OT good news re Viterbi's son's company
THE ENTREPRENEURS
Red light, green light
Photo enforcement specialists put bad driving into
focus
By Leonard Novarro
SPECIAL TO THE UNION-TRIBUNE
January 27, 1999
It was one driver's word against another.
The driver of the pickup that smashed into the passenger side of the late-model sedan
said the car's driver had jumped a red light. The driver of the sedan said she had come
to a full stop and entered the intersection after the light turned green.
The investigators in Mesa, Ariz., had no place to turn -- except to U.S. Public
Technologies of San Diego, a company that provides high-tech surveillance cameras to
monitor accident-prone crossings and intersections.
"They called us and asked if we had that accident on film. When we showed them the
film, they did cartwheels," recalls Dana King, a vice president of the company, a unit of
Lockheed Martin IMS.
Caught on film
There, on film, was the sedan -- entering the intersection when the light was still red.
And there, a split second later, was the pickup running into the side of the car.
Case closed.
"Our mission," King says, "is to protect cities from dangerous drivers."
A tall order, perhaps. But one that is being fulfilled everywhere the company has
installed systems to monitor railway crossings, speed and, particularly, traffic signals,
says Alan Viterbi, who in 1988 founded the company, now known as The Photo
Enforcement Group of Lockheed Martin IMS.
Cities as diverse as San Francisco and Oxnard report a substantial decline in violations
at intersections monitored by the company.
In Los Angeles County, where the company monitors 17 crossings for the Metropolitan
Transportation Authority's Blue Line, violations are down 92 percent at the sites, says
Lou Hubaud, the authority's director of system safety.
Pocketbook issue
"It's an excellent program," says Keith Enerson, assistant chief of the San Diego Police
Department, which has eight red-light cameras and will add eight more this year. "It
makes people a little bit more aware when they're stopping. If they don't, it hits them in
the pocketbook."
Systems supplied by the Lockheed group are similar to those that have been used in
Europe for 40 years. However, it wasn't until the last few years that the concept has
caught on in the United States.
Chalk that up to Viterbi, whose vision ended up capturing 80 percent of the market.
Forty U.S. cities use various enforcement systems; the Lockheed group supplies 32 of
them.
Viterbi grew up in San Diego and Los Angeles and earned a bachelor's degree and his
MBA in entrepreneurial studies from UCLA. He was an executive with a bus shelter
supplier and mayor of West Hollywood.
And, when your father is Andrew Viterbi, who with Irwin Jacobs founded Qualcomm,
entrepreneurship is almost a birthright.
With $10,000 in personal savings and money borrowed from his father, Alan Viterbi
struck out on his own, for the first year still trying "to figure out what this business
would be."
An import from Holland
He had the concept -- an old one, in fact. It was based on a system established in 1958
by former race car driver Maurice Gatsonides, whose company, Gatsometer of
Overveen, Holland, developed the technology to monitor dangerous crossings and
intersections throughout Europe.
The thought of getting a ticket in the mail based on a photo taken by an automatic
camera and not a law enforcement officer was widely accepted overseas, where 10,000
such systems operate worldwide. In the United States, however, the system had never
been tried.
Viterbi was convinced the idea would catch on if he could find a client to prove the
technology was effective, use that to fund government studies on the process and
finally, use those results as the basis for marketing the technology to municipalities.
First stop, Folsom. In 1989, the company sold the city a speed camera operated by a
police officer, and mailing a ticket based on a photograph was tried for the first time.
Viterbi also persuaded the National Highway Traffic Safety Administration to fund
studies in Washington and Michigan.
When those studies resulted in glowing reports in 1991, Viterbi initiated the marketing
phase, eventually landing contracts in several parts of the country. The turning point,
however, came four years ago, when the company landed its biggest contract: to
monitor grade crossings for the MTA between Long Beach and Los Angeles.
That and a 1989 agreement to become Gatsometer's exclusive agent in the United States
were the biggest steps to success.
Deep-pocket venture
Since then, Viterbi says company revenues have continued to double every year. Also
contributing to revenues is a percentage of fines collected from violations related to the
photo-enforcement monitors.
Revenues reached $10 million in 1998 and are expected to reach $20 million this year.
"Our business is very capital intensive. It takes deep pockets. The faster you grow, the
more capital you need," Viterbi says, explaining why Gatsometer's participation was
critical and the decision to go with Lockheed IMS, which provides information
management services to state and local governments.
"The hardest thing to explain to our customers was whether we would have the
resources to be here 10 years from now. Being part of Lockheed eliminates that," says
Viterbi, who is now vice president of photo enforcement.
Gatsometer provides the hardware, principally the high-speed 35 millimeter cameras,
which are placed in boxes and set on poles at problem intersections.
When a violation occurs, sensors buried in the pavement trip the camera to snap
photos of the front, and in some cases the back, of a car. Software and scanners
developed by the Lockheed group make it possible to click on the license or windshield
for clear views of driver and license plate.
Ticket's in the mail
Film is processed at nine regional sites, where it is digitized for transmission to various
police and traffic departments. Officers reading the film make the final determination
whether a violation has occurred and if a ticket should be issued through the mail.
Last year, the system ran into some problems in San Francisco, where police claimed
that images were so blurry that tickets were being thrown out before they reached court.
Viterbi said the problem has been corrected by enhancing the images in color. Despite
the problem, traffic officials in San Francisco praised the program for reducing red light
injury accidents by 9 percent.
Since the red light program has been operating in Oxnard, says Assistant Police Chief
Stan Myers, "You can count the number of citations overturned in court on one hand."
That wasn't always the case. Soon after the first contract with Folsom, the system
began experiencing a 10 percent error rate. At the time, most of the work was being
outsourced.
"We shut down," Viterbi recalls. "We told them to give us 30 days and we'll reduce
your error rate to less than 1 percent."
From that point, everything was done in-house, and, as a result, the company's
expertise grew to the point where they outbid IBM and several other large companies
for the contract to monitor intersections in Ontario, Canada.
"They told us: 'We know you're small, but you're the only ones who understand what
this is all about,'" Viterbi said. "Today, our rule is that one error in 2,000 is barely
acceptable.
"The best advice my father gave me was to live up to your commitments," Viterbi adds.
"If you do, the customer will make it up to you. When you're small, all you have is your
good name. You may lose your shirt, but if you do a stand-up job, your customer will
come back."
Myers praised the company's customer service. "We have an issue, call them up, and
they come right out and take care of us," he says. "They also interface not only with us,
but with our shareholders, the courts."
Free to make mistakes
Corporate culture from the start has been behind that, Viterbi says.
"What made us effective is that we were not a lot of layers," he says. "Our people were
given a lot of authority and that made them more responsive.
"People here are free to make mistakes. They need to (if we are) to do new and exciting
things. That's been our philosophy, and it's worked well for us."
And that won't change, he adds.
"One of the neat things about Lockheed Martin is that they are an entrepreneurial
company that Lockheed acquired in 1984," Viterbi says. "What they recognized about
us is that we were able to build an industry from scratch."
There's still plenty of room for building, particularly in the United States, Viterbi says.
About the only thing holding back some cities from adopting the technology are laws
limiting the concept.
Changing that requires a full-time lobbying effort, which explains the political
background of much of the company's management team, including Rich Leib, vice
president of legislative affairs. He has served on the staffs of several California
legislators.
"The hardest part," Viterbi says, "is keeping all the balls in the air -- recruiting, training,
payroll, hiring, managing, cash flow. When you're growing rapidly, managing is a real
challenge. None of us had done it before. It's like being a juggler."
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