Game for Security
Ever since she became involved in the security industry working for a distributor in the northeastern United States, Cynthia Freschi kept her eye on the prize of the gaming industry.
â€œI was watching the volume of business coming from the gaming industry and had visions of being able to supply the full gamut of services from design through installation â€“ the complete integration package,â€ reveals the president of North American Video Inc. (NAV), Brick, N.J. â€œI concluded it would be much more profitable to sell 300 cameras to one client than three cameras to one client. Seeing that, we broadened our horizons and started looking into the gaming industry on a national level.â€
Now sheâ€™s in the game to stay as SDMâ€™s second annual Systems Integrator of the Year. North American Video and its employees have hit the jackpot with their innovative technical savvy, 24/7 customer service after installation and sky-high sales increases.
Although the gaming specialty of the company is a niche that keeps growing (currently, it accounts for approximately 45 percent of the companyâ€™s total revenues), a majority of the companyâ€™s revenue is derived from other markets.
â€œGaming is the most prominent, but we have a lot of work in law enforcement, homeland security, transportation, campuses, pharmaceuticals, we do a lot of schools, utilities, retail,â€ she lists. â€œWeâ€™ve done some large campus and correctional work, post offices; not this year but in the past, we did the air mail facilities.
â€œWe had some smaller installations, like we did at the Coast Guard under some hazardous conditions that were unique and quite the challenge, although a small system,â€ she notes. â€œMy guys were up so many feet in the air in a bucket. Also recently over the past 18 months, we started getting into health care and pharmaceuticals.â€
Added to this spread across industries is annual growth from $16.25 million in 2001 to an estimated 2005 figure of $40 million. The revenue increases from 2001 to 2002 were 59 percent and from 2003 to 2004, 43 percent.
She attributes a revenue decrease from $25,846,738 in 2002 to $25,056,505 in 2003 to a delayed reaction to the 2001 business slowdown and billing projects to other years.
â€œYouâ€™re only outdoing yourself as much as you want to grow,â€ she points out. â€œAs a private company, the need for sustained growth is important, but not as necessary as if we were a public entity with shareholder responsibilities.
â€œWeâ€™ve managed to enjoy pretty aggressive incremental growth throughout the years,â€ Freschi maintains. â€œIn the beginning, we were doubling our sales. We feel weâ€™ll reach our goals this year, and gaming has continued to grow along with the homeland security market.â€
In addition to the companyâ€™s headquarters in Brick, it has offices in New York, Washington state, Las Vegas, Nev., and a small branch office in Venezuela that services the companyâ€™s business in the Caribbean gaming market. That office also serves banking, commercial and industrial markets in South America.
â€œOur South American operations are modest right now â€“ their revenue probably is around $1 million but growing,â€ she declares. â€œThe courtship outside the U.S. is even longer than it is here. Itâ€™s sometimes eight months before it comes to fruition. It takes longer to secure deals, and it seems to take more time to get deals right.â€
Spending the WinningsNAVâ€™s figures include revenue from two companies for which NAV is the parent â€“ M. Malia and Associates Inc., a security consulting and design firm, which was purchased in 2003, and CCTVProducts.com, a distributor NAV established in 2000 to sell security systems products on the Internet.
Both companies are headquartered next door to NAVâ€™s office in Brick. Freschi estimates that revenue from M. Malia has been less than $1 million annually and from CCTVProducts.com approximately $3 million annually.
The companies lend a synergy to NAV. Although Freschi insists that M. Malia and Co. operates totally autonomously, the companyâ€™s skills sometimes are utilized in design-build projects in which systems are designed by M. Malia and installed by NAV. However, other of Maliaâ€™s projects may not use NAVâ€™s services at all, she says.
CCTVProducts.com enables NAV to get a foothold into the businesses of potential NAV customers.
â€œYouâ€™d be surprised, weâ€™ve gotten our name out through CCTVProducts.com and opened up doors to Fortune 500 companies that have just stumbled across our Web site,â€ she recalls. â€œWe call them, and it opens up avenues for additional business. Weâ€™re able to provide sometimes large systems business based on what was a $200 Web site sale!â€
Stocking the inventory of the Web site and buying equipment for NAVâ€™s installations can result in purchasing quantities of products large enough to qualify for substantial discounts.
