Skydio CEO argues more drones will make us safer

Today, I’m talking with Slydio CEO Adam Bry, who runs the leading US maker of autonomous drones. We covered a lot in this conversation, including Skydio’s police and government work at a time when military use of AI is more controversial than ever and competing with Chinese drones against the backdrop of the Trump’s administration’s DJI ban. There’s a lot in this one – maybe more than anything, it was refreshing to hear Adam talk about using AI to bring even more people to work at Skydio as the company expands. I also got to fly a drone, which ruled. Read the full interview transcript on The Verge. Links: Flying a semi-autonomous industrial drone | Decoder Sorry kid, drones are for war now | The Verge The FCC’s foreign drone ban is here | The Verge Skydio is pivoting to enterprise — its consumer drones are dead | The Verge Skydio commits $3.5B to expand US manufacturing | Skydio A US drone maker tries to take back the country’s skies | Bloomberg DEA looks to add Skydio, Parrot drones to its arsenal | FedScoop The future of border security isn’t at the border at all | The Verge Subscribe to The Verge to access the ad-free version of Decoder! Credits: Decoder is a production of The Verge and part of the Vox Media Podcast Network. Decoder is produced by Kate Cox and Nick Statt and edited by Ursa Wright. Our editorial director is Kevin McShane. The Decoder music is by Breakmaster Cylinder. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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  Hello and welcome to Decoder. I'm Neelai Patel, editor in chief of The Verge, and Decoder is my show about big ideas and other problems. Today, I'm talking with Adam Brie, the CEO of Skydio, the leading US maker of autonomous drones. You'll hear us talk about it, but before we recorded this episode, I actually got to remotely operate one of Skydio's drones in the Bay Area from Adam's laptop in our podcast studio in New York. I also got to fly an indoor drone around our office. You can check out the full video of all that on our YouTube channel. We'll link it in the show notes. Beyond letting me fly drones around the country, Adam and I talked about why Skydio is so focused on the enterprise market. I, of course, asked him a lot about working with police and the military, but you'll hear him say that a lot of Skydio's customers are utility companies that use drones to remotely inspect important infrastructure in ways that simply weren't possible before.

• 2:14Speaker 04

  That's a big and important market, but it's also one that was being serviced by cheap consumer drones in the past, products that basically no longer exist in the United States since most of them came from China. And the Trump administration banned foreign-made drones late last year. All of those inexpensive DJI drones? Well, they disappeared overnight, leaving expensive Skydio products as the main alternative. Adam and I talked about all of that and the reality of manufacturing complex electronics like drones here in the United States. We also talked about Skydio's use of AI and how it lines up with its use in the military. I really wanted to know if Adam had any lines here at a time when military use of AI is more controversial than ever. As you can tell, there's a lot going on in this one. Maybe more than anything, it was refreshing to hear Adam talk about hiring more people

• 2:57Speaker 04

  at Skydio as AI makes the company more efficient. And again, I got to fly the drones, which ruled. Okay, Adam Bree, CEO of Skydio. Here we go.

• 3:18Speaker 04

  Adam Bree, you're the co-founder and CEO of Skydio. Welcome to Decoder.

• 3:21Speaker 05

  I'm very excited to be here with you.

• 3:23Speaker 04

  I am super excited to talk with you. We just had a little demo of flying an X10 drone remotely. I have a lot of questions to follow up about that. That was super interesting. The drone business itself is in a moment of extreme change, I would say. There's policies keeping some of your competitors out of the country. There's what you're doing with autonomy and working with governments and the militaries around the world. And then in general, there's just the state of drone technology, which seems like it's on the cusp of being yet another thing. So there's quite a lot to talk about. Let's just start with the very basics. Unless you're a drone nerd, you might not have heard of Skydio. Explain what Skydio is and how the company came to be.

• 4:01Speaker 05

  So we are the largest US drone manufacturer. We make drones that are essentially flying sensor platforms. We started in 2014. At this point, we serve what we think of as the critical industries that our civilization depends on. So we work with public safety. We work with militaries. We also work with energy utilities and construction companies and departments of transportation and security organizations. The common thread between all of our customers is that they have hardcore, oftentimes high-risk physical operations, where putting sensors in the right place at the right time to get better information can fundamentally change our And that's what we deliver. We deliver end to end solutions where the drone is a key piece of it.

• 4:41Speaker 05

  But the software and the autonomy and the integrations and increasingly the end to end workflows for the different industries built around the drone capability are really what our customers are buying. And we're at a super exciting moment where after years of talking about a lot of this stuff, it's really starting to work at scale with incredible impact.

• 5:01Speaker 04

  Yeah, if I think about just our coverage of drones over the years, you know, you start with those first DJI drones almost 10, 15 years ago now. The first Phantoms, they were pretty rickety. They had these giant batteries. And it was really just about flight, right? Being able to control flight in a pretty, pretty easy to use way. And then we got very quickly to, oh, boy, we could put fancy cameras in the sky. And that was really fun. And those cameras got really fancy. And now you're saying it's a whole sensor suite, or is it just augmented cameras?

• 5:32Speaker 05

  So I actually think what you described there, to me, parallels pretty closely the sort of chapters of the drone industry that I think about. The very early days for the category of thing that we make, these electric flying machines, were really toys. You know, I sort of think of the first chapter, the first 10 years was the electrification of radio controlled airplanes. And they were recreational. It was fun to go out and fly. This is the world that I come from. I grew up flying radio controlled airplanes. And I think what happened is people started bringing the toys to work and realizing that if you put the right camera on there and you had a skilled pilot there flying it, you could do a lot of useful stuff. And that created cool videos that showed up in cinematography, commercial real estate, things like this. The next chapter is really about autonomy, where the drone lives in a docking station.

• 6:15Speaker 05

  It's connected to the internet. It can be flown remotely and autonomously and becomes a piece of infrastructure itself. And I think the impact that we see from that is going to be orders of magnitude larger than everything we've seen thus far. And we've seen a lot of good stuff thus far. I mean, I think the world of drones as tools, a lot of great work has happened there. I think it's just very small scale compared to what's coming. And we're really at the transition moment into that now.

• 6:40Speaker 04

  The idea that the flight is almost the like. Fundamental building block that you don't need to think about as much because you're talking about the capabilities built on the second and third order of the thing being able to fly itself. Describe that. Do you spend time investing in how the drones fly themselves or is that solved?

• 6:59Speaker 05

  We spend a ton of time investing in that. There's kind of been this trope in the drone industry of like, oh, it's not about the drone, it's about the data, which is sort of true. You know, you could say the same thing about almost anything, like it's not about the phone, it's about the apps or the software or whatever. But you have to earn the right to deliver these solutions. The way you earn the right is by being world-class at designing and manufacturing these systems and making them super capable and super reliable. And I think one of the things that's oftentimes missed with drones is they are cutting-edge aerospace devices. They vibrate, they have aerodynamics, they have thermal concerns, we've got really advanced compute running onboard, a bunch of sensors. It's really akin to building a self-driving car that flies. And if you want to be a good drone company, you need to be a world-class aerospace engineering

• 7:44Speaker 05

  organization across 10, 15 different disciplines. And it's only once you have that and you're great at it that I think you can then start to like, to focus on enterprise software integrations that connect your solution into, for example, the 911 dispatch software that a public safety organization might be using or the incident management system for an energy utility. Those things really matter, but if the core technology foundation isn't great, they're less important.

• 8:17Speaker 04

  We're going to come back to the phrase "world-class." I have a lot of questions about what it means to be world-class in our current regulatory and tariff environment, but just give me some examples. We have a consumer audience, probably everybody listening or watching has used one variant of a consumer drone at one time, but just like every other product, every year they get slightly better until, you know, the five-year newer model is a step change better than the model people might be familiar with. What are some of the big advancements? In the flight capability that people might not have perceived over time.

