Ajax Systems: Large, Fast Growing, And Independent: Founder Interview
While most technology companies are run or ultimately controlled by financiers, Ukrainian-based Ajax Systems is founded and still controlled by an engineer.
Ajax Systems has rather quietly become one of the biggest security manufacturers in the world.
In an IPVM interview, its Founder and Chairman, Aleksandr Konotopskyi, spoke much differently, for better or worse, than the MBA or sales-focused executives that IPVM normally interviews.
In this note, we examine how Ajax developed, how Ajax makes decisions, how it plans to grow, and why it has "zero" interest in being acquired.
Executive *******
****, ******* *** ********** ** ** engineer, **** ** ***** *** **** products ** ** ***-**-*** ********.
******* **** **** ******** **** *** last *** ***** *** *** ****** 3,000 *********, *** ******* ** *** interested ** ***** *** ******* *** is ********** *** ********** ** ******* the *******, ********** ** "******" ********* that **** "******" ********, *** ******* told ****.
** ******** *** *******, ****'* *** is **** ******* ** *******'* *** and ******* ****** ****, **** ** engineer ******* *** *********** ***********.
** *** ******* ****, ***** *** company ******* **** *********** ***** **********, it ** ************ ********* **** ********** offerings ****** **** ***** ************, ****** ** ******* "******* ******" best-in-class ******** ** ****.
*** ******* ** **** ******** ** Europe *** *** **** **** ******* only ****** * ****** ~*% ** its ***** ********* ** ***** (~*** of * ***** ** ~*,***). *** company ** *** ********* **** ***** America, ****** *** *** ****** ** salespeople ***** ****** ******.
*** ******* ******* *** **% *********** shareholder's ****** ******** ******** ******** **** a **** *********** ** ***** * far ****** *******.
Ajax ********** - **** ** * *********** ** ******** *** ****** ******
*** *******, ***********, *** * *** other ******** ******* * ************ ******** in ******* ** ****. *** ******** had * **** ****** *** *** technical ****** **** *** ******** *** would **** ***** ***********/********** ****, *********** told ****:
** ******* * ************ ******** **** friends ** ****. **** *** *** last ******* ** ****. *** ***** step [***] **** *********. ** **** buying ***** ****** **** *****, *** we're ******* ***** ****** ** *******. The ******* **** *****. *** **** buying *** $***, *** *** **** selling *** $***. ** ****** **** golden **** ** ******.
*** ****, **** * **** *****, we ******* ** ********** **** ** had * *** ** ********* ****** and **** **** ******** *** ********** to *** ******* *** *** ********* were ********, *** ********* ** ********** were *** ****** **** *** ******. They *** ******** *** ********, *** they're ****** *** *** ****. ** you ********** *** *********, ** **** not **** ******* ***** ***** ** choose * *******.
*** ************ ******** *** *** ****** one ** *******'* ******* ******** *****************, *** *** ********** ***** ** Secur *** **** *** ***** *********, Konotopskyi ****:
*** ******* ************* **'* *** ** *** ******* distributors ** *******. *'* *** ******* this ******* ** ****** *******, ****'** in ****** ** **** *******. *'* fully ******* ** ****, *'* *** in ****** ** ***** *******.
*** **** ****** **** ***** ******** and ********* ******* ** **** *** ran **** ************ ***** **** ************* already *** ************ ********, *********** ****:
** ******* ** **** *** ***** products, *** ********* ******. *****, ** started ** ********** **** ******** ** Ukraine.
** ******* ** **** *** **** Western ****** *******, *** **** ********* ****** **********, *** ****** ****** ** **** distribution ** * *** *********** ** Ukraine ******* **** ******* *** *********** partners.
** ********, ***********'* **** ******* ** develop *** *** ********, ********* ******** detectors, ****, *** ******, ***** ********* the *********** ****** ** ****. *** company *** ********** ********** ** ****, Konotopskyi ****:
** **** ***** ***** *** ******, and ** ******* ** ******* *** own ********. ** ***** ** *** university *** ***********. * ****** ** a ****** ** ** ******* **** I **** **** *** ********** **** other *******, *** ** ******* ** develop *** ***** ***** ** *** the ********* ** ****. *** ******** company *** ********** ** ****. ** started **** *** ********* ******.
