Hans Kobler of ICx: Secrets to company growth

Hans Kobler of ICx: Secrets to company growth - top government contractors - best government contracting event

Hans Kobler of ICx: Secrets to company growth - top government contractors - best government contracting eventAs the CEO of Icx, a high-tech security company based in Arlington, Hans Kobler is always on the lookout for new security threats “” and ways to meet them head-on. “We focus on building the world's best sensors, integrating them and offering complete solutions to our customers in the military, in homeland security and in the commercial security market,“ says Kobler. In the following Q&A, Kobler discusses his company's growth strategy “” an impressive 800-plus person employee base, and a revenue chart that's projected to climb from $170 to $180 million in sales this year. 

What’s your biggest challenge in business?

Hans Kobler:
Nothing unusual, all the things that come along with a fast-growing business. We at ICx have a fantastic group of developers and technologists.  We have a good handful of products that have a lot of traction right now, growing at 100 percent-plus a year, and we keep introducing new products into the pipeline.  With the high growth of our existing products and the steady addition of new products, we have a lot of growth to deal with, roughly 30 percent-plus organically.  That is sometimes a challenge.  Dealing with the government is also a challenge at times because the business there is lumpy. The big programs get started and they get stopped, and funding gets shifted around.  That, at times, poses challenges, but not so much because we are so diversified.

We have probably the broadest technology footprint in the industry. This means that when the explosives market slows down, perhaps radiation or another area picks up.  In 2002 everyone was worried about anthrax, about a bio/chemical attack, and now it is six years later without an incident so we are experiencing a little bit of the “out of mind, out of sight“ syndrome.  These are the regular challenges of government business today.  The good news is that when I look at the turmoil in the stock market ““ the low dollar, sky-high gas prices and a troubled financial market ““ security is one of those safe havens. Whatever happens ““ if it's the Democrats or the Republicans who end up in the White House ““ people will want to make sure the country is safe.  So they will have to spend money.  The security industry, whether we like the state of the world or not, is a good place for investors.

What is your mix of product versus service in terms of your revenue?

Hans Kobler:
We are very product-oriented; that accounts for roughly two-thirds of our current business.  We get a fair amount of funding from the government to develop next-generation services in product and solutions.  We have a smaller customer service piece, and that is growing quite well because we are starting to get recognition as a partner for the primes, because we help them on larger programs. We also have a small transportation group that is winning a lot of business in this exciting market.

Right now you are in a competitive market space.  What is ICx's approach to differentiate itself in terms of the products you offer?

Hans Kobler: Very simple, we build the world's best sensors.  We make them more accurate, more sensitive, more selective, smaller, lighter, faster, and cheaper and then we allow them to talk to each other so that the customer not only gets technology but gets an overall solution.  We are also able to integrate our products into legacy equipment, so we take some of the riskier challenges away from them.

Talk a little about how technology is changing.  What is your group doing now?

Hans Kobler:
Overall, I believe technology will go down the path that I outlined.  People want and need smaller, faster, cheaper, lighter and coordinated security equipment.  This is what the market wants today.  For example, we can sell bio-detection to the Pentagon, but they also need chemical detectors.  They also want radiation detection.  First responders, showing up at any sort of disaster, cannot know what the threat is until they arrive, so they need to defend against the whole spectrum of threats.   Airports used to be totally focused on IEDs, finding bombs, getting the terrorists at the check-in gate.  Now, they want a layered defense.  They want to have a better situational awareness and that will require more sensors.  Companies and facilities will attempt to do the job with fewer people and more sensors, then get the data and turn that data into real-time information that people can act upon.

What will the company look like in three to five years?

Hans Kobler:
We'll be very profitable.  We'll be growing substantially.  We will not only be in security, but we will have branched out with our core technologies into other growth markets such as energy technology, medical applications and agriculture.  We will be much more international in scope than we are today.  Most of our competitors in the security space have 30 percent or 40 percent ““ even 50 percent “”of their revenues coming through the international side, and we are not even at 10 percent, so that space will grow.

What are some of the new markets you are looking at?

Hans Kobler:
By geography, of course we see big growth in the Mideast right now.  Number one, they have a lot of money, and number two they are scared.  That fear goes from protecting personal properties and high-value individuals seeking protection, all the way down to a country's borders.  The Saudi's have huge programs right now. India is a country that is, after Iraq, the one with the highest number of terrorist attacks.  China has issues and the Europeans are not far behind. That's by geography.

We will continue to see a strong demand from the military. Even when they come back from Iraq, troops will still have to deal with asymmetric warfare, which is a new reality; all of the Armed Forces will have to deal with that.  One can no longer win a war from jets and planes; soldiers have to fight the reality on the ground.  People in pickup trucks can bring down very expensive equipment.  People are hiding explosives in liquids and shoes, and we have to fight and face that new reality.  Homeland security is the same thing; there is still a lot of work to do.  We have been fortunate enough to not have an attack on our soil since 9/11; the Europeans were less fortunate.  It will happen here again at some point, and hopefully it will not be so devastating, but a lot of money will have to go into the Homeland Security market, and then commercial security will follow.  Banks, casinos and high-value buildings will need to find better ways to protect themselves against all of those threats “” from IEDs, to anthrax, to bird flu, to dirty bombs “” any of which could put them out of business.

What is something that most people are surprised to learn about ICx?

Hans Kobler:
When we talk to somebody they usually say “Where have you been?“  They look at the line up of technologies and solutions that we have and they say, “Wow, I didn't even know that product existed.“  We are kind of the best thing that nobody heard about, and that's just because of our young history.  We get steady confirmation that what we build and what we integrate is exactly what the customer needs.  For us, it's a matter of getting the story out and adding onto the great references we have. For example the TSA has picked up and is using our liquid screener; the Statue of Liberty is using our cameras and radar equipment, U.S. forces are using several of our technologies in Iraq. Those are great references that help us gain credibility and positive attention.

Interview with Hans Kobler was conducted by JD Kathuria

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