Four things I’ve learned doing lighting market research

I"VE BEEN doing market research on the LED and lighting market for almost a decade now.

I’ve lived through the days when a good deal for an LED A-lamp was over $20, to Philips comparing the price of one of their lamps to that of a hamburger a few years later. While the market has changed a great deal in this time, with lumens per Watt dominating the market in the early days to IoT and connectivity protocols being the main interest today, a lot has stayed the same as well.

So what are a few things that I have learned?
 

Being honest is the best way to succeed.

It sounds like a cliché, but this really is the truth when it comes to succeeding in this market. I’m not only talking about our market research either. While we at Strategies Unlimited do hold a strict standard of being open about all our assumptions that drive our market forecasts, I am talking more about players in the lighting industry itself. I have seen both the LED and lighting markets expand and contract several times over with new players constantly joining the fray, and in this time it’s apparent to me that companies that are more upfront about their products tend to fare better in the long run. While low quality products or underhanded sales tactics can survive in the short run, it won’t be long before these companies are called out for their practices and lose out entirely.
 

A business plan based on getting a small piece of a big pie is not the way to go.

Yes, the general illumination market is almost worth $100 billion, but in order to really succeed in this industry you can’t just expect to prosper by offering the same widget in an effort to get some market share. Companies that are able to break up the market into niches and offer tailored solutions for problems found in those niches are much more likely to succeed.
 

There will always be some first movers and some stragglers.

When LED was first introduced as a potential technology for general illumination there were a lot of people who, with good reason, were not keen on it making a huge impact on the market. It was expensive, the light output wasn’t there and the light quality was more reminiscent of CFL than an incandescent. In this early stage of development, it is understandable why there would be individuals and companies not jumping on the bandwagon. That being said, every year, improvements in all these parameters were taking place, making it quite clear that LED was the future of lighting. Even with overwhelming evidence to the contrary, several companies held on for dear life to incumbent technologies for way too long. No product exemplifies this sentiment better than the CFL halogen hybrid introduced at the end of 2013 by GE.
 

There will always be some first movers that are holding onto a dream.

I give OLED an A for effort, but it was pretty clear a while ago that this technology was not suited for the general illumination market. It was too expensive and not bright enough to compete with incumbent technologies or LED. And when compared to LED, technological advances were just not fast enough to compete with the whirlwind that was happening in the LED space. OLED does have its place for lighting, but a troffer isn’t one of them.

 

  • Philip Smallwood is chairing the Strategies in Light Investor Forum in London on Thursday 16 November 2017. Co-located with LuxLive 2017 at ExCeL London, the event brings together venture capitalists, investors and lighting industry CEOs to explore the disruption in the industry and assess where value in the market is to be found. For booking and other information, click HERE.

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