Jeff Bisberg is president and co-founder of Albeo Technologies (www.albeotech.com), a developer of next-generation, energy-efficient lighting systems. The company, which is headquartered in Boulder, Colo., bases its technology on the light-emitting diode, LED for short. In late February, Albeo concluded its first round of venture financing after securing some $1.5 million. Green Spark Ventures led the effort. Techrockies.com recently took a moment to talk with Jeff about the funding and the LED business. Holden Parrish conducted the interview.
First, congratulations on the funding. How did that come to pass, and how does the company plan to leverage the financing?
Jeff Bisberg: We were invited to present at NREL—the National Renewable Energy Laboratory. Although clean-tech has only recently popped onto people's radar, NREL has been working with energy-efficient companies for decades, and the Department of Energy has charged them with holding this annual industry growth forum, the purpose of which is to help startup companies such as Albeo get exposure to financing and the venture community. Marty Lawrence, the head director of the laboratory, was very influential in getting us invited to the show. We had a great presentation. People understood our message, and we had an excellent reception from the venture community after the show. That led to Green Sparks' investment in Albeo.
We look at this initial investment as an opportunity to expand our distribution channels. Secondarily, to fortify our portfolio of products, what we find is that almost every channel that we go into, whether its convention centers or large institutions, as our message filters into those channels, we get a very good response back from the community that they value our products.
This money will help get the message out to those folks. Whether it's printed media, a direct campaign, paper-quick, or good-old-fashioned going to shows in person, it takes some additional capital to get that pushed off. When we get to these industrial and commercial users, they sort of have chronic lighting problems—headaches they've had for years. Nobody's been listening to them or providing them with solutions.
When was the company founded, and who are the individuals responsible?
Jeff Bisberg: Albeo was founded in 2004. Peter Van Laanen and I had seen that LEDs were basically taking down certain markets. That's when the unspoken total cost of ownership hits the right equation, that market would convert to LEDs. We noticed that with traffic lights, flashlights, camping gear, etc. Although none of those markets were too spectacular, they had all converted over to LED. So we looked into the future to see if we could bring the value of LED lighting inside the house. In 2004, we started the company with that charter. It’s been steady growth from that point.
Give an example of how a business, school or agency could save money with your lighting products.
Jeff Bisberg: There are four key ways in which our lights provide benefits: maintenance, energy, cooling and materials.
Let’s look at the first—maintenance. One of our customers is one of the largest convention centers in the entire United States. In a convention center, there are many light fixtures in areas that are difficult to reach. Some bulbs are 40 feet or even 90 feet in the air. Because of the difficulty in reaching those bulbs, they’re very expensive to maintain, somewhere in the neighborhood of $1,500 or more per year.
A typical incandescent light bulb will only last about a thousand hours. That means at least once or twice a year, you have to make a trip up to that spot to make a change. LED lights last 10 times as long as an incandescent bulb, so LED lighting offers at least a 10-fold improvement in lifetime. There's a very quick payback in eliminating those costs to change the light bulb.
The second advantage is energy. It's fairly common knowledge that traditional incandescent lighting is incredibly inefficient. Thomas Edison knew it himself that it was not the ideal way to make light. A typical light bulb wastes 90 percent of the energy that goes into it as heat. Even a fluorescent bulb isn’t as efficient as an LED.
The real "gotcha" is energy rates were flat throughout the ‘90s. That won't happen again. Energy will ramp up faster than inflation—I’ve read estimates in the neighborhood of 10 percent per year. Relatively speaking, the amount of money you're spending on your light system will be going up disproportionately. If you switch from incandescent to LED, there's a six-fold energy savings. And if you switch from fluorescent to LED, it’s in the neighborhood of 25 to 50 percent savings.
Cooling is another benefit. In the southern United States, a lot of money is spent on air conditioning. Remember that 90 percent of the energy to power an incandescent light bulb goes to heat. But in the South, they turn right around and power an AC to get that heat out. With LEDs, you substantially reduce the amount of cooling energy required to keep the building at a desired temperature. Those savings are more difficult to calculate, but I'll give a rough estimate of 50 percent—half of the energy saved by switching to LEDs will be from the cooling, the other half will be from efficiency.
The fourth benefit is materials related. With LEDs, there are fewer bulbs to change and no ballast to change. There's also a recycling advantage. All conventional, energy-efficient lighting contains mercury. That’s why fluorescent lighting must be segregated from the traditional waste stream. Disposal costs vary, but it's safe to say that 20 percent of the cost of a fluorescent bulb is going to be spent on recycling.
It seems LEDs are everywhere these days. Go for a drive and you might observe LED stoplights, LED billboards, a motorcycle with an LED headlamp, a pedestrian with an LED flashlight—the list keeps growing. What makes the light-emitting diode such an attractive lighting solution?
Jeff Bisberg: It's the digital evolution come to lighting. Traditional lighting is an analog, inefficient, glass-blown technology that was developed over a hundred years ago. LED is really the digital solution here. It’s solid state, so there's nothing to break. It's long life. It’s high efficiency. It's small. It's DC and low voltage, so it's safe. It works in a wide range of temperatures. The LED has so many attributes that are far beyond what traditional lighting can do, it will eventually take over all lighting.
But it is expensive, that's the one negative. Certain niches that value those particular attributes—all it takes is for one of those attributes to become more important than cost and the market will shift over to LED.
LEDs also enable us to do things that were never conceivable with traditional lighting. My favorite example is a kid's shoe. Have you seen the shoes with red LEDs built into them that light up whenever the kid takes a step? You would never consider doing that with a traditional light bulb. Ever. But with an LED? Why not put one in a kid’s shoe?
LED technology has been available for some time. The first LED was created in the 1920s, and Texas Instruments patented an infrared version in 1962. So why the recent boom in LED technology?
Jeff Bisberg: It is an exponential growth that is continuing to happen. In the past, it had all been single colors. What has happened most recently is the availability of the LED in white, thus the name of our company, Albeo, the Latin verb for "to become white." The white LED has enabled so many additional applications because most lighting that everybody needs is white lighting, and that's only been available in an LED for the past 10 years, and only in the past five years has it been available at reasonable prices.
What differentiates your LED products from the competition?
Jeff Bisberg: What we do better is how we put the system together. The way that we marry our dry circuitry, our thermal heat-sinking, printed circuit boards and LEDs into patent-protected systems—that’s what differentiates us.
The analogy I use for the layperson is an engine. Let’s say I’m an engine manufacturer, and I give three examples of the same engine to three different people and tell them to go make a car with that engine. What you would see is you’d get three very different performances if I gave those engines to BMW, Ford and Chrysler.
What we do best is putting components together for a specific application. There's really no easy way to boil that description down, but that's what we do. There's three things that we optimize for: lumens per watt—that's efficiency; lumens per dollar—that's cost-effectiveness; and total lumens—that's the light you use. We are very good at optimizing for the application at a great price point for our customers.