podcasts

Lee Odess on trends in Access Control Systems

08 April 2020

Lee Odess is CEO of Group337, a growth studio focused on access control. Before Group337 he was an executive at Allegion, Unikey and Brivo. We talk about trends in access control, including the move from inconvenience to touchless systems as a result of COVID-19. This conversation was recorded in April 2020.

Yuval Boger (@TheChargeGuy): Hello Lee and thanks for joining me today.

Lee Odess: Absolutely appreciate the opportunity.

Yuval: So who are you and what do you do?

Lee: My name is Lee Odess. I’m the CEO of Group 337 which is a growth studio. I work with a lot of companies that want to see growth in either verticals or within their business. And then I also run a media platform called Inside Access Control, which is the voice for the physical access control industry.

Yuval: How would you define access control, by the way?

Lee: So I’d define access control as people wanting to get into places typically in the buildings or offices or their house, so structures. And it’s the components that go on the door itself and it’s the software on it and in the cloud or on-site, the things that make sort of the rules engines and whether you’re allowed to or not allowed to enter.

Yuval: So it would both be something like a smart lock as well as the, I don’t know, visitor management system or something like that?

Lee: Yeah. So it’s a combination of either a lock of some sort. So it’s either a deadbolt like you see in the residential side, could be a mag lock on the commercial side, it could be a mag strike, it’s at some sort of physical hardware that opens and closes as needed. And then different types of software really. There’s the management software of the actual access control system itself. And then there are different user interfaces like a visitor management system or a credentialing service or say a health club management software. So you’re starting to see it spread into a lot of places where people are controlling virtual credentials and identities and then extending those into the physical world.

Yuval: I want to ask more about that, but before we do, I think you have quite a bit of experience in the access control industry. Would you mind telling me a little bit about your background?

Lee: Yeah, absolutely happy to. So, started off in the industry as an actual integrator. My wife and I owned a business here. We work directly and indirectly in it. Took that company up and sold that when we decided it was time to make a change. From there went and worked for a cloud-based access control company called Brivo. They were the first to introduce the cloud infrastructure side of what has typically been a client server-based system. So, I was the Vice President of Marketing and Enterprise Sales there and then we also had a ‘labs’ division called Brivo labs. That was back when everybody was doing a ‘labs division where our charter was to see how we could leverage our backend systems into new spaces. So we were early on to this idea of single sign on to the physical world where you would take your offline credentials and online credentials and utilize them interchangeably.

So when there, we sold that business to somebody. When I left there, I went to work for a startup in the Orlando area called UniKey, which is one of the pioneers in Bluetooth technology when it comes to smart locks and in the smart commercial access control space. Was there for a couple of years, it was time for my family and me to make a personal decision and we decided to move back up to the DC area and when I did join Allegion, which is a 2 billion and so large manufacturer in the access control space, they’re a hardware manufacturer so they make locks, brands that you’ve known like Schleg and Von Duprin and Kryptonite, so different types. I handled all the partnerships and ecosystems. I had a team of people that executed the strategy that we put together there. So we worked with everyone from as big as Apple and Google and Amazon all the way down to just about anybody that wanted to access the locks.
From there, I left that and then started this company now working in this space but from a consultant’s point of view and then also trying to drive a message that is forward-looking as far as where the industry is going. Because it’s been historically a somewhat of a cottage industry that is been primarily we had threats if you would internally and was allowed to grow how it wanted to. Well, just like everything else in the world, it’s being eaten by software and we’re looking to drive and help some of that growth that the industry is being forced to do as well as willingly wants to do.

Yuval: You mentioned some of the innovations in the past, whether it’s single sign-on or Bluetooth locks and so on, and now you speak about where the industry is going. So where is it going?