* *** **** ** ****. * was ******** ** ****.Ajax *** ***** ** *******. Ukraine was already a quite well-known country, which has 40 million [people] in Europe. There is a lot of engineering talent because we have quite a strong engineering school there. It was possible to develop the product we started from a building intrusion system for the Ukrainian market. [Emphasis added]
** ***** *** *********, *** ******** detectors, **** ***, * *** ** panels, *** ** *** **** ********.It ******* ** ** *** * ****** ** ******** **** *** ******** ** ****** **** *********. [Emphasis added]
******* ****** ***** ** *******, **** could *** **** ****** ******** ** its ******** *** ** *** ***** features, *** **** ******** *********** ** start "**** *******" *** ****** "**** of ******," ** ** ****:
** * ****** *****, ****** *** interested ** ****** *** ******** ******* the ******** **** ***** ***** *** they **** *** ********** *** [*****] products.
** ****, *** ****, * ********** that ** ****** ** ***** ** from ******* *** ** ****** ** change **** ** ******.
***** **** ********** **** **** ******* distribution *** ******* ********, *********** ******* elaborated ** *** *** **** **** progress ** ********** ****'* ***** * product ****** *** ******** *** ******* to **** *** ******** "** * global *****":
***** ** ***, * **** ** grow **** ******** ** * ****** stage. ** ******* ** ****** * new ******** ********** ***** ** *** known **********. ** ******* ** ****** *** industrial ******. ** ******* ** ****** the ******* ** *** ******** ** Things **** * *** ** ********* to *** ***** *** ******* ** that ***********.
***** *** * [******], *** ******* in ****. ** **** *********** *** first ******* *******before, ***** ***** *** *** **** *** *******, ** **** **** **** ****** ******* *** ************ ** *** ****** *********** ** *******. We did not have any website, and 100% of our business was inside Ukraine. We will sell to monitoring companies and installers. [Emphasis added]
**** **** ******* ** *********** *** products ** ******* ***** ***** ** attract ********** ******* ** *******, ************** ** *** ***** *** **** ** *** *****; Konotopskyi ****:
** ****, ** *** *** ***** international **** ** *** *****. * couple ** ****** *****, *** ***** show ** *** ** ** *****, an ************* **** *** **** *** the ****** *******, ** ** ** international ***** ***** ******** **** *** the ****** *** *** ****** ****, from ******, *** ****** ** **** at **** ** ***.
***** *******, *** ****, ***** ******** Canada, *** ***** *******, *** **** we ********* ** ******* ******** ** IFSEC. *** ***** ****, ** ******* to **** ***** ****. *** **** thing ** ***, *** ******* *** feature ********, ***** *** *********** ******** were ****** ** ** **.
*** *** ***** ***** ** **** years, **** *** ******* ****** ****** Ukraine. ***** *** ***** **** *****, it ******** ***************.
Originally ******* ** *********, *** ****
******* *** ******** ************ ******** *********** was * **** ** **** ******** and **** ********, ** *** *** team ******* ** ***** ** ********** intrusion ******** ******* *** ** *** academic ********** *** ***** ************* ** Europe. *********** *********:
** ********** ** ** ***************** ***********, the ***-**** ** *** * ******** radio ******** *********** ***********. ** *** closer ** ********* *** *** **** interesting ** **.
** *** ****, ****** ** *** CCTV ******* **** *** ***** ******. There **** ** ** *******. ** are ******** ***** **** ******* *** analog *******, *** *** ****** ***** was ************ ** ****, ** *****. In ****** ********* **** *************, ** the **** ****** ** ** *** realistic, ******* ** ****'* **** ****** to *** **********. *** ******'* ** on******************* *** **** *** *******. **** were *** *********. *** ****** ** have * ****** *****, ***** *** the *****, *** ************** ************ ********* ********************************, **** *** ********* ** ******.
