L.E.D.

by Bob Johnstone

  Funding a startup is never easy, especially not in a recession like the early nineties. Venture capitalists were not interested in backing a company that might take years to reach full bloom. Instead, to get his fledgling firm off the ground, Clark sought money from angel investors. A small company must be highly specific in the markets it targets. Finelite found its niche in what Clark called “tailored” lighting. The company makes to order just a few types of fixture - mostly indirect pendants and recessed slot lights for offices and schools - guaranteeing their delivery within ten days. That was a very different business model from the likes of Acuity Brands, which lists over a million products in its portfolio and uses distributors to maintain a large inventory of finished goods. In fact, tailored lighting was unique. “Nobody else is doing that,” said Harry McGovern, one of Finelite’s sales representatives, “they’ve got it down to a science.” High reliability was also key to Finelite’s success. “We can build luminaires that last twenty to fifty years, no maintenance needed, no contractors to change lamps or bulbs,” Clark claimed. “Without a doubt they are the most hassle-free line we represent,“ McGovern noted approvingly.

  Located just across the San Francisco Bay from Lumileds, Finelite was able to monitor closely the initial flourishing of the solid-state lighting revolution. Later on, in 2010, the firm was one of the first to make the leap from high-power chips to the cheaper mid-power devices for general illumination. The transition to LEDs had happened more rapidly than even Clark, with all his experience in semiconductors, had anticipated. “When the change comes, it comes so fast it just takes your breath away,” he said. If a company was not absolutely committed, all-hands-on-deck, to solid-state lighting then it was going to get left behind. LEDs played to Finelite’s strengths in bespoke fixtures and being nimble in responding to clients’ needs. With fluorescents, tube lengths were fixed: four-foot, eightfoot, twelve-foot, meaning that you could stock pre-cut housings. With LEDs, however, fixtures could be any length. And in building, there were many instances where legacy lengths simply would not fit. A space might be, not twelve feet, but twelve feet three-and-one-sixteenth inches. “So at Finelite we said, Hey, let’s make our luminaires to the sixteenth of an inch; we’ll cut them like a deli would cut the length of bread you want.” In the fast-paced customer-driven world there was no room for complacency. “You really have to roll up your sleeves and be nimble every single day,” Clark said.

  By mid 2016, though Finelite was still producing some fluorescent fixtures to match those in existing facilities, about 95 percent of its business was LEDs. All the growth was in solid-state. In the company’s latest products the watchword was control. Finelite was equipping its fixtures with the ability to dim, from 100 to 1 percent. In addition, the color of the light that the luminaires output could also be finely tuned to match human circadian rhythms, going from blueish light, which was believed to energize schoolkids and employees in the morning, to reddish light, which was more appropriate for hospitality and social events in the evening. Both functions could be adjusted simply via a smartphone app. With its narrow product focus Finelite would probably never be big enough to trouble giants like Acuity. But there was plenty of growth in the LED fixtures market to go around. “In our little super-niche we can double and double again,” Clark said. From 2010 to 2016, the company had grown four-fold and now had almost 500 employees. “For a niche company, that’s pretty good!”

  Innovative and Finelite were formed to solve speci fic problems that occurred prior to the advent of high-brightness LEDs. But among the new breed of fixture startups arguably the most successful was Lumenpulse, a company that was purpose-built to leverage solid-state lighting. The firm’s founder and CEO boasted an unusual pedigree. Francois-Xavier Souvay - everyone calls him “FX” - was a second-generation lighting man. As he himself admitted, lighting was in his blood. Born in Montreal in 1970 Souvay manifested entrepreneurial tendencies early, forming a landscaping company when he was just 14. He got his start in lighting while still a student. In the mid eighties his father, a lighting designer who worked in the theater, sought to extend his skills to illuminating the exteriors of buildings, including the tallest skyscraper in Montreal. Souvay worked part-time helping his dad find a supplier of projection equipment that was rugged enough to withstand outdoor conditions. Beguiled, he quit university before graduating to join Z Lighting, a Canadian startup that designed its own decorative street lights. The company prospered, Souvay leading its expansion into the much bigger US market. When Z Lighting was acquired, he chose not to stay on. “I didn’t want to work for a larger company,” Souvay told me, “I wanted to be in control of my own destiny.” He consulted for a firm based in New Mexico that specialized in outdoor lighting, helping it triple its sales. In 1999, having been on the road for most of the decade, Souvay decided it was time to settle down and start a family. He bought a tiny Quebec-based distributor of architectural lighting called Luxtec. But distribution was never going to be enough to satisfy his ambitions: soon Souvay had hired industrial designers and started to develop his own products, rapidly increasing sales from $1 million to $20 million.