Lee: It’s a great question. So, I would say where it’s going is a couple of things. First off, I’d start with the industry historically has always been about inconveniencing people. That is what security does. You put structures in the way, whether it’s a turnstile or a lock, a door, whatever it may be. And it was about inconvenience. Well now though with the consumerization of things, the utilizing phones, the sort of people’s point of view that, “I don’t want to be inconvenienced, so I would like to have that balance of security and safety and convenience.” So that’s one of the areas that you see the industry moving to is that balance between the two. You don’t have to sacrifice them. Now you can deliver both and you can have policies in place that there are places where you want to have barriers and you want to have some friction created in it.

And that’s okay. So like high security, say airports or the government’s facilities, things like that. But when I get into my gym, I don’t know if I really want that friction. So, what we’re seeing now is a lot of people focused on bringing that to it and allowing it to be somewhat dynamic. So, that’s one of them.

The other one is that and I believe there’s going to be a flip where currently right now if you look at how everything works is you’re given an identity, a piece of plastic typically that’s really not you. It just has some bits on it that says it’s you, kind of maybe, but it doesn’t really know. So the assurance isn’t real high. We can see a flip now happening where you bring your own identity to the space and the parts on the edge and a couple with the cloud, so a hybrid type approach are going to have to be able to make a decision on what level of access you get based off of the level of assurance that you give that you are who you are. So multiple things like multifactor authentication is a way to help level up that security. There’s a lot, biometrics, you’re seeing a whole bunch, but the paradigm shift of you bringing a given identity that you don’t know if it is you or not to you bring your own identity total switch.

Which what that does in our business is there’s been a very big credentialing business where the people have “power” where they made money were the systems that created those credentials and would send them the people that’s been where the gold is. Well, that value is changing and that business has come falling apart and now you’re starting to see a heavy push from whether it’s startups in the business going in and pushing this identity message, or you have some large companies in our business that have shifted and said, “You know what? I’m going to go do some M and A work and bring in some of that into my own business.” So those are two examples.

Yuval: I look at credentialing, whether it’s now a retinal scan or fingerprint ID, like CLEAR in the airports, is that one direction that the industry is going? Or is it going to be some other type of credentialing that’s issued to me but is not directly part of my body?

Lee: Sure. So it’s funny you bring up CLEAR recently I wrote about the fact that I find them to be one of the biggest threats in our industry currently now that no one’s paying attention to because they’ve figured out that sort of great experience at the airport and they’ve moved into stadiums and you can see they’re moving into the buildings as well. So, the idea though that your question was around biometrics and to be fair, it’s been around for a while, it just hasn’t really worked really great. Number one. And I would say it’s really been seen at more of the high end and the experience has been somewhat not good. So because of that, the adoption hasn’t been that great. Now though, you’re seeing an influx of people and we talk about certainly, like the climate that’s happening right now, we’ve been talking about frictionless and seamless and utilizing biometrics as a way to do that.
And it was sort of seen as a nice to have. With the current climate and everything you see with the Coronavirus happening right now where you’re seeing this whole push for touchless, there’s now sort of rebirth if you would have a more mainstream message and I would say a better value creation story that’s happened to where I think we’ll start to see people adopt those in a much broader and wider way than we have historically seen. So it’s going to be a combination of your retina, your finger, there’s everything from how you walk, the gait. Your voice is another one that we’ve seen as authenticating. So, I think it’ll be a combination. It’ll be interesting to me, I think we’re a little bit far out from where it can be sort of realized everywhere, so ubiquitous, but there’ll be use cases out of the gates where I do think you’ll start to see a real big uptick coming out of Coronavirus.

Yuval: Going back to your definition of access control systems, if now an access control system is a retinal scan or a camera for face ID or something that looks at my gait, does that expand the definition of access control beyond just software and locks?

Lee: I mean I was calling that part of the software side. If you broke the software down there’s a lot in there. So, it’s everything from the embedded software on the devices to the mobile phones, to the wearables, to the backend systems, to middleware that sits within that to make all of that stuff work. So, there’s a lot that goes into it. I think it expands the percentages of different things that are used where right now you have a heavy sort of onsite lock and card type based system where the software sits on-site and the cloud-based and a lot of these middlewares and a lot of these newer technologies if you would that have been seen as I would say nice to have, like we talked about before, but not necessarily huge uptick.

