¶ EXCELLENT REPORT from McBride's Bridge...
10/11/00
Quite a few e-mails in the last two weeks! I can't cover every detail, but I will attempt to answer some major questions.
SecureView Pricing
I increased the price to establish the MSR (Manufacturer's Suggested Retail) at a higher point. This doesn't preclude an individual retailer from "marking it up" more, or less, depending on demand. The market will find its price point. Quantity will lower our costs.
A family with a new baby might not flinch at $699. The "magic number" that fits the average consumer--maybe $249 ? If you have a stranger hanging around your neighborhood, how much is security worth, a thousand dollars? More?
Keep in mind--simplicity and quality video are what make SecureView different. Add in portability, instant installation, and easy monitoring with any TV or VCR, and you have it all. Wireless cameras have no range and are subject to massive interference problems. Cheap wired cameras require drilling, pounding, and stapling; you have all those power supplies plugged into every wall...and then you can't tell who is at the door!
Distribution
Demand for the product will always outpace our ability to supply over the next few years. The world of electronic components dictates this. SecureView is a product that "shows well." Sell one homeowner on the block, and the neighbors will follow. Retailers are in business to make money and draw people into their stores. SecureView will do both. Alarm and security companies will use SecureView to solve installation delays and on problem sites. They make money first on the system, but more importantly on SERVICE.
Marine Division
This product line is now ready to go to mass merchandising. SeaView underwater cameras have been in the advertising spotlight for 2 1/2 years. Pricing for our simplest camera, the Super Mini, is $219 and it can hang on a pegboard. The market potential is huge; we have name awareness and production capability. The Marine Division cameras are what "got us here," and will continue to pay big dividends into the future.
Let me clear up a few misunderstandings about SecureView manufacturing...
The original plan was to use bulbs (technically "glass envelopes") from GE. This process looked simple enough: buy the "blanks" and put in the IRFS system and camera. The problem arose when we got ready to order our first shipment. GE could only ship 10,000 units initially, then 25,000 in a month. Why? They are in the business of making GE light bulbs, and that is their first priority. We also discovered that the "blanks" themselves comprised several different parts, each manufactured by a separate GE division, with no coordinated shipping or delivery between the plants. In other words, instead of 10,000 blanks, we were in fact having to order 10,000 of part "A," 10,000 of part "B," part "C," and so on...each from a different factory, producing on a different schedule. Imagine the nightmare when each of these items ships in a different place, time, and quantity...with no guarantee of everything being in place all at once...ever!
Six months ago, I made the decision to build our own housings. We started from scratch, and both styles of SecureView "bulbs" are now produced from our own tooling...all paid for, too! Now we have the capacity to produce 100,000 units a month. All the pieces that make up the bulbs were custom-designed for quick assembly and servicing.
During this time period, we were also able to reduce the component population of the IRFS board by 28 parts. The board runs better and cooler as a result. We passed our FCC tests and have qualified for a UL equivalency rating.
The easiest part of "inventing" is sketching out the idea or product. We all have an idea, a product that the world needs. Building and selling it--while protecting your work--is another matter.
Just received an e-mail as I'm writing this. The writer's major question is about advertising, and the TV commercial. Are we deviating from our original plan? I think progressive marketing is a dynamic process requiring constant modification. The basic plan has been expanded to allow more room for retail. We are not currently running TV spots. Due to the election, spot availability is non-existent, and the timing isn't good even if we could get spots.
Let me re-state my goals: I have one job, to build this company and sell product. I seek advice openly in areas where I believe I am less experienced. I prefer to communicate openly with my fellow owners. Yes, this allows my words to be taken out of context and manipulated--so be it. I will make many more mistakes. I can only say that I will get back up and keep moving forward.
Finally, the American Stock Exchange: A request was made for a list of free-trading stockholders (a "NOBO" list). This is in, plus an update of the most current information. That's all done. The final review will happen; a decision will be made. I've had nothing but positive feedback during the entire process. I'm also advised that "timing" is right for the move. I will, of course, inform everyone as we proceed.
Rich
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