Michael Matta was stuck in a dull gig tracking customer traffic patterns at BCE Inc.’s The Source retail chain when he got an idea: Instead of going store to store, why not just remotely tap into their security cameras?

The footage was only accessible on-site and little used except as evidence when thieves hit. Mr. Matta, a University of Waterloo electrical engineering graduate, wondered what other insights were buried in the video.

Nine years later, Mr. Matta runs a fast-growing Ottawa startup called Solink Corp. that is transforming the dowdy retail security system from a mandatory expenditure for insurance purposes into a business improvement tool. Solink’s system is used at 2,500 quick service restaurants and consumer loan branches primarily in the United States, including Tim Hortons, Five Guys and Chick-fil-A, to not only keep operations safe but also help operators increase revenues, streamline operations and catch cheating employees. Solink “goes to the security budget and says, ‘For so many years you’ve been an expense, why can’t you turn around and be an addition’ ” to business results, said ScaleUP Ventures partner Matt Roberts, a Solink financier.

Now, after four years of triple-digit growth (the number of Tims’ using Solink doubled in 2018 to 1,000 outlets) Solink is fuelling its expansion further after raising $16.3-million from Generation Ventures, ScaleUp and lead investor Valor Equity Partners, an early backer of Tesla and Space-X and owner of restaurant operations that use Solink. “We began our relationship as customers … and immediately saw value in Solink’s platform,” said Jon Shulkin, partner with Chicago-based Valor.

Solink, which generates about $5-million in annualized revenue and has 60 employees, takes a similar approach to that of smart-thermostat makers such as Ecobee that expand capabilities of established technology by incorporating recent innovations. Solink’s software marries security feeds captured by a store’s digital recorder to point-of-sale data. It uses artificial intelligence to rifle through the combined data to pinpoint specific events, such as when employees key in discounts, brew coffee or when lineups form. It uploads relevant snippets to the cloud so operators can access them remotely, and sends updates about anomalies and unusual activity.

“It’s taking that lens that’s always there and [provides] the same level of feedback you would have if you were sitting in your [operation] and able to coach staff on optimizing your business,” said Mr. Matta, who targets operators with multiple locations and $1-million in sales for each store.

While security video recorders typically gather dust in store backrooms, one-third of Solink customers tap into the system daily from their smartphones and laptops. The firm, which started as a consultancy funded by billionaire Terry Matthews, decided when it started selling products in 2014 to make its software compatible with most digital recorders rather that integrating with one type of hardware. That approach means new customers don’t have to replace existing equipment – but if they do, Solink sources the machines as part of its monthly fee, which starts at $175 a store on a three-year contract and includes installation, maintenance and upgrades.

Customers who have signed up for its security service say they’ve found many other uses and Solink retains more than 99.9 per cent of customers from month to month on average, far better than most subscription software firms. Betty York, who owns two Tim Hortons franchises in Oromocto, N.B., said she’s adjusted staffing based on traffic patterns identified by Solink and uses the system to monitor staff adherence to procedures, for training and to ensure snow removal happens on time. She credits Solink for helping cut food costs by 4 per cent and labour costs by 7 per cent, and by eliminating accidents. “It gives us a 24-7 visual of what our restaurants look like and how ready they are to receive our guests,” she said.

Cincinnati-based Axcess Financial Services Inc., which offers consumer loans at 960 outlets, said its Solink systems had cut seven months off the average time to uncover employee fraud and shrunk average losses to less than US$1,800 from more than US$12,000. Axcess’s senior director of asset protection, Aaron Rogers, said Solink costs Axcess US$1.8-million annually – but saves more than US$1-million in fraud losses, for a net savings of 30 per cent compared with other security systems.

Axcess has also used Solink for regulatory audits and to study in-store traffic flows. “I haven’t see anything [else] that touches what they do,” he said.

Solink is now exploring how to make its systems smarter by using more AI. It’s running a pilot project to see if drive-through staff can better serve repeat customers, suggesting items they typically order.

When asked if he’s troubled about tracking such information given recent concerns about tech giants collecting personal data, Mr. Matta seemed unconcerned. Customers are used to being surveilled and if staff watched all the footage they could “infer all the same insights we’re delivering,” he said. “Over time, the trade-off is that you can consent to the convenience of accelerating your purchase … [but] if the consumer doesn’t want to shop there because it’s creepy that the business owner knows how they like their coffee then, yeah, it’s probably not worth doing.”

The Globe and Mail, January 14, 2019