Shifting to the Future: A Look Into Genesis’ Journey Toward a Service-Focused Revenue Model

Published: 2016-07-19

You know the type. Genesis Integration was like most integration firms in its pursuit of project-based profit. After all, since launching a quarter century ago the Edmonton, Alberta-based company had grown quickly and consistently with its “Viking mentality,” as president and co-founder Kelly McCarthy calls it.

“We sold iron and labor,” he said during a typically tongue-in-cheek presentation at NSCA‘s 2016 Business & Leadership Conference. “We were basically Vikings. We would come to your town [and] pillage and burn it down and go to the next town. Our sales-people just hunted for towns and warriors went in and did their work and we never left [survivors] behind.”

It worked … for a while. It’s not like McCarthy, who recently began a term as NSCA president, didn’t see the writing on the wall. He knew the Viking approach had a shelf life.

View Photos of Genesis Integration Here

“We were based on projects as opposed to being based on customers,” he told the NSCA conference attendees. “I knew a number of years ago that we wanted to get into this service business but I had no idea how, because my DNA is a Viking.”

McCarthy will be the first to admit that Genesis had been a traditional integration firm and he’ll also tell you that there is no shame in that. There is, however, a gauntlet that has been laid down for those firms. Genesis has turned a corner.

While McCarthy’s firm may always have that Viking mentality in its DNA, it now also has a profitable cloud video managed service offering that not only has diversified its cash flow but has strengthened its relationships with its customers. Turning that corner hasn’t been easy for a number of reasons, says national sales manager Kevin McKay.

Also See: The Haves and the Have Nots: The Next Step in the Evolution of the Audiovisual Industry

“It’s like turning a giant freight ship around. It’s going to take a while. We’re probably about 25 percent of the way through the transition.” Again, McCarthy will be the first to tell you that if a traditional firm like Genesis can make the transition to a more service-focused revenue model, the rest of you have a fighting chance.

Story Has Traditional Beginning

It goes without saying that if Genesis Integration is a traditional integration firm its founder certainly must have roots in the music business, right? Right, McCarthy says.

“I started off as a drunken rock-and-roll musician with a blue mohawk, playing in bands, being the guy who knew how to fix the gear in five minutes before a gig. While everybody else was drinking, I was in the back with a soldering iron fixing the systems.”

The traditional evolution followed. McCarthy found himself mixing sound in studios and on tour. Then he started a family and realized:

“You know what, I can’t go out on the road for four or six months at a crack. I’ve got to figure out something to do.” What he figured out to do, of course, became Genesis Integration, which he founded with a partner who has since left the business.

At first they did what McCarthy knew best: live production, focusing on churches and nightclubs. At the time, 1990, “churches were starting to modernize a lot of their services,” McCarthy says. “They needed a bit more high-impact production. Nightclubs, of course, you could always load them up with audio, lighting and video. So that’s how we started.”

Both of those markets in Alberta included tight communities. “If you do good work, then the word travels,” he says. Genesis rode a wave of referrals and scored enough key projects to strengthen its growth.

Of course, it’s difficult to grow too dramatically serving two markets in a city that had a population of about 600,000 in the 1990s.

Genesis Integration Inc.
Headquarters: Edmonton, Alberta
Additional Locations: Vancouver (Integration), Vancouver (Fusion Cine, its broadcast/pro video company), Calgary, Toronto and Ottawa
Principals: Kelly McCarthy, president; Dan Moran, national design manager
Years in Business: 26
Employees: 120
Revenue $31M (2015); $38M (projected 2016)
Number of Commercial 2015 Installs350
Top 3 Markets: Corporate, Government, Healthcare
Top 5 Brands: Crestron, AMX, Extron, Sharp, Epson

“If you wanted to grow you either had to grow geographically or you had to grow through different verticals or different scopes that you were offering,” McCarthy says. “So being in a very large country with very low population density, we decided to spread out into other types of work.”

Meanwhile, a local security company went out of business. “We picked up a bunch of their key people and suddenly we were in the security business,” he recalls. At the time access control and surveillance were growing in popularity so again Genesis was able to ride a wave.

It began doing school intercom systems sometimes as the brand’s exclusive dealer in a geographic area. With its foot in the door of the school market it also integrated a number of different systems.

“That’s where a lot of the growth came from. In a school, an electrical contractor would be dealing with five different low-voltage vendors or contractors and we kind of wrapped that all up. We would do intercom, security, data, running all the cable
infrastructure. We just kept growing that business. That’s kind of how the company grew.”

Where Genesis’ story breaks from that of the traditional integrator is in McCarthy’s grasp of where the integration market was heading. Before the recession, 10 years ago, he says he knew Genesis had to change and needed to be in some kind of service business.

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Tagged with: Genesis Integration

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