• 8:48Speaker 05

  Originally drones flew in raw stick to control surface input. So I grew up flying radio controlled airplanes. You hold a held joystick transmitter. When you moved that joystick, there was a direct command sent to either an electric motor or a servo motor that would move a control surface and that thing just moved directly in response to what you did. There was no compute between your stick input and what happened on the device. The next step after that, which is really what made the quadcopter possible, is taking very low level, pretty primitive microprocessors next to inertial measurement units, the thing in your phone that tells it, you know, what orientation it's in, and writing these, these pretty basic, what's called an attitude control loop. And that's the fundamental thing that's

• 9:33Speaker 05

  running at the bottom of every quadcopter control stack, which basically tells it which orientation to hold in physical space. And so then, when you move the stick, it maps to the orientation of the quadcopter. And without that, a person couldn't fly a quadcopter. There's no way you could like move the stick to give a raw motor command. Just the mapping would be too much for, for our brains. And so that was sort of the beginning of these things becoming a little bit more accessible. The next step on top of that was GPS position hold of not just holding an attitude, but using GPS to figure out your rough position and being able to hold a position in the sky. And that was a big step forward because that meant you could go hands off and the drone would just sit there and hover. So that was kind of a necessary step to get beyond like expert pilot level skill to have

• 10:16Speaker 05

  them be usable by anybody. And, and that's what, you know, most drones historically have done. And most drones still today operate mostly based on GPS. I would say the next big chapter, and Skydio really helped pioneer this, is using computer vision. Putting cameras on the drone, not just the camera that captures the video the, the user might care about, but cameras that see everything, go into a computer that's running onboard AI and can use the visual information to make intelligent decisions, to hold position even if you don't have a good GPS signal, to avoid obstacles, to track moving subjects. And, you know, we started in 2014. That was around the time. It still seemed like a Crazy idea, honestly. It's hard to remember 12 years ago, like using computer vision for anything outside of the lab seemed somewhat far fetched.

• 11:02Speaker 05

  We launched our first product in 2018, the Skydio R1, which was, I think, really the first drone built around computer vision. Our competitors, you know, started doing similar things and we're now at a point where that stuff has reached maturity. I still think there's incredible capabilities yet to come, but it's mature enough that you can really count on it and rely on it and build products around it. The fundamental thesis there is like build the skills of an expert pilot into the drone. I think the only way you can do that is using computer vision.

• 11:31Speaker 04

  I'm just so curious about the notion, this thing can fly itself and now we can build applications on top of that core capability. But it sounds like this thing can fly itself is not a finished project. That's something you're still spending a lot of time on.

• 11:43Speaker 05

  Yeah, I don't think it's ever finished. I think there's just so much upside here in what you can do and how good the automation can get and what that means for what people can do with them. Like we work with public safety agencies today that are using these things to respond to 911 calls. And a part of what they need to do sometimes is follow a suspect, like somebody's fleeing a crime scene in a car. And they'll do incredible things flying semi manually, you know, our autonomy system is still under the hood, but flying semi manually to track moving vehicles through urban canyons. And our AI system is very, very good. It's not yet as good as the greatest human pilots that I've seen fly these things in those scenarios,

• 12:23Speaker 05

  but it will be. And when it is, it'll be that much more, more powerful and capable for more people to reap the benefits.

• 12:31Speaker 04

  I want to come back to that, too. There's a lot of, there's a lot of threads to pull on here. I want to ask about Skydio itself. You've taken a lot of investment recently. The company is getting bigger. I think you're up to Series F. You have like a multi-billion dollar valuation. You're about to make 2,000 more jobs in the United States manufacturing drones. How many people work at Skydio today and how's the company structured?

• 12:51Speaker 05

  So we're about 1,000 people, which I think for the, the scope and complexity that we manage is actually a pretty tiny company. We do a lot with a very, very small team. Because we have to span so many different disciplines across engineering, across software development, across direct sales and support for our customers and across manufacturing. In many ways, I think the company is structured kind of traditionally. We have a head of sales, we have a chief financial officer, we have a head of marketing, we have a head of people ops. I think people ops is, which we could talk more about, I think, one of the most important functions at the company. You know, I think what might be a little bit unique is just how technical we are at senior levels. So I have six or seven direct

• 13:35Speaker 05

  technical reports spanning hardware and software and hardware operations and chief engineers for a number of the vehicle programs that we're working on. And, you know, a lot of that is I'm very technical. I come from an engineering background. I still consider myself an engineer. I get pretty deep into the details sometimes on products and technologies that we're working on. And, you know, it reflects our belief that these are cutting-edge aerospace devices. And if you want to be a great company in this space, you need to be world-class at engineering them and delivering them. We spend a lot of time at the senior levels deep in the technical weeds. Like, my weekly staff meeting starts with a comprehensive

• 14:18Speaker 05

  review of like every little technical thing that's gone wrong with our products over the last week. And we'll go as deep as we need to in that meeting to figure out what's going on and what we need to do about it. We do the same thing on new programs. And we do that for a couple of reasons, I think. One, I think it's the most important thing. It's not the only thing that matters, but it is the most important thing. Even the people who are leading non-technical functions, I think it's useful for them to get steeped and exposed to what's happening technically. And then vice versa, I think having our engineering leaders really well-versed in the business and what's happening financially, what's happening with our customers is super important for them because they're making some of the most consequential decisions at the company on the technical side that are ultimately

• 15:02Speaker 05

  going to manifest in the market with our customers and in our financial results.

• 15:05Speaker 04

  I get the feeling that you think a lot about the accountants taking over Boeing. Like, that's what that sounds like.

• 15:10Speaker 05

  Well, like, the antithesis of that.

• 15:11Speaker 04

  Yeah.

• 15:12Speaker 05

  I mean, I'm certainly familiar with that story. It sounds awful.

• 15:19Speaker 05

  You know, I think it's really just us doing what we think is in the best interest of our customers ultimately, which is is being really focused on having excellent products and and technology, not just today, but a year from now, two years from now, five years from now, 10 years from now.

• 15:35Speaker 04

  You are the first CEO, I think, in five years of doing this show to say that People Ops is really interesting. We should talk about it more. What do you mean by that?

• 15:42Speaker 05

  I have a very talent centric view of business. So, you know, we talked about the organizational structure. I think that matters, but I think it's it's less important than just the people at the company. One of the analogies I used to think about this, I love sports analogies for business. You know, people, people obsess over batting order in baseball. I don't know if you're a baseball fan, but there's this whole theory of batting order, and it's evolved over time where you want like the leadoff hitter to get on base a lot, and then you get into the meat of the order, where you've got the power hitters that are supposed to knock them in. We're now at a point where you can use analytics to study this stuff. And I think the estimates are that the difference between like the most optimal batting order and the worst batting order is like 20 or 30 runs per year

• 16:25Speaker 05

  for a Major League Baseball team. They score, I think, something like 500 to 800 runs per year. Adding one star player to the lineup is like 100 runs per year. And I think business is the same way. It's, you know, it's not as like directly trackable as baseball, but one exceptional person anywhere in the organization can just completely change the trajectory of a product or a business. And I think most things, more than people realize, really come back to talent, even for big late-stage companies, certainly for early-stage companies. And so we spend a lot of time really focused on that, on trying to get the best people in the world for each of the different disciplines that it takes for what we're doing, and, you know, putting people in a position to have tremendous impact. And if you look at amazing

• 17:09Speaker 05

  new product things that we've done over the last year, like we talked about the F10s, this fixed-wing drone that gets caught with a robotic arm. It's like a crazy sci-fi thing. You know, I think that we did a good job, like, creating an org structure for that team to be successful, but it's really just the people on that team are phenomenal. And the same thing with R10, our indoor drone, which I think is now the the best enterprise indoor drone that's ever been created. We did that in 15 months. Just amazing. People did that. And I think that's, you know, that's ultimately what what it comes down to. And our head of People Ops is awesome, and she and I work together quite closely on recruiting and talent management inside of the business to to get more and more of that.

• 17:46Speaker 04

  I like this anti-moneyball approach to running a tech company. We're going to send this clip to the Sabermetrics people. It's going to go viral.

• 17:51Speaker 05

  Look, I'm not, yeah, I'm not anti-moneyball. I just think that, you know, I actually don't think this is that anti-moneyball. Like, a lot of what they were doing, I would argue, was was sort of talent assessment kind of things, like deeply studying what are the attributes that that lead individual players to to be successful or not. And I'm not saying the batting order doesn't matter. It does. Like, you might as well pull all the knobs to optimize them. But the the most important piece is is having world-class people.

