Andrea Tellatin (Twinkly)

Welcome to the Smart Home Founders series, where the founders of leading smart home companies get to tell their story. In this edition, we interviewed Andrea Tellatin, the founder of Twinkly, a company that creates smart lighting products.

Twinkly, known for its innovative Christmas lights introduced eight years ago, has become a major name in the smart home industry. The company has since broadened its range to include LED strips, RGB panels, and professional lighting for artists.

Twinkly offers an easy and quick method for users to set up personalised installations from any device. I sat down with Andrea, and we talked about how the company has influenced smart home lighting, and about Andrea's future ambitions for Twinkly.

Hey Andrea, thanks for taking the time to speak with us today! We’re excited to hear the inside scoop. Tell us about Twinkly’s inception. Tell me, how did it all began?

Hey Emile! Well, it all started with a call from Marco Franciosa back in 2016. At that time, I had just left Venture Capital and was enjoying a sabbatical, traveling with my family. Marco reached out to me about his patented lights, which were still in the early stages of development, but soon to hit the market.

While addressable pixels were available, they were too costly for most businesses to be a viable option. Another challenge was that LEDs could only be lit up randomly. Marco’s solution used a camera phone to map the positions of the bulbs. This transformed ordinary devices into flexible screens, deploying any picture, text, or animation.

How does this work practically? You flash LEDs in a specific color and map it on Twinkly, in an image, right?

Correct. There is an artificial intelligence, which not only recognises 2D forms but also understands the position of the LEDs in a full environment. You can take multiple views and the algorithm will rebuild the three-dimensional object.

So you and Marco had cool technology, but no company yet. How'd that happen?

Marco approached me to lead the company. He had an innovative product but lacked the know-how to establish the business. With no initial funding from Venture Capital or private equity, he entrusted me with the task of building the company from scratch.

Luckily, I was able to assemble a team of 15 individuals, former colleagues from my Venture Capital days, who believed in the project and agreed to work for equity for over two years. This allowed us to kickstart the company without any upfront costs.

That’s smart! We also started a bit like that. What were your initial challenges in building Twinkly?

Our first challenge was to create a prototype. Thankfully, we found our first investor in a Taiwanese company specializing in microcontrollers and Power integrated circuits (IC). They helped us develop the technology necessary to control the pixels using SPI (Serial Peripheral Interface) technology. One key innovation was designing addressable LEDs with just two pins instead of  three pins.

Additionally, we pioneered PLC (Power Line Communication), enabling data transfer over power lines. This technology, coupled with microcontrollers in each LED, allowed for seamless communication between devices.

Wow, I didn’t even know that. Almost all other LED strips have three or four pins. Tell me, when was Twinkly’s breakthrough moment, you think?

We reached out to the organizers of Christmasworld last minute. To our amazement, they had space left, just one tiny room next to the restroom. We took the only sample we had and came up with the name Twinkly, the day before heading there. It was a bit crazy when we arrived in Frankfurt. Our logo wasn’t sticking on the wall. So, we stood the whole event holding it in place, haha!

Then the magic happened. People couldn't access the restroom, because of how popular our tree was. A chance encounter with a John Lewis buyer led to a major distribution deal. They became our first major client, investing $500,000 upfront, essentially becoming our early investor in exchange for exclusive distribution rights in the UK for one year.

Twinkly's path hasn't always been that smooth, right? What were some of your challenges?

To say there were a lot of hurdles along the way is a bit of an understatement. Zero marketing budget, products plagued with hardware defects, the list goes on. Our LEDs would flicker, turn black, or wear off randomly. In the first few years of operation, we narrowly avoided bankruptcy. Cultural differences in manufacturing practices in China added an extra layer of complexity.

While securing integrated circuits (ICs) was relatively easy, thanks to my network in the region, issues arose with packaging and pin production. Unlike conventional LEDs, Twinkly's two-pin LEDs required programming, a concept unfamiliar to our partners. It took three months of intensive effort to overcome these differences, all the while addressing the hardware issues we encountered during production.

Oof. How did your customers react to that?

Our customers are amazing. I call it the second miracle. Rather than requesting refunds for our defective lights, they embraced our uniqueness, eagerly anticipating Twinkly’s second-generation model. They asked for a 50% discount whenever it was ready. This overwhelming support boosted our morale, propelling us forward. 

Thankfully, our second-generation Christmas tree lights were much more stable. As a result, we were able to break even.

And how are your finances going now?

We've seen our revenue double consistently, from 1 million to a staggering 60 million dollars in just eight years. This momentum is driven by our innovative products and strategic expansions, including our recent steps into gaming and home lighting with Square wall panels and Matrix light curtains. We're constantly pushing the boundaries of innovation, with plans to introduce exciting new features like music synchronization and third-party controller support in the months ahead.

You showed me some pictures of Twinkly being used outside the home. Where else do they use your LEDs?

If you go to Cartagena in Colombia, you'll find a big mural made with Twinkly. On London’s Oxford Street, both John Lewis and Selfridges have annual installations with our lights. Even at the stadium of Liverpool and Shakespeare’s Globe theatre, all the lights behind are made with Twinkly.

So is there a limit to the number of lights you can connect with Twinkly?

No, there's no limit. They are virtually connected, so when you plug one in and then another, they communicate with each other through the application. Each device is essentially recognized as part of the same network, regardless of how many are connected physically. The computational power is distributed among the lights controlled by a single power adapter and controller. So, effectively, there's no limit to the number of lights you can connect.

Right. The computational power is essentially shared among the connected lights?

Exactly. And in professional settings, we use Ethernet cables instead of Wi-Fi for even more bandwidth. While the limit for Wi-Fi-connected devices under the same network might be around 30 to 50, with Ethernet, we've created installations with up to three million pixels without encountering any issues. So, the bandwidth of the communication channel becomes the limiting factor, but with Ethernet, we can move gigabytes of data without any problem.

Let's talk business. What's Twinkly’s breakdown between consumer and business sales?

Currently, consumer sales make up about 80% of our business, while the professional sector accounts for the remaining 20%. However, I anticipate this ratio to shift towards 60% consumer and 40% professional in the future. This shift is driven by several factors. Firstly, the professional market offers less competition. Secondly, there are significant cost savings associated with using Twinkly for professional installations. Compared to traditional professional lighting setups, Twinkly can result in savings of up to 20% due to eliminating the need for expenses such as computer licenses, programmers, and content creators.

Impressive. Can you share what's next for Twinkly?

Twinkly's journey is far from over. We're exploring avenues in automotive technology, leveraging camera recognition to predict vehicle movements after accidents. Moreover, our recent introduction of Twinkly’s desktop application marks a significant milestone, offering users a fully immersive experience without the need for additional devices. 

How do you see the future of smart home?

We imagine an ecosystem where devices interact seamlessly. While smart hubs like Homey play a pivotal role in automation, our focus remains on providing decoration and experiences. Most smart home platforms don't go further than turning Twinkly on/off. I know that Homey does already a much more, so that's good for us. If you compare that to Matter, for example, that's soo basic. I don't think Matter will ever support the number of LEDs that we can control currently.

Yeah, that's still a long time away. Anyway, thank you for sharing your insights with us, Andrea! Is there anything else you'd like to add?

Haha, sure! I do like to express my gratitude to our customers, partners, and team members who have been instrumental in Twinkly's success. Together, we'll continue to illuminate the world with innovation, one LED at a time.