Transcript: Vivint CEO Todd Pedersen Talks Business Ventures
We really started to feel like we needed to own the entire process. To rely on others, especially with the growth that we knew we had in us and the talent and capabilities we had inside the organization, we knew we needed to own the customer base from start to finish: sales and installation to billing and monitoring, customer service and tech support, and ongoing service. That’s the direction we took.
The interesting thing is we didn’t start keeping customers until 2006. I think currently today we have 570,000 customers on our platform. Historically we’ve installed over a million customers but we sold customers off to other aggregators. I think by the end of this year we’ll be north of 700,000 customers on our platform, which is nowhere in the ballpark of where we intend to be. It’s quite embarrassing we only have that many customers, to me, but maybe that’s a topic for another day.
You shook things up a bit in the industry, coming in with the door-to-door approach. Do you feel that got a bit of a bum rap and are you continuing to focus on that?
Pedersen: No, I don’t think it got a bum rap. I think any sales that’s not done properly should have a bum rap, if processes aren’t controlled properly, if the right sales reps are not hired and trained appropriately or licensed appropriately. It’s not door-to-door sales, it’s sales in general, and that’s any industry, any service. If it’s not done right it deservedly should have a bum rap.
I’m only speaking for my company regarding door-to-door sales. I’m not going to promote door-to-door sales because people don’t do it the way we do it and control it the way we control it. This is not a promotion of door-to-door sales at all. I also don’t promote other peoples’ style of telemarketing or anything. I only promote what we do and I can speak to that.
I think as people have challenged or more specifically sued APX for our sales practices; when I’m saying sued I mean other companies in our space. We’re an open book. Anyone can come out here, look at our processes, and that’s always been the case; how we handle customers, other companies’ customers if they choose to take our service on. There is no disputing we do it right. That’s the only acceptable answer to me.
I’m okay with people questioning it, if they ever did. We always allowed people to look at every last detail of how we did things. I’d like to say it’s normally shut people up but that’s probably not the right thing to say. It maybe made them feel at ease with the way we did things.
There’s a lot of “old guard” in the alarm industry. It’s not that hard to ruffle some of those feathers. Do you feel like you’ve gone from being an outsider to being an insider now, as part of that circle? Or do you still feel like you’re going to your own thing?
Pedersen: An outsider is probably an understatement. I would say more there was a distaste in peoples’ mouth for our company, feeling like we were stepping on peoples’ toes. Actually I can’t speak for them but we definitely had a lot of angst towards us. We’ve tried to be as open as possible with groups and there are some amazing individuals that have built this industry up over the years. I’m trying to be open about how we think about things.
I think we’ve gone from an outsider; to good relationships; to an outsider. I would say we’re an outsider again now, but not from a relationship perspective or respect perspective because I have deep respect for a lot of people that have been in this space for a long time. Obviously it’s not just the name change, we are now a home services technology provider. I think all people need to do is watch the transition we continue to make. It’s going to be rapid and it’s going to be a huge transition over the next three, five, ten years, as a company and the technologies we bring into the home; the integration of those technologies and services.
Again, we will always do security. We intend to be, as always, the best security service provider, and hopefully the largest in the world. Right now I think we’re going to end up being ranked third largest in the world, second largest in North America, by RMA, as of the end of 2011. Obviously, number two is not very acceptable to me. There’s only two targets left, Securitas and ADT, and I think with time we should be able to attain that.
Security will be an integral part of our services but not what we are as a service company, going forward. We have a very interesting roadmap for rollouts of technologies and services into the home that I think are going to be very intriguing to the consumer.
Let’s talk about that for a moment, things like energy management, automation, and I know you’re into solar power now, and all these services. When and how did you come to realize that was the path you wanted to take, and what do you think those trends mean for the security industry?
Pedersen: We started to really talk about it six years ago. We started making conceptual plans about needing to be a more robust company from a services perspective. Think about it; we’re in a lot of homes every year and consumers want great services at a good price that’s convenient to them. I think they’re open to having one company offer multiple services. You see that in the bundled service plays by multiple companies.
It’s not that we’re groundbreaking, we just pay attention to what’s out there and what people are doing and what they accept. The problem back then was there was no panel that would provide what we needed in order to go out and accomplish that, and do a great job of it. I think you could have band-aided some different products on the market together to try to get to where we’re at now but it wouldn’t have been a great solution to the consumer. It may have been cost prohibitive, and at best a clunky solution. I think people have tried to do that and are trying to do it in the industry with some systems that maybe weren’t initially built with that end in mind. It’s maybe retrofit to make it work. For us, that doesn’t work.
We really started talking about that. It’s been years in the making. We just launched solar, a service that we’ve not just been contemplating but game planning for several years now. This wasn’t “hey, we like solar, we’re going to add it to the platform” as part of our roll out of services. It’s going to be a very important component to our services because now we’ve added power to the home because we’re the ones selling power to the home. We’re not selling solar panels. We’re selling them the power on a monthly basis. That’s just like RMR. It is RMR which fits our model. That’s one more component.
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