• 18:16Speaker 04

  This is one of the weirdest talent markets in tech that I I've certainly ever covered. You have outrageous salaries for people who work in AI, outrageous promises about AGI, and maybe you want to be on teams that are going to build AGI. You have some of the big platform companies saying that all 6,000 people are going to report to to Jack Dorsey with the power of agentic software tools. I'm not sure what any of that means. Is that affecting you? Is it hard to get the talent you want? Is it hard to pay them?

• 18:45Speaker 05

  Well, it certainly, it is a very competitive talent market, which is great. You know, it's a, it's a, I'm an engineer. I think it's great that, like, engineers are sought after and are, you know, the market compensation for for them is is going up. I think we have a a pretty unique kind of value proposition for for everybody, especially for engineers, in that we're building products that are very real and having real impact today. Like, robotics is hot again, and there's a lot of companies talking about robotics. There's a lot of grand promises being made. I think a lot of these companies that are starting off today are, you know, probably five to 10 years away. They don't think this, but I think they will realize that if they succeed at all,

• 19:29Speaker 05

  they're five to 10 years away from from having anything that's like a really viable business. We've been through that journey. We have an awesome core business. It's growing really quickly. But I still think we're we're at the beginning of kind of what's possible in our space, and there's a huge amount left to be built. But we build it knowing that if we can deliver it, it's really going to matter. It's going to save people's lives. It's going to make the energy infrastructure in our country operate more safely and efficiently. And because of that... We've been able to attract and continue to be able to attract really, really excellent folks to Skydio.

• 20:01Speaker 04

  Are you competing in the sort of bleeding edge AI research area or are you hiring different kinds of engineers?

• 20:06Speaker 05

  You know, we're not trying to build foundation models that are like, you know, 100 or 200 million dollar training runs. I think we were probably some of the earliest users of AI in real products. Like, we, you know, we use deep neural networks in our perception system going back to 2017, 2018, before I think anybody was doing that on a shipping robotics product. So we certainly are, you know, hiring folks and have folks on the team who are experts in AI and neural networks and all the other recipe of kind of algorithms it takes to build these autonomous systems. So, you know, there's, I think there's now, there's sort of this like smaller set of folks that are experts in these like very large cloud-based models. Like, we, you know, we're not training those ourselves.

• 20:49Speaker 04

  Let me ask you the other decoder question, then I want to start to pull on some of these threads that I've been pointing out along the way. You've had to make a lot of decisions in your run as CEO. Most importantly, I think, the decision to switch from consumer to enterprise. How do you make decisions? What's your, what's your framework and how's it evolved?

• 21:05Speaker 05

  I think a lot of what makes companies effective, if they become super effective, is that a lot of decisions almost become reflexive. It's like when you're learning a new skill as a person, you have to think about it a lot. Like, if you're learning to ice skate or something, you spend a lot of time thinking about like foot placement and stride and whatnot. And then over time, it just becomes very natural. For me as a leader and for us as a company, I think a lot of what's enabling us to move so quickly now is that we're just reflexive on a lot of things. Like, we've been through a bunch of product development cycles. We've seen new industries start to adopt our products and technology and the patterns that they go through. And so, you know, myself, my leadership team, kind of everybody in the organization, we just know how to deal with, with, with a lot of different kinds of stuff such that

• 21:49Speaker 05

  it doesn't even feel like we're making decisions oftentimes. Things just happen. The right thing just happens. And it's, it's super powerful and fun to be a part of that. That's not everything. And the, the new stuff, the frontiers, is where you kind of have to do slow thinking or like reasoning in the like, the, the LLM parlance. For me, writing is a very powerful tool to do that. So. Anytime we're facing a lot of uncertainty or ambiguity, I kind of tend to just start writing to help myself think about it. And that helps clarify my thinking. And then I also think the output from that tends to be a really powerful artifact for fostering debate and discussion and then ultimately having the thing that says like, all right, here's the plan.

• 22:33Speaker 05

  Here's what we're going to do. The other thing that I think it's super obvious, a lot of things in business are like super obvious, super simple, it's just hard to do them. Like, the whole point of a company is to do useful things for other humans. And it's very easy, surprisingly easy to lose sight of that, especially as companies get bigger. And so, you know, we really force ourselves to focus on that. Like, you know, what is what we're doing now going to mean for, how's it going to be valuable to somebody? And what are ways that we can make it more useful and more valuable to somebody? And ultimately, everything in a company should be oriented in that direction. And then probably the final thing that I'd say, this is one of our values is love the problem, get to the essence. I think it's really worth spending a lot of time going deep, deep, deep on understanding problems, whatever they are.

• 23:17Speaker 05

  The best solutions are, I think, born out of like, deep, deep understanding of problems, such that the solution oftentimes, the simple elegance solution oftentimes emerges from that kind of deep understanding. So for myself and for the team, I always try to focus people on really understanding the problem before, before, you know, swinging at too many different kinds of solutions.

• 23:35Speaker 04

  Can I ask you, I've been thinking about this a lot in the context of the tech industry and what kind of products we've all been dealing with and, I don't know, the rise of like B2B SaaS companies, Diamond Dozen. Do you feel like it's different because you make hardware? That your attitude towards your customer and what you have to deliver is because there's going to be a complicated piece of hardware that they have to charge and put on the roof and deploy versus you signed up for a subscription software product and maybe you forgot about it and that's your whole business?

• 23:59Speaker 05

  You know, I'm so deep in it at this point that it's probably hard for me to perceive. Like, I don't know what it's like to lead a pure SaaS company. You know, I certainly know that hardware is extremely unforgiving and you're dealing with real hard physical constraints and the kind of surface area and complexity of things that can go wrong is immense. And I think that that forces a deep level of rigor. But one of our goals... Is to be able to tolerate a very heterogeneous posture with respect to like risk and complexity and uncertainty. So our flagship mainline products, reliability is

• 24:42Speaker 05

  the single most important feature. We focus on it maniacally. We have to vet everything that we ship extremely rigorously and carefully. But not everything is like that. You know, there's pieces of like the cloud user interface where we can be and we need to be much more iterative and ship things faster. And it's okay if there's, you know, there's a bug in our issue or something isn't, isn't as polished. When we start a new hardware program like R10 or indoor drone, very different risk profile. It's not flying over people. It's, you know, in many ways, it's designed to crash because it's flying in, in indoor spaces. So reliability is still super important, but it's a different profile from X10. Part of the challenge, and I think part of what we're pretty good at, is being able to, to, to focus on the specifics of what we're trying to accomplish, what a particular product is

• 25:26Speaker 05

  meant to do, whether it's hardware or software, and deal with it on its own merits rather than just applying blanket rules across everything.

• 25:36Speaker 04

  We're going to pause here for a short break. We'll be right back.

• 25:48Speaker 01

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• 27:22Speaker 04

  Welcome back. I'm talking to Skydio CEO Adam Bree about how complicated it is to make and sell tech hardware here in the US and around the world.

• 27:30Speaker 04

  We see a lot of pure software companies totally rebuilding themselves around the idea that the AI will just vibe code everything, or a bunch of engineers will control 50 agents, and we're going to ship more software faster than ever. And maybe that's great, but I'm also like, is it going to be good? And I wonder if your relationship to the customer, like this piece of hardware is, your drones are very expensive. They have to be good.

• 27:54Speaker 05

  Yeah, I mean, we are extremely heavy users of AI. Like, one of the things that I've seen throughout the company that I'm super excited about is hardware engineers who, you know, they're brilliant engineers, but they don't have deep background in software. Probably they've like written a little bit of software when they were an undergrad or something. They're now vibe coding up incredible software applications to help them optimize different aspects of hardware design, to study vibration or aerodynamics or something. And so the hardware that we're building is for sure better because of AI. And on the software side, we're super heavy users. I mean, we have all kinds of automations internally. We have the ability for designers or product managers or anybody to like to prompt a change to the codebase that will then automatically, you know, get put into the queue and tested

• 28:37Speaker 05

  and reviewed, you know, reviewed by AI ultimately approved by a person. So we're super, super heavy users. Of AI, nobody knows exactly how this is going to play out. I do think that having hardware in this world of AI is super valuable because the integration of hardware and software gets more and more powerful. And hardware, I think, is is going to be amongst the last things to just be vibe codeable. To like prompt, I want a drone that does X, Y, Z thing. Maybe someday we'll get there. But doing the hardware is really hard. And once you have it, being able to just more and more easily add software on top of it to adapt it to more applications and more industries. Is, I think, is a very valuable place to be.