I think you’ll start to see those. I believe there’s a phase change happening to where because security was always the main value creator that we had and that’s all that really people cared about to where now you’re having more value creation happening with other systems and I think safety will become sort of table stakes at what you have. You’ll start to see those what have been smaller sized businesses get much larger and drive the specifications and adoption of why people pick that access control system or that lock because of what it can do versus it just being safe.

Yuval: And not to get too far off on a tangent, but does that not bring privacy concerns? If a company like CLEAR now knows what airports I visited, what ball games I went to, maybe what bars or cars that I rented and so on?

Lee: Well they kind of already do. So, I don’t know if it raises it any more than it already is there. And if anybody’s not thinking about that already and having those conversations, there probably late in my opinion. So, I think what it does is it does make that playing field larger, but currently, right now I don’t think it changes much of the conversation more than maybe more people are having the conversation.

Yuval: Let’s talk a little bit about touchless. So obviously there’s going to be some change and while I would prefer it to get my eyes scanned as opposed to putting my finger someplace, if I just want to be completely touchless, what other changes does touchless mean for the industry?

Lee:
So other changes that touch this brings to the industry is, I think one, and this is a debatable one that people have been talking about, is you have a lot of old systems that have been out. So a lot of the access control and security products that have been in the marketplace had been around for 30 years and they’re built for that. So but how do you now update those things properly to be able to support some of the needs that people have? So that’s going to be pretty tough because it’s a large capital expenditure to do that in a lot of areas. But so I think some will automatically do it and they’ll upgrade them to get them out of there.

I think you’ll start to see, touchless will drive new business models that haven’t necessarily been introduced, whether it’s the way things get financed, the expectations of paying a reoccurring revenue model to hardware as a service type models versus that you had before. So, I think one of the biggest impacts is going to be that business impact that they have.

Number two I think is you’ll start to see innovation happen in some of the older technologies that we’ve held onto forever. Like Prox, which is a type of card technology that we have of how it communicates. It’s really old and insecure, it’s well known to be that. That at some point I think the expectation is for that to be put to bed and frankly new technologies being introduced that drive a level of the security that we know we wanted and will also then bring the conveniences that we’re looking for. And I think the focus will be on and the money wanted to be spent, will be spent on that versus trying to find the cheapest thing that you could put in. So that I think is another one.

I think touchless will also drive different materials to be utilized and different levels of expertise around those materials and how that stuff functions. So I think the talent aspect of this is going to be impacted by touchless. So, folks that are good at that so Bluetooth, NFC, biometrics, services like I said, the voice authentication services, which again I would say haven’t been necessarily taken that serious as they should have, will now be taken serious. So there’ll be a talent movement on that end. I think there’ll be a… I talked a little bit about it already, but a consumer adoption uptick in that and an expectation if you would of how that should work.

A habit changing. So if you think about it’s a habit to go grab a door and open it, that’s going take a little, if you watch people, which, because I’m in the business we have is we film people how they use the door so you understand how their habits work, it’s sort of second nature to reach for something. Where I think the way people interact with spaces is going to change and the designs around them. So whether it’s a door, historically you think about it with some sort of mechanism that you grab onto, to how do you build it now that it doesn’t? So design practices will change. Elevators will change just about everything if you think about how many times you walk into something and have to grab something to open to get in there, it’s a lot, you do it often, more than you probably think. If you start paying attention you’d see it. Now, that whole experience that you have is going to have to change and that’s probably going to be the biggest impact.

Yuval:
If you look at a progression of the lock from a dumb lock where I would just insert a key and turn the mechanism to a battery-operated smart lock that maybe I type in a code to what you’re describing, a lock that might be cloud-connected to an access control system or have a face ID or voice recognition or something like that. That sounds like something that’s going to need much more energy than you know a couple of AA batteries will provide. Do you see that as an opportunity for wireless power to deliver that energy to such locks and other mechanisms?

