Following up on my recent blog, Market Leaders Emerge in 2014, here are some thoughts about what it will take for a company to become one of the market leaders in 2014.
The first and probably most important thing was already indicated in my previous blog. There are going to be tens of millions of LED bulbs sold in 2014. If you're selling these at a loss, then you're going to be losing a lot of money -- enough to bankrupt most companies, and enough to have the CEO screaming at you even if you're a mega-conglomerate. So any company that's going to be a market leader in 2014 needs to start selling bulbs at positive margin -- the higher the better considering what's coming in 2015.
I don't have any magical insight into margins at the five companies I think might emerge as market leaders next year, but there are widely circulating rumors in the industry that at least one of them, LSG, has been wrapping dollar bills around each bulb they sell. They better fix that real fast or they'll be history!
The next thing needed to be a market leader in 2014 is dramatic quality improvement. Now it's true that CFLs are selling hundreds of millions of units per year, and their quality generally sucks (to put it politely). But LED lights in 2014 are going to remain more expensive than CFLs, so having things that come out of the box dead -- or die within two weeks of purchase -- is going to put you back in the minor leagues. Stop using electrolytic capacitors. Stop trying to dissipate LED power into the driver. Do some quality inspection on the solder joints. How about hiring some engineers with some experience with quality design for high-volume production?
Market leaders in 2014 also need to do a better job with dimming. Despite all the talk here and elsewhere about dimming, most bulbs on the market today still do a terrible job of it. Here's the typical response to a dimmer: bright; bright; bright; almost off. Saving the $0.05 it would take to do a good job just isn't going to cut it.
And finally, you'll recall my biggest complaint: LED bulbs look awful. CFL manufacturers have the right idea. If you look at the history of CFLs, they have gradually become shaped more and more like incandescent bulbs. LED bulbs need to get on the bandwagon. Flat-topped spaceships from the planet Zorg (to repeat myself) are going to leave you keeping company with the people making photographic film -- out of a job. LED bulbs need to start looking a lot more like "real" bulbs. The comments on these blogs ("that's old fashioned"; "there's no need for that anymore") are just wrong. Make what the customer wants, not what your technology can do. If you can't make what the customer wants, design or invent something that can! (Disclaimer: the above is pretty much what I did before selling my company to Switch Lighting.)
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