Monday 22 January 2018

Security men who not only monitor crime but stop it from happening

David and Niall set up Netwatch after a friend's bad experience and turned it into a global success

Sean Gallagher

Sean Gallagher

FROM its hi-tech hub just outside Carlow town, Netwatch monitors, via satellite, the homes and business premises of thousands of clients, located across four continents.

Company: Netwatch

Business: Remote security and video surveillance

Set up: 2003

Founders: David Walsh, CEO, and Niall Kelly, CTO

Annual Turnover: €12m of recurring revenue

Number of Employees: 150

Location: Headquartered in Carlow with offices in Birmingham in the UK, New York and Boston in the US, and Amman in Jordan

Using the most advanced camera technology, the company can identify when intruders are attempting to break into a premises and, using leading-edge two-way communication software, they can speak directly to these intruders, shouting specific warnings such as "You in the red jacket, you are being watched by security cameras, please leave this premises immediately".

Approximately 90 per cent of the company's customers are from the commercial sector and include factories, offices and warehouses, garages, golf courses, GAA and rugby clubs and a growing number of church buildings.

In recent years, they have increased their work with insolvency companies who are dealing with properties that are either vacant or closed up.

About 10 per cent of customers are high-end residential owners, which includes well-known figures from the worlds of business, music and sport as well as leading industrialists in places like Johannesburg in South Africa and wealthy oil barons in Dallas, Texas. They even look after a number of members of the British Royal Family.

David Walsh grew up in Kerry. He studied Agricultural Science in UCD before taking up a sales and business development role with Keenan's of Carlow, manufacturers of agricultural feeding systems.

It was here that he met his future business partner Niall Kelly. Also from Carlow, Niall studied Electronic Engineering at Carlow IT and worked for a period as general manager of a golf course construction company before joining the electronics department of Keenan's.

"The idea to start a business often comes from the personal experiences of its founders and that was definitely true in our case," explains David.

A friend of David's and Niall's was working in a local company and was the key holder in the event of the alarm going off. One night, he ventured to his place of work to turn off the alarm but was immediately set upon by intruders. Upset by what had happened, David and Niall began to look for solutions that might better safeguard staff as well as premises.

They initially thought of installing cameras on the site to enable key holders to verify, visually, in advance of going to the premises that no intruders were on site. During their research, the pair made contact with an Australian company who specialised in manufacturing video transmission equipment, predominantly for the military. It was here they first came up with the idea of combining two-way audio and video surveillance.

"It was a real breakthrough moment," explains David "Rather than arriving after the event, as many other security firms do, we could now create a new business where we could not only capture security breaches when they occurred, but we could actually prevent them from happening in the first place," he adds.

When the pair returned from Australia, excited with their new idea and armed with their new technology, both immediately handed in their notice to their employers and Netwatch was born.

There were the usual challenges, though.

"Raising finance is always an issue for start-ups," explains David. "Like many entrepreneurs starting out, we didn't have a lot of money ourselves so we re-mortgaged our homes in order to get the business off the ground."

The pair then visited their local bank to ask for a €50,000 overdraft, only to come away empty-handed and disheartened. The bank did not believe in either their business idea or their ability to turn it into a successful business.

Undeterred, the pair eventually secured the overdraft facility from a different bank but their experience served to teach them a valuable lesson: never be over-dependent on any particular bank. Today, they continue to maintain relationships with a number of banks.

David can remember the day -- February 8, 2003 -- when their first customer went live. "It was a factory and warehouse which had been broken into a few months earlier," recalls David. "And they are still a customer today," he adds proudly.

In the early days, the company bought a variety of hardware products off the shelf but, by 2007, David and Niall recognised the need to set up their own Research & Development facility. With support from Enterprise Ireland, they developed high-end video processing software that enabled them to detect the subtle differences between real breaches and false alarms as a result of weather, trees or animals.

"As a result, our team are now able to react more quickly because we are only dealing with real events," says David.

Most companies experience pivotal moments in their early years and Netwatch's pivotal moment came in 2008 when David and Niall decided to turn their business model completely on its head. Under their new model, they would install their surveillance equipment on a customer's premises free of charge and the customer would, instead, pay for the service on a daily or monthly basis.

The move proved an overwhelming success and, apart from an initial strain on the company's cash flow, it made it significantly easier to sign up customers because they were no longer presented with a hefty up-front bill for expensive equipment. In addition, it also made it more difficult for competitors to displace them.

Their decision was soon tested when they were presented with an opportunity to secure the contract to monitor thousands of traditional, non-camera-based alarms for customers of other firms. However, they took the courageous decision to turn down the opportunity.

"It wasn't that we didn't need the additional income at the time. We did," David admits. "But we had staked our claim firmly on our desire to be the number one company in the world in video surveillance and we knew that this opportunity, good and all as it was, would only lead us off path."

When the recession unexpectedly began to take hold in Ireland, David and Niall focused their energies only on the things they could control.

"We simply put our heads down," explains David. "And we deliberately didn't listen to all the negativity."

Instead, the company made a number of important strategic decisions including investing even further in their communications hub in order to increase their capacity, doubling their marketing spend at a time when many companies were cutting back on theirs, and focusing on developing an international customer base. At the same time, the pair began cultivating a company culture that would support the world-class customer service business they wished to become.

With a clear strategy of empowering employees, they invited staff to suggest behaviours that they felt would contribute to the company's long-term success. What emerged included always putting customers first and always working as a team. What staff agreed would not be acceptable included disrespecting another employee, customer or supplier and hiding if they made a mistake.

"This had a dramatic effect on how staff dealt with customers and with each other and its effect on our business was astonishing," says David.

Today, David sees himself as a guardian of that culture and takes time to explain this to each new employee that joins the company. "In our business, customers come because of our technology, but they stay because of our people," he insists. "Our vision is to double the company and achieve a turnover of €25m over the next three years."

As I contemplate the tremendous success of Netwatch, I realise that the difference between good companies and great companies often lies not in what they do but in why they do it.

David Walsh and Niall Kelly started their business because of the experience of a friend who had been set upon by intruders. They sought to find a solution that would protect both the premises and key holders. They quickly settled on a new business model that differentiated them from others in the market.

They invested heavily in technology, in R&D and in developing the capability of their staff as well as cultivating a company culture that would drive success. Having built a recurring revenue-based model at home, they launched their business internationally.

Today, from their Carlow base, these two inspiring entrepreneurs have become deserving leaders in a global market.

David's tips for aspiring business people

1 Learn from your setbacks

"You have to accept that you are going to experience knocks and setbacks. The secret is to learn from these setbacks and move on without allowing them to dilute your enthusiasm or ambition for the future."

2 Being focused is vital

"Some companies trip themselves up by trying to be everything to everybody. In my experience, the narrower the focus, the greater the opportunity to become an expert in your chosen market."3 Have confidence in yourself

"We all need to believe in what we are doing and in our own ability to achieve success. In particular, we need to have confidence that, as Irish businesses, we can play as well as anyone else on the global stage."


Do you, or someone you know, run a business worth talking about? We're interested in your work -- and we'd love to hear from you. You can contact Sean at telling him what you do



Irish Independent

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