â€œOnce you build a casino, they hire their in-house staff, sometimes one technician, sometimes five depending on the size of the property, and they have an ongoing need for products,â€ Freschi explains.
Ron Freschi, Cynthiaâ€™s husband who is director of large systems sales, also does the companiesâ€™ purchasing. â€œWe have made some very large purchases, and we naturally enjoy discounts that they offer based on the volume that we had bought,â€ he points out.
Adds Cynthia, â€œRonâ€™s my purchasing guy â€“ he makes all my deals, he does all my buying. Weâ€™ll secure a deal, and I hand it off to Ron, and he acquires the product we need; he has tremendous purchasing talent. Even though he specializes in large system sales, he dedicates a great deal of his time to vendor relations and acquisitions.â€
â€œHe also covers all our local work in the tri-state area, and he takes care of technical crews that are dispatched locally,â€ she continues. â€œHeâ€™s my partner in life, and my right hand here at North American Video. We are joined at the hip. We work together all day but basically on different aspects of the business. We both have our strengths, and we capitalize on them.â€
Super SaleswomanshipResearching markets and aggressive approaches are how North American Video was founded. Before 1995, Freschi was working with her husband Ron in southern New Jersey for a security distributor in northern New Jersey that installed some integrated systems at locations such as schools.
â€œI pretty much learned the industry by researching answers to customersâ€™questions, and if tech support was needed, Iâ€™d pick up the phone with the customer in a three-way call to tech support,â€ she remembers. â€œSo the next time if I was asked the question, Iâ€™d know the answer.
â€œSometimes you just get it, and I just got it, I understood it well,â€ Freschi declares. â€œI had an itch for it, and I started educating myself, and I was able to become a proficient salesperson in a very short period of time.
â€œI was the person that they could call if they needed something, however obscure,â€ she relates. â€œThey knew they could call and we would search for a solution to their needs as well as alternate solutions they needed and also provided, and they would be impressed. I had worked in jobs that required customer service, so I wasnâ€™t a novice at how to handle a sales call.â€
She had begun serving the gaming industry on the national level at the distributor as a field sales engineer. â€œIn the short time I had worked for the other company, I was able to make some loyal contacts both with end-users and with manufacturers,â€ she says.
Before long, she had plenty of contacts in the industry and customers. â€œThey gave me chances and word of mouth, and they recommended me,â€ she explains. â€œI was extremely young and extremely aggressive, and it was appreciated.â€
She decided to leave the distributor and start her own company, so she brought along a salesperson and a person that handled purchase orders and accounts receivable and payable. â€œI approached the customers and they were receptive,â€ she reports.
In the beginning, only one out of 10 of their customers needed installations. â€œA lot of them were ongoing product sales, retrofitting, upgrading, kind of getting our foot in the door,â€ Freschi describes. â€œThen once we established a good trust and working relationship, we were able to quote the larger installation needs.â€
Research figured heavily in all her sales efforts. â€œI remember ordering this book back in 1995, and it was a paperback photocopied list of all the casinos, and I started cold-calling,â€ she relates.
She did more homework on the gaming regulations in Atlantic City, where some of her former customers had been.
â€œWe were able to take that knowledge and call on some of the smaller Native American casinos, and they appreciated what we knew from the bigger properties that we had worked with,â€ she notes. Her new company maintained a base of business with the Native American gaming market.
The companyâ€™s first major installation was at the Mountaineer Race Track in West Virginia. â€œI say major, but now, major is 1,000 cameras, and back then, major for us was 100 cameras,â€ she says of the size of the race track installation. Another installation at Ballyâ€™s Casino in Atlantic City, N.J., followed.
Then she tried to crack the Las Vegas market, finally getting orders from casinos there in 1997. She estimates the company now has more than 50 casinos in Las Vegas as customers.
