You can imagine the other services into the home we’re going to provide, maybe not as robust as what we intend to do, but it was a natural progression. I think it will prove out that by the end of this year, which will be our first full year in the solar business; we will be the largest residential solar company in the United States or North America. It is a perfect fit to our current platform. Our customers love it and it makes sense to them.
That doesn’t mean every security company should be a solar company. I’m not saying that. We’ve built our technologies and our backend services and platform to facilitate that. Again, that was multiple years of anticipating that, building to that. The actual launch was anticlimactic. We already knew what the end result would be.
You’re currently very ambitious in this space. From a competitive standpoint who or what concerns you the most and why? Would it be more the local security guys, the allied guys like IT, telecoms now coming in?
Pedersen: We try to be respectful of the smaller companies, the local players. They’re very important to certain types of consumers if they only want a security offering. I think that’s going to change when our full suite of services is out to the public and people are knowledgeable about the capabilities we’re going to offer. It would be a very rare case that someone would choose security only. I would say we’re not as concerned about the local security providers from a competition perspective.
It would definitely be a Comcast, Verizon, AT&T, companies of that size and magnitude, although they most of them or all those I mentioned lack complete capability I think even to compete with us, with some of the capabilities we have. They’ve got the capital and resources and the horsepower to figure it out if they really wanted to figure it out or brought on the right company or personnel.
That’s maybe something I wake up from. Actually I love waking up in fear, thinking who’s going to take us out, and then how are we going to beat them. That’s how we go about our day. Those companies could come in and make a humongous impact. Some of them are testing and trialing things out, but trust me when I say we have our own plan to disrupt their lives also.
You mentioned at the outset about exceeding expectations, and not settling for even the goals. Having the right people with the right attitude is key and obviously a high priority for Vivint. How do you find them, train them, motivate, and keep them?
Pedersen: Interestingly, and this may sound a bit odd, it seems like the right people find us. We have a fun culture, it’s not like we’re taskmasters and we’re crazy, screaming and yelling and demanding performance. It’s not like that but when you come here you quickly realize that you better be great and passionate about what you’re doing or you’re probably going to move yourself out because you’re not going to fit in; a lot of people can do jobs and perform tasks.
It feels like a lot of people end up finding us. Retention is an interesting question because we have very low retention in some departments like technical support and customer service. We live in a college town which actually fits perfectly for us because we get very high-skilled, smart, intelligent employees sitting in seats that get paid $9 an hour and it’s not their career, but they’re used to doing a great job, doing the best to accomplish what they’re told to do. They’re motivated, easy to talk to with consumers.
As far as executive staff and middle management, I think this is a very interesting place to work that has a lot of opportunity for people that are seeking opportunity and growth, if they want it. It’s not us stopping someone’s ability to grow and maybe fine tune their skills and gain management skills and that type of thing. It’s someone’s decision to not take that on. Those people normally manage themselves out of the company.
You talked about some lofty goals for this year. When we look at 2012, what are you hoping for, best-case scenario?
Pedersen: We’re going to do at least as many new customer adds as last year. We had 51% adoption of new services to our new customer base last year. It’s going to be at least that good, but as you can imagine, that probably won’t make me really happy. I could tell you from a longer-term perspective, we intend on fairly rapidly being a Fortune 500 company. That’s important to our organization as a goal, a measurement. Not that it means we’re providing great service or anything like that, but that’s a goal.
At some point in the near future we want to be installing millions of new customers a year, not hundreds of thousands. Those are maybe some things I don’t have to commit to; we aren’t going to do millions this year. Capital constraints are probably not allowing us to do millions yet. We’re working that though, if your listeners wanted to know where we intend to be. I look at Comcast — I think Verizon has a hundred million customers. We’re going to have 700,000 at the end of this year, maybe a few more, maybe 720,000. I’m embarrassed. Obviously we haven’t done a good job.
For so many years now the residential penetration has not been anywhere near saturated so it’s a tremendous opportunity.
Pedersen: It’s a tremendous opportunity. As far as a security-only play, no one is going to go out and figure out how to install self-originated, millions of customers a year. You have to acquire companies to do that. That’s not our business. That’s not our game plan.
We want to be in a position as a technology service provider into the home, to be installing millions of new customers annually. That’s the game plan. Then we can say now we’re competing with Comcast, now we’re competing with AT&T, Verizon, and the types of companies that have tens of millions of customers. Now we’re talking. That excites me.
Todd, that’s about the end of our time. I want to wish you the best of luck. I think it’s going to be exciting and fun to watch Vivint progress through the industry. Thank you again for joining us today.
Pedersen: You bet, it was nice talking to you.
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