• 29:17Speaker 04

  I'm actually, I'm personally fascinated by some of the old hardware in my life that has gotten new life because of AI. So I have old cameras and AID noise has breathed new life and it's.

• 29:28Speaker 05

  Yeah.

• 29:28Speaker 04

  I've added software to an old piece of technology and now it has a whole new life in a different way. You can kind of see that across all the entire hardware portfolio. Let me ask you about something that you said build hardware, not going to be just vibe code hardware. The United States government has banned Chinese drones. They're hard to get in this country. There's a bunch of gray market stuff. We're constantly covering gray market DJI drones coming from can other places. You got to build the drones here. How is that working right now? Are you invested in that supply chain? Can you have all the pieces you need to build them here? How does that work?

• 29:57Speaker 05

  We have always manufactured our drones in the US. We started doing this in 2016 and 2017 when people thought it was truly insane. You know, like we had investors in the early days that would come and do diligence on us and and see a manufacturing line. And just basically pull the ripcord like, what the hell are you guys doing? I'm out of here. Like conventional wisdom in Silicon Valley in 2014 was like, one, probably don't do hardware. And two, if you are going to do hardware, definitely outsource it to China. That's just not the path that we went down. And honestly, we didn't go down it originally for geopolitical reasons. We went down the path of US manufacturing for practical reasons because they're aerospace devices. Engineering and manufacturing are tightly coupled.

• 30:38Speaker 05

  And doing both side by side just enables you, I think, to to build better products faster. Now, it has become a critical strategic imperative for national security. And I think a critical strategic advantage for us that we've got a decade of experience under our belts. Building these things in the US because manufacturing is hard. You know, hardware is hard. Manufacturing is definitely hard. Running a factory, integrating the supply chain for your product in your own factory is a extremely complex, messy endeavor. And we're very, very good at it now. I think that we, you know, I saw you key on world class. I don't think that we are a world-class manufacturing outfit yet. Like blunt assessment, I think China is still better at manufacturing drones than we are. But I think we're pretty good.

• 31:22Speaker 05

  And I don't think there's any law of physics that says that you can't be a world-class drone manufacturing outfit in the US. And we're going to do it. I mean, we'll invest in whatever hardware and software and systems and talent and people we need to, such that, you know, we have the world's greatest drone factory right here in the US.

• 31:40Speaker 04

  Let me ask you about that. The idea that you can be a world-class drone manufacturer in the United States is, in one way, that that's the right ambition for a company that makes drones. But it's also fairly narrow. So, I don't know, Apple just turned 50. We did a bunch of coverage on Apple turning 50. And a big part of that story is they stood up the supply chain in China. And there's a huge array of vendors. There's a huge array of sophisticated manufacturing partners, component suppliers. You talked about the history of drones. Why are there cheap IMUs and microprocessors all over China? Well, it's because Apple built the smartphone supply chain. And we could build a bunch of stuff out of lithium ion batteries and cheaply available IMUs. We don't have that here. So I guess I'm just asking, you can be a world-class drone manufacturer,

• 32:23Speaker 04

  but the ecosystem that allows you to do that doesn't exist here. Do you need that ecosystem or have you found a way to do it all on your own?

• 32:29Speaker 05

  I 100% agree with you. It's like drones are, in many ways, the combination of kind of consumer electronics with hobbyist quadcopters. And historically, all consumer electronics have been made in China. I'd say a couple of things here. I think, one, I don't think there's any law of physics that says that we can't have a world-class consumer electronics.

• 32:53Speaker 05

  Wide-scale hardware manufacturing ecosystem here in the US. You know, I think there's some alternate universe, maybe with slightly different policy decisions and a few decisions here or there, where the East Bay and San Francisco Bay area looks something like Shenzhen, China. And I think it's a bummer that we don't have that kind of hardware richness in the US because I think we, you know, the counterfactuals are always hard. But I don't think there's like a rule of physics that says that that couldn't be the case. We're focused on drones. We're focused on doing awesome stuff with drones. I do see broader momentum towards building more and more stuff in the US. I think some of this is driven by policy. I think some of it is driven by, you know, capitalist opportunity.

• 33:38Speaker 05

  And I think all of that is to the good. We're still using supply of components that are coming from Taiwan and Japan, Korea, and so on. Over time, I think more of those probably can be made in the US. But the drone piece is the one that I have the most visibility into and the most confidence. And we can definitely do that at world-class levels in the US.

• 33:57Speaker 04

  Are there any Chinese parts in Skydio drones right now?

• 33:59Speaker 05

  Very, very, very, very few. So we had the great distinction of being sanctioned by the Chinese government about a year and a half ago. We knew that we had China risk. We had done a lot of work to get our supply chain out of China. And the big remaining dependency that we had, this was public, was batteries. And we fortunately had a decent supply of batteries on hand, but we had to, in very short order, stand up a new supply chain for batteries independent of China. At this point, all the first-level dependencies are gone. And it's, you know, anybody who's saying that they don't have any Chinese content in what they're building is probably deluding themselves because it's very hard to trace back to the second and third levels.

• 34:44Speaker 05

  But all the critical components, all the first-level dependency stuff is outside of China.

• 34:50Speaker 04

  Just for the listener, explain what you mean by first-level dependency.

• 34:53Speaker 05

  The suppliers that we work with, so buying the camera module, the sensor in it, the processor, the circuit board.

• 35:02Speaker 05

  The metals and plastics, the suppliers that we're working with directly and as far as we can push the suppliers that they're working with, but you know, you go back to like some passive component on a circuit board or the material that's used in a particular thing, it's, you know, it's hard to say with 100% certainty on things like that.

• 35:20Speaker 04

  The reason that Chinese government sanctioned Skydio was because the United States government was trying to kick DJI to the country. The FCC banned foreign drones last December. They had basically been fulminating about doing it since 2020. Do you understand why the FCC banned DJI drones?

• 35:37Speaker 05

  Well, I'd correct some. So the stated reason for China sanctioning Skydio was that we sold drones to Taiwan. I'm glad you intuitive possibly the real reason. You know, I think the real reason, as you stated, is that we, you know, we compete with DJI and the US government has taken actions against DJI and I think it was retaliatory. I don't know exactly what the right answer is, but I think it's, it's pretty clear and non-controversial at this point that depending on Chinese technology and critical industries has, has a lot of risks associated with it. And this spans a bunch of different categories. I mean, we've seen this in chips. We've seen it in raw materials like steel and magnets. We've seen

• 36:16Speaker 05

  it with cars. And I think drones are like, you know, one slice of this, like this broader geopolitical competition, which is really technology competition. Specifically with respect to drones, I don't think it's a, a uniform landscape. You know, the drones used by our military are probably the most sensitive. Like buying that from China seems like pretty clearly a terrible idea. I would argue, you know, the drones that are living in docks deployed across US cities and across critical infrastructure, it doesn't seem like a great idea to have those things calling home to Chinese servers. The, the most controversial piece of this is probably consumer drones. And, you know, I think there's, there's frustration

• 36:58Speaker 05

  in that market now that, you know, people who've been using these, these inexpensive, very capable Chinese consumer drones are now having trouble getting access to them. But even there, I think the national security stakes are, are quite real. I mean, if you look at the drones, the Ukraine And the Russians are using, there's a lot of direct consumer heritage there. And the supply chain that goes into a consumer drone is very closely aligned with the supply chain that goes into a military or an enterprise drone. And so I think it's it's hard to completely disentangle those things. Ultimately, that's that's what the policy actions, which by the way, have spanned both administrations, and I think are fairly bipartisan, are are aimed at.

