Digitally Securing the Physical World (S1:E32)
September 8, 2022
Join as we chat 1:1 with Steve Humphreys, CEO at Identiv. We discuss the company’s recent growth, the most transformational projects of 2022, and what gets him most excited about diving into work each day. Steve shares his mission and vision for the future of Identiv and how pervasive, IoT-connected technology can give us all the benefits of the digital world in our physical lives.
Speaker 1 (00:01):
You're listening to Humans in Tech. Our podcast explores today's most transformative technology and the trends of tomorrow bringing together the brightest minds in and outside of our industry. We unpack what's new in physical access, identity verification, cyber security, and IoT ecosystems. We reach beyond the physical world, discuss our digital transformation as a species and dive into the emerging digital experience. Join us on our journey as we discover just how connected the future will be and how we will fit into that picture. Your host is Leigh Dow, VP of Global Marketing at Identiv.
Leigh Dow (00:43):
Thanks for joining us. Today, we're talking to the very brilliant mind of Steve Humphreys, CEO at Identiv. Steve, I'm really looking forward to speaking with you for this session of Identiv's human and tech podcast.
Steve Humphreys (00:54):
Thanks for having me on, Leigh. Looking forward to it.
Leigh Dow (00:56):
Yeah, long overdue. I was like, "Oh, I can't believe we haven't had Steve on yet."
Steve Humphreys (01:03):
Well, you've had a lot of other great guests on though for sure. I'm happy to follow in their footsteps.
Leigh Dow (01:09):
I thought maybe we could start with you filling us in on your career and how you came to Identiv in the first place.
Steve Humphreys (01:15):
I started out as an engineer, came out of engineering grad school intending to do robotics all my life, frankly. Started out at GE and then had a couple of businesses totally redirected for financial reasons, rather than for technical merit, and I realized I better learn about this business stuff. I went back to business school and then came back and went back to GE, spent a total of about 10 years there.
Then I was recruited out to a little company, a German company called SCM Microsystems, and that grew up and we took that public actually in the late '90s. That's the company that later became Identiv. I grew it up to a pretty good size and actually stepped out of it. Did some other companies while Identiv went on its path and then came back about six years ago.
Leigh Dow (02:06):
Oh, okay. Is that first round where you met Manfred or the second time?
Steve Humphreys (02:15):
No, Manfred was in, I want to say 2001. We met there, and in fact, he started out I believe in Investor Relations with at that time SCM when I was with SCM.
Leigh Dow (02:30):
Because I know he just had his 22nd anniversary, so I thought the first pass must have been when you met.
Steve Humphreys (02:41):
Yes, exactly. Now, he was actually hired by the guy who's one of the co-founders of the company who stepped in as CEO when I stepped out. He was hired by a gentleman right after me. I was still on the Board and then he came in.
Leigh Dow (02:55):
Nice. This is a very exciting business to work in and it's definitely growing and changing. What gets you the most excited about work every day?
Steve Humphreys (03:05):
Well, both on the identity side of our business and the premises side of our business, it's technology that touches people every day. That's always cool. You want technology that's relevant to people and it's technology that matters.
On the premises side, it's obvious, protecting The White House, federal courthouses, airports, schools, hospitals. That's obviously affecting people every day and it has to work. You can't do vaporware in physical security. The place is either both accessible and safe or it's not. So again, as an engineering-based business person, that's the kind of industry I love where it really has to work and it makes a difference when it works.
Then similarly on the identity side, our RFID devices get embedded in so many things. We have a billion and a half IoT RFID devices out there, and everything from prescriptions for the visually impaired. If you're blind, your prescription can talk to you, that's affecting somebody every single day. It has to work right or they're not able to do what they want to do. Whether it's syringes or prescriptions or high-end brands, it's something that you interact with every day and the technology is pervasive. We can talk more about that, but that's what I find exciting every day. It's tremendous technology, virtually unlimited in its applicability and very relevant.
Leigh Dow (04:34):
That's the part for me that I think is really interesting and exciting. In other roles that I've had, usually in marketing, you are focused on one particular product family or product line. It has a very specific limited set of applications or use cases, and you spend all your time focused on that.
