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Vancouver startup’s eye in the sky watches you in HD

When Alexander Fernandes founded QImaging, which designs and produces high-end cameras for medical and industrial use, he went shopping for video surveillance equipment to monitor his facilities. Despite buying top-of-the-line cameras, the quality was wretched: The images were grainy and barely decipherable. After he sold QImaging and exited in 2004, he figured it was time to develop a fix.

At the time, digital photography was getting incredibly cheap, yet the majority of video surveillance systems at security-dependent locations such as airports, casinos, banks and nuclear power plants were still severely dated. And that was a problem. International airports, in particular, couldn't ignore the threat of terrorism.

Despite the immediate need, Fernandes spent nearly three years working on prototypes in Vancouver. He figured that the people who wanted high-definition surveillance required it because the stakes were high, so he refused to sell them anything that wasn't top-notch. Meanwhile, much of the market stuck with dated cameras. Even today, when television broadcasts of golf tournaments can pinpoint individual blades of grass, the majority of video surveillance systems installed globally still use analog technology, according to ABI Research.

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The power of Fernandes's cameras, now sold through his company Avigilon Corp., can be seen inside the Rogers Centre, home of the Toronto Blue Jays. Just 19 of Avigilon's high-definition cameras are needed to monitor the baseball stadium's 46,000 seats in mind-blowing quality. But this is only half the story: Crystal-clear images are extremely pricey to transmit because they require a lot of bandwidth, so Fernandes developed a system – High Definition Stream Management – that makes it easy and affordable to store and send the images.

As sales started to explode, Avigilon went public in November, 2011. In just over a year, the share price rose 156 per cent, and Deloitte recently named Avigilon the country's fastest-growing technology firm. Since the Vancouver-based start-up secured its first commercial sale in 2007, it has gone on to post $68-million in revenue during the first nine months of 2012, when it earned a $4.1-million profit. Avigilon is now a dominant global player in video surveillance, and over 90 per cent of its revenues come from outside Canada's borders. Clients include the University of Sydney, the Oklahoma County sheriff's office and San Diego metro transit.

Avigilon fills a big void in the Canadian economic landscape. The country has myriad private tech start-ups, but there is a serious dearth of high-tech corporations that can wean the economy off its reliance on manufacturing and resources. Tech companies make up a minuscule 1.3 per cent of the TSX. And "for every guy that designs a killer app, there's probably 10,000 that never see the light of day," says Fernandes. Even if they do, "where are they in five years?"

He acknowledges that he was lucky to have start-up capital, in part from selling QImaging for $22-million, plus millions more that he raised from angel investors. But he believes all start-ups should be careful when they lay their foundation. "Where most entrepreneurs fail is they have these grandiose plans, they go to the money trough, and then the VC starts dictating [terms]," he says. "Rather than go out and raise ten million bucks with a bunch of VCs and get a fancy office and fill it with fancy furniture…maybe start small. Find a first customer."

The three years that Fernandes spent perfecting a value-added product is what set Avigilon apart. But it also presented him with a dilemma: "If you want to be competitive and cutting edge, you have to extrapolate. You have to look forward in time to where technology will be," Fernandes says. When he started Avigilon, he had to predict the future of digital video. "If you design a product using current technology, by the time you develop it, perfect it and then market it…it's actually old technology."

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About the Author
Reporter and Streetwise columnist

Tim Kiladze is a business reporter with The Globe and Mail. Before crossing over to journalism, he worked in equity capital markets at National Bank Financial and in fixed-income sales and trading at RBC Dominion Securities. Tim graduated from Columbia University's Graduate School of Journalism and also earned a Bachelor in Commerce in finance from McGill University. More


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