Featured Business: Verde LED
Name: John Keohane, Co-founder, Verde LED
The one good thing about setting up a company in a recession for Verde LED was that it got people’s attention. The company started out selling energy-saving solutions to customers by retrofitting existing lighting. Co-founder John Keohane gives the example that customers can expect a 60-70% energy saving on a 100-watt bulb.
Verde LED had to educate the market in the beginning, but is now past that stage; people are sold on the benefits of LED and the company no longer competes against “old technology”.
Having graduated from University College Cork with a finance degree, John went straight into setting up the business rather than emigrating. He started it with Paul Martin, director of export sales. Paul, who is married to John’s sister, was working for Longford County Enterprise Board and looking to move to Cork. While John had an interest in renewable energy, Paul knew how to write a good business plan and how to go about getting support from enterprise boards and Enterprise Ireland.
The main competitors in 2010 were the likes of Philips and Osram. There has been more competition in the last two years but, having entered the market at an early stage, Verde LED gained momentum and significant market share.
In its first five years, the company has evolved to offer lighting design services, auditing, applications engineering and full turnkey services. The future lies in connected technology and the “Internet of Things”. Smart controls, such as lighting controlled by software rather than switches, mean a lot more savings. Another possible future service area is using lighting to bounce WiFi around a building. The trend, explains John, is for customers to look for data analytics. This might include knowing when it’s time to install another printer in a building because sensors have identified too many people at one printer.
The name Verde LED came from a Portuguese friend who pointed out that Verde means green in many languages, which was a good call based on the geographic spread of its market.
Headquartered in Cork, Ireland is the company’s main market. It exports more than half of its product overseas, mainly to Europe, and has offices in China, France, Lithuania and London.
When it comes to sustainability and renewable energy, Germany, Austria and Switzerland have always been ahead of the rest of Europe, says John. The company found through research that the appetite in Germany was big and that the German market appreciates quality products rather than being purely focused on price like some other markets.
The main thing from day one was getting the right product. “We weren’t going to entertain a race to the bottom with regard to price, it was about quality and sourcing the right components,” says John. They opened an office in Shenzhen in China and employed two quality engineers. That was the key enabler to guarantee Verde LED could produce quality product.
Interview with John Keohane
What was the inspiration for setting up your business?
I was always interested in the green sector and technology. I looked at a few different areas. Wind and solar were very popular, but what struck me was that the paybacks were very long. What appealed to me about the LED market at the time in 2009 was that the advances were happening fairly rapidly. LED lights have been around a long time but were only being used in indicator lights or niche applications. However, in 2010 it was tipping towards general commercial lighting. There was a change in the whole industry, which is what made it fascinating. That gave me the inspiration to believe it was the right time to start a commercial LED lighting company.
How did you initially fund your business?
We started it with very little money. We put in a very small amount of savings, and funded from cashflow. We were getting customers to pay us up front from day one, and we didn’t carry much stock.
Have you diversified your offering from your original focus or set up other businesses?
Over time there has been a demand for auditing and lighting design. We developed our own wireless control system, for lighting remotely. We have adapted our business model where necessary based on customer requirements and market trends, but everything is focused on energy-saving lighting solutions.
What have been the highlights to date?
We got a big break in our second year of trading with a company in the UK called Global Switch. We were to supply lighting to its data centre in the Docklands in London, which is one million square feet. It’s the biggest data centre in Europe. That helped to put us on the map and we got a lot of other contracts on the back of that.
What’s the bravest step you’ve made in relation to your business?
When we started off, the economic climate was very poor in Ireland and we realised we’d have to start exporting as soon as possible. That’s a pretty daunting task when you’ve no contacts overseas and you’ve done no business. There’s a trade fair in our industry called Frankfurt Light and Build. It’s the biggest in the world and is on every two years. We had visited it in 2010 and felt in 2012 we should take the chance and break the export market. We invested €50,000 to exhibit, which at the time was a lot of money for us. Thankfully the show was very successful; we secured a big order there and got a lot of business out of it afterwards.