*** ** ****** ***** ***********, *********** said **** **** *** *** ***** they ***** ***** **** ************* ***** a ****** ** ***** ***:
[****] ***** ** ** *** ********* less ***********, **** ** ****** ** a ****** ***** *** ** **** did *** ***** ** ***** ***** the **** ****** ***** * ****** of ***** ***.
Ajax - **% ***** ** ***********, *,*** *********
*********** **** **% ** ****, *** its ***** ***** ********* *******. *********** ****:
*'* *********** **% ** * *******. Then ** **** ******* *******. **'* a ******* ****** ****. **** ******** in *** ***** ******, ***, *****, *** ****** *********** and ******* ** *********** ** *******.
***** *** ******* *** *** ******** its *******, **** ********* **** ********* far **** **** $*** ******* ** revenue ***** ** ******** ******** ***** and *********. **** ***** ** *** growth ******* **** ** ******% ** ******* ** ************** **% ** ****. *** ******* **** **** ** has *.* ******* *** ***** *** 150,000 "***" ***** ********** ********** ** its ******.
**** *** **** *,*** ********* ********, including *,*** ********* *** ***-*** ***********.
Need ****** ** ***** ********** ********
*********** ********** **** ********** "*********** ******" is *** ********** ******* * ******* revenue ***** *** ******:
******** ******** ****** ********* **. ********* a *********** *********** [*******] ********* **. Changing *** ****** ** ****** ** a ********* *** ****** *** ********* me. ** ** ******** ** ******* all *** ****** ******* * ******? It's *** ******** ** ******* ******* a ******. ** **** **** *********. So ** ** **** ** ******* 1000 *********,we ****** **** *******; ** ****** **** * ****** **** ** ******* *** ***** *********** ******. [Emphasis added]
Not ******** **** ***** *** *******
*******, **** ** *** “********” **** becoming *** ******* *** ** ******* on ******** *** ******* ***** *** factories ** **** ** *** ***/***, Konotopskyi *****:
****** ** ** *** *******? ** are *** ******** **** **. ** deliver *** ******** *** **** ** they're ********** ****** *** **** **. If ****'** *** ********** ****** ***'* buy ****. ** **** *** ***********, 100 ****, *** ** **** ***** engineers. ** **** ** * ********** of *** *****. ** **** *** in *** *********. **** ** *** we **** * *** ** ****** because ** *** *** *******. ** are *** ****** ** ******. ** we *** ***** * *** ** operations ******.
***** ************ **** ******* ******** *** important *** *** *******, ** ***** this ***** *** ** ************ ** the ******* ** * "****** *******" and ******* ****, ****** ** **** are ******, "*** * ******* **** another ***":
********** ********* ******** **** ****** ******* is **** ********* *** ** *** that ********* ** * ***. * don't **** ** ****** *** ******* if *** ******* ** * ****** product. ** **** *** ****** ********, please ***'* *** **** *** * product **** ******* ***.
Financial ******* - *** ** ******* ****** **********
**** ** **********, *** ** ** not ******* *** ****-** *******, *********** said:
**** ** **********, ** ** ** funding ****** *** ***********. ** *** not ******* *** *** ****** ** sell. **** **** ******* *** *******, it *** * ****** ****. ** attracted** *****-***** ******* ******* *******, **** from ******* [** ****], *** **** ** *** ******* who ****** *** * ****-*** ****. We *** *** ******* *** *** cash-in *****.
*** *** * ********* **** **** for **** ***** ****, *** *** Ukraine-Russian *** *** *** ****-******** ***** made ** * **** ********** ******, according ** ***********:
*** *** * ********* *** ** go ***** ****. *** ***** ****** was ******* *** * *** ** money ** *** ***** ******. *** size ****** ** ** ** ** NASDAQ *** **** ****** ** ** go ** ******** **** ********* ***** Exchange, *** *** ****** ***** ********.
*******, *** *** *** ******* ******* Ukraine *** ******. *** ********** ***** market ******* ** ** **** ******* of *** **** ******** *****. ** now **'* * *** **** ** speak *** ***** ***** ***.
**** ** **** ** ** *** in *** ****** ** ***** ************ to **** *********, *********** ****:
* ***** ***** * ******* ***** of * *******, ** ***** ** stupid *** ** **** **[***]. ** [want **] ******** *** *** ****** with *** ******, *** **** **** have *********.
