For a while I have been wanting to do a brain dump of ideas I have had onto my blog and finally I have the will to make it happen. Many of the ideas I still think would make great businesses but for one reason or another I just didn’t execute them.

So I started playing around with the idea of revolutionizing the Home Security industry. This has been a market that has remained pretty much unchanged for a long time. A monitored burglar alarm service that relies on the police as first responders, business model which has put them at odds with law enforcement due to the high incidence of false positives.

This industry has had monopolistic tendencies for decades culminating this year in the acquisition of Brink’s Home Security (Broadview Security) by ADT Security Services bringing together the #1 and #2 companies in the US. Despite residential security services being just one of the many markets these companies provide services in, it is definitely the most financially attractive. For years these companies remain in control by forcing competitors out of business by lowering prices below cost.

The business model with a change here or there is basically moving into high-growth areas having a recurring service revenue.

What caught my attention is that despite advances in technology these companies still rely in their old infrastructure. Yes there are more advanced sensors including passive infrared,  ultrasonic, microwave, photo-electric, smoke, heat, etc and cameras but what was interesting is that for the most part when the alarm goes off a call is made to the monitoring service using a land line and reporting data gathered from these sensors to give the call center some data to act on after a call is made to the home.

This is were I think there is an astronomic potential. The value of the data gathered by these sensors would be a gold mine allowing the monitoring service and basic sensors to be provided for FREE and a premium charged for more advanced sensors and surveillance via cameras. A highly sophisticated and integrated system reducing the number of false positives. The system would of course go beyond security monitoring and merge with home automation, and home health monitoring. In order for the system to scale the intelligence in the homes (home security panel) would need to move to the cloud and communicate with a hub inside the home interfacing with multiple sensors, telephones, sprinkler system, entertainment system, electrical system (smart meter), appliances, air conditioning, water heater, and use of home areas by means of “mood” sensors.

Sources of income for the business would be advertising, cross-selling smart devices from manufactures, upgrades to premium plans, subscription to additional services such a health monitoring, and selling the raw data collected and even selling the data after qualifying it. Imagine being able to provide bulb companies burn-out rates, provide household advice on their energy uses and how to improve them, water usage and patterns, target marketing based on social status which could easily be determined by energy usage patterns, and mining migrating patterns within the home.

The Reality Mining Project was a social experiment conducted by MIT in which hundreds of hours of proximity data were collected by tracking mobile phones over a period of 9 months. Researchers created algorithms that could predict a person’s next actions accurately over 85% of the time. The program also determined social status and relationships as well as create a list of their friends and acquaintances and be right 90% of the time.

There is no doubt that this idea would have privacy advocates up in arms but in a world that is highly connected and the boundaries between public and private blur, it becomes a feasible business as long as there is not personal identifiable data.

Attached is a deck on the concept.