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Luo Yonghao once boasted he would buy Apple. (Picture: Smartisan)

Eccentric CEO who was blacklisted in China is back pitching “shark skin”

Flamboyant founder of Smartisan Luo Yonghao is using his brand built on bold pitches to sell a bacteria-repelling plastic inspired by sharks

Start-ups
This article originally appeared on ABACUS

When Luo Yonghao walked out on stage this week to introduce a brand that makes bacteria-repelling plastic, he joked about how much trouble he had traveling to Beijing. 

Luo, a colorful figure in China’s tech scene, is most widely known as the founder of gadget company Smartisan, which sold its smartphone business to ByteDance. But he was recently blacklisted by the government for failing to repay his dues to suppliers -- meaning he was barred from planes and high-speed rail travel.
But on stage, Luo seemed to be in good spirits. Despite Smartisan’s failure to sell enough of its phones or highly touted workstations to stay afloat, Luo was at the Beijing Olympic Stadium to talk about his newest venture selling shark skin.

Well, not real shark skin.

Luo Yonghao once boasted he would buy Apple. (Picture: Smartisan)

Luo now leads global branding at a company called Sharklet. The company makes a plastic material designed to repel bacteria, which was inspired by the texture of shark skin. 

The material was developed with the help of US Navy-funded research and patented by University of Florida materials science professor Anthony Brennan, according to Luo. It was originally marketed for use in hospitals, leading to Sharklet later being acquired by Chinese medical device company Peaceful Union.

But at Tuesday’s event titled Old Man and The Sea: A Sneak Peek into the Future, Luo pitched the material as something that could be used in consumer goods. This means it could show up in children’s backpacks, suitcases, exercise equipment or anything else likely to come into frequent contact with bacteria-covered hands throughout the day.

This might seem like an odd pitch from an entrepreneur who built a niche smartphone brand and once bragged that he would acquire Apple. But the 47-year-old has built his identity on bold pitches. In 2018, Luo set a Guinness World Record for the most-attended technology launch event -- and he actually got people to pay for their tickets.
Tickets for the R1 smartphone launch in May 2018 were said to have sold for between 100 yuan (US$14) and 1,000 yuan (US$142). (Picture: Smartisan)

Even before his career as a smartphone maker, Luo was an online celebrity. Back when he was an English teacher at the private education company New Oriental, he became known for humorous digressions that his students recorded and published online as Quotations of Old Luo.

After quitting the gig in 2006, Luo launched a blog and started doing inspirational speaking tours and wrote an autobiography. But as a smartphone maker, he built a reputation -- at least to his fans -- as someone who refuses to make subpar products.

One day in 2011, he started smashing Siemens refrigerators with a hammer at the German appliance maker’s headquarters. Luo was apparently unsatisfied with their quality. The hammer wound up being Smartisan’s symbol when the company was established in 2012.
His other public appearances were often just as outrageous. His product launches felt like variety shows that were reportedly so popular that scalpers could be found selling tickets. He bashed both Xiaomi and Apple, which he accused of losing its soul. After Smartisan launched its R1 smartphone model featuring 1 terabyte of storage, Luo said that Apple “will copy us like crazy.”

Apple still doesn’t have a 1TB phone.

The TNT Station was available for pre-order, but it wasn't delivered until a year later, sparking ridicule among Smartisan’s followers. (Picture: Smartisan)
At the same event, Smartisan launched the TNT Station, a monitor that resembled Microsoft’s Surface Studio. Luo said it was the first such monitor to be powered by a smartphone, the 1TB R1. During the event, Luo said he was emotional and that some employees spent nights sleeping in the office over six months to create the product.
“I'm building a startup to change the world, not to make some stinking money from you," he said.
But that project turned out to be the beginning of the end for Smartisan. Not even Bullet Messenger, the company’s answer to WeChat that briefly topped China’s iOS App Store chart, managed to last very long. The company ended up selling some of its patents to TikTok owner Bytedance, which recently launched its first phone under the Smartisan brand.

China’s viral king ByteDance is the first major Chinese tech player that made a mark on the world

With his recent financial troubles, Luo is now one of the bad boys of China tech who have been blacklisted for their massive debts. Luo is accompanied by Dai Wei, founder of bike-sharing company Ofo, and Jia Yueting, founder of crumbling entertainment empire LeEco. Nearly 15 million other “deadbeats” or “discredited individuals” join them on the blacklist maintained by China’s Supreme Court. But unlike other entrepreneurs on the blacklist, Luo has managed to garner some sympathy.
In a Weibo post titled “Confession from a deadbeat CEO,” Luo said Smartisan has repaid 300 million yuan (US$42.6 million), estimated to be about half of the company’s total debt. He personally vouched for 100 million yuan (US$14.2 million). 

During the event on Tuesday, Luo told his audience he has been released from the court’s spending restrictions. 

They founded three hot tech companies, but now they’re on a country-wide blacklist

“He's an eloquent speaker and is good at portraying vulnerability,” TechBuzz China Podcast co-host Rui Ma previous told Abacus. She added that Luo is hard to hate because he is a "normal person" who succeeded mostly on his own merit.

More recently, Luo has been in touch with entrepreneurs in China’s vaping industry, but health fears and government restrictions have dampened entrepreneurial enthusiasm in the area.

Luo is now a board member at Sharklet, according to the company’s website. During his event, he joked that he’s Sharklet’s “chief fraud officer.” And although the brand might be relatively obscure to most of the world, Luo can at least rest assured that his new venture is still making headlines in China. 

For more insights into China tech, sign up for our tech newsletters, subscribe to our award-winning Inside China Tech podcast, and download the comprehensive 2019 China Internet Report. Also roam China Tech City, an award-winning interactive digital map at our sister site Abacus.

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