Light Harmonic Labs: can this company stay viable?

[Audio_ELF]

I don't have any financial interest in Light Harmonic Labs (not paid for crowdfunding "ideas" or anything) but it strikes me that they have been more naive than deliberately dishonest.

 

They have more ideas than they can manage, and instead of focussing on getting one product to shipping before working on the next, Larry Ho appears to have lots of good ideas ... but the boring bit of turning exciting concept into shippable product is where he / Light Harmonic fail.

[wushuliu]

On 7/31/2017 at 8:39 PM, wwaldmanfan said:

 

With so many legit choices out there, I don't really get why someone would fall for that.

 

Just have to use the right buzzwords. People go crazy for the newest product that has all the buzzwords, especially if they have a certain philosophical bent with a fervent fan base.

[foodfiend]

On 8/3/2017 at 4:25 PM, Audio_ELF said:

I don't have any financial interest in Light Harmonic Labs (not paid for crowdfunding "ideas" or anything) but it strikes me that they have been more naive than deliberately dishonest.

 

They have more ideas than they can manage, and instead of focussing on getting one product to shipping before working on the next, Larry Ho appears to have lots of good ideas ... but the boring bit of turning exciting concept into shippable product is where he / Light Harmonic fail.

If they were just naive about it, then they should just focus on delivering the products already paid for, rather than to throw out new products. Besides, Larry has held management positions in other start-ups before, so I am sure there is a limit to this naivety. The same can be said of Gavin Fish...

[Lcocozza]

They are indeed scammers, I was charged for the shipping of my Vi Dac Tube back in december 2015, and they knew for sure that there was not a product ready to be sent.

 

If I lived a bit closer to their HQ I'd definely pay a visit.

[Ralf11]

Will you guys help fund my Kickstarter to build a new listening room - beer & pizza if it "succeeds!"

[hifial]

Just a FYI. I know of a recent buyer of a LH top of the line DAC from a dealer who had it sent in for the latest upgrades. It is my understanding that he will have the upgraded version back in a few days or so after about two months of upgrades.

 

I am not sure if some people understand that LH has TWO seperate divisions/companies. One is their original which is kind of like what most other companies are like (this where his DAC is from). The other one is the one most of the posters here seem to have a problem with. That is the one using crowd funding. I myself was tempted from time to time with some of the different ones online but I also knew that it was a GAMBLE that I would ever see the finished product or that it would be like it was advertised. 

You must understand that these have no PROMISE of delivering a PAID for product. At least that is my understanding.

 

AND I am NO WAY DEFENDING ANY OF THE CROWD FUNDING SITES. Just trying to help explain.

 

Again I have no affiliation with LH and I am just adding to the info. 

I hope this helps.

 

PS I will try and keep everyone posted of the outcome.

[Superdad]

On 8/10/2017 at 11:12 AM, hifial said:

I am not sure if some people understand that LH has TWO seperate divisions/companies.

 

Uh, not really.  Same people, same offices in Roseville, same phone number that is never answered and may never have voice mails returned.  But yes, two different web sites...

[Digital Assassin]

22 minutes ago, Superdad said:

 

Uh, not really.  Same people, same offices in Roseville, same phone number that is never answered and may never have voice mails returned.  But yes, two different web sites...

..and same crooks running them...

[Beefalo]

Actually, it makes me think my $ went to continue the production of the DaVinci dac at a larger margin.

Awesome.....glad I could help out with that.

[hifial]

2 hours ago, Superdad said:

 

Uh, not really.  Same people, same offices in Roseville, same phone number that is never answered and may never have voice mails returned.  But yes, two different web sites...

 

Alex, still doesn't mean that they are not two divisions. There are plenty of companies that use common offices and main phone numbers but run separate divisions and/or companies. 

 

But my main point is that buying anything from a crowd funding site is a total gamble. 

 

Do I feel bad for everyone that lost money, of course. And do I think that LH should have been more forthcoming and realistic about what they could deliver, of course. 

 

I personally know people that lost money with them but I also personally know others that got what they paid for. 

[PorkChop]

1 hour ago, hifial said:

I personally know people that lost money with them but I also personally know others that got what they paid for. 

 

The same thing could be said about Bernie Madoff.  Are you going to defend him next?  ("You know, anyone who invests with a securities firm knows there are no guarantees...")

