Founder @cavelahq • AI-enabled global manufacturing for brands
San Francisco, CA
Joined October 2022
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DNA testing is also used in supply chains to help enforce ethical labor standards.
Many brands and retailers we work with won’t touch cotton from Xinjiang and Uzbekistan over forced labor concerns.
This is a good question; I am currently working on an article on this very topic.
My general feeling is that we can't improve worker conditions by turning every consumer into a supply chain detective.
Instead, we have to empower workers to advocate for themselves. This means:
— Electing politicians who are pro-labor. The US Senate is currently reviewing The Fabric ACT, which can help garment workers by eliminating piece-rate system.
— Supporting or joining pro-labor organizations (whether unions or NGOs). These organizations help workers fight back against some of the worst abuses.
— Advocating on behalf of immigrants, as the garment industry has always been staffed by first-generation immigrants, going back to the 19th century. Garment workers shouldn't fear deportation if they report abuse.
If you find out that a company has been associated with labor abuse, it's a good idea to let them know you won't be purchasing their products. Believe it or not, companies monitor for these comments. However, meaningful change has to be structural, not through consumer advocacy alone.
I’ve largely stopped discussing Western reindustrialization with people who haven’t spent meaningful time in China.
Partly because preconceived notions about China can make it difficult to acknowledge its achievements without the conversation turning into accusations of CCP shilling.
But also partly because it’s difficult to have a productive conversation about building something without a shared understanding of what a functioning version looks like.
It’s like discussing how to build the next Silicon Valley with someone who has never seen a modern tech company and whose frame of reference is a handful of local IT firms and the fax machine.
I think Molson is directionally correct here.
Unfortunately, it’s difficult to convey the countless factors, both obvious and invisible, that have compounded over decades to result in China’s dominance of global manufacturing.
This is why people who have spent meaningful time in China often resort to anecdotes like the one Molson shared.
They’re attempts to turn something that is much larger and more complex into something that can be communicated simply.
The significance of these stories is immediately apparent to anyone who has spent time on the ground in China, but can be easily dismissed by those who haven’t.
There is no substitute for spending years in China working with manufacturers, understanding the nuances of the culture, and the broader supply chain ecosystem that has developed around them.
You’ll hear people come along and say:
“But Americans are ambitious!”
To which anyone who understands China will ask:
“Ok but are American businesses willing to collapse their margins to zero and lose money for 20 years to gain market share like the Chinese? Is the average American worker eager to put in 6-day workweeks and 12-hour days?” Etc.
To be clear:
I think there is a path to Western reindustrialization.
But just as manufacturing a garment isn’t simply about the factory itself, but the entire supply chain ecosystem surrounding it, reindustrialization will require a profound, broader technological, economic, governmental, and even cultural transformation.
The scale of that undertaking should not be underestimated.
Reindustrialization isn’t buying a $320 made in the USA sweater that can be bought for less than $10 in multiple other countries.
It’s not about getting a billion dollar valuation on your startup that has never built a real product that has a multi-million dollar contract from a government that spent 2 trillion more than it took in this year.
It’s not about looking cool** and it’s not about getting asset-price rich on mystery money.
Reindustrialization is about 4 things.
Until we have those 4, it ain’t going to happen.
Let me tell you a short story.
We had a supplier in China with a coal boiler.
The coal boiler belched dark soot into the air.
One day the government came in and said “you can’t use your coal boiler anymore. Replace it with a natural gas one; the coal is dirtying up the air.”
The factory would have to shut down for months.
No money for the boss.
No work for the employees.
And no orders for me.
“How long will the orders be delayed?”
“They won’t.”
“And how will you do that?”
“Don’t worry about it.”
The orders shipped on time.
How?
The factory switched to working nights.
The black smoke from the coal boiler couldn’t be seen in the dark night sky.
At the same time they installed a new natural gas boiler during the day.
By the way, this boiler was bigger than two semi trailer trucks side by side, literally it is beyond most people’s comprehension.
And that’s the point.
Reindustrialization is beyond peoples’ comprehension in America.
1. You need to have a government that does the right thing
2. You need to have factory ownership that is hungry for business
3. You need to have workers who are willing to make big sacrifices
4. And then everyone around them needs to be able tolerate the black smoke from the coal boiler
We don’t have any of these things today.
Will that change?
Maybe, but overpriced sweaters and billion dollar valuations on vaporware is not how we’re going to get there.
Great list for first-timers in China.
I'd also add: avoid politics. Taiwan, Xinjiang, Tibet, the Party, etc.
I see a lot of Americans jump into these topics quickly, even with good intentions. It won't do you any favors, and you won't get a real answer anyway.
