Russ: Welcome back to the BusinessMakers show brought to you by Comcast Business, built for business. My guest today, Russell Vail, Cofounder, President and CEO of IpDatatel. Russell welcome to the BusinessMakers Show.

Russell: Thank you very much Russ.

Russ: You bet.

Russell: ¬Pleasure.

Russ: Tell us about IpDatatel.

Russell: Well IpDatatel is a design dream and manufacturing company who also has a service for monitoring and connecting devices for the internet of things.

Russ: Okay. For what purpose, what applications?

Russell: Most of our applications in the security industry. So we can communicate with your alarm system remotely. So we can take a very dumb alarm system and now make it smarter. We also do connections for thermostats, lighting, and locks. Also IP cameras.

Russ: Okay. So are your customers mainly residential customers, are they commercial customers or are you somewhere else in the distribution chain?

Russell: ¬Well we sell to distributors and they sell to our dealers and we have thousands of dealers throughout the North America who install our products and they evangelize our products to other dealers and that’s how we grow.

Russ: Okay. And so at the end the retailers who are they selling to?

Russell: They’re selling to businesses, residential, industry, a little bit of everybody.

Russ: Okay. So do you put yourself in the category of being actually a manufacturer?

Russell: I put us in a category of more of a connected company. We connect to things, to the internet of things and we connect people to those things. So I think of us more as a connection company because we manufacture products but we also connect other people products. So at the end of the day we do have a slice of business that’s a manufacture, that’s we build this product in the US but for the most part we’re a connections company. We connect people and things together.

Russ: Okay. So you got on the BusinessMakers radar because you recently won the Fast Tech 50 contest at the Houston Business Journal which is awarded to people that are growing real fast. So that would mean business is good eh.

Russell: Business has been very good. We’ve been doubling in size about every nine to ten months for the last five years.

Russ: ¬[Laughs] Okay. That can be a challenge just as much as it is a benefit.

Russell: Yeah. As chief cat herder, I can definitely tell you it has been definitely a challenge to make that happen. When things happen this fast a normal year is more like a six months or a quarter to us. So when we look at this and we’re talking to people. We really have to move a lot faster. So decisions that get made are now split second decisions.

Russ: Okay. And how many employees do you have today?

Russell: We have 38 employees.

Russ: Okay. And is that the largest population you’ve had here at IpDatatel?

Russell: Yes it is and we’ll probably grow to about 50 over this next 12 months.

Russ: Okay. Real interesting. So what do you attribute the growth to beside superior leadership?

Russell: Well I don’t know if I would go that far. Sometimes there’s a little luck involved with that.

Russ: Absolutely.

Russell: ¬The growth is you’ve got to build a product that people need. We solve an excruciating painful problem for the security industry, that’s our primary target. The painful problem that the security industry has is that phone lines are going to go away. So they need to have alternative communications. Also there’s these old alarm systems that are connected and they’re not very smart. So what we do is we allow connections into these dumb alarm systems and now make them smarter.

Russ: Okay. So I have one of those dumb systems and probably over 20 years but about 10 years ago they came out and connected a radio signal to it. A radio signal though I think is just kind of like a backup in case the phone is down. So it is mainly still a phone but I think you would still put that in the old technology back category, right?

Russell: I would definitely put that in the old technology category. Most likely it’s a 2G type of radio maybe on AT&T’s network who they’re going to sunset the upper type of their technology. So you would need a company like ours to manufacture our product and your dealer would install that product.

Russ: Okay. So yours is primarily internet, Wi-Fi based, is that right?

Russell: We do internet and cellular. So we do a combo, so both. We believe in belt and suspenders for that. We also make that system now interactive so now you can arm or disarm that system remotely. That’s part of this connection piece. It’s not just a one way connection anymore.

Russ: Okay. All right. So help me understand this because I’ve paid attention to this a little bit in my home. I do have an old system, meaning it’s got old connectors and stuff and the house is wired. If I wanted to go with a dealer that handles your products, would I completely replace that, would I have to take it out, would I have to run wire in my house?

Russell: ¬Most likely you wouldn’t have to touch anything even inside the house.. No wiring changes other than just moving our device into your system. We communicate on the bus of the alarm communications for that control panel and that’s unique because we can service multiple manufacturers with one product.