********* ******** ******* ****** **********, *********** said ** ***** **** ** ******** their ******** *****, *** *** ******* is **** ** **** ******* ****** investment. *********** *****:
**** ******* ****** ** ** *****, as * ***, * ****** **** to ***** ***** *** **** **** go *** ******* **'* *** ****** of * ********. ****'** ****** *** shares, *** **** ****** **** *** shares *****. **** [*** ******* ********] can **** **[*** *******] ** * private ******, ** ** *** ** an ***.
* ******* ****** **** *** *** next ***** ** ******* ****** ***** can ****** ******.
Not **** ** “*** **** ** ***********”
*********** **** **** **** ** *** open ** "*** **** ** ***********," especially **** ***** ********* **** *** and *********, ******* *** ***'* *** a ***** ** ****, *** ****'* team ** **** ** * ******** to "****** ******":
You ***'* *** * ***** ** **** ****. It's really important to be a part of the team and the movement.
*****, ***** * ******* *****, **** are *** **** *********. **********, **** are ******* *** *** *****, *** how ***'** ********** ** * ****, but **** **, ********** ** *** not **** ** *** **** ** acquisition, ********** ** *** ********* [********* JCI *** *********]. ******* [**] **** begin **become ******* ****** ******* ***** **** ********. Yeah. We don't want to be a part of it.
**** ** * *** ********** *** the **** ****.People *** ****** ** **** *** **** ******* **** *** **** ** * ***** ** *** **** **** ** ******** ******, not because it's like the best-paid job.
*********** *** ******* ** *** ****** short-term ******** ******** ** ******* ****** why **** ** *** ******* ** acquisition, *********** ****, ****** **** ******** part ** *** ***** ****** ************* will ***** **** ********:
**********, *********** ** *** *** *** in **** *******. ** **** ****, it **** ****, ********* ** *** actions. ** *** *** ******** **** the ********* *******. **** ***** ** freedom [** **** ********* ** **].
**** *** *** ******** **** ** these *************, *** ****** ******** **** quarterly *******. ****, **** ***'** ***** public, *** ****** ******** **** ********* reports **** **** **** ** *** now. ** *******, **, ** *** not ******* ** **** ********* ** all. ** ********** *** **** * proposition *** *** ****, *** ** are **** *** *******.
Aims ** ******* ***-**-*** *********
*********** **** **** **** *** ****-**** goal ** ** ******* * ******** security ****** ** *********:
[***] ***, ****-******** ****, *** **, is ** ******* [*] *** *** [in ***** **] *** ******, [**** end ***** *** ****** ***********], *** security **** ********* ********* ***** ** our ******** ******** **** *** ******.
** ******, *** ******** ****** ** fragmented *** ***** * ******, ********** user **********. *********** ****** *** ***********:
***'* *** ** *** ******** ** work ** * *** *******, ** integrated ******** ******; ******* ** *** all *** *******, ** **** * lot ** *********** ** ** *** create ******* ******* **** **********. ***** will ** *** ********* *** * fire *****, ***** *** ******* ***********, but **** * ****** ***** ** view, ** ******, **** **** ** delivered ** ********* ****** ***** *****. One ********* **** ******* *** ** intrusion *****, *** ******* **** ******* you * ********. **** *** ************ has *** **** **********, **** ********* and *****. **** **** * *** of ********. ****'** ***** *** *** videos, [***] **** **** ****** ******* products ** ****. [**] **** ******, they're ***** *** ***** ****** *******.
*********** ***** **** **** ****** **** is **** ***** *** *** ********* systems, ** *** *** **** ********* product ********* ** ********:
**** *** **** **********, *** *** we *** ********* *****. ** **** fire ********, *** ** *** ***** for *** *********. ** **** * video ********** ******. ** **** ******** systems ** *** ******.
*********** ********** *** ********* ******** ** a "******* *****" *** *** ***** product *****, ********* **** ***** ******** and *** *****-**-****** ***** ************ **** as "***** ******." *** ******* ****** to **** ***** "***** ******" **** "samurai ******," ********* ** ***********.
