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

[Michelle LeFree <mlefree@xxxxxxxxxxxxxxxxxxxxxx>]

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.

Michelle