What’s your favourite part of being business owner/entrepreneur?
Working with exciting people and seeing the team grow and achieve goals together.
How do you achieve a work-life balance?
I’m still working on that. It’s very difficult in a small organisation; the demands are huge in business these days. With technology you’re never alone. I made a decision a couple of years ago that when going on holidays I would leave my laptop at home. You discover if you’re away for a week that, with a great team, business continues as normal. It’s important to get a mental break as well as a physical break.
Are you inspired by any business figures or success stories?
Denis O’Brien is somebody who I think has done an incredible job over the past 20 years. It’s amazing that someone from a small place like Ireland can go out and compete in the Caribbean, starting from scratch and becoming the top player out there in the telecoms market. It’s incredible.
What tools or technologies do you use that benefit your customers or business?
One thing we did recently is launch an online store, which has really helped us a lot. It’s B2B. We’re mainly using it for contractors. Customers can order 24/7 and it reduces the administration burden by automating the sales process.
Do you feel you know what your customers really want? How do you stay updated with this information?
It’s something we’ve tried to get better at over the years. It takes a lot of interaction. You constantly need to be in touch with the customers and see what you can do better and what they are looking for. We try to stay as close to the customer as possible. They are able to tell us what requirements they have, and what solutions they would like. We are always looking at the latest trends by going to trade fairs and conferences.
What has been the biggest challenge your business has faced?
People and qualifications is the toughest one for us. The lighting industry in Ireland is relatively niche. So for certain areas, like applications engineering and lighting design, we’ve had to recruit overseas.
What part of running a business comes to you naturally?
I like strategic planning because I was always interested in the bigger picture, so that comes naturally to me.
How did you scale/grow your business?
The biggest thing we used was distributors for our products overseas. We discovered early days we couldn’t grow fast enough organically. We’re piggybacking on infrastructure other companies have built and it’s working for us.
How do you get ideas to further your business?
We’re always asking customers what they feel they need. If enough customers say they need something, there’s clear demand for it. The other thing is getting ideas from trade fairs, not necessarily lighting companies but other technologies, to see how they’re applying their product or service in a market.
What motivates you to stay running a business?
Seeing project delivery, our products out in the market and satisfied customers. You never tire of that. It always gives me a kick if I go into a business where they use our products and it benefits that company.
What’s your vision for the future?
We are looking to see how quickly we can grow the company to become one of the top 10 luminaire manufacturers in Europe. The next step we’re looking to get into is the Internet of Things, which is a term for smart technologies. We developed a smart lighting protocol over the past two years and have starting deploying the technology successfully since the second quarter of this year. We see that as a big area of growth into the future, because people who have made the jump to LED can’t go anywhere beyond that as regards savings unless they were to turn the lights off.
What’s the best business advice you’ve received?
A couple of people told me to focus on quality product and a good service, and the rest takes care of itself. To a certain extent that’s true; if you’re providing quality products and a good service, there will be a market for whatever you’re doing.
What would be your advice to businesses starting out?
People need to stay focused on the goals when setting out. It’s easy to panic when you’re starting out if things aren’t working as you planned. People start to deviate, and that’s where you get into trouble. Stay focused on the goals and don’t be afraid to tell customers you want their business. A lot of people are embarrassed to ask for it. I don’t know if it’s an Irish thing. I find it actually works because the person at the other side of the table knows we’re really keen for their business.
What’s your favourite motivational business quote?
It’s: “You’re only limited by your own fear and inactions.” If you’re not going to act, nothing good is going to happen.
What, if anything, would you do differently?
Hindsight is great. The one thing I would have done differently is put more of an emphasis on marketing. I think we were a little slow in doing that. Since we did it, we’ve got great rewards. There was a level of paranoia at the beginning that we didn’t want too many people to know what we were doing in case people copied us. If people don’t know about your business, they can’t buy from you.
Phone: +353 21 4861577
Personal Twitter: https://twitter.com/verdeledjohn
Interviewed by: Web Content Partners
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