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Yelling at intruders pays dividends
Maxim Kelly

 


WHEN we think of disruptive technology . . .innovations that can radically transform a market by bringing a new approach to solving an old problem . . . we think of things like email, text messaging or blogging. We don't usually think of security firms.

But David Walsh, managing director of security monitoring firm Netwatch, certainly believes the company he cofound in 2003 has disrupted the Irish security industry. Netwatch is the first outfit to use phone line and satellite connections to link traditional burglar alarm systems with a centrally monitored digital CCTV centre which is staffed 24 hours a day. Ironically, the human element is the disruptive component: monitoring staff can watch properties in real time and warn off intruders through a public address system.

Walsh, who has been shortlisted for the upcoming Ernest & Young entrepreneur of the year award, had 12 years' experience as a salesman before starting Netwatch in 2003, which is evident in the way he discusses the 1,000% growth of the company over four years as a pitch rather than a process. His tales of the Carlow-based business's extraordinary expansion since its establishment are prefaced with tales of opposition and scepticism from competitors and observers, as he moved from being a sales director in the agricultural sector to branch out with business partner Niall Kelly to build his own high-tech security enterprise from scratch.

"Since the day we started we've never lost a client and that's amazing, incredible. Consultants reckon you'll always have about 20% of floating customers, but we've never lost one. It's blown us away. We could have lost three or four you know, but we've never even lost one."

Walsh says customer retention is achieved by listening to exactly what clients want, and he is bullish about doubling turnover to 15m by 2009 on this basis.

"What excites me about our business is that we've developed a business model that allows us to generate recurring income, as all fees come in as direct debits. Even though that 2009 revenue estimation looks like a huge jump, it's not really, because if we do seven million this year, starting next year we'll be doing seven million again plus whatever else we win by the year's end."

Netwatch's core offering is a system of motion sensors and digital CCTV cameras which link into a bunker-like command and control centre in Carlow by high-speed internet connections.

If a sensor is tripped at one of the 614 properties across Ireland, Britain, Spain or the US, monitoring staff see realtime footage of the intrusion and can dissuade trespassers from continuing their activities through a public address system while police or security patrols are notified.

This works by having monitoring staff yell at trespassers directly to scare them away. Walsh is proud of the straightforwardness of this simple idea which complex technology has helped him realise.

"The thinking behind this is very simple. People constantly say to us: 'Jesus it's so simple', but then again I suppose most good ideas are; people tend to stop whatever mischief they're up to when spotted by someone they didn't know was watching."

The company pitches its services as a peace-of-mind security offering and as a cost-cutting measure designed to save expenditure on manned guarding. As well as monitoring against criminal or nuisance activity, Netwatch systems can be set up to keep tabs on industrial processes or out-of-hours activity such as remotely opening gates for deliveries.

The service can also keep an eye on vulnerable employees or observe suspected staff fraud.

"Basically anything that's electronic can be done remotely."

Walsh got the inspiration for the Netwatch system with his partner, electronics specialist Niall Kelly, after a friend was attacked responding to an alarm call at his business premises.

They envisaged a new system whereby a key holder should know whether an alarm was genuine or not.

The pair travelled around before "begging to see" Australian military digital CCTV transmission technology called Adpro, and after quitting their jobs, returned to Kelly's home town of Carlow to set up Netwatch.

Walsh, from Kerry, praised the local enterprise board and chamber of commerce in Carlow for assisting the startup, and the nearby Carlow Institute of Technology as a source of highly-skilled staff.

"The most important thing I've learned in business is getting the right staff; it's absolutely fundamental to our or any business."

The company employs 60 full-time staff and ten contractors. Walsh envisages another 15 hirings before the end of the year.

"Our solution is technology-based, but at the end of the day, at two o'clock in the morning, you need to have somebody who'll always do his job and it's always down to the quality of the people in the command centre in terms of their values. They need to be able to buy into our way of thinking and we're very lucky these guys take it as seriously as we do."

Although Netwatch was set up primarily as a service for securing commercial premises, Walsh has developed a new home monitoring business division in response to clients' repeated requests.

