I wanted to post an article that has been circulating around the office and was written by one of staff, Patrick Rush. I hope you enjoy it. I know I did.
Cavemen can’t make LEDS, and Thomas Edison can’t sell them.
So why are they setting policy.
When considering a company's ability to deliver in the lighting market, it is erroneous to assume that those who were the largest players previosly are automatically those who can best deliver after a technological shift in the nature of the source and delivery of light. It is a natural inclination to assume that since the ultimate commodity sought (in this case, light) is constant, that the same suppliers who have delivered in the past are best fit to deliver it now. Even when the commodity is constant its production and delivery can vary dramatically.
Why do we change the method of production and delivery for something as fundamental as light? Many factors have influenced the changes we have seen in the technology of lighting. We have seen it go from the most rudimentary of technologies to some of the most elegant technologies. The need for mobility, dependability, control and suitability for the application have all played a part as have advances in fuel and delivery systems. but the one constant is that we have attempted to fill a need to illuminate our world.
Large corporations have been built from the production and distribution of lighting but are they the best suited to produce and deliver the next generation of lighting based on those criteria? To put this in perspective, consider prehistoric man. he possessed the skill to create fire and, by extension, could produce light. His "value chain" necessary to produce his light was to gather appropriate fuel, transport that fuel to his shelter and place it in a way that could combust but not suffocate him. then he had to apply his "technology" for igniting the fuel. when all of the components in his value chain were assembled, he lit the fire and produced light - and heat and smoke and toxic gases. He was adept at this process and it served him well for eons. Even today we can produce light through this same method but would not consider lighting fires in your home in order to light it? The idea seems absurd but the lesson is appropriate - someone may be able to produce the same "product" but the value chain they employ (prehistoric man current lighting industry) can be wildly inappropriate for our time and place.
When faced with adoption of a disruptive technology you must turn to the people who are versed in the technology behind what is being produced , not just the effect (light). Changing from burning wood to putting filaments in glass was quite unique and so to is going from light with heat to light from chips. LEDs are the next generation of lighting but they cannot be produced by prehistoric methods of the previous generation.
Monday, October 13, 2008
Saturday, October 4, 2008
Going head to head!
I have got to tell you. There is nothing more exciting and frightening than realizing you are coming onto the market with a product that, as technology stands, has no real competition. The LED product we are producing has literally no peers.
Why?
Because the lighting industry doesn't understand electronics. They don't need to. Well, let me qualify that statement. The lighting industry, as defined herein, are the light sources, both the light bulb and light fixture manufacturer's. The control companies are in a completely different realm of technology.
And the technology companies just tend to sit back scratch their heads, shrug their shoulders and think the technology will just make it to the market by itself. They do not understand the lighting industry. The newer companies that are emerging are essentially in the same boat. Very few of the new LED companies have a firm grasp on the foundations necessary to successfully bring technology TO the market at pricing that is acceptable to the end users.
Both the bulb man and the fixture man understand the means of developing and manufacturing goods for the best price to the customer. However, as consumer demand for technology comes to the market, both are being asked for more efficient methods of light production. In order to offer a solution to the market, many of those manufacturer's are buying up smaller technology start ups, much like the internet boom, in order to have both access and control of the technology. Their control of the technology is also worrisome.
GE, Phillips and Sylvania all now own LED companies. Not just the chip but all are looking into or already own the means to assemble for product offerings. Because they are they lighting guys, right? Well, it's not just that. Over the last 4 years, the Department of Energy has invested a publically announced $1 billion into about a dozen solid state lighting and lighting companies to help research and develop methods of improvement into the technology. GE is a rather large recipient of those development funds. However, were I the DOE and walked into a Wal-Mart store, saw the GE LED products on the shelf, I would ask for every bit of the money back. The quality of the products are substandard, ill-performing and not worth the taxpayer dollars spent to help GE catch up.
I liken this market conversion to the computer industry in the 1980s. If anyone on the street were then asked who would be the computer industry giants in the future, one would expect answers to be IBM, Xerox or Texas Instruments. However, it was the innovators without the excess baggage of pre-existing technology ties, massive inventory overstocks and factory commitments that were able to circumvent the market and bring the technology to the market at prices that were acceptable to the consumer. The Michael Dells, Bill Gates and Steve Jobs were able to seize an opportunity while the giants of industry were sleeping.
