Color Kinetics Maturing on Schedule
Source/Type: Editorials

May 6, 2005... Color Kinetics of Boston, Massachusetts USA is the kind of success story I love writing about. It comes in exciting chapters, reminiscent of so many startups in the compound semi industry. The story typifies the industry from the depths of the supply chain through innovative systems integrators like Color Kinetics. Chapters 1-3 are the struggles of the initial founders. Chapters 4-6 chart the exponential rise and prosperity for everyone with a low number on their badge. Chapters 7-9 mark the phase that Color Kinetics is now entering. Maturity. Chapters 10 and above are yet to be lived. One strives to avoid Chapter 13, however. (Switching analogies for a moment, we look towards many high-rise buildings, where the 13th floor is just skipped over in the floor numbering). Who knows how any company will eventually turn out? I do know there's never been a more colorful field, and there's never been a more colorful company. Color Kinetics lives up to its name. It's bright and clever, and it leverages its collective intelligence.

That's why George Mueller, co-founder of Color Kinetics and the company's current CEO and Chairman of the Board of Directors, will be our featured keynote speaker at BLUE 2005 in Taiwan on May 17th, just before lunch on that first session day. As of July 1st, George's title will be "Founder Chairman" as he hands over the hard work to current President and COO, Bill Sims. With any luck, George will get to go back to doing the fun stuff: Promoting the field and helping dream up the kind of innovative new product lines that continue to set CK apart from many of its peers.

I especially liked George's quote in the news release announcing the management changes slated for July. "By every measure -- revenues, product lines, partnerships and international expansion -- Color Kinetics is thriving, and I look forward to helping drive the company's continued success in my new role. Additionally, as Founder Chairman, I will devote my time more fully to working with industry thought leaders and influencers to propagate the greater cross-industry adoption of intelligent solid-state lighting."

Whereas Cree reminds me of Intel when at the same chapter of development (which I've noted in previous columns), Color Kinetics reminds me of one of the original microchip systems integrators, Apple Computer. I had the pleasure of serving as Apple's original and first PR person when it was a startup. It was sooooo cowboy and soooo risky an approach to PCs that my boss, Regis McKenna (yes, the silicon valley PR legend), told me not to waste too much time on Apple as they were likely to go belly-up early on. They didn't, obviously. The cofounders, Steve Wozniak and Steve Jobs, were two of the best ever, and still are. And Cree is another obvious success story in the making of a key company in the Wide Bandgap (WBG) material and device field. It's only natural that George Mueller should follow in the keynote slot filled at last year's BLUE event in Taiwan by Cree's President/CEO, Chuck Swoboda.

Based on that Apple/Intel perspective as case studies, what I see happening now at Color Kinetics, is natural maturation. The whole company has grown over recent years, and this year marks the turn to big company mentality and major league performance. Having successfully penetrated North and South America, Europe and Japan, they are now heading into the China market with two sales partners to be selected by the end of June (that should fuel the buzz at BLUE; everyone making LEDs wants to sell to Color Kinetics), I predict this company will go on to become very big and very successful. Color Kinetics went public only this year on the Nasdaq exchange (Symbol: CLRK), in a USA economic climate where only the strongest of young lions, like Google, can make a smash hit of an IPO. They're working now with Future Electronics as their distributor. That association allows CK to work more effectively with the very large-end system customers instead of spending precious time and resources with the myriad of small lighting designers coming on-line daily. Those grass roots relationships are what Future will handle for them now and is yet another indication of maturity. And in my opinion, they're now handling their IP like a sophisticated, dignified company should.

As I've said before, if I could only pick two publicly held USA-based companies in the compound semi/solid state lighting field to personally invest in, or to vote for as most likely to be huge many years from now, I'd choose Cree and Color Kinetics. In fact, after 30 years tracking the compounds, I've finally decided to put together a very modest, personal portfolio that includes CREE, CLRK and the following others: EMKR, TQNT, ANAD, JDSU, SPIR, RFMD, KOPN, WJCI, and VTSS. These are personal favorites that I've elected to invest in for a number of reasons. Prime among those is my basic frugality. Most of the above are priced at a low enough level I can actually afford to buy 100 shares of each (my betting limit in this type game). I'm doing this primarily to see what happens over the upcoming years to that modest portfolio, which is also designed to provide incentive for more color commentary by me on the industry as I advance into retirement mode. Also, each of the selections was made because of their positive track record within the industry and each will probably be around if and when there's a real pickup in the USA economy.

For those of you who are involved in the investment scene who want to access a secular listing, we're trying to put together a complete listing of all publicly held stocks that relate directly to the compound semi and solid state lighting industry. This "works in progress" can be found on our "CS Stocks" chart, which is in the throws of a total overhaul. What you'll see there now are the initial listings, to which I hope readers will commentate on, add to or subtract from. (Next up will be the big companies such as Northrop Grumman, Honeywell, Rockwell, Agilent, etc. who have a relatively small (to them) involvement in the compounds, but are very important players to our field). As I said, I'm personaly a novice investor, so I'll update you more on what I'm trying to do in a future editorial. We'll also draft some official and proper "disclosure" message. Cree and Color Kinetics were at the top on my investment wish list (despite being somewhat expensive to this novice) because I truly believe they are both now on the cusp of moving from a company worth millions to a company worth billions (at 100 shares each, I doubt I'll make even thousands, but hey, skin in the game is skin in the game, even if it's just a little scratch). Unfortunately, there aren't that many companies you can say that about in these "challenging" economic times.

In their quarterly earnings report conference call late Wednesday, April (link to the replay), George Mueller expressed his excitement in changing his title in July to "Founder Chairman" and he's also duly excited about speaking at BLUE 2005. As he said in the call, George intends to become an "industry-wide evangelist and educator" helping mold the international process of totally rethinking the future of lighting. Solid state lighting never had such an experienced advocate. Heck... George can control a rock concert from a PC out front! One doesn't get any more influential regarding the future than that!!!

Just look at any concert audience watching the Color Kinetics light show at work and you'll see precisely where the world is headed.... which is wherever the young people in that audience want to take it. George Mueller can share our pulpit anytime, and that time is 11am Tuesday, May 17th in Hsinchu, Taiwan, at the Ambassador Hotel. Plan to be there for BLUE 2005 and see and hear this exceptional solid state lighting industry leader for yourself.

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