While visiting a colleague’s security monitoring facility in Texas back in 2002, Mike May watched via live remote monitor as an enraged customer berated a diminutive employee behind a convenience store cash register. Through an on-site speaker, May’s colleague spoke directly to the ranting customer, convincing him to leave.
It was May’s “a-ha moment.”
“I said, ‘This is it! This is where security really needs to be,’” May remembers. “This is the culmination of services and systems coming together.”
May bought the company.
That led to May establishing what is now Iverify.us Inc., a Charlotte-based security services company that applies breakthrough technologies that embed remote video and audio surveillance equipment in every corner of their clients’ businesses nationwide. From its state-of-the-art monitoring facilities off Nations Ford Road, highly-trained protection specialists issue voice commands at the first sign of internal or external threat. In the event of an emergency, Iverify responds instantaneously, dispatching appropriate local response to their clients’ sites.
The result: Iverify deters robbery, shoplifting and internal theft. The company’s innovative security solutions result in an over 70 percent reduction in robberies, 60 percent-plus reduction in guard costs, and virtually zero false alarm fines. It’s results like these that won Iverify a listing on Inc. magazine’s 500 fastest growing private companies.
Kenny Kahn, Iverify’s chief strategic officer, characterizes the company’s offerings as shrink, robbery and burglary reduction, guard supplementation and business perimeter monitoring.
On-site signage clearly seen at every Iverify-protected location warns that the premises are being monitored live with audio and video. Those intent on committing crime can readily see cameras and sometimes even monitors, both outside and inside. Suspicious activity is addressed immediately through on-site speakers by Iverify personnel who monitor the live feed around the clock.
“We make you aware that we’re watching you,” says Kahn. “We’re preventing you from doing something. So it’s not necessarily about catching someone, although that happens.”
Not So Secure Beginnings
May grew up as a third-generation law enforcement professional in Shrewsbury, Mass. He was drawn to surveillance after nearly 10 years as a policeman in his hometown, but abandoned plans to join the FBI to help his late father operate his security business.
After his father’s death, May built his own company, May Systems, but eight years later his lender, a Swiss company, shut down its U.S. operations and part of May’s business was sold and part was liquidated. He woke up one day and his company was gone, he was separated from his then wife, and he was living in an apartment over a barn.
Instinctively, May began the process of rebuilding.
He approached a former client about funding a new company and SecurityEast was born with the stipulation that the business would eventually be sold to provide a return to the investor. Five years later, May sold to First Security of Boston, a high-quality security guard provider for New England technology companies.
While at First Security, May worked with industry luminaries such as Bob Johnson, CEO of First Security and a founder of ISMA, Ken Jenkins, former regional president of Pinkerton, and Marty Guay, current president of Niscayah, one of the largest security integrators in the country.
May was recruited from First Security by industry icon ADT, which was quickly bought by Tyco International. At Tyco, he operated a business unit that managed 80,000 customers, over 500 employees and covered three states. May also gained considerable insight into the mindset of the large corporate buyer through his involvement in the acquisitions of Wells Fargo, Alarmguard and Holmes Protective. Luckily, he got out before the Dennis Kozlowski scandal.
For the next year, May worked with a brother in loss prevention and then bought the Houston monitoring business that provided his “a-ha” experience.
May visited Charlotte in 2004 at the invitation of MCG Capital Corporation of Arlington, Va., owners of Interactive Business Systems (IBS). MCG knew May from the Houston surveillance firm and another he was operating in Massachusetts. It sought his guidance in fixing the Charlotte IBS company that had fallen on hard times.
May saw that IBS was doomed. He told the owners as much, but offered to buy it if he could consolidate his two companies into the Charlotte location. The purchase was finalized in 2005 and May named the new endeavor Iverify.
Seeking revenue stream assistance, May found highly experienced equity investor Richard Driehaus of Chicago, who helped with initial liquidity and continues to hold an interest in the company.
It wasn’t long before May came across Charlottean Bill Boyd, the former chief executive of Fort Mill-based Muzak. He is now chairman of Iverify’s board. Boyd had worked with Kahn, whose Muzak strategic and branding efforts he had admired, and was responsible for bringing Kahn into the fold.
“Bill very quickly became my mentor,” says May. “We just clicked. He’s a guy who has vision and loves the concept of the business.”
Boyd, with no monetary investment in Iverify, likes the mentor thought. “We trust each other,” says Boyd. “I understand the type of issues he’s facing. I’ve been through most of them.”
A Capable Guardian
May calls Iverify a security/guard system hybrid. It’s built on a solid foundation. “Our principles are prevention, awareness and deterrence,” he says simply.
“The concept is, if there is a lack of a capable guardian, you will be inclined to commit a crime,” May explains.
“How do I create a capable guardian remotely?” he asks rhetorically. “First there’s simple signage to notify of surveillance.” He clicks off more. “You always put cameras outside the store. Then there are speakers. As you walk up to the store, you may hear an announcement that starts, ‘Good afternoon…Any criminal activity will result in police dispatch.’ You walk in and there’s your image on a flat screen TV. And there are more announcements inside. There are 16 cameras inside a 7,000-square-foot store.”
The protection specialists monitoring the cameras at Iverify in Charlotte have the capability to alert authorities at a moment’s notice. And they can tell police if someone is armed and give a detailed description. And they have, on more than one occasion, assisted in an arrest.
The concept changes if somebody pulls off a robbery.
“If we don’t get you,” May says, “then it becomes intervention, documentation and evidentiary. We’re going for apprehension.”