  LEDs had piqued his interest early on. In 2001 Souvay initiated research into solid-state lighting. But two years later, with products ready to launch, he pulled the plug. “The market wasn’t ready,” he recalled. The efficiency of LEDs was too low, their cost too high to justify the amount of effort needed to generate a profit. In 2006, judging that the time was now ripe, Souvay rolled the dice, pouring all his savings into starting up Lumenpulse, his vision of what a twentyfirst-century lighting company should look like. “I saw that there was going to be a huge disruption in the lighting industry,” Souvay explained. Many lighting companies would not be able to make the leap, because they had no electronic engineers, did not know how to design circuit boards, or develop software. Mostly what they did was put new lamps in old boxes. “All of a sudden, with LEDs, you really needed to rethink how you design a product,” Souvay said. “It’s no longer just designing a luminaire, it’s designing a system that integrates the source and the controls. So you need all of those skill sets under one roof.” Lumenpulse started out with a clean slate. Souvay recruited a team of experts who combined traditional lighting industry strengths like industrial and optical design with new disciplines like electronic engineering and programming. They set out to convert what Souvay called the architectural lighting market to LED.

  “Architectural lighting” is a conveniently ambiguous term. It usually refers to fixtures used outdoors. But architectural lighting could also be used as a synonym for “specification-grade,” to describe the kind of fixtures that were chosen by professional lighting designers. Early on, Lumenpulse would focus on lighting outdoor applications like access roads, pedestrian areas, public spaces and building exteriors. But it was clear that longer term the company’s ambitions also included indoors. “I see ourselves becoming the most exciting specification-grade LED lighting company in the world,” Souvay boasted to a reporter from Forbes magazine in 2014. He viewed the solid-state lighting industry as having evolved into three distinct tiers. Upstream were chipmakers like Nichia and Lumileds; in the midstream, module makers that produced light engines and LED strips; then downstream, fixture makers. Many traditional luminaire manufacturers bought their components from module makers. But relinquishing control of their supply chains to a third party (which also had to make a profit) meant their gross margins suffered. With its optimized talent pool Lumenpulse was able to develop new products and adapt existing ones much quicker than its rivals. For inspiration, Lumenpulse looked outside the lighting industry. The company modelled its supply chain on Dell Computer. Sub-assembly of fixtures was delegated to contract manufacturers, with final assembly done in-house to control quality. This approach minimized capital investment, allowing the company to focus its resources on research and development.

  Lumenpulse’s policy was to purchase its own components, design its own circuit
boards, and develop its own software. To staff its supply chain the company was fortunate in being able to recruit top talent from the ruins of Nortel, the Canadian telecoms giant which went bankrupt in 2009. “Sourcing our own electronics and having a team of experts to manage the supply chain gave us the ability to have superior margins, which meant we could invest further into R&D and continue to develop new products more frequently and more aggressively,” Souvay explained. Lumenpulse was able to offer its customers thousands of SKUs, configured to the needs of specifiers, and ship them in two to four weeks. Another reason for its success was the company’s strength in optics. When Lumenpulse was founded back in 2006, the amount of light output by an LED was seen as all-important. For chipmakers, performance was always measured in lumens per watt; by default, that became the gold standard. Souvay had come to believe that the quantity of light was the wrong metric on which to focus. It was, he thought, “the biggest mistake the lighting industry ever made.” The real-world performance of a luminaire was not evaluated based on lumens per watt; rather, it was on its ability to deliver light where it was needed. This was achieved via optical control. In the end, what mattered was not how many lumens you could produce, but how you translated those lumens into usable light. Optics offered a golden opportunity to differentiate. “That’s really how we won,” Souvay said, “we developed innovative optics that, for example, could light up a building facade using half the number of fixtures.”

  Improvements in optical control would also, he believed, be key to the future of solid-state lighting. LEDs had become so bright they dazzled the eye: “glare bombs,” Souvay called them. “It’s terrible,” he complained. “We have the best source in the world to control because it’s small. People tend to forget that the ideal ratio is always to have the biggest possible optics with the smallest possible source.29 That’s how you can control the intensity, put the light where you need it while controlling glare. But nobody’s doing that, everybody’s designing their products using very small, off-the-shelf optics, instead of taking the time to innovate on the optical side.” Accordingly, Lumenpulse was pouring its resources into optimizing optics, so that they captured the available light and delivered it where it would ensure visual comfort. “This is where you’re gonna get the full benefit of LED,” Souvay asserted.

  If the use of “lumen” in the corporate moniker was in retrospect slightly unfortunate given Souvay’s views on metrics, then “pulse” was entirely accurate. Implicit in the name was the recognition that digital as well as optical control was crucial for the future of lighting. With fluorescent fixtures dimming had been very expensive. With solid-state lighting, by contrast, it was much cheaper. No additional hardware was required. Fixtures could be controlled using digital signals. “Pulse-width modulation” is geek-speak for a common way of using digital signals to control things like motors (and lights). The question was, How best to send the signals? The most convenient way - because you did not need to instal additional wiring - was to use existing power lines. Early attempts to use power lines to control appliances like lighting dated back to the 1970s. But sensitivity to line noise and crosstalk between signals made the technology a nightmare. Instead, many companies opted for wireless control to dim lights. But as anyone who uses wifi to connect their computers to the Internet knows only too well, wireless signals can be blocked. Wireless also has scalability issues: in a large building, multiple users have to contend for the same finite number of frequencies. Meanwhile, with the advent of digital technology, power line communication had improved to the point where utilities were now using it in conjunction with smart meters to report electricity and gas usage. If power companies trusted the technology sufficiently to use it for billingrelated purposes, Souvay figured, then surely it was reliable enough for lighting controls.

