Pando

Persistent Surveillance founder: “We have more fun than we should be allowed"

By Dan Raile , written on December 4, 2015

From The Movies Desk

“We are open about what we do, and don’t mind people nosing around. I probably wouldn’t haven’t named the company what I did though, it gives people the heeby jeebies.”

Ross McNutt is not a typical technology startup founder. For one thing, his company, Persistent Surveillance Services, is based in Dayton, Ohio. For another, he’s a middle-aged father of four and a veteran of the wars in Iraq and Afghanistan.

But in other ways, he’s a model of classic Christensenian disruption, a scrappy outsider who’s picking off the customers of mainstream incumbents with a much cheaper, technologically inferior product, a novel approach, and highly individualized customer service.

He’s got a publicity gameplan that deliberately courts a safe but media-baiting degree of controversy, is expanding rapidly overseas, and into other business verticals. And of course, he never flinches when he says he is making the world a better place.

Only McNutt’s incumbent competition is the Department of Defence and its ecosystem of contractors, and his primary customers are domestic and foreign police departments and law enforcement agencies.

Last month he presented his bread-and-butter product in front of a tech conference crowd gathered at the Palace of Fine Arts in San Francisco for Fusion’s Real Future nonference.

He outlined the scope of the problem he’d set out to solve – the high cost of violent crime – and then gave a demo through his laptop, showing how his Cessna-born aerial camera system and team of analysts had led to a murder arrest in Ciudad Juarez, Mexico, with second-by-second imagery tracking the perps backward and forward in time, eventually leading police to a particular house. The crowd didn’t entirely seem to share his enthusiasm for catching bad guys, nor did he seem to care.

Next, he debated EFF Executive Director Cindy Cohn on stage.

“Now how many people were creeped out by that?” Cohn opened.

Hands shot up in the crowd.

She argued a 4th Amendment violation.

“It doesn’t apply, we’re only responding to reported crimes,” McNutt responded. “We’re not tracking people who haven’t committed a crime.”

Then Cohn swung with a 1st:

“You could figure out who organized that protest, couldn’t ya?”

No, replied McNutt. Probably not. The system is not that good for tracking people in a crowd. It’s great for getaway cars and lone gunmen running erratically through the neighborhood, though.  

McNutt was able to rope-a-dope till the bell rang prematurely and the final unpanelist was brought up to the stage – a for-hire pen-tester who demonstrated just how easy the internet of things has made tapping into insecure camera devices. McNutt had a sticker over his laptop camera. He outlasted the opprobrium.

Later at the cocktail hour I found him standing off to the side, away from the lineup for the cocktail robots.

He’d talked about wanting to post billboards on the highways outside of cities, to read “Welcome to San Francisco. You are under video surveillance.” I asked if he’d considered the cost-efficiency of the Panopticon effect, where the widespread belief that someone was watching would keep anyone from having to watch.

“Yes. That’s why we do so much publicity.”

McNutt and PSS have been the subject of a number of article features and even an episode of the Radiolab podcast. 

His favorite superhero is Batman. Obviously.

“We have more fun than we should be allowed,” he said.

* * * *

I talked to McNutt again earlier this week, by phone. For the CEO of a surveillance company, he’s remarkably easy to get a hold of.

At the cocktail party, he’d told me that PSS’s decision to take the Juarez contract was entirely demand-based. I was too thick at the time to ask more. But having just returned from a stay in  Mexican city, heard tales of deep and thorough cartel permeation, and just how fucked up the last ten years have been in some parts of the country, I finally reached the bottom of the stairs and encountered my wits.

“We will often hold community meetings, but that is based on a customer’s desires,” McNutt told me over the phone, explaining the deployment process. “In other places we are very quiet, like overseas. Places where people will go after us and our customers are at risk of being killed,” McNutt said. “The cartels don’t worry about killing a city official.”

“In Mexico we didn’t go after the cartels, just the murderers. We worked with various organizations. I won’t tell too much, but it was spread out so you couldn’t tell where it was coming from. Both domestic and US organizations asked us to pass it across.”

McNutt said PSS has also conducted border operations in New Mexico and Arizona, on behalf of both drug and immigration enforcement, for roughly a tenth the price of a Predator drone operation.

“We direct border patrol and they just show up and wait at the nearest point on the road,” he said. “You can tell the difference between a drug group and immigrant group by formation.”

“We don’t use drones. They crash, they’re expensive, it’s difficult to get liability insurance. Besides, it’s currently illegal to fly them commercially over populated areas. And our pilots are usually in training to be airline pilots, anyway, so really they just need the hours. They’d probably pay me.”

He said that PSS has not recently been doing many operations in the US, though many are pending, pouring the taxpayer tap like molasses. The company has small but growing sidelines in traffic and pipeline monitoring, direct sales of its systems, and business intelligence.

“Like how many cars are in the Target parking lot versus Sam’s Club vs. Costco. Hedge fund type of stuff. But we don’t do a lot of that yet.”

For now, the international law enforcement contracting business is pretty good. A lot of that $150 million in pending projects is international, he says. But where?

“Most of our operations have been in friendly countries.”

Mostly?

“Yeah, well like Russia, but way before Crimea and things went downhill. But we wouldn’t do business with like a North Korea.”

Turkey?


“We would work with the State Department for that,” he said. Then chuckled, “But we could be very good at securing their southern borders. If that is really something they really wanted to do… but you could say that about our country as well.”