Three years ago, Cree's founder and former CEO of Cree, Neal Hunter, left the chip factory and immediately set up LED Lighting Fixtures (LLF) and marched into the supply chain. For this market dominated by LED lighting, he has something to ask for. (Editor's note: On February 8 this year, LLF has officially signed an acquisition agreement with Cree. Since then, LLF's products have combined Cree's lighting series XLamp LED and its patented color mixing technology. Although things have changed, Hunter has no shortage of LED lighting industry. The insights are still enlightened by later entrepreneurs. Now LLF is even more powerful, and together with Cree continues to lead the entire LED lighting industry.
Author: Richard Stevenson "Compound Semiconductor" column editor
Why did you leave Cree and establish LLF?
I left Cree for personal reasons. I have been in Cree for 18 years, and my role has been changing. I didn't plan to re-do the technology at the time, but later Gerry Negley (former employee of Cree) and Tony van de Ven (CEO of Lighthouse Technologies) found me and proposed the idea of ​​pushing LEDs into the lighting industry.
The lighting industry is saying: "It takes three to five years, or five to ten years, for LEDs to enter the lighting industry." We are tired of hearing this and believe that this is an opportunity for those who master chip-related technologies. But the direction of our application is completely different, not general lighting but billboard lighting. However, in the process we have discovered our core technology, which can help us achieve very high performance and very good color rendering performance.
If there is not a good team, I will not re-do the technology. Among the company's core teams, Gerry and Tony are highly talented inventors and scientists who have worked in entrepreneurial companies before, and bringing together these outstanding core talents is a rare opportunity. And it's unbelievable that Cree's former senior vice president Mike Rogers and former CFO Cynthia Merrell are also willing to join.
Is the newly established company difficult to finance?
According to our previous experience, company financing is easy. In the initial stage, we personally and other strategic partners invested a lot of money, and now we are in the financing stage called “b seriesâ€. We spent only a day or two on these jobs, but it seems to exceed our expectations. For the industry, having so many investors is exciting, and we just want to make sure they are excited about the right reasons.
The industry we work in is worried about what chips or products we use, but we also need to remember the user experience. Consumers don't care about chips, they care about the quality of light. They would say that I am used to using warm light, or that it initiates light unlike LEDs. Our understanding is that they don't want to see LEDs, just want to see the light. If they know that efficiency is high, it will make them feel better. Even if they know that a product can be used for many years, they don't have to change often, they will be more satisfied.
That is the negligence of people, even when I was at Cree. I have been thinking about chips and packages in my mind, but what really matters is an experience. You need to turn all the technology into a consumer lighting experience.
Have you ever considered setting up a lighting department in Cree?
This is entirely possible, but we have not considered it before. We tried the true color display in the 1990s, but because we were ahead of the normal technology cycle, the performance was not very good at that time. The general view of the board of directors or Cree employees is that shareholders may not be interested in going to the high end of the industry chain.
What are your expectations for LLF?
I hope it will be the next influential lighting company, and that must be done before it can be successful. You need to push a finished product to the end market, because any unformed consumer goods are difficult to get on the market.
Now LLF has a lot of different products that we need to speed up. We have developed a lighting platform and need to deploy this platform to a number of different product lines.
How will you see the current progress?
We have already launched the entire industry, for which we have exhibited lamps with a luminous efficacy of 80 lm/W, and our original product will be 60 lm/W. This will be a huge boost for the industry. Other luminaires and light bulb companies originally thought they could sit back and watch for a while, but now they can't sit still.
From the perspective of business tactics, we have customer representatives in 49 states. This is exactly what some people have said: "You can't do it because it is impossible."
Two of the largest lighting companies in the United States have blown all of their channel vendors to tell them that if they represent our product line, they will run the risk of losing their authorized agents. We are really flattered. We are still an unprofitable company, and they just made a free advertisement for us. They tried to use typical and ancient tactics to protect their territory by setting up isolation. That means they are not innovative. But trust me, they will use LEDs in their product lines sometime in the future. We will also create an innovation in the industry.
Do you have a lot of customers?
We have not yet released new products, and I expect the number of customers to be 20-50. At first, we thought that our product development goal was the family market, but later found that there are very many opportunities in the commercial market.
We are working with the Friendly Ice Cream Company, which has more than 500 stores in the United States. We are piloting there, and once successful we will be fully rolled out. There are many retail customers like this type who are also looking for a pilot partnership, but we want to enter the midwestern commercial construction industry.
What is the price and profit of your products?
We have our own intellectual property on the core platform of LLF, which will give us a good long-term margin. You have to be realistic and don't overpriced the product. We expect the price of the product to be around $75, with twice the output and performance of other competing products, and overall lower prices. If you want to win in business competition, then you must set the right price.
We are indeed sourcing from Cree, but there are some other suppliers for our supply. We are currently using Cree's XR-E technology.
Like any other consumer, we also want products that are more efficient, brighter and less expensive. However, this is the industry's praise for LEDs many years ago. But we also want to see more energy-efficient products.