• 37:37Speaker 04

  There's a supply chain and then there's software command and control. Like, I don't, it doesn't seem likely that the Chinese government is going to take my Mavic Air and launch it in the sky on my behalf, right? And then do something nefarious with it. So is it the actual consumer drone a danger? Or is it the fact that at some point it connects to the Internet?

• 37:54Speaker 05

  I think it's non-uniform. I think it's different in different stories. You know, I think having like a network-connected autonomous docking station drone at a nuclear power plant calling home to China.

• 38:05Speaker 04

  Yeah, that seems bad. I'm just saying, in the consumer market.

• 38:07Speaker 05

  And there, and there, so there, I think it's sort of like a direct cybersecurity exposure risk. I think on the consumer side, it's more the supply chain leverage that ultimately, and I'm not, you know, I don't think there's like anybody's done anything wrong by buying and going out and buying a Chinese consumer drone. But ultimately, economically, that is essentially supporting like a Chinese defense contractor. Right? And and it's helping them build up their like their their technology and and economic might. And in aggregate, that that really matters. And, you know, again, I don't, you can debate what the right answer to that is. But I don't think you can deny that there is, you know, it is not in our national interest to be supporting Chinese drone companies.

• 38:52Speaker 04

  I'm asking these questions because we have a lot, we have a lot, we have a big consumer audience, they have a lot of feelings about supporting defense contractors in a lot of different ways. Scotty is a defense contractor now. Like, a lot of your clients, even your website, it just sort of directly speaks to military applications. You stopped making consumer drones in 2023. Your first enterprise drone was 2020. Well, I've always been curious, was it because the cost of building the product in the United States was so high that you couldn't compete at a consumer level? And it was easier? In some ways more lucrative to go after the enterprise and government contracts?

• 39:24Speaker 05

  This was a very difficult, this is probably like one of the most consequential, difficult decisions that we made as a company. And it was hard largely because, you know, I personally thought the consumer product was awesome and I loved, you know, the things that our customers were out there doing with them. It was really driven by the fact that we were still just a very small company. And there's always this trade off between like focus and serving different, different customers in different ways. I didn't feel like we could be great at both. I didn't think that we could be great at continuing to build like the best consumer products for the kinds of things that we're doing and figure out how to serve enterprise and government customers. It was a combination of factors.

• 40:06Speaker 05

  Honestly, the biggest one was just the impact opportunity that we saw with enterprise and government customers. And when we started in 2014, these markets didn't exist. The enterprise stuff was always part of our long-term vision, but nobody was really doing anything with these things in 2014. So the beginning, the idea was like, you know, we'll, we'll build these consumer products. The consumer market's probably going to develop the fastest and the first, and then the technology platform that we have there will enable us to go and do other things. Now, you know, I think at the time, we were maybe thinking we could do it all. I think in practice, when we got there, it really did feel to me like we had to choose. But it's, you know, it's really life-saving, efficiency-driving work for our civilization, the customers that we serve. And yes, it seemed like there was a good business opportunity there, but at the time,

• 40:50Speaker 05

  the markets were like basically zero. So it's not like, you know, it wasn't obvious. I was really drawn, and I think a lot of us at the company were, were drawn to the, the impact potential and a belief that there was a great business to be built.

• 41:01Speaker 04

  The X10 that I flew earlier on your laptop, how much did that cost?

• 41:05Speaker 05

  It depends on the configuration and, you know, whether it's in a dock or not. As a standalone system, without any of the cloud software associated with it, with the advanced sensor package, probably something like $15,000. But, you know, with, with a dock and all, everything associated with that, it's substantially more.

• 41:24Speaker 04

  And then the operating costs, if you do have the cloud software, I have a line here that says it's $25,000 per year per drone.

• 41:30Speaker 05

  There are certainly some configs that are like that. I mean, it's, there's a lot of different options out there depending on what you want to do with it and what hardware and software you're getting.

• 41:38Speaker 04

  I'm asking this because we've talked to a lot of drone professionals, firefighters, volunteer fire departments, and their fear is that there's no cheap consumer drones to do the jobs that they were doing. I'll just read you the quote here. First responders are using consumer drones for the most part. A lot of fire departments in search and rescue, they're volunteers with small budgets. They can't spend $50,000 on the Skydio program. They're going to get gifted a handful of cheap DJI drones, and that's good enough to save people's lives. If I was being as rude and direct as possible, I would say, the United States government, doesn't matter the president, has handed you a gift. They've taken away your cheap disruptive competition that was a good enough substitute with consumer product. And now you have the opportunity to sell $50,000 Skydio programs to first responders

• 42:23Speaker 04

  who have no other options. Can you get cheaper? Can you deal with that?

• 42:27Speaker 05

  I think there's two pieces of this. One, yes, we definitely can. And R10, our indoor drone, is $6,000 for the hardware. And that includes the controller, it includes the drone, and there's incredible capability there that I don't think you can get for any other price point. I mean, there's people build other flavors of indoor drones that cost tens of thousands of dollars that are outpaced for the R10. The more scale we get up to, the lower cost we can reach with our products. But the highest impact in most scenarios, I believe, and I think that the data is bearing this out now, is coming from more advanced dock-based, remotely operated autonomous drones. You can see this in the data. Like,

• 43:10Speaker 05

  we have hand-flown fleets, we have dock-based fleets. The dock-based drones fly 5 to 10x as much. Just the same way that like, you know, a cloud server is fully loaded, even though a desktop computer might sit at home unused. Like, once you just make the thing available to be driven through software, there's much more you can do with it. And we compete head-to-head against DJI in the dock-based world and have for the last year, and win head-to-head on the capability. I mean, there's a lot of agencies out there that were skeptical of Skydio and, you know, like flying their Chinese drones, that were doing this sort of like 911 response with drones that were open-minded. Enough to trial our system and will tell you that it's better.

• 43:52Speaker 05

  It's, you know, the autonomy and the integration of the whole thing just enables them to new, do more, better, faster. Ultimately, I think that reaching massive scale is going to be our highest impact path. So the F-10 product, our fixed wing drone, for example, will have something like a 50 mile coverage radius from its docking station. And, you know, when you think about sparsely populated areas where there might be like a volunteer fire department, I think being able to click a button on a map and have an F-10 show up 10 minutes later, 30 miles out from its docking station, like that is life-saving capability. And I think it'll be, not to say that great stuff hasn't been done with some consumer drones in the hand of volunteer firefighters, but I, you know, when I think about like, what's the best

• 44:34Speaker 05

  possible solution here, I think it's, I think it's like a badass dock-based F-10 that's zipping around at 100 miles an hour and can cover thousands of square miles.

• 44:44Speaker 04

  I agree. I think I'm just focused on the cost, right? They were buying

• 44:47Speaker 05

  Yeah, yeah. So on the cost, I think the, the cost permission for that F-10 will be way lower. If you do like a fully balanced analysis of like, what does it take for the person's time to go out there and fly it and how much training is involved versus like clicking a button on a map and, and having a dock-based F-10 show up. Not everybody's going to like that answer. But I think it's, it's fundamentally true in, in most scenarios.

• 45:14Speaker 04

  I'm excited for you to go to like the city council meeting in my hometown of Racine, Wisconsin and pitch cost permission because the upfront cost is, is very high. This is what I'm getting at is there was a, a low-end competitor that has just been eliminated. We've gone looking around for other US consumer drone companies and there don't appear to be any. Maybe a better comparison here is like the car industry. Jim Farley, CFO for, he's been on the show, loves to talk about how much better the BYD cars are. He's always like, man, these are here. Yeah, it's good. He's, he's gotten very good at it. It's very practiced. And the United States government is just protecting our auto industry from that competition. Yeah. Like straightforwardly, the car influencers are like, man, these cars are better than our cars. Do you worry that you're being insulated from that competition?

