Speco’s Todd Keller: An Insider’s Long View of the Video Surveillance Market
Todd Keller has been key to Speco’s place in the security industry since the 1980s, helping the company make the transition from analog to IP.
Joining his father’s business in the early 1980s, Speco Technologies President Todd Keller has long been uniquely positioned as a witness to the mercurial video surveillance industry. He joins the conversation to discuss the evolution of the marketplace, including the effects of commoditization and how he has strategically positioned the Amityville, N.Y-based company.
When did you see commoditization begin to take hold in the U.S.?
In 2001, Speco was doing a whopping $8 million [annually]. Then the Sept. 11 attacks occurred. By 2010 Speco broke over $100 million. The importance of surveillance, the importance of the products and solutions we were providing, were an absolute necessity in today’s environment.
I’ve been traveling to Asia since 1985. I always looked at the Chinese [manufacturers] as “they’re almost there,” but by 2010 to 2012, they started to take form. They did the old Japanese model, “Let’s come in with cheap prices and shake up the marketplace.” Myself and other CCTV players never really thought they would be a formidable force. That’s part of learning and growing. They’ve mastered it, and they trumped us. It really put a hardship on not just us but others as well.
Hikvision has done a phenomenal job. A lot of the second- and third-tier players that were in my market just disappeared and went out of business. We were very fortunate that when business was good we put away for the rainy day. It rained. The good news is today I’m looking at the other side of it. We continued to innovate, create, come up with commonsense solutions.
What the Chinese did do successfully is create cameras in every environment. I give them an enormous amount of credit because if we’re safer and we see what’s happening, we’re all better off.
Speco has progressed from analog to meet demand for IP-based wares. How else have you evolved to remain relevant?
The challenges clearly are pricing. It’s Moore’s Law. The technology is getting better and cheaper. What we really focus in on is we corner the market on low-light issues. That’s for the simple fact the majority of crime happens at night.
Speco has trademarked what we call the Intensifier. The Intensifiers operate even when there is the slightest bit of light, maintaining a color picture by day and a color picture by night. The advantage of no IRs does the following things. A lot of times when you see the criminals in the news, they have that IR iridescent glow on their face. It kind of shadows their face a bit. Without the IRs you eliminate the glow and are left with the exact details that help identify who this person was.
The Intensifier still to this day is one of the top-selling items that Speco has. I’m beyond amazed that in the land of the inexpensive cameras these are still expensive and they’re still our No. 1 selling item, which is very exciting.
Regal Cinemas came to us and said, “We have a problem here. When the movie comes on, and the theaters turn pitch black, what do we do?” The Intensifier still needs a bit of light. When it comes to those types of situations, we then invented what’s called FIT — Flexible Intensifier Technology. Really what that camera does is when it almost comes to pitch black it switches from color to monochrome. Years ago monochrome was truly the best way.
Once again, you didn’t get that IR freaky reflective glow. You had the flexibility of saying, “Here I can still make out his facial features; everything that is necessary to identify this perpetrator.” But if it is pitch black and you still need IR, it does give you that flexibility. That’s why we call it Flexible Intensifier Technology. It has three different settings. From a technology standpoint, we’re so excited about the things we’re creating and inventing that are different from the marketplace, but the market still is how much, how much, how much.
What in particular are your dealer partners grappling with in the market currently?
The reality is that the biggest challenge a lot of them deal with is the availability of information online. Everybody now thinks they’re an expert when it comes to security. We as manufacturers have to continue to educate on what the professional products do vs. some of the consumer-available products, which five years ago stunk. Today, they’re not so bad.
We continue to have to challenge ourselves to make things better, No. 1, and by adding in the additional life-safety aspect — by creating a text notification, by creating a deterrent, by creating an awareness campaign that something is going on.
It’s also how can I make the installer’s job easier? How do I make it so that in today’s environment they can get in and get out. They want to have a solution. They want to have a scalable opportunity to increase and grow. Here I have to make those landing steps, while still keeping an eye on competitive nature.
Beyond pricing, how have you counteracted Asia-based competitors?
What they’ve always done is they’ve created capture, record and review. That means I watch this guy do something, and I can watch it later after he completed his mission. My mission has always been, ‘How do I stop it? How do I eliminate it? How do I deter it?’ Around 2013, we came out with a patent called Digital Deterrent. The Digital Deterrent was designed as a deterrent. I’m going to give you a quick example:
At a 7-Eleven, in the back of the building, there is a dumpster. It’s become a community dumpster, and now the independently owned or franchised 7-Eleven has to deal with it. So that franchise calls up the local security guy to put in some cameras. Let’s put one on the dumpster. Let’s do the front door, the rear door, the cash register, the aisles and everywhere else cameras needs to be. Let’s put up monitors. Great, we’ve got it covered.
Two weeks later, the garbage is still piling up. And now there’s a couch out there. The classic example is the franchisee will call up the local security guy. ‘We got him.’ OK, when did it happen? Was it Monday or Tuesday? ‘I don’t know.’ Was it this week or last week? You have to go throughout the painstaking process of finding the incident. Then once you find it, you download it, hand it to the police and what’s really being done? The reality is nothing.
What we’ve done with our patented technology is No. 1, we mask out the top of that garbage dumpster. We set parameters. In this example, the convenience store closes at midnight and reopens at 6 a.m. We set the parameters around that. We set the sensitivity so that in the event an animal, a dog, a tree or whatever it happens to be doesn’t set it off.
We are in the audio business. Now when someone comes into that protected area, the following things occur. No. 1, “Warning! You’re under surveillance.” Historically, when someone hears that they look to see where that noise is coming from. No. 2, with relays, and this is an option, the lights go on. Like cockroaches, you put the lights on and they all go running. The same thing with criminals. The light goes on, the criminal starts to run.
No. 3, the most important part about it is the app. When an incident occurs you have a choice to receive an email or a text. When that text comes in, it prompts you to open the app to see what’s happening, when it’s happening. Candidly, before Ring, before all these other consumer products, we were the first to have two-way communication through the app. That power and presence is designed to deter. We’ve taken that and exploited it to no end.
Where do you rank margin squeeze created by Asian manufacturers in terms of your greatest challenge?
Speco, like everybody else, are definitely getting squeezed. We looked at the commoditization of the products and asked, “How do we be different?” What Hikvision successfully did was create the high-silicon chip. It used to be the Sony chip, the Panasonic chip. For our Intensifier, we use an Israeli chip, but it’s all about the chip.
If they have the chip market covered, let’s support their chip. Why beat it? What we did was go to a Chinese manufacturer and outsourced the following suggestions. No. 1, the capabilities of saying, “How do I install it easier?” The biggest challenge that exists is if I’m mounting a camera on the exterior of a building, where do I put all my wires? What we do with our products is include junction boxes. We include the ease and convenience of making that installation quicker and more professional.
When it comes to the commoditization of some of the products we still have to be the same, if not better, in pricing than what Hikvision and Dahua and others out there are doing. But we have to give more.
Part of our tagline we use is, “Speco: Giving you more.” Giving you more means so much more than just the statement. It means we give a back box. We give a 5-year warranty. What we’ve learned in the security business is when a security dealer installs the product, the expectations of the end user vs. what’s installed sometimes isn’t met. In the event it’s not met, we will back that product 100%. Meaning take it back.
Everybody watches the “CSI Miami” and all this other stuff. “Zoom in on that telephone number.” Some of those things are realistic now, but some of them are not as realistic. That’s the biggest problem that exists.
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