← Decoder with Nilay Patel
Decoder with Nilay Patel
Skydio CEO argues more drones will make us safer
01:13:17
Adam Bry on competing with China, mass surveillance, and why Silicon Valley shouldn't draw red lines for drone use.
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hello and welcome to Decoder. I'm Nilai Patel, editor in chief of the Verge, and Decoder is my show about big ideas and other problems. Today I'm talking with Adam Bree, 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. He 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. 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 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 at skydio as AI makes the company more efficient. And again, I got to fly the drones which ruled. Okay, Adam Bri, CEO of skydio. Here we go. Adam Bri, you are the co founder and CEO of Skydia. Welcome to Decoder.
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C
I'm very excited to be here with you.
- [03:27]
B
I am, sue, 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.
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C
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 outcomes. And that's what we deliver. We deliver end to end solutions where the drone is a key piece of it, but the software and the autonomy and the integrations and increasingly the end to end workflows for the different industries, both 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.
- [05:05]
B
Yeah. If I think about just our coverage of drones over the years, you know, you started 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?
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C
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 electrical flying machines were really toys, you know, and 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 then 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, 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 this 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.
- [06:44]
B
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. The capability is built on the second and third order of the thing being able to fly itself. Describe that. Do you, do you spend time investing in how the drones fly themselves or is that solved?
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C
We spend a ton of time investing in that there, you know, there's, 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 on board 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 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, 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. You know, those things really matter. But if the core technology foundation isn't great, they're, they're less important.
- [08:21]
B
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, 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?
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C
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 what orientation it's in. And writing these pretty basic, what's called an attitude control loop. And that's the fundamental thing that's 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 move the stick to give a RAW motor command. Just the mapping would be too much 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 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 them be usable by anybody. 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 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 we started in 2014. That was around the time it still seemed like a crazy idea. Honestly, it's hard to remember. Twelve years ago, using computer vision for anything outside of the lab seemed somewhat far fetched. We launched our first product in 2018, the Skydio R1, which was I think, really the first drone built around computer vision. Our competitors 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.
- [11:36]
B
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.
- [11:48]
C
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, but it will be, and when it is, it'll be that much more powerful and capable for more people to reap the benefits.
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B
I want to come back to that too. There's a lot of.
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C
I'm giving you a lot to come
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B
back to pull on here. I want to ask about skydio itself. You've taken a lot of investment recently. The company's getting bigger. I think you're up to series F. You have built like a multi billion dollar valuation. You' to make 2000 more jobs here in the United States manufacturing drones. How many people work at Skydio today and how's the company structured?
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C
So we're about 1,000 people, which I think for 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's structured kind of traditionally. We have 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 level. So I have six or seven direct 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 the space, you need to be world class at engineering them and, 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 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, 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 going to manifest in the market with our customers and in our financial results.
- [15:10]
B
I get the feeling that you think a lot about the accountants taking over Boeing.
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C
That's what that sounds like antithesis of that. I mean it may. I'm certainly familiar with that, that story. It sounds awful. 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.
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B
You are the first CEO, I think in five years of doing the show to say that people OPS is really interesting. We should talk about it more.
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C
What do you very talent centric view of business. So we talked about the organizational structure. I think that matters, but I think 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. 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 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 the most optimal batting order and the worst batting order is like 20 or 30 runs per year for a major league baseball team. They score I think something like five 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 not as 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 putting people in a position to have tremendous impact. And if you look at amazing new product things that we've done over the last year, we talk about the F10s, this fixed wing drone that gets caught with a robotic arm. It's like a crazy sci fi thing. I think that we did a good job 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 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 ultimately 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.
- [17:50]
B
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.
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C
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 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 most important piece is having world class people.
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B
This is one of the weirdest talent markets in tech that 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 Jack Dorsey with the power of agentix 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?
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C
Well, it's 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 pretty unique kind of value proposition for everybody and 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 probably five to 10 years away. They don't think this, but I think they will realize that if they succeed at all, they're five to 10 years away 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 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.
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B
Are you competing in the sort of bleeding edge AI research area or are you hiring different kinds of engineers?
- [20:10]
C
You know, we're not trying to build foundation models that are like, you know, 100 or $200 million 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 I think there's now there's sort of this smaller set of folks that are experts in these very large cloud based models. Like we're not training those ourselves.
