Home Automation Podcast Episode #4: An Industry Q&A With Ted Bremekamp
A Talk with the CTO of one Largest Custom Integration Firms
This week's home automation podcast features our host Ron Callis interviewing Ted Bremekamp. Recorded live on Tuesday, May 23rd, 2017 at 12:30 p.m. EST.
About Ted Bremekamp
Ted Bremekamp is the Chief Technology Officer and General Manager at ETC, a nationally recognized leader in the residential electronics industry. With a degree in Electrical Engineering from Notre Dame and more than a decade of experience in AV and automation, Ted is a recognized industry expert.
Ted is also a member of ProSource’s board of directors and the President of the Bill Raskob Foundation, which provides interest-free education loans to deserving students throughout the U.S. In the interview, Ted discussed his role in running one of the largest custom integration firms (#15 on CEPro100 for 2017).
The live interview covers a series of topics surrounding the AV and automation industry, such as:
- The primary benefits of a ProSource membership
- A day in the life of running a $14 million a year integration firm
- How a $5 million business grows to become a $15 million operation
- Ted's take on Crestron's source code
Ron: Hello everyone. Ron Callis with One Firefly. We are back with another episode of automation unplugged. Thank you for joining us. It is 12:30 p.m. on Tuesday, May 23rd. Hope you're having a great day and thank you for joining us live here on the One Firefly Facebook page. So for those of you that joined us last week, you'll notice that we had a few technical issues or glitches and we've worked through those have actually ended up rebuilding my computer and reloading all the software. And God willing we've got all of those bugs resolved. I'm very excited today. I'm joined by Ted Bremekamp from ETC. ETC is one of the largest integrators in the nation. I'll get to this in a little bit. But on the recent addition of CE Pro 100 , the recent CE Pro Magazine ETC was listed as the number 15 integration company in terms of revenue in the country. And I've been in Florida since 2003 and ETC has always been a leader in the pack here in the state of Florida. At least one of the leaders of the pack so I'm gonna jump right over to you guys meeting Ted again. Ted is the CTO of ETC. How are you doing Ted?
Ted: I'm doing good today. Thanks, Ron.
Ron: Awesome man. Thanks for joining us. And you said it yourself being a guinea pig here on our Automation Unplugged Facebook Live show.
Ted: Yeah. Hopefully , better than the last week.
Ron: It is going to go better than that, well I can see that we actually have audio coming out from your end so that means we're already better than last week.
Ted: There you go.
Ron: How's your day going so far?
Ted: It's doing good. It's a nice sunny day here in South Florida so it's good. Things are going well.
Ron: We do live in paradise, don't we?
Ron: All right I'm going to check on our our our Facebook page just to see if the streams coming through. It looks like it is coming through. So that is positive. So Ted, I want to go into a little bit of your background and just set the stage for our audience so they kind of know where you come from as well as we'll get into a lot of fun topics relating to your role at ETC. You're also involved with a foundation that gives back to students entering college. But just to kind of fill everyone in. How did you get started in this industry? And I know you've been in this industry now for almost 30 years. Do you mind giving me a little bit of background?
Ted: Sure no problem. I graduated college from University Notre Dame with an electrical engineering degree and out of college after taking a little bit of time off. I got hired by a company in Jupiter Florida called Custom Sight and Sound. And they were one of the leaders if not the major leader in high end luxury custom automation systems before automation systems and custom devices were around. And I was hired to design and develop and manufacture custom products to do automation and high end luxury homes. And back then there were no Niles, there was no Crestron, there was no automation companies or integration products out there. So I was designing and developing products to make our high-end luxury clients lives simpler and better overall from an integration standpoint.
Ron: Now Ted what's an example of that? You said you were inventing products like today you can order almost anything you need from a vendor and put together a completely integrated home. What were some of the examples of things that you had to invent ? You know, by the way what's the timeframe are we talking?
Ted: So this was 1987.
Ron: OK so in 1987. And you were going to do a fully integrated home. What were some of the things that you would have to invent and kind of use your new fresh new electrical engineering degree from Notre Dame? What were some of the things you'd have to invent?
Ted: So one of the main things we developed was an automatic relay interface for a television. So back then there were no such thing as surround sound receivers back then there were just two-channel receivers and a lot of high-end people wanted to have good sound coming out of their TV through speakers in the room. So we developed an automated relay system that had a sensor that went on a backup the old tube TV that actually picked up their frequency off the playback transformer in the TV and would switch the audio from the TV sounds through the better sounding speakers in the room either through an amplifier or directly from the TV amplifier through the speakers in the room. This allowed customers when they had their TV remote to control the volume and everything on their TV and have better sound than the speakers on the TV. So that was one of the main things. The other thing we developed was a digital audio bus with LED display keypads that allowed homeowners from an LED display keypad to control audio within a home with everything centralized from audio distribution within the home.
