The Future is Bright

LumenOptix

LumenOptix LLC provides specification-grade retrofit lighting, providing savings without compromise to either aesthetics or performance. LumenOptix’s solutions routinely provide fifty to eighty percent energy savings…

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The company designs and manufactures in the Philadelphia area and sources the vast majority of its parts and components from within 100 miles of the factory as well. Its work speaks for itself and Business in Focus recently got the inside scoop on this proudly American company.

When it comes to manufacturing, it can be difficult to compete with the major billion dollar domestic conglomerates and the cheap global import competitors from China, India and Taiwan as well. Cheap labor, and multimillion dollar tooling and equipment investments in high volume and high speed production create a major disadvantage for small, American manufacturers. So, how is it possible to compete? LumenOptix President Jay Goodman thinks he has the answer and his company is thriving despite the odds.

Jay has always seen himself as an outlier, an underdog. He’s been in the industry since the late 80s and started assembling fixtures in the early 2000s. He was always passionate about the lighting industry from the beginning but didn’t always have the necessary capital, buying power or the vertical integration to compete in the more commoditized segments. The ace in the hole was his belief in creating and selling differentiated value-added solutions based on features and benefits rather selling vanilla “me-too” product based solely on price.

“The more benefits and features I could put into something – the more of a justifiable premium I could charge for it – enabled me to command a margin that I could live off of.” He learned early on that if you’re not the low cost producer then you can’t be the low cost seller. Manufacturing was his prime interest because he wanted to be able to control the design and features of what he was selling.

When Jay was attending college in the eighties, he was scoffed at for his desire to manufacture as most of his peers and professors felt that the big players like Japan and China would kill him on labor costs. He often heard, “we’re an information economy now,” and other comments suggesting manufacturing was dead. The belief was that America simply could not compete anymore, but Jay did not believe this to be true. “I always believed that if you competed on features, benefits, rapid delivery, customization, and customer intimacy and relationships, that you would be competing from a place that is inherently the weakness in the business model of the Goliaths and the imports and would be the strength of a more nimble, small competitor. To be honest, I think the leaders of these companies would readily admit that these are their weaknesses and that sizable small business exists there outside of them.

Jay began in his garage and, from the beginning, strove to assemble a better quality, better performing product that delivered more of whatever the customer was looking for. He took a deep dive into every performance aspect of lighting fixtures and learned enough about the technical aspects of lamp and fixture performance to be a serious competitor in the market. He put together a system that had a really compelling value based on the life of owning and using the fixture rather than based solely on the first cost. While it may have been true that his fixture was priced higher than the majority of competitors’ products, the value of having the lowest total cost of ownership was what sold it.

“They will recognize quality, performance and value if you tell the story properly. Designing something to be better is not enough. You’re only as good as your ability to clearly and concisely communicate that value to justify its premium. It’s really about my appreciation for the true art and discipline of professional sales,” he says.

“I’m a salesman at heart and I have enormous respect for sales acumen. To be a true salesman one needs to make a logical and justifiable case, to use features as the dots and connect them to paint the full picture. A dozen doughnuts, a jug of coffee and a good joke doesn’t work for me… I’m probably not a good enough joke teller,” he says. One needs to clearly communicate the features and how these translate into benefits for the buyer.

In order to be competitive, especially when dealing with the conglomerates and the multinationals, every advantage has to be used. To describe competing with foreign imports, this Philadelphia Flyers’ fan who ‘bleeds orange’ for his favorite hockey team, likes to use a sports analogy. As a hockey guy he does not want to compete with a football player on grass; bring it onto the ice and it will be a different story. In other words, don’t compete in the same arena in which the other athlete or competitor excels.

“If I try to compete on their field they will steam roll me,” he says. “They need to come to my field and compete. It really becomes about strategic selling and company positioning so that you don’t try and go into the markets where low cost manufacturing and high volume is the primary sales driver.” It boils down to targeting and qualifying prospects so that we’re talking to customers and influencers who not only value what is being created but are also willing to pay the premium for “better.”

LumenOptix caters to the more discriminating real estate owner, manager or occupier. It is an audience that wants savings in energy and maintenance but, most importantly requires the right light prior to even looking at the savings. There has to be good glare control, appropriate beam control, great color and color rendering and excellent overall lighting performance. An import may be less expensive, but the lighting quality just doesn’t cut it; or a fixture from a conglomerate might give great light, but it won’t fit into the existing infrastructure and requires a complete tear-out.

