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

[NOMBEDES]

Larry Ho, Founder
In 1995, Larry founded Taiwan’s top and fastest-growing internet company, Inforian Inc. Taiwan. The company started with USD$15K paid-in capital with USD$100K annual revenue in first year. In 5 years, it grew 1200% and became a USD$ 200M market valuation business. He led one of the top online music web sites, and became the exclusive music service partner of Real Networks and the podcasting service partner of Apple China in 2006. His company accumulated 6M members within 32 months. Larry is also known for his 2010 co-development projects with tech giants Intel, Asus, and Sennheiser, along with others.

Advisory Board
Ravi Shah (Google), Ali Javidan (Google, Tesla Motors), Peter Duminy (BBC, Stax, B&W)

 

 

Roseville

5701 Lonetree Blvd., Suite 114
Rocklin, CA 95765

Voicemail: (888) 842-5988
Email: [email protected]

Shenzhen

Area No.44, Tian-Hong Smart Hardware Zone, Bao-An District
Shen Zhen City, Guan Dong Province, China

Shenzhen

Room 601, Hai-Xiang Plaze, No. 1052, Nang Hai Da Dao, Nang Shang District Shen Zhen City, Guan Dong Province, China

 

 

I would hate to give a black eye to an entire nation.  Why don't we Google the Uighur people of the Xinjiang region?  

 

 

 

 

17 hours ago, Superdad said:

 

How is that? Light Harmonic is a USA company.  

And no one company's poor ethics can give a black-eye to an entire nation...

 

[bernardperu]

2 hours ago, NOMBEDES said:

Larry Ho, Founder
In 1995, Larry founded Taiwan’s top and fastest-growing internet company, Inforian Inc. Taiwan. The company started with USD$15K paid-in capital with USD$100K annual revenue in first year. In 5 years, it grew 1200% and became a USD$ 200M market valuation business. He led one of the top online music web sites, and became the exclusive music service partner of Real Networks and the podcasting service partner of Apple China in 2006. His company accumulated 6M members within 32 months. Larry is also known for his 2010 co-development projects with tech giants Intel, Asus, and Sennheiser, along with others.

Advisory Board
Ravi Shah (Google), Ali Javidan (Google, Tesla Motors), Peter Duminy (BBC, Stax, B&W)

 

 

 

 

I Have contacted Ali J and Peter Duminy. I have provided them with links and evidence to this whole fiasco.

 

Anyone knows how to get in touch with Ravi Shah? 

[marflao]

Here u go... 

https://www.linkedin.com/in/ravi-shah-a6ba041

[Panelhead]

  I looked up the Stella. A quoted reviewer commented they are the best hybrid headphones they have heard. 

  The page does look slick.

[EdmontonCanuck]

On 1/8/2019 at 4:19 PM, EdmontonCanuck said:

 

Just want to give a quick shout out to Jarek for helping me get those cables I requested a few posts earlier. Thanks Jarek 🙂 @LHCommSquad

 

Thanks again to Jarek for getting me those lightspeed cables. They arrived the very next day via expedited shipping.

[Currawong]

On 1/12/2019 at 4:03 AM, LHCommSquad said:

Addressed here in Sept 2017: 

https://support.lhlabs.com/solution/articles/13000037906-faq-did-lh-labs-use-wave-s-funding-to-sponsor-other-products-

 

"First of all, please know that the $1.6M USD shown on Indiegogo campaign is not 100% directly related to Geek Wave project. There is Geek Source music server, Pulse DAC combo, Headphone holiday sales of Hifiman, Audeze, DSD music download, USB 1G/2G Cable, and IEM-X, Vibrato earbud... there. In order to get the exact number, we downloaded from Indiegogo backend and remove all the none-wave-related perks in that Excel. The overall number and funding we got for Geek Wave development and manufacturing is $680,869.28 (After 9% deduction from Indiegogo's commission and Paypal's transaction fee) 

 

For a big project to develop a super high-end portable player, this $680K+ is really not a lot and we always carefully using it. There is no room to sponsor any other products by this fund. "

 

 

How about the profits from those sales too? How much of the $680k is left? Is there any way of knowing, or was it all pooled together and now LHLabs/Light Harmonic has almost nothing? If so, where did it all go?

