00:42:38 · Ty Morse
[00:42:38] S0: I had a conversation with Chris Power probably three weeks ago from Hadrian, and I was talking about one way and two way doors, where a two way door, you know, you can make a decision and walk forward, and then walk back if it's not the right one, and one way doors, you walk in and you can't walk backwards. And he had this interesting idea where he said, yes, there are one way and two way doors, but, in a lot of cases, especially with hardware companies, you have to effectively just walk in the one way door and roll a hard six, where you have to bet the company and then just be right. What have been situations, you know, like the doc example, where there was a lot of, you know, there's a lot of, quote unquote, mixed feelings about making those bets, but you knew that they were the right ones and just bet the company on it?
00:43:25 · Adam Bry
[00:43:25] S1: Yeah, I generally agree with that. And I think that may be true for non hardware companies as well, I just think for hardware companies it's a little bit more visceral and clear. I mean, there's been a whole series of key decisions where if it didn't work, we really had no... Like, the company just wasn't gonna work. You can go all the way back to the beginning, I mean, the big, big bet that we made when we started the company was that you could build a reliable, capable, autonomous drone based on computer vision, which in 2014 was very unclear, like, even experts in computer vision research labs and robotics were skeptical of that claim because the stuff barely worked in the lab, And that was, you know, if that turned out to be wrong, there was gonna be no Skydio. A subtle one, but a critical one, when we developed Skydio two, which was our second generation drone, we knew we needed to simultaneously get, like, better three-dimensional sensing of the world around us in a lower cost way in order for our economics and products to make sense, and so we shifted from using what are called global shutter cameras, where basically the whole frame is exposed at the same instant, which is what historically, basically all had been used for computer vision, to rolling shutter cameras, which is what go into our phones and basically everything, where every line is exposed one row at a time, and so if the camera's moving, like if you take a video with your cell phone where it's moving, you'll see this skew across the image because it's a rolling shutter sensor. So, at the time, when we started working on this in 2018, there was almost no computer vision done on rolling shutter cameras because the math just kinda gets explosive, and we built the rolling shutter cameras into the drone before we had solved the algorithms, and there was no turning back from that, right, like, we had to make that decision to bake it in and just say, you know, we think we're gonna be able to solve and we did, and we got, not only did we get to like, parody from the old capability, we took a huge step up.
00:45:26 · Adam Bry, Ty Morse
So that was a really big one, I think the focus on doc was a really big one that's worked out for us, And then I think that we correctly recognized that public safety and emergency response was going to be the first kind of dock infrastructure use case to reach substantial scale, and that it would be a, a great beachhead and and kind of lighthouse to other applications and we went all in on that a couple of years ago, which has also worked out super well for us. [00:45:53] S0: You've been in this for a very long time, and you said, like in 2021 or 2022, when you're making this decision to move to enterprise and start working on doc. [00:46:03] S1: A bit sooner than that, yeah. [00:46:04] S0: You're basically like burning a huge amount of cash, and you're mostly focused on consumer. How do you, in your mind, when you're just looking down the barrel of like a shotgun, make a massive bet and say, okay, I know that this is, you know, how things look today, but here's how we're gonna basically steer through this tunnel.
00:46:19 · Adam Bry
[00:46:19] S1: Yeah. Mean, I to some extent, you just do it. I think in order to do anything as a company, as a CEO of company, you've got to convince other people it's a good idea. And I find it much easier to convince other people for good... It's a good idea if I actually believe it's a good idea. And so, if- Crazy. Yeah, and so, well, it sounds simple, it's true. So, you know, if I find myself in a position where I'm trying to, like, explain to an investor or a potential employee, you know, why we're doing a particular thing. And, you know, I find that I don't have the, like, conviction that, like, I, you know, I believe it to my bones. That's a clue that, like, we need to do something different. And so with the doc example, like, I just couldn't... I couldn't explain to anybody why we wouldn't be massively investing in it. Like, you know, I couldn't explain why, like, couldn't simultaneously explain to somebody why Skydio is gonna be a super valuable company and we're not investing in Doc. Like, to me those two things just did not fit together logically. So, the only path forward is like, we're gonna do the thing, and I think when you have that, you're not gonna be able to convince everybody, when you have that level of conviction, it makes it easier to convince other people and get them on board, or at least get them curious enough to like come along for the journey and see what happens.
00:47:42 · Ty Morse, Adam Bry
[00:47:42] S0: Over the course of the last thirteen years, has there ever been a moment where it felt like everything was failing and employees or morale or whatever was just out the window and you had to pull it back from the brink? [00:47:53] S1: Yeah, there's certainly been a lot of hairy moments. I think, I think when we launched R1, our first product, and we didn't sell very many of them, that was like, that was a painful kind of moment for the company. And on that one, think we basically got through it conviction in the overall technology direction that we were heading. [00:48:16] S0: You ever have a mutiny? [00:48:21] S1: Well, one of the great features of capitalism as we practice it here is people just can vote with their feet, right? Which I actually think is great. It's like if people don't believe in what you're doing, they can go and find something that they do believe in, which is just kind of healthy all around. So, because of that, you know, the mutinies are expressed in like, in people leaving or or joining. You know, probably, like, most recently, the the most challenging moments have been, like, before we launched Dock for X10, before it was really scaling, where, you know, the if you just look at the company on the financials, it's very uncompelling. And so, you know, that makes it difficult to raise money, and, you know, ultimately, we probably had to roll a few hard sixes to get through that and get to the other side.
00:48:21 · Adam Bry, Ty Morse
[00:48:21] S1: Well, one of the great features of capitalism as we practice it here is people just can vote with their feet, right? Which I actually think is great. It's like if people don't believe in what you're doing, they can go and find something that they do believe in, which is just kind of healthy all around. So, because of that, you know, the mutinies are expressed in like, in people leaving or or joining. You know, probably, like, most recently, the the most challenging moments have been, like, before we launched Dock for X10, before it was really scaling, where, you know, the if you just look at the company on the financials, it's very uncompelling. And so, you know, that makes it difficult to raise money, and, you know, ultimately, we probably had to roll a few hard sixes to get through that and get to the other side. [00:49:10] S0: You know, you get axed from China a couple years ago, and you have to bring a lot in house, and then you have to decide, like, which things are we gonna vertically integrate versus which things are we just gonna partner with suppliers on? How'd you kind of make the trade off on, you know, we might not make the camera or the battery, but we're gonna make these other things.