***** ******** ****** *** ******** ******* "cannot ** *******" ** **** *** "speaking ********* *********," ****'* **** ** to "******* **** ***," *********** ****:
[***] **** ** ** ******* [****] altogether. **** ** *** ********** ********* platforms, ***** *** ******** ********* *********, it ****** ** *******. ** ****** be *******.
*********, *** **** *** ******, *** you ***'* **** *** ******, *** sometimes, *** **** ** **** * detector ** ** ** *****, *** you ****** **** *** ******** ** go ** *****.
*** ******* ****** ** ********** ** in-house, ********** ******** ******** ******* ******** like *****. *********** ****:
**** ** ******* *********, **** **********, fire *** *****, *** *** **-*****, we ******* *** *** ********* *** overall ********* ******. ** ******* ** dream **** ** ***** ******* *** integrated ******* [****] *****. ** *** big **** ** *****, *** ** love *** ** ********. **** ** probably ** ******* **** *** ***.
"Half-Ready" ** ***** *******
**** *** **** ******* *************** ***** 2016, *** *** ******* **** ******* to **** ** *** ** *** Canada * **** *** *** *** recognized **** *** ****** ** ***** America ** **** ********* **** ** Europe, *********** ****:
*** **** ******** ** ** ****** right ***. ** *********, ***** *******, the ****** ****, ******, *** ** Europe. ** [**** ***************] **** ****. [It *** ****] ***** *****.
** *** ****** ****** *** ******, we [**** **** *******] *** *** year *** *** ******. ** *** taking *** ***** *****. *** ******* market *** ** ******* ********* [*******] the ****** ****** *** ******. ** the ****** ******, *** *** **** successful ******** *** ******* **** *** parts.
*********** ******* ********** ** ******** *** American *********' ********* ********:
** ******, ****** ***** [*******] *** integrate **** *** **** ********** ** you ***'* *********. ** ******, *** too **** ********* **** ***** *********, for *******, *** ** *** ****** States *** ******, *** ******** ** an ********* **** ** *** ***** system. ** ******, ** **** ** the ******* ****** ********. *** ****** begin ** ***** * *** ******** in ***** ** *** ***'* **** outdoor ****** *********. ** *** ****** States *** ******, ****'** *** ******* at ***. ***** ******** ********* *** [also] ****** ******* [*** ** *** Canada].
** *******, ***** ******** **** ** super *******, ********** ** *** **********. Ajax ** ****-***** ** ***** *******. for ***, ** ***** ** ******. However, ** *** ******* ** ******* the ******* **** **** ** **** at *** ******, *** *** **** interesting **** **** ** ******* **** we ******* ***** ******* ****.
** *** ** ******, **** ******** against *****.***, ******* ********, *******, ***, and *****, **** ** **** ***** comprehensive *********** *** ***-**-*** *********, *********** added:
*** **** ****** *********, ***** *** considered ** ** *** **** ******** on *** ******. *** **** *****.***, which *** ** *********** *********** ** those ***** ** *******. *** **** delivering * ***** ** ********, *********, thermostats, ***. **** *** ***** ****.
***** *** *** ******* *********** *** Ajax: ******* ********, ******** **** *****.***. Then *** **** ************* *******, ***** is **** ******, ****** *********. **** you **** ***, ****** ******* ** commercial, ****-******** *****. [**** ***] ******* closed, *** ***** ******* ************ ** selling ******** ** *******. ***** ** trying ** ** ** **** *** all-in-one ******** ***** ** ***** **** to ******* ** **** **********.
*********** **** **** **** ****** ***-**-*** technology ***** ** ************ *** ** its ******* ***** ** *** *** factory, *** *********** ** ********* *** company ****** ** ******* ******* ** compete ** *** ** ******:
** *** ****** ** ***-**-*** ********** now, *** ** *** ************* ** our *** *******, ** ** *** controlling **********, ******** *****, ******** *****, and *** ******* ** *** ************. This ** ***** ** *** ******* and ***** ** **** **** - the ****** ** ************.
