Simplisafe Tested

Geutebruck USA • IPVMU Certified

So it doesn't look like real innovation, just simply trade-off. Asthetics for cost, ease of use for choices.

John Honovich

IPVM

In reply to Luis Carmona

It's not technological innovation. Agreed.

The question is whether it is a business model 'disruption', i.e., can Simplisafe use the Internet to sell / market systems directly to consumers at more attractive terms than the traditional dealer / door knocker model?

Jeremiah Boughton

I studied SimpliSafe a few weeks ago.

When it comes to customers, Home Alarm Companies have nothing to worry about when it comes to Simplisafe as this hits a different demographic. This demographic currently has no alarm system and would not have an alarm system unless it was inexpensive and no contract such as Simplisafe.

I also believe that Tech DIY's would not find this an attractive option. Tech DIY's do not need a Central Station to monitor and they would just like the warnings themselves. They would also want a more open system, something like Revolv.

Where a company like Simplisafe makes ripples in the Home Alarm industry is the added amount of False Alarms which brings the added cost of police visits to cities/counties. More and more cities/counties will start charging the people for these visits. This is a pain to Home Alarm Companies as it is more customer expense and when the customer gets hit with the expense, they will start to blame the Home Alarm dealer for faulty equipment and/or faulty installs...yes...even upper middle class and rich people hate added expenses especially when it is kind of like a fine.

John Honovich

In reply to Jeremiah Boughton

IPVM

With regards to false alarms, the free monthly option only triggers a local audio alarm, so the only call to police would be a person on the phone actively calling 911.

Jeremiah Boughton

In reply to John Honovich

I do not see the free monthly option in their website. I suppose you could just take the sim card out.

John Honovich

In reply to Jeremiah Boughton

IPVM

It looks like they make it hard to find but you don't need to purchase a plan. See this excerpt:

Jeremiah Boughton

This could hurt companies like ADT or any company that uses door knockers. Door Knockers are notorious with pressured sales. They probably have a lot of people they pressured into a system that does not fit the average demographic of a home alarm system.

Keefe Lovgren

In reply to Jeremiah Boughton

IPVMU Certified

Brian, with the system having one "generic" zone for all sensors what is the method for arming when the zone is open? Will it automatically bypass the open zone?

Brian Rhodes

In reply to Keefe Lovgren

IPVMU Certified

Yes, the system just ignores open sensors. It does note the condition in logs, but essentially it bypasses those 'zones'.

Keefe Lovgren

IPVMU Certified

In reply to Brian Rhodes

Brian, thanks for the feedback. So is there a way to determine what zone is open and then go close it? Or even on a similar note if a sensor goes bad what supervision method does it have for letting the owner know what sensor is needing service?

Andrew Lund

There is nothing new or disruptive about this. As has already been pointed out, the only newsworthy item here is the $57 mil cash injection. They will do a lot of marketing, they will sell a huge number of systems, and at the end of the day there will likely be a VC that may or may not get its investment returned.

Does the name Laser Shield ring a bell for anyone? You know... The name that, in about 2007, was getting blasted all over the airwaves, popping up on every other website banner ad, and had some security dealers wringing their hands with worry that Laser Shield was going to destroy their business. It is a self-installed system that is even easier to set up than the SimpliSafe (the motion sensors were designed to be free-standing - just set them on a bookshelf, etc, or you could wall mount them). It does not suffer from this ridiculous, crippling single zone idiocy, and I can attest to the fact that their monitoring is top-notch. I know this because they contracted with the central station I have used as my primary station - and been very happy with - for many years. I will admit I was pissed off about the whole Laser Shield onslaught, but not because I was worried about them... I was ticked off that my own central station had created an entire new division just to, essentially, put me in competition with a lick and stick piece of crap with big marketing dollars. Haha Ultimately I understood their reasons - there was a LOT of money being poured in to Laser Shield - and I got my focus back on what matters, which is doing my job right so I don't have to worry about what others do. Especially the lick and sticks of the world.

Fast forward 7 years or so... Laser Shield has had zero impact on my business, and as best I can tell from a quick Internet search, they are now little more than an afterthought in the industry. It's a joke, in fact, to say they were ever even in the same industry as I am. That's like Mercedes wringing it's hands because Tonka slashed it prices. I even had one long-time security customer selling Laser Shield systems in his store (which I still monitor to this day). His total units sold? Two.

