Recommendations for Surveillance Startups / Investors

Author: John Honovich, Published on Aug 08, 2009

While there are many startups in video surveillance, many of them have under-achieved, especially the most prominent, VC backed companies in the market. Indeed, this has caused VentureBeat to symbolize the security startup market as a sinking ship. VentureBeat concludes with a quote from a VC lamenting:

“If you aren’t in it for the passion, forget about it,” she said. “If you you’re in it for the bucks, don’t bother."

Now, this seems overly pessimistic as a description of the entire market. US VC backed startups? Yes. Other startups around the world? Not necessarily.

Nonetheless, there are many challenges that video surveillance startups encounter. With such a heavy influx of companies with IT background, there's a steep learning curve for these startups (an element we addressed in our Top 5 Mistakes IT People Make in Physical Security). Beyond that, inflated expectations and market forecasts have contibuted to unsuccessful strategies.

In light of this, we have compiled 17 recommendations on the video surveillance business that startups and investors should consider when developing their business and operational plans.

***** ***** *** **** ******** ** ***** ************, **** ** them **** *****-********, ********** *** **** *********, ** ****** ********* in *** ******. ******, **** *** ****** *********** ** ********* the******** ******* ****** ** * ******* ****. *********** ********* **** * ***** **** * ** *********:

“** *** ****’* ** ** *** *** *******, ****** ***** it,” *** ****. “** *** ***’** ** ** *** *** bucks, ***’* ******."

***, **** ***** ****** *********** ** * *********** ** *** entire ******. ** ** ****** ********? ***. ***** ******** ****** the *****? *** ***********.

***********, ***** *** **** ********** **** ***** ************ ******** *********. With **** * ***** ****** ** ********* **** ** **********, there's * ***** ******** ***** *** ***** ******** (** ******* we ********* ** ****** * ******** ** ****** **** ** ******** ********). ****** ****, ******** ************ *** ****** ********* **** ********** to ************ **********.

** ***** ** ****, ** **** ******** ** *************** ** the ***** ************ ******** **** ******** *** ********* ****** ******** when ********** ***** ******** *** *********** *****.

[***************]

A ****** ********** ******

*** ****** ****** *** ***** ************ ******** *** ** $** B *** *** ** ************ *** * ******** *****. *****, widely ******** ** *** *******, *** ******* ** ***** $***-*** M *** ** ***** *-*% ** *** ******. *** ******* Axis ** *** *** ******* *** ***** ******* ** '****' about $**** ***.

*** ***** ************ ****** *** ***** **** "****** ***** ***." As ****, ******* ******** ***** **** ****** ***** ******* *** achieve **** *% ****** ***** ** * ***** *** ******* the ******* ** *** ********.

***'* ******* *** ****** **** ********* ****** *********.

Mature ******

***** ************ ** * ****** ****** ***** **** ********* ******* have ******* ********. ***** ** ***** *** **** ***** *** more **********, ** ***** ** ** ********* ** ******** ***** surveillance ******* (*** ********, ****'* *** ** **** ******** *** sold).

Lock-In ** ******** *******

**** *** ****** *** ******* ** **** ** ***** ***** existing ****** *** * *** *******. **** ******* **** *** budget *** *** ******* ** ******* *** **** *** ********** capital ********* **** *** **** *** * - * *****. 

***********, ************** ** ******* ** ***** *** *******'* ******* ** one ******** *** *** ********* ** ****** *** ** ***********. For ********, ** *** ***** ** ***/***, **** ********* *** negatively ******** ** *** ******** ****** ********* ******** (***** ** almost ****** ********). ** *** *** ** ** ****** ************, even ** **** ******* *** ********* ** * *** ***** VMS *********, *** **** ***** *** **** **** **-**% ** the ******* ** *** ******.

*** ******* ***** ** ********** **** ** ** ** ********** to *** ***** ********. ****, *** *** *** * *** dozen ***** *** *** **** ** ***** *** ********* **** be **** *********.