Chinese factories work 12 hour days, 6 days a week.
This factory owner explains how her factory runs from 8am-8:30pm, Monday-Saturday.
I tell her Americans say Chinese factories exploit their workers.
She tells me about one worker who asked why they don’t work 7 days a week.
About how workers will leave for another factory if their schedules aren’t packed.
“If you don’t work overtime, it means your business is not good.”
This is consistent with what we’ve heard from most factories we speak to in China.
(All conversations shared with permission)
In Huangzhou today.
Recurring theme is Chinese factory owners saying young people don’t want to work.
A common trope, but looking around you do notice factory workers are mostly older.
“I grew up poor. My parents told me I needed to work hard to make money. But the young people today grew up with money, so they don’t care about working.”
I ask the factory owner what’s the solution.
“Automating production so we don’t have to rely on workers.”
True enough, the factory I’m in has already automated >70% of his production.
10 machines doing the work of 200+ people.
This was my day in Shenzhen today.
You find what you look for.
modern travel is increasingly flying 10 hours to experience a slightly different version of the same globally optimized lifestyle.
same third wave coffee. same natural wine bar. same brutalist menu. same sourdough. same beige hotel. same tasteful ceramics. same instagram lighting.
what a ridiculous convergence.
All business is arbitrage.
Businesses exist by exploiting a gap: information, technology, geography, access, distribution.
These gaps are temporary. Once a gap becomes obvious, competition rushes in and closes it.
Businesses survive by converting that initial arbitrage into something harder to replicate: scale, brand, network effects, proprietary data, customer relationships.
The problem is that technology has shortened the window in which to do that.
The internet shortened it first by making information abundant and communication instant. This actually favoured entrepreneurship: opportunities spread faster, bringing more competition, but execution remained difficult.
That friction gave businesses time to turn an initial advantage into something durable.
It created conditions for many different solutions to the same problem. Different approaches could coexist, develop, and compete.
But now AI removes that friction. Execution is faster and cheaper, and arbitrages get competed away almost as quickly as they emerge.
And even if you manage to outcompete everyone, frontier models can absorb the business you’ve built on top of them, calling into question the very idea of building for durability.
It’s tempting to see Gen Z entrepreneurship as fickle, opportunistic, or unserious, but it seems like a very rational adaptation to a fundamentally different business landscape.
Gen Z entrepreneurship increasingly looks like running a portfolio of asymmetric coups rather than betting everything on one serious, long-term project.
One month it’s an AI wrapper. Then a TikTok Shop product, a viral food trend, or buying scarce inventory during a shortage and renting it back at triple the price. In Europe you can also trade the state: find the latest subsidy, regulation or public failure and put yourself in the middle.
Build the website over a weekend, extract as much as possible while the window is open, then abandon it as soon as the trade stops working.
It’s basically entrepreneurial day trading. Low commitment, limited downside, permanent optionality and a small chance one bet makes you rich.
And honestly, it’s rational. Why spend ten years committing to one difficult company when AI lets you place ten cheap bets per year and one winning bet can make you rich?
Tech has entered the “third wave” of merch.
The first wave was swag: logo slapped on a shirt, pen, or lanyard.
The problem was that nobody wanted these items. They would go straight to landfill.
The second wave was a solution to this: corporate merch. Still a company logo but now on a quality product, like a Patagonia vest or a Stanley mug.
This solved the disposable swag problem, but there were two issues:
1. Everyone could make the same item, so it didn’t stand out.
2. The corporate logo often cheapened the product.
Enter the third wave: retail-grade merch.
A Claude thinking hat. A Notion chore coat.
Unique custom products that are more retail product than promotional product. Often following the streetwear limited drop model.
Products desirable enough to stand on their own in a storefront.
The new merch model is no longer something you give away, but something people would buy.
The issue isn’t that these pursuits aren’t worthwhile.
It’s that they’re often just poorly disguised escapism wrapped up in the allure of prestige and accomplishment.
They are attractive because they substitute a messy, ambiguous problem with a bounded, legible one.
The answer always lies in the work you are avoiding.
America is paying the price for outsourcing manufacturing to China.
Moving production overseas offered a short-term gain at an enormous long-term cost.
The problem is you cannot divorce design from manufacturing.
Proficiency in manufacturing drives proficiency in design.
You iterate, you try things that work, things that don’t. In the process you figure out how to improve.
This is how China became the leader in everything from EVs to drones.
Without exercising the manufacturing muscle, the design muscle, which drives innovation, atrophies.
The US is right to reindustrialise.
Own your production, own your destiny.
