Light Harmonic (LH Labs). Scam? USD$6 million not delivered since 2014

[agisthos]

I think Jarek has acquitted himself well and you are giving him a hard time he does not deserve. He is not responsible for what happened.

 

Many of you have never run a business, as is obvious by all the claims about "where did the money go" and how "overfunded" each product was. Let me tell you what went down here...

 

* Each product had a very small profit margin due to the crowdfunding incentives (or no margin due to design-price mismatch). So being overfunded by 2000% does not help, it can even be the reverse, the more a product is funded the more they lost.

* Gavin hired what looked like 30+ people at one point, and a big new office rented. Huge cash burn of millions right there....

* The bad PCB batches (there was multiple cases). 200 bad fully loaded PCB's is still about $200 each even with China manufacturing. It happens a few times, combine that with all the attempted rework, all the customers sending back hundreds of Pulses for repair, you end up being in the hole very quickly even though you sold 2000 of them.

 

I'm not making excuses for them, I'm just telling you how it went down, reading between the lines and seeing the absurd expansion LHLABS attempted. They burned through all the cash in a big hurry for... what?. Very bad mismanagement.

 

Running a traditional high end audiophile company like Light Harmonic, with low sales and high margins, is very very different to doing mass production runs on low margin. They did not know what they were doing and got caught out. They are not scammers, just incompetent.

[agisthos]

Probably the worse part of the Pulse campaign was its just an average product for the money paid. I had a Infinity with all the options, and it was like every other Sabre DAC around $800-$1000. Nothing special.

 

But in fairness I used it as a DAC in a full system, not as a headphone setup. The later may have been the optimal sound output.

[agisthos]

4 minutes ago, LHCommSquad said:

 

Generally speaking, from all the reports I've read and the people I've talked to and know personally who have the Pulse, the DAC was excellent and excelled in its price range. The headphone output was the weak point in that unit. I've never used one so I can't comment on how it sounds with headphones. The headphone output on the next generation has been heavily requested to be improved. 

 

Okay, I should say I had an Infinity S, a special single ended version of the Infinity, only 20 were made, with a summed SE output stage. Its possible this design configuration, or the summing circuit, just never worked well. So have to be clear about that, as my Pulse was not the norm.

[agisthos]

24 minutes ago, LHCommSquad said:

 

-Design/price mismatch is a big one I hear from Larry over and over again. Marketing team went nuts with discounts and perks with zero research into R&D cost. 

 

 

People who have not run a business selling a product with multiple input costs do not understand this. Due to the nature of the mismanaged perks, by the time the product was developed LHLabs would have found they were losing money on each unit for some of the products. This was obvious to me at the time - as they kept crowd launching each new product.

 

I thought, they probably have already designed this stuff and its ready to go... but when Larry Ho started being so open with his design process (which showed he was starting from a blank slate) I realized they were going to be in huge trouble.

[agisthos]

25 minutes ago, LHCommSquad said:

 

-The hiring spree has been hinted at by outsiders but never really mentioned by Larry as part of the issue. I assume I wasn't told *everything* though. 

 

 

Gavin was excitedly uploading videos doing a walk around of their new (friggin huge) office building. I counted over 20 employees in one video and thought, *they are going to burn though this money quick*...

[agisthos]

48 minutes ago, PeterSt said:

 

Allow me: BS. Each product has a huge profit ahead of the cost.

 

Did you even read what I said? As the products were not even developed yet, they had no idea what their cost or profit was (they probably had a rough BOM in mind, which was then blown out by each wave of perks).

 

Just because you have taken in 1,000,000 for 1000 of item X, this does not mean you are "in profit". Only when the item is actually built and costs accounted for will you know if the venture was profitable.

[agisthos]

Peter I'm very glad you are not my accountant or bookkeeper 😊

[agisthos]

In some way I feel a bit sorry for Larry Ho. Yes he was a part owner of LHLabs, but he was just the designer. It was Gavin Fish who was running the day to day operations of LHLabs and who burned through all the money with his poor business competency. So if you want to attack someone for losing your money, he bears far more responsibility than Larry.

 

Because Larry decided to try and save the LHlabs name, and deliver the product in a piecemeal fashion with whatever extra funds he makes from Light Harmonic, it has kept him as a focal point for the attacks, while Gavin has gotten out of it scott free.