Long ***** *****

*** ***** ************ ***** ***** ** *********** ****. **'* ****** for **** ****** **** ***** ($**,*** *** ** $***,*** ***) to **** * ****** ** * **** ** ********. ******* dollar ******** *** **** ***** ** *****. **** ** ********* because *********** ** ******** *** ***** ********** *** **** ********** or *** ********* ** ********** *******. *** **** ********* ** this ** ** ***** ** ****** (*********, ***.) ** ****** times, ******** ******* ** ****.

**** ** * *** ******* *** ******** ********** ***** ****** plans. **** ** *** *** *** ** ***** ******* *** want **** ******* ** **** *, ***** **** * ** those ** *** ** *** ***** ****, * ** **** 2 *** *** ********* ** **** *. **** ** * major ***** ** ************** ******* *** ***** ************ ********.

The ********** ** "******" ********

**** ***** ************ ******** **** **** * ************* ************ - a ******** *** ****** ******* **** ************** ********** **** ******** products. **** ** ***** ********** ** *** *** ******** ******** from ***** *********** *** ***-*****.

*******, ******* *** ****** ** ****** *** ***** *** ** many *********, *********** ******** ** ****** ** '****** ********'. ** this, * **** *** ****** ** ******** *** *************** **** are ****** ** **** ****** ** ******** ** ******** ******** (this ***** ** ** ********* ***** ** **** ****** ******* for ******* ** ********** ********* *** *** *******, ***.). **** and *****, ***** ****** **** ****** * *******'* ******* ******* they **** *** **** ** *** '******' *** ********* ******* that ****** ******* *****.

***** ************ ******** **** ** *********** **** ** *******, "** new ************ ***** *** $**** *** *** ***** ******** * lack **** **** *** $***," ***. **** ******, ****** ***** pain ** ** ***** ** *** *** **** *** *****, will *** ***** **** ** *** ******* *** ***** *****. They **** ******* *** ***** ******* *** ******* ** '*** ready ***'.

Buyers ********* ** *** ** **** **** *******

******* ***** ************ ******* ****** ******** *******, ****** *** ******* in *** **** *** ******* ********** ***** *******. *** *** key ***** ****** ***** ** ** ******** *********** ***** *** loss (*.*., *****, ******, ***.).

*** ******* *** **** ******** *** ** ******* *** **** of * ******* ** ******* ******* **** **** *********. ************, this ***** ******** **** *** ******* ** *** ****** *** total ****** ** ******** ****** (*.*., * ********* ****** ******* of * ** *******). *************, **** ******** ******** **** **** lower ***** *********** ***** (*.*., **** ********** *** **** ** change *** ******** ***** *** ****).

**** ***** ************, **** ****** * ******** '**** ******', *** be * **** ****. **** ** **** **** ********* *** the **** ************* ***** ***** ** ****. ********* ******* *** a **** ******* ** ****. **** *** **** * ******** per *****, ****** ** **** ** **** ** ******* **** the *** ****** ****** * ********* ** *****.

Beware ** ******* ******* ** ******* **** ******** ******

****, ******* ****, ******** ****** ****** ****** **** ********** ******* similar ********. ******** **** ******* **** ******* ** ***** ***** technology *** *** ****** ***** ** ********** **** **********. ******* of ****-** *** **** ************* ********** ********* *****, **** ******** handicaps *** *******.

******** **** ***** **** **** *** ********* *** '***** ********' and *** '****** **********'. ** *******, **** ***** ** **** off *********** *** **** ** ** ********* ** **** ** immature ******* *** **** *****. ********, ** ***** ** **** for **** *** ***** ** *** ******* **'* ****** ***** budget.

*****, * **** **** **** * ***** ******** ********** **** their ****** ** ********* ***** ****** *********. *** **** ** it ********* ** *** ******, ** ******* * ********** ** weakness ********** *** *********** **********.

