There's plenty of good ready to be sold audio equipment out there that don't require crowdfunding or preorders. Schiit audio for example, why risk your time and patience on a company who frequently(yes, Schiit also has issues but not as bad) misses their own estimated deadlines. Also they do employ a lot of censorship on their Indiegogo page and forums.

Caveat emptor.

jer, and kothganesh... I can see advantages from the company side: get investment without selling shares!

It continues to be a business model that does not appeal to me, except, perhaps, for getting something made and available that is really really new, and really impossible to fund in any other way. I don't know, but I suspect that this is what got crowdfunding started, with the financing of real innovation.

That an established audio company needs to crowdfund its next models seems pretty strange to me.

None of this means that I might not, one day soon, end up with one of their products! I'm going to hear one this coming weekend. 

But this is a relatively low-cost item. Whereas I have confidence that a company with a model like Schiit is going to be around, and I do not have confidence in the one-crowd-fund-after-another shows. But hey, perhaps they do have capital and are using it for something else.



 

jer, and kothganesh... I can see advantages from the company side: get investment without selling shares!

It continues to be a business model that does not appeal to me, except, perhaps, for getting something made and available that is really really new, and really impossible to fund in any other way. I don't know, but I suspect that this is what got crowdfunding started, with the financing of real innovation.

That an established audio company needs to crowdfund its next models seems pretty strange to me.

That's a fair observation (origins of crowdfunding) and an equally fair point of interest (do they need to crowdfund anymore?).

"Established" is a great choice of words. The dictionary defines it as "having been in existence for a long time and therefore recognized and generally accepted." I'm not sure I'd call LHLabs an "established" company quite yet - they're in the process of becoming one, though. When I think of an "established" company, I picture a company that has a long history, a series of well-regarded products released and in the hands of a great number of consumers. I think of a company that, by all appearances, has a solid financial footing with reasonable cash reserves. A company that can pay its basic operational and facilities costs, make infrastructure investments and upkeep, fund future product research & development, and is growing steadily. All this requires not only money in the bank, but a regular influx of revenue from product sales (or investors) that can meet or exceeds the demand placed on the company by all of those things.

In truth, it's hard to accuse any company that is less than 5 years old of truly being "established", barring a few rare exceptions. Light Harmonic (LHLabs parent company) was itself only founded in November of 2010 (it will be a couple of more months before even the parent company hits 5 years!) and it was just two people - Larry and Gavin. They had two products, a ~$26,000+ DAC called Da Vinci (so, not a ton of consumer demand there... but Larry was out to prove a point: high resolution matters) and a $1,000 USB cable called Lightspeed which most people scoffed at (until they heard the difference it could make for themselves).

Almost 2 years later, in August of 2013, they started a Kickstarter campaign for another product, the GEEK (this would become the 'Geek Out'). It set records by exceeding its $28,000 funding goal in just 10.5 hours, with a final tally of $303,061 from 2,146 backers. In 2013 they also founded LH Labs to encompass their new line of crowdfunded and crowd-designed products.

It's worth pointing out that most "startups" aren't profitable for at least 3-5 years, and some take much longer than that. Expenses usually exceed income by a long-shot. If they're well-managed, they *might* break even, but then they're probably losing money on product returns or just lack of good old fashioned sales. By way of example, Amazon.com was founded in July of 1994. Jeff Bezos didn't post his first profitable year until 2003!  One could argue that they were an "established" company even without being profitable, but it wasn't until the very late 90s that people had any degree of faith that truly "established" booksellers like Barnes & Noble and Borders weren't going to eat them for lunch!

Bearing all that in mind, the question you've posed remains: Does LHLabs "need" to crowdfund anymore?

I think they do. They've staked their business model (at least where R&D is concerned) on not only crowdfunding, but crowd-designing. When they're established (and have a steady stream of income from retail sales -- something they are just now starting to be able to develop with a few products like Geek Out and Pulse to offer) I think they can choose to ease-up on the crowdfunding and focus more on the "crowd designing".

To hear Gavin and Larry talk about it, "crowd design" is part of their company's DNA. It's democratizing the development of the next generation of playback devices. It gets them jazzed and fuels their passion for bringing hi-fi to the masses. Even if they do stop the crowd "funding", I'm pretty sure the crowd "designing" is here to stay. Personally, I like that. I like having a seat at the table during the design phase. Others don't care to, preferring to leave such decisions to the engineers and designers, and I respect that.

 

None of this means that I might not, one day soon, end up with one of their products! I'm going to hear one this coming weekend.  But this is a relatively low-cost item.

