Aimetis Co-Founder Explains Why He Left The Security Industry

By: Brian Karas, Published on May 19, 2016

[link no longer available]Aimetis' Chief Software Architect and co-founder, Mike Janzen [link no longer available], made the acquisition of Aimetis not only his exit from the company, but from the security industry as well.

An experienced Computer Scientist, Janzen is the type of person our industry needs.

Janzen spoke with us about his decision to make his next startup something well outside of the security industry, and why the security market is not suited to startups right now.

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Comments (18)

Transalated - I can't make my fortune by 40 and retire. He lacks the long vision necessary for true success.

He lacks the long vision necessary for true success.

He's a software developer. What would you recommend he do?

If he wants huge success, he needs to develop software that is helpful to a large group, not a narrow slice of the public. He needs to appeal to a larger audience or build a better mousetrap. As it is, he rolls out that same tired excuse that the 'old guard" is holding back the success of his product in the industry. I would counter that his product is not as appealing as he thinks it is.

I disagree. Janzen has sold off a couple of companies, and while I don't think any of them resulted in massive cash, I think overall he's done OK. I've known a lot of guys like him, and I also don't think he wants to retire, his personality type likes solving problems and doing things.

As for the vision part, I thought his comment about finding good/big markets was more insightful than a lot of startup types I've spoken with/worked with over the years. He looks for markets that have enough potential for success, and then tries to build a solution there. To me, that has more long-term vision than someone who wants to build a game platform for Facebook, or a social-media sharing site.

I'm curious, if you had a decent developer at your disposal, what security-industry problem would you tell them to solve? What is an area where someone could get to "make a fortune and retire" money right now in security?

Considering your question in all of 60 seconds, I don't have an answer nor a bucket list.

I can tell you this; if it were up to me, and it is not, software development would not be an area of primary importance for me at the moment. Rolling out true high-speed data development across the country would be my focus.

It actually, IMHO, should be an election issue given this is an election year. In the 50's Eisenhower put the full weight of the Whitehouse and coupled it with funding to build a true Interstate highway system that gave citizens and businesses access to all portions of the US like never before, resulting in unprecedented business growth for several decades.

I see high-speed data and the related infrastructure as the thing. Gigabit (or higher) access for everyone would allow unparalleled growth and opportunity.

I agree with you that a better high speed infrastructure would be of benefit, but that's also not something that a guy like Janzen would see as being the kind of market he could tackle, long-term vision or not.

That no ideas jumped out at you quickly could be part of the problem he alluded to. It seems like we may be at a stage where the industry does not need a new "thing", it needs the existing things to be simpler, cheaper, etc.

There is potentially lots of money to be made in the security industry, less from an inventions standpoint, and more from an optimizations standpoint. This is, IMO, the environment that causes a forward-looking software developer/founder to look to other sectors for a next move.

In my view, the Aimetis Symphony VMS platform stacks up extremely well against other enterprise class products in terms of features, ease of installation, ease of use, and pricing model. And they have always had a great support and management team. Yet they never have been able to get traction. It's been said they are "the best kept secret" in the VMS market. Contrast this with Exacq who came to market later, a great team but just an OK product, and they very quickly became a market leader and had a very profitable exit. Does this have something to do with the fact that the Exacq team came from Integral and already had the network where the Aimetis guys were outsiders? The Old Boy network? I don't think it is a matter of better marketing from Exacq. In other industries if you can build a better mousetrap you have a very strong chance of succeeding. In the security industry, people seem to care less, follow a trend, and do what everyone else is doing. For most users, video surveillance is just not considered a critical application like communications or network security. The products are only considered when they are purchased and if and when there is an incident. So innovation is not in such high demand or quickly adapted. For the most part, a company will go with their local integrators recommendation without the same scrutiny they put into products for other applications and the integrator often has a "go with what you know" approach. So I don't think it is a question of there not being a market but a market that often doesn't reward the best and most innovative. And this was probably enormously frustrating for Mr. Janzen.

Does this have something to do with the fact that the Exacq team came from Integral and already had the network where the Aimetis guys were outsiders? The Old Boy network?

There were a couple of more basic reasons:

(1) Exacq was easier to get started with. That was a general complaint about Aimetis. I tried using Aimetis in the earlier days and had a lot of problems figuring out their setup and approach. Part of that is likely because Aimetis was more IT centric whereas Exacq benefited from their knowledge of the simplicity that this market required.

(2) Exacq had much more field representation (e.g., well connected rep firms). Again that is likely because they were already in the industry and knew how and how to reach out to integrators. I don't think that's old boy, that's 'domain expertise'.