Startup's ******* ***** ****** ** *** **** ** **********

** * **** ** *****, **'* **** *** * *******'* product ** ** ****** ******* ****** **'* *** **** ***** of *** *********'*. **** ** ********* * ******** ** ***** budgets ** *** ***** *** ********* * ****** ** ******* cost **************.

*** ********* ** **** ** **** * ******* *** ********* another ********* (*.*., ********* ********** ******** ** *******, ********* ********* guards, ** ******* ********* ****** ***** **********, ***.). *** ******* is **** ******** ****** ****** ****-******** *** **** **** *** eliminate ** ***** ****** ********** (*.*, ********* ******* *** ********* 12 ****** *******, ********* *** ********* **% ** ******, ***.). Buyers ********** ** **** ***** **** ******* ********* ********* ***********.

*** ***** *** *****, ********** ** *** ********* **** *** startup ** ******** ** ***** **** *** ****** *** ********* from *** **** ** '****** ********', *** ****** ** ** to *** * ******** ** *** ******. ** *** ****** and *** **** ********, *** *** ****** ******** *** ***** or ***** ***** ******* ***** **** ****** ******.

Get ******* ********* **** *** **** ** **** ********

**'* ******* ********* **** ******** ***** * ******** **** ****. First, **'* ******** ** **** * ********* **** ******* ** a ************ ****** **** ********, **** ****** ** *** **** to **** *****. ********, ****** ********* ***** ** **** *** the ********** **** *** ************ **** ******** **** ****. *******, you *** *** **** ** **** **** ***** *** ******* case *******.

******** ****** *** ***** ***** *****-******* ***** ******** *** *** expense ** ****** ***** ******* **** ** ******* ** *** less **** ****. **** ** ** ********* ********** **** **** make ** *** ****** *** *** ***** **** *** *** future ********* ** ******* **** ********.

IT **** *** **** ***

**** ***** ************ ******** **** **** * ********/** **********. ** such, **'* ************** **** ***** ********* ****** *** **** *** IT ** **** *********. 

*******, *** **** ** ** ** **** *** ************. ***** has ******* ********* ** ***** ************ ******* ***** '***********' **** IT **********'* ****** *********. ** ***** ****** ******** **** ***** sales *** ********* *****, *****'* ****** **** **** **** ******* can.

**** ** *** ** *** **** * ******* ** ** unimportant. ******, **'* **** ****** ******** *** *** ***** ****** - **** ** *******, ****-** ** ****** *******, ********** ** justifying ********* ********, ***.

Embrace ** ****** *** *********** *******

**** ******** *** ** ************** ** ******* *** ****** *** traditional ******** ***** *******. **** **** ******* ********. *** ****** pick *** ** *** *****.

*** *********** ******** ******* *** ************* ******* ** *********** *** then **** ** *** ***** (**** ** * ********** ***** -- **** *** ************ **** **** ************ ***** ******* ************* and ***********). *******, ** *** *********** *****, ************* ** *** sell ****** ** *** *****, **** ** *** **** ** service ********* ** ******* **-**** *******.

******** *********** **** ** ** **** ********** ** ***** ************* with *** *****. ** **** ******** *** ***** ****** ****, they *** **** *** **** *** ******** *** ****, ** more ******* **** ***** ******** ****.

******* *** ****** *** *********** ***** ** ***, *** ****** understand *** ***** *** ** ***** ***** ***** *** *** choose. *******, ** **** ********* *********** ****** **** ** ******** of ******* ** *** ***** *** *****, *** ****** **** to ** ******* *** *********** ******** *******.

Don't ************* *** ********** ** ****** *********

**'* ****** *** ***** ************ ******** ** **** ** ********** with ***** ************ **********. **** ** ****** *********** *** ******* in ******* ****** *** ******* ****** ***********.

