The BluB0x saga. As an industry, we can do better.
It’s rare you find a living example of a point you are trying to make about an industry. Fortunately for me, we have BluB0X. My desire here is to not blow them up. I applaud their desire to speak up and take a stance. But it is a relevant example of what we as an access control industry are missing when it comes to the next evolution of our industry for which we are currently in. Specifically, how to break free from the cottage industry and into the mainstream growth we all want and desire.
Some background first. Recently BlueB0X has expressed themselves three ways externally - twice on LinkedIn and once on IPVM.com. On LinkedIn they posted a message about their IP that, in summary, boasts that they have the “best product. Get excited but also beware if you violate it.” They followed that up with another message that took an image about Elan Musk and Tesla noting that “the industry is full dinosaurs.” From there, IPVM grabbed it and asked its community what they thought of it, which in turn erupted into an all out of offensive and defensive tit for tat (me included). Some will say that all PR is good PR but you could argue it lacks effectiveness and lands flat. If anything, it is not going to help them or the industry at all. So with that background, what does this BluB0x saga highlight about our industry and what can we do to bring exponential growth from the mainstream? Here are my thoughts.
Back when I worked for Lutron, a common presentation we would give was once we called “Why Dim? The circle and the dot.” The electrical industry has a ton of parallels to the security and access control industry so its relevant. Here is how the circle and dot presentation would go:
We start with a drawing a dot. That dot represents the current market. Most cottage industries, especially old ones with a bunch of barriers like channels to manage, weird buying habits, legacy technology and a large install base, have a bunch of players fighting over that dot (or pie of opportunity). Usually that dot is owned by a couple dominant players (10-15% of the market that do business in the high millions) and then a bunch of companies that make up the rest (each having 1-5% of the market doing business in the low millions). Super fragmented. The industry grows at a typical 8-10% year over year. Some companies within the industry grow more. They eat a little more of the pie, some shrink a little, most just grow with the pie or are flat. Some are small or new and they see massive growth but because they are going from $0, their relative growth as it compares to the rest of the industry (the dot), is in small %. And you rinse repeat that year over year. Then the big companies need more growth so they do some inorganic growth and buy some of the small players. You see this as a $25M - $50M payout. Good money for those involved. They get some golden handcuffs. Wait it out. Then return to try and do it all over again. Everyone once in awhile, after year over year of 8% growth, you see one pop for $100M+ but those are rarer today. Its also sometimes based on their install base (since we all know that our industry bases a lot of its growth on adding parts to existing systems that either have failed or need one or two pieces added year over year). Marketing here is somewhat traditional, if at all (its rarely creative). Looks like trade shows, conferences, industry publications that reprint press releases, and LinkedIn posts. We also do market roadshows where we show off our newest hinged panels and talk about the cloud vs client server. We grow…slowly. The public companies get rewarded for the predictive slow plotting growth. Some of us, especially the biggest companies are thrilled with this growth because they have volume and typically their margins on products built 10, 20, 30 years ago are cash cows and they have a strangle hold on the mind share of the channel who holds anything new as insecure and threatening to the sanctity of safety. Better safe than sorry the old adage goes. “If it’s convenient, it must not be safe.” Or “My customer just doesn’t need mobile. Why when their cards work just fine?” Then some of the smaller companies, who in a lot of respects aren’t necessarily wrong, waste their time and energy or don’t invest in skill sets or tools in areas like marketing. They get frustrated and start barking at the dot. They start telling the industry how their product is better and you should switch to theirs because their “blue blinky light is so much more blue.” You also hear how the channel is holding their company back from expanding beyond the 8%. And some start to get even more frustrated. So they yell louder and start to flex in weird ways like calling the industry dinosaurs or boasting/threatening how their IP is soooo good. Rinse repeat. Rinse repeat. Not sexy, but it works. At least it does within the dot. And we continue to grow at 8%. Some again, fatter than that, others less. But again, not sexy, but it works. For some time…
Then you draw a large circle around the dot. This represents the white space or what some like to call green pastures or blue ocean of opportunity. This is the land of new technologies, new business models, new channels, new customer segments. This is what you see investor decks call TAM (total addressable market). Here you have 20%, maybe even 50% growth. This is what attracts venture capital money into the cottage industry as we know it. This is what attracts companies like Amazon to introduce products at no cost so unmanned deliveries can happen. This is how valuations for some new entrants are in the $1B. This is where the general public starts to see and understand the value proposition that dot, our industry, can start to add value too. They start asking questions that are about conveniences, features that used to be something our industry only provided but now they are asking someone else like, they start seeing ads about people and human capital productivity - but it smells like access control - and on and on. Gobs and gobs of money start to get spent (its expensive). Great storytellers start to appear. Value starts to shift. Some in the dot get squeezed really hard. Others figure out how to catch that lighting in a bottle. They figure out how to service their core base of customers (the dot) while simultaneously expanding into the white space. New entrants from the white space start to make some headway into the dot. And on and on…. We wake up one morning and the game has changed.
There are many examples and Harvard Business Reviews to read that show that what this is, is called disruption. We can continue to moan and groan within the dot but I challenge our industry to pop their head up and look around. There is an enormous opportunity if you figure out how to take care of your base (not threaten them) and play the new game the circle provides you.
Where should we start?
Start with better storytelling. It is not easy. Feels uncomfortable. I get it. So try this…work with people that can help you get going.