• 45:55Speaker 05

  The only like long-term stable solution is building the best drones here in the US. I don't really care, honestly, from a product development standpoint, whether Chinese drones are allowed in the market. I think, you know, we serve the US military. We know for certain that our adversaries are going to be using Chinese drones in a conflict. If we want our troops to have the best capability. The stuff coming out of China is the relevant competition. That's the standard that we we hold ourselves to from a hardware standpoint, whether or not they're in the market or not. I can say with with pretty high confidence that in this new world, the world of drones as infrastructure where AI and autonomy are central, we're integrating these things together into end end solutions is the winning recipe that's most valuable for customers.

• 46:40Speaker 05

  I think that, not think I know, we have the best solutions in that that space. And you know, you can you can talk to customers who have used both and we'll tell you that. I think in that world, we have the upper hand. In the kind of hand flown world where it's more manual and there's more pressure on price, China has the upper hand. Fortunately for us as a company in a country, I think we're headed more towards the autonomous remote world. But you know, I still think that whether or not they're allowed in the market, that's the competitive bar that we want to hold ourselves to.

• 47:12Speaker 04

  Obviously, the United States is just one market. The European market is huge. There's a lot and who knows what will happen with NATO. Like, there's a lot of pressure on the kind of contracts that you want to fulfill. As you go in different markets around the world and you compete with DJI, are they winning on price like you're saying? Are you winning on features? What's the balance?

• 47:28Speaker 05

  I think it's, you know, it's going to be a slightly different story in different markets for different customers that care about different things. And most of our business is still here in the US, but we operate in Canada now, we operate in Japan. And we have and will continue to successfully compete head to head on the the strength of like the integrated automated solutions that we can deliver. And as we get bigger, we get better and better at manufacturing more hardware at at at lower cost, which will enable us to serve more and more markets.

• 47:54Speaker 04

  Are you going to keep all the manufacturing here in the United States?

• 47:56Speaker 05

  That's the plan, yeah. Yeah, we're I mean, we're doubling down. Like, we announced we're spending three and a half billion dollars over the next five years in the US on our own manufacturing with with domestic suppliers, on our own internal operations. You know, we're we're getting a new giant factory. Like, we're we're all in. I think that.

• 48:14Speaker 05

  Yeah, I think that we're already one of the leading examples of like real US manufacturing, working at substantial scale. But I think we have many more gears that we can, we can find.

• 48:25Speaker 04

  Real US manufacturing, working at substantial scale, you have 1,000 employees. How much of your manufacturing is automated as you, and as you invest in manufacturing, how many people are you going to hire versus how much automation are you going to bring to bear?

• 48:38Speaker 05

  Automation is definitely a key part of the story. R10, the product that we just launched, is the most automated product that we've had from a manufacturing standpoint. We actually over invested in automation there because we wanted to develop and trial a lot of new techniques. So, you know, automation will be a key piece of it, but there's, there's always going to be a lot of jobs involved in, in, in running a factory and in just operating the company and delivering and installing the stuff for customers.

• 49:04Speaker 04

  I'm just thinking about the, the sort of like famous Steve Jobs quote of, I couldn't get, I couldn't fill this ballroom with manufacturing, engineering, management, and in China, I could fill like multiple football fields. Do we have the talent base for you to do what you're saying you want to do?

• 49:17Speaker 05

  Well, I think that these things take time. Like, you know, I don't think you're going to overnight create the like, the talent base and the ecosystem that exists in, in China. But it's not zero. I mean, and, and look, I think, you know, Tesla gets a lot of the credit here. They, you know, they have built and operated factories at, at large scale in the area. We have a large number of Tesla alumni that work at, at Skydio. There's actually a lot more than people realize. I mean, a lot of like higher end enterprise servers and things of this nature are built in the Bay Area. So the, the talent base is, is larger than I think most people realize, and there's a lot of momentum behind it now. So, you know, it's easy to look at the world today and say like, yes, China has a richer

• 50:01Speaker 05

  ecosystem. They've got more happening there. But I don't think that it has to be that way. I think we've actually, as a company, got a great foundation. And, you know, these things ultimately are demand driven. Like if, if there's a need to build more and more drones, like that creates the conditions for more people to like, to want to get into it and, and get great at it. And we're seeing that happen right in front of our eyes.

• 50:26Speaker 04

  We have to take another quick break. We'll be back in just a minute.

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• 52:12Speaker 04

  Welcome back. I'm talking with Scotty Osiato, Adam Brie, about the challenges and implications of autonomous drones, especially in defense and law enforcement work. I'm going to end by talking about AI and autonomy here, the need to build more and more drones, and we're seeing it happen in front of our eyes from a government and defense contractor. It's going to cause a lot of our audience to have a lot of very specific feelings about what these drones are for, who's making the decisions, whether they have any say in the matter. The demo I saw with you was very cool, right? There's an emergency somewhere. The drone takes off from the dock. It flies to it. It helps the first responders do whatever they're going to do. The flip side of that is, boy, there's a lot of surveillance ideas baked into that. As you add more and more autonomy to the drones, boy, there's a lot of ideas baked into that about who's making what decisions, especially if the drones have any lethal capabilities.

• 52:56Speaker 04

  What's your, what's your perspective there? How do you draw the lines?

• 52:59Speaker 05

  There's two things that you kind of alluded to, and we could talk about either of them. There's the military use of the products where we are in a technology race against China. I very strongly believe we want our troops to have world-leading capability. I think that's, I think the world is better off. I certainly think the US is better off. If that's the case, our military is ultimately accountable to democratically elected folks who are calling the shots, and they're controversial. Obviously, not everybody agrees, but there is a democratic process in place. And then the other side of it is, is public safety and, and law enforcement, where the products have incredible impact.

• 53:40Speaker 05

  And I actually think if you care about transparency and accountability in policing, drones, it's hard to imagine a better tool than a drone. I mean, it's kind of like a flying body camera. It provides objective documentary video evidence of everything that's happened, and it's extremely narrow and precise. You know, it's not blanketing a city in cameras that are passively collecting. It's responding where you know there's an emergency and providing very narrow intelligence just in that scene, just in that scenario, to drive better outcomes. There's definitely legitimate concerns and questions about this stuff. But one of the things that I've learned and actually been very positively surprised by

• 54:20Speaker 05

  is just the level of direct accountability that exists with state and local law enforcement today. Like, all the, all the contracts that we have with police customers have to be approved by the city council. And that incentivizes the police agency and us as a company to do everything we can to, to make it just an obvious win for the community. And so we have a feature we call the Transparency Dashboard that makes it easy for agencies to publish the flying that they're doing so they can create a public record of all the flights that they've done, where the drone went, what it was responding to, what its trajectory was along the way, what the camera looked at. So we don't publish the video. But you can see the camera footprint on the ground. So somebody, any citizen can go

• 55:02Speaker 05

  and and look at this and see what their agency is doing. And I think this is an example where technology is is just a straight win, you know, in the trade off between better policing and better outcomes and protecting civil liberties and transparency. Drones are an example of, I think, technology just fundamentally moving that curve up to the better. So that's that you can get better outcomes while still protecting privacy and transparency.

• 55:22Speaker 04

  Yeah.

• 55:23Speaker 05

  And and I think the trajectory the space is on actually proves that. Like, I was concerned five years ago that public pushback was going to be one of the the big barriers to adoption, even though we knew the impact would be strong. And we just haven't seen that. I mean, we've seen communities oftentimes asking for their their local police department to use it. And the stories speak for themselves. I mean, the videos of finding a missing person, deescalating a dangerous situation where it's just obvious without a drone, you would have had a different outcome. You know, I think when people see that, they they they tend to get it. And so the good news, you know, I'd say for people that that have questions or concerns here, there's democratic processes in place. Like, you know, if Skydio is being considered in your city, you can go to the city council meeting, you can see what the debate looks like, you can you can speak up. And I think that's healthy. You know, it's like every community ultimately gets to decide for themselves.

• 56:08Speaker 04

  I understand why you want to pull apart military and policing applications. And I won't linger on it too long. I think for a lot of people in America, their police forces look ever more militarized, or the president has deployed the military into their city. And the idea that there will be pervasive surveillance backed up by something that feels militaristic is definitely more real today than maybe it was 10 years ago. And the idea that there will be pervasive surveillance or, you know, preemptive policing enabled by cameras and sensors and what have you, people don't like that. And they don't feel agency, right? So saying you can go to the city council and get rid of Skydio when there's muddied interests pushing Skydio forward. I think there was a controversy with Skydio

• 56:53Speaker 04

  in Las Vegas, right? Like, how do you feel about that? Do you feel like people actually have enough agency? Or is this just a way for you to say, look, your city is going to buy it, we're just the vendor?