*** **** ****** ****** ** *** *** ******* ** ** hire * ** ** ***** **** ****** *** ********. ** this *****, **'* ******* *** ****. *** ** ** ***** is ***** ** **** *******. ** ** ***** *** ********* not ******* ** ********* ** ******* *********** *** *** *** appreciate ****** **** **** ******* ****. **** ** *** ** of ***** **** ********* **, **** ** *** **** *** time ** *** **. *** ******* *** **** **** ** an ****** ***, **** ** **** ****** **, ******* ************ will **** *-** ****** ** *******, **** *** *******.

*** **** ******** ** *** *** ******** ** **** ********* when **** ***** ********* *** ********** *** *******. *'* ** so *** ** *** **'* ****** *** * ********* ******* to **** *** * *** ***** *** ** ******** ************ before ******** ***** *** *******. **** ***, *** *** **** to ***** *** ******* *** ****** ** *** ******** ****** than ******* ******* **** *** ***** ** ** **. ****** way, **'* ***** ** **** * *** ***** ** ********** the ******** **** - ****** ** ** ** ***** ***** paid ** ** *********.

Quick ******* ****-** ** ********* ****

*** ** *** ****** ***** ******* ** **** ** **** hard ** ****-** ******* *******. *** ********** **** ********* *** founders **** ***** ******** $** * *** ** ******* ** 5 *****. ** ***** ************, **** ** ****** ** *************. 

"Big" ** ******* ********* ********** *** *******

**** *** **** ******, ******** ***** ************ ******** **** ******** over $** * *** ** ** **********. *** ******* ** that ** ******* **** **********, ********* **** ** ********* **** of ******** ** ******* ** **** *. *******, **** ** nearly ********** ** ******* *** **** ***** *** ******* ** take ****** ***** **** ****** *** *******'* ********.

** *** **** ** ****** *** ***** ************ ******, *** are ****** *** **** ***** ************ ** ***** *** ******** growth **** * ****** **** (**** ** *** **** *********** successes ** ** ***** **** ****, ******* *** ********* *** it).

Security ************* ** *** *** ******** *** ********

******** ***** **** **** ********** **** *** **** *** *********** premiums (*** ** *** ***** *******) ***** ** ***** **** term ********* *** ****** *********.

*******, **** ******* ** *** ******** ***** **** ******** ************* do *** ****. **** *********** *** ***** ********* (**********, **********, Covi, ********, ****** ***). **** *** **** ***** *** ******* does ****** (***********, ******), *** **** ** **** ** ** 2x *******.

*** ********* ******** ************* **** **** **** ******** (********* ******** lock-in) *** **** *** *** ****** **** **** ******** **** disrupt ****. ****, **** ** **** **** ****** *** ****** capitalizations ** **'* *** ******** *** **** ** *** $*** or $**** *** *** * ******* (*.*., ***** *******'* ********* is ***** $**** *** *** **** ****** ******, ** ** video ******* *** $*** ***).

IT ************* **** *** **** *********** ******** *** ********

*** **** *** **** ***** ************ ******** ** **** * big ** ******* **** * *****-******* ****** ********* **** ******** them. **** *** ******* *** **** **** - ***** **** their **** ************ (****** *** *********) *** ***** ********** **** not ****** *** ******* *** *****.

***** ** ************* **** **** ** **** *** ********** *** there ** ****** ********* *** ** ********* *** ** ******* yet.

Concluding ***************

**** ***** ****** ** ****, **** ** * ******* ** key *************** *** ********/********* ********* ***** ************:

  1. ********* ****** ******* *********** ($*** *** ***** * *****)
  2. ** *** **** **** ******* **** *** ******* ***** ***********
  3. **** ****** ********* ****** ********* ** ** **** ** *** founding ****
  4. ***** ***** ******* ********* *****. ***'* ***** ***** ******* *******
  5. **** **** ** ****** **************** ******** **** ******** *******
  6. ** ***** *** ********** **** *** ******* ***** *** *** go ** ******
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