From putting together his first Taser in

his garage in 1993 to today having a

drone business that is growing triple

digits and these drones are helping to

protect people at large events. That is

the story of founder and CEO of Axon

Enterprise Rick Smith, who I caught up

with in my new episode of Power Players.

Rick, good to see you. It's been a

while, man.

>> It is awesome to be back on. Thanks.

>> The last time I talked to you was a

couple years ago and I know this is a

wildly different business compared to

when we talked last time. But for those

not familiar with your story, tell it to

us because you founded this company in

1993.

You took a lot of big bold bets many

years ago. Like why did you found this

company and and how did you get going?

>> So uh I got started in this space. I had

two friends who were shot and killed.

They weren't like particularly close

friends, but it was more just like guys

in my social circle. America's more

dangerous than many of us realize. Like

gun violence is a big problem. And the

thing that struck me is this is a

technology problem. If we had Captain

Kirk's phaser, who would choose to shoot

bullets at people anymore?

And so I started a journey of

discovering the Taser. It actually been

invented before I was born in the late

1960s. The inventor was the chief

scientist on the Apollo moon landing

program in the 1960s. I mean this is

like a Marvel movie, right? So I called

this guy up when I'm 23. Like hey,

whatever happened to the Taser? The

first place I ever saw a Taser was in a

Jean-Claude Van Damme movie, Time Cop,

in the mid-80s. Um next thing I know

we're starting in his garage in Tucson.

Seven years of miserable failure,

bankrupting my parents and their best

friends that were funding this thing.

Then we turned the corner, took off, was

wildly successful. So successful that we

got hit with a raft of lawsuits and

crazy controversy cuz we came out of

nowhere. And this idea of using

electricity to incapacitate people

it turns out that that's kind of scary

to a lot of folks. It's that's why we

invented the body camera business. Was

like, all right, people are worried like

are police abusing people with the

Taser? What does it actually do to

people? Let's just record it. And we

made a big bet in uh about 2008, not

only on body cameras, but also on the

cloud, cuz we realized the only way we

could scale body cameras is if every

20-man police department didn't have to

set up their own video servers. And in

the moment we did that, it was a pretty

crazy bet. I mean,

our stock was down for about 5 years. I

took a a company this weapon company

making electric weapons, was converting

to a software company. So, investors

thought we'd lost our mind. They're

like, "When in history has a weapon

company become a software company?" Our

customers didn't want to wear cameras.

They thought the cloud was illegal for

them to put data in something they

didn't fully understand. And luckily, we

just stuck with it cuz it's just you

know, sometimes you just got to believe.

Like, our customers need to be able to

show the world what they do, so we're

not imagining what happens in these

terrible policing incidents. And then

Ferguson, Missouri happened, and the

rest is history. That's when the

business just really took off.

>> When you found out that you want to go

all in on a product called a Taser in

your early 20s, like how did you develop

that first prototype?

>> It was crazy. I had no idea like what I

was doing. And in some ways, that's a

gift as a young entrepreneur, cuz you

don't know what you're not supposed to

do. And so again, I discovered this

inventor lived in Tucson.

I was This is before the internet. So, I

was at the ASU law library looking

through patents. And I'm like, "Holy

smokes, this guy's address is like 90

minutes from here." So, I dialed 411.

And for some of your viewers who may not

know what that is, before Google, that's

how you got a phone number. And uh he

answered the phone, and I basically just

went down to visit him. He was 73, and

he was pretty frustrated. He'd been at

it already for 20 years. He'd got He

basically started two companies. They

both went bankrupt.

And here I am this bright-eyed,

bushy-tailed 23-year-old. I'm like,

"Hey, man. Like, let's give it another

shot."

And he basically said, "Okay, we'll tell

you what. If you pay me some patent

royalties, and we we cut a deal, I'll I

will help you make the first Taser

in my garage and then once once you sort

of get up and running, I'm going to go

back to retirement. And so that's what

it was. I I borrowed my my parents had a

trailer they used to take the dog shows

on the weekend, so I lived in that in a

trailer park in Tucson. Every morning

I'd show up, knock on Jack's, you know,

door. All right, let's go. And we built

the first Taser in his garage. Like, I'm

pretty convinced this guy could have

built a nuclear weapon if we had some

uranium. Like, it was crazy. We're

building with parts from Ace Hardware.

Uh uh uh uh you know, [laughter] taking

things like bicycle tire valves and

cranking them into welding them into the

metal casings to make propulsion

systems. Uh and we made our first

prototype in exactly 30 days.

