Motley Fool Money: Axon President on AI, AR, and Drones as First Responders

Release Date: December 15, 2024
Hosts: Dylan Lewis, Ricky Mulvey, Mary Long
Guest: Josh Isner, President of Axon Enterprise

1. Introduction and Axon Overview

In this episode of Motley Fool Money, host Mary Long introduces Josh Isner, President of Axon Enterprise. Axon is renowned for manufacturing Tasers and body cameras for law enforcement officers. Additionally, the company offers a cloud-based evidence management system and innovative augmented reality (AR) technologies aimed at enhancing police training for handling high-stress, high-stakes situations.

Mary Long provides a brief overview:
"Axon builds Tasers and body cameras for law enforcement officers. They also have a cloud-based evidence management system and immersive augmented reality technologies that help police departments better train and prepare officers for stressful, very high-stakes situations."

2. Axon’s Business Segments

Jason Moser, The Motley Fool’s investment analyst, commends Axon by likening it to Apple in its industry, highlighting its market-leading hardware and comprehensive ecosystem of software and services.

Josh Isner elaborates on Axon's two core business segments:

1. Body Cameras and Evidence Management:
   "We really have two kind of core businesses. One is the iPhone iTunes model for body cameras for police... All of the video... is housed in evidence.com and we house over 30 times the amount of video in the Netflix library currently on evidence.com."

2. Less Lethal Technologies:
   "Tasers, or conducted electrical weapons are the thing there... our mission to offer a police officer that same amount of stopping power, but make sure at the end of it that the suspect is alive."

Additionally, Axon has branched into virtual reality (VR) training and AI analytics, enhancing their product offerings and fostering entrepreneurial growth within these sectors.

3. Competitive Landscape

When discussing competition, Josh Isner identifies Motorola as a significant competitor in the body camera space. However, he emphasizes that Axon's primary competition is the status quo within government procurement processes, which are inherently slow and resistant to change.

"Ultimately, government is not built to be on the front end of adoption... the competition that we're kind of most focused on."
— Josh Isner [04:40]

4. Immersive Technology in Training

Axon is pioneering the use of virtual reality (VR) in police training, significantly improving retention rates compared to traditional methods. Josh Isner highlights the effectiveness of VR:

"Retention goes up about 40% versus conventional in-person training... confronting real world scenarios that are modeled after real incidents that have happened in policing."
— Josh Isner [00:01]

Axon collaborates with HTC to develop AR tools, creating customized content that enhances training realism and flexibility.

5. AI Era Plan

Axon's AI ERA Plan is a comprehensive suite of AI tools designed to streamline police workflows and enhance efficiency. Announced in mid-October, the plan has gained rapid acceptance, passing several city council meetings within weeks.

Key Features of AI ERA Plan:

• Draft One:
  Automatically analyzes body camera footage and audio transcripts to generate initial police reports, reducing report-writing time from 50% to 10-20%.

"We're giving police officers back more than a day, a week of time to be out in the community doing what they do best, which is fighting crime."
— Josh Isner [10:53]

• Future-Proofing:
  Subscribers on a five-year contract receive all future AI features, ensuring continuous enhancement without additional costs.

Customer Feedback:
Prosecutors have praised the quality and efficiency of AI-generated reports, confirming their acceptance in legal proceedings.

"We're seeing a lot of promising support and acceptance of these reports in the courtroom already."
— Josh Isner [13:33]

6. International Expansion

Currently, Axon is primarily a US-centric business, with international operations constituting about one-fifth of total revenue. However, the company is strategically expanding overseas, aiming for international revenues to represent up to 80% in the future.

Key Strategies:

• Leadership Appointment:
  Hiring Cameron Brooks, former head of EMEA for Amazon Web Services, to spearhead European cloud adoption efforts.

"We have far more police officers internationally than there are in the United States... we're very optimistic that we're going to start to see some of these national police forces adopt our products in larger quantities."
— Josh Isner [15:27]

• Market Penetration:
  Targeting large, centralized police forces in countries like Italy to leverage scale and drive rapid adoption.

7. Drones as First Responders

Axon's acquisition of B Drone marks a significant expansion into the drone technology market, focusing on drones as first responders (DFR). Josh Isner outlines the strategic importance of DFR:

"We really believe that the first police technology to include humans that arrived to a scene is going to be a drone... it can give the police officer and the dispatcher more situational awareness as they arrive to a scene."
— Josh Isner [18:16]

Components of DFR:

1. Drone Hardware:
   Partnership with Skydio for premier US-made drones.

2. Infrastructure:
   Utilizing D Drone’s capabilities for Beyond Visual Line of Sight (BVLOS) operations, enabling autonomous drone missions without constant human oversight.

3. Streaming and Situational Awareness:
   Axon Respond, a product that streams live drone footage to real-time crime centers, enhancing situational awareness.

8. Future Innovations: Humanoid Robots

Looking ahead, Axon envisions humanoid robots playing a crucial role in public safety. Josh Isner shares his perspective on this potential innovation:

"Ensuring a safe outcome in a tense policing scenario is to get the human out of there... so that day is coming."
— Josh Isner [21:32]

Humanoid robots could allow remote control by officers, reducing the risk of physical harm while maintaining effective decision-making in the field.

9. Personal Insights: Golf and the 'Next Play' Mindset

The conversation concludes on a personal note, discussing the parallels between golf and investing. Josh Isner attributes much of his professional success to the "next play" mentality learned from golf:

"Your last shot, whether it was good or bad, no longer matters. The only thing that matters is what you're going to do when you're standing over the ball."
— Josh Isner [23:24]

This mindset fosters resilience and forward-thinking, crucial for both personal growth and business success.

Conclusion

Josh Isner's insights reveal Axon Enterprise's commitment to leveraging cutting-edge technologies like AI, AR, and drones to transform public safety. With strategic international expansion and a focus on innovative solutions, Axon is poised for significant growth and impact in the law enforcement industry.

Notable Quotes:

• "Retention goes up about 40% versus conventional in-person training."
  — Josh Isner [00:01]

• "We really believe that the first police technology to include humans that arrived to a scene is going to be a drone."
  — Josh Isner [18:16]

• "Your last shot, whether it was good or bad, no longer matters."
  — Josh Isner [23:24]

This summary captures the essence of the podcast episode, highlighting Axon Enterprise's innovations, strategic directions, and the leadership mindset driving the company forward.