Dallas-based Razberi makes video surveillance appliances for corporations, public infrastructure, and school systems that want to deploy a high quality networked security system on or near their various locations. I had the pleasure of speaking with CEO Tom Galvin about his transition from an engineer to a CEO, how his role has evolved as the company has grown, and what security issues CEOs need to be worried about (that they aren’t already).
I see you have a degree in electrical engineering from Iowa State. What prompted you to go back and get your MBA?
Tom: I was inspired by my father. I told him that I was going to enroll in grad school to get a master’s degree in engineering. He said, “That’s fine, but you should consider getting an MBA to round out your education. You can learn more about engineering in your job.” In hindsight that was the best advice I ever received. I went into business school not knowing how to read a balance sheet or really anything about finance. It was a great education for me to get that business degree.
When did you realize you might want to be a CEO someday?
Tom: Honestly as a young engineer I never really aspired to be a CEO. My first job as an engineer was at Boeing. Being a young engineer in such a large company, the CEO position seemed a long, long way from me. What I did aspire to was starting a tech company, and I always had an interest in being an entrepreneur. Becoming a CEO at some point was really just a result of founding a company.
When did you start Razberi?
I’m a late bloomer in terms of being an entrepreneur. I continued to work in management positions, managing engineering and product development in large companies. I never really found the right opportunity to start a company. Then I ended up taking a leap as an entrepreneur and founding Razberi five years ago in 2011 in my 40s. It’s been a great experience, and I’ve never looked back.
How has your approach to management changed and your role as CEO evolved since you started the business?
That’s a great question. This has been very interesting to me. We started with limited resources. Out of necessity, all the founding employees of our business wore multiple hats and had multiple responsibilities, including myself. It was a very hands-on job for me. As a founding CEO in the early days the focus is on getting a company established and surviving.
As the resources in the company increased through fundraising and revenue growth, it has allowed me to bring on a strong management team. My role has become more strategic and in a good way. Now I spend more time looking at where the company needs to be six months from now, a year from now.
And the other role that’s changed for me quite a bit as a first-time CEO is learning how to manage a board of directors and investors. How to keep everybody aligned as we move in a strategic direction. That’s a new element that I didn’t have to worry about before. It’s been a real growth opportunity for me.
What resources have you used to try to improve yourself in the CEO job? As you said, with the technical jobs it’s often pretty easy to know how to get better. How have you found that in the CEO role?
Good question. I think a pivotal moment in the company was the decision we made 18 months ago to raise capital so that we could have the resources to grow faster. In that process I approached someone I had worked with in the past who became my mentor. His name is Ken Boyda, and he is a former retired officer of General Electric. I worked in his organization at one time and approached him because I didn’t know how to raise capital. Ken, to his credit, took me aside and introduced me to some venture capital firms, and guided me in that process. The net result is we had our First Series A capital raise in late 2014 from Live Oak Venture Partners. As part of that process, I asked Ken to join a new board of directors that we formed, and he has served as our Chairman of the Board ever since. I talk to Ken several times a week. He’s been a great mentor to me as I’ve evolved my role as a CEO.
Is there a corporate culture that you’ve tried to push at Razberi consciously or has it developed over the years?
I think it’s a little bit of both. I’ve tried to emulate a culture and attitude in the company. We are very customer focused. We work hard. We have a high level of integrity in how we do business. I think that is reflected in the employees that we’ve been able to hire as we’ve grown. That culture really permeates everyone we work with as well. We have customers that are very loyal to our business.
I was very fortunate in the founding employees I recruited to the business. They walked away from good jobs to take a risk with Razberi. All those founding employees are still here. They emulate the culture. As we bring on new employees the culture instills in them in the right way. We have a very positive culture, with very low turnover. It’s a tribute to the employees that we’ve hired.
How do you find out what’s happening on the ground in your company? What’s your source of operational information?
I stay in touch with our company leaders daily. In addition, we have several structured operating rhythms to gauge our progress at Razberi. Our weekly operations meeting is used to review customer orders, customer calls, and weekly production. Our monthly sales review includes a report-out of monthly goals and customer engagements from each sales leader. Our weekly leadership meeting reviews our progress toward quarterly goals in each functional area of the company.
In addition to the structured reviews, one of my favorite activities is “management by walking around.” I get some of my best information about the business just by walking around our facility and visiting with employees. It’s amazing to me how casual and unplanned meetings in the coffee room can be so productive. We had a new employee start this week in our assembly operation. I walked back to introduce myself and the employee said, “Oh you must be the Tom everyone is talking about. They said you would come over and ask me questions about what I’m doing.”
What do you tell that new employee?
A few things are important to me. I want that new employee to understand the importance of his or her role in the company. We are at a size where every employee has a significant impact on our company. I always want to empower them to speak up when they see a better way of doing things.
Is there anything you are seeing in your business or industry that’s a trend that may be enlightening to other CEOs?
Security and protection of people and assets is important to every CEO, but one area that many may not be aware of as much is the vulnerability of the physical devices connected to their corporate networks. As more Internet of Things devices are deployed, whether it’s your security cameras or other devices that are Internet enabled, often times they aren’t properly protected when they are installed. They are vulnerable to tampering or hacking.
The massive distributed denial of service (DDoS) attack a little over a week ago caused outages of major websites such as Amazon and Twitter. Hackers hijacked an estimated 100,000 devices, including network security cameras, into a “botnet” for the attack. These devices were left “open” on the internet, but even cameras on private networks are vulnerable to attack.
In The Wall Street Journal a month ago there was an article about a major cyber security breach hosted by what the reporter called “an army” of network cameras that were intended for video surveillance and security. Hackers had gotten into these cameras and hosted a denial of service attack on a corporate network. This is a real problem in our industry.
As security systems have evolved from analog devices to internet-enabled devices, the challenge is that security systems have become IT systems. However, the channels of delivery for security systems are different from IT. When you have a security problem in your business, you don’t call an IT guy. You call a security company.
Part of Razberi’s value proposition is simplifying the installation of network systems for these traditional security dealers, with automated cybersecurity protections built into our product.
How do you describe that innovation or differentiation you’ve brought to the market?
Our product is a network appliance that manages systems of network cameras that are used for video surveillance and security. We combine the switch, server, storage and intelligence along with health monitoring and cybersecurity features all in one box and scale up as customers need them. Plus, we deploy all this at the edge of the network, on the customer’s premises or near it, so all that bandwidth from the video footage doesn’t have to traverse the corporate network all the time. This is a huge savings not only in terms of bandwidth but also costs. Security professionals can easily deploy our appliances. Razberi offers the highest quality video surveillance and security at the best economic cost.
How do you gauge your success so far?
What is exciting for our employees is the fact that we created something in our industry that didn’t exist before. It’s a new product category. Being in that position allowed us to attract talent and investment when we needed it. The U.S. government, Fortune 500 companies, and some of the most recognizable public venues in the country use our product to support their video surveillance systems. We further validated what we were doing about three months ago when one of the largest network camera manufacturers in the world signed a deal to license our technology. That confirmed the whole concept and product that we developed. It’s an exciting time for us!