A conversation with Jim Hull, recently retired founder of Monitronics
Q: Is Monitronics how you envisioned it would evolve over the years?
A: When you start a company from nothing, it's extremely important that you have an understanding of the market, with what you want to do. I did my homework and think I had a pretty good understanding of it. We stayed extremely well focused. Yes, it has grown a little faster than anticipated.
Q: How did you develop the concept of the company while meeting the company's objectives?
A: Knowing the market is also how you develop the concept. To get there you have to understand what the subscriber and industry is about. It is what you call a negative- and event-driven market, meaning that something will give you a certain level of anxiety that will cause you to think about buying a security system. Years ago, when you made that decision to have a security system, it was a large-money decision. With the advent of mass-marketing, that really became a $30-per-month decision. So the market did change and because of that change, something developed which has caused a significant problem to some of my competition. Volume is normally the answer for everything. Once you get into mass marketing, there is volume, cost and quality. And all three move in different directions. If you increase quality, volume goes down and cost goes up.
From the very beginning, we have had a quality driver. I think as a result we were able to do a lot of internal development for customers. Only 20 percent of the market is penetrated. You have to know those things and realize that there can be changes. We started it two years ago by instating an activation fee of $69 dollars. The more the customer pays up front, the higher quality the customer is. Our attrition rate decreased by 30 percent when we put an activation fee in. I think we did a better job on turning down volume. Again, because we really knew the market, we were disciplined to turn down some pretty high-volume deals to push the quality driver as high as we did.
Q: After graduating from Michigan Technological University, do you remember what persuaded you to enter the business world?
A: It was a combination of my personality and a tremendous opportunity when I went with Controlled Data, a rapidly growing computer company back in those days. Within five months of joining the company, I had 90 engineers working for me and by the time I was 29, I was living in Europe as general manager of the European Systems division. With my personality, I took every opportunity that I could to learn something and progress. It wasn't something I had to agonize over. When you start a company up, you cannot replicate a mature company. It is too expensive, too tedious, and you just can't make it. What I did learn is how to put the hooks in. You can run a company on certain policies, but you don't need the policy manual. Someday you know you are going to need those things, so you put the hooks in place and as you expand you know what works.
Q: In the beginning of your professional career, did you ever have any doubts that your goals could not be accomplished? How did you overcome those fears?
A: I might be one of few driven personalities that you may have ever met. The whole thing keys on past experience: if you allow the past to dictate your future, then you will always have more doubts than you need. I think you have to believe you can actually change things. Change the future. Do it a different way, learn from the past absolutely, and learn what not to do, as well as have enough confidence to think: "Yes you can change things."
Q: With more than 20 years in the industry, what is your perspective on how the security industry has evolved?
A: There are some products and marketing concepts that have evolved quickly, like mass marketing, but overall a negative market grows slowly. Because it is an event-driven market and because it reflects a retail market at the same time, prices are usually held as low as possible. Technology has come into the market, but very slowly. I do expect in the future that technology will certainly increase, like the concept of video monitoring, and VoIP has. You might see causal monitoring over our own cell phones. At the same time, you need to be linked to emergency monitoring and have to have duel sources operating at same time. The definition of monitoring will broaden.
Q: People have described you as pioneer in the security industry, what do you think of that title?
A: I think "Survivor" is a better a title.
Q: What advice can you give to recent college graduates who want to enter the security industry in an executive role?
A: Anytime you enter any industry, really and truly understand the market from all aspects.
Know which way it moves. You need to be an out-of-the-box thinker. If you put yourself in a box, as pretty much defined by history, you are going to find it more difficult. If you are going to lead a company, then you are going to have to lead it. There are two types of leaders: one is the passive leader, who finds out where the company is heading, and just jumps out in front and yells, "Follow me." The other is the active leader, who knows what the market is doing and says, "We are going to go in this direction." You need to have a combination of vision, analytics and willingness to spend time in the market.
Q: Upon retirement, you plan to serve as Chairman of the Board of Directors for Monitronics. What would you like to accomplish in that role?
A: To maintain Monitronics' mission statement. People forget in this industry what monitoring firms do. We save lives and protect property.