Firm That Sells Home Security Started with Domain Name
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Firm that sells home security systems started with a domain name

July 26

2010

More than a decade ago, MicroStrategy acquired the domain name www.alarm.com because it saw potential in such a short, pithy piece of Internet real estate. But the software maker, based in Tysons Corner, did not know what it wanted to do with the name.

So the company turned to Alison Slavin.

At the time, Slavin was brand new to MicroStrategy, armed with a philosophy degree and the title of general associate.

"This was my first job out of college, and I didn't have a technical background," she recalled, adding that the company felt it necessary to put her through six weeks of software boot camp.

They asked her to write a plan to build a security system company that would make it possible for customers to monitor their property via a cellphone or other mobile device, this long before smartphones really took off.

Building a business from scratch sounded like fun to Slavin, so she researched the security industry, attended conferences and found little competition to the idea.

"When you think about the standard alarm system -- when you open a door the alarm goes off, that's a very insurance-based model selling peace of mind," said Slavin, 31. "We saw an opportunity to offer people the ability to monitor and control a security system through a BlackBerry, for example."

Alarm.com is now is an established company with 400,000 customers. The privately held company declined to provide financial results but said it has been profitable for years.

In February 2009, MicroStrategy sold its entire investment in the Vienna-based firm to ABS Capital Partners of Baltimore for $27.7 million. Since then, the company has been working to expand its offerings. It just moved into the energy management market, offering customers a way to remotely control and monitor their thermostats and lights in a home or business.

A user can log on to the Web and change the thermostat from work or while on vacation. Slavin said some people use their iPhones to change the temperature or turn their lights on or off while they are upstairs getting ready for bed.

"We saw an opportunity for a tech firm to build something better than the gigantic firms that already owned the home security space," she said. "The manufacturers and providers weren't bringing innovative products to market, and their technology hadn't changed significantly as the world was changing significantly."

The company does not sell directly to consumers but works with about 1,000 security distributors of all sizes throughout the United States and Canada. The distributors, who typically bundle Alarm.com's service with traditional alarm systems, pay the company a monthly fee for each customer based on the level of service they buy.

Its security service allows a consumer to remotely watch doors and windows via the Web or mobile browser on a smartphone, record any motion, notify customers of power failures and keep a log of events.

"Some people use it for keeping an eye on kids like latchkey kids or teenagers where you might be concerned about a different kind of activity," she said. "Some people use it to monitor pets or see if a pet sitter arrived."

The company employs 60 people and its growth has taken off in the past couple of years with the overall expansion of the wireless phone market.

Alarm.com recently had a spike in business thanks to an iPhone app it created. "We created it for our existing customers to control their systems remotely . . . but overnight it became a huge consumer lead source for us, and we farmed those leads out to dealers throughout the United States," Slavin said.

Slavin, who is the company co-founder and officially its vice president of product management, noted that Alarm.com was insulated from the dot-com storm of early 2000 when so many online firms went belly-up. The firm didn't have any customers for three years after its inception as it continued to research and ready its product.

She said Alarm.com has had success emulating MicroStrategy's hiring style: "Look for bright people from good colleges, and even if they don't have relevant experience, as long as they have a good attitude and are hardworking, they can develop into strong leaders and managers. It's all about the raw materials."

Slavin said her particular story shows that opportunity can present itself unexpectedly. Though she's not sure a new business should start with a domain name.

"I wouldn't recommend just investing money in a business based on the domain name alone, but any sort of creative spark can start a plan," she said. "Just keep an open mind throughout the entire process and try to be as nimble as possible to capitalize on some trends."