In this role, it's so interesting for me personally and exciting, because really like you said, the security piece of it is securing some of the most secure buildings in the world. On the RFID and NFC side, it is literally limitless possibility. Those things are just really intriguing and interesting to work on every day.
Steve Humphreys (05:15):
I find when you talk with people about it and you start talking about some of the use cases, their own creative juices start going. Whenever you talk about it, you can embed an intelligent device in virtually anything and it doesn't even need a battery or it doesn't even need power, but then it gives a whole bunch of new capabilities, as well as identities to that device and you start talking about use cases. People's imagination just starts to go with them and you can come up with a dozen more great use cases in a short conversation.
What I go through with investors often, we go through use cases and count up, and it's 10 billion units here and a billion and a half there. Pretty soon you really are pervading everywhere and not just from a business perspective, but changing the way people interact with their products and what those products can do for them in really meaningful ways. As you can tell, I find it one of the most exciting businesses you can be in.
Then on the security side as you were saying protecting some of the most important buildings, but also the fact that if security isn't convenient, I talked about how it has to work, or can't hide with vaporware and security, but also it has to be very convenient because otherwise you get the metaphorical equivalent of people who just prop the door open if it's not convenient, and then you've undermine your entire security. If it's hard to use, you actually haven't accomplished anything. It has to be super secure and extremely easy to use. For an engineer, that's the fun part, finding out how you can solve for both of those problems.
Leigh Dow (06:48):
I'm a big sports fan and I read the sports business journal pretty regularly, and I get the sports techie newsletter. I read a story the other day about how in sports, they're using video management systems now for scouting. They're using those video management systems and the analytics to have people from other teams be able to do scouting more effectively and efficiently without having to have the travel and tapping into it whenever they need to. I thought that was just a really interesting use of that type of technology that isn't really security related.
Steve Humphreys (07:24):
Yeah, absolutely right. Once you have all of this infrastructure deployed, you're right, you can start to do all sorts of things that make it more convenient. You can see how some of your teams interact and the business and figure out how to create facilities and environments that are more productive for them. That ultimately is the vision of it. You want security almost to disappear in the background and people are safe, but then to have a very responsive physical environment. Like you said, if it's sports, it can improve performance there. If it's schools, it can really see where kids, students, and teachers are spending their time and how to optimize the school facility, hospitals. Again, you could come up with so many use cases if you just start to talk about it, and that's exciting about it, it's unlimited in what the benefits are that can be delivered from it.
Leigh Dow (08:18):
Well, you just finished reporting the Identiv financial results for the second quarter. I thought maybe we could talk a bit about the growth that the company's achieved in different areas of the company, the different business units.
Steve Humphreys (08:31):
That is of course from a business perspective, the excitement is about the growth and profitability. The businesses, the technology is very cool and the use case is very cool, but the growth has been accelerating as we speak. In the last quarter our RFID business grew over 40%. For the first half of the year, our premises business grew 20%. Both of those are substantially more than their markets are growing. Premises you're talking 6 or 7% growth, and we're growing at three times that. We think we can sustain that because, and it goes back to we are deep technically in both of our businesses, and that's causing us, I think to get more market share. We can talk a little later about what some of those applications are, but that's what differentiates us.
On the security side a lot of companies have almost hollowed themselves out. They do software, but then they source the controllers. They buy the readers from somewhere else. They buy your ID cards that you tap at the door to get in. We provide them all. You can certainly get third parties and they'll interact with anybody who wants. The fact is, if you want something very secure, very high performance, very cost effective. The Apple model is a dominant model where you get something, and the whole system is solved because you've got a lot going on underneath the covers there. I think that's why we're growing and getting market share, because customers realize they want to consolidate their suppliers, they want to have the complete solution there, and then they can manage that complete solution.
