Qolsys Aims to Fly Higher With Tyco Wind Beneath Its Wings
An undisclosed investment will allow the start-up provider of security and home automation products to greatly speed up its strategic roadmap.
When Tyco Int’l recently announced an investment in Qolsys, the Silicon Valley maker of the all-in-one IQ panel, the company said the undisclosed outlay would advance its Internet of Things (IoT) strategy.
For more insight into the decision to invest in the start-up manufacturer of security and home automation products, check out this report by CE Pro‘s Julie Jacobson who spoke with David Grinstead, vice president of worldwide sales for Tyco.
To get Qolsys’ perspective, I checked in with co-founder Mike Hackett, who serves as senior vice president of sales and marketing. First off, Hackett remained tight-lipped on the dollar amount of the investment, but apparently “significant” doesn’t quite illuminate the full extent of Tyco’s expenditure. In short, the cash infusion will scale the company sufficiently so it can begin immediate expansion and national support efforts.
“Since the investment closed we have hired six engineers. We are really putting the pedal to the metal in terms of growing and accelerating our roadmap more than anything,” Hackett said. “There is room to innovate everywhere across the spectrum, whether it is a better-looking door/window [sensor] with better range and better battery life or new home control devices that we haven’t even conceived of yet. We need the resources and the bandwidth to develop these quickly and get them to market and serve our customers.”
The Tyco deal marks the company’s first real investment from the outside since officially launching less than five years ago. Remaining self-funded heretofore allowed Qolsys executives to stay focused on product development as well as their channel strategy, especially as noise around the space exploded with growing awareness and the dawn of the IoT phenomenon. When time came to seek institutional funding, all investment strategies were considered, Hackett said, including IPOs and large investments from other companies not named Tyco.
Hackett assures that Qolsys will remain autonomous.
“[Tyco is] very focused on being a good partner wanting to help fuel our innovation and keep our culture intact. There is definitely a different culture here in Silicon Valley around software development, around the pace of innovation,” he said. “They have been great in saying, ‘We don’t want any of that to change. We don’t want to get in your way. We just want to help you move faster.”
The Tyco alliance not only helps validate Qolsys as a legitimate player in the market but, importantly, helps the company begin to shed the stigma of being a new entrant, an unknown commodity and all that that entails. There was no concern by management the channel would not embrace the IQ panel. Instead, Qolsys executives anticipated their biggest hurdle would be the battle that comes with being the new kid on the block.
“‘You are from Silicon Valley. You don’t know our business.’ That [viewpoint] has been more of the resistance,” Hackett said.
In terms of Qolsys directly leveraging Tyco’s strengths in the marketplace – whether via their sales teams or marketing muscle – remains to be determined, Hackett said. “At the very least for an incumbent to step up and publicly say this is really strong technology and we want to participate in some way, we think there is a strong message of validation that will help overcome some of that outsider/new entrant resistance.”
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