As we launch our new products and innovation onto the market, I am hopeful and wary. In my preliminary research and in the market strategy sessions, we have always tried to design and develop product to produce a quality light with optimum performance for the right price. I have seen the competition's products and I know what my operating overheads are. We are achieving a higher quality product at a better price than GE. Now I know they have a heck of a lot more purchasing power than me. So I am absolutely certain when I say, someone in their value chain is pricing to keep pricing of LEDs artificially high. A year ago and quite often today, you will hear someone in the industry say, "It's not ready! In 5 years, maybe." That is a delaying tactic if I have ever heard one. I have been working with high quality LED products for the last 3 years at least. The naysayers are merely trying to rely on their name to drive the business and not necessarily what is right for the country or the industry. They are not invested in advancing technology but on maintaining marketshare.
My hesitancy in their entry into the market, is that as technology comes to the market, it will be bought and put into an offering to be introduced later category.
As is indicated by Philips and the LED streetlight they have had developed, tested and installed for 12 years in the Netherlands. If they were interested in bringing quality product to the market, they would have done so already.
For more information on product, as of this weekend I just launched my website: www.nextgenillumination.com
Why?
Because the lighting industry doesn't understand electronics. They don't need to. Well, let me qualify that statement. The lighting industry, as defined herein, are the light sources, both the light bulb and light fixture manufacturer's. The control companies are in a completely different realm of technology.
And the technology companies just tend to sit back scratch their heads, shrug their shoulders and think the technology will just make it to the market by itself. They do not understand the lighting industry. The newer companies that are emerging are essentially in the same boat. Very few of the new LED companies have a firm grasp on the foundations necessary to successfully bring technology TO the market at pricing that is acceptable to the end users.
Both the bulb man and the fixture man understand the means of developing and manufacturing goods for the best price to the customer. However, as consumer demand for technology comes to the market, both are being asked for more efficient methods of light production. In order to offer a solution to the market, many of those manufacturer's are buying up smaller technology start ups, much like the internet boom, in order to have both access and control of the technology. Their control of the technology is also worrisome.
GE, Phillips and Sylvania all now own LED companies. Not just the chip but all are looking into or already own the means to assemble for product offerings. Because they are they lighting guys, right? Well, it's not just that. Over the last 4 years, the Department of Energy has invested a publically announced $1 billion into about a dozen solid state lighting and lighting companies to help research and develop methods of improvement into the technology. GE is a rather large recipient of those development funds. However, were I the DOE and walked into a Wal-Mart store, saw the GE LED products on the shelf, I would ask for every bit of the money back. The quality of the products are substandard, ill-performing and not worth the taxpayer dollars spent to help GE catch up.
I liken this market conversion to the computer industry in the 1980s. If anyone on the street were then asked who would be the computer industry giants in the future, one would expect answers to be IBM, Xerox or Texas Instruments. However, it was the innovators without the excess baggage of pre-existing technology ties, massive inventory overstocks and factory commitments that were able to circumvent the market and bring the technology to the market at prices that were acceptable to the consumer. The Michael Dells, Bill Gates and Steve Jobs were able to seize an opportunity while the giants of industry were sleeping.
As we launch our new products and innovation onto the market, I am hopeful and wary. In my preliminary research and in the market strategy sessions, we have always tried to design and develop product to produce a quality light with optimum performance for the right price. I have seen the competition's products and I know what my operating overheads are. We are achieving a higher quality product at a better price than GE. Now I know they have a heck of a lot more purchasing power than me. So I am absolutely certain when I say, someone in their value chain is pricing to keep pricing of LEDs artificially high. A year ago and quite often today, you will hear someone in the industry say, "It's not ready! In 5 years, maybe." That is a delaying tactic if I have ever heard one. I have been working with high quality LED products for the last 3 years at least. The naysayers are merely trying to rely on their name to drive the business and not necessarily what is right for the country or the industry. They are not invested in advancing technology but on maintaining marketshare.
My hesitancy in their entry into the market, is that as technology comes to the market, it will be bought and put into an offering to be introduced later category.
As is indicated by Philips and the LED streetlight they have had developed, tested and installed for 12 years in the Netherlands. If they were interested in bringing quality product to the market, they would have done so already.
For more information on product, as of this weekend I just launched my website: www.nextgenillumination.com
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