Inter-Con Security is a family business. Was it always the plan to take the baton from your father, who first succeeded your grandfather?
It was not always the plan. My thought had been to go to law school and make partner at Sullivan and Cromwell, however, the industry has been very crazy with M&A roll-ups and private equity-backed feeding frenzies for the last 10 years. Our company, at the time, was a middle-market security company, and all the others were being purchased by these private-equity backed players.
Our family had a serious conversation about whether to sell or compete. The decision was made by the family to compete rather than sell. At that time, my father and grandmother asked if I would be interested in taking the next step as the third generation of ownership and management. I said yes, moved my family across the country, and despite the stress, it's been the best business decision I've made.
Who do you perceive to be Inter-Con Security’s biggest competitors in the security space?
In North America, we are the fourth largest security company as measured by annual revenue. Inter-Con's main competitors are large private-equity-backed and publicly-traded companies that largely utilize a generic approach to services called the “branch model,” which shares resources (including security officers) between many different contracts.
By contrast, Inter-Con uses a “dedicated” organization model, which entails the provision of fully dedicated personnel to a single account. This approach is relatively unique in our industry, and delivers higher quality and more efficient service, at scale. Our 1,450+ aviation security officers are also stationed nationwide at locations like JFK Airport, ensuring service reliability in large-scale programs (99.8% post-coverage rate).
Inter-Con Security’s first client was NASA almost 50 years ago. How did your grandfather secure this deal?
My grandparents are children of immigrants from Mexico. My grandfather dropped out of high school to join the army and fight in Korea. He then got his GED and joined the LAPD, rising to the rank of lieutenant. He conducted polygraph tests for the LAPD and was one of the lead investigators on the RFK assassination, conducting the polygraph interviews with Sirhan Sirhan. Later, he was loaned to the federal government to train national police departments in Latin America.
After concluding that these police departments could never meet U.S. standards, he saw an opening for a private security company to augment these departments. He took his pension, life savings, and contacts from the Department of State and started knocking on doors. The first client, NASA, came from a contact at Edwards Air Force Base, who was frustrated with the security provided by young military personnel. My grandfather proposed using experienced, retired LAPD officers, which proved to be a successful solution, eventually leading to contracts with U.S. embassies and federal work.
You partner with some of the most heavily trafficked logistics hubs and airports around the world. Who is currently in your portfolio?
Five or six years ago, we had only a handful of airports. We are now growing quickly and have been awarded several large international airports, including JFK, LaGuardia, and Newark. Domestically, we are also at Nashville and Clinton International and handle security for commercial aviation hubs for companies like Amazon and UPS. Additionally, we work with startups and high-net-worth individuals, providing comprehensive aviation-related security services.
The branch model used by competitors does not fit well with airports’ stringent staffing and training requirements. We pay our officers significantly more, around $25 an hour, compared to much lower industry averages, leading to higher quality and fully staffed programs. Today, we handle 3.3 million hours of service annually in aviation, making up about 15% of our portfolio. For a company with about a billion dollars in revenue, this translates to a couple of hundred million dollars from aviation security alone.
What do the biggest threats to safety and security look like in 2024?
Security threats can be categorized into domestic and external. Externally, large military conflicts and aggressive actions by countries like Russia, China, and Iran pose cyber risks rather than physical threats to domestic aviation. Our main fear is state-funded cyberattacks targeting airport operations, such as air traffic control systems.
Domestically, the concern is the politically charged climate leading to potential incidents at airports. With the upcoming election, there's a significant fear of domestic disturbances, especially at major airports. These threats require us to focus on correct staffing and technology to minimize potential damage and react effectively to any incidents. Clients, especially those like the Port Authority of New York and New Jersey, understand the increased demand for security during election years so are very focused on correct staffing and technology to ensure airport security.
What are your expansion plans for Inter-Con Security over the next two to five years?
We have almost tripled in size over the last five years and are focusing on growing from a billion-dollar company to a two-billion-dollar company. Critically, our growth has been entirely organic, rather than through M&A. Our business model is based on winning and retaining clients, with a 97% client retention rate. We aim to take a larger share of the high-end, high-quality aviation-based market. Our motto, "everywhere security matters," reflects our commitment to providing top-notch security services.
What are opportunities in technological advancements and innovation that Inter-Con is leveraging, opportunities in the workforce amongst others?
Our proprietary technology solutions are entirely focused on getting the right person to the right post, at the right time. In addition, we have largely automated accurate pay and billing. We do this through our proprietary and home-developed application, an AI-powered scheduling system, and various other tools.
In terms of other tech solutions like cameras, and access control, we are tech agnostic. We partner closely with industry-leading technology companies like Google, Amazon, Salesforce, and Microsoft, who are experts in their respective fields, so we can provide our clients with the most innovative, high-quality, and best solutions possible.
