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Sean Darras founded LuxTech – which designs, develops and engineers LED modules that enable light fixture manufacturers to enter or expand their offerings. -- in June 2012. By the beginning of 2014, Darras had validated his business model, raised $700,000 in investment, hired 3 full-time and 2 part-time employees, built a national distribution network, and secured contracts for sales of over $5 million. Darras expected LuxTech to continue to grow very rapidly in part because LuxTech had a well-validated business model and wasearly in addressing the needs of the industry’s fastest growing segment.
“The first start-up I worked at took us 3 years and $3 million investment to reach $1 million revenues. [LuxTech] took 1 year and $15,000 investment to reach $1 million revenues. Which would you rather do?”
Darras systematically followed the “Lean Start-up” method pioneered by Steve Blank at Stanford and endorsed by the National Science Foundation for science and technology based start-ups. He got out and spoke to potential customers first and in –depth. This validated his business model before he tried to obtain big financing and scale the business.
In Spring 2013 – after he was fairly sure of his customers and value-add, he attended a program at the Energy Efficient Buildings Hub (EEB Hub) funded by US Department of Energy and led by Penn State at the Navy Yard and met Laurie Actman, Deputy Director. Laurie encouraged him to explore the funding and complementary services offered by EEB Hub Commercialization Center (HCC) and EEB Hub partners Wharton Small Business Development Center (SBDC) and Ben Franklin Technology Partners of Southeast Pennsylvania. Sean followed up. He wrote his business plan and worked out the details of his business model in Wharton SBDC’s Strategic Business Planning Workshop. Then he used the plan as a key part of his application for Ben Franklin’s investment. Darras then located his business in the EEB HCC. He drew on Wharton SBDC’s Commercialization Acceleration Program (funded by Department of Energy and Small Business Administration) through which Consultant John Currie conferred with Darras weekly during the summer 2013 as Sean built a national network of sales distributors.
By the end of 2013, Darras had a national network that had achieved $5 million in sales. He was hiring and working to grow LuxTech much further.