â€œSome of the casinos are small,â€ she concedes. â€œThere are places out there that are gas stations with slot machines that qualify as casinos and then there are facilities like the Wynn Las Vegas.â€
She did all this with a high-school and hands-on education in an industry that has been male-dominated. â€œI believe that being a woman has worked with me more so than against me,â€ she insists. â€œWe deal day in and day out with men in the industry, and I think they appreciate the change. There are so few women in this industry in high-level positions, but that is also changing.â€
Strong SuitFreschi considers North American Videoâ€™s 50 full-time employees in its headquarters and regional offices to be the companyâ€™s strongest point. â€œWe have an excellent staff,â€ she emphasizes. â€œThese guys can be away from their homes and families for up to three months, and they do it, and they do it well, and theyâ€™re definitely the best in the business. Usually, they end up in Florida in the middle of summer and North Dakota in the middle of winter.â€
She also praises her customers. â€œWe have a great customer base; theyâ€™re extremely loyal,â€ she points out. â€œMost of our business is reference-based, so it is word-of-mouth, or we supply references of systems weâ€™ve done.â€
Recently, a prospect complained that he could not find one negative comment among 30 references. â€œThatâ€™s because my staff is so committed and theyâ€™re so good,â€ Freschi insists. She thinks the names on her client list create trust in prospective customers.
The companyâ€™s technical innovation also keeps it popular with customers, she believes. â€œFrom day one, we were waiting for digital to happen,â€ she remembers, â€œso we geared up as soon as digital hit the marketplace. We were one of the first companies to successfully install digital in the gaming industry and in other industries, and we continue to have people calling us with R&D questions.â€
Freschi maintains the systems at the Borgata Casino in Atlantic City and the Wynn Resort in Las Vegas are both innovative uses of technology currently available. The key is the software the company has written for systems and equipment currently available and the way the systems are structured and implemented.
â€œBeing the best in breed is what differentiates us from the rest of our competitors,â€ she stresses. â€œItâ€™s really important that you have the ability to react to the customers in a timely fashion, and that I think has earned us a reputation and propelled us in business since day one.
â€œWeâ€™re flexible â€“ we donâ€™t like to say â€˜noâ€™,â€ she emphasizes. â€œUnless we know itâ€™s impossible, you wonâ€™t hear a â€˜noâ€™ from us. And doing so, that doesnâ€™t mean you slap it in in a short time period. We have some of the most beautiful work. Weâ€™ve had pictures of our work taken and wanted to be used in training packets for other industry people.â€
An inevitable factor in the purchase equation is cost. â€œIt all comes down to price,â€ Freschi admits. â€œYou could have the greatest package and the greatest references, and if youâ€™re $1 million higher, youâ€™re not going to get the job. While we enjoy great references and all these wonderful things that weâ€™ve built up, cost has a very big impact in our business.â€
The companyâ€™s advantage there goes back to its strongest suit. â€œOur employee to revenue ratio is three times less than the average,â€ Freschi calculates. â€œWe are one employee to $500,000 in revenue.
â€œWhen you look at the documents Iâ€™ve seen, the industry median is about $120,000 to $160,000 per head if you get up over the $20 million mark,â€ she asserts. â€œWeâ€™ve been able to be proficient, efficient and keep the staffing to a minimum while still being able to service all our clients.â€
Betting on the HouseFor employees, staying at NAV and advancing is a good bet. â€œAs big as we are, as weâ€™ve managed to grow, weâ€™ve grown organically; weâ€™ve trained and moved up within our organization,â€ Freschi notes. â€œOur receptionist that I started with is now our office manager, and my assistant is now one of the top salespeople in the industry. Everybody moves up; thereâ€™s not a ceiling here.
â€œWe have great project managers, and they get technicians out and give them hands-on training,â€ she relates. â€œAll of our people go to classes, and they have to take their testing because thereâ€™s certification. Then they go on the job, and they have to work on so many jobs. They have to have so much experience in the field before they can become a senior technician and then a project manager and then a senior project manager.â€
In addition to training current staff members in information technology (IT), NAV has hired employees with IT backgrounds. The employees provide hands-on training in their specialties, with IT people learning as much about video as they provide information about computer networks.
