It’s a scary moment, and a big risk, for a company to branch out and diversify from its core business, particularly in a conservative field like electrical contracting.
But a lucky or insightful bet can pay off big time down the road, like corporate security is paying off for two area electrical businesses that invested in it decades ago.
For Larry Dashiell, the owner and CEO of Santa Rosa-based Summit Technology Group, the decision was based on necessity.
Dashiell was thrust into the hot seat at Summit in 1986, when he was just 22, after his father died in a plane crash. He had to learn quickly.
Until then, Summit had focused, like most traditional electrical contractors, on the high-voltage side of the business — wiring for power and lighting — leaving the less lucrative low-voltage side, mostly VDV, or “video, data and voice,” to subcontractors.
“The traditional electrical contractor has remained the traditional electrical contractor,” he said. “They put the conduits and raceways in for a low-voltage contractor to come in. Most electrical contractors have a partner or subcontractor they work with because they don’t have the in-house capability to do that.”
And that was how his dad’s business did things, too, at least until 1990, when Dashiell was fed up with it.
“We had to work with companies that did low-voltage work,” Dashiell said. “But it was hard to find reputable companies that would show up on time or were professional. A lot of the (audio-visual) companies back then were ex-band members or roadies.”
Though musicians and their ilk knew a lot about wiring power and sound, they were pretty ignorant of business basics, Dashiell said.
“The low-voltage side was kind of like the wild, wild West. There was no standard,” he said.
Not that starting a new business — Summit Electronic Systems — focused on low-voltage work, including security and surveillance, was easy.
“There weren’t a lot of people in that industry who understood business,” he said. “There wasn’t a lot of training for electrical contractors on how to start that kind of business. Did you need to hire an engineer? A programmer? A network designer?”
The answer to all three questions, it turned out, was yes.
But how long, he wondered, would he have to wait for a payoff from this investment?
TILL THE COWS COME HOME
For Michael Nann, vice president of Novato’s WBE Security Systems, his interest in security technology literally started with cows.
As a young man, he studied a dairy farm in the Central Valley,
“They first tried an application where they wanted to figure out which cows had been milked and which hadn’t, so they could separate them into two chutes,” he said. “They had a chip hanging around their neck. That was the first time I’d ever seen any kind of logical control.”
From counting cows, Nann, trained as an electrician, went on to work for United Airlines, which was changing from physical keys to key cards. Access control and security intrigued him.
“I liked the concept of electronic security more than lights and plugs,” Nann said.
He learned a great deal on the job while working on an electrical project for Visa Inc. in Foster City. In 1999, WBE CEO Leslie Murphy poached him from San Francisco electrical contractor McMillan Corp., which had a corporate security division. Murphy was placing her own bet of the growth of future security business.