On Tuesday March 6th the INSEAD Alumni Association had the opportunity to meet LED Lease & Finance and discuss LED lighting and applicable business models. Alumni Gijs de Rooij (MBA’00D) and Bas van der Giessen (MBA’02D) started LED Lease with Eline de Rooij in 2010. The company offers energy-saving lamps to professional users in a lease or pay-in-installments contract.
Bas explained recent advances in LED lighting technology. The quality of light is now more than sufficient for hotels, warehouses and offices. Lifetimes and electricity consumption are on a level wholly different from earlier technologies. Gijs introduced the business model. The customer uses its energy savings to pay off the lamps, which are financed with the backing of a large private investment fund.
As a next step in its marketing strategy, LED Lease is preparing to offer “light as a service” or “pay per lux” contracts. Akin to the way in-house printing can be paid per page without buying a printer, pay per lux means that users will pay subscription fees for having light on their floors and desks rather than buying lamps.
We discussed the business model and its challenges further over a light Thai dinner. Several alumni brought experience in lighting, business services, and financing to the table. We had a high-level discussion, ranging from the best target segments to ways of converting a hesitant customer. We finished the event with a round of drinks, enjoying the view of Amsterdam from the Parooltoren.