 

I'm going to speculate again: If my suggestion about buying commercially available DAPs and sending them to customers instead is unviable, it suggests the LHLabs has blown all their funds and is running on fumes, only keeping up the pretence of actually completing the project to avoid being sued into non-existence. 

 

On 1/18/2019 at 6:00 AM, LHCommSquad said:

 

Is that like Mikhail from SinglePower Audio?

 

Bringing up a guy famous for taking a lot of money from people, then giving them nothing for years (and sometimes nothing at all) is really putting your foot in your mouth, isn't it?

[Jud]

5 hours ago, Currawong said:

 

How about the profits from those sales too? How much of the $680k is left? Is there any way of knowing, or was it all pooled together and now LHLabs/Light Harmonic has almost nothing? If so, where did it all go?

 

I'm going to speculate again: If my suggestion about buying commercially available DAPs and sending them to customers instead is unviable, it suggests the LHLabs has blown all their funds and is running on fumes, only keeping up the pretence of actually completing the project to avoid being sued into non-existence. 

 

 

Bringing up a guy famous for taking a lot of money from people, then giving them nothing for years (and sometimes nothing at all) is really putting your foot in your mouth, isn't it?

 

LHL took considerable pains in prior updates sent to funders to say their contributions weren't being used for anything but the Wave, and nothing was communicated by LHL or IGG that the amount shown on the Wave page was a total across all IGG projects by LHL.

 

I also quite cynically wonder whether the communications to funders of other projects are similar, and that everyone's being told some version of "the money you thought was pledged to this project went elsewhere," thus making millions magically disappear.

 

It's these sorts of things that make me wish for an agreed independent accounting. But if that ever comes, I'd be one of the more amazed people on the planet.

 

BTW, backers of the Wave just received Update #179(!). Among other things, it said of a recent redesign involving the CPU, "Now that it's done, the process should go much more smoothly than before." This sounds rather familiar; I haven't looked, but I wonder whether we've been told at one or more points in the previous 178 updates that things would now proceed more smoothly.

[Beefalo]

‘OK, I think we're either going to take a break from the forums again or put certain individuals on "ignore". Again, the toxicity and bad information by certain forum commenters revolving around this topic is strangleholding conversation. Thanks everyone.’

                Jarek (Stuck Limo), LH Labs ‘mouthpiece’ - Head-Fi post.

 

Sorry we hurt your feelings. Apparently ‘conversation’ involves pics of generic developer boards and Larry Ho with  3 men that could be his cousins (the Wave development team). 

Money is emotional, especially having it stolen. Try to ignore. We are not going away.

 

[PeterSt]

What kind of people would actually do such a thing.

[buonassi]

here's a good one....   LH is developing another IEM.  This time the allure is its 21 balanced armature transducers - and it's 6K price tag

 

https://www.head-fi.org/threads/the-discovery-thread-new-bgvp-dmg-initial-impressions-pg2507.586909/page-2758#post-14731766

 

https://www.head-fi.org/threads/flinkenicks-17-flagship-iem-shootout-thread-and-general-high-end-portable-audio-discussion.826876/page-918#post-14721521

 

"The Oscar XXI" - as if "Stella" wasn't a big enough slap in the face to all the folks who got ripped in the previous LH crowdfunding Ponzi.  

 

You can't perform this racket nowadays.  Maybe in the 90s before the internet was commonplace.  I really can't wrap my brain around this.  Does not compute.  The sheer will and determination of Larry Ho is puzzling.  

[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.

[stuck limo]

4 minutes ago, agisthos said:

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.

 

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 and there was also controversy over it. 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. 

[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.

[stuck limo]

9 minutes ago, agisthos said:

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.

