Entrepreneur Joel Matlin founded AlarmForce in Toronto, Canada in 1988. He recognized that the home security market in Canada had great potential, but there was no one company or product offering what the consumer wanted.
The real breakthrough for the company came three years later, in 1991, when they introduced their two-way voice communications system. This allowed a very simple but effective way for a homeowner to communicate directly with the monitoring stations in the event they heard an unexplained noise or someone entered their home.
Coupling the two-way voice with a simple proximity sensor permitted a very straightforward and uncomplicated way for Canadians to have affordable home security monitored by a professional guard force.
The company philosophy of voice intimidation of any would-be thieves, along with the protection afforded by 24/7 monitoring, proved immensely popular with the average homeowner in Canada. Matlin himself starred in many of the ads. The company inundated the airwaves promoting their relatively inexpensive product. Matlin’s low-key approach and his friendly voice and face quickly became recognizable throughout Canada.
The AlarmForce business model does not allow for outsourcing of any parts of the enterprise. The company manufactures their proprietary sensors, detectors, and two-way voice panels. They directly employee technicians and own and operate the monitoring centers. Their cost is relatively cheap for monitoring, at $25/month. Since they do not sell their equipment through any retailers, they retain ownership, and hence all profits go directly to the company.
Going Public: New Products and Markets
In less than ten years, AlarmForce’s simple solution became a hit with the Canadian consumer. As the largest home security provider in Canada, Matlin decided to take his company public on the Toronto Stock Exchange in 1997.
They continued to innovate, and in 2000 launched a new product called AlarmPlus. At the time, most companies used landlines to send alarm signals. (AlarmForce’s primary package offering still uses land lines today.) The AlarmPlus could send a wireless signal if a phone line were cut, providing a simple backup for their system.
In 2004, the company decided to enter the U.S. market. They started operations in North Carolina, and expanded to two other states, Georgia, and Ohio, during the next three years. Today, they operate in five states and have twelve monitoring centers outside Canada.
The company began a parallel product line, AlarmCare, in 2008. This product targeted the growing elderly and homebound personal care market. For a modest monthly fee, users wore a panic alarm pendant on his or her neck. Pressing the button, the router in their home would connect them through two-way voice to the monitoring center. Medical help could be dispatched, and/or family members notified.
AlarmForce added a camera to their modest product lineup in 2011, the VideoRelay. Capitalizing on the success of their two-way voice security system, the VideoRelay incorporated a speaker and mic as well as the camera. Using a motion detector, any time a visitor approached the door where it was installed, the software notified the user by email and allowed him or her to communicate with and observe who was present.
The company then launched CellWave in 2013, followed the next year by AlarmForce Connect. CellWave allowed AlarmForce customers for the first time to use cellular rather than hard line phone connections to transmit alarms to the monitoring centers. AlarmForce Connect let them control the basic functions of the system through a smartphone app.
Corporate revenue, which for the first five years after going public remained stagnant, rose to $49 million annually with a price per share up from $1 in 2003 to $13 ten years later.
Despite the success of the company under Joel Matlin, the Board of Directors unexpectedly fired him in August 2013. The reasons were unclear, but unsubstantiated rumors suggest that the Board wanted new leadership in the hope of growing the company more quickly and finding a buyer.
Matlin has a pending $11 million lawsuit against the company based on his termination.
Matlin had a one-year non-compete clause in his contract with AlarmForce. However, now that the year is up, in June 2015 he and his son started a company in the United States called Think Protect.
The Think Protect concept goes in a different direction that Matlin’s AlarmForce corporate philosophy. Matlin and his old company built a reputation on simple and no-frills home security. Think Protect appears to bring that philosophy into the high-tech world of today by emphasizing high-tech sensors, smart home technology, and smartphone app control. Though proprietary equipment, instead of leasing the products, Think Protect sells them directly to their customers, who retain ownership even after the contract expires. There are no technicians either. The user installs the equipment.
Matlin has maintained some of the AlarmForce features such as price. The website offers central monitoring for one of the lowest prices in the home security industry, $12.99 per month. Interestingly, they also advertise that all contracts are month to month with no termination fees. The company also provides medical alert devices as a separate offering, with the addition of email as well as voice notification in the event the panic button is pushed.
The home security business has a lot of players. It remains an open question as to whether or not AlarmForce has made the right strategic choice by removing Joel Matlin.
Joel appears to have not only landed on his feet, but has also created an interesting competitor to his old company. AlarmForce has not penetrated the U.S. market very deeply, though revenues from American operations have been profitable. His new company, with its emphasis on the cutting edge technology, may do better. Most of the successful home security companies in the U.S. follow a high-tech business model like Think Protect.