Iverify monitors a location 24 hours, inside and out. Parking lot cameras watch the front door, the back door and the perimeter.
May targets retail companies and, early on, struck up a relationship with Matthews-based Family Dollar Stores. Of its 6,700 stores, the chain experienced a recurring robbery issue in a small percentage. Once the Iverify monitors were in place in those high-risk stores, the robbery issues were resolved.
Between 2006 and 2009, Iverify’s service for Family Dollar grew from one store to 307. The chain has eliminated several million dollars a year in guard expense and the Iverify service costs a fraction of that.
Store workers like it, too. For example, a concerned cashier can pick up a phone that is immediately connected with Iverify and Iverify will enable all cameras in the store to get a full view of the situation. An Iverify specialist will broadcast over store speakers that there is potential trouble and that the store is being monitored and police are on standby.
“It was unbelievable to see the reaction from the employees—for that person earning $8 an hour, they don’t have to wait until there is a gun in their face,” May says with furrowed brow.
The savings for Family Dollar mount when you add a reduction in shrink—losses from both internal and external theft.
“We use intelligent video,” May explains. “You can focus on a high-shrink item. When you pick that item up, it can trigger someone from Iverify to say something, or it can trigger a message that gets an associate to come over and assist you.”
Family Dollar executives like what they’ve seen. “They said, ‘We’re getting a byproduct here we weren’t even looking for,’” May says. He estimates savings of $50,000 annually per store on guard costs alone for stores like Family Dollar.
Citi Trends, a value-priced urban-inspired apparel chain, also tried out Iverify. Iverify helped create a significant reduction in shrink and Citi Trends has become an important client to Iverify.
Securing Its Future
All told, in 2009 Iverify signed agreements with five national retail companies. Recurring monthly revenue for Iverify jumped almost 40 percent in 2009 and May pegs revenues for the year at $13.2 million. The company has experienced 50 percent growth in the last six months of 2009. Now at five years, the company has reached profitability.
A down economy doesn’t affect Iverify, because the company typically saves its clients so much money. “For a $10,000 to $15,000 a year expenditure, it’s the same as putting in a guard at $50,000 or $60,000,” May points out.
The company added 60 employees last year, bringing the total to 200. Most monitor video screens and interact with store employees and customers. They know how to contact law enforcement in a snap. And they work in shifts. The protection center, called The “I”, never closes.
For the former law enforcement and loss prevention types he hires, May offers attractive benefits, heavy on health care payments. He also allows four weeks of vacation. There’s a robust training program that features sessions sanctioned by the Retail Loss Prevention Association of the Carolinas.
But Angie Hardison, executive vice president of operations and human resources, points to another reason people sign on with Iverify. “Mike is a natural leader,” Hardison says, “and an expert in this industry. When people hear him speak, they follow him.”
May recognizes that dynamic. After studying law enforcement at Northeastern University, he was president of his class at the Massachusetts State Police Academy. In his twenties, he rose to shift sergeant at the Shrewsbury Police Department and gained the respect of the “grizzled veterans” he supervised.
He feels his leadership source is sincerity. “If there’s a belief in what you do, if you’ve committed your life to it, and you’re passionate about it, I think people get behind you,” May says.
Boyd offers a slightly different take. “I think he’s a really good business guy and he has a good head on his shoulders,” he says. “He cares about the culture of his business.”
Indeed, Kahn sees commitment among the troops.
“Iverify employees are very passionate people,” Kahn says, noting the law enforcement background of many. “They live for the protection of other people. They bring a great amount of experience. They are very knowledgeable about what to do in a moment of crisis.”
For the next two years, May wants to recruit new retail clients, and then branch into other sectors. Already, Iverify is serving some banks and Duke Energy uses their services, particularly at construction sites, to guard against thefts of copper.
May’s sure of continuing organic growth, but will also be acquisitive. Two years ago, he bought a competitor, Smart Interactive Systems, for $8.5 million, which boosted revenue in the retail and banking sectors. That led the firm to a need for more space, so May bought the 45,000-square-foot building on 15 acres at Regency Executive Park. That building had once housed technology titan Osprey Systems, so it benefits from big connections to TimeWarner and AT&T bandwidth. Although May initially expected to lease out unused space, this year Iverify will occupy the entire building.
At 55, May’s hair is jet black, belying the grind of his weekly commute to a south Charlotte condo from the 57-acre farm he and wife Tricia own in central Massachusetts. They’ve tried to move from their Boylston home to Charlotte, but with five children—two in college—it’s difficult. So most weekends, May is in Massachusetts with family.
Yet he and Hardison are on call 24 hours a day. For a serious incident, one or both gets notified. That happens maybe twice a week, but escalates dramatically during the holidays.
Recently, someone walked out of an Iverify-protected store wearing an unpaid-for Rolex with a price tag of $35,000. Because the video images are razor sharp and in color, authorities had an excellent chance to catch the culprit.
As technology continues to improve, it bodes well for Iverify’s future.
With its multi-acre campus, Iverify could expand and even build new structures. Or it could bring in another company interested in a secure site.
Meanwhile, May has started a channel partner program in which a few members of the Honeywell Dealer Network offer the Iverify services.
An alternative that May vows he won’t consider for Iverify is franchising. “I would lose control of quality,” he explains simply.
“I want to make sure we always execute on our promise,” May says. “Reputation is so important. When we do make a mistake, we have to step up. We will write a check for the loss and say we’re sorry.
“One of the problems in the security industry is the terrible reputation for lack of professionalism and for self-serving behavior,” he adds. “I want stuff to work, and it’s got to work right. I just want to make sure we deliver.”