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Just a few minutes ago I was standing in the middle of a sea of cardboard boxes. They include power supplies for your XXXXXXX. Or new laptops made by XXXXXXXX. Or other consumer electronics goodies from brands you know and love. Sorry, the owner of the supply chain (Liam Casey founder of PCH) forced me to never tell what brands I saw being shipped from his warehouse in Shenzhen, China because he’d lose tons of business if he pissed off the companies who were paying him to build stuff for you.

The brands don’t matter, though, they would distract you from the real disruption that’s happening here.

In just the last year or so there is a total revolution in manufacturing here and it’s so significant that I spent three days getting a detailed look at PCH (Liam was named Ernst and Young’s Entrepreneur of the Year back in 2007 and the Atlantic Monthly wrote a great article about Liam a few years ago). I have never spent three days studying a single company since leaving Microsoft. Thanks to Phil Baker, who was a product manager at Polaroid and also on Apple’s Newton and just wrote an excellent book on how to get products built introduced us (my friend Buzz Bruggeman introduced me to Phil). Later Tim O’Reilly himself Twittered that I had to meet Liam when I went to China. His reputation is so large that people call him “Mr. China.” That’s funny because he was born in Cork, Ireland, but you can read about his background in the Atlantic article so I won’t waste time about that here. Thanks to everyone who got me to meet Liam, it was an incredible trip.

Here’s a photo of Liam and Phil hanging out in Shenzhen yesterday:

This is Liam, on the phone making yet another deal:

The changes that are happening here have deep impacts on all the computer companies you know and love, but also what we are seeing is the obliteration of the middle-man and distributor. Let’s go back to when I used to sell consumer electronics in the mid-1980s. A product back then would be made in a Chinese factory (or, more likely, a Japanese one). Get shipped over in a pallet to a distributor, who would have to keep huge inventories. Then they would ship out to retail stores using their own shipping companies. Very slow, expensive, and as a retailer I had no visibility into where my order was, or how long it would take to get there.

Go foward to two years ago. You’d buy something from a retailer and they would order it from a supply chain manager and it would be shipped to the retailer, like Amazon, and shipped out to you. You had some visibility into how long that would take, but often not much.

Today? A product goes from factory directly to your front door via FedEx through Liam’s supply chain. How long does that take? Four to five days. All trackable via FedEx and other methods.

What’s different today? The Chinese are now cutting out Amazon and are building Websites that you can buy products from directly and they’ll ship right to your door.

Next? We used Twitter to discuss a new product with people around the world, get feedback on what they want, and the designers, who no longer will be in Europe or America, can work with the customers to build something highly customized and that serves their needs exactly. Then a factory gets fired up and the product gets shipped out — all within days of the Twitter storm.

What?

Yes, you heard me right. You can now Twitter with Liam Casey. He doesn’t quite understand yet how to build a new brand with Twitter, but he’s a quick study and he saw how I was able to talk with people around the world within minutes to come up with a new idea.

Yesterday he showed me a new gadget that will get on blogs like Engadget, Gizmodo, Obsessable, GearLive, Gdgt, CrunchGear. It is mind blowing. The engineering is done all in China. The factories are all in China. The website will be hosted in China, or maybe over on one of the new clouds that Amazon, Microsoft, Google, and Rackspace are now opening up. The brand name will be done in China, via Twitter and FriendFeed. The PR is done in China via Twitter and FriendFeed, or maybe via a blogger tour in San Francisco and New York because that’s where most of the gadget bloggers live (last night CNN’s Rick Sanchez Twittered me, which demonstrates that Twitter has a powerful reach now into mainstream media).

This is total ownership of everything. Total disruption of everyone who used to make money along the supply chain. Retailers? Disrupted. Traders and middlemen and distributors? Disrupted. Web designers and developers? Disrupted.

Are you scared yet?

You should be if you are being disrupted. Now, get over your fears, because there are tons of new jobs in this new world, too, you just need to see how this changes everything and then take advantage of the new opportunities. Where are the high value bits in this whole process?

Not the manufacturing.

