As an Industry, We Need a New Shared Reality
Some overstate it.
Others understate it.
Somewhere between that is its reality. What I do know is, it is much larger than we think, and the majority of industry underestimates it.
It? It is what we believe the addressable market and opportunity size is, who the customer and the customer customers are, and what "we" are collectively looking to achieve as an industry.
While new entrants to access control garner large valuations and mainstream media speaks to the massive market opportunities available that include access control, our industry continues to stick with incremental growth numbers (congrats on your 8% growth!) and conservative siloed addressable market reports (access control is larger than whatever number you are using).
We think too small (because the ruler we use measures high security only), and we rely too much on the rearview mirror. We are getting in our way.
I held a YouTube Live Ask Me Anything (AMA) last week. One attendee asked the following questions:
What does 'safety' really mean? How can we, the individuals who dream and build and innovate products and solutions and software systems, help create a more inclusive world - where spaces aren't just secured, but people are genuinely safe? How can we use our platform to empower individuals, empathize better, and contribute to a world that looks much different than our own now?
As I stated in the introduction note, this question, coupled with being called a contrarian, two conversations I had with CEOs around our market opportunity, and the response to last week's newsletter, I believe, we, as an industry, need a new shared reality. And this shared reality needs to be bigger.
I believe our industry has forever focused on only 1-10% of the "security" market, gives lip service to the rest of the market (for instance "SMB"), and has lacked the imagination to dream bigger beyond safety. Then we spend the time coming up with reasons why it can not be or how the bigger dream is "crazy."
Have you ever said to yourself or your peers the following question?
How did [insert Latch, Verkada, Smartrent, Openpath, or Proxy] get that valuation?
I know many of you have. That is the point. If you are asking that question, you are too focused on the access control market as it has historically been defined and are thinking, in my opinion, with fear or short-sightedness.
It is much more prominent, and they have unlocked a story that shows a zoomed out vision of what the market can be. The key is "can." I am not saying they will be the ones to realize it. What I am saying is, they are the ones telling the best story about what it can be. So can you. Challenge your team. Challenge yourself.
As the industry goes mainstream, I think the following way we look at our industry needs to evolve:
- New faces, ideas, and fresh perspectives need to be mix with the legacy and tenure of your team. I am as impressed with 30-year veterans as I am with 30-day fresh talent.
- Access control as a feature is a more significant value proposition than access control as a product. As it becomes a feature, there is the new value being unlocked, and because it is new, you are not going to find that business model looking at your old Excel spreadsheets. For instance, delivery. Our industry, except for Chamberlain and a few startups in the consumer space, missed (and continues to miss) this opportunity. The value opportunity turned into a value arbitrage. It is happening right now in the commercial market and it has already happened in multifamily. What other features does access control unlock in the future that you have a chance to participate in, but unless you start looking forward or broader, you will miss?
- Access control has a new customer - the end user. We have historically given that up to HID through their readers and cards. Most access control companies know zero about what that customer needs, the value you create for them, and the opportunity to capitalize on the value creation. For example, most access control companies are using the old business models of plastic cards for identity services. Not only a missed opportunity but intellectually lazy.
- Access control data is more than log files and has a lot more value. In some markets and use cases, we may have a "razor and razor blades" opportunity where the hardware of access control is the gateway to where the real value is, the data. Very few incumbents capitalize on this massive market opportunity, and many new entrants are seizing the opportunity.
- How we define our access control products needs to expand. I am specifically speaking to when it is part of the ecosystem versus a seed to flower product offerings. Your services are a product as much as your hardware. There are new opportunities and new value created. Are you participating or giving it away?
- We need new channels and new programs for our products to get to the new customers. Our traditional channel may or may not be the right channel. What I am 100% sure of is that we need to reconsider how and who gets the products and services to those new customers along with the older ones.
- We need a renewed focus on products and solutions for the small to medium-sized market. It will not be addressed by going top-down. Meaning, the answers the majority of our industry has built for the high-security use cases will not work for the large addressable market of small to medium-sized businesses. You know too much about the high-security market and care way too much about it. Do yourself a favor and either bring in new people that can look at this with fresh eyes or create the space for your mind to explore.
I do not think this new shared reality is going to be won with a technical magic button. I think it's going to be people coming together and creating a sense of community around a shared vision. I think it starts by sparking a conversation broadly. This also does not mean the opportunity for differentiation or innovation is gone. It just means we act and talk like a community on a macro level. We see the collective opportunity as being much more significant than what we traditionally have viewed it as. We align on shared interests and answer the hard questions posed to me above during the AMA.
So... what does safety really mean?