New DriveCam CEO Is Focused on the Road Ahead

3/26/09Follow @bvbigelow

It’s been a little over six months since Brandon Nixon moved into the driver’s seat as CEO at San Diego-based DriveCam, a venture-backed company that uses a combination of technologies to help reduce risky driving behaviors. That seems like enough time for a new boss to get up to speed, so I stopped in recently to ask Nixon why he agreed to take over a startup that’s already got some mileage on the odometer.

Nixon has his reasons, three to be specific, all related to the potential growth he sees for the company and its technology. And his reasoning carries some weight. As a general partner at Housatonic Partners, Nixon oversaw the private equity firm’s investments in a number of telecommunications-related companies. In 2002, he stepped into the CEO’s job at a Housatonic portfolio company, Enerdyne Technologies of El Cajon, CA, and led Enerdyne’s sale four years later to ViaSat (NASDAQ: VSAT) of Carlsbad, CA, for $17 million.

So in essence, by naming Nixon as CEO, DriveCam was redefining itself as less of a video technology company and more of a data communications technology business.

Yet DriveCam’s business strategy has only come into focus since 2005, when the company got about $50 million in venture funding from San Diego’s JMI Equity, Silicon Valley’s Menlo Ventures, New York-based Insight Venture Partners, and Integral Capital Partners, the Menlo Park, CA, firm that also put money into Google, Akamai, and Qualcomm.

Until then, DriveCam was mostly bootstrapped, although spokesman Eric Cohen says “there’s not a lot of historical information” available now about the first seven years. The company was founded in San Diego in 1998, after Australian inventor Gary Rayner experienced one of Southern California’s infamous road rage incidents. His idea for mounting a small video camera on the dashboard was novel enough to win a most-innovative product award in 2000 from Connect, the San Diego non-profit group that promotes technology and entrepreneurship. The device combined hardware and software to store unbiased video clips that served as an unbiased eyewitness to traffic accidents and other highway incidents.

Fast-forward 11 years, and it now seems as though hardly a cable TV channel goes by without seeing reality TV video footage of some terrifying high-speed police pursuit that was recorded by the dashboard-mounted camera in a patrol car. “There are a lot of crash recorders on the market,” Nixon conceded. But the company learned a long time ago there wasn’t much demand for such video. Today, Nixon says, “We are in the prevention business. We try to prevent crashes. That’s how we drive down the cost of claims.”

Nixon says DriveCam has integrated a variety of technologies so the company now provides both a product and a service for its target market, which consists mostly of big companies that operate fleets of vehicles. Today, DriveCam’s camera module includes a motion-sensitive accelerometer chip (similar to the Nintendo Wii) with proprietary technology that records and saves the video from an accident or erratic driving incident. The event recorder uses a wireless cell phone network to transmit the video clip to a DriveCam data center, and the company has developed software to help “score” the incident. The company also has developed a Web-based, software-as-a-service application to help fleet managers review the incident, coach their drivers and to develop long-term data that helps a customer identify their riskiest drivers, riskiest delivery routes, and riskiest vehicles.

With the integration of technologies already in place, Nixon says he joined DriveCam for three reasons.

The first is the company’s potential market. While DriveCam has installed about 100,000 of its video modules in taxis, delivery vans, utility trucks and other fleet vehicles, Nixon estimates there are 2 million fleet vehicles in the United States alone. The company is currently focused only on the U.S. market, but Nixon added, “Most of our clients are multinational, so they pull us sometimes into foreign markets.”

His second reason is that DriveCam’s subscription service provides recurring revenue, “which is a business model that I have grown to love,” Nixon says.

The third reason is what Nixon calls DriveCam’s value proposition. “It’s undeniable and proven that we’ve cut our clients claims costs in half,” Nixon says. “Most of these fleet operators are self-insured. So it’s a value proposition that sells both in a good economy and the economy we have today.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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