Guest Post: Watch Out for Xicato, and Other VC Reflections From Lightfair

Guest Post: Watch Out for Xicato, and Other VC Reflections From Lightfair
Last week I attended Lightfair, North America’s largest lighting show, in Philadelphia.  It was my first time attending the show since May of 2008, when it was held in Las Vegas.  It was amazing to see just how much had changed -- which until the last couple of years hasn’t been much.

The biggest innovation in lighting (after Edison invented the incandescent bulb) was fluorescent lights, which GE started selling in 1938.  The second was probably the invention of the solid state dimmer switch in 1959 by Lutron.  Sure there have been improvements since then, but there are few (if any) technical fields that have seen fewer changes than the lighting world (especially when you consider how massive the lighting industry is).

That was true, of course, until LEDs came into the picture. Back in ’08, there was a smattering of LED-based lights (or solid state lights -- SSL), but the majority of them were fluorescent, halogen or based on some other technology.  Today, as last week proved, it is all about LEDs. Despite the fact that SSLs are still in their infancy (the biggest use cases today are in street lights, specialty retail and some museums), there was a plethora of lights and enabling technologies being showcased at Lightfair this year. Here are some of the trends that I found most interesting.

The LED version of Edison’s classic

There’s a reason why Edison’s invention is still talked about 100 years after the fact --  the endurance of the original light bulb design is remarkable. Its time may be running out, however, as numerous governments have, or are investigating outlawing the bulbs in favor of more energy efficient versions. At Lightfair, I saw a number of screw-in replacement bulbs made out of LEDs. There were literally dozens of 40W replacement bulbs from behemoths like GE and young upstarts like Lemnis Lighting. As I looked for higher-wattage bulbs, however, the list got shorter. At the top of the range I saw only two 100W replacement LED-based bulbs. One was from Sylvania: it was behind a case and you couldn’t touch it. The other was from a startup that was just out of stealth, Switch Lighting (and you could play with their bulb). Switch’s bulb looks really interesting (check out a picture here) and was one of the few bulbs that was liquid-cooled (i.e., the bulb is filled with a liquid vs. a gas). Switch also claims to have a proprietary driver technology that allows them to achieve the 100W mark.

The big question to me in this market is whether someone will develop technology that gives them a sustainable cost advantage. Markets like light bulbs show tremendous price elasticity.  To be successful, I think companies need to show that they can have a cost advantage through some cleverness or distinctive intellectual property in their design. My investment interests aside, it’s clear to me that consumers are about to get access to high-quality LED bulbs that will naturally get cheaper over time.

The desire to educate consumers on light quality

In the past I’ve seen the benefits of SSL marketed in terms of energy reduction (that’s the driver for our investment in Redwood Systems). At the show, however, I saw a number of companies that were aiming to educate consumers on the benefits of SSL to deliver higher quality light.  We’ve all experienced low-quality light -- from the dull blue light given off by the 1970s-era fluorescents to the eerie yellow light of a high-pressure sodium bulb. I didn’t fully understand the benefits of higher-quality light until last week, however.