• 57:02Speaker 05

  Part of living in a democracy is that not everybody's going to agree. But I'll give you like a non Skydio example. So there's a company you may be familiar with Flock Safety that makes automatic license plate reading cameras as their core business, which is a completely different kind of technology. You know, this is basically like passive collection on all the time. The value of it is creating a database of basically like every car and where it's been. The business model incentivized sharing of that data as broadly as possible. And then I think on top of that, the company doesn't have a great history of what they say publicly lining up with what's actually happening with that data. And there's a huge amount of pushback against it. And I think some of it may be misguided.

• 57:46Speaker 05

  I think some of it is the company's mishandled. And I think some of it has to do with concerns about the core technology. But because of that pushback, the contracts are debated at city council and in a lot of places it's being ripped out or replaced with something else. And, you know, again, I don't know exactly what the right answer is. It's probably different for different communities, but I think it's an example of the process in action where communities get to decide. And, you know, there's inevitably going to be some concerns. My personal view on it is, you know, even the sort of harshest critics I think are valuable because it's part of the accountability mechanism for us. You know, it's like we get to see what are people concerned about, what don't they like? And even if it ends up getting deployed in a community, it's valuable to see what the

• 58:28Speaker 05

  concerns are and to be asked tough questions because it changes in some cases how we think about product development and, you know, what can we do to address this?

• 58:36Speaker 04

  What changes have you made specifically as you've thought about Flock?

• 58:39Speaker 05

  Well, this is not in response to Flock. I mean, the transparency dashboard was largely driven internally, like it seemed like a good thing to do, but a lot of the specific features have been iterated on and improved based on, you know, concerns that have been raised. Like there was a case, you know, I'll anonymize a little bit, but there was a case where a woman was afraid that a police agency flying one of our drones might have been looking at her in her private property. They weren't. And so we enhanced the transparency dashboard to show the camera footprint on the ground such that you could just, she could go on and see for sure that they weren't.

• 59:16Speaker 04

  How do you validate that? If you're, you know, your citizen, you're like, man, I see that drone flying. They're, they're big, they're noisy. They're, they're not, you know, they're, I have, I've seen like a lot of TikTok clips of people noticing the boxes getting installed on roofs and then the conspiracy theories flourish, right? You can say, there's a dashboard, you can look at the dashboard for my company. But you have to validate it. You need some external perceived independent validator of that. How does that work? Is there a feedback loop there?

• 59:41Speaker 05

  This is the thing with social media, like what is the ground truth? What, how do we decide what misinformation is? Who gets to decide? And there's no perfect answer to these questions. The thing that I would say is I think there is actually, almost uniquely with state and local law enforcement, there are generally very good accountability and feedback loops there. I mean, in the case of sheriffs, so county sheriffs, they're directly elected. In the case of police chiefs, they're, they're usually appointed by an elected mayor. And when something goes wrong, they're on the nightly news explaining it. Or if there's a concern about technology they're using, they're on the nightly news explaining it and they usually don't want to be there. I mean, it's part of their job, but

• 1:00:21Speaker 04

  Some of them really want to be there.

• 1:00:22Speaker 05

  Some of them, some of them may want to be there more than others. But look, I, I think that the feedback loops there, I think are actually generally pretty active and pretty healthy. And again, not everybody's going to like the outcome. You know, there's, there's going to be some percentage of the population that just doesn't like the idea of having police at all, or doesn't like the idea of, of having police with advanced technology. But I always think it's helpful to think like, well, what do you want to have happen? Like, let's say that somebody's trying to break into your house or, you know, a loved one goes missing. What do you want to have happen? You know, like, do you want like a drone to show up in 30 seconds so that the officers know exactly what they're heading into? If, if you have a loved one lost in the woods, do you want to be able to very quickly surveil that area with a bunch of autonomous drones to, to increase the chances of them being found?

• 1:01:07Speaker 05

  And it's not to say, like, I think the, the concerns around privacy and transparency are totally valid, but I think you also have to weigh that against the alternatives. And I think drones, in particular, kind of uniquely optimize this where you're getting maximum benefit in terms of better outcomes with minimum trade off in terms of sort of like mass blanket, always on surveillance.

• 1:01:28Speaker 04

  Let me make a comparison for you. Jamie Semenoff runs Ring. He's been on the show several times. His thesis is that if you put up enough Ring cameras in certain neighborhoods, you can quote, "zero out crime." And he and I have debated this at length, where you can actually zero out crime. Does that feel doable to you? Or is that the wrong trade-off in actually if you put enough Skydio boxes on enough roofs, you can zero out crime?

• 1:01:48Speaker 05

  You know, I think the Ring cameras are great. I have one myself. I'm not an expert and deep in all things Ring. I certainly think, let me take a different spin on it.

• 1:02:00Speaker 04

  But it's an example of what you're talking about. There's a trade-off here. You put up enough fixed cameras.

• 1:02:04Speaker 05

  Let me give you like a more concrete, like in our space. I think this gets at what you're talking about. There's something like 300 million 911 calls per year in the US, one per citizen per year on average. Do I think the world is better off if there is an autonomous drone that shows up in 15, 20 seconds to every one of those by default? Yeah, I do. I think that will save a lot of people's lives. I think cities will just operate more efficiently. And I think we can do that with maximum protection of privacy and civil liberties because it's targeted, it's narrow, it creates a digital record. Because of that, it's less subject to abuse. Does that end crime? Probably not, but I think

• 1:02:49Speaker 05

  it probably takes a really big bite out of it. And I think a lot of people are going to be safer and happier because of it. And you know, it's a huge motivator for what we're doing at Skydio. And I do want to emphasize that this is not like, it's fair and right that public safety and military get a lot of attention, but this is not all that we do. I mean, a lot of our drones are just off inspecting the energy grid and making sure that the power stays on or gets back on faster, or keeping roads open for departments of transportation, which you know, to most people is kind of like boring out of sight. I think that stuff actually ultimately might end up being the biggest segment in the business. But I think this is an example of technology just fundamentally moving things forward for the better.

• 1:03:29Speaker 04

  Sadly, I have to keep asking you about military applications. I do want to talk about power line inspection. We'll do a full hour on that, one of these things. The other sort of complicated moral question that you've alluded to already is how the military uses this technology. There is obviously a brewing controversy with Anthropic where they've drawn some red lines about how Claude might be used in military applications, whether or not it's even capable of doing things the military might want it to do. Certainly mass surveillance has come up in the Claude discussion. Do you have red lines where you've told the military that you won't allow your technology to be used for certain things?

• 1:04:00Speaker 05

  So this is an area that I think is actually one where we've, I've gotten some things wrong. I think that historic, like we said some things previously that led some folks externally and internally to believe that, for example, like we would prevent the military from putting weapons on our drones. Now, you know, we're generally focused on building flying sensor platforms. We're what the military calls dual-use technology. And it turns out that the requirements from a sensor and flight time and reliability standpoint for inspecting the energy grid are actually pretty similar to what makes something useful to a soldier on the battlefield for what they call ISR, intelligence surveillance reconnaissance, short-range intelligence surveillance reconnaissance. I have a pretty

• 1:04:43Speaker 05

  strong opinion that the, the people who are putting their lives on the line, who are ultimately accountable to democratically elected leaders, they are in the best position to make these life-or-death decisions of like what tools to use and how to use them. And I think it's very easy from an office in Silicon Valley to sit back and think that, you know, we're very smart and, you know, we know the technology and the idea of using it for XYZ thing seems evil or bad, so we're just going to write a policy or ban people from doing it. I think that's ultimately misguided. I think it's actually dangerously misguided. And I think it's not giving democratic processes enough credit. I think it's not giving the servicewomen in our military enough credit. I mean, the military has a whole

• 1:05:24Speaker 05

  policy wing of brilliant people that, that sit around thinking about this stuff. And they're not going to get it exactly right, but they care a lot about it. And then, at the end of the day, you're talking about typically, you know, a, a young person in a trench somewhere whose life is on the line. I think it's just, it's not our place to tell them what they can and can't do. We're focused on making our products great. It's certain things, we're less focused on other things. And our voice matters in the conversation, but I think ultimately it should be, should be up to the folks whose job it is, who are putting their lives on the line to decide how to use it.