The real value and profit is in two places: R&D and coming up with new businesses and new ideas. Take, for instance, the Chumby which was designed at a Tim O’Reilly Foocamp and who’s company still has less than a handful of people. Chumby is the new post disruptive business model. Want a job? This is how to do it. Hang out at Foocamp. Come up with an interesting business. Get funding. Go see PCH. Profit! Well, yes, there are a few details involved there.

Other jobs that’ll open up? Anything involved in building brands. Marketing, PR, blogging/Twittering/FriendFeeding, building web experiences, videos, going to conferences to show off new products to audiences, etc.

That’s it. That’s where our new economy is going to be. And this process will happen to EVERYTHING. Liam was telling me about car factories that’ll make you a car and ship it directly to you in 18 days or less. The American car industry? Well, they figured out how to sell Buick’s and Chevy’s to the Chinese, so if I were working at GM right now I’d be trying to figure out how to take advantage of this new manufacturing capability.

So, to wrap it up, what did I learn?

1. The Chinese no longer are just manufacturers.
2. Those who can build new products and market them will do just fine, but they will face new competition from the Chinese who are doing a ton of R&D now, so are going to come up with their own products and they will figure out how to talk to world-wide markets and will figure out how to build brands (Twitter, blogs, FriendFeed, etc will play into that in a huge way).
3. The days of when Chinese were seen as only copiers/cloners are OVER. I’ve seen some mind blowing stuff developed by the Chinese and we’re just seeing their economic engine sputter to life in the past couple of years.
4. Americans are being fed only the negative stories about China and that is lulling them into complacency. The largest book store in the world is in Shenzhen. The largest city hall I’ve ever seen is here. The largest library I’ve ever been in is here. This is an increasingly educated workforce that’s just starting to get going. Americans need to come to China and see what’s going on because it is absolutely stunning in its scale.
5. The Chinese, over the next 10 years, will turn from the worst polluters (there was a show on 60 Minutes just on Sunday about the ewaste and horrific environmental problems here) to being the leading producer of environmentally-friendly factories, infrastructure, and products. Already Liam’s database of 800 factories includes tons of environmental data and products built by his supply chain will be tracked for amount of energy and carbon dioxide that they used in the manufacture of them.
6. The speed at which things get built here is stunning. 12 years ago I was in the TV tower in Shanghai. It was the only building on that side of the river. Now there’s an entire set of skyscrapers that put New York to shame.

We’re working on a video of Liam’s company that should be up in about two weeks on FastCompany.tv where we’ll go much more in depth about some of the changes. More to come as we move tomorrow to Guangzhou to meet with Chinese bloggers from around the country (China now has the most Internet users of any country and is growing so fast that the stats are difficult to understand).

I’ve been putting photos up on Flickr. We’ve had several videos up on Kyte.tv. And everything we’re doing is getting wrapped up on my FriendFeed account where I’ve been interacting a lot with tons of people. Hope you’re enjoying what we’re seeing.

Also in China right now are a group of bloggers who are on a separate tour than the one we’ve been on. You can follow them on Twitter at China 2.0. It’s interesting how they are discovering the same things about China while being thousands of miles away in the north. This weekend I’ll join the China 2.0 bloggers and hopefully we’ll be able to do some live video where we share what we learned with you.

Just some quick impressions.

1. If you want to compete with your web service and keep copying from happening, do two things: 1. let users upload streaming, live, video. That drives the censors here nuts. 2. Make your system totally open so your users can leave. The Chinese don’t understand that concept. They love cloning walled garden approaches like Facebook. Even that won’t guarantee success here, they have resources for cloning services that you just wouldn’t believe.

2. If you could make face masks sexy you could make a mint here. The pollution is horrendous. Last time I was here, 11 years ago, it was bad, but now it’s worse and people are starting to wear masks to protect their lungs. I think a good marketing campaign would be all you’d need.

3. American brands are doing very well here. There are tons of Buicks here (GM started with Buick because that was a brand that was in the national consciousness here. There are tons of American brands here from Osh-Kosh to McDonalds to Budweiser (they think it’s better beer than their own beer).

4. I met with quite a few geeks here building companies. It was very rare to find an entrepreneur that had been in Shanghai for more than six years. The amount of new people moving in to build businesses is amazing.