[hifial]

42 minutes ago, PorkChop said:

 

The same thing could be said about Bernie Madoff.  Are you going to defend him next?  ("You know, anyone who invests with a securities firm knows there are no guarantees...")

 

 

Again, I am NOT defending them at all. Please DO NOT  put words in my mouth. 

 

I am just putting things in context. They obviously made mistakes and hurt some of the people. I am just pointing out that not everyone got hurt and that LH has more than one company/division and that from what I understand still conducts business. 

In my opinion they should try and make it right. 

 

Also your comparison to Madoff is beyond insulting to me. Where I come from your word is your bond. I have no use for people like him. 

 

[foodfiend]

5 hours ago, Beefalo said:

Actually, it makes me think my $ went to continue the production of the DaVinci dac at a larger margin.

Awesome.....glad I could help out with that.

Yup! It was only on hindsight (which is always 20/20), that our money went to fund their R&D...

[montpierjazz]

Hopefully premature to call LH Labs dead -- there are some, albeit limited signs of life.  But...

 

However, the Madoff comparison seems apropos; it's my understanding that he was involved in multiple business entities, some with his sons who had little visibility to larger Ponzi scheme (?).  But regardless if Light Harmonic and LH Labs are legally separate entities, at the end of the day Larry Ho is at the top of both.   

 

Personally, I doubt much of the money raised through LHL found its way to Light Harmonic. Still, Larry and Gavin & Co. abused the crowdfunding platform: maybe I was naive, but my understanding I was paying/pledging for the realization of a single product, and if sufficient money raised, reasonable resources would be dedicated towards fulfillment of that product in a timely fashion.  Instead, IGG allowed LH access to launch one campaign after another before completing the first -- so rather than funding a specific product my "pledge" was going towards start-up of a company attempting to develop a line of audio products produced at much larger scale than Light Harmonic.  IMO this should not have been permitted and IGG should have been policing itself.   As a result, not surprisingly, LH & GF got in over their (swelled) heads.  

 

At first I was willing to give them some slack to get out of the hole they dug.  But it now is clear that once they got past the small portable Geek Out DAC's to Pulse, LPS, Soul/Vi DAC, Wave DAP, Source, etc. they crossed a line from being "overly optimistic" to being outright dishonest and lying about ETA/progress.  

 

Here's where one might have hoped they had invested in competent help for design and manufacture expertise including pipeline management, outsourcing production to properly vetted, reputable vendors, etc.  Instead seems more likely the money was pissed away going towards digital advertising and website/forum (re-) designs and CES rooms and clueless consultants creating ridiculous surveys attempting to determine all the stuff they had promised.  

 

And let's not forget a complicit role the audio press might have had (i.e., Stereophile initially publicizing LHL crowdfunding, lots of banner ads on their websites, reviews ignoring the mounting reliability/fulfillment concerns, and my favorite: TAS two page spread ad for the absurd $120K Sire vapor-DAC! ... hopefully they were paid in advance(?)

 

Further, LH compounded difficulties by displaying no self discipline when time for "pencils down" by endlessly tinkering with what had been promised, over-engineering options that made an already daunting production task simply impossible.  On top of all this are ongoing Quality Control issues resulting in the reported high rejection rates of components and in-field product failures.  Not sure how much of this is sloppy engineering or poor part sourcing or lousy tech build, etc. -- suspect combination of all -- but clearly some skillsets missing.

 

At the end of the day, fortunately I'm only waiting for a Vi DAC as I realized that LH was clearly spiraling out of control.  Many have sunk much more $ into LHL.  I know there are numerous trustworthy, successful crowdfunding campaigns, some even on IGG.  But clearly a cautionary tale and know I will never go near IGG again.  Hopefully the law will catch up with the cesspool IGG provides for scoundrels and it will go belly-up before others get taken in.  

 

Anyway, that's my 2 cents!

[kennyb123]

30 minutes ago, montpierjazz said:

 

Further, LH compounded difficulties by displaying no self discipline when time for "pencils down" by endlessly tinkering with what had been promised, over-engineering options that made an already daunting production task simply impossible.  On top of all this are ongoing Quality Control issues resulting in the reported high rejection rates of components and in-field product failures.  Not sure how much of this is sloppy engineering or poor part sourcing or lousy tech build, etc. -- suspect combination of all -- but clearly some skillsets missing.

 

 

I think the key thing here is to consider intent.  The tinkering suggests not an intent to defraud, but an intent to deliver a really well engineered product to their customers.  Poor choices were repeatedly made with that particular aim taking precedence.  And yes, some skill sets were clearly missing, but this seems more of a case study in poor leadership than something resembling what Madoff did.  

