EP 145: Rick Smith (CEO, Axon): The Wild Ride From Near-Bankruptcy to $50B+

Rick Smith, CEO of Axon, shares the company's mission to reduce violence through technology, aiming for a future where bullets are obsolete. His personal experiences with gun violence shaped his view of the issue as a technological challenge rather than a political one. Axon, founded in 1993, initially focused on tasers but shifted to body cameras around 2008, a transition that took seven years to gain traction. The company rebranded in 2015 and went public in 2001, overcoming initial skepticism from investors about electrical weapons. This shift to a model that includes hardware, software, and AI has led to a market cap increase to around $50 billion.

The "defund the police" movement and events like Ferguson significantly raised the profile of body cameras, changing public and police attitudes towards their adoption. Smith notes that even without Ferguson, other incidents would have likely led to the mainstream acceptance of body cameras. The transition from a hardware-focused company to one that incorporates software and AI brought cultural changes and challenges, including new hiring practices and internal conflicts regarding compensation.

Smith emphasizes the importance of curiosity and humility in aligning incentives within the company. He recounts a challenge when the organization resisted a new direct sales approach suggested by a young hire, which ultimately led to a cultural shift and the hire becoming president. He stresses the need to prioritize creating value over merely appeasing investors, reflecting on the pressures of being a public company and the challenges posed by short sellers, including a significant attack in 2005 that nearly led to bankruptcy.

Smith connects controversies surrounding Axon to the development of body cameras, designed to improve accountability. He advocates for focusing on solving valuable problems rather than solely pursuing profit, which has led to innovations in police work, including AI solutions. He expresses skepticism about the societal impact of short sellers, suggesting they can create instability.

The conversation also addresses the challenges of new technology aimed at reducing police shootings, with upcoming field trials for a device designed to improve reliability in critical situations. Smith discusses the importance of addressing gun violence, noting that American police kill about 1,000 people annually, while private citizens account for 40,000 deaths. The company plans to return to the consumer market in 2026, targeting gun owners to enhance their experience with safer, non-lethal options.

Smith highlights the impact of drug-related issues on society, particularly the opioid epidemic, and the role of tasers in managing violent outbursts. He discusses the internal practices at Axon, where employees and police customers voluntarily experience taser discharges to foster empathy. Innovations at the intersection of law enforcement and AI are explored, with the company launching AI features in body cameras to automate bureaucratic tasks.

The conversation touches on Axon's strategic shift under Smith's leadership, focusing on innovation and integration, and the challenges of customer comfort with products like body cameras. Axon has positioned itself as a market leader in records management, leveraging AI to enhance productivity in drafting police reports. The company identifies itself within the violence suppression industry and is involved in legislative efforts to change the regulatory environment surrounding tasers.

Smith reflects on the importance of hiring the right people and the value of delegation, expressing enthusiasm for Axon's future and his commitment to the company. He describes his current state as being "in the zone," enjoying his work and engaging in various activities, including advocating for important messages in Congress and collaborating with engineers on next-generation products.