I am copying this comment from the Firetide post as I think it's worth hearing / discussing:
Guys, this is Cosimo Malesci, Fluidmesh co-founder and VP Sales and Marketing. I have been following some of the conversations here on IPVM regarding the Firetide acquisition and the wireless CCTV market and wanted to share my two cents on the topic. I think there are some interesting insights on entrepreneurship and innovation in the security market that can be drawn from what happened.
I want to start by saying that Firetide has always been a good competitor for us over the years and we have definitely learned a lot from them (and hopefully they have learned a few things from us). Mostly we feel we have helped each other out by creating awareness about wireless in the video surveillance marketplace. Although we don’t know if and how things are going to change for them in the post-acquisition phase, we wish them a bright future and a lot of success.
I believe that to fully understand the reasoning behind what happened, we need to go back to 2001 when Firetide started. At that time mesh was the ‘hot’ technology in wireless mostly due to the muni-wi-fi bubble. As a consequence, many mesh companies managed to raise a lot of VC money. When the muni-wifi bubble bursted, the mesh companies that survived tried to pivot by landing in different markets: some landed in the video surveillance space, others in the smart-grid space, etc. As John has already highlighted, the wireless video surveillance market is fairly small which makes it extremely challenging to deliver the returns that a VC expects. This is where a lot of the troubles begun and you know how things evolved from there.
As some of you are concerned with the future of Fluidmesh and questioning if companies like us will be able to survive given the small and ever evolving nature of the wireless cctv space, I will share with you our story hoping to clear some of the confusions. We started Fluidmesh in 2005 as MIT students and since day one we decided to focus on wireless solutions for video surveillance. The muni-wifi bubble had just burst and we had a feeling the market we were going after was substantially less than $1B. We decided to play it safe and bootstrap the company instead of seeking VC money. The fact that we had a limited initial investment allowed us to turn the company profitable in quite a short time and we have managed to keep it that way since then. We were free to grow the business as much as we felt reasonable and now, looking back, this was the best decision we ever took. In 2011 Fluidmesh become a portfolio company of two private equity firms in Chicago. We wanted to have wider shoulders, leverage the experience of professional investors, and start some additional technology developments. Still we, as founders, kept a significant portion of the company and we are still running the business. It has been a good move and we feel it has allowed us to step things up a notch. Given how we are structured, the size of the market is large enough for us to be successful and profitable. Because of this, we will continue innovating to find new ways to deliver better and more cost effective solutions to the market. We see a pretty bright future ahead of us.
We feel that wireless backhauling will be playing an increasingly important role in physical security in the coming years and we are very excited to be part of this ‘wireless revolution’. With video surveillance becoming widespread and security cameras becoming more affordable, the need for wireless is greater than ever. We welcome these new challenges on a daily basis as they will give many wireless companies the opportunity to innovate, grow, and deliver better solutions to the marketplace.