[foodfiend]

@kennyb123

I would contest the idea that they were naive and lacked experience. They evidently knew what they were doing, and were obviously trying to use the Indiegogo platform to fund their company into a much bigger company. Basically, they circumvented the use of VC/PE investors (who would demand equity for investment), and went to an unknowing and trusting audiophile consumer base to get cash (and no equity). This would be fine if they weren't so greedy, and fulfilled all their product orders before launching the next crowdfunding project (but would have resulted in a much slower growth rate). Evidently not, and Indiegogo did not go after them for it. The result is a large group of people who put money into the projects, with nothing in return.

 

Considering the high rate of hardware failures, I am also quite sure that LH Labs attempted all sorts of cost-cutting measures in the crowdfunded projects (to yield an even higher profit margin) by using less-than-satisfactory components, and dodgy outsourced assembly.

 

Many assumed that the association with the DaVinci DAC meant a certain quality standard, but the assumption was obviously unfounded. Like others have mentioned, they kept the commercial product line quite separate from the crowdfunded line - different component sourcing and assembly. So, not only were crowdfunders funding R&D efforts, they were also funding their cost-cutting efforts (by being guinea pigs for untested suppliers and such).

 

Naive? I think not. Very shrewd, if you ask me...

[stuck limo]

1 hour ago, montpierjazz said:

1 hour ago, montpierjazz said:

Personally, I doubt much of the money raised through LHL found its way to Light Harmonic. Still, Larry and Gavin & Co. abused the crowdfunding platform: maybe I was naive, but my understanding I was paying/pledging for the realization of a single product, and if sufficient money raised, reasonable resources would be dedicated towards fulfillment of that product in a timely fashion.  Instead, IGG allowed LH access to launch one campaign after another before completing the first -- so rather than funding a specific product my "pledge" was going towards start-up of a company attempting to develop a line of audio products produced at much larger scale than Light Harmonic.  IMO this should not have been permitted and IGG should have been policing itself.   As a result, not surprisingly, LH & GF got in over their (swelled) heads.  

 

 

 

This is the crux of the issue. The IGG page makes NO mention at ALL that you are contributing to two things: the product PLUS the funding of other gadgets.

 

So big surprise, people donated to fund a specific project and found out their money didn't go towards that specific project (instead, say, the Tesla system). I'd be livid too if I was a customer. Completely unacceptable. 

 

I hope LH Labs can turn it around, because I honestly love all my Geek Out DACs. (have owned most of them) But I would never fund any of their projects...I would only buy after the product was real. (and I got ripped off on the V2 --- first they make it via plastic, then they release an update version with a metal chassis and updated internals. Still not completely happy about that)

 

ALSO: Another huge thing they need to fix is all these options. They need to consolidate their products and options into one thing. No more of these 3 different versions of the same thing. That's BS and pisses people off.

[DukeOfMdns]

On 7/30/2017 at 4:45 AM, Dean358 said:

 

Exactly!

This is truly a bummer!

 

I did receive my Geek Pulse S and linear power supply, and am thoroughly satisfied with them.

 

But I am out on the Wave and the Source. 

 

What bothers me is that we may really never know what happened (is happening).

 

 

 

[stuck limo]

Supposedly backers are getting a weekend update, per LH on the IGG site.

[kennyb123]

43 minutes ago, foodfiend said:

@kennyb123

I would contest the idea that they were naive and lacked experience. They evidently knew what they were doing, and were obviously trying to use the Indiegogo platform to fund their company into a much bigger company. 

 

I never said either of those things.  I said that they "poor choices" and they had "poor leadership".  I don't see how that's debatable.

 

I've worked in technology for over two decades and have seen projects, products and companies fail numerous times.  All had in common a start with good intentions.  But success doesn't come easy.  Those with great technical minds tend to be really crappy at business.  Often what makes the difference that brings about success is that the technical folks stick to what they're good at and let others lead.  It appears that Larry failed to do this.  This kind of things happens every day and it's usually the investors and shareholders who get stuck footing this bill.  And that's true in this case too, as those purchasing were essentially the investors.  

 

I don't think it's fair that some folks are treating this as a straight up purchase.  This was a funding endeavor with the investors potentially receiving their share paid out in the form of a product.  The risk was always there that the payout depended on the success of the endeavor.  Caveat emptor.