"The spate of tiger kidnappings in recent years has raised awareness in relation to home security, particularly for high net-worth individuals and staff in possibly dangerous environments such as working at banks where they could be attacked at home."

He said some insurance companies tend to give discounted premiums to businesses which use the Netwatch system for staff home protection or health and safety compliance, and is looking at developing a more formal relationship with insurers.

"Even though it happened kind of by accident it's a huge part of our business now, " says Walsh, "particularly Irish and English-owned homes in Spain."

Concerns about terrorist sabotage of utility infrastructure in the US also led to a new business opportunity after Walsh visited Carlow's twin town of Tempe in Arizona on a local business exchange. Somewhat bizarrely, staff in Carlow now monitor municipal water treatment facilities in the Grand Canyon state.

"In Ireland you can do cold calls, but in places like the States you absolutely need an introduction or otherwise you just won't get a hearing, " says Walsh.

"Even though the US is a much bigger place than Ireland, the who-you-know factor is absolutely critical."

Walsh is using the Arizona operation as a test bed for future US expansion and said the next big decision the company faces is whether to expand abroad as a franchise or continue organically.

"Going down the franchise road does bring in extraordinary growth, but we want to make sure whoever takes over a franchise has the same core values as us; they're using our name. It's important that any third party doesn't oversell our system.

"I think it's vital to get the right people. But as you scale up, and this will be a challenge for Netwatch going forward;

we believe we can achieve a lot in the next three or four years. The challenge for ourselves is to remain young at heart and I really believe that.

"We've more than 600 clients now, and I want to ensure we get to 2,000 clients, but each new one will get the same level of service, the same level of respect, and generate the same level of excitement I had with the first one. We have to mind them all the same way."

The Kerryman is a salesman by background and his belief is that one has to truly believe in the product as a solution in order to create a successful business.

"People do business with people who have the same core values as themselves.

In our business the guys on the road have to believe in what they're selling, otherwise there's no future in it."

Walsh predicts growth across the entire private security industry will be based on its taking on more and more functions traditionally undertaken by law enforcement, and believes Michael McDowell's 2004 Private Security Services Act has laid the ground rules for a well-regulated indigenous industry.

"I don't think the traditional burglar alarm monitoring industry, and businesses in general, can continue to expect the gardai to continue to be a mopping up service for when an alarm goes off.

There's a high number of false alarms and we cannot keep expecting the gardai to race out to what in all likelihood is a false alarm when there's more important things happening for them at two o'clock in the morning."

Netwatch has already won a pilot public contract to monitor a public space in Tallaght, for example, where there was a problem with anti-social behaviour, and Walsh expects this trend to continue . . . a trend that in turn will provide opportunity for manned private security patrols, which the Netwatch system has threatened as it charges per day what a security guard firm would charge for one hour.

"The business community will have no problem with a high-quality private security company investigating an alarm as opposed to the gardai, and in that situation you can be guaranteed responses as part and parcel of the service level agreement, " says Walsh.

However, mention of Irish broadband providers' lack of service level agreements exercises Walsh.

"Our core business is through broadband connections, but also GSM back up systems we can use in the event broadband goes down. There has been progress been made in relation to broadband in Ireland in terms of penetration but it's quality of service where the operators have a long way to go. There are no SLAs currently with broadband providers. ISDN lines have SLAs. It's a f***ing joke and that's the truth now."

Walsh is aware of concerns about development of a big brother surveillance society but is adamant in his stance.

"Every citizen has the right to be protected and the choice in relation to CCTV and surveillance in public areas is either have cameras and enjoy a crime free area, or remove them and take your chances. I don't think any law abiding citizen will have a problem with monitored cameras."

CV
DAVID WALSH

Age: 42
Occupation: managing director, Netwatch
Education: De la Salle College, Waterford; BSc UCD 1988.
Career: 1989-2002 . . . sales and management positions at agribusiness Keenans, Carlow.
Family: Married to Beatrice with three children: Patrick, seven, Clodagh, six, and 'The Boss' Christopher, three.
Home town: Castleisland, Co Kerry
NETWATCH Location: Carlow
Established: 2003
Turnover 2006: 5m
Turnover 2007: 7.5m expected
Employees: 70




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