Lee: I believe so, yes. It’s sort of a combination of two. I do think the computing power needs will be reduced on some things and then there’ll be new things introduced that’ll bring it back up. So call it a net even on the need to have a higher power to drive a lot of what we have. Especially the, and if you’d think about it, a lot of these, there’s a lot of structures that are existing right now that need this stuff, right? So how do I get power to that is a big problem. So, I think naturally, yes, I think there’s going to be a need to figure out the power problems. So, batteries are a problem not only for just doors and hardware like this, but I mean cards everywhere. I just think it’s a thing that needs to get solved. It’s sort of the weakest link in the chain a lot of times when it comes to this is that we have all these great ideas, but if I can’t power them, it doesn’t matter.

So understanding how you do that, how you do it efficiently, how you can do it cost-effectively? Because there’s also that part, right? There are the pressures that, if I left it to every industrial designer that I’ve ever known and engineer to build it and there was no cost associated it, you’d have the best things ever. But realistically it also has to have some call it economical and consumer pressures if you would that drive what you actually build. But when it all comes down to it, yes, I think the more edge computing that we’re going to need, which is going to happen even more, even though there may be a reduction in the power that is needed to drive certain things that right now seem like battery hogs, I do think there’ll be new things that are introduced that are going to need it. So you’ll net even so you’ll need something, yes.

Yuval: And as we draw towards the end of our conversation, you mentioned that the door of the future may be a much different, maybe I’m not going to have to grab onto or have to touch, but until that happens, there are billions of doors out there today that would need to be sanitized somehow. That would need to slowly be upgraded to the world that you’re describing. Doesn’t sound like a change that’s going to happen overnight?

Lee: No. I mean all of these things and it should be seen with and through the lens of, I’m not saying these things are going to happen overnight. I think you’ll have different parts that will gradually change and just like at a crisis you have innovation and the rest, but there needs to be a buyer on the other end. Right? So, I think some of these things will accelerate, yes. Some of these will be slower, some of them will be habitual. They’ll need to be systems like you talk about that help on sanitization, maybe in the meantime, there’ll be someone with a rag and disinfectant, right?

But at some point, different materials will be used. Different ways to do it, whether it’s wirelessly or not like will be introduced and you’ll have a layered type approach. But I definitely think a lot is going to be changing that comes out of this. I think it’s an exciting time for the access control industry because it’s now somewhat of mainstream, if you would direct result of what’s going on that people, a lot more people are thinking about it than just the security industry. And with that, I think you’ll, there’s a great opportunity for a lot of people to rethink how things are done and introduce practical value solutions that people would want to adopt.

Yuval: And do you see that from your existing clients? A renewed need for innovation or a renewed budget for innovation?

Lee: I believe so. I think right now, I mean if we talk about the absolute now there’s some still trying to get their heads wrapped around what’s going on. But I am starting to see a lot more conversation around, “Okay, so what are we going to do when we come out of this?” There was already beforehand you saw companies with innovation engines being built and then you have new startups that are just innovation engines really. So, that sort of spirit has been there. I think there is a renewed energy around that, that whenever these times like this happen, you take a look at what you’re doing and it’s an opportunity to, sometimes forced into having to rethink what you’re doing, but then other times it’s a good excuse to now take a look at it. That I have seen, I’ve had enough conversations now to know that I do believe this, that phase change I talked about is going to be accelerated.

Yuval: Lee, how can people get in touch with you to learn more about the work that you’re doing?

Lee: Absolutely. So a great place for me is on LinkedIn, Lee, Odess. They also can go to my website, it’s group337.com or text me and I’ll be happy to engage at (202) 999-8180.

Yuval: That’s great Lee. Thanks so much for being my guest today.

Lee: Thanks for the opportunity. Appreciate it.

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