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B
Let me ask you the other Dakota 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, but 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 has it evolved?
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C
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 kind of stuff, such that it doesn't even feel like we're making decisions. Oftentimes things just happen, the right thing just happens and it's super powerful and fun to be a part of that. That's not everything. And the new stuff, the frontiers, is where you kind of have to do slow thinking or reasoning in 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, 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. The whole point of a company is to do useful things for other humans. And it's very easy, it's surprisingly easy to lose sight of that, especially as companies get bigger and so we really force ourselves to focus on that. What is what we're doing now going to mean for how is 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. The best solutions are, I think, born out of deep, deep understanding of problems, such that the solution oftentimes, the simple, elegant 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 swinging at too many different kinds of solutions.
- [23:39]
B
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 B2B SaaS companies dime a dozen. Do you feel like it's different because you make hardware? That your attitude to 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 our whole business.
- [24:04]
C
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 hard 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 the single most important feature we focus on 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 or an 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 in many ways, it's designed to crash because it's flying 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 focus on the specifics of what we're trying to accomplish, what a particular product is 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.
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B
We're going to pause here for a short break. We'll be right back.
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A
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C
support
- [27:05]
A
for the show comes from Upwork. When you're hiring, you want things to be easy, not another thing that gives you a headache. That's why Upwork makes it easy to hire specialized freelancers quickly so you can get the expertise you need now without weeks of recruiting or a full time hire. Upwork is a one stop platform to find, hire and pay expert freelancers. You can find specialized talent across web and software development, data and analytics, marketing, business operations and more. You can also enjoy the benefits of Business plus, which gives you access to the top 1% of talent on their platform. With AI powered shortlisting, you'll get matched to the right freelancer in under six hours and you don't need to worry yourself with the operational stuff. Upwork has contracts and payments covered, it's free to sign up and posting a job is easy. Visit Upwork.com right now and post your job for free. That's Upwork.com to connect with top talent ready to help your business grow. That's up w o r-k.com Upwork.com support for the show comes from Outshift, Cisco's incubation engine. Today's AI agents operate in silos, which can limit their true potential. When it comes to AI advancement, companies out there have been focused on building bigger and smarter models. But scaling up is just one approach to reach superintelligence together. Cisco says we need to do more. We need to scale out. To do this. They're going back to the blueprint from 70,000 years ago. Humans just didn't get smarter individually. Rather, the cognitive revolution transformed society because we began sharing knowledge, goals and innovation. And Cisco says that AI agents are now at that exact same inflection point. They can connect, but they can't think together. That's why Outshift by Cisco is building the Internet of Cognition. Its goal is to transform AI from isolated systems into orchestrated superintelligence by creating an open interoperable infrastructure. Cisco says Outshift is enabling agents and humans to share intent, context, and reasoning. The cognitive evolution for agents is here. Explore the Internet of cognition@outshift.com that's outshift.com.
- [29:34]
B
Welcome back. I'm talking to skydio CEO Adam Bry about how complicated it is to make and sell tech hardware here in the US and around the world. 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 that your relationship to the customer, like this piece of hardware is your drones are very expensive. They have to be good.
- [30:06]
C
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, they're brilliant engineers, but they don't have deep background in software. Probably they've written a little bit of software when they were in 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 code base that will then automatically get put into the queue and tested and reviewed by AI, ultimately approved by a person. So we're 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 going to be amongst the last things to just be vibe codable to prompt. I want a drone that does XYZ 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 I think is a very valuable place to be.
- [31:29]
B
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 AI Denoise has breathed new life and it's. Yeah, I've added software to an old piece of technology and now it has a whole new life in a different way. And you can kind of see that across the entire hardware portfolio. Let me ask you about some of the. You said build hardware. We can't 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? Do you have all the pieces you need to build them here? How does that work?
- [32:09]
C
We have always manufactured our drones in the U.S. we started doing this in 2016 and 2017 when people thought it was truly insane. We had investors in the early days that would come and do diligence on us and see a manufacturing line and just basically pull the ripcord like what the hell are you guys doing? I'm out of here. 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 their aerospace devices, engineering and manufacturing are tightly coupled and doing both side by side just enables you, I think, 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 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's still better at manufacturing drones than we are. But I think we're pretty good. 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 we have the world's greatest drone factory right here in the U.S. let me ask you about that.
