Do you think it would be possible for a venture capital group to create a model similar to Y Combinator specifically for the lighting industry?
For those of you who don’t know, Y Combinator is a Silicon Valley venture model that has systematized seed-level funding for the most nascent of software and tech ideas. Although it provides very small funding levels, its real strength is in bringing together seasoned entrepreneurial pros to help advise small teams of relatively young professionals that have good ideas and great potential.
How could this model help the lighting industry?
Unlike software, we are a capital-intensive business. Lighting entrepreneurs develop hardware: real stuff that requires printed circuit boards, enclosures, optics, etc. Lighting products need distribution; you can’t just click “upload” to a palette of merchandise. However, these two “limitations” are slowly changing. Lighting is becoming an electronics business; and the electronics industry is figuring out ways for evermore cost-effective and flexible production and distribution methods.
Kickstarter is demonstrating and pushing the boundaries on this trend for low-cost product launches of consumer electronics . But what Kickstarter lacks is guidance from experienced industry pro’s. Sometimes this is good, finding product ideas that “experience” veils; but other times products in Kickstarter are seemingly launched in a complete vacuum of even basic industry knowledge, like the popular LIFX program.
Also, as lighting systems move towards a common “Internet of Things” approach (piggy-backing on the hardware and communications standards used by the Internet such as TCP/IP, CAT6 cabling, wifi, etc.), the costs of developing novel lighting applications decreases significantly, while the ability to connect to a much larger standard ecosystem of complimentary components greatly increases.
A venture organization might be able to generate a significant financial return by harvesting great ideas from university research programs, young entrepreneurs, architects, lighting designers, etc. and bringing them together in an organized incubator program. Supplying critical support services such as UL/CE compliance assistance, access to specialized consultants and suppliers, or a common pool of generic market research would significantly reduce the cost faced by lone entrepreneurs in launching lighting products. The capital required would remain significantly higher then the typical software-only web startup of Y-Combinator, but remain low-enough to encourage creating a more diversified risk portfolio of different ventures.
Does anything like this concept exist yet specifically for the lighting industry?