Then similarly on the identity side, these are embedded devices that really affect the value proposition of the product that they're a part of. Again, our ability to customize, to personalize and then to really get the most out of those devices for the product is pretty unique in the industry. We're growing substantially faster than any of our segments, and that obviously means you're taking share from other companies there. It's a very exciting time from a growth perspective.
Leigh Dow (10:33):
What do you feel have been some of the most transformational projects that we've had at Identiv in 2022?
Steve Humphreys (10:39):
There's a couple of answers to that. You can look at from the kind of market visible projects and products. Certainly our Velocity Vision product on the premises side has been quite a change with the full integration of video and access and all the things we've been talking about on the premises side. The example that you came up with was right with video. Now as you start to connect that with access control, it really makes a transformational experience for your customers. Our SmartBridge is other product that is going to be transformational. It is coming out in word volumes this year.
Then on the RFID enabled IOT side, there's been so many, you could hardly even count. We talk about a lot of them on our earnings calls, whether it's the capacitive-enabled syringes, some of the virus test kits that we've come out with, some of the high end brands, cannabis, clothing, a lot of them there. On the product side, a lot of exciting products and projects.
Internally, there's been a lot of interesting and really exciting projects from our internal perspective. The expansion that we've done across all of the business has been probably the main characteristic of all of our experience with businesses growing and new people. In particular, for our RFID-enabled IoT business we're expanding into a whole new production facility. In addition to Singapore, we're going to have one in Indonesia and that'll be a step function, both in terms of capacity and some of the technologies and cost effectiveness.
The other thing that I find that is interesting in our expansion is everything we've done in our sales, engineering, training, tech support, project management and marketing platforms. We've really transformed our business in terms of how we reach our customers, how we find our customers, deliver our message, deliver the service and solution, whether it's training, our SEs, and then tech support and support it. That actually is the most exciting area of a project for me is I see the growth we're trying to support you need that customer facing platform. It's just totally different from where it was a year and a half ago, and that's very exciting.
Leigh Dow (13:06):
Just from my perspective with Marketing, we did a podcast episode with the entire Marketing team, and we were talking about some of the challenges that we face in this industry in marketing. One of the things that we talked about is how we've gotten so much better and we're continuing to improve on it, of using more data to inform our go to market plans.
Steve Humphreys (13:29):
Well, exactly. As you say, use so much more data, which underneath that is all the platforms that the Marketing team has built, and then the people that you've brought in to leverage those platforms. It's challenging because it's a chicken, and egg thing. You don't have the data until you build the platform and the people can't apply their expertise until you've got both. Again, over the last year and a half and even year, it's just totally changed and where we are now, it's really in place. We can start to leverage that and use it, and that's super exciting.
Also because these are technically driven industries and really effective marketing sometimes isn't introduced and used as effectively in industries like that. I think we have a huge opportunity to get the message more meaningfully to customers than anybody else in the industry. That's really respect for what you and the team have built there for all of us.
Leigh Dow (14:31):
It was a really good conversation. It was a fun conversation because there's some lively personalities on that team, but it was also just really great to hear that our team is doing a lot of work on the customer journey and really understanding how to meet our customers where they are and talk to them about what they need in a way that maybe we couldn't before a couple years ago. That was a really good conversation that we had. It's something that, as you know, we've put a lot of investment and work into.
Steve Humphreys (15:04):
Yes, exactly. It's terrific to see it all come to fruition. It's very exciting.
Leigh Dow (15:09):
We're fast earning a reputation as a leader in specialty or customized RFID applications for the IoT. How do you see that being achieved thus far? We have some of the most innovative, brilliant minds in R and D and in other aspects of what we do, but what's your take on how we've achieved that reputation?
Steve Humphreys (15:31):
Well, it's been several years in the making of course anything like that, especially with an embedded technology like that. You've got to get designed into the early adopters and that always involves a mutual learning process. Then they have to get that into the supply chain and they have to bring the products to market.
First off it's been commitment to it from years ago. Second, it's been focus on high value add The RFID industry in particular has predominantly been dominated by companies that just want to get a simple design and then crank them out in the hundreds of millions. That's never been our position, partly because that's not where the margins are. It's also not that interesting, but also as importantly, it just doesn't make that much of a difference. Whereas what we're doing is designing in RFID technologies that really are relevant to the product and the customer journey and the customer experience, and ultimately become a part of that.
