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Gene C

A letter by Bob Carver

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Message from Bob Carver

 

Date unknown

 

As you may know, I lost control of the Board of Carver many long years ago – 1987 to be exact. I became only a figurehead at the company I founded, and after watching the actions of the Board from up close (more on this later), I decided enough frustration was enough and I left. Since then I’ve watched from afar as a once proud company has gone down. As the years trolled by and the company’s valuation trickled away, I made it clear that I was always available to help. I repeatedly asserted that I could stanch the losses in excess of $3,000,000 per year and put the company on solid footing. I shared my plan, yet the Board wanted nothing to do with me. I was persona non grata. I was the Evil Founder. In the meantime, I founded a new company, Sunfire, salted it with two inventions and a small capital infusion, and off it took.

 

Sunfire’s growth has been strong, with sales revenue nearly doubling each year. Ditto for earnings. If all goes well, and that’s a big if, I intend to combine Sunfire and Carver approximately 15 months from now, thus forging a larger and stronger public company. (Sunfire is at this time privately held.)

 

Back to Carver. By the end of 1998, Carver had spent all its money and then some. Carver Corporation reminded me of the 1950’s science fiction movie in which an H-bomb has been dropped on New York. What used to be a beautiful city was shown with only the wind blowing through a dusty and empty town, and only the occasional tumbleweed rolling along deserted streets. No cars, people, or anything. Empty! This was the state of affairs at Carver when the Board of Directors finally called me. Carver Corporation literally had a mere seventeen dollars in the bank. They had managed to develop a negative net worth of over $1,000,000. I visited Carver and found nobody home. The assembly line had been shut down and the workers had gone. Carver hadn’t been able to pay salaries. There were empty desks, empty cubicles, blackboards with writing on them, and no one around. It was as if everyone had just left on a moment's notice. My Carver was a thriving, bustling place. This was surreal.

 

I was witnessing the complete and unmanaged collapse of the company, like an imploding star, into an uninhabited black hole. Carver had no money, no employees, no plan, no technology, and no manufacturing. Carver did have roughly $1 million in lawsuits, $1.6 million in unpaid bills, and a practically nonexistent Dealer network. Through a series of disastrous sales and marketing tactics, Carver had angered its Dealers, who had resigned the line in droves. Carver retained a few factory Representatives in name, but these were ineffective and without action. The primary lending bank had informed Carver it would seize all remaining assets unless the outstanding loan balance was immediately paid in full. I was informed the landlord was in the process of acquiring a court order allowing him to padlock the building. I knew Carver didn’t have a legal leg to stand on, and the landlord would indeed prevail and shut the doors. The Board asked me to step in and save Carver. I jumped at the chance, and put my years of passion and experience to the task.

 

Those years have taught me that at a minimum, a Board of Directors owes a company a capable and competent leader. In my opinion, Carver’s Board failed miserably in this regard by repeatedly appointing leaders with absolutely no audio industry experience. As incredible as it seems, after each CEO would in turn fail at the job, he was then given a seat on the Board of Directors! Ultimately, the Board was almost entirely comprised of former failed Carver CEOs! Decisions at the very top of the ladder were being made by men who had failed to pull the company out of its downward spiral. Unbelievable! All I could do was watch from afar as decisions made in ignorance and arrogance relentlessly hammered your company into the ground. Forgive me, for I digress…

 

To begin, I quickly cut a deal with the bank, paid off the debt, and effectively became the secured creditor for everything Carver owned. Every computer. Every table. Every pen and pencil. Indeed, every roller track, power tool, assembly line, jig, fixture, copy machine, all assets including the patents, trade marks, and the very name of the company. We got word that the landlord had received his court order, effective on the first of the coming month – just days away. My Sunfire employees and I rented trucks, leased numerous storage sites throughout the area, and cleared space at Sunfire in preparation for a very hurried move. During the course of several arduous days and nights, we loaded everything up and moved it all out. You can believe that Carver again has a responsive leader, and one who truly cares. I’m back. Carver now has a fighting chance.

 

Prior to doing all this, I signed an agreement with the Board of Directors (see "The Operating Agreement"). Inked just prior to the Consumer Electronics Show, this agreement galvanized Sunfire’s engineering department. We designed five new products, including two brand new technologies and one clearly in a class by itself through the use of existing Sunfire technology. We worked around the clock – from the crack of dawn to late in the morning – night after night, day after day, and finished just in time to go to the show. We showcased five new products sporting the Carver Logo. Our goal was to generate excitement for the New Carver Corporation, and to sign up 100 new retail Dealers. It was also our intention to sign up 18 new factory Representatives at the top level of the new revitalized sales network for Carver products.

 

As we all know, trust is something that is earned slowly and is difficult or impossible to regain once lost through an unfaithful act. When a company is placed in what I call ‘the penalty box’ for such a loss of trust, it often remains there indefinitely. At best, it’s very difficult to get out of this ‘box.’ We fully expected the Dealers would be extremely wary of the Carver brand. We’re proud of the trust Sunfire Dealers have in us, and we knew that they would at least listen. Carver had lost the trust of its dealers, and in turn lost its way. We had much work to do.

 

We asked Dealers to look at the new products and talk with us. To our great pleasure, the Dealers loved the products. On the basis of the new products and my personal commitment to the Dealers (most of whom I’ve known for many years), their wary attitudes faded significantly. I gave them a solemn pledge, "Even though Carver used to be bad, it will now be good." One by one, we managed to sign up 100 Dealers – exactly our goal. We also signed up an entire factory Representative network. This new network of Dealers and Representatives is simply waiting for the new designs to be finished, put into production, and distributed.

 

We’ve replaced Carver’s dysfunctional infrastructure with the healthy corporate systems in place at Sunfire. We have an exceptional sales force, a world-class engineering department, and above all, new technologies. Sunfire has assumed all the functional and operational elements for the Company. Everett Audio Repair, an independent repair shop in Everett, Washington, has assumed responsibility for warranty service. Things are looking up for Carver. Carver now has Dealers and factory Representatives who are firmly committed. Carver now has new technology, and hope to go with it.

 

It’s been a wild ride for all of us. We’re packed to the gills with twenty years worth of Carver stuff sitting around everywhere. It's like a submarine ready to put out to sea; one can’t even walk through the isles because there are so many stores, provisions and other gear. Carver was once following a death spiral to its doom, and now it isn’t. We have a chance. That’s where we are today.

 

Sincerely,

 

Bob Carver

  • Thank You 12

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Er. Gene? Holy shit.

Forgive me for the stupid question here because I am mobile with a flakey browser .....

What is the approximate date of this?

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Er. Gene? Holy 5hi7.

Forgive me for the stupid question here because I am mobile with a flakey browser .....

What is the approximate date of this?

Before 2003.
  • Thank You 1

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This is a good read but there is one part I do not understand  "Prior to doing all this, I signed an agreement with the Board of Directors (see "The Operating Agreement").
 
 
I guess I am  vindictive, I would had fired the whole lot of them, by my understanding he took care of the debt of the company,
at that time I would had taken control and planted my big foot right up their A@#$ and showed them the dooremkulou.gif
 
But that's just me

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To a large extent when a company goes public the founder loses absolute control in exchange for capital. The board had the power to out vote Bob.

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