Verkada Salesman Falsely Alleges Competitor Bankruptcy

By John Honovich, Published Jan 02, 2020, 09:28am EST (Info+)

A Verkada salesman falsely told a large end-user that the user's VMS provider faced bankruptcy.

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Verkada management acknowledged the error to IPVM.

Inside this note, we examine what the Verkada salesman did, the problems this created for the end-user and the underlying strengths and weaknesses this illuminates in Verkada's sales model.

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Comments (44)

What an odd tactic in general.

He alleges that one of the components (VMS) of a hybrid (eg: not all single vendor) surveillance system is facing bankruptcy. There have not been that many VMS startups, so presumably this is a company that is older than Verkada. Also, there are very few (if any) common VMSes that would stop working if you did not pay a SUP or ongoing license fee. So, with all this in mind, he proposes to the customer that they invest in an all-inclusive system from a very new company, where the components likely WOULD stop working if the company went bankrupt.

This is not just lack of understanding of the market, it is lack of understanding of basic sales tactics.

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“backed into a corner many sales people will bend the truth” unfortunately.

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Very true, but if you believe even half of the hype around Verkada, there should be no reason to be "backed into a corner" selling the product right now.

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I think the one question I would fear from a prospect isn’t technology or industry based. Simply “what happens to my investment if we stop paying the annual fees”

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he proposes to the customer that they invest in an all-inclusive system from a very new company, where the components likely WOULD stop working if the company went bankrupt.

In their minds, Verkada is destined to be a multi-billion dollar company. I think that's a fair bet, as the business model (locked-in subscription business with unprecedented industry sales organization) is strong. The long-term customer value proposition is another matter.

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In their minds, Verkada is destined to be a multi-billion dollar company.

Granted, but some of those same minds also thought the world needed dice that made a bigger splash when landing in a mug of beer.

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The price of the h/w alone is absurd. 10 year warranty won't matter much when the h/w specs are going to be pitiful in 2 years.

I can't imagine locking into a 3, 5 or 10 year cloud plan with ANY piece of hardware in 2020.

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You are preaching to the choir!

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If you don't know or understanding anything, make it up. Great skill set.

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"Fake it until you make it" is the motto around Silicon Valley.

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We already knew that these clowns use Boiler Room as part of their training program, but it seems that they've now added The Wolf Of Wall Street too.

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Boiler Room is not an instructional video:

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Boiler Room...One of my all time fav's.

Unfortunately not a great start for Devon McPherson to be the headline on IPVM for this so early into his career.

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For this so early into his career

I think 98% of Verkada’s reps will work outside the industry next as their focus is selling what looks to be the hot new thing in tech, not making a career in the surveillance industry.

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I used to work for a credit counseling company many years ago and "ethics" wasn't very high on their priority list. As employees, we were encouraged to watch Boiler Room and GlenGarry Glen Ross as these should inspire us. Thankfully, they are no longer in business.

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I see their pitch being successful in younger SMB companies. I can't imagine any real enterprise company would go Verkada let alone not use an integrator or dealer restricted product. The reality is that large multi-billion dollar enterprises want consistency and conformity across sites for installation, use, training, support etc. Not sure how this model scales upstream but in SMB I bet Verkada can get away with churn and burn.

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The know it all IT manager will be easily led by a fellow tech bro and unimpressed by a guy who drives a truck. However the latter actually knows things.

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I used to be an engineer on ocean going vessels and we used to say every ship starts sinking as soon as you put it in the water.

Maybe Verkada believes every company is headed toward bankruptcy as soon as they open their doors (every company except Verkada, that is)

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In the long run, we're all dead.

John Maynard Keynes

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"Our salesperson has received a warning and will complete additional training."

Additional Training =

"Remember to simply insinuate that competitors are weak vs making specific unproven claims"

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As a distributor, I've had clients tell me that our competition told them that the company I work for went bankrupt, is in financial ruin, is getting ready to be bought out by another company, is no longer bringing in products, etc... To me, when this happens, it means that the competition is getting desperate. I would assume that Verkada has been desperate for market share for a while now.

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I would assume that Verkada has been desperate for market share for a while now.

If by 'desperate for market share' you mean they are struggling to grow revenue, then definitely not. All signs point to them growing very quickly (granted it's from a very low base since they only started selling in the past 2 years) but they are winning numerous large scale accounts - hundreds to thousands of cameras each, which is very, very rare for a company in this industry this young.

