Light Years Ahead

Profile on U.S. Energy Technologies founder and former CEO, Byung-Il Ham

Cover Story TransPacific

1996

People think we make nuclear bombs," jokes Byung-Il Ham, founder and CEO of Fullerton-based U.S. Energy Technologies Inc.

Only recently has the 56-year-old inventor begun enjoying success commensurate with his gift for creating ultra-efficient lighting circuitry. His intimate knowledge of the way electricity behaves has prompted some to suggest that that's what flows through his veins. One of his biggest fans is General Electric who is favoring U.S. Energy with the kind of attention and orders normally reserved for companies with 100 times U.S. Energy's projected $7 million in '96 revenues.

Last August GE, the world's leading distributor of consumer lighting, signed a unique agreement to distribute U.S. Energy's 8-product line of innovative low-wattage safety and night lights.

"They saw our night lights at the Chicago trade show," Ham says in his impressionistic but spirited English. "It was love at first sight." Ham speaks the way his circuitry works, in inspired shorthand.

"General Electric reviews thousands of products all over the world," says Insook "Sue" Ham, Ham's petite, efficient, preternaturally youthful wife and COO. She claims to be twice as old as the twenty something, most people take her for. "They were picky with every detail, but our products got approved over all the others." Insook speaks quick, efficient English. The job of juggling the many facets of U.S. Energy's day-to-day operations makes time her most valued commodity.

Byung-Il Ham points proudly to the red, white and blue U.S. Energy logo on the bubble pack of one of his safety lights. "With other companies' products they put only the GE logo on the package. On ours the U.S. Energy logo goes beside the GE logo. That's how much they respect our quality reputation."

The relationship has given three-year-old U.S. Energy a pipeline into every major hardware, discount and supermarket chain across the country. Seven months into the distribution agreement, its shipments have trebled, and the growth curve remains steep. By 1997 shipments will be up tenfold over 1995. The deeply religious Ham sees the hand of providence in his pairing with GE. "It's like having 250 sales people."

"It's definitely a marriage made in heaven," agrees sales manager Dick Werft who brings to U.S. Energy two decades of experience as a Sylvania sales engineer. "We make the products and ship them direct to GE's warehouse in Dallas. They handle the rest. Now we can concentrate on using Byung's brains to get more products going."

Ham's wizardry with lighting circuits is U.S. Energy's crown jewel--and the main reason for the high esteem the company enjoys with GE and others. The safety lights are profitable best-sellers that gave U.S. Energy low-cost entry into the lighting business, but they only scratch the surface of Ham's genius.

In the last two years Ham has won 10 patents from the U.S. Patent Office. Three more are pending. These patents are the paper trail of a genius who has grasped the closest thing to a Holy Grail in the lighting industry--an ultra-efficient ballast circuit for industrial-grade fluorescent lighting fixtures.

American industry is required by law to spend $20 billion in the next live years to replace outdated. energy-wasting fluorescent fixtures with those that incorporate advanced tubes and ballasts A ballast is the circuit that regulates the flow of electricity to a fluorescent tube. A good ballast sends, at the flick of a switch, the precise surge of current needed to instantly ignite the gases in a fluorescent tube, then drops the current to the far lower level needed to maintain fluorescence. Bad ballasts make switching unreliable and generate excess noise and heat, resulting in wasted energy and drastically shortened tube life. Frequent tube replacement multiplies lighting costs since the hours maintenance engineers spend replacing burned-out tubes are expensive, not to mention the high cost of the fluorescent tubes themselves. Replacing bad fluorescent fixtures with good ones save as much energy and money as replacing hot inefficient incandescent bulbs with conventional fluorescent lights

Even a lay person instantly sees and feels the difference between a fixture containing one of Ham's ballasts and a conventional fixture. Ham's fixture is a third the weight and half the thickness. A fixture's weight and size is controlled by the size of the transformer, the biggest, heaviest, most energy-hungry component in conventional fluorescent ballasts, typically making up about 75% of a ballast's weight. Ham's industrial-grade fluorescent ballast uses transformers less than a quarter the size and weight. Ham achieved this through an inspired configuration of diodes, capacitors and resistors that directs current precisely in step with tube requirements. The payoff: energy consumption is cut and tube life is extended 200%.

