Value Added: TrafficLand’s love-hate relationship with our clogged roads

Thomas Heath
Reporter May 15, 2011

“I hate, hate, hate traffic,” says entrepreneur Larry Nelson.

And who doesn’t?

Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington Metropolitan area. Previously, he wrote about the business of sports for The Post’s sports section for most of a decade. View Archive

I sing hosannas every day, smiling as I sail south on Metro’s Red Line, beavering away on my iPad while stressed-out drivers above sputter along clogged arteries.

Nelson, 54, has leveraged his dislike of traffic into a growing business that might make him, and his investors, very rich.

He is the founder and chief executive of TrafficLand, a Fairfax County company that connects with 10,100 traffic cameras across the United States and allows viewers to check conditions on major roads through television and the Internet.

Heading toward Fairfax’s Route 7 at Tysons Corner? Check TrafficLand. What about New Jersey’s Route 70 at Haddonfield Road? It’s on the site. Sometimes I check my home town of Syracuse, N.Y., to see what the Interstate 81 off-ramp at Hiawatha Boulevard is looking like.

TrafficLand’s 20 full-time employees and a dozen or so part-timers work out of a 7,000-square-foot office near (the often-clogged) I-66 in Fair Lakes. It has contracts with 55 of the 140 state and local transportation departments across the country, allowing TrafficLand to tap into those 10,100 cameras and sell those feeds to television stations, online traffic sites and newspapers such as The Washington Post.

The secret sauce is a patented software that allows TrafficLand to inexpensively move the video from government hubs to its own data center.

“We feed the video into an enormous video engine located at our server farm” in Ashburn, he said. “It goes out to our facilities . . . and distributes it to the world.”

Sounds like a traffic junkie’s version of the Weather Channel.

Nelson, a former successful video salesman, has invested $500,000 of his own money in the venture. He also has corralled an additional $6 million from such investors as U.K.-based Australian David Coghlan, Mark Ein of Washington’s Venturehouse Group and the Zitelman Group out of Rockville.

One potential buyer offered $31 million, but the deal fell through.

Nelson owns a quarter of the company, which grossed in the mid-single-digit millions in 2010 and hopes to double that this year. The firm was profitable by 2004, its third year, but has since plowed profit and money it raised back into new equipment for expansion. The investment comes to $20 million in all.

“This is my calling,” he said.

An Army brat who studied business at the University of South Carolina, Nelson quit school when he felt the urge to make money. He sold residential electronic security systems starting in 1979, building up a clientele that was soon earning him more than $100,000 a year.

He got the video-surveillance bug in the late 1980s running companies that installed security systems in casinos, airports and government facilities.

By 2000, Nelson had a healthy six-figure income and a seven-figure bank account (in part due to nimble stock trades), but wanted to start his own business in something that combined video and the emerging Internet.

He heard of a company called highwaynet.com that transmitted live traffic video, but he didn’t like the company’s execution. For one thing, highwaynet.com only allowed the viewing of one video at a time. He envisioned a catalogue of pages that allowed you to view a bank of traffic videos simultaneously.

He become obsessed with the idea of providing live, accurate, unfiltered traffic information. With a journalist’s fervor, he calls TrafficLand’s product “self-confirming, ground truth.”

He registered the name TrafficLand because it sounded like Disneyland, and set up shop in Old Town Fairfax with one employee — his former executive assistant at the company he had worked for.

Nelson used his connections in the video manufacturing industry to build equipment that would be installed in state and local transportation departments and plug into their traffic cameras.

Nelson started the company without a real business plan. He thought there was profit in the content somewhere.

The big break came the day the Web site went online: Sept. 11, 2001.

TrafficLand was hearing WTOP traffic reports from reporter Bob Marbourg, who was telling drivers to avoid the bridges south of the Pentagon and Memorial Bridge because they were shut down.

Nelson checked his monitors and found that those lanes and bridges were open. He called Marbourg and told him 14th Street bridge and other points near the Pentagon to Interstate 395 were still open.

“He goes on the air and said you can evacuate to the south,” Nelson recalled. “We gave him something that was affirming.”

WTOP became TrafficLand’s first customer.

After 9/11, TrafficLand checked its logs to see where the people calling up its Web page were coming from. The answer: fairfaxcountypolice.org, virginiastatepolice.org, dcpolicedept.org. It was all the first responders and emergency teams.

“We realized the government and public wanted access to this, and we said, ‘Oh my goodness. This could be a good business.’ We can go around the country and we can install equipment in department of transportation facilities. We can make deals with DOTs and repurpose this video to many different customers. Think of it as a spiderweb feeding into our data centers.”

Nelson hired salesmen to knock on company doors, showing off the technology and Web site. First he started pitching Washington area media organizations such as WMAL radio, WRC TV and Virginia State Police.

TrafficLand has more than 500 customers nationwide, paying from $250 to $20,000 a month.

The company has two sets of sales teams traveling the country. One is charged with persuading transportation departments, from state to county to local cities and towns, to join the TrafficLand network, a laborious process that Nelson said was his biggest mistake. He grossly underestimated the time it would take to sign up the DOTs, but he keeps at it.

The other sales team is on the hunt for media companies, police departments and others who will pay for the service.

TrafficLand’s selling points include something called “one-second latency,” which allows the viewer essentially real-time viewing of the traffic.

“That means if you are standing on [London’s] Piccadilly Circus and clap your hands and I am watching you do it, I will hear the clapping one second later.”

Another selling point is called “four nines uptime.” That means the system works 99.99 percent of the time, which means it is out of service only eight minutes per year on average.

So where is this headed?

TrafficLand now covers major roads in 43 of the 50 biggest markets in the United States, a critical mass that it thinks will lead to big national contracts from makers of car navigation devices and others.

“If we can get big chunks [of business] like Garmin, TomTom, Onstar, iPhone and Droid, we can become hugely profitable,” Nelson said. “Give me $2 per car per year and 30 percent of the nation’s drivers and that’s $200 million a year.”

Makes you love, love, love traffic.

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