Uh I remember that. Uh and then the US

government we made the first prototype

to send to the federal government so

they could give us a ruling on whether

or not it was a firearm, which was the

biggest risk to the business.

Uh and they responded in 2 weeks. So, 45

days from the founding we'd built our

first prototype and gotten government

approval.

Uh and and now I look at, you know, now

I've got like 6,000 employees.

Doing that would take a team of 50

people several years. Like, that's the

startup startup magic, right? You just

do crazy things cuz you don't know any

better.

>> And of course they're not made from Ace

Hardware materials anymore.

>> [laughter]

>> They're not made from Ace Hardware,

that's true.

>> [clears throat]

>> It's true. But I do miss making stuff

from Ace.

>> So what do you So you have this Taser

device? I mean, what do you go up to

local police precincts and say, um

Mr. and Mrs. Cop, please put away your

gun and uh buy my Taser thing. Here's

how it works. How do you demonstrate

>> That was pretty much it. So, we launched

as a consumer product and failed cuz

consumers were skeptical. They're like,

hey, and we launched it in the Sharper

Image. If you remember the Sharper Image

catalog, it had cool little Tasers.

And shockingly consumers were like,

okay, this isn't real. This has got to

be some kind of gimmick. Uh then we had

a second product launch that was a a car

security thing. We were just struggling

to figure out a product that would pay

the light bill. And then it on the verge

of failure we pivoted into policing and

and we basically dialed in the product

and we had no money to launch it. So, it

literally was exactly what you said. We

hired a former Marine in a Winnebago who

went cross-country knocking on doors at

police departments, like, "Hey, let me

show you the new Taser." And in the

early '90s, a Taser was used on Rodney

King in Los Angeles and it failed twice.

That was before I started this company,

that was the old Taser. And they went to

their batons and obviously the rest is

history. So, the Taser had a horrible

name in policing. Nobody believed it

worked. And so, when we would show up at

police departments, we gave this guy a

couple of $100 bills and the pitch was

like, "All right, if you don't believe

the Taser works, here's 100 bucks. Who

wants to try it?" And then literally,

we'd hook them up. Nobody got the 100

bucks, they would fall down. Like, word

spread like wildfire. One thing about

the police community, they all talk to

each other. There's all these

communiques they share back and forth.

And suddenly,

you know, within 12 months, we were cash

flow positive. 18 months from the launch

of the M-26, we went public on the

Nasdaq. It a massive $10 million

money raise. That was our IPO. Raised 10

million.

>> And now you're a $40 billion market cap.

>> Yeah, we've come a ways. Yeah.

>> How

tell us, you know, explain to us a

little bit from an entrepreneurial

standpoint, how do you

how did you scale up the business? I

mean, cuz it's not like you could just

sit give someone a

former Marine a $100 bills and go to

every police department. Like, how did

you get the business where it needed to

be in those early days?

>> Well, it really was that. It was like I

was out personally

leading instructor courses.

What we learned is in policing, the

first thing you got to do is you've got

to have an instructor's class so that

they know how to use the equipment and

and that there's a certification

process. They will not take anything out

on the street without certification.

All right. So, me and this Marine, he

happened to be the former chief

instructor of hand-to-hand combat for

the US Marine Corps. So, he knew about

developing lesson plans. And when you're

small, you just figure it out, right?

So, we developed it together.

Uh and then

three of us would go out and we would

offer these courses. Now, the buzz began

with him going cross-country in this

Winnebago, knocking on doors. And then

as the buzz picked up, agencies were

offering to host classes. Uh and we give

classes away for free cuz we also

discovered in policing

if the class is free, some cops will

show up just because it like it helps,

you know, with their resume to get more

certifications. And most in companies

charge for certification. So, this is

like another a freebie for any

instructor to get another certification

on their resume.

And it was just it was the grunt work uh

that that got us going. There was

absolutely zero magic. You know, there's

that old like there's no silver bullets,

only lead bullets.

We just you scratch and claw and fight

your way to survival.

And then then once it took off, you

know, then you start hiring people

following scaling, uh you know, with

sales people. And And it turns out uh a

lot of instructors in law enforcement

will

uh basically work as consultants to

train at other agencies. They typically

can't work for a company while they're

doing work at their own agency. That

would be a conflict of interest. But

like a Seattle PD officer can be an

instructor and go train at other

departments. In fact, that's standard in

the industry. Most police departments do

not want to be trained by a sales guy.

They would rather be trained by somebody

they know, "Okay, you're a professional

cop. You're paid to train me, but you

don't make any money if I buy or not.

You know, you it I can trust that you're

going to like give me the real scoop on

this."