5. The censorship here is an annoyance that everyone makes fun of. It’s sort of like having a boss that randomly turns off websites to try to keep you working on what he wants you to work on. But, when you dig deeper you see it really is a protectionist scheme that keeps businesses from outside China from effectively competing. There are several Facebook clones here that are more popular (and more profitable, even) than Facebook itself.

6. I’ll never complain again about California drivers or California smog laws.

7. Chicken feet are more tasty than one might expect.

More to come soon.

Well, at most of the places I’ve been the past few days my blog (and all blogs on the wordpress.com domain) is blocked so I haven’t been able to post, or even read my blog.

But I’ve been posting a ton over on Twitter and on FriendFeed. Both of those sites are totally available in China and are fast. Many other blogs are blocked here in China too. Huffington Post, for instance, isn’t available.

The censorship here is somewhat easy to get around, if you have a proxy server available outside of China.

Anyway, I’m on using one of those servers right now, so am going to do a quick post.

Embedded here is a video of Gary Rieschel of qimingventures.com, the cofounder of Softbank Capital, who shows me a new company he invested in that makes interactive screens in taxis.

More to come when we can sneak through the great firewall of China but in the meantime you should watch my FriendFeed account for more photos, accounts, and videos.

We had a great time in Shanghai, but now are in Shenzhen where I am interviewing “Mr. China” (that’s what an article in the Atlantic called him) Liam Casey (he’s one of the top supply chain managers in the world).

More later.

We’re in San Francisco’s airport right now on our way to Shanghai, China. I’m mostly happy with how the politics came out, but now it’s time to get back to tech. If you unsubscribed or blocked me somewhere, sorry, but I did the same to a few people who were driving me batty.

Now looking at TechMeme we’re back to arguing about the future of Yahoo and all that. Glad to see that, see you when we get into Shanghai.

The headline screams “no one in tech can defend McCain.” So, who wants to take up the other side? Anyone?

I found two. John Dvorak bet me $100 that McCain would win. My producer, Rocky Barbanica, who was a software engineer for decades before switching careers, bet me another $100 that McCain would win.

Over on Twitter and FriendFeed most of the participants there, including me, are for Obama, but there are a few who are staunchly for McCain.

This is your last chance to talk politics for a while! Whew, glad to hit Wednesday and be done with all of this.

This week Microsoft didn’t get much hype for its three major announcements. Certainly it didn’t stay on top of TechMeme as long as, say, if Steve Jobs gets a sniffle. But don’t miss what they did.

1. On day 1 of the PDC they announced Azure, which is a set of cloud services that competes with Amazon’s S3 and Rackspace’s Mosso and will radically change enterprises’ acceptance of cloud services for a whole lot of reasons.

2. On day 2 of the PDC they showed off Windows 7 which is getting high praise from my blogging friends who were lent laptops with it on there (I didn’t get Windows 7 yet).

3. On day 3 of the PDC they showed off new Web-based versions of Microsoft Office that were really nice. Will the new PowerPoint have the collaborative features, of, say, SlideRocket? Will Zoho go out of business? No, and no, but this is a significant move into the Web for a group that’s tried to pretend that the Web didn’t matter that much.

4. They also released new Mac and Mobile versions of Mesh and further explained how that’ll enable new kinds of Internet-connected apps to be built.

Some really great resources on all this:

Microsoft put up videos of every session at the PDC.
Ars Technica covered it well.
Microsoft’s own Channel 9 has a ton of videos.
I have a database of all blogs and good items on FriendFeed for these searches:

• PDC
• Azure
• Windows 7
• Microsoft
  (These all are hand picked items from the live web and have good conversations around tons of items. I watch 3,600 incoming accounts and hand select the most interesting items by clicking like or commenting on them).

So, lets talk about whether Microsoft will be successful in changing the marketplace again. First some things you should remember:

1. Microsoft has an extraordinarly strong sales force.
2. Microsoft is a world-wide company with thousands of evangelists located in almost every local market. When I attended the Converge South conference in North Carolina, Microsoft had an evangelist there to make sure everyone got the latest software they were pitching. Same thing happens in Israel. In China. In Russia. In Dubai. In India. Does Rackspace have that kind of on-the-ground sales muscle? No.
3. Microsoft is one of the few companies with enough cash to ride out the recession in good shape and keep its data centers up-to-date with the latest machines.
4. Microsoft has a huge set of developers who know Visual Studio well and have been building apps with C# and Visual Basic for years now.
5. Microsoft has sales leverage due to its other products. Here’s an imaginary Microsoft salesperson’s pitch: “You want Exchange server? Your company will need to buy that unless you’re a small startup and can consider going with a new approach like Gmail. Well, how about you get it a lot cheaper if you go with our cloud services?” Same for Sharepoint. Or SQL Server.