Ron: Now were you guys? This is when you were back with Custom Sight and Sound. Correct?
Ted: That's correct. Yeah.
Ron: Now were you only putting this into your projects or were you guys actually manufacturing and selling these products to integrators throughout Florida or throughout the country?
Ted: Only in our projects at the time. We never got around to distributing or selling it to other dealers.
Ron: Got it. OK. So yeah. Your customers were pretty special.
Ted: Yeah. And we happened to be in a great part of the world where there's quite a few high end clients. There was back then and there is now which is what's great about this part of the country.
Ron: For sure. Now your office is located exactly where? Just for everyone watching?
Ted: West Palm Beach Florida.
Ron: OK. And this is ETC and now you joined ETC in 2003.
Ted: That's correct.
Ron: What were your roles originally there at ETC and what have they transitioned into?
Ted: So when I first hired on ETC, ETC did very little AV and integration. They were primarily a lighting control, security, phone company and I was hired to help develop the audio-video integration side of the business. So my main role was to run engineering and design and integration for the company and train salespeople and technicians and programmers and grow the audio-video business side of it.
"One observation that I have, is there's a lot of movement and that is people might be happy somewhere for some period of time and that at some point you know someone offers them a dollar more and another location and they move on."
Ron: OK. And you've managed to stay with ETC since 2003 and now you've had roles in engineering and in programming and operations. I've been in the the audio video industry since 2000. So it's just about 18 years not maybe about approximately half of what you've been into in the industry for. And one observation that I have, is there's a lot of movement and that is you know people might be happy somewhere for some period of time and that at some point you know someone offers them a dollar more and another location and they move on. But if you've stayed and you've stayed loyal to ETC and grown in your roles and responsibilities. What do you attribute that?
"We've had people here almost 35-40 years that are still original people working here. ETC hires great talent even if there's not a position for the talent when they come across it."
Ted: It has a lot to do with the owners Bill Marinette and Cynthia Marinette and the quality of people that are here at ETC. We've had people here almost 35-40 years that are still original people working here. ETC hires great talent even if there's not a position for the talent when they come across it. And that talent stays here and it's great to work with such experts and talent and industry. And because there's very little turnover and everybody works as a team and has respectful input and has listened and helps guide the company it's just a great atmosphere and great working with such wonderful people here. So there's not really a reason to leave when you have such a great work environment.
Ron: I know there are a lot of folks in this industry watching this or watching you and are perhaps jealous. So I guess they could always contact you guys are you still hiring?
Ted: We're always looking for good people.
Ron: You're always looking for good people. I mean what your current role Ted? It says CTO Chief Technology Officer. What does that mean?
"We're very conservative when it comes to products and vendors that we do business with. We like to make sure our products work before we sell them to our customers."
Ted: I relate to most of the vendors in the sales department and engineering on what brands and what technology we bring in and what we sell. We're very conservative when it comes to products and vendors that we do business with. We like to make sure our products work before we sell them to our customers. We try and minimize the number of vendors that we do business with to make it easier for our technicians to know what they're installing and help troubleshoot and design systems as well as our service department being able to be reliably efficient in troubleshooting whenever there's an issue with a particular project.
"ETC has consistently been ranked at least by the measurement of CE Pro as one of the top integrators in terms of revenue in the nation."
Ron: OK. Understood. Now ETC has consistently been ranked at least by the measurement of CE Pro as one of the top integrators in terms of revenue in the nation and what is a typical project for you guys? What is the type of work that ETC would take on?
Ted: So we primarily are doing the luxury custom home residential home. It's usually one of the top one percent of our clientele because of the area we're in. And we're doing all the low voltage in the house and integration on almost all the projects which includes lighting, CCTV, security, audio-video, access control, pretty much all of it including structure wiring and from a company standpoint and a project standpoint we do not sub any of our work out. We do everything from the very beginning from pre-wire till the very end of programming and client relations.
Ron: OK understood. I want to get into more of the mechanics of the types of projects you take on and maybe your advice you might have for others but before we go there , you also serve on a number of other boards and one in particular is a group that my firm One Firefly is also a part of and that's Pro Source.