>> Was there a moment that you could point

to that you knew

this company was going to be big?

>> When Sacramento police

bought Tasers for every officer, that

was that was a a crazy moment cuz like,

man, the capital of California. And that

was about 3 months before our IPO.

Uh say that was probably the moment.

Maybe the one right before that was the

first time I ever saw a cop carrying a

Taser out in the wild. It was in the

Salt Lake City Airport. Uh when I

just looked over and oh my god, that

guy's wearing the thing I make. Like,

holy holy cow. Like, this is working.

>> Rick, I've never seen one of those

before. Could you show Could you show it

again real quick? That that is that is

wild. And it just recharges?

>> Yep. It's got a a rechargeable battery.

And then this is the magazine. You put

10 rounds in it. This one's unloaded so

I don't, you know,

play with a live weapon while I'm on on

an interview. But yeah, it it's it's

what we've basically learned

is if we're going to be successful, we

never talk about taking a cop's gun

away.

You know, that would be

just unacceptable in America. There's so

many guns out there. But this is a new

kind of gun, right? This is a gun that

doesn't kill people, but it gives you

the job of incapacitating them,

which is what you want. Like, when

police use lethal force, they don't use

it because it's lethal. They use it

because it's reliable.

That Our problem is we're not as

reliable as a gun yet.

Now, we're getting very close. In fact,

we have When you mention like, "What do

we not do yet?"

Today,

our biggest limitation is we have this

Achilles' heel. This may or may not get

through heavy clothing. If you're

wearing a down jacket,

we may or may not be able to get through

it. So, I'm spending a fair amount of my

time in the labs with our engineers

working on a new cartridge system

that is designed to penetrate through

heavy clothing, which, believe it or

not, that's actually pretty easy. Here's

the hard part.

The same cartridge, if you're wearing a

parka, we got to make it through. But if

you're naked and we fire it at you, we

got to make sure it doesn't end up down

in your intestines causing a serious

injury. So, we needed to penetrate

through clothing and then stop as soon

as it punches through the skin. And we

got some very clever designs.

>> I mean, like I I like that's why love

doing this podcast. Like I can he

actually hear stories like this and go

holy This Well, I love to hear

that and you're still

in the labs like helping to

drive product innovation.

>> Yeah. Oh, yeah. Yeah, in fact, I we

launched we call this new cartridge the

Apollo cartridge because we talk about

our moonshot mission. We we tend to be a

bit thematic and and like try to get

people focused. Like we're not we're not

here to make a business. We're on a

mission to make the bullet obsolete. And

when you think of things that way, it

pushes you to take more risk. Uh and

ultimately that's good for the business.

Like good risks. Like don't just sit on

your butt and and make the next Taser

slightly better than the last one. We're

going to go from two shots to 10. And

we're going to solve this clothing

issue. Anyways, we launched the we

announced the Apollo cartridge a year

ago. And to be honest, it it was failing

in testing. We weren't getting through

clothing well enough. So, we had to hit

the pause button. And so, yeah, I

parachute back in with the engineers.

That's That's the fun of the business.

Like, "Okay, guys, it's crisis mode.

This is like Apollo 13 now. Like, we've

spent $10 million on automation

equipment. The line is ready to go, but

the design ain't working. What are we

going to do? Like, I I don't want to

claim victory yet, but we're close. I

think we've got some design mods that

are testing very well."

>> Is it You think this year?

>> Uh yeah, we I think by next winter we'll

have it.

>> Wow.

>> And then when we do, this weapon will

actually outperform a 9 mm bullet. And

by that, I mean from the time you pull

that trigger till the time he's on the

ground and can't move, this will be

faster than shooting him with a bullet

and waiting for him to bleed out.

>> That is

>> And that's going to be a game changer.

>> That is a game changer. Then then does

that Is that the first step in making

the bullet obsolete?

>> Well, you know, the first step was

getting the neuromuscular effect dialed

in. Then it was getting them enough

shots so we're competitive with a gun,

right? Like, police don't carry a

derringer pistol with two shots cuz it's

hard to hit people.

Now it's getting through clothing and

just getting that last mile of

reliability. And then I'll tell you the

next thing beyond that is going to be

how do we make it so an officer doesn't

have to put their own life at risk? So,

today as I stand here right now, if

somebody enters a school with a gun or a

hospital or, you know, God forbid, you

know, where people go and do these mass

shooting events, the only way you can

stop them today is you send in more

people with more guns and they have a

gunfight. Like, this hasn't changed

since the Wild West. Now, I can make

this much, much more effective, but a

cop's never going to take this, no

matter how effective it is to a

gunfight. And my answer to that is

simple, don't get in a gunfight. Send in

a drone or a ground robot,

and we can remotely incapacitate people.