What is the reliability?
Obviously this is extremely important. We chose Cree's XR-E technology because of reliability. We are looking for reliable test data that is widely recognized in the industry. Many companies have thrown data about the so-called 50,000 hours of work. But how do you know? What is the standard of testing?
It is the responsibility of the luminaire manufacturer to confirm that you are using a device with excellent performance. But the heat you handle is not the same, so the higher the efficiency, the easier it is to produce a high-performance, sturdy fixture.
Our luminaires emit 650 lm of light at approximately 12 W, so the heat handled is much less than that of conventional LED luminaires, but it still needs to be handled carefully.
Do you see small fluorescent lamps (CFLs) as a future threat?
of course. Everyone thinks CFL will be used in road lighting. Although they are more expensive, they can produce more light, which is acceptable for many people. The CFL industry is growing at an alarming rate.
But that's also a good thing because it can awaken people's awareness of efficient lighting. Our industry needs to be clear, not so much as we are attacking each other, but rather promoting the development of the industry. There is a trend in the LED industry to constantly attack each other. I think that some large-scale groups should not be involved in such activities.
How is LLF different from other LED-based lighting companies?
We have an unusual platform. Tony and Gerry have decided to put some color properties on it and make it completely different from any other product.
Regarding the patents we have, it not only protects our color properties and the way we mix different colors of light, but also protects some basic chip technologies. So we have a full set of technology.
In addition, we have a team with extensive experience in all aspects of business, whether financial or general. Tony is responsible for the operation of the plant, Gerry is responsible for many aspects of the work, and Cindy has raised more than $350 million from Cree, where he works.
How do you compete with large lighting fixture manufacturers such as Osram and Philips?
I think we will meet on the battlefield of lighting, but the question is when will they give up their fluorescent or incandescent lights.
Now you can argue with others why they are adding toxic substances to fluorescent lamps with full knowledge, and fluorescent lamps are used throughout the United States and even the world. But I think that is not a small problem for the US judicial system. Although everyone seems to be in peace now, I believe that someone will eventually come up with it.
And our products will be non-toxic alternatives. It has outperformed fluorescent lamps in terms of color quality and efficacy, and I think they will definitely respond to products like ours. We will cherish every opportunity.
Editor's Note: The actual progress of LLF is as described by Mr. Hunter. Since Richard's interview, LLF introduced LR4 and LR6 last year. According to the results announced at the IBS conference just held in Florida, LLF is showing its 4-inch LR4 compact spotlight. And announced that the LR6 module launched in August last year, quickly gained market recognition, sales have climbed all the way. With 65 agents in the US and Canada and a strong sales network of more than 400 distributors, the LR6 module has sold more than 50,000 units, enough to illuminate 2 million square meters of floor space. In addition, the LR6 received a grand prize from the American Lighting Association last fall and passed the US Department of Energy test.
Author: Richard Stevenson "Compound Semiconductor" column editor
Why did you leave Cree and establish LLF?
I left Cree for personal reasons. I have been in Cree for 18 years, and my role has been changing. I didn't plan to re-do the technology at the time, but later Gerry Negley (former employee of Cree) and Tony van de Ven (CEO of Lighthouse Technologies) found me and proposed the idea of ​​pushing LEDs into the lighting industry.
The lighting industry is saying: "It takes three to five years, or five to ten years, for LEDs to enter the lighting industry." We are tired of hearing this and believe that this is an opportunity for those who master chip-related technologies. But the direction of our application is completely different, not general lighting but billboard lighting. However, in the process we have discovered our core technology, which can help us achieve very high performance and very good color rendering performance.
If there is not a good team, I will not re-do the technology. Among the company's core teams, Gerry and Tony are highly talented inventors and scientists who have worked in entrepreneurial companies before, and bringing together these outstanding core talents is a rare opportunity. And it's unbelievable that Cree's former senior vice president Mike Rogers and former CFO Cynthia Merrell are also willing to join.
Is the newly established company difficult to finance?
According to our previous experience, company financing is easy. In the initial stage, we personally and other strategic partners invested a lot of money, and now we are in the financing stage called “b seriesâ€. We spent only a day or two on these jobs, but it seems to exceed our expectations. For the industry, having so many investors is exciting, and we just want to make sure they are excited about the right reasons.
The industry we work in is worried about what chips or products we use, but we also need to remember the user experience. Consumers don't care about chips, they care about the quality of light. They would say that I am used to using warm light, or that it initiates light unlike LEDs. Our understanding is that they don't want to see LEDs, just want to see the light. If they know that efficiency is high, it will make them feel better. Even if they know that a product can be used for many years, they don't have to change often, they will be more satisfied.
That is the negligence of people, even when I was at Cree. I have been thinking about chips and packages in my mind, but what really matters is an experience. You need to turn all the technology into a consumer lighting experience.
Have you ever considered setting up a lighting department in Cree?
This is entirely possible, but we have not considered it before. We tried the true color display in the 1990s, but because we were ahead of the normal technology cycle, the performance was not very good at that time. The general view of the board of directors or Cree employees is that shareholders may not be interested in going to the high end of the industry chain.
