Skydio CEO argues more drones will make us safer

21:56The 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 like 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.

22:37Here'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, it's 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 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.

23:09And then probably the final thing that I'd say, 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.

23:38Nilay Patel: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 the rise of B2B SaaS companies, dime a 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 our whole business? You know, I'm so deep in it at this point that it's probably hard for me to perceive.

24:07I don't know what it's like to lead a pure SaaS company. 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 risk and complexity and uncertainty. So our flagship mainline products, reliability is the single most important feature. We focus on it maniacally. We have to vet everything that we ship extremely rigorously and carefully.

24:54But 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 OK 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. It's, you know, 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. And 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.

25:40Nilay Patel:We're going to pause here for a short break. We'll be right back.

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29:33Nilay Patel:welcome back i'm talking to skydio ceo adam brie about how complicated it is to make and sell tech hardware here in the u.s 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's your relationship to the customer. Like this piece of hardware, your drones are very expensive. They have to be good. Yeah. I mean, we are extremely heavy users of AI.

30:08Like 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 Vive 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.

30:37we have the ability for designers or product managers or anybody 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 five-codable, you know, to like prompt, I want a drone that does XYZ thing. Maybe someday we'll get there.

31:16But 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.

31:28Nilay Patel: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 AI denoise has breathed new life. And I've added software to an old piece of technology and now has a whole new life in a different way. And you can kind of see that across all the entire hardware portfolio. Let me ask you about something that 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 Ken and other places.

32:01Nilay Patel: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? We have always manufactured our drones in the US. 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. Like conventional wisdom in Silicon Valley in 2014 was like, one, probably don't do hardware.

32:33And 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 U.S. 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 U.S.

33:06because manufacturing is hard. Hardware is hard. Manufacturing is definitely hard. Running a factory, integrating the supply chain for your product in your own factory is an extremely complex, messy endeavor, and we're very, very good at it now. 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. 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 U.S., and we're going to do it.

33:41I 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.

33:51Nilay Patel: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'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.

34:24Nilay Patel: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? I 100 % agree with you.

34:45Drones are in many ways the combination of consumer electronics with hobbyist quadcopters. Historically, all consumer electronics have been made in China. I'd say a couple 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 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 U.S.

35:26because I think we – you know, 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, you know, 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 U.S.

36:02But 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.

36:09Nilay Patel:Are there any Chinese parts in Scudio drones right now? 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 – 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.

36:56But all the critical components, all the first-level dependency stuff is outside of China.

37:02Nilay Patel:Just for a listener, explain what you mean by first-level dependency. 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. The reason that Chinese government sanctioned Skydio was because the United States government was trying to kick DGI to the country.

37:39Nilay Patel:The FCC banned foreign drones last December. They had basically been fulminating about doing it since 2020. Do you understand why the FCC banned DGI drones? Well, I correct some – so the stated reason for China sanctioning Skydio was that we sold drones to Taiwan. I'm glad you were intuitive possibly the real reason. I think the real reason, as you stated, is that 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 pretty clear and non-controversial at this point that depending on Chinese technology and critical industries has a lot of risks associated with it.

38:19And 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, 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 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 U.S.

38:55cities 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 I think there's frustration in that market now that people who've been using 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.

39:36And 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.

39:49Nilay Patel: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? I think it's non-uniform. I think it's different in different stories. I think having like a network-connected autonomous docking station drone at a nuclear power plant calling home to China. Yeah, that seems bad. I'm just saying in the consumer market.

40:19So 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 – 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 a Chinese defense contractor, right? And it's helping them build up their technology and economic might. And in aggregate, 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.

41:04Nilay Patel: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. Scotio 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. 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 in the consumer level? And it was easier, in some ways, more lucrative to go after the enterprise and government contracts?

41:36This was a very difficult – this was 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 tradeoff between, like, 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 the best consumer products for the kinds of things that we're doing and figure out how to serve enterprise and government customers.

42:17It 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 beginning, the idea was like, we'll build these consumer products. The consumer market's probably going to develop the fastest in the first, and then the technology platform that we have there will enable us to go and do other things. Now, I think at the time, we were maybe thinking we could do it all.

42:46I 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.

