DropcamIn 2009, two software engineers in San Francisco decided to help one of their fathers solve a mystery.
Dog droppings kept appearing in his yard, although he owned no animal. Frustrated, the man tried to set up a surveillance camera to catch the neighbor's pet in the act. A software engineer by trade, it should have been easy for him to hack together a live video feed, but he ran into all kinds of streaming problems.
His son, Greg Duffy, looped in fellow engineer Aamir Virani. They purchased a camera, reverse engineered it, and created software that could record and display live video from multiple devices. The pair started slapping their logos on top of the re-configured cameras and selling them for hundreds of dollars. When the camera company caught on, it gave Duffy the option to either partner with it or be sued. Duffy chose the former.
The working prototype was enough to land Dropcam a seed round of financing led by Mitch Kapor and the first product launched at the end of 2009. "We were not what I'd call a 'Silicon Valley darling,'" Duffy says. "No one was doing hardware then."
Dropcam is an affordable surveillance option for everyone, and it stores video in the cloud so the footage is never lost and always accessible.
For a while, Dropcam was only a software company. Users could pay for the partnering company's cameras and also pay for Dropcam's easy set-up and streaming service on Androids, tablets, desktops and iPhones.
Now Dropcam has ended its partnership with the camera company and brought everything in-house. Its first original camera launched in 2012 for half the price, $149. Within a year, Dropcam's revenue shot up 5X. The HD-quality camera has movement alerts, two-way talking, DVR capability, night vision, and the ability to clip and share portions of videos publicly.
If Dropcam wasn't the darling of Silicon Valley before, it's becoming one now. A few weeks ago, Duffy received an email from Mary Meeker, a former Wall Street analyst who works for one of the most prominent VC firms in Silicon Valley, Kleiner Perkins Caufield & Byers.
Although she isn't a Dropcam investor, she wanted to include it in her annual, highly-anticipated presentation about the state of the Internet. Her colleagues raved about it, particularly the new Talk Back feature, which lets users communicate with people on the other side of the screen without placing a call and waiting for them to pick up.
KPCBMore video is uploaded to Dropcam per minute than YouTube. YouTube uploads more than 100 hours of video in that time frame, and Duffy says his company does "way more" than that.
While the pair set out to make a home-monitoring camera, they're finding countless use cases for their software and hardware. It's being used by cops in place of security cameras, because all of the video is stored in the cloud rather than locally. It can't be stolen or destroyed. Dropcam users have used footage to catch burglars, even when burglars steal their cameras. Parents use it as a baby monitor, or to drop in on pets while they're away from mobile devices. Most importantly, people are capturing moments – like a child's first steps or a neighbor's pesky dog – that were missed before Dropcam.
"When I am on the road, I still join my husband in singing bedtime lullabies using Dropcam," Randi Zuckerberg, sister of Mark Zuckerberg, says.
Dropcam makes money on each device it sells (the items are only sold online, on Amazon or Dropcam.com), as well as from subscriptions. For $9.99 per month or $99 per year, users can DVR and replay up to seven days of footage. For $29.95 per month or $295 per year, they can replay footage up to 30 days later.
The company is only 30-people strong, but Duffy says it will quadruple its staff by year-end. Unlike other startups, Duffy says he doesn't work his team to the bone. He provides daily breakfast and lunch for employees but not dinner, because he'd rather them go home and "recharge their batteries."
"We had two goals starting this company," Duffy says. "One, we saw a need and we wanted to make a product people would want to pay for. The other was to build a company we'd, as software engineers or anyone for that matter, enjoy working for."
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