On­tario startup Solink’s AI video-sur­veil­lance tech­nol­ogy gains trac­tion with re­tail­ers

The Globe and Mail (Alberta Edition) - - REPORT ON BUSINESS - SEAN SILCOFF TECH­NOL­OGY RE­PORTER

Michael Matta was stuck in a dull gig track­ing cus­tomer traf­fic pat­terns at BCE Inc.’s The Source re­tail chain when he got an idea: In­stead of go­ing store to store, why not just re­motely tap into their se­cu­rity cam­eras? The footage was only ac­ces­si­ble on-site and lit­tle used ex­cept as ev­i­dence when thieves hit. Mr. Matta, a Univer­sity of Water­loo elec­tri­cal en­gi­neer­ing grad­u­ate, won­dered what other in­sights were buried in the video.

Nine years later, Mr. Matta runs a fast-grow­ing Ot­tawa startup called Solink Corp. that is trans­form­ing the dowdy re­tail se­cu­rity sys­tem from a manda­tory ex­pen­di­ture for in­sur­ance pur­poses into a busi­ness im­prove­ment tool. Solink’s sys­tem is used at 2,500 quick-ser­vice restau­rants and con­sumer loan branches pri­mar­ily in the United States, in­clud­ing Tim Hor­tons, Five Guys and Chick-fil-A, to not only keep op­er­a­tions safe but also help op­er­a­tors in­crease rev­enues, stream­line op­er­a­tions and catch cheat­ing em­ploy­ees. Solink “goes to the se­cu­rity bud­get and says, ‘For so many years you’ve been an ex­pense, why can’t you turn around and be an ad­di­tion’ ” to busi­ness re­sults, said ScaleUP Ven­tures part­ner Matt Roberts, a Solink fi­nancier.

Now, after four years of tripledigit growth (the num­ber of Tims’ us­ing Solink dou­bled in 2018 to 1,000 out­lets) Solink is fu­elling its ex­pan­sion fur­ther after rais­ing $16.3-mil­lion from Gen­er­a­tion Ven­tures, ScaleUp and lead in­vestor Valor Eq­uity Part­ners, an early backer of Tesla and Space-X and owner of restau­rant op­er­a­tions that use Solink. “We be­gan our re­la­tion­ship as cus­tomers … and im­me­di­ately saw value in Solink’s plat­form,” said Jon Shulkin, part­ner with Chicago-based Valor.

Solink, which gen­er­ates about $5-mil­lion in an­nu­al­ized rev­enue and has 60 em­ploy­ees, takes a sim­i­lar ap­proach to that of smart-ther­mo­stat mak­ers such as Ecobee that ex­pand ca­pa­bil­i­ties of es­tab­lished tech­nol­ogy by in­cor­po­rat­ing re­cent in­no­va­tions. Solink’s soft­ware mar­ries se­cu­rity feeds cap­tured by a store’s dig­i­tal recorder to point-of-sale data. It uses ar­ti­fi­cial in­tel­li­gence to ri­fle through the com­bined data to pin­point spe­cific events, such as when em­ploy­ees key in dis­counts, brew cof­fee or when line­ups form. It up­loads rel­e­vant snip­pets to the cloud so op­er­a­tors can ac­cess them re­motely, and sends up­dates about anom­alies and un­usual ac­tiv­ity.

“It’s tak­ing that lens that’s al­ways there and [pro­vides] the same level of feed­back you would have if you were sit­ting in your [op­er­a­tion] and able to coach staff on op­ti­miz­ing your busi­ness,” said Mr. Matta, who tar­gets op­er­a­tors with mul­ti­ple lo­ca­tions and $1-mil­lion in sales for each store.

While se­cu­rity video recorders typ­i­cally gather dust in store back­rooms, one-third of Solink cus­tomers tap into the sys­tem daily from their smart­phones and lap­tops. The firm, which started as a con­sul­tancy funded by bil­lion­aire Terry Matthews, de­cided when it started sell­ing prod­ucts in 2014 to make its soft­ware com­pat­i­ble with most dig­i­tal recorders rather that in­te­grat­ing with one type of hard­ware. That ap­proach means new cus­tomers don’t have to re­place ex­ist­ing equip­ment – but if they do, Solink sources the ma­chines as part of its monthly fee, which starts at $175 a store on a three-year con­tract and in­cludes in­stal­la­tion, main­te­nance and up­grades.

Cus­tomers who have signed up for its se­cu­rity ser­vice say they’ve found many other uses and Solink re­tains more than 99.9 per cent of cus­tomers from month to month on av­er­age, far bet­ter than most sub­scrip­tion soft­ware firms. Betty York, who owns two Tim Hor­tons fran­chises in Oro­mocto, N.B., said she’s ad­justed staffing based on traf­fic pat­terns iden­ti­fied by Solink and uses the sys­tem to mon­i­tor staff ad­her­ence to pro­ce­dures, for train­ing and to en­sure snow re­moval hap­pens on time. She cred­its Solink for help­ing cut food costs by 4 per cent and labour costs by 7 per cent, and by elim­i­nat­ing ac­ci­dents. “It gives us a 24-7 vis­ual of what our restau­rants look like and how ready they are to re­ceive our guests,” she said. Cincin­nati-based Ax­cess Fi­nan­cial Ser­vices Inc., which of­fers con­sumer loans at 960 out­lets, said its Solink sys­tems had cut seven months off the av­er­age time to un­cover em­ployee fraud and shrunk av­er­age losses to less than US$1,800 from more than US$12,000. Ax­cess’s se­nior di­rec­tor of as­set pro­tec­tion, Aaron Rogers, said Solink costs Ax­cess US$1.8-mil­lion an­nu­ally – but saves more than US$1-mil­lion in fraud losses, for a net sav­ings of 30 per cent com­pared with other se­cu­rity sys­tems.

Solink is now ex­plor­ing how to make its sys­tems smarter by us­ing more AI. It’s run­ning a pi­lot project to see if drive-through staff can bet­ter serve re­peat cus­tomers, sug­gest­ing items they typ­i­cally or­der.

When asked if he’s trou­bled about track­ing such in­for­ma­tion given re­cent con­cerns about tech gi­ants col­lect­ing per­sonal data, Mr. Matta seemed un­con­cerned. Cus­tomers are used to be­ing surveilled and if staff watched all the footage they could “in­fer all the same in­sights we’re de­liv­er­ing,” he said. “Over time, the trade­off is that you can con­sent to the con­ve­nience of ac­cel­er­at­ing your pur­chase … [but] if the con­sumer doesn’t want to shop there be­cause it’s creepy that the busi­ness owner knows how they like their cof­fee then, yeah, it’s prob­a­bly not worth do­ing.”

Solink’s soft­ware mar­ries se­cu­rity feeds cap­tured by a store’s dig­i­tal recorder to point-of-sale data.

DAVE CHAN/THE GLOBE AND MAIL

Solink chief ex­ec­u­tive Michael Matta mon­i­tors live cam­eras at his desk on Jan. 3 in Ot­tawa. Solink’s video se­cu­rity tech­nol­ogy is used at 2,500 quick-ser­vice restau­rants and con­sumer loan branches based pri­mar­ily in the United States.

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