Translation: It doesn’t matter that Microsoft didn’t get all that much hype this year at the PDC or that it didn’t sell out or that other companies like Amazon, Google, and Rackspace are ahead in the cloud game.

You just saw Ray Ozzie turn the creaky old cruiseliner hard to port and damn, it is impressive.

What do you think? Am I right? Did the old cruiseliner just make a major corner turn? Or is this all stuff that can be ignored?

No, we’re not outsourcing, next Wednesday we’ll be going to China for a sizeable trip to hear from entrepreneurs and venture capitalists there and get some tours around factories. I’m telling you this so we can arrange some fun dinners and other impromptu events. It’s Rocky’s first time there, and I haven’t been to China in 10 years, so it’ll be interesting to see the differences.

November 5. Travel day.
November 6. We arrive in Shanghai in early evening.
November 7. Going to Wuxi to see Seagate’s factory and possibly others there.
November 8. Travel back from Wuxi, we’d like to have a dinner in Shanghai — any ideas where we could do that? I remember having fun at the Peace Hotel, but looking for other ideas.
November 9. Meeting with VC’s and entrepreneurs in Shanghai.
November 10. Travel to Shenzhen.
November 11. In Shenzhen. Meet with Phil Baker and Liam Casey, “Mr. China.”
November 12. In Shenzhen. Anyone want to meet up? Let us know.
November 13. In Shenzhen. There’s a Blogger Dinner planned that evening that I’ll attend.
November 14. Travel to Guangzhou to join up with the also happening China 2.0 blogger tour.
November 15. In Guangzhou for the Chinese Bloggercon.
November 16. In Guangzhou for the Chinese Bloggercon.
November 17. Travel to Hong Kong. Any bloggers want to get together in Hong Kong? We’re looking for a fun dinner or something to do.
November 18. Travel home.

We’re also planning out some trips to factories and other things but will try to fit other things in. Hope to see you there!

We’re taking a bus to the CES show and I needed a way to get Wifi onto the bus and people kept telling me about Autonet, which is a way to turn your car into a wifi hot spot. So today I visited the CEO, Sterling Pratz, and got a demo.

Also car related Ford lent me a Ford Flex this week with Microsoft Sync which is pretty cool. I’ll have a separate video about that on Monday.

Today Electronic Arts laid off a bunch of people. I guess video games aren’t selling well now that we’re all tightening our budgets. But a new startup in Silicon Valley has a better idea: make a better golf game online and give it away for free. It’s called the World Golf Tour and I interviewed the CEO and got a demo (16 minute video).

How is it better? Well, they are visually superior because they use real photography of real golf courses. Plus, since you play in your browser, you are able to do all the collaborative stuff you’d expect to do online.

For those of you who have moved to Silicon Valley in the past 10 years you might have missed that it is built on a set of former orchards. Which is why this startup (Maverick Brands, aka Sunkist Naturals) caught my eye. I thought that maybe this CEO, Mark Shaw, had missed the memo that we do web sites and design iPhones here now and that we outsourced our food production to the Central Valley over the hill.

OK, I’m being a bit of a smartass because I know that there’s lots of food and drink companies that have started here, or near here, like Odwalla which is now owned by Coca Cola and is served in Google’s lobbies.

Anyway, we did a longer HD video series with Mark that’ll air soon, but here’s a short little one I filmed with my FlipCam.

Some things I learned while talking with Mark yesterday.

They are less than a year old and already got their product onto 5,000 grocery store shelves. How? Hiring people who have great reputations in the industry. Having a brand that doesn’t need a lot of advertising to get noticed. Distribution is key to their strategy. They located their factory along Interstate highways in California that get a lot of trucking traffic and can buy partial loads on those trucks and get to market fast, which keeps their product fresher and lets them be much more nimble because they don’t need to get an order for an entire semi truck trailer load.