That's the next step of this.

Uh is how do we make it so we don't have

to put anybody at risk, we can

immediately send in a device,

probably an aerial drone, and stop

somebody. And if think about this way,

you like if it's your kid's school,

yeah, you want to stop that shooter, but

a shootout now with multiple officers

firing high-powered weapons, like

that's extremely dangerous. Far more

safe we could fly in a drone and take

that guy down using AI targeting, so

it's going to be more accurate than a

person. If you miss and you accidentally

hit somebody, you're not killing

anybody, you know, with the with stray

bullets.

>> This is a I want to tell you this, this

is a scary time in this country with

these these mass shootings at these very

large

um well-populated

uh events.

Two questions. One, what do you think

about what we're seeing here with this?

And then number two, like what what have

you seen budget-wise from departments,

police departments across the country?

As you get more of these events, are

they saying to you, Rick, I've got I've

found more money for you uh and your

team because you can help prevent things

like this?

>> Yeah. So, here's what's interesting.

When we start talking about putting

drones and robots, I actually don't

think it's going to be funded by the

police

because ultimately where it's going to

come from are the businesses that have

to protect their people. So, I had the

pleasure meeting Fred Smith, the uh the

founder of FedEx.

>> Yeah.

>> Oh, man, what an entrepreneur. Did you

ever interview him by the

>> I've I briefly talked to him, but not

interviewed him. But, holy cow. I mean,

American icon right there.

>> Yeah. Incredible. And we showed him

where we're going with Taser-capable

drones.

And he said, "This is one of the most

amazing things I've ever seen. I want to

put them in all of our stores." Now, of

course, he's now passed away and that

was more philosophical. So, you know,

since we're talking about investments,

so we should take that as an order. But,

the point was this.

FedEx had a shooting occur in one of

their stores. Remember back before

people would go to schools, they would

go to the post office. We used to call

it going postal.

>> Yep.

>> Uh you know, in the vernacular of for

people going out and and and going on a

shooting spree. Um so, I think what will

actually happen is businesses will be

like, "Hey, we want to protect our

employees." And businesses are

hyper-rational, right? When you put an

armed guard at a business,

your risk people are looking at that

going, "I hope to God they never have to

fire a bullet cuz if we're shooting

people within our business, that's an

extremely high liability event." But, a

business that could deploy a drone with

a non-lethal weapon, safer for

everybody. But, where it gets really

interesting is

they'll say things like, "Well,

and and and Fred actually in our

conversation had said this as well. He's

like, "Hey, I'd love to have these in

our stores, but I don't know that I want

my employees operating a Taser drone."

And I said, "Great. Actually, I think

society would prefer that that's

operated by

a sworn law enforcement officer anyway."

But, one advantage about the company

that was Taser is now Axon,

we happen to have built the largest

system of connected sensors

in the world for government. We have

over a million body cameras. We're the

market leader in drones as first

responder, in-car cameras. We have a

system called Fusus where we can take we

can fuse all of your CCTV cameras.

And you as a FedEx or as any other

business could hit the button and share

those to the police.

So, now in a crisis if somebody shows up

with a gun, right you you don't have to

operate that drone. You hit a button and

we can immediately share it to police

operation center and it'll be operated

by a professional. So, I think that's

that 5 to 10 years out, but I think that

is the game changer where it's not going

to make sense to show up anywhere with a

gun anymore because you'll be detected

and stopped by small autonomous robotic

systems operated by police, but paid for

by the private sector.

>> Well, this brings up I think the

evolution in your business. Now, this

drone business you acquired it what uh

it's called a different name 18 months

ago. Uh it has been growing if if I'm

right triple digits. Within that growth

rate who is who is buying these drones?

And I was very intrigued by maybe one

group that is buying it. And these

companies that are making data centers.

And I see the uproar with people like

oh, don't put a data center in my

backyard. I would imagine if you were

building a data center, you want

protection of that really large asset

right now.

>> 100%. So, we actually made three

acquisitions in this space. One, we

bought a small tactical drone company

called Skydio. They make drones for

special forces and for SWAT teams. So,

you haven't heard much about that yet,

but stay tuned. The second is a company

called Dedrone. That is counter-drone

detection. And so, basically you install

sensors and that's the business that's

growing at I don't know like north of

500% and that's where you can track

drones and then we can integrate with a

bunch of different sensors and with

different types of interceptors to be

able to either jam a drone, hack into

the drone,

or like we have partners in Ukraine

where we're actively building

integrations if you need to fly a small

interceptor drone up to take that drone

down. And then we have a third area

which we've done through a partnership

with Skydio which is the leading

American drone maker. Skydio is our

partner for outdoor long-range drones.