SimpliSafe will make a splash with their marketing. They are already sacrificing credibility if they are, indeed, saying such stupid things as to call the rest of the security industry antiquated when they are peddling a system that would have been an embarrassment to any reputable security company even 25 years ago. This thing is a cheap toy compared to, say, an ITI CareTaker II from circa 1990. I agree with the above commenter that the biggest long-term impact these jokers will have is to increase false alarm numbers. There's a VC somewhere who did not do its homework. Which is also not new.

Keefe Lovgren

IPVMU Certified

In reply to Andrew Lund

SimpliSafe will make a splash with their marketing. They are already sacrificing credibility if they are, indeed, saying such stupid things as to call the rest of the security industry antiquated when they are peddling a system that would have been an embarrassment to any reputable security company even 25 years ago.

Andrew, your quote above is a great point. Nothing about their hardware makes them stand alone or seem "less antiquated" the real differentiator between them and the companies of the 80's is their marketing approach.

John Honovich

IPVM

In reply to Andrew Lund

Andrew, good feedback.

I agree that there is no fundamental technology advantage.

However, the market for selling and promoting services online is far more mature now than it was in 2007. That alone will help such services go farther.

It's like Dropcam. Isn't Dropcam a toy compared to a real professional surveillance system? But it's really taking off on the consumer / residential end, largely do to the effectiveness of its marketing.

Andrew Lund

In reply to John Honovich

The differences I see in that comparison are:

1) Dropcam may be a toy compared to a high-end surveillance system, but it is one that seems to do a pretty decent job of what it is intended to do, if the impressions I have heard are accurate. (Disclaimer: I have not personally had my hands on one.) In fact, if it does reliably send a functional picture that streams well to a mobile device, it is already leaps and bounds ahead of many NVR and VMS setups. I'm sure I'm not the only dealer on IPVM who yearns for the day when standard DSL and cable internet, or whatever replaces them, produce truly useful upload speeds. I hate having so much capability be so throttled by such a seemingly ridiculous limitation. Dropcam isn't exactly high-res, but if it is as easy to use as I hear it is, then it is already streaming video on that same internet connection when I am still sitting there with my high end gear, wrestling with transcoding (or lack thereof) and server resources, and trying to balance resolution and recording quality vs agonizingly slow access to video outside of the LAN. I don't think consumers will have the same smooth experience with SimpliSafe, in general, any more than they have had with the countless other DIY security systems over the years. This offering does have a big leg up on previous DIY systems with the mobile apps, especially when it comes to "self-monitored" installations, and that will help them. But I don't see it as a game-changer to security dealers because...

2) A glitch with Dropcam means you either get video you don't want, or you don't get video you do want. Annoying... perhaps even means you miss an important event... but you are not getting blown out of bed in the middle of the night by a siren, you do not have irate people on your central station contact list wanting to be removed, and you aren't wasting the time of law enforcement or receiving fines. That will be the experience of many with monitored SimpliSafe systems. The longevity of SimpliSafe monitoring customers will be, on average, much shorter than the longevity of monitoring accounts for most security companies. Even ADT will fare better in that regard. ADT has to do massive marketing to maintain and expand their account base, partly becasue of their enormous number of accounts, and partly because their business model naturally leads to a higher attrition rate than most of the rest of the industry. SimpliSafe will have to continue with massive marketing to maintain any account base it generates with massive marketing, because many of their systems will not be monitored, and the attrition rate of those that are could be astronomical compared to that of professional installation companies. Starts to sound a bit like the futility of trying to build a perpetual motion machine, already.

Much more credible new competition... Comcast. I am already feeling a small effect from them jumping in to security, but for smaller companies I don't believe it will pose serious competition long-term. They already tick off such a high percentage of customers every year with their shenanigans, I just can't lose any sleep over the prospect of customers having to decide between a professional security installation versus one slammed in by the cable guy, who is already tasked with far too many installations in one day as it is, before adding in security and the extra training time with the customer on top of it. They are perfectly positioned to do some real damage to established dealers... right up until they wake up to the service nightmare they are biting off. Remains to be seen how they will handle it.

And, as was already pointed out, Nest could prove to make a much bigger long-term impact than SimpliSafe. Might as well toss Apple's name out there, too. If I have to place bets on who gets the best end of a 3-pronged stick between Google (owns Nest), Apple and SimpliSafe for the DIY market, my money's not going on the relative no-name with only a $57 million warchest and zero share of the smartphone and tablet OS market to fuel their accessory hardware sales.

The industry is changing fast, and getting harder in some ways, but every industry has to adapt over time. No reason we should be exempted.

Undisclosed Integrator #1

Advertising endorsemen/testimonial policy. Do you really believe Rush Limbaugh and Shawn Hannity protect their family and home with this product and service?

