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June 7, 2012

How Leo Li led Spreadtrum's turnaround

How Leo Li led Spreadtrum's turnaround
When China fabless chip company Spreadtrum tanked after going public in 2007, investors brought in a reluctant Leo Li (shown) to turn it around. With a little luck, Li has the company back on track and looking to expand globally.

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1/25/2013 3:30 PM EST

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Things did not go as planned. Spreadtrum’s Nasdaq stock price tanked worse than Facebook’s, plunging to 73 cents a share by the end of 2008.

1/21/2013 11:38 PM EST

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12/6/2012 6:43 AM EST

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rficPDX

No, Mr. Li, I'm afraid that's not quite correct - a turnaround isn't "much more difficult than starting up a company." I recently finished 5 years as part of a management team that successfully turned around a failing startup, and I've done a number of startups. One critical thing a turnaround has that a startup doesn't - customers. Sure, they may be customers with a vengeance, but they have been sold on the core product technologies before, and they can be sold again. Startups have to cold-sell an entire industry on the full vendor package - value of technology, ability to supply volume with quality, support, reliability. That's the hardest sell in the technology industry.

6/8/2012 6:10 PM EDT

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junko.yoshida

That's a legitimate point, rficPDX. I do recognize that if nobody has ever heard of you, it must be a tough sell. But then, reversing your customers'opinions about your products, what do you do? Tell them to "trust me"?

6/8/2012 10:37 PM EDT

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ShashiT

If winning in business thru protectionism and Goverment intervention, I dont call it as a success.

6/8/2012 4:46 PM EDT

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dong2

Success is success, nothing else.

6/8/2012 7:41 PM EDT

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ibm221

keep on going Junko,
I bet your next stop will be Xi'an...

6/7/2012 10:22 PM EDT

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junko.yoshida

I found Leo Li personable, modest and yet aggressive. He knows that Spreadtrum suffered from its image problem. Li is now on a mission to convince the world that China fabless can become world class. In an opening statement at a financial conference, Li likes to say: "We (preadtrum) are not that terrible." He goes out every day, debunking the myth about China being all about no technology and cheap products.

6/7/2012 7:33 PM EDT

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rick.merritt

Quite a turnaround and an ambitious plan. Loved the story about Subway!

6/7/2012 6:21 PM EDT

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ibm221

that's a confusing restaurant name indeed.

6/7/2012 8:12 PM EDT

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Santiago123

The biggest issue with previous management is lack to QA control. They were good founders but not good managers. There were lots of customers before 2009 in China indeed(at that time, the customers have to given kickback to the sales people of MTK to get their chip!), but Sprd product was so buggy that many customers went bankrupt (who put the $4 chip on a $100 phone, and it turned out the phone does not work.) To an entry level GSM chip or a entry level smartphone, there is not much technology. The question is to find enough customers. Sprd and MTK get a sweet spot here.

6/10/2012 9:27 PM EDT

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