(3) Exacq focused more on appliances where Aimetis focused more on analytics. Analytics were a bust overall and Exacq knew from their experience that appliances were key to making it simple for their customers.

Net/net, Exacq knew their customers better than Aimetis, made the right decisions to support those customers and won.

And I would say the same thing about 3VR, who I worked at nearly a decade ago, who faced the learning curve in products, people and customers that Exacq had already figured out from Integral.

I would like to add that Aimetis never had much of a sales or marketing presence at least in the US...when I worked for a tech partner and tried to bring them into something the people were great but then they would disappear back into the woodwork...

So for me it was lack of understanding how to go to market as much as anything else as to their lack of growth.

Just an FYI I thought the Integral DVR's were the most difficult to program of any i worked with and Exacq had many flaws when it came to compatibility with some cameras and they overcame those deficiencies to be a large player...Aimetis could have overcome their deficiencies as well with a good sales force.

I never used Integral when it was Integral but we tested the Pelco DS series that was acquired from Integral. Even years later, the Integral DS offering was significantly behind early Exacq. I think Exacq learned from Integral and built a better product the second time.

We can call it an Old Boy network or call it domaine expertise, which sounds much nicer. But what I think we mean is established industry relationships. I used "old boy" because it seems to be a pretty difficult network to penetrate in this industry.

We can call it an Old Boy network or call it domaine expertise, which sounds much nicer.

Disagree.

Old boy network is calling up the CEO of Tyco IS or Siemens and him getting your product immediately authorized and the sales team pushing your product because you are buddies with him.

Domain expertise is understanding which type of product to build and which channels to use to be successful. That's hard for outsiders to do (I know it was hard for 3VR despite the $50m, I am pretty sure it was hard for Aimetis as well).

Could Exacq have both? Maybe, but from dealing with the Exacq people, they never struck more as nerds than good ol boys.

...they never struck more as nerds than good ol boys.

To be sure, term "Old Boy Network" originated in British all-male private schools and referred to ones fellow mates and acquaintances of an elite class.

Should not be confused with good ol' boys like seen here:

The guy is pretty much dead on. The turn over on security installations is really long compared to most other product industries, thus even if a new entrant comes into market and is the leading product they are unlikely to get a large percentage of the overall pie even if they were to win 100% of new installations that year. It's way easier to build software and get traction for things that people switch more often like their service ticketing system than moving customers off their vms after it has been deployed and people are trained. The other side of it too is that until after the fact is that budgets normally don't allow for switching out the entire system, but they do allow staying with the incumbent and adding to the existing system versus a wholesale rip out. I think the adage that no one was ever fired for buying IBM is accurate here.

The turn over on security installations is really long

Agreed, and related: Lifespan of Video Surveillance Systems and Lifespan of Electronic Access Control Systems

Thank for all the comments. I just want to clarify some things:

  • The security industry is conservative in nature since acceptance of rapid change is not careful/secure. I don't view this as a problem that needs to be solved. It is something to be accepted and viewed as an opportunity.
  • Therefore the technology used in the security space is almost always used in another industry first (one that accepted more rapid change). This gives an advantage to alert incumbents since they can apply synergistic technology from other industries to their products and move them through their well oiled channels.
  • The two points above contribute to the "old boys club" advantage. However, I agree with John Honovich that an even bigger issue at Aimetis was lack of domain knowledge.
  • The delay between tech popping up in one place and it being applied somewhere else is diminishing, therefore the rate of change in security will increase (but it will still lag other industries).
  • What I learnt while at Aimetis: (1) Just because some tech seems cool (computer vision) doesn't mean a business can be built on it, (2) have people on-board with domain knowledge/experience, (3) pick a large or growing market, (4) usability matters, (5) fire fast, (6) patent or you'll get screwed, (7) it'll take longer and cost more than you think, (8) know when to hold and when to fold, (9) it is usually best to own the relationship with the customer.
  • I'm not necessarily done with the security industry, but my next phase is in fintech.
  • I did not go looking for another opportunity - an opportunity found me. I turned down the opportunity initially, but they were very persistent ("they" included a long standing friend from university). I view fintech as an opportunity to stretch myself in a new direction.
  • I'm not trying to retire. That is no way to live. The security industry has taught me a lot. I'm very grateful.

Interesting!

One question: Were you surprised by your ultimate deal valuation?

Good Luck in your future endeavors!

In the end, I wasn't surprised by the deal price. But that is a discussion for beer, not for forums. Things are not always what they seem.

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