Napco Founder Shares Company’s Strategy for Success
Dick Soloway shares what factors contributed to Napco’s 13 quarters of record revenues, discusses strategic initiatives and more.
Established in 1969, Napco Security Technologies has risen to become a leading manufacturer across a range of sectors including intrusion, fire, video, wireless, access control and door-locking systems.
Based in New York, its products are sold and installed by tens-of-thousands of security pros across the globe. Napco Founder Richard Soloway, a member of the SSI Industry Hall of Fame, joins the conversation to discuss strategic initiatives and more.
How is Napco helping dealers succeed in the midst of rising market disruption caused by DIY systems?
DIY products and these types of smart home products are usually a little complicated to use or install for the average consumer. But we make professional-grade equipment which is priced right and easy to upgrade the existing systems that are out there, as well as use them on new work.
So that’s what we try to do. We want the dealer to make more money on every install by being able to charge more for these extra value services that homeowners and business owners want. The type of products we make function year-round, year after year, with no breakdown.
Very reliable products are what we built our reputation on. We don’t want the dealers to have to roll the truck back and fix the alarm every couple of weeks. Now that we’ve added the radio to it, you get this functionality of not having to deal with the phone company anymore.
Or go to a job and find out there’s no phone line and wonder, ‘How do I get my communications?’ Well, you use a Starlink radio; very inexpensive and you get all this functionality. So we’re helping in that way. No callbacks, more recurring revenue and trying to widen the number of installations out there.
Only about 22%-23% of homes in America have an alarm. You can use our alarm panels and radios at very inexpensive prices, but reliable, so dealers can penetrate larger portions of the market.
How does the company maintain quality across its multiple subsidiaries and product brands?
At Napco we have 1,000 SKUs, all kinds of products, made by our subsidiaries. We acquire companies which our dealers can use to expand their network of jobs. We make all the key items for the dealers.
We also have a vertically-integrated factory so that the quality is top. We make sure we buy commercial-grade parts, not consumer-grade parts. Consumer products for amplifiers and different audio equipment, that’s consumer-grade. We use industrial-grade components.
We test everything with automation, quality checks, all throughout the manufacturing cycle. We have a great engineering staff that knows how to design products that really have a strength to them and have a high functionality.
All the companies that we are dealing with now, all the larger companies, they’ve all been acquired; all the original founders are gone. The spontaneity, the entrepreneurship isn’t really there anymore.
There’s a lot of impersonal relationships where you have to leave messages on voicemail or they answer the phone in foreign countries and you can hardly understand what they are saying to you and you’re stuck on a job and can’t get an answer. With Napco, everything is answered at our New York factory. You get quick service and great answers from long-term employees.
Napco has reported 13 quarters of record revenues. What’s been the secret sauce?
I attribute it to the fact that we are the only integrated manufacturer in the security industry — access control, locking and alarms. So, therefore, we’re a one-stop shop for applications, engineering; we can get everything answered under one company.
We are a very entrepreneurial, hands-on business. We have a lot of very dedicated people that have been with the company 25, 30 years, so they are very customer oriented. We have lots of new products that are coming out all the time that integrate different systems within commercial and residential installations.
Security dealers and integrators today want to do more than just a home or small business. They also want to do hospitals, city jobs, high rise jobs, and we have the products so you can do these integrated solutions to protect these buildings.
We have a brand new line of access control single-door panels, new access control enterprise-class software so you can do all types of jobs. These include big city jobs, multinational jobs where you can take people out a system after a certain period of time, even if they aren’t in the U.S.
They can be traveling to a division outside of the country and after a certain amount of time they are removed from the system without having to go to the system. It’s all done remotely.
We call that CA4K Continental software. So our locking division has lots of new products, our alarm division has lots of new products, our access division has lots of new products. All this combined together has given us 13 consecutive quarters of growth.
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