A first peek into the trials and tribulations of starting a disruptive light bulb company eliminating electronic waste
Most startup stories @medium are looking back at what happened, so I thought it might be useful to write a warts and all blog almost in real time. Hopefully in that way I can capture some of the sense of excitement, both good and bad, while providing opportunities to learn from our successes and failures. However first I need to cover a bit of history to bring the story up to date.
I’ve been involved in the Lighting Industry in one way or another for more years than I care to remember, with only marginal improvements in technology and products. However, the recent developments in LED technology are creating the biggest change in the industry since Edison was playing with hot bits of wire and are now beginning to deliver on the promise of long life and ultra high efficacy, at least in parts.
Our spin-out business Cool-Curve Ltd was approached 18 months ago to lead a consortium bid for a grant funded project to develop a lighting product that would follow Circular Economy (CE) principles. Having been involved in multi partner projects before I was a little reluctant as they can be a pain to manage, but I was introduced to a great design company, The Agency of Design who had considerable CE experience, that I thought we could work with well.
The grant funding comes courtesy of Innovate UK, an executive non-departmental public body that is the UK’s innovation agency. This organisation has proven to be a fantastic supporter of leading edge SMEs and has seeded many leading new technologies and products.
In researching the scope of the project one fact stood out, there are 6 billion light bulbs thrown away every single year. That’s pretty much one for every single person on the planet! That scale of waste demonstrated a massive area for improvement through applying CE principles but also a substantial business opportunity.
As noted in several articles recently, a common trait of the unicorns such as Uber and Airbnb is that they address major well established markets but in a disruptive way, rather than creating new markets. So it seemed to us that the light bulb market might provide a similar opportunity if it could be approached effectively.
One characteristic of the market supporting this belief was that the major manufacturers were deliberately designing products to have relatively short lives thus maintaining their existing replacement business model. This was confirmed by a designer at one of the firms who despaired that he was being asked to downgrade his designs. So there was clearly an opportunity to create differentiated products that could last a long time if they could be provided to customers in an attractive way.
Early investigations showed the economics of long lived products when combined with the large energy savings could provide users with a cost effective alternative while still providing good margins. Designing the bulbs for remanufacture would only improve profit potential if the business model could be structured to ensure they would be returned towards the end of their productive life. So we started to review how that could be achieved while providing customers with a great experience. Logically the best way to achieve this would be a comprehensive service offer, providing the bulbs for a regular fee with on-line 24/7 monitoring.
Having decided this as a model we were able to commence the funded project with some confidence, so settled down to the hard graft in February 2015.
Bringing it all up to date the product designs are almost complete with initial prototypes being manufactured. An integrated wireless technology has been chosen to provide both control and communications with the lamps and been proven in testing, while new optics has been developed to provide market leading performance.
However the most exciting (for me) element of the project so far has been the support the proposed business model has received. As most readers might think, why the hell would I rent light bulbs?
It seems that many have been pissed off by how many they have to replace every year, particularly the halogens that infect the ceilings in most new builds (in the UK at least). The other major issue that comes to the fore is the fear that high tech connected products elicit in many potential users “What if I can’t make it all work?”. Assuming that we can provide a service that resolves these issues then the benefits of using it can be compelling, and that’s before you start to consider the funky coloured designs and how they might fit into a particular aesthetic.
So now we’re starting to put together what we need to do to create the business, pitches, slide decks, financials etc. needed to interest investors. So far so good.
In the next episode I’ll be covering the prototype process (with pictures), back office software development and how the fund raising is going — hope you enjoy and connect if you’re interested in what we’re doing.