  29 It was ever thus. The Fresnel lens, invented in 1819 for use in lighthouses, produced light that was 38 times brighter than that produced by the best reflectors. In addition to hardware, there was also the issue of what software to use. In 2009 when Lumenpulse began investigating controls, its researchers discovered that there were at least five different protocols for dimming a fixture, some analog, others digital, none of them compatible. Dealing with such complexity presented a real challenge. “We needed to find a solution to make this easy, so that a five-year-old could figure out how to configure a system without having to worry too much about the protocol,” Souvay said. The company developed a language called Lumentalk, a gateway technology that was compatible with all the other protocols. It made digital dimming over the power line - Power-overEthernet as well as line-voltage AC - simple to implement.

  Dimming was just the beginning. Controls were still in their infancy. Tuning white light from cool to warm to match circadian rhythms was the coming thing. Lumenpulse would be integrating tunability into its growing family of new products. The company had made its name illuminating the exteriors of such high-profile projects as Soldier Field in Chicago and the Shard, London’s tallest building. Then in March 2016 Lumenpulse acquired for $60 million Fluxwerk, a British-Columbia-based maker of innovative linear LED luminaires for commercial and institutional spaces. “The Fluxwerk acquisition is a really good pickup for them,” commented Harry McGovern, who represented both Lumenpulse and Fluxwerk. “The one thing Lumenpulse did not have was a product for offices, they were always the concealed fixtures up in the coves and behind facades and things like that. This gets them into the forefront.” Like its new parent, Fluxwerk was founded (in 2011) specifically to target LED luminaires. “They figured out a unique product that they can ship very quickly, on time, on a cost-competitive basis, and made it very easy for the contractor to instal,” McGovern explained. In addition to a visually arresting V-shaped design, the luminaires featured precision-engineered acrylic lenses. By mixing and dispersing light the proprietary optics eliminate any visual image of the LED point source and ensure that color is consistent. In March 2014, Lumenpulse floated on the Toronto Stock Exchange, raising C$100 million. It thus became one of the very few solidstate lighting firms to have successfully gone public. In 2015 Lumenpulse recorded sales of $145 million, up over forty percent on the previous year.

  Though Innovative, Finelite, and Lumenpulse all have their own unique strategies, they also shared several traits. Namely, an emphasis on optics, speed to market, and perhaps most significantly for the future, controls. The final part of this book looks at the shape of lighting to come, beginning with a look at lighting control technology, how it originated, where it is at, and where - thanks to the advent of LEDs - it is heading.

  P A R T III: Beyond Mimicry

  C H A P T E R F O U R T E E N

  Crossing the Chasm D uring the first eighty-odd years of its existence, the incandescent bulb could either be on or off — and that was about it. What people mostly craved was more light, so that they could see better. Little thought was given to control, except in the theater, where for dramatic purposes it was useful to be able to fade lights up and down. To achieve these effects, designers of stage lighting employed rheostats, bulky items that took up lots of space and gave off tons of heat. Enter Joel Spira, inventor of the dimmer. The sine qua non for Spira’s invention was a new type of semiconductor device. Known as a thyristor, it was commercialized by GE in 1958.30 The thyristor functions to control the amount of power that is delivered to an appliance, which it does by switching the current on and off very rapidly, like a gate opening and closing. (The name “thyristor” derives from the Greek word thura meaning “gate.”) GE’s first customers were, predictably, manufacturers of theater lights.

  In 1958 Joel Spira was a 31-year-old physicist designing trigger mechanisms for atomic bombs. But the potentially apocalyptic nature of his work troubled the young man, causing him to lose sleep. Casting round for something less life-threatening to do, he stumbled across the thyristor. “Its uses are limited only by the imagination,” an advertisement for the new device bragged. Spira immediately saw that th
e thyristor’s small size meant that it could fit into an ordinary domestic light-switch wall-box. Perhaps dimming might be attractive to home owners as well as stage directors? A timely thought: a housing boom was then underway in the US, with millions of homes under construction. In the spare bedroom of his New York apartment, Spira began tinkering. He came up with the now-familiar rotary-dial dimmer. In 1961 he moved out to Coopersburg, PA, where he established a firm called Lutron to manufacture his invention.

  30 GE was a leader during the early years of the solid-state revolution. At the company’s Advanced Semiconductor Laboratory in Syracuse, New York, Nick Holonyak provided theoretical support for the team that developed the thyristor. In 1962, while still at GE, Holonyak invented the first visible LED.

  For any successful startup figuring out what to make is only part of the story. The other - in some ways harder - part is figuring out what to do with what you’ve made. Spira came up with a brilliant marketing strategy: instead of geeks, the typical early adopters, he would target housewives. In the theater, dimming the lights created atmosphere. In the home, he realized, dimmers could be used the same way, to make the mood intimate, softening hard edges, causing wrinkles to disappear, making everyone look more attractive. The link between illumination and romance was of course nothing new. On his 1964 album When Lights are Low Tony Bennett crooned: