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This company just raised $30m to put cameras all over your house

This company just raised $30m to put cameras all over your house


What began as a playful experiment is now a booming business

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Greg Duffy started Dropcam with a simple goal: find out which neighbor was letting their dog poop on his dad's lawn week after week. His father had looked into security cameras, but couldn't find one that made it easy to record, stream and monitor large amounts of video. So Duffy and his friend Aamir Virani, both software engineers, decided to build a solution. "It was pretty scrappy at first," admits Duffy. "We were buying cameras off the shelf, reverse engineering them and flashing them with our own firmware." The duo built and shipped all the early units by hand.

Fast-forward four years to today and the company is announcing a $30 million round of venture funding. It now makes its own hardware, the Dropcam HD, and says the new money will be used to triple the staff and expand from the web to retail stores. "Over the past year our revenue and units sold have grown more than five fold," claims Duffy. "We now process more hours of video each day than any service on the web, even more than YouTube."

Dropcam now processes more video per day than YouTube

"This is a company that can revolutionize security for the home," says Trae Vassallo, a general partner at Kleiner Perkins, one of Dropcam's new investors. Vassallo has a long history with hardware, having worked at Ideo, where she helped develop the Palm V. "There is a whole new wave of smart devices that pair hardware and software in an elegant way which are going to displace the clunky industrial models that have been around forever. Dropcam can do for surveillance cameras what Nest did for the thermostat."

The Verge review of the Dropcam HD, penned back in January of 2012, was decidedly mixed, noting that the monitoring functions weren't fully baked, video was mediocre and the unit had to be plugged in at all times. Duffy argues that because Dropcam thinks of itself primarily as a software company, much of this has been improved on since. "We don't ask our customers to go back out and buy a new unit to fix these problems. As we improve the monitoring and video quality, those changes work all the way back to the first units Aamir and I hacked together."

As for the need to always be plugged in, Duffy says the device works with any power source that has a USB port. As proof he points to Franky the tortoise, who wears a Dropcam on his back with a battery pack and broadcasts live from Lou's Pet Shop in Detroit for seven to eight hours a day.

Like Google Glass, its clear the comfort level with this kind of ubiquitous surveillance is higher in Silicon Valley than the rest of the world. Vassallo has three cameras in her home and two in her parents' place that she uses to watch her family when she's travelling. Among a group of non-techie friends I surveyed, the majority agreed this would creep them out.

Duffy acknowledges that there are still psychological barriers to adoption for some, but says this will pass as people see "Our system is catching a robber in the act pretty much every day." the benefits outweigh the drawbacks. "It's getting to the point where our system is catching a robber in the act pretty much every day."

The Dropcam HD retails for $149 and the company offers two tiers of paid cloud storage that let users access footage from the past week or month. Duffy says 39 percent of people who bought the unit subscribe for this service, giving the company a healthy revenue stream separate from its hardware sales.

Looking ahead, Duffy says he is most excited about bringing improvements in computer vision to the platform. Dropcam can already pair with a phone to turn on and off when a user enters or exits their home. And it can do basic motion detection. But Duffy says the new funding will help accelerate the company's move into smarter sensing that will decide when motion on screen is important or irrelevant. "We want a system that alerts when you need it and leaves you alone when you don't."