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After Shocking Himself While Swapping His Light Switches, He Found a Solution. Now His Products Help Homes Sell Faster. Derek Richardson thought it should be as easy to change light switches as it is to change light bulbs. Now his company Deako's smart modular lighting is being installed in 10,000 homes a month.

By Kim Kavin

This story appears in the November 2024 issue of Entrepreneur. Subscribe »

Courtesy of Derek Richardson

Derek Richardson knows how to handle himself around a junction box. He earned an electrical engineering degree in the late 1990s and then worked for the company that made Blackberry devices.

But some 15 years later, he and his wife bought a new home, and they started to paint the walls white, he realized all the light switches were beige.

Richardson tried to hire an electrician to install matching white switches, but couldn't get anyone. So he spent six weeks doing it himself, while his kids ran around and his wife begged him to move as fast as she could paint.

"After shocking myself a couple of times and going down to the circuit breaker a couple of times, I thought, man, there is a connector where the lightbulb is," he recalls. "Anybody can change a lightbulb. Why didn't somebody make a connector for the switches?"

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His company, Deako, started operations in April 2015, selling modular smart lighting control systems. Once the backplate is installed — which can be done without a professional electrician — homeowners can change out the switches as easily as a light bulb.

Individual homeowners can buy Deako's products, but Richardson's real business boom came from working with builders such as Toll Brothers and Meritage Homes. D.R. Horton, the largest homebuilder in the United States, ran a test: It put five Deako switches in half its homes, and only one switch in the other half, to see if it made a difference in sales.

"We found, after about 100,000 homes, that people bought homes about 20 days faster when it included our smart lighting," Richardson says.

In 2023, Deako saw its gross revenue grow by 52% compared to 2022, and the company is forecasted to grow 81% by the end of 2024. All of this made Richardson a finalist on our Entrepreneur of 2024 list of innovative leaders.

How new is the concept of smart lighting systems?

It's been around for 20 to 30 years for the super-wealthy. A company quoted me $20,000 to put in a smart lighting system. What we've done is made it so that the average person can now do it themselves, at one-tenth the cost. You can get a whole-home system for $1,000 to $2,000. The average price of a Deako-equipped home is $350,000.

Is smart lighting something that homebuyers want nowadays?

With younger buyers of new homes, the expectation has really changed. It used to be, give me a smart thermostat like the Nest or a Ring doorbell. Now, they want to be able to control their lights with their voice or their app.

How does a builder incorporate Deako switches into new construction?

A lot of times, you have one builder right across from the other builder in the same community. They all have access to the same materials, but they need to differentiate and stand out. The homebuilder puts it in with the lowest-cost simple on/off switch, and then asks the homeowner: Do you want smart switches? Dimmers? Motion sensors? Each family can make their own decision.

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And when D.R. Horton did this, they found that their homes sold 20 days faster?

Yes. Our partners were able to save around $4,000 in bank loan fees per home by avoiding interest costs typically accrued while waiting for the homes to be sold. A few hundred dollars is a small investment for these builders to save 20 days on the market.

And for the homeowner, no matter what kind of lighting gets invented next, Deako can make a pop-in switch that fits the same connector?

Right. When Edison invented the lightbulb and they came out with the connector for the lightbulb, they weren't envisioning that 100 years from now, there would be LED bulbs and bulbs with speakers and motion sensors in them. But they futureproofed those homes by putting the connectors in.

Can owners of older homes install Deako switches too?

Yes. If you're renovating a home, you can save 20% to 25% on your lighting bill just by having dimmers in.

One of the biggest energy-saving benefits is putting timers on your exhaust fans in the bathrooms. I've got three daughters. Two are teenagers. They'll go in the shower and turn the fan on, and then they go to school. That can be dollars a day in electricity cost and wearing out fans in my home. With a smart switch that has a 45-minute timer, it automatically turns off.

Related: 4 Key Strategies to Help Entrepreneurs Cope With Failure

Kim Kavin was an editorial staffer at newspapers and magazines for a decade before going full-time freelance in 2003. She has written for The Washington Post, NBC’s ThinkThe Hill and more about the need to protect independent contractor careers. She co-founded the grassroots, nonpartisan, self-funded group Fight For Freelancers.

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