43:13Nilay Patel:The X10 that I flew earlier on your laptop, how much does that cost? It depends on the configuration and 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. 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. 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.

43:50Nilay Patel: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. It's they can't spend$50 ,000 on the Skydio program. They're going to get gifted a handful of cheap DGI 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.

44:23Nilay Patel: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? 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.

45:01The 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, you know, 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 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.

45:39And we compete head-to-head against EGI 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. It's, you know, 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 F-10 product, our fixed-wing drone, for example, will have something like a 50-mile coverage radius from its docking station.

46:24And, 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 when I think about what's the best possible solution here, 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.

46:55Nilay Patel:I agree. I think I'm just focused on the cost, right? They were buying consumer drones. Yeah, so on the cost, I think the cost permission for that F-10 will be way lower if you do a fully balanced analysis of what does it take for the person's time to go out there and fly it and how much training is involved versus clicking a button on a map and having a dock-based F-10 show up. Not everybody's going to like that answer, but I think it's fundamentally true in most scenarios. I'm excited for you to go to the city council meeting in my hometown of Racine, Wisconsin and pitch cost permission because the upfront cost is very high.

47:33Nilay Patel: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 U.S. consumer drone companies, and there don't appear to be any. Maybe a better comparison here is the car industry. Jim Farley, CEO of 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 here. It's got a big stick. Yeah, it's good. 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.

48:05Nilay Patel:Do you worry that you're being insulated from that competition? The only long-term stable solution is building the best drones here in the U.S. I don't really care, honestly, from a product development standpoint, whether Chinese drones are allowed in the market. I think we serve the U.S. 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.

48:37I can say with pretty high confidence that in this new world, the world of drones is 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. 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 in a country, I think we're headed more towards the autonomous remote world.

49:17But 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.

49:24Nilay Patel: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? 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 U.S., but we operate in Canada now.

49:47Now 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.

50:05Nilay Patel:Are you going to keep all the manufacturing here in the United States? That's the plan. Yeah. Yeah. I mean, we're doubling down. Like we announced we're spending$3.5 billion over the next five years in the U.S. 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 U.S. manufacturing working at substantial scale. But I think we have many more gears that we can find. Real U.S. manufacturing working at substantial scale. So you have 1 ,000 employees. How much of your manufacturing is automated?

50:43Nilay Patel: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? 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 overinvested in automation there because we wanted to develop and trial a lot of new techniques. So automation will be a key piece of it. But there's always going to be a lot of jobs involved in running a factory and in just operating the company and delivering and installing the stuff for customers.

51:15Nilay Patel:I'm just thinking about the sort of like famous Steve Jobs quote of 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? Well, I think that these things take time. I don't think you're going to overnight create the talent base 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.

51:53There'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 talent base 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 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 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 get great at it.

52:32And we're seeing that happen right in front of our eyes.

52:37Nilay Patel:We have to take another quick break. We'll be back in just a minute.

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56:06Nilay Patel:Welcome back. I'm talking with Scottie O.C.O. Adam Brie 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 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.

56:39Nilay Patel: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? 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 the world is better off.

57:12I certainly think the U.S. is better off. If that's the case, our military is ultimately accountable to democratically elected folks who are calling 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.

57:52It'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.

58:37And 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. You know, in the tradeoff 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 you can get better outcomes while still protecting privacy and transparency.

59:17Nilay Patel:Yeah. And I think the trajectory this space is on actually proves that. Like, I was concerned five years ago that public pushback was going to be one of 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 a different outcome. I think when people see that, they tend to get it.

59:47And 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. You can speak up. And I think that's healthy. You know, it's like every community ultimately gets to decide for themselves.

1:00:03Nilay Patel: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 preemptive policing enabled by cameras and sensors and what have you, people don't like that and they don't feel agency.

1:00:40Nilay Patel: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 in Las Vegas. 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. 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.

1:01:14You 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. I think some of it is the company's mishandled. 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.

1:01:49And 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. I think 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 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.

1:02:31Nilay Patel:What changes have you made specifically as you've thought about Flock? 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 – 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.