Another advantage of Ham's industrial ballast design is its unique safety feature The ballast causes a tube on the verge of burning out to flicker distinctively This lets users avoid the fire hazard of leaving in a burned out tube. By pinpointing the source of the burnout, it also eliminates the costly and wasteful but routine practice of discarding the ballast with the tube.

Ham wants to produce and distribute his industrial-grade ballast in time to ride the retrofit boom up to the first ranks of the lighting industry. If he succeeds, in five years U.S. Energy will mushroom into a $500 million company. If he fails, it will be a $30 million company enjoying 35% gross margins in the safety-light niche it dominates. Either way, Ham will be the same happy man he has always been.

His positive temperament, and that of Insook, go far toward explaining the many warm, trusting relationships U.S. Energy has forged with the industry's leading lights, so to speak. Within weeks of inking the unique distribution agreement, GE began favoring U.S. Energy with the kinds of technical tie ups most inventors only dream about.

To overcome the structural limitations of large corporations in addressing niche markets, GE has entrusted U.S. Energy with the mission of finding or creating high-quality, low-cost sources for upgrading its entire line of consumer electrical products. His pinpoint knowledge of every significant component manufacturer in Corea, Taiwan, Hong Kong and Europe lets Ham write his own ticket. One of the first products under this new agreement is one of his designs, an extension cord with a built in surge-protector to be sold at the same price as ordinary extension cords. That product alone will add tens of millions to annual sales.

U.S. Energy's 4.5-watt mini-fluorescent plug-in light for small enclosed spaces like closets, bathrooms and the like, lasts 30,000 hours and emits the light equivalent of a 20-watt incandescent bulb. The Bright Light is equipped with a sensor that automatically turns it on when darkness falls. These products won accounts like Home Depot, Ace Hardware and Fedco. Encouraged, Ham signed a lease for the current 16,000 square-foot space in a high-profile industrial park dotted with tenants whose brands are household words.

Enthusiastic word-of-mouth by happy customers helped grow U.S. Energy's sales from $800,000 in 1994 to $2 million in 1995. The new distribution agreement with GE has begun generating big orders that doubled, then tripled monthly shipments by mid-1996.

U.S. Energy's 60 employees are now assembling and shipping 80,000 units a month. Ham expects monthly sales to treble again by next January. He knows U.S. Energy is still too small to take on the giants in the industrial and commercial fluorescent fixtures arena and is busily creating new niche products to give the company the necessary critical mass.

"He's a genius," says Werft of Byung. "He could come up with an idea a day if we just locked him up in his room and put food under the door!"

"My ideas are always simple," says Ham. "I'm always trying to simplify everything. Thinking is my hobby."

A bewildering array of prototypes fill U.S. Energy's conference room and laboratory. Among the most promising from a profit standpoint is an ultra-thin lightweight exit sign equipped with a remote-testing battery backup. Local fire regulations require commercial and office buildings to mark every exit with an illuminated exit sign. Each month millions of exit sign bulbs across America burn out and are replaced at a cost of $45-90 each. Armies of fire inspectors in every city make regular rounds of commercial buildings and test each sign by turning off the AC current to check the freshness of backup batteries meant to keep signs lit in a fire or earthquake.

Ham's exit sign reduces maintenance to an absolute minimum. For starters, it's guaranteed to outlast the building. The remote tester eliminates the need to climb a ladder to switch off the AC current to test the battery backup. What's more, the sign is so thin and light it can be fastened with double-sided tape. It's typical of Ham's efficient, simple, benefit-packed designs.

Small independent lighting companies are trampled on or gobbled up each year by the hundreds. In the past 20 years the lighting business has shrunk from 1,300 manufacturers to less than 500. Today nine giants control over 50% of the nation's $5 billion industrial-commercial lighting market.

Yet the future is bright for U.S. Energy. The bureaucracies of the big companies deny them the ability to take the many small quick steps needed to seize niche opportunities. What's more, they're only too willing to leave well enough alone. Byung-Il Ham isn't. He can examine virtually any lighting product and make it simpler, safer, more benefit-packed. More importantly, he can take an idea and turn it into a prototype in a few days. He is, in effect, a small but fearsome predator who can turn the tables on the giants, biting off market niches before they can lumber into position to confront him.

"I don't care so much about the money," Ham says. "I just want to do it right."