John Honovich

In reply to Undisclosed Integrator #1

IPVM

Thanks for sharing. I was not aware of that.

Here's context for the Shawn Hannity reference. Evidently, he is a paid endorser for Simplisafe.

Andrew Lund

In reply to John Honovich

OK, ignore everything I have said previously. I and my archaic systems are now relegated to servicing 20,000+ square foot homes with 50+ ground level windows, and shopping malls. After all, SimpliSafe said so. hahaha

One of the challenges of selling in the 21st century? Customers are very savvy and very well-informed. One of the beauties of selling in the 21st century? Customers are very savvy and very well-informed. Treat them like morons at your own peril, SimpliSafe.

I am dying to know... did their VC calculate in the cost of selling by treating consumers like complete idiots, or did that get left out of the negotiations? And how soon will that cutesy blurb about "just google "alarm system complaints"" get deleted when their name starts topping the search results? :-)

Undisclosed Integrator #1

There's something "Terribly Wrong" when any alarm company advertises and prints an endorsements from leading, conservative talk show hosts such as Sean Hannity and Rush Limbaugh purporting statements such as, “SimpliSafe makes the best alarm system in America—I’m on a mission to protect all my listeners with one.” –Sean Hannity

Undisclosed

The important point here is not whether or not SimpilSafe has quality offerings, the major point is that there is an industry that is ripe for disruption.

ADT and the like are dinasours that will evolve or die.

Think about NEST getting into this market. That will be the real game changer. And there is a big enough market that this will happen. Someone will take this market.

Daniel McKimm

There's consideration here. Call me biased as I have participated in this trade for almost 35 years. Competition and evolution will continue, but to discount the hard working, entrepreneurial dealers, let alone those that continue to experiment and meet customers' needs and risks through a more integrated solution, will never simply (no pun intended) roll over and cede their businesses to a cooki-cutter, one-size fits all false sense of security concept.

And that's irregardless of what any alleged mission oriented talk show host purports as he deposits yet another check for reading his well scripted and paid for endorsement.

Not everyone is ready to sell their souls, and so disengenuously I might add, as some allegedly conservative talk show hosts like Limbaugh and Hannity might have you believe. There are too many of us in this who know the difference and want what is best for the clients we serve. That is why we made this our profession. You can't address everyone's health needs using an aspirin while avoiding addressing the symptoms or considering the benefits of soliciting a healthcare professional. Security needs and risk assessments work the same way.

Many of SimplySafe and ADT's clients are not necessarily the clients many of the independents are seeking. Our clients are typically better informed and not so easily influenced or led by price and celebrities.

Brian Rhodes

In reply to Daniel McKimm

IPVMU Certified

Thanks for the comment here. Let me take the opposing view:

1) Residential customers see alarm companies poorly. Whether deserved/undeserved, the sales tactics, poor customer service and long auto-renewal monitoring contracts have painted the entire segment in a negative light.

This strong dislike means a 'DIY' alternative has room to grow, for no other reason than customers can bypass the slimeballs and get the same result. (ie: monitored intrusion system)

2) I like your comment about marketing to the 'lowest common denominator' by using 'talking heads' to pimp the product, but it really gets no better from the incumbents, who resort to 'be a man' campaigns and similar.

Overall, I think the expectations of the residential market are much lower than you'd like (or that they should be). Thoughts?

Jason Pfau

IPVMU Certified

With residential markets, never underestimate the power of cheap.

Dan Paul

There is a huge difference between the quality and capability of home/apartment security systems and customers and the commercial/institutional products and customers. The home users that want all the bells and whistles you can get in a "better" (more advanced) commercial system have to balance what they want against what they can afford.

YOU GET (Exactly) WHAT YOU DON"T PAY FOR!

For the residential market there are also some out there like AT&T, Verizon or TW that have great pull through potential and better integration and advertising as well. I'd be more afraid of those companies!

IMHO, there are too many players in this residental market to make it worth entering or others would have by now. Guess they need the non traditional funding because normal methods are seemingly unconvinced.

I agree with Scott that you can never underestimate the power of cheap but remember, that adage applies to EVERY market (hears trunks slamming in the distance).

Chris Hammond

I was sufficiently teased by your headline and then rather dissapointed that it was about a DIY company offering an unsophisticated solution. Sort of wasted my time on this one.

John Honovich

In reply to Chris Hammond

IPVM

Chris, they just got $57 million. It's certainly well worth knowing where a company who just got that much funding is at.

Ray Bernard