• 1:05:58Speaker 04

  Do you think this is different because you make hardware?

• 1:05:59Speaker 05

  From like Anthropic, for example?

• 1:06:01Speaker 04

  Yeah.

• 1:06:02Speaker 05

  No, I think that, I mean, the practical implication, you know, the instantiation details might be different, but, you know, we face this question of, you know, when the army started running some experiments where they were putting grenade droppers on our drones, there were people who felt like we should shut that down. There was, you know, questions internally. So, you know, I think that's a pretty like visceral example of like, you know, the military's experimenting with turning this thing into like a lethal device. But, you know, I just don't think it's our place to decide.

• 1:06:39Speaker 04

  Well, so wait, there's decide, but then there's like building the capability, right?

• 1:06:43Speaker 05

  Yeah.

• 1:06:44Speaker 04

  Maybe in the case of Anthropic, no one knows what the models can do and you can just ask it for anything. You're like, make me a bomb and like, maybe it'll do it. And maybe Anthropic has some real feelings about whether or not that's a good idea.

• 1:06:54Speaker 05

  Yeah.

• 1:06:55Speaker 04

  They restrict it. For you, it's right. I mean, the military like hands you a purchase order and says, put a grenade dropper on it. And you can or cannot do that. You can literally say, we will not allow our sensor platform to target people and identify them and then fire the gun.

• 1:07:09Speaker 05

  I think one of the problems here is you end up with really strong adverse selection. So like, if you make a policy that says, you're not allowed to do XYZ thing with our products, the chances are pretty high that the US military is going to follow it, right? They have lawyers, they look at this stuff, they will probably follow the terms of service. And ultimately, it may mean they just don't buy the product. Our adversaries, terrorists, they're not going to follow the terms of service, right? They don't care. They don't care what our policy says. Like, they're happy to buy the thing or hack it and they don't care about like what Anthropic's policy says. If you try to draw these lines to establish purity of like, oh, we think XYZ thing is bad, you shouldn't do it with our product, we're going to try to create legal terms or like things in the product that prevent you from doing it. I think ultimately, you just end up on the wrong side of this stuff because the quote unquote, good guys, you know, maybe not uniformly, but will generally follow what

• 1:07:51Speaker 05

  the policy says. Bad actors are not going to care. They don't care at all what the policy says. And I think it's just, it's not to say that you can't have an opinion, you can't talk about it, you can't debate it. But I think when you start trying to draw these like bright lines and say, this is good, this is bad, you more often than not are just going to end up on the wrong side of moral questions ultimately.

• 1:08:11Speaker 04

  Can I bring this back all the way to the beginning? You started by talking about talent and recruiting talent and getting the best people and how that is better than the right structure, which is some real decoder bait. I have to be honest with you. Like, that's the whole thesis of the show.

• 1:08:25Speaker 04

  As you're out in the world recruiting, people have a lot of feelings about working for defense contractors, about working for the military, about helping to kill people. Google, right now, is beset by internal controversy about working with the government. Then they're going to do it anyway because I think Google has enough people that maybe some attrition is fine. You only have 1,000 people, you've got to recruit some more. How does your talent base feel about this and how has it affected your recruiting?

• 1:08:46Speaker 05

  Look, I think debate about this is healthy. I think questions about it are healthy. Different companies have different postures. There's some companies where like, get on board or get the hell out. I generally think it's healthy to have a diversity of perspectives on this stuff. I think this is actually one area where like, we have quite a bit of diversity and diversity is awesome. And I'll say, one of the dynamics that I've seen, and I think you can see this most clearly in public safety, when we started working with military and police in the summer of 2020, which was not a super popular time for law enforcement in the US. There were a lot of negative headlines about it. There were a lot of people internally who had some concerns.

• 1:09:27Speaker 05

  I think over time, as our products have grown in that space and people have seen the impact that they had, almost everybody, including folks internally who were initially very concerned about it, have come to the belief that it's really incredibly impactful, positive work to be a part of. So I'm happy to have this conversation with anyone. I'll have it with a candidate that I'm talking to. I'm having it with you right now for the world to see. And people get to make up their own minds on it. But if you really care about developing cutting-edge tech to have positive impact in the world, defined as like, helping people do their jobs better, helping our critical industries run in a safer, more efficient way, and saving lives, I think Skydio is hard to beat.

• 1:10:12Speaker 04

  You're part of a cohort of companies, I think Andreessen Horowitz led your last round, they've led almost all of your rounds, I think.

• 1:10:18Speaker 05

  No, we've got, I mean, they led our seed in Series A and then they doubled down in the Series D. So they've been great partners, great investors, but we've got a lot of great investors.

• 1:10:27Speaker 04

  I'm asking about Andreessen particularly because they're American Dynamism Project. They do a lot of government lobbying. There's reports today that they're going to do even more lobbying in this cycle. Palantir exists, Android exists. There is a new cohort of defense companies that are thinking very differently about what it means to defend America and be some of these contractors. Do you perceive yourself to be part of that group? Do you have a different culture? How does that work?

• 1:10:51Speaker 05

  You know, we're our own thing. And I would say each of those companies have their own thing. Like, a lot of the folks from Andrel came from Palantir, but they have a different identity, a different culture than Palantir does. I don't really think of us as being part of any particular group or cohort. I, you know, I think about us as like trying to be the best in the world at what we do from a technical standpoint and trying to deliver outcomes that really matter for our customers. And defense is actually, it's, everything in the business is growing right now. Defense is growing very quickly for us. It's actually a shrinking percentage of our overall business because other things are growing just that much faster. So I'm super proud to work with the US military.

• 1:11:33Speaker 05

  And I think it's generally good that more tech companies are doing so. But I would say that our identity is probably, compared to the other companies you're talking about, less defined by being sort of a defense contractor, being super defense focused. I actually think some of the biggest value we can provide to our defense customers, especially in our space, is by being incredibly successful in civilian markets, such that, you know, when they're going head to head against adversaries using Chinese consumer drones, we've got the best thing to match that.

• 1:12:04Speaker 04

  Adam, we're out of time. Thank you for being so open. I have a million more questions for you, but I'm just going to ask here at the end, can you build us a cheap consumer drone again? Please.

• 1:12:15Speaker 05

  Look, this is probably the hardest question to end on because I would love to do it. You know, I think we could do it, but we're still so early in, in these markets where the potential is so massive and there's still so much left to build. I can't justify taking our focus off of that. So I really hope somebody else does. Maybe we can partner with them in some way. Maybe we can provide some technology. I certainly think there's a need there. I hope that we will get great American consumer drones. I think it's unlikely that it's going to be us that's manufacturing them.

• 1:12:49Speaker 04

  Sounds good. We'll have you back to a full hour on Powerline Monitoring soon. Thank you so much.

• 1:12:52Speaker 05

  All right, thank you. This is great.

• 1:12:55Speaker 04

  I'd like to thank Adam Brie for taking the time to join Decoder, and thank you for listening. I hope you enjoyed it. If you'd like to let us know what you thought about the show, or really, anything else at all, drop us a line. You can email us at [email protected]. We really do read all the emails. You can also hit me up directly on Threads or Blue Sky. The show's on YouTube. You can watch full episodes at DecoderPod. It's the same handle on TikTok and Instagram. Both of those platforms are a lot of fun. If you like Decoder, please share it with your friends, subscribe wherever you get your podcasts, and hit us with that five-star review. Decoder is a production of The Verge and part of the Vox Media Podcast Network. The show is produced by Kate Cox and Nick Statt. It's edited by Ursa Wright. Our editorial director is Kevin McShane. The Decoder music is by Breakmaster Cylinder. We'll see you next time.

• 1:13:31Speaker 07

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