SimpliSafe Company Analysis

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SimpliSafe Company Analysis

Company History and Statistics

  • The idea for SimpliSafe began in 2006. After three friends' apartments were burglarized, Chad Laurans set out to design a more affordable security using wireless technology.
  • Founded in 2006 by Chad and Eleanor Laurans, SimpliSafe started as a security system designed for renters. For the first two years, the Laurans ran SimpliSafe in their home while testing the system at the homes of friends.
  • According to Mr. Laurans, "SimpliSafe raised an undisclosed amount of angel funding in 2007 and became profitable in 2011.... Top-line revenue tripled from 2012 to 2013."
  • After receiving initial funding from investors, SimpliSafe was launched commercially in 2009.
  • In 2010, SimpliSafe shifted its marketing focus and rebranded, targeting its system to homeowners and began offering new easily-expandable features such as "like smoke and carbon monoxide detectors, ability to connect hundreds of sensors, multiple bases, and a louder siren for a larger space."
  • By 2014, SimpliSafe grew to over 100,000 customers.
  • By 2015, SimplSafe grew to 250 employees, up from 15 in 2012 and about 100 at the end of 2014.
  • Before June 2018, SimpliSafe had raised about $57 million, much of that coming from a 2014 funding round led by Sequoia Capital."
  • On June 29, 2018, venture fund/private equity firm Hellman & Friedman acquired SimpliSafe in a deal that valued the company at about $1 billion.
  • As of February 2020, SimpliSafe has over 300,000 customers in the U.S.

Advertising Campaigns

Fear Is Everywhere

  • Advertising firm Preacher developed a brand campaign for SimpliSafe that led to its "Fear Is Everywhere" commercial that launched at Super Bowl LIII (2019).
  • This was the first ever Super Bowl commercial for a home security company.
  • "The campaign capitalizes on a time in culture when fear runs rampant in our institutions, news sources, and technology, and when SimpliSafe has committed to making home a place where everyone can simply feel safe."
  • "The advertisement features fears including job-replacing automation, privacy-invading smart devices and fictional social media posts and news stories. In the commercial, a newscaster states, 'What you don’t know about your garage door could kill you.' SimpliSafe then poses the question, 'Wouldn’t it feel good to fear less?'"

Robbert Larson

  • Element Productions developed a series of commercials starring fictional "full time burglar, part time con man" Robbert Larson, whose vocation has turned him into a home security expert of sorts. (Commercials are available to play at linked site.)
  • The Robbert Larson campaign began running in August 2019 and was featured on ESPN's Monday Night Football in September that year.
  • Humor is used to promote SimpliSafe's products with the premise that a burglar would be one of the best experts in home security.
  • Each commercial contains the tagline "Protect Home Like a Pro."

Earlier Advertising

  • Ten years ago, SimpliSafe's advertising was still targeted to apartment dwellers and/or renters.
  • In 2010, its tagline was "Peace of Mind for City Living" and had been featured in over a dozen nationwide periodicals, with focus on both the DIY (do-it-yourself) aspect and focus on apartment dwellers.
  • One example, is a video released on The Grommet.
  • By April 2011, SimpliSafe removed the focus on renters (not to the point of exclusion) and focused on cost savings and other conveniences offered. For example, in April 2011, its website headlined "Discover why The New York Times described our security system as: 'All the bells and whistles for a lot less money'" instead of the tagline, "Peace of Mind for City Living."
  • By 2014, SimpliSafe was clearly focusing the DIY aspect of its system for all homes and no longer focusing on just renters.

Insights Into Postings

  • On its website, SimpliSafe currently touts reviews from several online periodicals: "The best home security system" by Business Insider, 11/12/19; "consistent monitoring response times"by The Wirecutter, 1/17/20; "SimpliSafe belongs at the top of your list" by CNET, 3/28/18; Editors' Choice by PCMag, 11/18/19.
  • Under the title, "Everything you need to know:" Experts choose SimpliSafe: It's the #1 home security pick of Business Insider and Editors' Choice of CNET, PC Magazine and more;" "Live professional alerts: Our monitoring staff calls you the second trouble's detected and stays with you until it’s solved;" "We dispatch 350% faster: We verify the alarm is real, so police dispatch up to 350% faster;" "It's a lot less expensive: We cut out the middlemen and markup so you get more security for less—with no contract;" Prepared for the unexpected: Lose power? Lose Wi-Fi? Someone attacks the system? Natural disaster? SimpliSafe is ready;" "Protects against fires and water damage: More than just intruders—our pros monitor against leaks, floods, fires and more;" "Keep an eye inside and out: With HD security cameras for indoors and out, see what’s happening all the time;" "Designed to disappear: From the tiny size of our sensors to easy one-touch control means you'll never notice your security system;" "Detects people, ignores pets: Motion sensors use a precision human-form detection algorithm."
  • The SimpliSafe Home Security App has an average 4.8 out of 5 star rating on Apple's App store; and 4.6 out of 5 at the Google Play store.
  • SimpliSafe's system gets on average 4 out of 5 stars on Amazon.
  • The largest customer complaint is that some feel SimpliSafe is not upfront about the monthly costs necessary to use the app.

