But they burst and now it is time to pay the butcher's bill for Chinese company LeEco. From The Register:
LeEco – the Chinese biz that said it'll topple US tech giants – has already hit the rocks
Less than a month ago, Chinese media and electronics firm LeEco made its glitzy launch into the US market. However, its founder Jia Yueting has just told staff that the firm is in trouble.
Back then LeEco (pronounced Le Echo) promised a smartphone better in spec to Google's Pixel or Apple's iPhone but costing half as much; a $5,000 seven-foot Android-powered smart TV; an electric autonomous vehicle; an electric bike; and a VR headset. Now it is slashing its expectations and product lines.
"No company has had such an experience, a simultaneous time in ice and fire," Jia said in a letter to staff that was leaked to Bloomberg News. "We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited."
He wrote that the company had caught "big company disease" and has grown faster than its organization could cope with. As such, the company will be trimming the fat and tightening up its product line, and Jia said he would cut his annual salary to a single Yuan ($0.15) as an economy measure.
So now we know, the Chinese have Bolivian Marching Powder. I actually had the same problem (too-rapid growth, not cocaine) with my second business in Seattle. Things were going gangbusters and I kept adding functionality - more equipment on cheap long-term leases. We hit a bit of a bump in business and all of a sudden, the lease payments were more than our gross revenue. I was able to pull out and successfully sell the business a few years later but that is an experience I will never let happen again.
Competition is good and I like that the founder has cut his salary - keeping skin in the game. Time will tell.