My hypothesis is that the sales team knows that they will be in a new industry in a few years anyway so they are not worried about 'dinosaurs' not liking them. That's simply based on their track record of going from startup to startup based on what's hot, regardless of the category or industry.

If you stayed in an industry and did such things, you would gain a bad reputation and it would harm your employment prospects longterm but whatever blockchain or self-driving car or whatever hot segment there is in 2022 will not care what Ryan Young et al. did in video surveillance back in 2019.

Of course, for Verkada's board and execs who may remain, it is an issue. But as lots of other fast-growing Valley startups have shown, better (financially) to get hyper-growth first and deal with the fallout, if it comes, later.

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Oh Dear - I will aviod them like the plague.... :(

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I appreciate the full fledged assault on these guys, they are a huge market disruption, I'm scared of them and Meraki. This article pulls no punches, attacking the little whipper snapper, digging up "dirt" (drinking games aren't all that bad and neither is trying to make some money selling them) and just crushing the entire organization. I love it.

These guys lie, have they been actively trying to conduct cyber security attacks, designed back doors into their products? Are they under investigation for human rights violations? Boy oh boy I bet IPVM would REALLY get after them if that was the case.

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I cannot tell if this is sarcasm or poorly worded praise.

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If I've learned one thing on IPVM recently it's that I can safely ignore any post authored by Jason Crist.

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Cool story bro

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wow! when did IPVM turn into TMZ? Not so much respective to the article and information regarding the false information. That's good and important information to know...

But personally attacking the SDR? I know you'll defend this as simply publishing his work history, that is publicly available... but c'mon. Your disdain for Verkada really shines brightly in this post.

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But personally attacking the SDR? I know you'll defend this as simply publishing his work history

Yes, it is literally his work history. So do you think highlighting someone’s most recent work history is irrelevant or inappropriate?

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Not at all... But there is an appropriate way to do this. Your post was a bit sensationalistic – graphics, screen grabs, personal pics, custom stamps, and a YouTube clip – to the level of a click-bait article.

I think you know this… So not sure why I’m even responding. I suppose I misinterpreted the type of content I hoped to have when subscribing to IPVM.

My bad…

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personal pics

There are no personal pics in this post. The only pic we used of Verkada's salesperson is the pic he uses professionally on his LinkedIn:

As for:

I think you know this…

I don't know what you are getting at. You've repeatedly alleged this is personal but everything we used was from his work.

It's definitely atypical to hire a surveillance technology salesperson who most recently sold dice for drinking games but that was Verkada's work decision.

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I agree with you John, wrong p word (personal). Maybe “petty”? Yes, petty.

New poll, was the content relating the young salesmen for Verkada “personal” or “petty”. 😂

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Maybe “petty”? Yes, petty.

maybe Petty?

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I agree that looking 10 years down the road is absurd... Assuming they are around and still maintaining their cloud in 10 years.

Also, look at the costs...

One of their cameras is listed at $799.

Then add a 10 year cloud license, because what good is a 10 year warranty if you can't use it for the next 10 years. $1,599

Then there is a viewing station at $1,999. I am sure you can view it without, but let's look at a system approach.

Then a 10 year cloud license for the viewing station. $3,999

So the total to view 1 camera is $8,396. Assuming you don't need any switches or mounts or anything....

Anyone know why their camera has wi-fi & bluetooth? Most enterprises do not want wireless nodes all over the place. Also, wireless connectivity, but without low voltage, so you need to run a PoE network connection anyway..

Seems crazy...

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We have checked our Verkada cameras, looked for wifi & Bluetooth networks while the camera was running for an extended period of time and after power cycling, and we have not detected anything.

Can you share where you have seen a wifi & bluetooth connection?

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I could have sworn that I saw it in the datasheet. Now I am looking at the documents again, and I don't see it.

So, my bad.... Sorry for any confusion...

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Dice Corporation has entered the chat.

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If you were wondering the head to head performance comparisons and specs of all of the new Hik cameras you’ve come to the right place!!

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Additionally, contributors to this site, i.e. John Honovich...

that guy has been around since forever! i think he's related to somebody high up ;)

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i think he's related to somebody high up ;)

When are they going to get smart and fire Honovich?

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This seems like the Summer Sales tricks that were used to churn alarm customers in the US until a few million dollars worth of penalties sorted it out.

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I was able to obtain exclusive footage of the recent Verkada board meeting:

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Update: The salesman here has now left Verkada to be the head of growth in an unnamed stealth mode startup:

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