Another huge difference is the importance Chinese employees attach to their job titles and their promotions. Frequent promotions often count for more in China than salaries, and it's a full-time job simply managing the process of stepping people up, and down, the ladder. That's why one of Jin's first hires in China was a human resources manager. Salespeople are often eligible for promotion every three to six months. Yet if they don't meet their sales goals for three months in a row, they face demotion, a common practice in many Chinese industries. But what Chinese workers seem to care most about is having an opportunity to hone their skills. "In each interview, the first question is about your training system," says HR manager Karen Huang. "Then, 'Can I have a career path?' Then, salary." On all these criteria, MFG.com scores highly, says Huang, 32, whose career has already spanned stints with Chinese units of American, German, and Taiwanese companies. Even so, she urges Free to offer even more training and more slots for promotion, and he quickly agrees. MFG.com's Atlanta and Geneva offices, Free says, tend to think of the Chinese employees as less sophisticated, even a bit primitive. In fact, some Chinese managers are head and shoulders above their U.S. counterparts. "We've been looking for a year for a person like Karen in the States," he says.
During each of his visits to China, Free meets individually with his managers -- to glean what's happening, ensure that Jin is doing a good job, make sure no one is about to quit, and, mostly, to applaud everyone he sees. To the new sales manager: "You're a rock star. We're very happy to have you." To a new customer service rep: "I'm very proud to see you and to meet you here." To a quality-assurance specialist about whom Free barely knows a thing: "I was hearing how good you are."
Free appears genuine and sincere. But all the backslapping also serves a purpose. Free wants to keep his Chinese employees pumped up, because MFG.com is up against some stiff competition.
First and foremost is the sizzling hot and much larger Alibaba.com. But Alibaba is a more basic matchmaker that puts buyers and sellers together, leaving them to negotiate offline. Free is positioning MFG.com as a full-service provider, both for the mostly American and European manufacturers that use his service and for the contractors, which increasingly are Chinese. Unlike Alibaba.com, for example, MFG.com keeps records of all the online negotiations and design drawings between the various parties and even coaches Chinese and American companies in how best to deal with one another. Alibaba may be bigger, but Free will tell you that MFG.com goes deeper. And plenty of companies are listening. "This is an amazing, amazing market -- you can feel the energy in Shanghai and all over China," he says. "If there's one market in the world that I don't want to screw up, it's China."
Shanghai is a long way from Tyrone, Georgia, where Free grew up. Tyrone is 25 miles southwest of Atlanta on I-85, also known in some parts as the Alan Jackson Highway, for the country singer. Though it's now considered part of the Atlanta metro area, Tyrone was a town of 160 when Free was a boy. As a small-town kid, he helped haul trash for his father's construction company. Free's dad took only one three-day vacation a year, usually taking the family to Florida. While growing up, Free never traveled outside those two states.
By the time he was 20, it was looking as if he never would. He dropped out of college after six weeks. The math courses threw too much homework at him too quickly, he says, and he was embarrassed to be taking remedial English. He enrolled at Griffin Technical College to take a one-year machine shop course, and in 1982, he got a job as a machinist. Three months later, just after his 20th birthday, he married his high school girlfriend. (They later divorced.) His initial job was running a stamping machine that pressed out the metal window lining for Ford Aerostar vans. He pressed a button six to 10 times a minute, 360 to 600 times an hour, 10 hours Monday through Friday and eight hours on Saturday. One day, his boss asked who on the floor knew about computer-aided design and manufacturing, otherwise known as CAD/CAM systems. Free's hand shot up. In fact, he didn't know a thing about them, but he did know he was meant for more than life on the plant floor.
After studying some technical manuals, Free, who has a knack for all things mechanical, started working on digitizing his employer's manufacturing systems. In 1988, Northwest Airlines (NYSE:NWA) poached him to work on its CAD/CAM manufacturing projects. He rose to become a fleet manager there, then the director of technical operations. In 1998, he left the airline to start a company that distributes CAD/CAM systems, 3Datum. He soon noticed all his clients were complaining about how difficult it was to find suppliers. That's when he hit on the idea for MFG.com, which he started in 2000, after selling 3Datum for $1.2 million. He bootstrapped the company, pouring all his energy into it. "When you have everything tied up in the business, you focus like a freaking laser," he says. In 2005, when a publicly traded French software company came sniffing, Free agreed to be acquired for about $25 million.
But three weeks before the deal was set to close, Free received a call from Seattle. Jeff Bezos, the founder of Amazon.com, wanted to meet. Bezos had heard about MFG.com from engineers at his rocket start-up, Blue Origin, which used the service to source components. Free flew to Amazon's headquarters, where Bezos argued that if MFG.com was acquired, it would never live up to its potential. Instead, Bezos offered to become an investor himself. Free backed out of his agreement with the French, and Bezos's personal investment company, Bezos Expeditions, bought a minority stake for about $14 million -- which included $2.1 million in cash for Free. In January of this year, MFG.com's prospects got a boost when a pair of Fidelity VC funds kicked in $25 million. Free sold a big chunk of stock with that round, and his stake dropped from 51.2 percent to about 24 percent. About 20 percent of MFG.com's shares have been awarded to employees in the form of stock options.