When you add capacitance and acceleration and temperature and other sensors, you can create a product that has capabilities even beyond what it originally had, but for very low cost because of the way our devices go to market. We've achieved that reputation by starting early, by being committed to it, by having a vision that really leverages all the capabilities in there. Also, as you mentioned, the main ingredient is the engineering and technical team that we have in place. Now we've built the sales and SE and product positioning team that is committed to the very same vision.
When we go to market, the entire arc of the whole business platform is going in the direction of higher value add solutions. We are comfortable with long sales cycles. We understand customers aren't even necessarily going to know what they can accomplish when they start out. We do that whole collaborative and educational selling process with them. It's really been several variables that have really just come together in the last six to 12 months I'd say of having all of that platform, but it started years ago with both the vision and the technology and some key people and some anchor customers, of course. Now it's really taking off and we're building out the team as fast as we can to keep doing it.
Leigh Dow (17:56):
The other thing that strikes me probably because I've interviewed almost all of them now for the podcast, is the difference in the partnerships that we have in this space over the last year and a half.
Steve Humphreys (18:09):
As you say, the partnerships go everywhere from the chip vendors to some very high-end applications. One that I think we all find exciting is Wiliot with their Bluetooth pixels, whether passive or active, because one of the challenges with RFID is you either need to be near field reading a couple of centimeters away with your phone, or you need a distance reader for UHF, but those are custom proprietary and expensive. With Bluetooth, of course, you've got all of your phones have Bluetooth reading capability, and now you have distance readers with the device that can be deployed at RFID scales.
That is very cool, and that is by virtue of a partner. Other partners on the software side, whether it's a Collect.ID or Blue Bite or Tapwow similarly taking the capabilities in the device and bringing the data capabilities to bear for the customers. It really is a whole ecosystem of technology companies and fundamentally people who have this vision of what RFID-enabled embedded IoT devices everywhere can be. It's even more fun when you're doing it together with partners.
Leigh Dow (19:33):
Speaking of vision and all that goodness, what's your vision for the future at Identiv, let's say over the next couple years?
Steve Humphreys (19:41):
Well, I think you can pretty well extrapolate from what I've spoken about is technology is at our core and that drives across the premises business and the identity business, and especially in RFID. So making that technology more deeply embedded, leveraging it more effectively, and then making it totally pervasive so that your security is all around you. It's very highly secure, but it's practically invisible, and then it's delivering extra benefits to you, whether it's efficiency or convenience or safety or something else.
Then similarly with RFID-enabled IoT embedded in all of the products around you so those products are responsive. They aren't just some dumb thing sitting there that has a label that you read, but it actually can engage with you and you can engage with it. To the extent you want to share what other things you're engaging with, you can leverage interactions, whether it's drug interaction or whether it's clothing and sports events and sports figures or something else that the world around us becoming more responsive is what we're trying to do and build.
We really see it as the next generation of the overall internet. We talk about the Internet of Things, but when it becomes truly pervasive, then the things around you really are part of your network and you get all the benefits of the digital world in the physical world. That's ultimately the benefit we want to provide to our customers and ultimately the world.
Leigh Dow (21:13):
Excellent. Well, Steve, we really appreciate you joining us today. It's been a pleasure speaking with you and hearing your insights in this really fast-paced, quickly changing industry.
Steve Humphreys (21:23):
Thanks Leigh. It's always a pleasure. As you know, I could certainly talk about this all day long, but really appreciate the discussion and sharing it with everybody out there.
Leigh Dow (21:32):
Absolutely. For our audience, if you like this podcast, please like and subscribe.
Speaker 1 (21:38):
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Physical security, identity verification, the IoT, the hyper connectivity of our lives will only grow more pervasive. As technology becomes more automated and experiences more augmented it's up to us to preserve our humanity and use new tools and trends for good. The only question is, are we up for the challenge?