This is where the targeting comes into play. The prospective client has to value that quality of light first and foremost, and then the imports won’t stand a chance. Everyone wants savings, but the right light has to take precedence over all else.

With that in mind, LumenOptix caters to universities, indoor shopping malls and common areas in hotels. These are places where one cannot afford to compromise the lighting in exchange for savings. One cannot have an airport with lighting that makes people feel like they’re in a dungeon, simply to save money. Jay has learned to concentrate on clients that have a need that must be satisfied – the need for really good lighting and savings that installs quickly and easily into the already installed infrastructure. “If the prospect is willing to compromise on the combination of those aspects, I’m happy to refer them to my friends at the credible conglomerate lighting companies who can easily satisfy that need.”

I asked Jay to give me an example that exemplifies what his company does. Satisfied customer Garnet Valley Middle School is a classic example of lighting and technical knowhow before energy savings. The work was done in an auditorium that has a very expensive and sophisticated house dimming system. The dimming system has to work with whatever is taking place in the auditorium whether it is a school play, choir performance, ceremony, or other event.

“Dimming sounds easy, but it’s not. When you truly demand the lighting to be right – architectural or theatre grade dimming is pretty sophisticated. So, it’s very difficult for people trying to sell inexpensive energy saving retrofits to accommodate that application because they couldn’t get it past the dimming test, but we have proven our technical knowhow and our background in configuring for dimming systems. This is one example where our technical expertise and supply chain relationships enable us to the get the lighting right first, then provide the savings.”

The motto of LumenOptix is: “Light has to be right – then price.” At the middle school, the team first had to prove that the dimming system worked well enough to satisfy the expectations of the school.

“The maintenance and energy savings were only considered after we proved that we could maintain the integrity of the lighting system. The number one driver was assuring true compatibility with the dimming system.”

The next consideration was the costs associated with constantly changing lamps that were twenty-five feet above thirty rows of theatre seats. It is an expensive undertaking!

“This is an example of our specification grade retrofit solutions. This is one of many projects that we have won strictly based on the same setup parameters that we are constructing now. There is nobody I know of that is specializing in this segment presently. LumenOptix is really pioneering it.”

Jay is a big fan of the business philosophy book Blue Ocean Strategy written by W. Chan Kim and Renée Mauborgne. Rather than trying to compete in a heavily occupied field, the book urges business to find clear “blue ocean” niche spaces where there are very few or no competitors. By making the dimming systems work at a highly specialized level, LumenOptix eliminated the majority or even all of its competition which lacked the sophisticated knowhow necessary to configure the lighting and to deal with the nuances of installing into what already exists.

LumenOptix works within what it deems “the already built environment” versus new construction. “Personally I don’t particularly like the word Retrofit as it connotes too many different things to too many different people. We prefer that [former] term and there is a dramatic difference between manufacturing fixtures to fit into an existing space vs. manufacturing fixtures that get installed to have the building built around them in new construction At LumenOptix we sell an integrated solution for the already built environment.”

LumenOptix has shipped fixtures as far as Hawaii, Mexico and Canada and is looking to expand its geographic reach. After further penetration of its existing market, it will continue to add product derivatives, and extensions into its current categories and continue to add new product families that are consistent with our market position.

Getting the message out is the biggest challenge for LumenOptix. “There are a lot of preconceived notions about the implementation of new construction lighting that can work against you when trying to sell specification grade lighting solutions for the already built environment. It requires taking incredibly experienced, knowledgeable and accomplished specification lighting professionals and trying to wipe the blackboard clear when they think about lighting upgrades.” It ends up as an education process even with the most accomplished lighting people. That education is critical when directing people into that “blue ocean”.

Jay Goodman is a huge believer in American design and manufacturing. He has accomplished success by doing things a little differently and recognizing that he shouldn’t compete with the large conglomerates; he should actually continue to create a value proposition that is complementary to them.

“You can add value in so many ways. The market certainly needs companies to compete on price and high volume but it doesn’t need every company to be there. The market needs niche players as well and what I love about the lighting industry is that it’s a $14Billion a year domestic industry. A niche company in this industry can be a $100,000,000 company and it barely appears on the radar screen,” he says.

“I think American manufacturing is alive and well and there’s no other business or place in the value chain that I’d rather be. Another one of my favorite business books,” Jay shares, “was by Howard Schultz of Starbucks. So if I can steal his line: ‘onward…’”

November 13, 2018, 8:06 PM EST

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