Ron: So you sit on the board of directors at Pro Source. If you don't mind, for our audience, what is Pro Source and what are your roles and responsibilities as you sit on that board of directors?
Ted: So Pro Source is a buying group. It's the largest integration buying group in the country currently. My role is to guide the direction of Pro Source. It's a nonprofit organization that's owned by its members. So as a board member, we set budgets, we set procedures and guidance for the organization for the coming year. So where we're an advisory board to our staff and to our members and we take input from our members to decide what role the process will play an industry in the coming year.
Ron: So my firm, we're a vendor partner of Pro Source and then ETC is a dealer member of Pro Source. Is Pro Source looking to add new dealers to the group and if so what would some of those criteria. And I know your job is to not sell or promote it. It's to advise. Just in case anyone listening might be interested to the best of your ability. What are some of those criteria that define a good Pro Source member?
Ted: A good Pro Source member is a member that is doing two to three million dollars in business currently or more is in an area where there's not a lot of other Pro Source members already. We like to not flood a particular market or area with a whole bunch of members because that kind of adds a little competition between the members and we'd like to be a little exclusive. Also the dealers should be probably around for a few years , has been established and has an actual office or showroom rather than someone just working out of the back of their car . .
Ron: The whole trunk slammer concept, so trunk slammers need not apply?
Ted: Pretty much. That's correct.
Ron: Now what are the benefits? Why would a dealer want to be a part of Pro Source. Why does ETC want to be a part of Pro Source?
Ted: So there's several reasons. One probably my biggest one is the relationships and the knowledge we gain from talking to other dealers around the country to share good practice. Upfront discounts on products to help make products that they sell that belong to Pro Source more profitable for each company. That's what brings people but what keeps people there and expose each other.
Ron: Got it. Now that makes sense. Now Ted before we go further, I've got a message or two here within my software that's telling me the Facebook stream may have broken for a minute so I'm going to look for some of the folks that are watching give us some feedback here on the chat. Is the stream continuing or has it reconnected? If you don't mind just drop me a note or a comment here just so that I can ensure everyone out there is getting a positive experience. OK. All right. It looks like we are good and it looks like we are still live Ted.
Ted: So you know that's great.
Ron: Sometimes you know technology doesn't always cooperate but we smile and we roll with it you know.
Ted: That's right.
Ron: It's the best we can do.
Ted: You gotta love it.
Ron: You gotta love it or you gotta particularly love it or you wouldn't have been doing it for 30 years.
Ted: That's right.
Ron: That's fun. I am curious. What's your perspective of the industry now. I mean the way it looked 30 years ago you talked about you know you were inventing black boxes to help switch audio from the TV. And here we are now with a little bit of software and doing an interview and live streaming it to the world. So technology is clearly advancing. What's your perspective of what that means for an integrator?
Ted: I think it makes it harder for an integrated because technology is changing so fast and advancing so quick in so many different areas that it's hard to keep up. We're kind of lucky here at ETC we have a large enough staff and we have multiple people keeping up with different segments. But it's hard for a smaller company to keep up. We have voice control now. Everything's network-based. There's all the DIY stuff coming out to do it yourself stuff. Stuff is getting less expensive because technology is making it less expensive so it's harder for companies to make money. It's just such a changing world that you know who knows. In another five years there may not be any Comcast or Direct TV might be all streaming Hulu and Netflix. I mean it's a changing world.
Ron: So would you challenge that one of the benefits of the size of your organization and you guys are, is that public knowledge how many people you have?
Ted: Yes it is.
Ron: So how large is your team today?
Ted: We have one hundred and five people.
Ron: Hundred and five. That is certainly larger than most integrators.
Ron: And would you challenge that that's one of the strengths that you can diversify that staff and put them on different technology specialties?
Ted: It's definitely a strength especially from the engineering and the technical side of it as well as service. I mean we're better able to take care of our clients both from design standpoint and from a service standpoint.
Ron: Got it. Now you guys are, this is published data. It's no secrets you guys. According to the data here I'm assuming this means in 2016 if it's being published now does this mean '16 data?
Ted: That's correct.
Ron: So you guys did around 14 million dollars in top-line revenue last year. What would you, what piece of advice? And I know maybe some of this advice is shared when you're in either CEDIA sessions or Pro Source sessions. But what sort of advice would you give to that business owner running a five million dollar a year operation about what would what they would need to focus on or perhaps do differently if they wanted to become a 10 million dollar or 15 million dollar a year operation?