[stuck limo]

15 minutes ago, kennyb123 said:

 

I don't think it's fair that some folks are treating this as a straight up purchase.  This was a funding endeavor with the benefit that the investors would receive their share paid out in the form of a product.  The risk was always there that the share payout depended on the success of the endeavor.  Caveat emptor.

 

It was represented as (essentially) a straight-up purchase though - the funds were supposed to go towards one project, not multiple. I think a massive part of the endeavor failing was that the funds were misappropriated, something that was never disclosed to the backers. There was very little "risk" in the first place, until the funds went bye bye. (yes, I'm aware there were massive technical issues, but appropriate funding could have helped alleviate that)

 

Essentially, LH needs to come clean about what happened and why, apologize profusely, finish the products, ramp up their customer service, and focus on one project at a time/simplify their line-up. Then, and pretty much only then, can LH get their reputation back.

[kennyb123]

12 minutes ago, stuck limo said:

 

It was represented as (essentially) a straight-up purchase though - the funds were supposed to go towards one project, not multiple. I think a massive part of the endeavor failing was that the funds were misappropriated, something that was never disclosed to the backers. There was very little "risk" in the first place, until the funds went bye bye.

 

The funding campaign was done on Indiegogo, wasn't it?  Here's what they say:

 

"When you contribute to a crowdfunding project you are supporting a startup or a new creative endeavor. The reality is that many startups and new ideas - and even some established business - fail. This is why it’s important for each contributor to assess the risks of the project to determine if they are willing to accept them before supporting a campaign."

 

https://support.indiegogo.com/hc/en-us/articles/205665518-What-happens-to-my-money-if-a-campaign-fails-

 

It's unfair to spin this into this simply being the purchase of a product.  Clearly the objective here was to launch a new company and series of products.

[stuck limo]

31 minutes ago, kennyb123 said:

It's unfair to spin this into this simply being the purchase of a product.  Clearly the objective here was to launch a new company and series of products.

 

You're correct, but WHERE is this explicitly stated on the IGG page for the Geek Wave? Where does it say, "Hey guys, you're contributing based on this product on this page, but your funds are really not intended to go solely towards this project. Just FYI."

 

Where is this stated ANYWHERE for customers not in the loop on the company practices? Where does it say that the funds are going to be for a whole new product lineup, not just for a specific product?

 

[foodfiend]

38 minutes ago, kennyb123 said:

 

The funding campaign was done on Indiegogo, wasn't it?  Here's what they say:

 

"When you contribute to a crowdfunding project you are supporting a startup or a new creative endeavor. The reality is that many startups and new ideas - and even some established business - fail. This is why it’s important for each contributor to assess the risks of the project to determine if they are willing to accept them before supporting a campaign."

 

https://support.indiegogo.com/hc/en-us/articles/205665518-What-happens-to-my-money-if-a-campaign-fails-

 

It's unfair to spin this into this simply being the purchase of a product.  Clearly the objective here was to launch a new company and series of products.

I do agree that there is always a degree of risk when crowdfunding. That is why there is supposedly a perk attached to early support/funding (shouldering some risk for a better price). At the same time, most projects will indicate the degree of risk in the campaign. LH Labs referenced their pedigree with the Da Vinci DAC and the previous Kickstarter campaign, which would give the impression that there were few hurdles in the project. In fact, in the promotional Indiegogo video, Gavin Fish said that the "tooling was already in place", and they were not needing to "raise cash" due to the Kickstarter campaign's overwhelming success. As such, they did give the impression that risk was minimal.

[kennyb123]

1 hour ago, stuck limo said:

 

You're correct, but WHERE is this explicitly stated on the IGG page for the Geek Wave? Where does it say, "Hey guys, you're contributing based on this product on this page, but your funds are really not intended to go solely towards this project. Just FYI."

 

Where is this stated ANYWHERE for customers not in the loop on the company practices? Where does it say that the funds are going to be for a whole new product lineup, not just for a specific product?

 

 

Can you point to any guidelines that you would have required them to disclose how they intend to use the funds to grow their business?  

 

The goal of these campaigns is to grow businesses.  In the hands of a better businessperson, the decision to spread the investment across a series of products might have proven a total success.  We might be applauding that decision now had he had a competent manager running things.

 

Bottom line is that it's incumbent upon the investor to do their due diligence before handing over funds.  That there was some risk in this should have been obvious.