â€œIâ€™d just like to get across that my staff is part of the backbone of my organization, and without their extra efforts we wouldnâ€™t have been able to make it as far as we have,â€ Freschi admits. â€œTheyâ€™re a group of fantastic people, and theyâ€™re dedicated, and theyâ€™re irreplaceable, and we just hope to be able to continue to find people like the people we have now.â€
The Skyâ€™s the LimitFreschi cites the emerging technology of mobile video as being a growth area for the company. â€œWeâ€™re on the ground level there,â€ she maintains.
Besides transmitting security video from school buses, which NAV already is doing, to police cars or other locations, this technology would enable video reception wirelessly on a handheld device or a cell phone, she explains.
This would enable customers or even first responders to an emergency to receive video information wirelessly as they approach a building. They could see inside the building from the outside during a fire, hostage situation, terrorist incident or bomb scare.
â€œWe are involved in some other products,â€ she reveals. â€œTheyâ€™re fresh and hot, and theyâ€™re going to change the way the industry is able to do business from mobile devices.â€
The company plans to open offices in the Midwest, Southeast, California and the Washington, D.C., metropolitan area by 2007. After the security system NAV is installing for the Wynn Macau Resort in China north of Hong Kong goes online, which is scheduled for August of next year, an office for the Pacific Rim may be established.
â€œI guess the skyâ€™s the limit,â€ she predicts â€œWeâ€™re continuing to grow organically, weâ€™re having a good time, weâ€™re adding people as we need. Weâ€™ve never had to let an employee go for lack of work. We maintain our staff levels and increase them accordingly.
â€œI thought I wouldnâ€™t hit $20 million, I thought I wouldnâ€™t hit $30 million on my own, now weâ€™re shooting for $50 million,â€ she marvels. â€œI just want to keep on growing the business the way we have and maintain our reputation and quality of service.â€
Sidebar: Cashing Out?Despite offers to sell the business, Cynthia Freschi, the owner of the privately held North American Video, Brick, N.J., with her husband Ron, knows when to hold onto her business. Although she is playing her cards close to her vest, for now she is standing pat, she says.
â€œWe have had quite a few offers over the years,â€ she concedes. â€œItâ€™s not the right time. I personally want to take North American as far as I can on my own. I love the industry â€“ I love what I do.
â€œI probably would only consider selling the company if it was an opportunity to really make something big and take care of all my people that have been with me forever,â€ she continues. â€œIf it wasnâ€™t beneficial to my entire staff, I wouldnâ€™t even consider it.â€
She points out that her contracts commit her for at least the next three years. â€œSo we have to make sure we see them through and keep our word,â€ she insists.
Sidebar: Blowing Your Own HornItâ€™s no use being the best if no one knows it. North American Video (NAV), Brick, N.J., has an aggressive marketing communications program that includes attending the trade shows and advertising in the trade magazines of clientsâ€™ industries, such as gaming, education, transportation, homeland security and others, and promoting and marketing on the Internet. Cynthia Freschi, NAVâ€™s president, also contributes articles to trade publications.
â€œWe have expanded so far outside gaming, and we have a pretty good presence in some other markets, that weâ€™ll need to start being more active at additional trade shows,â€ Freschi plans.
North American Video is a member of the American Society for Industrial Security (ASIS), the National Fire Protection Association (NFPA), the National Burglar and Fire Alarm Association (NBFAA) and sponsors industry trade shows.
It also is involved in its hometown community of Brick, N.J., and communities where its regional offices are located. The company sponsored construction of a new school playground in the Brick area and supports local sports teams and organizations with sponsorships and donations.
NAV also is a benefactor to several fund-raising organizations dedicated to improving the quality of life, such as the Jersey Shore University Medical Center Foundation and the COTR India Relief Fund. The company has donated video surveillance systems to womenâ€™s abuse centers, local animal shelters and the Tsunami Relief Fund.
North American Video also is involved in the Christian Childrenâ€™s Fund and currently sponsors an undisclosed number of children in Third World countries. â€œIâ€™m also a PTA member for my daughterâ€™s school,â€ Freschi adds on a personal note.
