gavn8r
Member of the Trade: Lendi
Previously: Light Harmonic/LH Labs, Audioengine
Hi everyone,
I try not to chime in very often here because Casey is so much better than me at keeping track of the thread. But this morning, I spent some time reading through everything, and there’s a few things that I think I should respond to. Then I’ll probably leave it to Casey to answer any more questions you might have.
I note that we’re over 400 pages of comments in this thread alone. I’m very happy about that! I think it reflects the truth that you all care, no matter what your feelings toward us are.
Now, let me jump into it.
Lachlan Likes a Thing
In regards to Lachlan, I think his motivations are pure. I just don’t like the way he’s going about this very real problem. The fact is, we responded to his ticket within 11 hours. After we got a little behind on tickets and he hadn’t been able to interact with us for four days, he posted a video review on YouTube telling the world about his problems. At that point, I instructed Casey to reach out to him directly, which Casey did on three separate occasions. Lachlan seems to not like that we did it out of the ticket system.
He claims (and I have no reason to disbelieve him) that his headphones were damaged by a popping noise coming from Pulse. On our Skype call, he told me the headphones that were damaged we Takstar Pro-80’s. In looking up the specs, I found that their rated impedance is 60 ohms, their rated input power is 250 mW, and their max input power is 500 mW. He plugged them into an amp that outputs 770 mW into 60 ohms. This is a recipe for headphone damage.
As I told Lachlan in our Skype call, we have insurance that will cover damaged gear caused by our products. It’s a 3rd party who conducts their own investigations and makes a determination whether or not something will be covered. If they determine that our product caused damage to another piece of gear, they’ll ask for the damaged item to be sent in and will pay the claim. If they determine damage was caused by something other than our gear (like end user error), they won’t pay the claim. In my opinion, Lachlan’s headphones were caused by his own error. But we’ll let the insurance company’s claims adjuster decide that.
We’ve sold and shipped thousands of Geek Out and Pulse units. We hear from time to time from users that complain about the loud pop when the unit is powered on or off. It’s a design choice that we’ve made and we always warn consumers to follow best practices when using our gear (see Pulse’s user guide). The pop is louder than what you’ll get from other manufacturers’ devices (if they decide not to buffer the output) because our products are usually much more powerful. Simple as that.
We’re finally in touch with Lachlan (again, after repeated attempts) and his unit is being replaced. We’re paying expedited shipping charges to help the process to move more quickly.
The numbers on the shipping status page that Lachlan questions are accurate. We don’t manually change these numbers once a product starts shipping… mostly because I can’t spare the time. Each time a tracking number is assigned by the shipping team, our system updates to show the new percentage of units shipped.
During the delivery phase of Geek Out, we learned that no matter how many units are actually delivered, the overall feeling in the world is that we haven’t shipped anything. It seems that once we reach about 90%, the feeling shifts. I’m curious if that will prove true with Pulse. I bet it will.
Now, on to other questions…
Ponzi Scheme Allegations
I’ve said this before and I’ll say it again. Crowdfunding IS NOT a profit center for LH Labs. It’s true that it’s a revenue center for us, but it’s certainly not profitable. In the case of Geek Out, we spent about $200,000 more on the R&D of the device than we took in from Kickstarter. (BTW, this is the reason so many crowdfunded products go “belly up.” Fortunately for us, we’re well capitalized and always have been.)
In the case of Geek Pulse, my guess is that the same thing will happen. It might be hard to believe that a company like ours 1) would be willing to take a loss on the crowdfund of the product, and 2) isn’t making a profit from $2.8M+ raised. Other than opening our books (which we won’t do), I don’t know what to say other that that which I’ve already said that will help you feel better about this. Maybe I should put it this way:
If the math is linear (which it isn’t), a $200K loss on a $300K project should mean a $2.8M project will mean a $1.86M loss for us. We’re okay with that. If we were suffering a $2.8M loss on this project, we’d still be okay with it. And it’s not because we’re using funds from later projects to fund the loss on previous ones. It’s because we have the ability to absorb the loss on the R&D (which is typically a loss center anyway) in order to get profit from the product at retail later.
To further beat this dead horse, let’s look at Geek Out again. During the campaign, we sold ~1700 units at a loss. Since that time, we’ve sold another ~13,900 units at a profit. Believe me, we’re pretty happy with the way things are turning out.