So, if I take a step back, the way I

look at it is like our job is to figure

out how to help our customers solve

these really interesting public safety

challenges, and drones are probably the

biggest safety challenge in the world

right now. And if we can't build the

best system, we'll go find a partner and

and connect them in. And what we deliver

is the connected uh sort of connect dome

of all these devices.

>> So, the

these drones, the drones you have now,

you said they're Taser powered. So,

they fly down and tip they would

actually taze someone on the ground or

and then second area like do do you

Okay, no, like what do they do exactly?

>> Yeah. So, that does not exist yet.

>> Okay.

>> The drone that is capable of stopping

somebody

is in the future. The drones today uh

will effectively fly over a scene, and

they will give you an immediate

awareness of what's happening, which is

a big advantage, but they right now they

can see, they can observe, they can

communicate, you can fly them down and

distract people, which often works where

they holy crap, there's a drone here. It

will interrupt the the things that

they're doing. Uh but we do not yet have

the ability to

put an effect on somebody. Uh but that

is something we're actively in R&D.

>> How far do you want to push this drone

business? And by that I mean

uh do you envision the day uh at some

point and when you're still leading the

company that this is

shooting some form of round at someone

like a tech drone and like you're

selling these to the Department of War.

>> Yeah, yeah. We will not make

intentionally lethal drones. Like and by

the way, the world

I thought wars were over. I wrote a book

uh before the pandemic called The End of

Killing, where I predicted that we are

at the end of modern wars. I was wrong

catastrophically. War is back. And

democracies need tools to win. So, I'm

not saying we don't need lethal drones,

we do, but that's not something we're

ever going to make. Where we view our

purpose in this world is how do we take

situations where historically the

solution might be to kill somebody and

find a way to not kill them. So, we're

be focused on drones that don't kill,

but they can stop people without killing

them. So, we're very focused on the

non-lethal portions of this. And we'll

let Anderol and others do deal with the

lethal drones.

>> Rick, lastly, before I let you go,

you're founder of a company 1993. You've

changed how

police do their job, how many people do

their job, and how

just people stay safe in this country.

Um

what do you think your legacy would be?

>> Um I think

if this

Let me take the if out.

We are going to make the bullet

obsolete. At the end of my career, we're

going to look back and remember, "Gosh,

you remember we used to shoot bullets at

people here in America?" Like, that's

that's crazy. We will have brought the

phaser to life. But, there's one other

piece to this. We started with the

Taser, then we got into body cameras,

and now we have this huge neural network

with millions of cameras and sensors,

and where AI is at the core of our

business now, because you can imagine,

there's not enough people to watch all

those cameras. So, we can use it to like

help a police officer write their

reports, translate languages to all the

different people they deal with. So, AI

is now transforming the next leg of

growth for us. And so, as I look at what

when I the big picture, we want to build

the future as envisioned by Gene

Roddenberry, the the creator of Star

Trek, right? Like there, that phasers,

they communicators, like technology sort

of uplifted civilization. That's what

we're trying to do. Unfortunately, when

you make technology for police, the

media tends to immediately run to the

George Orwell story of, "Oh, this is

going to be used to oppress people, to

kill people, to take away their

freedoms." So, we're really conscious of

like, "Hey, how do we build the

technology infrastructure for the world

we want to raise our kids in and leave

our leave to our kids?" Like, that

supports democracy, where we make it

very hard. Like, everyone needs Taser

devices,

it's got a log that records every time

it's used. We built cameras to watch how

you use it, right? So, we think a lot

about It's not just our job to make tech

and throw it out there. How do we make

it in a way we're proud of that And uh

by the way, for our investors, that's

how you build a long-term business. You

got to think like, what could go wrong

and how do we prevent it from going

wrong? How do we take more

responsibility so that our products are

durable and they're going to be here in

50 years and that we don't, you know,

step on a landmine because, you know,

people were out there abusing our our

tech.

>> From one product in 1993 found uh by

someone

um looking through a at the library

through a patent log um to almost a $40

billion market cap. Hell of a success

story. Rick, good to see you again. Uh

let me know when you're in New New York

City again.

>> Thanks. Yeah, and uh stay tuned the next

couple years. I think we are going to do

more impactful products in the next 5

years than we've done in all of our

history to now.

>> Well, you keep me posted. You're always

welcome on and uh we'll talk to you

soon. Take care.