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Case study

To build credibility, surveillance startup hires rival employees Add to ...

THE CHALLENGE

Alexander Fernandes is the founder and CEO of Avigilon Corporation, a Vancouver-based provider of high-definition (HD) digital video surveillance and access control systems.

When Avigilon Corp. launched its first high definition video surveillance system in 2007, it immediately appealed to police forces, border control agencies and government offices because they needed high-quality image detail that provided users the ability to clearly identify individuals, even from great distances.

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However, like many innovative early-stage companies, Avigilon faced a significant challenge: how to gain customer traction before a larger, more established competitor catches up with their technology and dominates the market.

THE BACKGROUND

Prior to Avigilon, Mr. Fernandes was the founder and CEO of QImaging, a quantitative imaging corporation which made high-resolution digital cameras and software for scientific, machine vision, and industrial applications that were used by organizations such as NASA, Harvard and MIT.

QImaging launched in 1999, and in 2002, was sold to Roper Industries for $20-million. After departing QImaging in the spring of 2004, Mr. Fernandes took six months to think about about what business he would like start next.

“I was looking for the opportunity to apply my skills, interests, and experience to a large market that was undergoing a significant shift in technology where no one company had a major foothold,” said Mr. Fernandes.

Video surveillance appealed to him not only because of his extensive experience in cameras and imaging, but also because the industry presented many opportunities.

The global video surveillance markets consists of several major verticals including education, healthcare, retail and critical infrastructure. Each vertical had different requirements and all relied heavily on analog video. The problem with analog video technology, however, was that the images it produced were so grainy that they could not be used effectively in court.

At the time, the industry was also fractured; most cameras were provided by Asian suppliers and the surveillance software was provided by North American and European companies. No one company controlled the market and the industry was slow to adopt HD surveillance because it was difficult and expensive for system integrators to build one-off systems.

Mr. Fernandes concluded there was an opportunity to create a HD video solution that was easy for system integrators to install and could be used in multiple markets.

In Oct. 2004, he incorporated the name ‘Avigilon’(from the phrase ‘a vigil on’ – to be perpetually alert and watchful) and in 2005, he self-funded the initial research.

“In order to create a highly differentiated product, you can’t create solutions using readily available technology. You need to use cutting edge technology knowing that the price will come down and then when it does the foothold you gained by being first to market can be expanded into adjacent markets,” he said.

He then raised $500,000 from angel investors and employees, and used the money to develop prototypes in 2006 and by 2007.

In Dec. 2007, the company released its first product and early customers included high security government departments, police departments, and land border agencies where there was a real need because people could not be prosecuted based upon existing solutions as they did not provide evidentiary quality video.

With a product on the market and nearly 30 employees, the challenge for Avigilon became how to accelerate sales fast enough to prevent larger more established analog players coming along and taking the market.

THE SOLUTION

Mr. Fernandes knew that system integrators were the keys to his success because they were trusted by the end customer to design and install effective surveillance systems. The good news was that system integrators were looking for a video solution that was reliable, simple to install and could be used in numerous applications. The bad news was that they were slow to come on board because Avigilon was deemed a start-up and they were concerned about its corporate viability.

It was about this time that Mr. Fernandes learned that a rival company – which had strong relationships with system integrators – was shuttering, and that one of of the company’s vice-president of sales was looking for a new role.

Mr. Fernandes quickly hired this VP of sales as well as a number of salespeople who had just lost their jobs.

THE RESULT

The relationships that Avigilon’s new sales team had developed with system integrators proved valuable, and gave the company instant credibility.

The company went from $5-million in 2008 to $60-million in 2011, and went public on the TSX exchange on Nov. 8.

In 2012, revenue hit the $100-million mark and Avigilon was named the fastest-growing technology company in Canada on the Deloitte Technology Fast 50 and was named Cantech Letter’s TSX Tech Stock of the Year.

Avigilon now has almost 350 employees and protects commercial buildings, airports, banking, casinos, retail, and critical infrastructure, in more than 80 countries around the globe. Avigilon’s client list includes Target Field, home to the Minnesota Twins MLB team, Vancouver 2010 Winter Olympics and the Associated British Ports.

“Our goal is to reach $500-million in revenue by 2016. By leveraging appropriate sales channels, and adding new capabilities like access control, we continue provide much needed services to our existing customers and penetrate new, untouched markets. This give us great confidence that we will reach this goal,” says Mr. Fernandes.

Craig Elias is the founder of Shift Selling Inc. and an entrepreneurship instructor at the Haskayne School of Business at the University of Calgary. This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Small Business website.

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(Editor's note: An earlier online version of this story contained an incorrect number for Avigilon's 2012 revenue. It was $100-million, not $10-million.) 

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