STRATEGIES IN LIGHT SPOTLIGHT — Strong services and distribution focus will sustain the SSL business
At Strategies in Light, sustainability analyst Jed Dorsheimer will present a view of the challenges and opportunities for the LED and lighting sectors. Here extends his perspective on the value proposition of SSL in the current business environment.
Banking and consultancy firm Canaccord Genuity has long been a partner for investors, venture capitalists, fund managers, and various industry leaders to help them capitalize on their financial opportunities and leverage investment in growth markets such as energy and SSL. The company has also collaborated closely with the Strategies in Light advisory board to produce the Investor Forum, where LED and SSL business executives discuss timely topics impacting investment in LED and SSL technology development, applications, and where to go next.
In early 2016, during the Strategies in Light Investor Forum, Canaccord Genuity’s Jed Dorsheimer talked about LED price declines and the oversupply of LEDs. At that time, Dorsheimer noted that Canaccord was studying potentially profitable niche markets, including horticulture, what he labeled “pharming” for cultivating legalized medical and recreational cannabis, human performance/productivity, building management, and visible light communications (VLC) that would emerge as profitable services and applications beyond general illumination. During his talk, he posed the question “Are we even in the lighting business? Or are we in the business of delivering experiences to consumers?” That question continues to be evaluated and addressed in the market-focused sessions at Strategies in Light. Dorsheimer will present a talk titled “Can We Agree It Was an Evolution and Not A Revolution?” during Track 1 that will potentially disrupt attendees’ view of the current challenges and coming opportunities.
Join us at Strategies in Light for the full presentation and read on for Dorsheimer’s observations on the LED markets and SSL business strategy.
LEDs Magazine: You worked in the investment side of the industry for quite some time before bringing that business acumen to the lighting and services supply chain, and now you are working in the consultancy and investment practice once again. How have your experiences in these areas shaped your vision of the SSL market opportunities?
Jed Dorsheimer: What I thought I knew about analyzing businesses and what I learned about running a business were not the same. This is the value I intend to bring to my practice today.
LEDs: At a previous Strategies in Light Investor Forum, you observed that value-added services were the route to improving profits in the SSL industry, and we’ve supported that view in much of our content. How do companies quantify the “value” in value-added services — especially with regard to making themselves attractive to investors? Where does the most profit lie?
JD: Most of the profit lies in the distribution channel. And while many have bet on these layers of margin stacking disrupting, the true value, which is often in the end customer relationship and service being provided, remains and has kept the downstream fairly intact. Since most investors, consultants, and bankers have not run one of these businesses, the nuances, which are subtle but important, are often missed. What appeals to a Board or portfolio manager in practice may or may not work.
LEDs: Let’s talk about the tech side for a moment. After Strategies in Light 2018, chief editor Maury Wright described OLED lighting as a “glass half empty or half full” situation. Should we expect this technology to prove profitable in the general lighting market, or should the SSL industry accept its prohibitive price tag and move on to more viable commercial opportunities?
JD: It’s not the price that limits this technology. It’s the physics. If we move to large surface emissions at low power density, then there is a possibility OLEDs will usurp LEDs. However, this is not the direction the lighting industry has gone. So when I look at power density and the molecular stability of an OLED, I see a large gap between commercially viable products and what we have now. That said, there is so much that we can innovate and change. Technology has barely scratched the surface and there remains fundamental challenges to be broken through on the inorganic and organic LED markets. I have had the distinct pleasure of being actively involved in this sector for twenty years; I cannot wait to see what we can do in the next ten!
Get to know our expert
JED DORSHEIMER is managing director and senior analyst for sustainability at Canaccord Genuity. Dorsheimer recently rejoined Canaccord Genuity after spending two years with Acuity Brands Lighting, where he served as vice president of corporate development, as well as vice president of the Commercial Office portfolio. Prior to joining Acuity Brands, Dorsheimer was responsible in part for developing Canaccord Genuity’s successful sustainability practice with an emphasis on disruptive energy-efficient technologies such as LEDs, solar, displays, and transportation. He has been a frequent speaker at Strategies in Light and its Investor Forum, and has served on the conference advisory board.