 

-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. 

-The bad PCB batches as well were a huge issue and Larry does not like to talk about it, I assume out of embarrassment. Gavin was the one who brought that out into the open. 

-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. 

 

[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*...

[stuck limo]

11 minutes ago, agisthos said:

 

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 I realized they were going to be in trouble.

 

I've stated this before multiple times, but from the story I got, the marketing team was there to a) build hype and b) get funding. They would come up ideas, run to Larry to ask if it was theoretically possible, Larry would say "yes" and then the marketing team would put it out as a perk  IMMEDIATELY (with zero research or secondary opinion by Larry) and ask everyone to fund it. They essentially ran un-checked (most of the time) and it was a disaster. Larry is responsible and he admitted that to me. Total fiasco on both a) marketing side and b) management of marketing. 

[PeterSt]

23 minutes ago, agisthos said:

 

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...

 

I know it is hip to crowd fund a product. But it is a hoax. For a start up, yes, but no LH was a startup that I can see.

We call it "investment". It is the natural means for succes. Crowd Funding is the natural means for failure.

 

Quote

* Each product had a very small profit margin due to the crowdfunding incentives

 

Allow me: BS. Each product has a huge profit ahead of the cost. Suppose 1.5M is funded and we keep on doing this, then all the time of doing this (kind of development) we have 1.5M in the pocket. Only when we start enjoying pension, the 1.5M has to be paid back.

OK ?

I call this hoaxing for each self-respecting company which oughts to have the money and normally invest.

[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.

[PeterSt]

3 minutes ago, agisthos said:

Just because you have taken in 1,000,000 for 1000 of item X, this does not mean you are "in profit".

 

Tell that the tax inspector.

 

3 minutes ago, agisthos said:

Did you even read what I said?

 

Yes Sir.

 

4 minutes ago, agisthos said:

As the products were not even developed yet, they had no idea what their cost or profit was

 

Did you read my post ? it is a guide to failure. Go to a bank (I accidentally typed back )  with such BS and see how much money you well get (for a loan).

Thus, BS.

[agisthos]

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

[PeterSt]

The problem is worse; My (ERP) company writes software for that (and them).

I will admit that when I had coming in 1.5M of money without real orders against it, I wouldn't know where to book it. But even if the orders would be real (let's say that they are/were) then there would be no cost against it. And telling the tax forms "oh, no worries, the cost is virtually there !", is not something someone there will dig. I will need to pay tax over that profit.

 

Only recently I figured (FWIW) that such a thing (same realm) is happening to Tesla (Motors). They pre-sold the Model 3 (or whatever) against a 1000 down payment. Say that 100,000 people did that. They right away "sold" those cars which didn't even exist yet and could book 100M.

Today they fire 7% of personnel because the selling price will need to be USD 1875 higher (and another 1875 next year). "We can not sell as many cars because of this" (talking 60K or whatever costing cars). Yea, sure.

If you want to know the letter Musk wrote to the personnel regarding this, let me know. Utter BS. But apparently necessary (and that I believe).

 

 

[Jud]

2 hours ago, agisthos said:

They are not scammers, just incompetent.

 

Perhaps for the first year or so, though incompetence isn't a lot to be proud of, either. But 4-5 years down the road stringing folks along and never allowing people the option to get out, I'd say that becomes something stronger than mere incompetence.

[Jud]

@LHCommSquad: I have you on my ignore list, as I mentioned to you previously. Once in a while I look at something you've posted, as I did with a couple of your responses today.

 

You are not my client, and so this is not to be relied upon as legal advice. But I wanted to tell you (this is not meant as criticism) that some of what you have related about LHL might be construed as recklessness with other people's money, and reckless behavior might be enough for legal liability to attach.  (I don't know enough about CA law on these points to be certain, but it did at least raise concerns in my mind.) For that reason, though it might result in me and others getting less information from you about what has gone on with LHL, you may wish to refrain from relating more "war stories" regarding what was screwed up and how badly.