great way to.

find me. I also have a substack and I'm going to be coming out with my own podcast, you know, dealing with, you know, entrepreneurial expert, pulling the curtains back on shadow and myself sharing stories very similar to what you guys are talking about, but a little different.

More from my POV of life in China. being a foreigner, celebrity. I was. Always invited to VIP events. I, I, think in one of my LinkedIn posts I talk about, I went to the first NBA basketball game in China, Shanghai. gone all high level shows, all the concerts I've gone to.

Like I said, I was always in invited grand openings because what. China likes to do is show that they are becoming internationalized, so they'll want certain foreigners in the audience, you know, when it's big events. So I was able to take, take advantage of that being that I got to China, you know, so early and I came, you know, Shanghai, I'm telling you it's amazing city, and I came in oh four.

I came really at the very beginning of this Renaissance or golden era. Coming through now and of foreigners came because then they flooded or China. I would say right around oh eight, you have foreigners coming in from everywhere. riff wrap. They wanted to keep the good foreigners that were there working, or entrepreneurs or backpacking and hanging around, they were like, okay, we gotta figure out how to get you outta here before World Expo, which was 2010. Okay. Alright Stuart, please do, I hope to talk with you guys again. There's a lot left on lot. Lot of meat on the bone left to discuss. 

[00:30:25] David: I appreciate your time, Dwayne. This has been a lot

[00:30:27] Duane: Yeah, it has. I enjoyed it. Truly, I. 

[00:30:30] David: On that note, we are out. We'll be back next week. Thank you everybody.