Wellington
By doing away with overhead lights on some of its beachside roads, more than 10,000 Florida babyturtles have been saved by 3i Innovation Ltd.’s in-roadlights, according to its state officials.
“The hatchlings are guided by the moon, and traditional street lighting completely throws themout,” says the Auckland-based company’s managing director, Charles Maud.
3i’s still globally unique product is
In 3i’s case this is for light emitting diodes [LED], and the use of its technology is seen innumerous European tunnels and roads, as well as an increasing number of other infrastructuresettings 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’sconcentrated on its commercialisation and applications Maud says.
“This is a very stable technology, and 90% of what we do is understood and boilerplate, or ofindustrial strength,” he says. “There was no real need to spend more to improve it. We have avision 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 LEDbulb], there is no point of failure/corrosion at that connection. A single wire is able to provideboth the power required for the LED as well as being able to directly communicate with every singlebulb 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 fordesigners, 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 lightingis 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 in2008 will be worth $100bn by 2020. This will be driven by globalisation, urbanisation and especiallygovernment 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 arespecial opportunities whenever you’re around water,” says Maud. “That’s a key point of ourtechnology 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 usedistributor partners who themselves might be light manufacturers, in order to provide them with safesolutions for certain environments. Currently 3i has about 20 distributors, though 10 of these forma 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 ourtechnology might fit,” Maud says. “We don’t see ourselves in design for example, but we canfacilitate 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, slicingand 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 relationshipshould 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 EuropeanUnion. From a safety point of view inductive lighting, without the need for direct electricalcontact, has been directed as being required in all tunnels by 2019 “We have distributors whotarget 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 andproviding the technology for others. Almost all the components are sourced from New Zealandmanufacturers, and then assembled by 3i. The change in production method has collapsed thetechnology’s price as well as enabling an even better understanding of its use and application hesays.
3i has about 10 core staff in Auckland, and also leverages the R&D services and skills ofAuckland University for some challenges.
The company has no competition, and “we’ve locked our proprietary knowledge up verytightly,” Maud says. “We understand the practical applications of how our products work and putsome excellent practices around that.”
Part of the business model is a “terrific aftermarket,” says Maud. LED’s don’t lastforever, even if there’s no direct electrical contact to corrode. “The lights need to bereplaced and they have to come back to us,” he says. “We have repeat sales that will build veryquickly, and that’s a growing market.” One aspect of the technology’s communication feedbackis that if a light is replaced, and the system doesn’t recognise it, the light won’t work. Thelight 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 hardand the lead time could be six weeks, six months or even a couple of years to go from interest toorder. Once they’re in our system though, then it’s a completely different process.”
As one of 10 finalists in the University ofAuckland Business School’s Entrepreneur's Challenge for 2010, Maud says winning part of the $1million 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 toinvest. 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 buildingthat particular base. “We’d use the funds to increase our strategic alliances andpartnerships,” he says. “Carrying that out, with its due diligence, meeting and understandingpeople, is an expensive exercise.”
In five years time, leveraging off the growth in LED lighting, Maud expects 3i to be muchbigger.
“If we can leverage the sympathetic technology we have for LED’s, we’re going to be sittingright next to that growth,” he says.