Thursday, January 18, 2007

The promise and challenge of marketing at Albeo

You have probably seen LED lighting. I'm certain you have seen LEDs.

Red, green, and blue LEDs are the power-on indicators for your consumer electronics, and high-power LEDs are used in traffic lights, auto brake lights, and bicycle headlights. Over the last decade, LED manufacturers have figured out how to make them white, and they continue to make them ever brighter. This has enabled them to begin being used in general lighting applications.

Compared to traditional incandescent, fluorescent, or halogen lighting, LEDs are still the most expensive light source (per lumen), but they have some unique, valuable characteristics:
  • They are as efficient as fluorescents
  • They have no glass to break
  • They don't break when vibrated
  • They only use safe, low voltage
  • They last many years before they die
  • They are cool to the touch
  • They have no hazardous materials (fluorescents have mercury)
  • They are quite small
So, here's the marketing challenge that Albeo faces: finding the niche applications that value some of the above features enough to pay the price for LEDs. Or, more accurately, choosing which of the several dozen niches that Albeo should pursue.

The phone rings all day long at Albeo with new customers interested in Albeo's lighting products. This is good news and bad. It's certainly good that there is clear demand, but it is very taxing on a small company's limited resources to try to sell to a very broad range of customers.

Many of these niche applications, while they can be quite large, are very independent of other applications. For instance, one market that would likely value LED lighting is the RV market. RVs tend to shake most forms of lighting to early failure, and they need efficient lighting to run on batteries. This sounds like a perfect solution for LEDs, particularly in high-end platforms.

The problem is that the channels used to sell to the RV market, and the communication vehicles used to reach it, are completely independent of those used for any other vertical application. That means that the company would not be able to leverage any marketing and sales investment in the RV vertical into any other vertical. For a small company, these investments are precious, so choosing the markets to pursue for early and maximum ROI becomes a critical decision.

Not that I'm complaining, because these are great problems to have. LEDs are going to displace many other forms of lighting over the next couple of decades. We just need to make sure we position Albeo to be the leader of that transition.
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