EnVysion ‘minds the store’ for busy owners, managers

BOULDER – A Boulder startup is aiming to solve one of the challenges of the small-business owner: how to be in two or three or maybe a dozen places at once.

EnVysion Inc. is a broadband video surveillance company that provides Internet-based digital video recording solutions.

But surveillance solves much more than basic security problems, said Matt Steinfort, president and chief operations officer.

“If all you’re interested in is security, you can go to Radio Shack and buy cheap cameras, and as long as the tape or DVR is running you can get the footage,” Steinfort said. “We build on this and say this is an operational management tool. Over the Internet you can see into your store without being there and drive profitability and consistency across your brand.”

Like a lot of surveillance products, EnVysion’s system stores video footage on digital video recorders. What makes the system different, Steinfort said, is EnVysion’ s software that allows users to search through stored video to get to what he calls the “10 minutes that matter.”

The EnVysion system is integrated with operational systems like point-of-sale cash registers, so all of the information the cash register records – transactions, voids, etc. – is captured in real time along with the video.

If a store owner suspects an employee of tricking the cash register by posting void transactions and taking the cash, EnVysion gives him a way to check the video without having to watch hours of transactions. “I can say ‘show me the voids and associated footage’ to see if it’s a real valid transaction or if the employee is putting money in their pocket,” Steinfort said.

Other video segments can be checked to see if employees ask for an ID on alcohol and tobacco sales; how often the back door is opened and who is going in and out; whether lunch-hour and drive-through lines are moving satisfactorily; and other operational activities.

EnVysion’s target customers are retail and service companies with hundreds of locations like fast-food and fast-casual restaurants, convenience stores and retailers with a “smaller footprint,” Steinfort said. Since the typical EnVysion setup is 16 or fewer cameras, the company doesn’t go after large retailers like discount or warehouse stores.

Steinfort wouldn’t name specific customers, but said EnVysion’s “marquee clients” include four chains: a record store along with fast-food, fast-casual and convenience store chains.

What these stores have in common is that the owners are typically responsible for more than one location and have difficulty managing all of them.

“We’ve heard from a number of managers and owners of stores that if they could be physically in their stores they could add percentage points of profitability,” Steinfort said.
“In any store they are likely to have new management … because of high turnover. Being able to view all of your stores at once from a central location enables them to expand the scope of stores they can control. They can provide that coaching and guidance without physically being there.”

EnVysion was founded in 2004, but has gone through a complete change of ownership and direction since then, Steinfort said.

Strategic partners Ledcor Technical Services and a number of angels – including EnVysion Chairman Dan Caruso, board members Mike Jones and Bob King, and Steinfort – invested an undisclosed amount in the company in December 2005.
In February, EnVysion raised $3 million; $2 million came from private equity firm Columbia Capital, $700,000 from Bear Equity, and the rest from Ledcor and the angels.
Bear Equity is owned by Caruso, who’s also chief executive officer of the Englewood-based telecommunications company ICG Communications Inc. Until he joined EnVysion in February, Steinfort was senior vice president of corporate strategy at ICG. ICG’s Boulder office is housed in the same downtown Boulder building as EnVysion.
Although the two companies are “sisters” through the investor relationship, Steinfort said EnVysion and ICG are not affiliated.

Most of the $3 million is going to develop a new technology that will make EnVysion’s product a Web-based application. Today in order to view the stores remotely users need to download software to their PC. With the new version, any computer with Internet access can be used.

The company also is developing a DVR appliance that will solve some of the Internet setup problems, Steinfort said. Today setting up the DVR “requires manual intervention and a tech person to configure it,” he said. The new version will be more like voice over Internet protocol – automatically setting up the routing connections and going through the user’s network firewall.

Finally, EnVysion is converting its product from one that users purchase to an application service provider model. Today the system costs $5,000 to $12,000 upfront, and the client owns the equipment.

For a typical EnVysion client – a retailer that nets about $30,000 a year per location, Steinfort said – that kind of money makes it a tough sell. But if, “We can offer that same service for $150 a month that really opens up the market for us, because now they can make that decision easily,” he said. “They know they’ll make that back in terms of reduced loss and revenue retention.”

EnVysion’ s 14-member staff doesn’t have the software development background to develop the new version of the product, so it hired Denver-based BoldTech Systems Inc. for that work, Steinfort said. Management and design is done locally while much of the coding is by less expensive junior programmers at BoldTech’s plant in Hangzhou, China.

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