Can someone get me Mr. Senkut's email address please? I have some swampland in Florida that he might want to invest it. It might not be worth much now, but once we drain it and put up a shopping mall it will be worth millions. Getting in now is the smart thing, and it seems like this kind of investment might be up his alley.
In fairness, venture investing is about making bets on the future where you can never really be certain what will happen. Most investments turn out poorly but the few that are home runs make it. Will Verkada be a 'grand slam'? It could. He's bought himself a lotto ticket and the rest of us have not.
For example, the Honeywell comparison is just incompetent. On the other hand, he said it to TechCrunch, which has zero interest in doing due diligence or asking obvious questions. 'Software eats the world'. Software eats buildings. Maybe Verkada eats buildings. Or maybe not.
I think they are right about that. Why wait a few times a year to spend hundreds of thousands of dollars to then have to follow up later? Verkada is effectively running a non-stop trade show online by its continuous heavy social media advertising campaigns.
I wonder how their lead generation is going, throwing tons of money into marketing can be very dangerous when there are only a few qualified leads handed over to sales. I also wonder what relationship they have with installers and integrators...
when there are only a few qualified leads handed over to sales
I think there's every reason to believe they have a lot of leads. Most importantly, Verkada can almost certainly justify spending far more per lead than conventional companies. Let's say Axis has a lead - that's a one-time camera sale, with solid but not certain probability of selling some more cameras in the future. With Verkada that's a camera sale + a very high probability of an annuity in camera licenses for years to come plus expansion sales of both cameras and more recurring licenses.
I also wonder what relationship they have with installers and integrators...
What does it matter to Verkada? As Verkada's CEO told IPVM:
Sales always own the relationship with end customers
There's few integrators that love Verkada but that does not matter. Verkada is overwhelmingly nurturing these deals themselves and there are certainly companies out there that are happy to be handed the install / local support work.
Let’s say they spend twice as much to acquire a customer as the next highest spender in the industry. To be clear, I don’t know but as a thought experiment.
They likely can afford it because they know, unlike their traditional competitors, that they are effectively locking in a very long term stream of profits. VCs are excellent at funding the scale up of such businesses.
I am wondering if Verkada's GTM strategy is like that of alarm companies - give away the hardware and rely on the RMR. While Verkada hardly gives away their cameras, they lock you in with the promise of new and exciting features and proprietary hardware.
Here is a great article on what appears to be a similar situation evolving with Verkada..Not saying they will see the valuation tumble like WeWork but at some point you must become profitable, not just barely profitable but wildly profitable.
I did one of the webinars from a Facebook ad. I had I believe three different cameras for more than a month
That's a good example of their funnel in action: social media ad -> Yeti webinar -> inside sales person -> free trial cameras. Verkada did not win this one but I am sure they won many others using a funnel very few industry manufacturers use.
First question has to be they dropped 80 mil at a 1.6 they picked up five percent, the investor picked up 5%. Who buys 5% of a company? Like why didn't they put more capital? And why is it so slim that the ratio just blew my mind when I read this? Yeah, I mean, it's it's just again, it's something we don't see that often. I mean, so the question is, is this may be the early announcement, it might be crunched, just speculating here not doing anything. But like one option is maybe they have another 80 million available that the company can take at the same price in three to six months, right?
The only thing about putting in more capital is - what would Verkada do with that money? This market is only so big and only moves so fast. But it does raise an interesting point. What if Verkada raises another $100 or $200 million in the next 2 years? What will they do with it?
Secure funding, hire a sh*t load of sales reps that target paid-for end-user leads.
They don't use rep firms or distribution and their reps bring the deals to the integrators they want to work with (in hopes of switching their business)
Their sales team are by far and large, poorly educated on competition and the security market in general. Most have come from Yelp, copier sales, etc - none from the traditional security market (former Yelp, office supply sales, etc). The end result? Ramp up as much and as fast as possible and sell.
Their sales team are by far and large, poorly educated on competition and the security market in general.
That's true but they are also super confident and polished. A lot of buyers key in on that, especially if the buyers also are poorly educated on the details of the product / offering.
Ask a Verkada salesman about WDR or compression or whatever and I assure he will confidently dismiss it, in a manner, that an unknowing end user will accept. Leaving ethics and accuracy aside, it is an effective way to close deals.
Perhaps. But I've been told that Avigilon has a tough time keeping employees around as well. If so, maybe that's why they're digging into that field for future representatives - or perhaps hiring from that field is where they feel they'll find the "hunter" that will grind out 60-80 cold calls a day for 18 months before burning themselves out as well.
I don't know what kind of training Avigilon puts its people through, and I have seen the evidence of the revolving door of sales people through there. However, I have never heard anyone say that an Avigilon sales guy doesn't know what he's talking about. From my experience, and from what I've heard, the Avigilon guys are all fairly well trained on not only their product, but they also are aware of what's going on in the market.