Legend Silicon, once a red-hot China-U.S. startup focused on DTV chips, closed its U.S. operation in late 2011. What went wrong and what did we learn?
MOUNTAIN VIEW, Calif. Ė Last week I had a chance to sit down with Raj Karamchedu, author of a book entitled, "The Disconnect Patterns: Notes for Managing a U.S.-China High Technology Company."
After reviewing the book earlier this month, I was eager for a face-to-face meeting with the author--for two reasons. First, I wanted to learn more about whatever happened to Legend Silicon (Karamcheduís last employer). Second, I wanted to hear more about Karamcheduís personal experience working at Legend Silicon. My thinking was that Karamchedu left a lot unsaid in his book.
I understood that nobody wants to burn bridges with a former employer. So, I didnít exactly expect a tell-all story. But our conversation revealed a few clues about what might have led to the closure of Legend Silicon in the United States, and subsequently a few things anyone working in a China-U.S. company ought to know.
Legend Silicon, focused on digital TV chips, was once a red-hot start-up based in Fremont, Calif. It appeared to have come up with all the right ingredients--including the Tsinghua University pedigree (even a Tsinghua professor) of its founders, along with on-the-ground intelligence, procedural knowledge and close ties with Chinese government agencies, and a U.S. management team.
Legend Silicon, deeply involved in the development of digital TV standards in China, also looked like it was emerging at the right time in the right place, since China was getting ready for the Beijing Olympics in 2008. What better timing could anyone ask for showcasing digital TV technology?
In spring 2007, Intel Capital, the investment arm of chipmaker Intel Corp., led a series D private equity investment round worth up to $40 million in Legend Silicon.
Legend Silicon's booth at CCBN (China Content Broadcasting Network) exhibition in 2011.
Fast forward to the end of 2011, Legend Silicon decided to close its U.S. headquarters, with its U.S. management team laying off everyone in the U.S. including themselves. Legend Siliconís Chinese subsidiary still exists to serve existing customers, but there appears to be no new product development going on. Legend Siliconís website still exists both in English and Chinese, but the page that lists its management team is no longer available.
So where did Legend Silicon go wrong, and what lessons did Karamchedu learn from having been COO?