Offerings ***** ************, **********, **********, *** **** ******** *******
**** ** * ******** ****** ******** for **** *** ************, **********, *** industrial ******* *** *** **** ******** market, *********** ****. *** ********** ******-*******"********" ******* ******* ******** **** ****** ***, *** its***** ******* ******** *** **** *** *** months ***.
** **** ********* *********** ******* ****, ***** ** ***** *** ****-******** "Grade *" ******** ** ******* ** the *********** ******** "***** *":
********** * ************ ******* ****** **** in ********** [**] *** ******** ** North ******* ** *** ******. ******** [is] *** ********** ********, *** ** don't **** * ******* ****** *** for *********** ************.
** ** *** ******** ***** ******, you *** ****** *** ****-******** *** Grade * ***** *******. **** ******** will ** ***** *, ***** ** Pan-European ********.********** * ***** ************ ******* **** is *** [*********] ** ****. ** is ********* ** ****** *********** *** is **** ** *********, *** ***.
**** ****** **** ****** ****** ** Konotopskyi ********:
** ***** *** *** ****** ******, we **** ** **** ********* ******* lines.
******** *** ********** ***** *****; ** are ******** [**********] ***. *** *******, Grade * [******** *** ** **** in] ********** ***** [**** **] * bank [ ** ******* **** *****] high-security *************.
** *** ******** ***** ****** [***** including] ******** **** ******** *****, *** remote ***** **** *** ****** *******.
*** ******* ********* *** ******** ******** product ******* ****** ** **** ****** in *** **** **** "**** *** ****** *** *** ** it ** ********* *** * ******** system ** **** ****?"
Video ************ *********
** *** * *********** ********* *** an *********** *******. *** **, ****** yet ******* ******** ******* **** **** not **** *****; **** *** ******* have ********* ** ******* *** ***** across ******** *********, ** **** *** make ***** ** *** ******* ****, no ****** *** **** **** ***. This **** ** * ********* *** Ajax **** ********* ******* ******** ** deeply **** ************* **** ***, *****, Alula, ***...***. **** **** * *** tell, **** *** * ***** ******* line; ** * **** ******** *** today *** ******* *** * ******* to **** **** **** ***** *****, I ***** ********* ******** ****.
********, ** ******* ***** ********* ****** it *** ** ***-** ** * reasonably ***** ****** ** *** ** existing ********. *** ***********, **** ** high *** ********** *** **********, **** for *** ****** **** ******** *** make ** ** ** ***.
**** *** ******* ** ** **** their ******* ** ** ** ****** priced **** ***, ****** ** ****** control **** *** ******* *** ******* implementations *** **** ** **** ****** margin *** ** ** ** **********. Our ******* **** ******* *** *** hitting **% ****** *** ** ****** do ******** ***** $**. *****-*** *******, sure, *** ******* **** ** *** get * ** **** *** ****** tech ** ******* *** ******* ** a ***.
** *** **** *** ********, **** to **** ***** ** ******** **** rep *** *** * **** *** for ****. **** ****** **** *** water ****** *** ***** ******* - they *** ****** ******** ******** ******** to ***** ********* *** *****. *** motions *** **** ******** *** **** they ***, ******** **** ***** ******* is, *** *** ************* **** ********** else ** ***** ********* ** *******.
**** ****** **** ******* ** *** Ubiquiti/ ****** **** ********. *** *** market- *** * *** ******** *** lead **** “*********** *****” **** ******** by ***** *** ********* ******* *** channel.
*********** **** ** *** **** ** North ******** ******. *** **** (*** really **********) *********, ***** *** ** to ****** ********* **** ***********.
******* ****** *******, *** ***** **** all ** ****** ** ***-**-***" ********?
** ** **** **** *** ****** for. ***** **** **** ***** **** not *** ********** ******** ***** ************, they *** ***** ******* **** *** now ** **** (****** **** *** it ** ** **** *********).
**** **** ******** *** **** ******* in **/**
******. ** *** * ******* ****:**** ******* **** ***** ************
***** *******, ***** ***. *’* **** to *** **** ****** ******* ********* integrate ***** ******** ******** ******** ********