Ted: So there's a couple of things I would say. One would be before you sell product to your clients make sure you know what works and test it. Don't be the first one to jump on a new technology without testing it. You spend so much time trying to fix manufacturers' problems that you don't know about after the fact. Be cautious. There's plenty of products coming out tested and play with it before you sell it. The other big thing that I lecture a lot of people about is having sales do sales don't have them do project management, don't have them be a technician. Salespeople are good at selling they're not good at the paperwork they're not good at managing projects. You want them selling and that's probably one of the biggest things I see within other companies are trying to get salespeople to do other things than sales. The other big thing I would say is you need to get everybody in your company working as a team together on a project, get technicians engineering, sales, management all working together listening to each other. Working together on a project. One of the biggest things that I think we do is after a project we sit down and we talk about successes and issues we've had on projects to learn from both. What did we do well and what didn't we do well and how can we get better? That's a big thing from a team standpoint.
Ron: Interesting. You'll have various stakeholders in a project from sales project management engineering programming. You'll have them throughout the life of that project to continue to communicate and collaborate?
Ted: That's correct because the projects are constantly changing and they're not a known fact, from what is sold to what's installed is constantly changing and everybody needs to be on the same page in communicating about those changes and what's happening.
Ron: Got it. Now I'm gonna try to get a sound off here on time which means I have another eight minutes. So I want to touch on just for a moment what at least in the press or media in years past has been somewhat controversial and that is the topic around source code. Typically where this comes up is in the conversations relating to Crestron and so I'm curious about your position specifically when you have programmed a job and so there is code and graphics that operate in a source file and then they would be compiled into an executable and thus uploaded to a processor. Who owns that source code? Does the dealer own it or does the client own it?
Ted: My philosophy has always been that in the 20 years I've been programming Crestron. And along with ETC, is the customer owns the source code and we will always give a copy of the source code to the owner at any request that they have. And a lot of projects we will make a copy of it and put it on disc for them so they can have a copy of it. I believe the source code belongs to the owner. They're paying us to write the program, it belongs to them.
Ron: But what about your concern or do you have a concern that maybe when they need service on that home they might go to another company they might give that other company your source code your graphics? Is there any, that's the counter-argument right? That's the people that challenge that the homeowner or the end-user does not own it. They challenged that they put all these months or years into developing it that it shouldn't be relinquished.
Ted: Yeah that's always a concern. And it's happened and there's not a lot you can do about it but it's the customer 's source code, they paid for it. And with other integration companies now like Control4 or Lutron or Savant, all that source code is available within the processor itself to pull out. So Creston is kind of unique nowadays with having a separate compiled source code you can 't pull out of the processor so. I still believe it's the customers and dealers just have to deal with the issue of it being given to another dealer.
Ron: Do you think there'll be a day you know you're a big Crestron shopper. At least I believe you have been in the past. Are you still doing a lot of Crestron today?
Ted: Yes we are. We're still doing a lot of Crestron today.
Ron: Do you think there'll be a day when Crestron perhaps goes the way of nonproprietary source code or do you think that?
Ted: Well I think they've gone that way a little bit. They came out with a ping which is nonproprietary source code, it's stored in the cloud. And you know the ability to pull it back out of the cloud is, it's not so proprietary compared to the compiled versions of previous. So I think they're going to get there eventually. Maybe not 100 percent but probably 50 percent I'm guessing.
Ron: Got it. That's good. That's flipping a coin right?
Ron: All right. So you mentioned some of the other big brands in controls, Savant, Control4, Elan, Crestron. You can even pick some of the major lighting brands like Lutron and others. What's your position and you have both a leadership role within your company as well as within the industry as a part of the Pro Source group on how manufacturers should evaluate when they should be putting on new dealers in a marketplace?
Ted: I think manufacturers need to look at what other dealers are in the area and if those dealers are selling a reasonable amount for that particular vendor and look at the market size of the area you're in. I mean you can't necessarily go by a particular city size because some cities have more market and you need to have a number of dealers to handle that size market but you don't want to overcrowd a market with too many dealers because it's not good for the dealers not good for the vendor. Not that happy dealer. So I think it's something each vendor has got to look at by market and what the demand in that market is for their product. But you need to limit the dealers to have each deal to be able to make a reasonable amount of income from that vendor. And if you bring too many dealers onto that vendor you're spreading the wealth around too much. If the market can't bear that that many dealers.