LH Labs Only Cares About Money
We do care about money. We’re a business, after all. It’s just not the only thing we care about.
Our company is made up of people. People like me. What I care most about in this world is my wife, our children, and our family’s future. I also care about our employees and their families. I won’t jeopardize everybody’s sole means of survival by trading long-term security for short term cash. I won’t do it.
Wave Survey
One of the disadvantages of changing the product all the time is the fact that it’s very difficult to code the logic necessary to track those changes. I used to be the coder that had to do all of that. Now we have a full-time coder. She’s been working on the Wave survey for about a month. We’ve soft-launched it to BETA testers twice now, and each time they’ve found a way to break the system… which is their purpose.
It’s coming! Once I launch it again, it will definitely be broken again. But if it is, we’ll fix the problems and do it all over again. Hopefully, this won’t lead to more frustration.
ESS SABRE9018AQ2M Test Results
We were the very first company to receive a batch of these chips. Larry’s super excited to test them. In order to test them, there has to be a PCB that utilizes it. That PCB was designed, “gerbered”, and sent out for fabrication. We expect the PCB to come in next week. Then it needs to be hand populated. This will take at least another week. Then tests begin. When asked why it’s taking us so long to publish test results, I usually want to answer, “I cannot change the laws of physics!”
By the way, we were also the very first company to use the 9018K2M. The vast majority of manufacturers to use that chip took 10+ months to prototype with it. It took us 30 days to do it in Geek Out.
Transferrable Warranty
I’ve always been against this for reasons that I’ve articulated umpteen million times. It’s just a bad idea for any manufacturer of consumer electronics. The vast majority of CE manufacturers don’t offer it. It’s assumed by many consumers of high-end audio gear that if they don’t register a product and subsequently sell it, that the warranty transfers to the new owner. This is not usually the case. Most manufacturers require a proof of purchase from an authorized reseller in order for them to honor a warranty.
When I finally bent and said I was okay with it, we offered it as a perk. We even included an extension of the warranty as an olive branch for fighting against the will of our backers. Ultimately, 2 people bought the perk. So we determined that it wasn’t that hot of a hot button after all and pulled it down.
The feedback we got was that $79 was too high a cost for a transferrable warranty. Well, our actuary looked at all the data and told us that’s what it would cost us to offer it, so we just passed that cost along. I think it was a fair idea, but only two other people agreed with me. I doubt we’ll ever offer it again.
DFU Update Problems
I’ve personally never been able to duplicate some of the firmware flash experiences that others describe. Don’t get your dander up, I’m not calling you liars. I just can’t duplicate your problems.
When there’s a DFU problem, please open a ticket and let us help you resolve it. If it turns out that something went wrong and it was our fault, we’ll pay to ship it in, fix it, and ship it back out to you. If it turns out it’s enduser error, we’ll gladly fix the problem for you, but we won’t pay the costs.
The Zip files (that contain the DFU files) that you download from the website are named after the product they’re made for. For example, if you want Geek Out firmware, the file is called Geek_Out_Firware_1V5.bin.zip. If that’s not clear enough to you which product you should flash this file on, please don’t flash anything. If you are downloading files to flash both Geek Out and Pulse, please don’t put those files in the same folder. It’s a bad idea
If you accidentally flash the wrong file to your unit, we consider it enduser error. And I think there are plenty of people here at Head-Fi who’ll agree with and defend our point of view.
Conclusion
Guys, I know there are things that we need to improve on. Our Customer Happiness team, for example, has gone through three different configurations in our quest to make it better.
Since we launched the new ticket system, here’s how we’ve been doing:
I took that screenshot from the reports that are generated automatically by the system. It’s a dramatic improvement over the old system.
Our company is now 10 times bigger than it was the day we launched Geek Out in terms of number of employees. As we continue to experience this rapid growth, we’ll find lots of ways that we can improve... and we’ll continue to improve them.
I’m personally grateful for your part in our company’s growth and success. Thank you, all. My commitment to you is that we’ll never forget how much you’ve helped us. And I hope, as you use the devices that you help us design, develop, and manufacture, you’ll enjoy the crap out of them for a long time, and that you’ll accept the longevity and performance of our devices as our homage to you.
