Being a cleantech entrepreneur could have been easier for James McKenzie if he’d have compromised on his principles, but that was never an option for him.
Fresh from picking up Entrepreneur of the Year at the New Energy & Cleantech Awards, McKenzie says that if an entrepreneur in the new energy space is prepared to lie about what their products do then the gain, albeit short-term, can be great.
However, for his business PhotonStar LED, it has always been about proving the company’s products work, and work over time.
McKenzie beat off competition from the likes of Breathing Buildings’ Shaun Fitzgerald, David Martell from Chargemaster and Freewatt’s Julian Patrick to pick up his prize at what was the sixth outing of the yearly event.
Operating in the LED market as McKenzie does, it is often a hard sell promoting products which are often two and a half times the cost of what they are replacing.
The champion entrepreneur first came up with the idea for his business while stuck in traffic in Taipei. Spit-balling with his colleague Majd Zoorob, the two quickly took to passing time by thinking about how the LED technology they were both involved with through chip making could be used for the next big surge, lighting.
Rewinding a little, McKenzie’s background has seen him study physics and computing before going to Brunel University where he worked on optics for his Ph.D. He joined Bookham Technology when the company was in its very early stages and was involved, as a member of the management team, in its growth phase leading up to an IPO in 2000.
He then went on to join Teem Photonics as VP of business development and marketing, exiting the company following a fundraising round in 2003. A stint at Mesophotonics as CEO, where he successfully raised £5.5 million in 2003, followed before he decided to set up his own company.
McKenzie founded the business in March 2007, four months before the collapse of Lehman Brothers and the beginning of recessionary times.
With venture capitalists saying that it was the worst time the two could have picked to start, McKenzie’s entrepreneurial brain was put to the test and he decided that the business needed to come up with a quick revenue stream.
‘On 16 March 2007 everyone was very excited about LEDs and then suddenly, overnight in mid-August, it collapsed,’ McKenzie explains.
‘So we thought, ok, we better come up with some products to make some money, to be able to afford all these patents we’ve now filed.’
Having grown steadily over the following years, PhotonStar took the decision to join the Alternative Investment Market in December 2010 through a reverse takeover by Enfis Group.
‘We slightly avoided the VCs as they were in a flat spin after the meltdown, and very few were doing any deals,’ he adds.
‘So we went down the business angel route and then got to a stage in mid-2010 when we were turning down potentially 25 per cent of our monthly turnover as we couldn’t fund our stock.
‘Having been to the banks they weren’t interested as they said we didn’t have enough history, and we tried them all.’
McKenzie says that the shareholders of Enfis were very keen on the sector but, with Enfis itself having had a fairly troubled existence, were looking for a new team and business plan.
Since then the designer and manufacturer of smart LED lighting products has gone on to make a success of its technology which integrates LEDs, sensors and controls to provide intelligent lighting for commercial and architectural applications.
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Its products provide greater CO2 reduction, lower cost of ownership and improved functionality. The business is split into three divisions: PhotonStar LED, which works with lighting designers, architects, house builders and others to develop LED lighting options; and PhotonStar Technology, which develops LED lighting technology for general lighting and specialty applications such as films and television production lighting, UV curing and medical applications. Also contained is Camtronics Vale, which provides subcontract electronic manufacturing services in the UK.
The business has recently gone back to AIM to secure a further £1.57 million through a placing with institutional investors. The capital will be used to finance the next stage of its growth and specifically to fund a new wireless circadian lighting product range using its ChromaWhite technology.
McKenzie has built a company which is now an established manufacturer with a good reputation, and it is now in a position where it is supplying technology to other manufacturers.
‘The market is moving quickly, the prices are dropping about 15-20 per cent a year and efficiencies are going up,’ McKenzie comments.
‘Competition is growing, but we’ve got five years of history to say our fittings will last.’
That statement seems to sum up McKenzie, who is making a success of his business by constantly innovating and being ahead of the development curve. There is set to be increased competition in the market of cheaper and more environmentally friendly, but McKenzie appears to be miles ahead of the others.