- [33:53]
B
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, 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?
- [34:41]
C
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 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 wide scale hardware manufacturing ecosystem here in the U.S. 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 in the 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, these 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 U.S. i think some of this is driven by policy. I think some of it is driven by capitalist opportunity. 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 in. We can definitely do that at world class levels in the U.S. are there
- [36:09]
B
any Chinese parts in Skydio drones right now?
- [36:11]
C
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, 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 diluting themselves because it's very hard to trace back to the second and third levels. But, but all the critical components, all the first level dependency stuff is, is outside of China.
- [37:02]
B
Just for the listener, explain what you mean by first level dependency.
- [37:06]
C
The suppliers that we work with. So buying the camera module, the sensor in it, the processor, the circuit board, 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 go back to some passive component on a circuit board or the material that's used in a particular thing, it's hard to say with 100% certainty on things like that.
- [37:32]
B
The reason that Chinese government sanctioned skydio was because the United States government was trying to kick DGI out of 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?
- [37:49]
C
Well, I correct some. So the stated reason for China sanctioning Skydia was that we sold drones to Taiwan. I'm glad you had intuitive. Possibly the real reason. I think the real reason, as you stated, is that we compete with dgi and the US Government has taken actions against dgi and I think it was retaliatory. I don't know exactly what the right answer is, but I think it's pretty clear and non controversial at this point that depending on Chinese technology and critical industries 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 it with cars. And I think drones are like one slice of this broader geopolitical competition, which is really technology competition. Specifically with respect to drones, I don't think it's a uniform landscape. The drones used by our military are probably the most sensitive. Buying that from China seems pretty clearly a terrible idea. I would argue the drones that are living in docks deployed across US Cities and across critical infrastructure doesn't seem like a great idea to have those things calling home to Chinese servers. The most controversial piece of this is probably consumer drones. And you know, I think there's, there's frustration 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 quite real. I mean, if you look at the drones the Ukrainians are using 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 hard to completely disentangle those things. Ultimately, that's what the policy actions, which by the way have spanned both administrations and I think are fairly bipartisan, are aimed at.
- [39:49]
B
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.
- [39:59]
C
Right.
- [39:59]
B
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
- [40:06]
C
the Internet 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
- [40:16]
B
China, yeah, that seems bad. I'm just saying in the consumer market.
- [40:20]
C
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 it's helping them build up their like their technology and economic might and in aggregate that really matters. And again, you can debate what the right answer to that is, but I don't think you can deny that there is, it is not in our national interest to be supporting Chinese drone companies.
- [41:04]
B
I'm asking these questions because we have a big consumer audience. They have a lot of feelings about supporting defense contractors in a lot of different ways. Scottyo is a defense contractor now. Like a lot of your clients, even your website 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 the consumer level and it was easier in some ways more lucrative to go after the enterprise and government contracts?
- [41:36]
C
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 I personally thought the consumer product was awesome and I loved 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 focus and serving 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, 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, the beginning, the idea was like, you know, 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 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 drawn to the impact potential and a belief that there was a great business to be built.
- [43:14]
B
The X10 that I flew earlier on your laptop, how much does that cost?
- [43:17]
C
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 with a dock and everything associated with that, it's substantially more.
- [43:36]
B
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.
- [43:42]
C
There are certainly some configs that are like that. I mean, 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.
- [43:50]
B
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 who have no other options. Can you get cheaper? Can you deal with that?
- [44:39]
C
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 could 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 we have hand flown fleets, we have dock based fleets. The dock based drones fly 5-10x as much, just the same way that a cloud server is fully loaded, even though a desktop computer might sit at home unused. 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. There's a lot of agencies out there that were skeptical of skydio and like flying their Chinese drones that we're 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. The autonomy and the integration of the whole thing just enables them to do more, better, faster. Ultimately I think that reaching massive scale is going to be our highest impact path. So the F10 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 F10 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 you know, when I think about like what's the best possible solution here? I think it's, I think it's like a badass dock based F10 that's zipping around at 100 miles an hour and can cover thousands of square miles.
- [46:56]
B
I agree. I think I'm just focused on the cost. Right. They were buying.
- [47:00]
C
Yeah. So on the cost, I think the, the cost per mission for that F10 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 having a dock based F10 show up. Not everybody's going to like that answer, but I think it's fundamentally true in most scenarios.