Press Release Over Previous Two Years

  • July 9, 2018 — "SimpliSafe, AAA Club Alliance, and AAA Carolinas partner to give travelers peace of mind," offering home security discounts to AAA members.
  • October 16, 2018 — "SimpliSafe Takes Its First Step Outside of the Home With Video Doorbell Pro," which can be used sand-alone or integrated with the home security system.
  • July 29, 2019 — "SimpliSafe’s Mission to Make Every Home Secure Now Backed By Hellman & Friedman." According to SimpliSafe Founder and CEO Chad Laurens, "Home security is at an inflection point. Despite the market’s growth, today still only 20% of homes are protected. With innovative technology, unparalleled service, and radically fair prices, SimpliSafe is rapidly making its vision of ‘every home secure’ a reality."
  • August 20, 2019 — "SimpliSafe's Sleek $99 Smart Lock Launches Sept. 15." Fully integrated with its system and so compatible with Amazon Alexa and Google Home voice commands, the smart lock is "the thinnest on the market."
  • October 29, 2019 — "Home Security Companies Continue to Raise the Bar on Customer Satisfaction, J.D. Power Finds." In the DIY Install Segment, SimpliSafe came in a close second place to Ring Alarm with regard to customer satisfaction.
  • February 20, 2020 — "Home security company creating nearly 600 jobs in Henrico County." SimpliSafe is investing $5.5 million to establish its second customer support facility in Henrico County, Virginia.

SWOT Analysis

S: STRENGTHS

  • As noted previously, Hellman & Friedman took a controlling interest in SimpliSafe with an investment that valued SimpliSafe at about $1 billion.
  • U.S. News and World Report named SimpliSafe "Best home security system of 2020" and gave it fourth place among "The Cheapest Home Security Systems of 2020."
  • Quick and easy installationSimpliSafe pioneered the idea of DIY home security systems. It is easily set up as all pieces (with exception to the base station) are wireless and battery-powered. Installation is nail-free and can be done easily under an hour.
  • Modular systems — Users can easily customize their home security and add only protection they want or need. For example, cameras, smoke detectors, water sensors, etc.
  • SimpliSafe's advantage that it may be best known for is the lack of long-term contracts. Customers can pay a monthly fee (with no long-term commitments) for around-the-clock professional monitoring. Users can also choose to self-monitor (with no fee) through the app with much more limited capabilities.
  • Its wireless system is more secure than direct competitor Ring.
  • As opposed to companies like ADT, SimpliSafe continues to operate during electricity and WiFi outages.

W: WEAKNESSES

  • Perceived and Actual Risks Inherent in WiFi: "In 2016, a whitehat hacking company reported a vulnerability in SimpliSafe's security system that could potentially allow someone with specialized equipment and skills to hack and disable the system from up to 200 yards away. According to SimpliSafe, the vulnerability is not unique to the SimpliSafe system and that other similar security systems can be affected. Nonetheless, SimpliSafe resolved the vulnerability by launching a newer and better version of its security system, SimpliSafe 3. Unlike its predecessor, SimpliSafe 2, SimpliSafe 3 can be updated over the air to allow fixes for similar vulnerabilities." This still can affect potential consumers' trust of wireless solutions.
  • SimpliSafe does not support communication protocols necessary to integrate with many smart home devices and so lags companies such as ADT when it comes to home automation.
  • Ring is its primary competitor amongst wireless, DIY solutions, and offers a less expensive professional monitoring plan, $10 versus SimpliSafe's $14.99 and $24.99 options.
  • Many customers perceive that SimpiSafe's advertising is deceptive with regard to the monthly fees necessary for operability of the app.
  • A monthly subscription is required for several useful features such as away-from-home control, smart-home integration and video storage.

O: OPPORTUNITIES

  • According to SimpliSafe's founder in June 2019, only about 20% of homes were protected by home security systems.
  • 70% of SimpliSafe's customers are buying a security system for the first time.

T: THREATS

  • As noted earlier, SimpliSafe was a pioneer in the DIY space. Other companies are entering including Ring, Nest, Frontpoint, Adobe and even ADT.
  • Already controlling an estimated 25% share of the residential security market, ADT entered the DIY space in February 2019. It has 250 sales locations throughout North America.

Research Strategy

Several sites were used, including SimpliSafe's website and several online periodicals. Archive.org was used to research advertising issues going back 5-10 years. The competitive insights into the company's competitive advantages were combined with the Strength section of the SWOT analysis.
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