Burglars on camera and the recession in its sights

FUTURE PROOFING: IN THE business of detecting and averting rogue events, it's no surprise that security company Netwatch also had the recession in its crosshairs.

Co-founded in 2003 by David Walsh and Niall Kelly after their friend was attacked by intruders when responding to an alarm, the pair set about developing a more high-tech way to beat burglars.

By 2007, Netwatch’s real time remote security monitoring system was using video and satellite technology to intercept thousands of crimes in progress.

Within three seconds of detecting suspicious behaviour at a client site, video footage beamed back to the company’s Carlow communications hub triggers a live and personalised audio warning telling the intruder – “Yes, you in the black balaclava” – to get lost.

But then the recession hit.

“We could see it was coming down the track,” says Walsh.

“There was an element of cancelling contracts and driving down prices. Margins were getting tighter and tighter. Clients were saying, ‘we’ll take our chances, we can’t afford it’, whereas six months earlier there was no problem.”

While Walsh was used to buyers haggling on price, he felt this was different. “We knew there was something happening outside the control of contract managers.”

In January 2008, Walsh brought the company’s 40 staff to a Carlow hotel to spell out the crisis. But he also had a plan – heavy investment in R&D, a shift in focus to international markets and an investment of €5 million in a monitoring hub in Carlow.

“To be fair to the staff, they understood the risks,” says Walsh of his proposal to sink further funds into the business at a time of worsening economic growth. “We were betting the company, but they were betting their careers, but we decided we’d get together.”

Betting that competitors would batten down the hatches and stop investing in R&D, Netwatch did the opposite. “It was a huge risk but we also felt there was a huge opportunity,” says Walsh.

But with Irish banks tightening the screws, where did they get the funds? “From day one, we ran the company efficiently and we have a philosophy that the best way to finance any organisation is through gross margin not bank loans,” says Walsh.

“For the first five years up to 2008, we had a very strong balance sheet and we decided to leverage that for the expansion.”

But having a good relationship with the bank helped too, he says. “I’d say to anyone, keep your bank informed of the good stuff and the bad stuff – then when you do need something they trust you.”

Netwatch refocused its sales drive also, moving away from monitoring construction sites towards permanent factories and warehouses. “We mitigated our losses by becoming independent of any one particular industry,” he says.

In April 2010, the company officially opened its corporate headquarters and communications hub in Carlow, creating 50 jobs.

Assisted by Enterprise Ireland, a dedicated €1 million RD centre developing intelligent monitoring software, transmission equipment and site hardware created a further eight jobs.

Now with clients in the UK, South Africa and the US, the company has more than doubled employee and customer numbers since the recession first bit.

Burglars at 2,000 sites from Cape Town to Booterstown to Boston get a live and personalised audio warning, in a Carlow accent of course, to get lost.

The company says it has foiled more than 25,000 criminal incidents since its inception. It has also just won the contract to monitor the telecoms masts at the London Olympics.

Speaking from a sales trip to Boston, Walsh is ebullient. “Every new contract we get in the States will mean new jobs for Ireland,” he says. And his advice to others weathering the economic storm?

“No matter what industry you are in, break away from the crowd,” he says. “And it’s all about sales. Sales don’t walk in the door, you have to go out and ask for them. The only place where success comes before work is in the dictionary.”