I hope you enjoy it, Thad! I have friends who rave about their LHLabs gear, and I have friends who don't care for it, mostly because they aren't a fan of the SABRE chips that Larry is basing his current crop of products around. To each their own! 

Whereas I have confidence that a company with a model like Schiit is going to be around, and I do not have confidence in the one-crowd-fund-after-another shows. But hey, perhaps they do have capital and are using it for something else.

That's a fair concern and when it comes to company futures, nothing is ever guaranteed. I like Schiit's model, too (to some extent -- being a direct-to-consumer brand, they don't support independent dealers like me, but I respect what they're reaching for and I love celebrating others' success!). I love that they use local labor and make things as simple as possible while maintaining a dash of good design aesthetic (but not so much as to drive the price up).

And they certainly have a sense of humor.
 

Hi Gavin

That's a fair observation (origins of crowdfunding) and an equally fair point of interest (do they need to crowdfund anymore?).

"Established" is a great choice of words. The dictionary defines it as "having been in existence for a long time and therefore recognized and generally accepted." I'm not sure I'd call LHLabs an "established" company quite yet - they're in the process of becoming one, though. When I think of an "established" company, I picture a company that has a long history, a series of well-regarded products released and in the hands of a great number of consumers. I think of a company that, by all appearances, has a solid financial footing with reasonable cash reserves. A company that can pay its basic operational and facilities costs, make infrastructure investments and upkeep, fund future product research & development, and is growing steadily. All this requires not only money in the bank, but a regular influx of revenue from product sales (or investors) that can meet or exceeds the demand placed on the company by all of those things.

In truth, it's hard to accuse any company that is less than 5 years old of truly being "established", barring a few rare exceptions. Light Harmonic (LHLabs parent company) was itself only founded in November of 2010 (it will be a couple of more months before even the parent company hits 5 years!) and it was just two people - Larry and Gavin. They had two products, a ~$26,000+ DAC called Da Vinci (so, not a ton of consumer demand there... but Larry was out to prove a point: high resolution matters) and a $1,000 USB cable called Lightspeed which most people scoffed at (until they heard the difference it could make for themselves).

Almost 2 years later, in August of 2013, they started a Kickstarter campaign for another product, the GEEK (this would become the 'Geek Out'). It set records by exceeding its $28,000 funding goal in just 10.5 hours, with a final tally of $303,061 from 2,146 backers. In 2013 they also founded LH Labs to encompass their new line of crowdfunded and crowd-designed products.

It's worth pointing out that most "startups" aren't profitable for at least 3-5 years, and some take much longer than that. Expenses usually exceed income by a long-shot. If they're well-managed, they *might* break even, but then they're probably losing money on product returns or just lack of good old fashioned sales. By way of example, Amazon.com was founded in July of 1994. Jeff Bezos didn't post his first profitable year until 2003!  One could argue that they were an "established" company even without being profitable, but it wasn't until the very late 90s that people had any degree of faith that truly "established" booksellers like Barnes & Noble and Borders weren't going to eat them for lunch!

Bearing all that in mind, the question you've posed remains: Does LHLabs "need" to crowdfund anymore?

I think they do. They've staked their business model (at least where R&D is concerned) on not only crowdfunding, but crowd-designing. When they're established (and have a steady stream of income from retail sales -- something they are just now starting to be able to develop with a few products like Geek Out and Pulse to offer) I think they can choose to ease-up on the crowdfunding and focus more on the "crowd designing".

To hear Gavin and Larry talk about it, "crowd design" is part of their company's DNA. It's democratizing the development of the next generation of playback devices. It gets them jazzed and fuels their passion for bringing hi-fi to the masses. Even if they do stop the crowd "funding", I'm pretty sure the crowd "designing" is here to stay. Personally, I like that. I like having a seat at the table during the design phase. Others don't care to, preferring to leave such decisions to the engineers and designers, and I respect that.

 
I hope you enjoy it, Thad! I have friends who rave about their LHLabs gear, and I have friends who don't care for it, mostly because they aren't a fan of the SABRE chips that Larry is basing his current crop of products around. To each their own! 

That's a fair concern and when it comes to company futures, nothing is ever guaranteed. I like Schiit's model, too (to some extent -- being a direct-to-consumer brand, they don't support independent dealers like me, but I respect what they're reaching for and I love celebrating others' success!). I love that they use local labor and make things as simple as possible while maintaining a dash of good design aesthetic (but not so much as to drive the price up).

And they certainly have a sense of humor.