Ron: I'll ask the inverse of that question. If a manufacturer has let's say regional manager and that regional manager's out there trying to hit their quota and they put a bunch of dealers on with the theory that that's going to drive their sales. I don't agree with by the way but I know it's often practiced. And if that does happen, what role or responsibility do you think the manufacturer has to, I don't know if police is the right word, but to control or restrain the dealers that are in the marketplace that maybe aren't doing the best job or best-representing automation as a category or that particular brand.
Ted: I think it's very imperative that the manufacturer police and monitor what the each of the dealers are doing because if they bring someone on who is not doing a good job it's gonna end up not right away but in the long term causing a bad name for that manufacturer because the end-user is going to think it's a manufacturer problem and not a dealer problem. And over time that client him and their friends will say don't use this product because it's not a great product and it has nothing to do with the product it has to do with a dealer who installed it or programmed it. So I think it's very important to manufacture or police the dealers and the quality of the work that they're doing.
Ron: Well hopefully they're all watching this. They're all gonna have roundtable discussions and hopefully decide how to implement that strategy. I agree with you 100 percent. Got a couple another minute or two here before we wrap up. Ted, I know you're the president of another group, I'm going to look down at my notes here, you're president of the Bill Raskob Foundation.
Ron: And do you mind sharing this, I learned this when you and I were recently at a conference, and you shared a lot of the details. I thought it was fascinating. I had no idea. I've known you for a long time and didn't know it. Didn't know you had this role with this organization. Do you mind sharing?
Ted: Sure. Not at all. It's a private foundation that I've been involved with for about 30 years. I've been president for about twenty-five. It's a volunteer program that I make time every year and on a monthly basis to run. And the purpose of the foundation is to give interest-free loans to college students to go to college and we've been in business the foundation for about seventy-five years now. It was started by my great grandfather seventy-five plus years ago in honor of one of his children that was killed in a car accident. It's a great foundation that does great work and I'm glad to be a part of it.
Ron: And how does a student or potential entrant to your foundation apply for funds for college?
Ted: We have a website called the Bill Rascoff Foundation. You go on there and as an application , you can fill out and you submit it and then the board reviews it. We take applications once a year, usually in the spring. So we have time to review and get back to students before the Fall school cycle starts.
Ron: OK and so now thank you for sharing that. And I will make sure that the notes the exact website URL is included in the notes. Let me just I see Sean Sturmer is making some comments on Facebook live here. He says hey Ted how you doing.
Ted: Sean has been around a while too.
Ron: Sean I think Sean's going to be on this show. I think Sean is very active at commenting on our content. And Sean thank you for watching sir, appreciate it and give a plug to URC, great company, and Sean's out there you know working hard to grow his company and improve the name of home automation everywhere. So Ted we're going to wrap up here. Most important question of the afternoon. I want you to think really long and hard about this. This is very profound. And that is you know let's say that you were friends with your buddy Elon Musk. And let's say that he gives you a personal invitation to be on one of the spaceships. Space X trips to Mars. Do you take him up on that invitation and do you join him on that flight?
Ted: At this point my life I would say no. I think I'm a little too old, by the time we get to Mars and spend time on Mars. I think if I was twenty years old again or twenty-five I would probably take him up on that invitation but I think this time in my life that's a little too stressful and too much time to go at this point my life.
Ron: Do you think you will live to see us you know humans sending fellow humans to Mars?
Ted: I think so especially since I'm gonna live for a long time I think so. I think it'll be my lifetime.
Ron: Awesome. Yeah. Ted, it was awesome having you on the show. I think our technology mostly cooperated, maybe even entirely cooperated. I don't know we'll have to see what it looks like afterwards but it was a pleasure having you on. And thank you for taking time out of your busy day to join us here on our page.
Ted: Thank you. It was very enjoyable. Thank you for inviting me.
Ron: All right ladies and gentlemen thank you for joining us. We are signing off and again this is Ron Callis with One Firefly on the fourth episode of Automation Unplugged. Thanks so much everyone.
Ted Bremekamp is currently the Chief Technology Officer and General Manager at ETC. Ted's prior experience includes a degree in Electrical Engineering from Notre Dame and more than a decade of experience in AV and automation. He is also a member of ProSource’s board of directors and the President of the Bill Raskob Foundation, providing interest-free educational loans to students.
Ron Callis is the CEO of One Firefly, LLC, a digital marketing agency based out of South Florida and creator of Automation Unplugged. Founded in 2007, One Firefly has quickly become the leading marketing firm specializing in the integrated technology and security space. The One Firefly team work hard to create innovative solutions to help Integrators boost their online presence, such as the elite website solution, Mercury Pro.
Resources and Links from the Interview: