The sad state of Switch & its liquid-cooled LED bulb

Earlier this year I noticed a small clear oil spot that had accumulated on my bathroom counter. I don’t generally use many oil-based hair or lotion products so I was mildly curious where it came from. But since it was just a small round spot, I paid it no mind and wiped it up. Maybe a friend had left something oily on there, I thought.

A couple weeks later it was back. A little weird. I cleaned it up again. What is doing that, I casually wondered?

It wasn’t until my boyfriend sent me a text message the other day asking me if I could please stop dripping oil on the bathroom counter, that I started to really investigate. And it didn’t take long to find the culprit. About two feet above the reoccurring oil spot we have a series of four LED bulbs, and one of them — a 60-watt equivalent frosted-tinged LED bulb from startup Switch — appeared to be leaking a clear oil substance.

Switch Lighting's 60-watt equivalent LED bulb.

Switch Lighting’s 60-watt equivalent LED bulb with frosted tint.

You can see in the pictures that oil accumulated outside of the bulb and some tiny bugs had landed on the bulb over weeks and died in the oil. And yes I’m gross that I lived with a leaky light bulb accumulated with dead bugs for awhile.

Oh yeah, Switch, I remembered those guys. They were founded back in 2007, and they had developed a liquid-cooled LED bulb that early adopters seemed pretty excited about and the venture capitalists at VantagePoint Capital Partners had funded early on.

Switch’s PR firm had sent me the bulb in question at the end of 2012, and I’d promptly popped it into one of the four sockets in the bathroom and I’d been using it ever since. It was an early version, before the bulbs were more widely on sale to the public, though it was purchased at a Batteries Plus store in San Francisco. Perhaps its early nature was cause for the leaking. They also sent me one with an entirely clear casing, and no frosted cover, which had no leaking issues.

I also remembered these Switch bulbs at one time had a lifetime warranty for residential users (though I got mine for free), so I started Googling around to see if other users had had this problem and had gotten a warranty claim on them. I quickly discovered there were a few others out there that had experienced similar leaks (that clear oily drip), including on this comment thread on Amazon from earlier this year. This lighting forum comment thread here also raises the leak issue. Overall though most reviewers seem pretty happy with the bulbs.

But the more I started searching around about what was the latest from Switch, the more I realized something that potential customers, distributors (and some in the media) had already started to realize earlier this year: that Switch appears to be no longer operating. If it hasn’t fully liquidated its assets and laid off all of its staff, it’s definitely gone into cold freeze hibernation mode.

State of Switch

Switch’s website is no longer available (hasn’t been for months) and a customer service phone number has been disconnected for about as long. Customer and distributor complaints on forums claim that the bulbs are no longer available from a variety of stores, though there’s some inventory still available via resellers on Amazon. The company’s Facebook and Twitter haven’t been updated since January 2014.

I emailed various Swift representatives for a more concrete answer, but haven’t gotten any responses from them yet. On Linkedin the company lists about a dozen current employees, but also almost 100 former employees that have left the company, many in the spring and summer of 2014. One of the original technology gurus, former CTO David Horn, left the company in June 2014, according to LinkedIn.

Legal documents shed some more substantial light onto what occurred with Switch earlier this year. According to a suit filed against Switch this Summer, from plaintiff ixmation (which was making production assembly equipment for Switch):

[blockquote person=”” attribution=””]On or about May 30, 2014, Switch made an assignment for the benefit of creditors for the purpose of liquidating its assets. Switch is no longer operating and in business.[/blockquote]

According to the suit, Switch started working with Sherwood Partners to liquidate its assets. I’ve reached out to Sherwood Partners to learn more about those proceedings and if they occurred.

Ixmation says that Switch owes it a little over a million dollars for work on an automation factory system it was making for Switch. Switch asked ixmation to stop work on the system in March of this year, and ixmation was trying to get an equitable lien on a line of credit from Wells Fargo Bank to cover the remaining costs it says it is owed.

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While ixmation’s motion was eventually denied (not that Switch doesn’t owe it money but that ixmation can’t access the line of credit), recent legal documents add more color to how this may have occurred. A legal document from the case, filed on October 23rd, quotes Switch Project Manager Myron Moreno as saying that in early 2014 Switch’s funder, VantagePoint Capital, “laid off more than half of Switch’s employees, including employees who were working on the custom automation system and necessary to complete the FAT stage of production.” Moreno told ixmation at that time that Switch was “trending towards liquidation.”

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Switch is also named in three other suits filed in the Superior Court of California, Santa Clara County: debt collections suits filed against it by shipping company American President Lines, and printing company Lightning Press, and a breach of contract and warranty claim filed by electronics manufacturing company Zytek Corporation.

Whether Switch will officially file for bankruptcy or has already liquidated its assets is unclear to me, but it’s obviously a mere shell of a company. This I think is all irregardless of any leaking bulbs, which are a little disturbing on their own.

Promise of Switch

Unfortunately Switch’s story isn’t all that uncommon, and it — like the tale of biofuel maker Kior, or electric car company Fisker — represents just how hard it is for a venture capital-backed start up to innovate and commercialize early energy technology.

Switch Lighting was founded seven years ago, and was originally called SuperBulbs when it was in stealth mode. Physicist Ron Lenk was the original inventor and the first CEO, and he left the company in 2009 after a disagreement about whether to use gel or a liquid, according to this Wired feature.

The premise of the bulb was that it was designed to have small LEDs placed around the edge of it, rather than a traditional central lighting point, and also used liquid within the bulb to cool the LEDs. Liquids are a lot more efficient cooling medium than air and this combo was their secret-sauce.

What the Switch 60 bulb looks like when it's not covered in oil and bugs.

What the Switch 60 bulb looks like when it’s not covered in oil and bugs.

The bulb was supposed to be cheaper than other LED alternatives, was able to fit into a standard A19 socket, was supposed to produce a more compelling light, and wouldn’t get as hot as other bulbs. The company touted it as an incandescent killer, and a lighting revolution and large publications like Wired featured the company in detail when it came out of stealth in 2011.

The early 60-watt equivalent version I got was pretty heavy, and actually retailed for $50 back then in late 2012 when it first went on sale. Newer versions of Switch’s bulbs were selling for much cheaper than that. At one point in January 2014 — a couple months before it was looking into liquidation — Switch decided to offer its newer infinia bulb for as low as $3.99 with utility rebates in certain states. I would be surprised if they were making money off of that price point.

One thing I noticed early on was just how complex the original bulb was compared to a basic incandescent (hilariously called the Liberace of light bulbs here). But unlike with commercial LED makers, the Switch bulb was competing directly against the residential incandescent. Switch simplified the bulbs significantly after that first line, and they seemed to have changed their strategy after they launched.

Switch had a variety of CEOs over the years, and it seemed like they had a new CEO every time I wrote about them. VantagePoint seemed to call a lot of the shots when it came to execution, so it’s not surprising that the Switch Project Manager is quoted in the suit as saying that a large round of layoffs from VPCP had prohibited the company from finishing the new assembly equipment it wanted. By 2011, VantagePoint had already put “eight figures” into the company, according to this Wired article.

VantagePoint has had a variety of these types of capital intensive, struggling portfolio companies including thin film solar startup MiaSole, biofuel company Mascoma, electric car infrastructure company Better Place, and green building company Serious Energy. Though it’s had some successes, too, like Tesla and Solazyme. Last year VantagePoint stopped raising a planned $1.25 billion fund to put into cleantech companies due to lack of support from its limited partners (the pensions and big investors that put money into venture capital funds).

Switch's Infinia bulb

Switch’s Infinia bulb

Sources I’ve spoken with over the years that have worked at some of these struggling companies have told me that while VantagePoint was willing to back some of these capital intensive companies early on, it later was unwilling to provide more funding beyond a certain point even when the companies were in a dire state. The reality is that many of these companies just needed more money, and a longer time to market, than the venture capital model really allowed for.

Switch was funded smack in the middle of the cleantech VC bubble of 2007 and 2008. Far less money is available to these types of companies nowadays.

Beyond funding issues, commercializing early stage manufacturing technology in general has continued to prove difficult for venture-backed startups. As Tesla’s CEO Elon Musk has noted many times over the years: making physical goods and “stuff” is a lot harder to get right than making software. Factory production requires repeatability and utter efficiency to deliver good products and keep costs down.

Early commercialized energy hardware can easily suffer from defects, like the case of Fisker’s A123 batteries. I’m not sure how widespread the leaking problem is for Switch, but that could be the result of an earlier stage manufactured product.

The lack of success of most (non-digital) venture-backed energy startups is truly unfortunate because in order to fight climate change, lower carbon emissions, and make energy use more efficient, the world needs more energy innovations and energy-focused entrepreneurs. Switch’s light was a noble idea, but it seems like its time has passed.