Because they are a startup they are able to spend more on ingredients because they don’t have the pressure that other companies have to reduce cost. Also, they have a high-tech factory that has no oxygen. Workers basically have to wear space suits to work inside the packing plant. This lets them ensure quality and also keep the product fresher longer (oxygen ruins fruit and causes rapid spoilage, even if refrigerated).

They spent a lot of time thinking about the packaging, bringing in a designer from Europe, where fresh foods are taken more seriously than here. They worked on a rounded bottle that looks unique but still isn’t likely to fall over.

Mark is a great evangelist for his product. He not only is an authority on his marketplace, he keeps versions of his competitor’s products around and can tell you the good and the bad of them. So few CEOs are willing to educate me on the marketplace, which includes their competitors (the good ones do, last week talking to Rackspace employees they could tell you everything that Amazon is doing right, for instance — that made me impressed enough to remember it a week later).

Things that high tech startups would recognize? The crappy low-cost furniture, since most of the employees work on the road he didn’t need lots of nice furniture or overy impressive desks, etc. The wifi router in the corner. The selection of Macs and PCs.

Any other startups in Silicon Valley catch your eye the way this one did?

“But Scoble, is the stuff any good?” It’s passed the Maryam test with flying colors, and I like it. Will I give up Diet Coke for it? Probably, it sure is better for me than the chemical stuff in that or Pepsi.

Ron Conway was one of the investors in Zappos. Facebook. Twitter. Digg. Kyte. And many other companies I use and like. So, when Ron Conway speaks, I listen (and turn on the video camera). Here’s a four-minute clip where he talks about how long the economic downturn will be. Whether or not companies are getting funded. What entrepreneurs should expect.

We’re broadcasting live video on Kyte.tv from both sessions of VentureBeat’s roundtable on the economic impacts on startups of the recession. Recordings will be up too. Every startup executive should listen to this. Sorry, we missed the first few minutes of the first session, but caught the good stuff. There’s a BBC reporter here and I’ll link to her article about the sessions too.

• John Doerr, venture capitalist at Kleiner Perkins (backer of Google, Sun, Amazon and scores of other companies);
• Ram Shriram, the early investor in and founding board member at Google;
• Ron Conway, arguably the most prolific angel investor, who wrote a memo to his companies advising serious financial caution;
• Max Levchin, the Slide founder and PayPal co-founder who helped lead that company through the first IPO after the last bubble popped;
• Nirav Tolia, the Epinions co-founder who was the unnamed subject of Benchmark partner Bill Gurley’s recent memo to Benchmark portfolio companies (Tolia is the one who laid off 70 percent of his staff during the last downturn but who somehow managed to turn a profit for his investors);
• Matt Cohler, the former executive at Facebook (he provided adult supervision there during the early years), who recently joined Benchmark as its latest partner. He worked at McKinsey & Co. during the last downturn.
• Jason Calacanis, the Sequoia-backed founder of Mahalo and writer of a controversial letter predicting doomsday for the vast majority of Web 2.0 start-ups. Shortly afterward, Sequoia stirred the valley by holding a mandatory meeting for the CEOs of its portfolio companies.
• Kittu Kolluri, the partner at the valley’s largest venture firm, New Enterprise Associates, who built and then sold Neoteris during the last downturn, chalking up one the biggest successes of that trying time.

Yesterday Microsoft announced a new set of cloud-based services, called Windows Azure. Today they announced Windows 7. I’m tracking the news here, will have more to say later.

Funny, I couldn’t Qik this video. Why? It was embargoed until tonight. So, I used a Flip camera instead of my Nokia phone.

But Qik is moving fast to support the most handsets out there.

For the people who don’t know what Qik does it lets you broadcast live video from your cell phone.

Anyway, a whole team of Russians made this because it’s hard to get video access on a Blackberry. In the video you meet the team behind Qik.

Want to read up on the moves instead of watch a video? Here are some others who’ve written about this news:

TechCrunch.
VentureBeat.
NewTeeVee.
ArsTechnica.
ReadWriteWeb.
WebWare.

And, of course, you can talk more about Qik on FriendFeed.

I’m tired of being depressed about the economy and the news.