- [47:26]
B
I'm excited for you to go to the city council meeting in my hometown of Racine, Wisconsin and pitch cost per mission because the upfront cost is very high. This is what I'm getting at is there was 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, CEO, Ford, he's been on the show, loves to talk about how much better the BYD cars are. He's always like, man, these are your stick. Yeah, it's good. He's gotten very good at it. It's very practice. And the United States government is just protecting our auto industry from that competition. Like straightforwardly, the car influencers are like, man, these cars are better than our cars. Do you worry that you're being inflated from that competition?
- [48:07]
C
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 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 hold ourselves to. From a hardware standpoint, whether or not they're in the market or not. I can say with pretty high confidence that in this new world, the world of drones is infrastructure where AI and autonomy are central, where integrating these things together into end solutions is the winning recipe that's most valuable for customers. I think that not think I know we have the best solutions in that space and you can talk to customers who have used both and will 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 and a country, I think we're headed more towards the autonomous remote world. But 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.
- [49:24]
B
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. 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?
- [49:40]
C
I think 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 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 lower cost which will enable us to serve more and more markets.
- [50:06]
B
Are you going to keep all the manufacturing here in the United States?
- [50:08]
C
That's the plan, yeah. 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 domestic suppliers, on our own internal operations. We're getting a new giant factory. We're all in. I think that we're already one of the leading examples of real US manufacturing working at substantial scale. But I think we have many more gears that we can find real US
- [50:38]
B
manufacturing working at substantial. SC you have 1000 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?
- [50:50]
C
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.
- [51:16]
B
I'm just thinking about 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?
- [51:29]
C
Well, I think that these things take time. Like you know, I don't think you're going to overnight create the talent based and the ecosystem that exists in China, but it's not zero. And look, I think Tesla gets a lot of the credit here. They have built and operated factories at large scale in the area. We have a large number of Tesla alumni that work at skydio. There's actually a lot more than people realize. A lot of higher end enterprise servers and things of this nature are built in the Bay Area. So the talent base is larger than I think most people realize and there's a lot of momentum behind it now. So it's easy to look at the world today and say like, yes, China has a richer 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 these things ultimately are demand driven. Like if there's a need to build more and more drones like that, that creates the conditions for more people to like to want to get into it and get great at it. And we're seeing that happen right in front of our eyes.
- [52:38]
B
We have to take another quick break. We'll be back in just a minute.
- [52:49]
A
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- [55:02]
C
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- [55:52]
A
snapshots from Q3 21 to Q4 25
- [55:54]
C
compared to average AT&T and Verizon bills.
- [55:56]
A
Comparison excludes discounts, credits and optional charges. Price guarantee on talk techs and data exclusions like taxes and fees apply. CT mobile.com.
- [56:07]
B
Welcome back. I'm talking with Scotty O CEO Adam Bry about the challenges and implications of autonomous drones, especially in defense and law enforcement work. I want 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 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. What's your perspective there? How do you draw the lines?
- [56:55]
C
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 one world leading capability. 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 public safety and law enforcement, where the products have incredible impact. 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, is just the level of direct accountability that exists with state and local law enforcement today. Like 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 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 and look at this and see what their agency is doing. And I think this is an example where technology is just a straight win and 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, such that you can get better outcomes while still protecting privacy and transparency.
- [59:18]
B
Yeah.
- [59:18]
C
And I think the trajectory the space is on actually proves that. 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 local police department to use it. And the stories speak for themselves. I mean, the videos of finding a missing person de escalating a dangerous situation where it's just obvious without a drone, you would have had a different outcome. I think when people see that, they tend to get it. And so the good news, I'd say for people that have questions or concerns here, there's democratic processes in place. Like, if skydio is being considered in your city, you can go to the city council meeting, you can see what the debate looks like, can you can speak up. And I think that's healthy. You know, it's like every community ultimately gets to decide for themselves.
- [60:03]
B
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 money interests pushing skydio forward, it. I think there was a controversy with skydio 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's going to buy it. We're just the vendor part of living
- [60:58]
C
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. 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, incentivize 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. 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 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 there's inevitably going to be some concerns. My personal view on it is even the harshest critics I think are valuable because it's part of the accountability mechanism for us. It's like we get to see what. 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 concerns are and to be asked tough questions because it changes, in some cases how we think about product development and what can we do to address this.