1:03:11Nilay Patel:How do you validate that? If you're a citizen, you're like, man, I see that drone flying. They're big. They're noisy. They're not – 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 the company. But you have to validate. You need some external perceived independent validator of that. How does that work? Is there a feedback loop there? This is the thing with social media. Like what is the ground truth? How do we decide what misinformation is?

1:03:41Who 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.

1:04:14I mean, it's part of their job. Some of them really want to be there. 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. You know, 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 is trying to break into your house or, you know, a loved one goes missing.

1:04:46What 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 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 like 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 tradeoff in terms of sort of like mass blanket always on surveillance.

1:05:23Nilay Patel: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, whether you can actually zero out crime. Does that feel doable to you or is that the wrong tradeoff in actually if you put enough Skydio boxes on enough roofs, you can zero out crime? I think the Ring cameras are great. I have one myself. I'm not an expert in deep and in all things Ring. I certainly think – let me take a different spin on it. But it's an example of what you're talking about.

1:05:56There's a tradeoff here.

1:05:57Nilay Patel:You put up enough fixed cameras. Let me give you like a more concrete – like in our space, I think this gets at what you're talking at. 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.

1:06:36Because 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, 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 to most people is kind of like boring out of sight.

1:07:11I 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.

1:07:24Nilay Patel: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 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 want to allow your technology to be used for certain things?

1:07:55So 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, 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.

1:08:37I have a pretty strong opinion that 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 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.

1:09:11And 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 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, you know, 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.

1:09:44We're less focused on other things. And our voice matters in the conversation. But I think ultimately it should be up to the folks whose job it is who are putting their lives on the line to decide how to use it.

1:09:52Nilay Patel:Do you think this is different because you make hardware? From like Anthropic, for example? Yeah. No. I think that – I mean the practical implication, the instantiation details might be different. But we face this question of 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 questions internally. So I think that's a pretty visceral example of the military is experimenting with turning this thing into a lethal device. But I just don't think it's our place to decide. There's decide, but then there's building the capability.

1:10:39Nilay Patel: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 maybe it'll do it, and maybe Anthropic has some real feelings about whether or not that's a good idea and they restrict it. For you, it's right. I mean the military 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. I think one of the problems here is you end up with really strong adverse selection.

1:11:06So 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 Anthropics policy says. If you try to draw these lines to establish purity of like, oh, we think XYZ thing is bad.

1:11:33You 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, 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 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.

1:12:06Nilay Patel: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. 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 maybe some attrition is fine.

1:12:35Nilay Patel: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? 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 we have quite a bit of diversity, and diversity is awesome. 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 U.S.

1:13:16There were 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.

1:13:51But 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.

1:14:07Nilay Patel:You're part of a cohort of companies. I think Injuryst and Horowitz led your last round. They led almost all of your rounds, I think. 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. I'm asking about Andreessen particularly because there's their 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. Andruil 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.

1:14:41Nilay Patel:Do you perceive yourself to be part of that group? Do you have a different culture? How does that work? We're our own thing. And I would say each of those companies have their own thing. A lot of the folks from Andrill 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 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.

1:15:16Defense 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 U.S. 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 contractor 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.

1:15:59Nilay Patel: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? 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.

1:16:36I 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.

1:16:43Nilay Patel:Sounds good. We'll have you back to do a full hour on Powerline Monitoring soon. Thank you so much. All right. Thank you. This is great. 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 decoderattheverge.com. We really do read all the emails. You can also hit me up directly on Threads or Blue Sky. The show is on YouTube. You can watch full episodes at DakotaPod. It's the same handle on TikTok and Instagram.

1:17:08Nilay Patel:Both of those platforms are a lot of fun. If you like Dakota, please share it with your friends. Subscribe wherever you get your podcasts. And hit us with that five-star review. Dakota is a production of The Verge and part of the Vox Media Podcast Network. The show is produced by Kate Cox and Nick Stat. It's edited by Ursa Wright. Our editorial director is Kevin McShane. The Dakota music is by Breakmaster Cylinder. We'll see you next time. There's a new way to sweet green. meat wraps handheld hearty and made for life on the moon with bold chef crafted flavors fresh ingredients and over 40 grams of protein they're built to satisfy without slowing you down try wraps today in the app or at order.sweetgreen.com available at all participating locations

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