By doing away with overhead lights on some of its beachside roads, more than 10,000 Florida baby turtles have been saved by 3i Innovation Ltd.’s in-road lights, according to its state officials.
“The hatchlings are guided by the moon, and traditional street lighting completely throws them out,” says the Auckland-based company’s managing director, Charles Maud.
3i’s still globally unique product is inductive power transfer for lights, in which without needing direct connection, power is provided using magnetic resonance to induce an electrical circuit.
In 3i’s case this is for light emitting diodes [LED], and the use of its technology is seen in numerous European tunnels and roads, as well as an increasing number of other infrastructure settings such as airports and marine.
With a background in investment banking, Maud and his brother bought the business two years ago, for a technology grew out of Auckland University research in the 1970s,. From that time 3i’s concentrated on its commercialisation and applications Maud says.
“This is a very stable technology, and 90% of what we do is understood and boilerplate, or of industrial strength,” he says. “There was no real need to spend more to improve it. We have a vision that the technology’s saleable, we want to realise its potential.”
The technology is based around the fact that because there is no direct connection [with an LED bulb], there is no point of failure/corrosion at that connection. A single wire is able to provide both the power required for the LED as well as being able to directly communicate with every single bulb on its circuit. With no direct connection there is no chance of a spark either.
Such powering/communicating possibilities out of a single wire provide a huge flexibility for designers, lighting designers in particular.
One example is being able to power a swimming pool lights from the outside through the pool wall, without any drilling required.
The marriage of 3i’s inductive power and communications technology and the rise of LED lighting is another reason for an accelerated push into the market.
By Dutch electronics giant Phillips’ reckoning, the LED market that was worth US$2-3 billion in 2008 will be worth $100bn by 2020. This will be driven by globalisation, urbanisation and especially government banning of incandescent light bulbs as a relatively inefficient form of lighting.
And while inductive powering of such bulbs isn’t going to always be required, “there are special opportunities whenever you’re around water,” says Maud. “That’s a key point of our technology in situations like boats, marine, outdoor lighting, mines, oil rigs and the like.”
However 3i’s sales channels aren’t to directly provide such lighting itself, but to use distributor partners who themselves might be light manufacturers, in order to provide them with safe solutions for certain environments. Currently 3i has about 20 distributors, though 10 of these form a core group who order 3i products on a monthly basis.
“We have the skills onboard to look at a technology and how different arrangements of our technology might fit,” Maud says. “We don’t see ourselves in design for example, but we can facilitate light designers doing different things. We want to enable them to have our technology, which is essentially half the size of a matchbox, and embed it in their products.”
From that point of view, 3i is licencing its technology to others, forming partnerships, slicing and dicing the relationship for whatever works best from a geographical or products perspective.
“We’re led by interest,” Maud says. “We see what people want, what the relationship should be, could be, rather than trying to second-guess what others’ want.”
An example of this is the company’s predominance in in-road tunnel lighting in the European Union. From a safety point of view inductive lighting, without the need for direct electrical contact, has been directed as being required in all tunnels by 2019 “We have distributors who target these markets, and provide a tender using our products,” Maud says.
Another part of the company’s success is adopting an in-source model of constructing and providing the technology for others. Almost all the components are sourced from New Zealand manufacturers, and then assembled by 3i. The change in production method has collapsed the technology’s price as well as enabling an even better understanding of its use and application he says.
3i has about 10 core staff in Auckland, and also leverages the R&D services and skills of Auckland University for some challenges.
The company has no competition, and “we’ve locked our proprietary knowledge up very tightly,” Maud says. “We understand the practical applications of how our products work and put some excellent practices around that.”
Part of the business model is a “terrific aftermarket,” says Maud. LED’s don’t last forever, even if there’s no direct electrical contact to corrode. “The lights need to be replaced and they have to come back to us,” he says. “We have repeat sales that will build very quickly, and that’s a growing market.” One aspect of the technology’s communication feedback is that if a light is replaced, and the system doesn’t recognise it, the light won’t work. The light user has to go back to the distributor, 3i’s partner, for the correct part.
“It’s important to understand the selling process,” says Maud. “The first sale is hard and the lead time could be six weeks, six months or even a couple of years to go from interest to order. Once they’re in our system though, then it’s a completely different process.”
As one of 10 finalists in the University of Auckland Business School’s Entrepreneur’s Challenge for 2010, Maud says winning part of the $1 million funding prize isn’t the main part of the competition’s appeal.
“We don’t necessarily need the money, we’re pretty successful as it is,” he says. “We’re using the exercise to help us articulate our story to those who might be looking to invest. A lot of people can talk a technology story, but not talk a financial story.”
Maud says any winning funds would be applied to growing its business relationships and building that particular base. “We’d use the funds to increase our strategic alliances and partnerships,” he says. “Carrying that out, with its due diligence, meeting and understanding people, is an expensive exercise.”
In five years time, leveraging off the growth in LED lighting, Maud expects 3i to be much bigger.
“If we can leverage the sympathetic technology we have for LED’s, we’re going to be sitting right next to that growth,” he says.