- [62:31]
B
What changes have you made specifically, as you've thought about Flock?
- [62:35]
C
Well, this is not in response to Flock. I mean, the transparency dashboard was largely driven internally. It seemed like a good thing to do, but a lot of the specific features have been iterated on and improved based on concerns that have been raised. 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.
- [63:11]
B
How do you validate that? If you're, you know, you're a citizen, you're like, man, I see that drone flying. They're. They're big, they're noisy. They're. They're not some. 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 the conspiracy theories flourish, right? You can say there's a dashboard. You can look at the dashboard. Provided by 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?
- [63:36]
C
This is the thing with social media. Like, what is the ground truth? 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 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.
- [64:16]
B
But some of them really want to be there.
- [64:18]
C
Some of them may want to be there more than others. But look, 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. 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 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 a loved one goes missing. What do you want to have happen? Do you want a drone to show up in 30 seconds so that the officers know exactly what they're heading into? 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 increase the chances of them being found? And it's not to say I think 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.
- [65:23]
B
Let me make a comparison for you. Jamie Siminoff 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.
- [65:44]
C
You know, I think the ring cameras are great. I have one myself. I'm not an expert in deep in all things ring. I certainly think. Let me take a different spin on it.
- [65:55]
B
It's an example of what you're talking about. There's a trade off here. You put up enough fixed cameras.
- [65:59]
C
Let me give you 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 we'll 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 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 that'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 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. For the better.
- [67:25]
B
Sadly, I have to keep asking about military applications. I do want to talk about power line inspection. We'll do a full hour on that one of these days. 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 clawed discussion. Do you have Red lines where you've told the military that you want to allow your technology to be used for certain things.
- [67:56]
C
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 strong opinion that the people who are putting their lives on the line, who are ultimately accountable to democratic, democratically elected leaders, they are in the best position to make these life or death decisions of 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 we're very smart and we know the technology and the idea of using it for XYZ things 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 service women in our military enough credit. I mean, the military has a whole policy wing of brilliant people 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 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 at 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.
- [69:53]
B
Do you think this is different because
- [69:54]
C
you make hardware from like anthropic, for example? Yeah, 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, the military is experimenting with turning this thing into like, a lethal device. But, you know, I just don't think it's. It's our place to, to decide. And, and I think there's decide, but
- [70:37]
B
then there's like, building the capability, right?
- [70:38]
C
Yeah.
- [70:39]
B
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. Yeah, 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.
- [71:04]
C
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.
- [71:15]
B
Right.
- [71:15]
C
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. They're happy to buy the thing or hack it, and they don't care about 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 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, maybe not uniformly, but will generally follow what 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 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.
- [72:06]
B
Ultimately, 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 bit. I have to be honest with you. Like I, we, that's, that's the whole thesis of the show. 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. But maybe some attrition is fine. You only have a thousand people, you've got to recruit some more. How does your talent base feel about this and how has it affected your recruiting?
- [72:42]
C
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, 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 was a lot of negative headlines about it. There were a lot of people internally who had some concerns. 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 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.
- [74:07]
B
You're part of a cohort of companies. I think Andreessen Horowitz led your last round. They've led almost all of your rounds.
- [74:13]
C
I think no, we've got. I mean, they led our seat 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.
- [74:22]
B
Amasserman, Andreessen, particularly because they're American Dynamism Project. They do a lot of government lobbying. There's reports today that, that they're going to do even more lobbying in this cycle. Palantir exists, Anduril 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 it work?
- [74:46]
C
We're our own thing, and I would say each of those companies have their own thing. A lot of the folks from Anduril 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 something or cohort. I think about us as 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 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, with the US Military, 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 contract or 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 when they're going head to head against adversaries using Chinese consumer drones, we've got the best thing to match that.
- [75:59]
B
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?
- [76:10]
C
Look, this is probably the hardest question to end on, because I would love to do it. I think we could do it, but we're still so early 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.
- [76:44]
B
Them sounds good. We'll have you back to do a full hour on Powerline monitoring soon. Thank you so much.
- [76:47]
C
All right, thank you. This is great.
- [76:50]
B
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 atdecoder the verge.com 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 Decoder Pod. 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 Boxing Podcast Network 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.
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