Take care,
Gavin
I try not to chime in very often here because Casey is so much better than me at keeping track of the thread. But this morning, I spent some time reading through everything, and there’s a few things that I think I should respond to. Then I’ll probably leave it to Casey to answer any more questions you might have.
I note that we’re over 400 pages of comments in this thread alone. I’m very happy about that! I think it reflects the truth that you all care, no matter what your feelings toward us are.
Now, let me jump into it.
Lachlan Likes a Thing
In regards to Lachlan, I think his motivations are pure. I just don’t like the way he’s going about this very real problem. The fact is, we responded to his ticket within 11 hours. After we got a little behind on tickets and he hadn’t been able to interact with us for four days, he posted a video review on YouTube telling the world about his problems. At that point, I instructed Casey to reach out to him directly, which Casey did on three separate occasions. Lachlan seems to not like that we did it out of the ticket system.
He claims (and I have no reason to disbelieve him) that his headphones were damaged by a popping noise coming from Pulse. On our Skype call, he told me the headphones that were damaged we Takstar Pro-80’s. In looking up the specs, I found that their rated impedance is 60 ohms, their rated input power is 250 mW, and their max input power is 500 mW. He plugged them into an amp that outputs 770 mW into 60 ohms. This is a recipe for headphone damage.
As I told Lachlan in our Skype call, we have insurance that will cover damaged gear caused by our products. It’s a 3rd party who conducts their own investigations and makes a determination whether or not something will be covered. If they determine that our product caused damage to another piece of gear, they’ll ask for the damaged item to be sent in and will pay the claim. If they determine damage was caused by something other than our gear (like end user error), they won’t pay the claim. In my opinion, Lachlan’s headphones were caused by his own error. But we’ll let the insurance company’s claims adjuster decide that.
We’ve sold and shipped thousands of Geek Out and Pulse units. We hear from time to time from users that complain about the loud pop when the unit is powered on or off. It’s a design choice that we’ve made and we always warn consumers to follow best practices when using our gear (see Pulse’s user guide). The pop is louder than what you’ll get from other manufacturers’ devices (if they decide not to buffer the output) because our products are usually much more powerful. Simple as that.
We’re finally in touch with Lachlan (again, after repeated attempts) and his unit is being replaced. We’re paying expedited shipping charges to help the process to move more quickly.
The numbers on the shipping status page that Lachlan questions are accurate. We don’t manually change these numbers once a product starts shipping… mostly because I can’t spare the time. Each time a tracking number is assigned by the shipping team, our system updates to show the new percentage of units shipped.
During the delivery phase of Geek Out, we learned that no matter how many units are actually delivered, the overall feeling in the world is that we haven’t shipped anything. It seems that once we reach about 90%, the feeling shifts. I’m curious if that will prove true with Pulse. I bet it will.
Now, on to other questions…
Ponzi Scheme Allegations
I’ve said this before and I’ll say it again. Crowdfunding IS NOT a profit center for LH Labs. It’s true that it’s a revenue center for us, but it’s certainly not profitable. In the case of Geek Out, we spent about $200,000 more on the R&D of the device than we took in from Kickstarter. (BTW, this is the reason so many crowdfunded products go “belly up.” Fortunately for us, we’re well capitalized and always have been.)
In the case of Geek Pulse, my guess is that the same thing will happen. It might be hard to believe that a company like ours 1) would be willing to take a loss on the crowdfund of the product, and 2) isn’t making a profit from $2.8M+ raised. Other than opening our books (which we won’t do), I don’t know what to say other that that which I’ve already said that will help you feel better about this. Maybe I should put it this way:
If the math is linear (which it isn’t), a $200K loss on a $300K project should mean a $2.8M project will mean a $1.86M loss for us. We’re okay with that. If we were suffering a $2.8M loss on this project, we’d still be okay with it. And it’s not because we’re using funds from later projects to fund the loss on previous ones. It’s because we have the ability to absorb the loss on the R&D (which is typically a loss center anyway) in order to get profit from the product at retail later.
To further beat this dead horse, let’s look at Geek Out again. During the campaign, we sold ~1700 units at a loss. Since that time, we’ve sold another ~13,900 units at a profit. Believe me, we’re pretty happy with the way things are turning out.
