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?
customer-base is truly global--including those in the U.S., Europe,
Japan and China, pricing becomes one of the hardest issues with which
your China-U.S. company must wrestle.
In theory, you can’t have
two separate prices for the same chip, and yet, Chinese OEMs/ODMs are
clearly in need of a different pricing model than what’s applied in the
West. While it’s customary for a U.S. chip company to reduce the price
for chips purchased in volume, the price often goes up in China if you
buy in volume. Meanwhile, Chinese OEMs/ODMs almost expect to get their
hands on a new chip at a very low cost--initially.
mediate that gap remains a huge challenge-- turning into a tug of war
between a U.S. team who wants to decide price according to a set of
familiar rules and a China team that sees a whole different demand from
its local customers.
4. Knowing if your chip is actually getting designed in
isn’t particularly specific to Chinese OEMs (I've heard similar stories
about Korean giants like Samsung), but, generally speaking, you’re never
sure if your chip (which you thought was a design win) is actually
designed into a system by your customers. More often than not, you’re
working for OEMs/ODMs along with a number of other competing teams from
your rival chip companies. Despite a lot of handholding with your
potential customer, you’re never sure your chip will eventually get
designed into their systems. This practice--maybe necessary from an OEM
viewpoint--could suck up a lot of your resources with no results after
5. Expect no feedback from your China customers/colleagues
of the most frustrating things for anyone working for a U.S.-China
company is that you rarely get any feedback from your China colleagues
or customers. Often, Chinese customers just don’t know what they want.
Perhaps more striking is that your customers or colleagues often share a
fear of creating a new market. They’d rather go after a market that’s
already proven or that’s getting visibly hot.
So, while they
might quietly decide to hang their hat on novelty features to the next
product cycle, they neglect to communicate their decisions or share
their desires with you. You end up with an enigma designed into a
DrQuine, I like your definition of "innovation." That's very clear.
In defense of Mr. Karamchedu, however, I would like to point out that it wasn't Karamchedu but me who wrote the sentence on innovation. I wanted to illustrate how the original definition of "innovation" has gotten dilluted so much (mostly by the marketing machines) to the point that almost everyone today, even in the U.S., uses the word "innovation" very lightly.
And the author Karamchedu's point was that Chinese are now taking advantage of the very dilluted meaning of "innovation" and they are now saying that they, too, are innovating...
Karamchedu's understanding of "innovation" is quite different from mine. I understand "invention" to be the creation of a new idea (a patent) but "innovation" is the complete process of identifying a need, inventing a solution, and carrying that to market. I see innovation as broader than invention. Adding bells and whistles to an existing concept is neither innovation nor invention, it is product improvement or market expansion.
Hi Junko. My role in China was mostly limited to core R&D activities, so I had little interaction with customers. Regarding feedback from colleagues, I had to study/adapt. This included:
1. Learning to speak/read the language well enough to bridge the communication gaps.
2. Learning how and when to allow my colleagues to save face in potentially awkward situations.
3. Significant time spent socializing and building guanxi through activities such as basketball, badminton, karaoke, company trips, etc.
4. Adjusting my management style to a more 'traditional Chinese' one on a tactical basis.
5. Regular forced progress reports both in group meetings (8am sharp on Mondays, no exceptions) and written format.
6. For people I wasn't managing and who weren't forthcoming, I would take alternate paths, such as sending someone else to ask.
7. Rewarding people who gave good feedback.
There are others, but most of the items on this list are not necessarily China-specific. What really took getting used to was the reticence in speaking up to begin with, especially if someone was stuck or behind on their task.
In the US, where I started my career, speaking out is received much better than in China. In the end, patience and persistence won out.
typically, China doesn't have big players in the semiconductor industry. Although they host plenty without the characteristics you describe.
Of course, smaller unknown manufactures will seek niche's in the market. It is expected they will be more creative and less open due to high risk products. I don't think this has anything to do with the Chinese per se.
I agree, the dual-SIM card phone is a uniquely Chinese "innovation." Those who ignored (read Nokia) the trend initially missed out on the opportunity big time.
So, here's my question. If you are not getting any feedback from your Chinese colleagues or customers, what steps would you have to take?
How do you get used to that? Is there any way to remedy that?
Perhaps. But I'd like to point out that I didn't make up this list -- out of thin air.
This jives well with what I've heard over and over with a number of people I talked to (who work at China-U.S. companies)over the last few years.
While the labor cost issue becomes the first thing every U.S. company pays attention to when it forms partnerships with Chinese colleagues and customers, in the end, I think the cultural gap (in terms of business practices) is much bigger than we all realize.
I welcome anyone's first-hand experience working at a U.S.-China company.