Having created the world’s first designer low-energy light bulb, Plumen had to think strategically about the way in which future business innovation would be cultivated.
Looking back at the design process that led Plumen to the product it’s best known for, co-founder Michael-George Hemus said there was no clear research and development (R&D) budget or strategy. “No-one knew if it was going to be possible to make it or not. Out of the people who were willing to try, no-one had a clue what the cost was going to be.”
With each subsequent project, Plumen has got better at developing an R&D budget. In hiring an engineer, who has become the company’s technical director, Plumen now has a much better handle on cost and timings.
“We now know, if we want to launch a product on ‘X’ date, exactly when the prototype has to be ready. Working backwards from there, we know how long we have for do the innovation part and product testing. There are certain milestones where we know whether we are on track or not,” Hemus said
Timings have a big impact on revenues, Hemus said. “The more realistic you can be about your timings, the better you are at predicting when revenues are going to come in on the back of the innovation.”
This approach has also given the company better control on the cost of developing a new product. “Even if we are doing something completely new, we now have a much better understanding of the approximate cost involved. That has enabled us to vastly improve timelining which ideas to develop, and which to leave on the shelf.”
Engaging suppliers in the R&D process
Despite having a much stronger R&D budget and strategy, the third bulb Plumen produced took five years to develop. “We learned a lot about how to make the process better during that time. Having a bulb take that long was costly to us in terms of lost sales.”
One of the key lessons learned by the management team was around when to involve suppliers in the R&D process. Plumen used to come up with ideas, which it put to its suppliers early on. However, as Hemus explained: “Suppliers always say that they can do it. Then they might start, try, struggle and then put it on the side.”
With Plumen’s second and third bulbs, the business thought they were in development when, in actual fact, they’d been laid to one side. “It was taking a lot longer because there was an unwillingness [from the suppliers] to admit they weren’t sure how to do it.”
Plumen now does a lot of R&D in-house and only engages suppliers when it has something solid for them to work on.
Hemus said the company has also got better at selecting its suppliers, with a more in-depth interview process conducted. “There are a lot of factories out there that know to produce, but don’t necessarily understand the science behind the technology.
“Because we want to innovate on a lot of the projects that we do, we need engineers who understand everything about the technology. Then they will have a much better understanding of what innovations are possible and how to achieve them.”
Plumen now works with fewer, higher-quality suppliers. That means products cost a bit more per unit, but the specialist suppliers are willing to do lower minimum orders meaning products can be tested that might not have been otherwise. Ultimately, Hemus believes it gives the business more flexibility.
Developing external contacts
So different are Plumen’s bulbs, the company initially struggled to get people to use them in their lights. To deal with this, the company started to develop its own glass and metal shades that worked well with its bulbs. That, however, distracted the business from its main job of making light bulbs. “There are other people who are better at manufacturing shades out there. We should work with them to do it,” Hemus added.
The result for Plumen is a slightly lower income from lightshades, but considerable savings.
“We have more human and financial resource to devote to the core part of our business. But we also have a much wider range of accessory shades out there because we are partnering with more than one other company.”
Building on innovation
In taking its innovative products to market, Plumen has always sold online with considerable success. Hemus said the company did not initially engage with its customers in the right way. “We were just putting the product out there and not thinking about when the customer needs it and what the customer requires.”
That meant Plumen needed a strong presence on Pinterest and other social media channels. Hemus commented: “If you’re regularly on Pinterest, you are looking for inspiration. We try and offer as much inspiration as possible. If we offer something that someone likes, they will regularly click through to the website. At that point, we might help them beyond inspiration.”
The company has assigned one of its staff to social media strategy and grown its community of followers to 60,000 across all platforms. “Those things work exponentially. As you get more people, you get further reach. It self-perpetuates, if you do what you’re meant to be doing properly.”
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