What are your expectations for LLF?
I hope it will be the next influential lighting company, and that must be done before it can be successful. You need to push a finished product to the end market, because any unformed consumer goods are difficult to get on the market.
Now LLF has a lot of different products that we need to speed up. We have developed a lighting platform and need to deploy this platform to a number of different product lines.
How will you see the current progress?
We have already launched the entire industry, for which we have exhibited lamps with a luminous efficacy of 80 lm/W, and our original product will be 60 lm/W. This will be a huge boost for the industry. Other luminaires and light bulb companies originally thought they could sit back and watch for a while, but now they can't sit still.
From the perspective of business tactics, we have customer representatives in 49 states. This is exactly what some people have said: "You can't do it because it is impossible."
Two of the largest lighting companies in the United States have blown all of their channel vendors to tell them that if they represent our product line, they will run the risk of losing their authorized agents. We are really flattered. We are still an unprofitable company, and they just made a free advertisement for us. They tried to use typical and ancient tactics to protect their territory by setting up isolation. That means they are not innovative. But trust me, they will use LEDs in their product lines sometime in the future. We will also create an innovation in the industry.
Do you have a lot of customers?
We have not yet released new products, and I expect the number of customers to be 20-50. At first, we thought that our product development goal was the family market, but later found that there are very many opportunities in the commercial market.
We are working with the Friendly Ice Cream Company, which has more than 500 stores in the United States. We are piloting there, and once successful we will be fully rolled out. There are many retail customers like this type who are also looking for a pilot partnership, but we want to enter the midwestern commercial construction industry.
What is the price and profit of your products?
We have our own intellectual property on the core platform of LLF, which will give us a good long-term margin. You have to be realistic and don't overpriced the product. We expect the price of the product to be around $75, with twice the output and performance of other competing products, and overall lower prices. If you want to win in business competition, then you must set the right price.
We are indeed sourcing from Cree, but there are some other suppliers for our supply. We are currently using Cree's XR-E technology.
Like any other consumer, we also want products that are more efficient, brighter and less expensive. However, this is the industry's praise for LEDs many years ago. But we also want to see more energy-efficient products.
What is the reliability?
Obviously this is extremely important. We chose Cree's XR-E technology because of reliability. We are looking for reliable test data that is widely recognized in the industry. Many companies have thrown data about the so-called 50,000 hours of work. But how do you know? What is the standard of testing?
It is the responsibility of the luminaire manufacturer to confirm that you are using a device with excellent performance. But the heat you handle is not the same, so the higher the efficiency, the easier it is to produce a high-performance, sturdy fixture.
Our luminaires emit 650 lm of light at approximately 12 W, so the heat handled is much less than that of conventional LED luminaires, but it still needs to be handled carefully.
Do you see small fluorescent lamps (CFLs) as a future threat?
of course. Everyone thinks CFL will be used in road lighting. Although they are more expensive, they can produce more light, which is acceptable for many people. The CFL industry is growing at an alarming rate.
But that's also a good thing because it can awaken people's awareness of efficient lighting. Our industry needs to be clear, not so much as we are attacking each other, but rather promoting the development of the industry. There is a trend in the LED industry to constantly attack each other. I think that some large-scale groups should not be involved in such activities.
How is LLF different from other LED-based lighting companies?
We have an unusual platform. Tony and Gerry have decided to put some color properties on it and make it completely different from any other product.
Regarding the patents we have, it not only protects our color properties and the way we mix different colors of light, but also protects some basic chip technologies. So we have a full set of technology.
In addition, we have a team with extensive experience in all aspects of business, whether financial or general. Tony is responsible for the operation of the plant, Gerry is responsible for many aspects of the work, and Cindy has raised more than $350 million from Cree, where he works.
How do you compete with large lighting fixture manufacturers such as Osram and Philips?
I think we will meet on the battlefield of lighting, but the question is when will they give up their fluorescent or incandescent lights.
Now you can argue with others why they are adding toxic substances to fluorescent lamps with full knowledge, and fluorescent lamps are used throughout the United States and even the world. But I think that is not a small problem for the US judicial system. Although everyone seems to be in peace now, I believe that someone will eventually come up with it.
And our products will be non-toxic alternatives. It has outperformed fluorescent lamps in terms of color quality and efficacy, and I think they will definitely respond to products like ours. We will cherish every opportunity.
Editor's Note: The actual progress of LLF is as described by Mr. Hunter. Since Richard's interview, LLF introduced LR4 and LR6 last year. According to the results announced at the IBS conference just held in Florida, LLF is showing its 4-inch LR4 compact spotlight. And announced that the LR6 module launched in August last year, quickly gained market recognition, sales have climbed all the way. With 65 agents in the US and Canada and a strong sales network of more than 400 distributors, the LR6 module has sold more than 50,000 units, enough to illuminate 2 million square meters of floor space. In addition, the LR6 received a grand prize from the American Lighting Association last fall and passed the US Department of Energy test.
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