Sidebar: Systems Integrator of the Yearâ€”Winning Wynnâ€œI had my eye on Wynn from the second I knew it was even a possibility,â€ sighs Cynthia Freschi, president of North American Video (NAV), Brick, N.J., about the resort recently completed in Las Vegas.
â€œI had always wanted to do work with Wynn casino,â€ she admits. â€œI really wanted to do a Wynn project from when I can remember. When Wynn decided to build his new casino, I positioned myself to the front of the line and went after it with all I had and was successful.â€
She did not feel ready to bid on Wynnâ€™s prior project in Las Vegas, the Bellagio hotel, but completing the surveillance system for the Borgata Hotel and Casino in Atlantic City, N.J., in 2004 gave her company credibility on the strip. The job included more than 1,700 cameras and one of the largest matrix video switchers ever configured.
â€œThe Borgata was a flagship â€“ it was a high-profile job, and we were able to come in and successfully secure that job,â€ Freschi declares. â€œAt that point, it lent a lot of credibility to us that it was a start-to-finish mega-resort, and indeed that helped with my resume at Wynn casino.â€
The Wynn hotel has more than 2,700 guest rooms with floor-to-ceiling windows. The facility houses priceless works of art from Renoir, Picasso, Cezanne and Van Gogh. The casino measures 110,000 square feet and has several gambling areas.
To protect this facility, the security system at the Wynn Las Vegas includes more than 2,000 cameras. Its surveillance system is fully digital and recorded completely digitally. Key to the system is the transmission configurations that connect the cameras to the massive matrix switcher and its approval by the Las Vegas Gaming Control Board.
The facilityâ€™s access and life safety systems are integrated into the video system to provide staff members with centralized monitoring of these operations. It also is integrated with the resortâ€™s point-of-sale (POS) applications for retail, food and beverage outlets.
Plans call for adding additional areas such as race and sports book and slots and integrating radio frequency identification (RFID) technology to track playing cards and chips.
The alarm control and video system at the Wynn Las Vegas also incorporates several unique innovations in networking and integration. The security phase of the project started in January 2004. Installation began in the fall of 2004 and the project was completed by April 28, 2005.
This schedule was achieved by literally building, testing and programming almost the entire security system off-site in NAVâ€™s Las Vegas facility before installing it at the Wynn Las Vegas.
NAVâ€™s project management team was divided into four categories with a project foreman assigned to each area representing a different phase of the systems.
Offsite programming for the system was completed in three weeks, during which every camera was connected to the matrix system and tested. The digital recording system was tested in modules of 32 cameras each. During this process, every camera was numbered based on its intended location and back-focused.
NAV also configured and tested the digital recording system at their facility where programming was customized and tested for integration with the Wynn Las Vegasâ€™ alarm, life safety and POS systems.
â€œThose contracts were the largest as of yet weâ€™ve had and the most sophisticated systems weâ€™ve yet to see in the industry,â€ Freschi maintains.
Similar techniques are being used to install the system at the Wynn Macau Resort in China north of Hong Kong. It is being built in the Las Vegas facility, installation begins onsite next January and opening is scheduled for August of next year.
â€œItâ€™s being referred to as the new strip,â€ Freschi says of Macau. â€œItâ€™s slated to be a huge gaming destination. A lot of the challenges in Macau are different than any jurisdiction Iâ€™ve ever seen, because the Asian games allow back-betting.â€
She explains that this means camera coverage must be tripled compared to other table games. â€œIâ€™m actually excited,â€ she gushes. â€œI canâ€™t wait to see how it turns out. Itâ€™s going to be different than any other gaming market in the world. It will bring its own unique set of challenges.â€
The entire system they are installing is being prebuilt. NAV has partnered with one of the larger integration firms out of Hong Kong, Freschi announces. A local labor force will hang cameras and cables.
Establishing an office for the Pacific Rim is being considered. â€œWe hope to possibly do that opportunity if it looks like it will make sense business-wise,â€ Freschi notes.