I was reading my feeds and realized I love the Web. I learn so much, have so many cool apps (thanks Google for Google Earth on my iPhone). Am challenged so often (nine days of politics left). Meet so many cool people (last week 25 of them showed up at a Tweetup in Austin that we organized in just a few hours). Get access to so many cool things and experiences (I’m trying to plan our China trip out and am already overwhelmed with people wanting to take Rocky and me on tours and dinners and such).

This week I’m going to try to do something good every day for someone else. Hey, tomorrow Ford is lending me a car. Anyone want a ride somewhere? How about we work an afternoon in the food bank?

What in technology is making you happy? We need more happiness. Talking to executives about the economy is making me grumpy and I’ve learned that the only way out of this funk is to give of myself to causes bigger than myself.

Anyway, thank you to everyone who brings me an interesting item in Google Reader or Twitter or FriendFeed or Techmeme or here. Hopefully someday I’ll get to thank you personally for making my life more interesting and me more informed, more entertained, more connected.

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Ryan Howard, CEO of PracticeFusion.com, showed me how they are transforming doctors offices with its Web service. Half a million doctors are on board already. Saves money and is free for doctors, while competitive systems are tens of thousands of dollars. Interesting look inside his business and how he’ll make money. Interesting for the rest of us to see where our medical records might be stored in the future.

Yesterday I visited Qik.com’s headquarters and they loaded a very early version of their iPhone streaming video app onto my iPhone. Here’s the first video I did with it.

Note that this is NOT a jailbroken iPhone, but they needed to do some magic to build me an app that’ll only run on my iPhone. I don’t know when it’ll be submitted to Apple as an official application. But for now I’m having fun trying it out.

A couple of weeks ago I wrote that one of the ways to build a recession-resistant company is to be in the healthcare market since people will still need their healthcare. Yesterday I ran into the CEO of Healthline, West Shell, and had a 15-minute conversation with him. This is a dramatically big web company. Crunchbase says it has 4.2 million unique visitors a month. So, getting his point of view on anything is interesting, but hearing his view on the economy at this time is even more interesting (he is seeing an effect even on his company, so my advice that healthcare will be recession resistant might not have been that good, although he says they are setup very well to thrive long term).

By the way, this is a video I did on Maryam’s new Flip camera. Nice quality for a low-price camcorder.

He also tells me about the recent Health 2.0 conference, the efforts of Google and Microsoft in the healthcare market, privacy of your health records, among other things, including what he thinks Barack Obama will be able to get done in healthcare if he’s elected President.

Rackspace today announced they are purchasing Jungle Disk and Slice Host in an event that’s going on now.

What does this mean?

Rackspace is competing with Amazon’s Web services. Microsoft is expected to launch other similar services next week at its PDC event. Rackspace will announce several new services both today and over the next few months.

Rackspace’s employees tell me they are making their services open so that their customers can leave and go to other company’s services.

Who is Jungle Disk? They are a service that’s wholly on Amazon’s Web services right now and offer their customers backup and storage. You pay per gigabyte per month to back up your hard drive. They will announce new storage services and will give their customers a choice of using either Rackspace data centers or Amazon’s. Or both. Now you will have access to your data even if Amazon’s servers are unavailable for some reason.

Who is Slice Host? They have thousands of VPS Hosting customers who are mostly web developers who want access to super fast and super reliable cloud services. They compete pretty directly with Amazon’s EC2 services.

More as I live blog the event, keep refreshing to see more over the next hour, or watch the live event.

Earlier this year I got a tour of Rackspace’s new headquarters and met several of its leaders in a video.

DISCLAIMER: Rackspace is one of the sponsors of my blog and FastCompany.tv.

UPDATES: They just announced that Mosso, Rackspace’s cloud services, will be renamed “Cloud Sites.”

We’ll do more live blogging on FriendFeed here because that lets me interact with people a lot faster than my blog does.

There’s a TON of funding events that have gotten announced over the past few days. I’m tracking those here. Today I’m at a Rackspace event where they are announcing some more optimistic news — more on that later but there are a ton of bloggers who’ll be at the event so I’m sure it’ll be all over TechMeme later too. Not to mention that the event will be broadcast on live video too. It’s not all doom and gloom out there, although I’ve been tracking layoffs on that same link too.