Risks of Video Surveillance Startups

Author: John Honovich, Published on Jul 10, 2009

In discussions with video surveillance startups and investors, both routinely over-estimate the size and the potential of the video surveillance market. This increases risk of integrators/end users to be stuck with end of life products as startups fail.

The main risk is over-funding video surveillance companies resulting from infeasible growth/revenue targets. While startups focus on how big the video surveillance market is, the most important issue is how large any particular company can likely become. In video surveillance, a manufacturer that generates $10-20M USD annual revenue is already quite large. It's difficult to exceed that revenue level and only a few dozen companies globally it. Even the most successful video surveillance startup of the last decade (Axis) only generates about $250 M USD annual revenue. Arguably the next largest is Mobotix and their 2008 annual revenue was about $40 M USD.

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