Re: [Harp-L] Harrison Harmonicas - a voice of experience

Some notes on the Harrison Harmonicas situation from someone who has been in a position very much like that of Brad Harrison.

In the late 80's and early 90's I had a small self-funded medical software company that had a hot product. My company was too small to exploit the market so I sold out to a larger company with far better resources to market the product. They hired me for several years to transfer the technology and help in its engineering and marketing efforts. It all ended well for all parties. The existing and the new customers had better product and better service. The new company had a fine product that was ready for a hungry built-in market -- no R&D or initial product development required. My partners, employees and I had a nice "exit vehicle" with tidy little sums in our pockets to show for our years of sacrifice and hard work. And a couple of us from the old company had high-level positions in the new company. This sort of thing happens every day. I admit that it was a bit of a let-down for me in the sense that I had pipe-dream hopes of becoming the Bill Gates of medical software, but in the end everyone lived pretty happily ever after.

So Brad may not be the new Matthias Hohner, but he did fine in my book. There's one possibility about Harrison Harmonicas that hasn't been mentioned. Every entrepreneur who starts a company has in mind an "exit vehicle," or an end-point goal. Frequently that is selling out to another entity. In that respect, maybe we should be happy for Brad.

Also, as someone said, the new company will very likely want to hire Brad to help "transfer the technology." If this is the case and if they are successful in making Brad's innovations work, everyone could come out happy. Brad would have a strong position in the new company (and a bit of a personal nest-egg for his future). The company would have an excellent product, ready for a market that is already primed and ready. Most likely one of the first things the new company would do is to fulfill all those back orders quickly and take other steps to repair their image (that was sullied out of the gate by HH's poor public relations).

When a company purchases another company, it is purely a matter of dollars and cents, with the new company assuming all the old company's resources and all of its liabilities. Those back orders added up in the "plus" column for HH, appearing as part of their resources in the deal. They are appealing to the new company because they are already "built-in" to the deal -- customers that they have "in the bag" so to speak. Of course, in assuming the HH debts, the new company would assume the liability of all those down- and pre-order payments. They fall into the "negative" column. Realistically, though, in comparison to the machinery, patents, innovations and other HH assets, those down- and pre-payments are likely pretty small. It would take a ton of pre-orders to pay for the 3-D CNC milling machines and specialized fixtures to make those ultra-special HH reeds.

This kind of resolution may not happen over night and there may be a period of further uncertainty on the part of those pre-order holders (of which I am not one). But I'm confident that the new company has done their "due diligence" prior to making the deal, and that such due diligence revealed all the gems as well as all the warts at HH. Honestly, my bet is that the likelihood of the pre-orders being filled is actually greater now than it would have been had Brad made another choice as to the future of his company (other situations could have easily been far less appealing to those owed down- or pre-payments). So I urge patience and understanding on all sides. In the end, Brad probably did the best he could for you loyal "pre-customers" as well as himself.

At least that's the way I see it.


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