LH Labs Only Cares About Money
We do care about money. We’re a business, after all. It’s just not the only thing we care about.
Our company is made up of people. People like me. What I care most about in this world is my wife, our children, and our family’s future. I also care about our employees and their families. I won’t jeopardize everybody’s sole means of survival by trading long-term security for short term cash. I won’t do it.
Wave Survey
One of the disadvantages of changing the product all the time is the fact that it’s very difficult to code the logic necessary to track those changes. I used to be the coder that had to do all of that. Now we have a full-time coder. She’s been working on the Wave survey for about a month. We’ve soft-launched it to BETA testers twice now, and each time they’ve found a way to break the system… which is their purpose.
It’s coming! Once I launch it again, it will definitely be broken again. But if it is, we’ll fix the problems and do it all over again. Hopefully, this won’t lead to more frustration.
ESS SABRE9018AQ2M Test Results
We were the very first company to receive a batch of these chips. Larry’s super excited to test them. In order to test them, there has to be a PCB that utilizes it. That PCB was designed, “gerbered”, and sent out for fabrication. We expect the PCB to come in next week. Then it needs to be hand populated. This will take at least another week. Then tests begin. When asked why it’s taking us so long to publish test results, I usually want to answer, “I cannot change the laws of physics!”
By the way, we were also the very first company to use the 9018K2M. The vast majority of manufacturers to use that chip took 10+ months to prototype with it. It took us 30 days to do it in Geek Out.
Transferrable Warranty
I’ve always been against this for reasons that I’ve articulated umpteen million times. It’s just a bad idea for any manufacturer of consumer electronics. The vast majority of CE manufacturers don’t offer it. It’s assumed by many consumers of high-end audio gear that if they don’t register a product and subsequently sell it, that the warranty transfers to the new owner. This is not usually the case. Most manufacturers require a proof of purchase from an authorized reseller in order for them to honor a warranty.
When I finally bent and said I was okay with it, we offered it as a perk. We even included an extension of the warranty as an olive branch for fighting against the will of our backers. Ultimately, 2 people bought the perk. So we determined that it wasn’t that hot of a hot button after all and pulled it down.
The feedback we got was that $79 was too high a cost for a transferrable warranty. Well, our actuary looked at all the data and told us that’s what it would cost us to offer it, so we just passed that cost along. I think it was a fair idea, but only two other people agreed with me. I doubt we’ll ever offer it again.
DFU Update Problems
I’ve personally never been able to duplicate some of the firmware flash experiences that others describe. Don’t get your dander up, I’m not calling you liars. I just can’t duplicate your problems.
When there’s a DFU problem, please open a ticket and let us help you resolve it. If it turns out that something went wrong and it was our fault, we’ll pay to ship it in, fix it, and ship it back out to you. If it turns out it’s enduser error, we’ll gladly fix the problem for you, but we won’t pay the costs.
The Zip files (that contain the DFU files) that you download from the website are named after the product they’re made for. For example, if you want Geek Out firmware, the file is called Geek_Out_Firware_1V5.bin.zip. If that’s not clear enough to you which product you should flash this file on, please don’t flash anything. If you are downloading files to flash both Geek Out and Pulse, please don’t put those files in the same folder. It’s a bad idea
If you accidentally flash the wrong file to your unit, we consider it enduser error. And I think there are plenty of people here at Head-Fi who’ll agree with and defend our point of view.
Conclusion
Guys, I know there are things that we need to improve on. Our Customer Happiness team, for example, has gone through three different configurations in our quest to make it better.
Since we launched the new ticket system, here’s how we’ve been doing:
I took that screenshot from the reports that are generated automatically by the system. It’s a dramatic improvement over the old system.
Our company is now 10 times bigger than it was the day we launched Geek Out in terms of number of employees. As we continue to experience this rapid growth, we’ll find lots of ways that we can improve... and we’ll continue to improve them.
I’m personally grateful for your part in our company’s growth and success. Thank you, all. My commitment to you is that we’ll never forget how much you’ve helped us. And I hope, as you use the devices that you help us design, develop, and manufacture, you’ll enjoy the crap out of them for a long time, and that you’ll accept the longevity and performance of our devices as our homage to you.
Take care,
Gavin
