I wish everything were an auction

A few months ago, I had a discussion with John Ives about his startup, Storage Markets, and the challenge of setting price for an unprecedented offering. I'm now experiencing exactly the same thing with Albeo.

LED lighting is dramatically different from traditional lighting. Here's a list of differentiators we use occasionally:

• Reduced energy consumption; 10 times less energy than incandescent
• Reduced maintenance costs; 10 to 100 times less maintenance
• Reduced thermal loads; 10 to 20 times cooler than other lights
• Longest lifetimes; for 50,000 to 100,000 hours
• Highly resistant to shock and vibration; no glass or filaments to break
• Extremely safe; low voltage, no EMI, low temperature
• No recycling costs; no mercury
• Full scale control of light level; adjustable from off to full on
• Smallest form factors
• Widest range of operating conditions; -40 to 70 degrees C
• Easy to integrate with electronics; micros and sensors
• All colors available; high color purity, all whites

Clearly, LEDs provide a very different lighting solution from traditional lighting. However, they cost maybe 10 times more to manufacture. So, how does one price LED offerings?

I'm going through that process now for several new products we're about to launch. Setting price is one of the most difficult things a marketer does. I strongly believe in setting price before I learn what a product costs to manufacture. It is very easy and common to base price on cost, even if one does so unconsciously because he knows the products' cost. However, our customers don't care what our products cost to make, do they? They care about what the products do for them; the value they deliver.

The ultimate way to determine the price is with an auction. Not that I want to sell our products on eBay, but why can't everything be an auction? It would make my job so much easier.

Getting the message right, revisited

A year ago, I posted about Albeo being interviewed by BCBR and us not doing the appropriate messaging prep work to get our story across clearly. Although the BCBR article turned out OK, we were determined to do better in the future.

I recently mentioned that the local TV station, 9News, did a story on us. It came up quite suddenly; they called us at 9:30 and arrived an hour later. (We had to run home to put on our dress-up clothes, since we were looking pretty shlubby.)

Before Ward and his cameraman showed up, we reviewed the key messages we wanted to deliver, and even wrote them up on the white board in the conference room where the interview took place. Jeff (Bisberg, Albeo's founder and CEO) methodically worked them into his responses to Ward's questions, and I was quite pleased as the interview progressed. By the end of the interview I was confident that, no matter what material they chose to use, our messages would get through.

Then, something weird happened. Ward realized that they hadn't yet filmed a 15-second teaser that would run in the half-hour leading up to the news program. Ward and I worked up a two or three sentence script for that while the cameraman set up the shot.

During that five minutes of shot preparation, Ward chatted about some vandalism problems occurring in his neighborhood. He lives out in the boonies on several acres of land with a driveway gate that's not visible from his house. He was thinking about putting a camera out on the gate, in addition to the current intercom, to check out visitors remotely. He remarked that there's not adequate light out there for the camera, and I pointed out that he could install Albeo lights with integrated motion sensors so they would light up as soon as someone came up to the gate. I also noted that Albeo's lights are rugged enough to stand up to potential vandals.

So, what happens next? The cameraman gets the shot set, Ward picks up the mike, throws out the few sentences that we wrote together, and ad-libs the teaser with something about Albeo's "vandal-proof" LED lights. Vandal-proof?! Among our top ten important differentiators, that may be number 25. Seriously, he leads with vandal-proof?

After carefully staying on message for 45 minutes, we slip off message for a few minutes at the end and we get stuck doing vandal-proof lighting. Obviously, we're targeting that huge prison lighting market.

Clearly, the moral of this story is that one must always stay on message. Always.

Looking forward at the next few months

Now that I'm blogging again and have joined Albeo full-time, I have several topics that I think I'll be writing about soon. These include:

• How solid-state lighting breaks the entire lighting industry product and channel structure
• Thinking about expanding Albeo internationally
• Destination Imagination
  
• Albeo's first trade show
• Guitar lessons
  

Of course, there will be much more that comes up that I'll feel the need to write about. I have to say, I certainly enjoy being back online. I hope you keep reading, although if you don't, I'll probably still post.

Catching up on open topics

There are a couple of topics I left open when I stopped blogging last year, so I thought I'd wrap those up a bit.

Yes, I still do BSS with the kids, although not nearly as frequently. We did get to tour the 9News newsroom with Ward Lucas. Ward had done a story on Albeo (make sure you check out the video), and I was chatting with him between shots, telling him about BSS, among other things. He graciously offered up the tour. Last weekend, we also attended a robotics competition, which I'll post about soon.

I also completed my personal trifecta: the Elephant Rock Century, the Triple Bypass, and the Copper Triangle. I had made a public commitment to the Triple, but privately I committed to the whole package. For those of you not in the Colorado cycling community, these are all difficult events, from 80 to 120 miles, with several thousand feet of climbing, much of it over 10,000 feet.

The experience of doing three difficult events in a season had several positive benefits:

• I worked myself into my best cycling shape ever
• I achieved a couple of personal cycling milestones on the side: (i) sustaining more than 20 mph on a closed loop for an hour, and (ii) riding up the world's highest paved road to the peak of Mount Evans.
• I had an excuse to get ride of my ten-year-old, heavy road bike and get a new climbing machine

The downside of the whole trifecta thing was that it was a tremendous time commitment, particularly when I had little extra time (hence the lack of blog posts). If you're going to ride strong over mountains, then you have to spend practice time riding over mountains.

That commitment played a part in one decision I made, which I will publish here for future reference. I'm not going to do Triple Bypass again. That's just too big of an event for a recreational rider like me. The logistics are complicated, the weather risk is big, and the potential for stomach discomfort is high (you need to eat a lot of calories to fuel yourself for 8-10 hours of hard exercise, even though you don't feel like eating anything). I have proven twice now that I can do it, but I don't get enough from it to do it again.

I think that wraps up any open topics from my last posts. Of course, it's not like these are the only things that happened over the past year, so if I recall anything you might be interested in, I'll be sure to post about it.

Did you miss me?

Yes, I'm back. As you can see, I haven't blogged for a year. I know my scores of readers have all put their lives on hold during my hiatus, and I deeply apologize for the resulting national economic slowdown.

So, let me explain why I disappeared for a year. As you know from several postings, I was working with Albeo Technologies when I disappeared, and I still am. However, I was doing so as a volunteer on my 'free time.' I had a day job the whole time, however, which happened to be in Colorado Springs, about 100 miles from my home in Boulder. Between Albeo, my day job, commuting, cycling, BSS and general parenting, blogging ultimately had to take a back seat.

Well, things have changed dramatically, and I am tremendously excited! First, my day employer sold the Colorado Springs division to another company, but retained my products. They requested that I relocate to California to work in the headquarters or at least work from my Boulder home. I decided against those options and agreed to a retention package through today, March 31. This set the stage for me to make a change.

As March 31 approached, another fortuitous thing happened. Albeo closed their first major funding round, which enables me, along with several others, to join full time and really hit the accelerator. I can now focus on executing for one company, rather than having such a schizophrenic work life.

In my next posts, I'll catch you up on other news and take a look forward at likely upcoming topics.

Thanks for sticking with me. I'm happy to be back.