Russ: Okay. So sounds pretty cool. You’re taking an old security system or old security system capability and really adding a much more reliable communication connection system and controlling even some things like you mentioned like door locks and stuff.

Russell: It’s a little bit more then that Russ. So what happened, say for example we make your house smarter in different ways. And how we would do this, I don’t know if you’ve heard of geofencing?

Russ: No I haven’t.

Russell: But geofencing is where you’re tracked either by your phone or your car and as you get closer to your home things start to happen naturally. So we’re making devices communicate with other devices in this internet of things and internet of things is a big buzz word. It means a lot. It could be what you wear, that’s a wearable type of technology, wear a connected technology. So geofencing, as you get closer to the home say your porch light would come on if it’s late at night. So it’s more of a if this then that, type of scenario.

Russ: Oh wow. Okay.

Russell: ¬If you turn your alarm system on “away” do you really need all your air conditioning or heating going full blast? Probably not. So you could have some setbacks within that. And you’re lighting could start to dim as you pull out of the driveway. So you’re house really becomes more smart. You’re building becomes smarter. So those are those are the things, the enabling of that connectivity. Connectivity is just the first part. You know we’re really blazing trails to make that a truly smarter home or smarter business.

Russ: Sounds real to me, cool. So I know you primarily do security but what other applications do you use in your business that connects things?

Russell: Well we connect thermostats, we connect locks, lighting, for a homeowner such as yourself. If you left your house you don’t know if you’ve locked the door. You have that opportunity to open up a application on either an android or a Apple device and be able to see if that door’s locked. I don’t know how many conversations we’ve had with my wife about, “Hey did you lock that door? We’re on our way to the airport. It’s going to be very bad if we haven’t.” So now you can. You can literally see if that door is locked or not locked.

Russ: No I have that kind of behavior problem too. I never know. I’ve even turned around and gone back a lot of times to do it.

Russell: Well we save that round-trip. So that’s a good deal.

Russ: Okay. So say I got real interested wanted to buy products you’ve already described you sell to distributors, distributors sell to retail. What kind of retailer would I go and find your products in?

Russell: You would find it in a local alarm dealer or regional alarm dealer. Most likely those guys would be the first point of contact where you find out about our particular products. We brand our dealers. It’s a little bit unique. We’re kind of a behind the scenes company. So a lot of times people would not hear about IpDatatel because it’s really about the dealer. The guys that’s servicing your particular account.

Russ: So when you sell your product through a dealer you put the dealers name on the product actually?

Russell: All the way down to the application. So when you open the application it will be XYZ dealer it won’t be IpDatatel.

Russ: Okay. Real interesting. What about do you go to any like any Radio Shack, Walmart, Target, would I find your product there?

Russell: ¬No you would only find it through a dealer network. A professional dealer network.

Russ: Okay. And at the end of the day there’s got to be other people that are sort of in the same space, right. You’re not the only one that does this?

Russell: There’s about five competitors that we deal with that sell the same similar product that we do but we’re unique in the fact that we do both internet and cellular and so now that drops our competition really down to one other.

Russ: Okay. And so that means that there’s a lot of people that just do internet there’s some people that do well not a lot of people. One or two that do just internet, one or two that just do cellular but only two of you that do both of them?

Russell: Yeah. And doing the cellular part is easier for a lot of folks to get that done the hard part is building your network and making that robust enough to be able to handle those signals.

Russ: Right. So when you’re using both you must have a primary and the system tries to communicate over one and if that fails it goes to the backup system?

Russell: ¬Correct.

Russ: Okay. So obviously growing in a happening space. What’s in line for the future, what do you see the company looking like in your ideal scenario say five years from now?

Russell: Oh five years from now, that’s a little ways out there you know. I think for what we’re looking at five years from now is probably being a $500 million company.

Russ: Wow. Wow. That would be big. You’re not close to $500 million today are you.

Russell: No we’re very, very far from it and I’m saying in value not necessarily in gross sales but we’re certainly heading in that direction.

Russ: Okay. Okay. Well I appreciate you sharing your story with me and I wish you good luck Russell.

Russell: ¬All right. Thank you Russ.

Russ: You bet. All right. And that wraps up my discussion with Russell Vail Cofounder and President and CEO of IpDatatel and this is the BusinessMakers show brought to you by Comcast Business built for business.