How big is the market for fluorescent lighting fixtures that are sturdy enough to survive the chlorine-filled air of an indoor swimming pool?
Hardly big enough to get the serious attention of major manufacturers, maybe, but large enough to provide an important leg up for a Reno startup intent on carving itself a place in the lighting market.
Coming off first-year sales of about $1 million, LUX Dynamics projects sales of $2.2 million during 2010 as it puts together a network of about 85 dealers nationwide.
In fact, the company is investing nearly its entire annual marketing budget on a booth at a major trade show for the lighting industry in Las Vegas in May.
"We're counting on that to produce the big push," says John McCarty, one of the company's founders.
The company's pitch is two-fold:
First, LUX fixtures are built in the United States in Reno, as a matter of fact. As one of a small handful of American companies in the market, it wins lighting contracts that specify American-made products.
Second, the fixtures developed by co-founder Patrick O'Flaherty, a two-decade veteran of the lighting industry, are far sturdier than most of their competitors.
That's not exactly what O'Flaherty envisioned when he set out to produce a low-priced entrant into the market.
"It was the vision for a week," he laughs. "At the end, it was a Cadillac."
But the Cadillac has found a niche in swimming pools the company's first sale was lighting for the Alf Sorensen pool in Sparks and in high school gyms, where wiseacres have been trying to kick basketballs into fluorescent lights for decades.
"We built a brick," O'Flaherty says.
LUX Dynamics also is aggressively seeking a position in retrofits in industrial and distribution buildings, especially in states such as Nevada where utility company rebates cover much of the cost for companies that scrap older, low-efficiency lighting.
Although the company's products cost 10 to 15 percent more than competitors, O'Flaherty says their efficiency and availability as modules that can be configured to almost any use overcome the pricing disadvantage.
"With paybacks of less than a year, it becomes a no-brainer," McCarty says.
McCarty, a real estate investor squeezed by the recession, and O'Flaherty met as members of the Entrepreneurs Organization in Reno, and began sketching out the company in the autumn of 2008.
They've bootstrapped the company so far starting with only $70,000 in capital and have scrambled as the pace of orders has grown to about 1,000 fixtures a month.
"We done this as tightly as we could," says McCarty.
A key decision: LUX turned to Alpha Production Technologies, a Sparks organization that employs people with disabilities, to manufacture subassemblies. Alpha provides a flexible labor force, up to 85 workers at time, to meet the flow of orders to LUX.
At least half of the components in LUX Dynamics products are purchased from businesses in Reno and Sparks, and McCarty says suppliers such as A&B Precision Metals Inc. in Stead provided invaluable assistance.
The company's limited capital, meanwhile, has helped to keep its founders focused on a handful of product lines.
"We have more ideas than we have money," says O'Flaherty.
