Skydio CEO: crime down 30% in San Francisco after drone-as-first-responder rollout, factory expanding 6x

automate compliance and security. Vanta is the leading AI trust management platform. We have Adam Bry from Skyo. He's the co-founder and CEO in the Restream waiting room. Welcome to the show, Adam. Great to see you. How are you doing?

Great to be here, guys.

Thanks so much. Uh, give us the backstory of Skyo. Get us up to speed on SkyO. I'm obviously familiar with the with the company, but for those who aren't, there's there's so many places we can go in drones and defense and and DJI. There's a million places I want to go, but but introduce the company and and take us through the shape of the company right now. So we are the largest US drone manufacturer. Uh we sell drones to the military. We sell drones to public safety and law enforcement. Uh we sell drones to critical infrastructure inspectors. Uh we serve a number of our allies around the world.

Yeah.

And the big bet that we made when we started the company was on AI and autonomy. So we started in 2014. We've been at it for 12 years. Yeah.

Um so we made made very big bets on AI and autonomy when they were uh not nearly as obvious as they are today. Um, and we're at a very exciting moment in drones where where they're really having their moment and the way people use drones is transitioning from, you know, manually flown to dock based and remote and autonomous. Um, and we're just seeing incredible stuff happen now with our customers.

I remember Chris Dixon, I I believe this is the story, showed me a video of a Skyo drone flying around a house and doing sort of a roof inspection. Is that a real business now or insurance agency? walk me through some of the less everyone knows about Ukraine, what's going on there, but like how are drones actually getting used in the American economy today in an industrial context.

Uh so that is a real use case. Uh we have customers that are doing uh insurance claims adjustment with drones. So rather than taking out a ladder and climbing up on a roof, you just take a drone out, you push a couple buttons, it automatically digitizes, inspects the whole thing. The biggest and fastest growing use of our products today is in law enforcement and public safety where there's just been this huge paradigm shift. So law enforcement has been using drones for like the last 1015 years. But historically it was typically a pretty small team. They were manually flown. You know, they would get called out every once in a while if there was an event.

Uh but the the paradigm shift now is the drone lives in a docking station on the roof of the police department. Uh it can be flown remotely and when a 911 call comes in, you click one button on a map and the drone will launch itself. It'll fly there. It'll give you real-time awareness.

Um, and it just changes outcomes because you can see a crime in progress. You can find a missing person. We we Yeah, we've got a good one here. So, this is uh this is close to home. This is San Francisco Police Department. Okay.

So, this is called drone as first responder. So, basically, this was a report of a stolen vehicle. They launched the drone. They're following this guy from the air. He doesn't he doesn't know they're there. So, they knew that people would do this. They'd steal license plates after they'd stolen the vehicle.

Wa.

They never actually caught anybody in the act. Uh, but with the drone it's it's easy. You'll see. So now he's got a stolen stolen plate.

Oh, he's putting it on the car.

Yeah, exactly. He So he he he nicely holds it up so we can read it from the drone.

No way.

Uh,

this is not an actor. This is a real criminal.

No, no, this is real. This happened uh this happened last year in San Francisco. So now he's tinting the window. So this

this is bad news, right? This is stolen vehicle. Cold plated the vehicle. Tinting the windows. He's going off to do a bunch of bad stuff, but they know exactly where he is thanks to the drone. They send out a plane plane close unit. They roll a spike strip. Um,

so he's got flat tires and that's basically the end of the story. And this is happening all the time. This is happening like every hour, almost every minute somewhere across the country.

Yeah.

That cops are responding to calls with autonomous

drones. So, uh, take me deeper into that example. That that feels like a replacement for dispatching a whole helicopter. That feels like a police department to have someone sort of manually piloting that even if there's some autonomous systems that are just keeping you from crashing into the walls. what level of autonomy are we talking about right now for like the most functional use cases?

So the way that our our customers talk about it is force multiplier

um and it really is a force multiplier because you can have one person sitting in an off center they call them real-time information centers uh and they can be flying up to four drones at once um because there's a lot of automation built into the software so you can just click a button on the map and the drone will fly there or you could click on a car or a person of interest and the drone will start following it. So, it's a highly highly leveraged activity and it's also just faster to get somewhere. So, rather than taking half an hour for an officer to roll out on the ground and you know find the address uh whatever it's like 30 seconds for the drone to get there, it can very quickly determine what's happening. And yes, you're right. You do have sort of a remote officer who's who's flying and controlling this thing, but they're just much more highly leveraged. And so, the impact is is kind of two-sided. One of the one of the ends is what you saw there in that video where it's like highstake scenario crime in progress. We're going to use the drone to change an outcome. The other end of the spectrum is like the most mundane stuff where somebody reports that like, you know, there's a car parked where it shouldn't be or something and would waste an hour of somebody's time to go check on it, but you just send the drone. You can very quickly see what's going on. And and so the law enforce I think I think default expectation in really probably like the next two or three years is if you call 911 a drone should show up in 60 seconds or less. And this this is happening now you know San Francisco, New York, Philadelphia, Oklahoma City, Miami uh you know big the big cities across the country are all using SkyO. Um, and

yeah, so when when a city does when a city uh signs up as a customer, deploys uh deploys your product into the field,

is there a lag time before you see like I'm assuming crime statistics

must start to change as criminals realize, hey, I don't have like, you know, 15 minutes to kind of get my act together after committing a crime. and I have like, you know, 120 seconds and then I'm going to be being tracked and it just makes it a lot more complicated. So maybe you end up uh, you know, getting a real job or something like that and instead of committing crime. But where what what what kind of shows up in the data,

economy booms as criminals,

crime goes down, employment goes up.

Yeah, good.

So like San Francisco has been publishing this. I think that I think that uh crime is down like 30%. Auto thefts are down close to 50%. Wow. Yeah. Since

they rolled this out. So I think um and there was there was actually like an unintentional testimonial from a guy who, you know, who had lived in this world. You might have seen this. I remember we should actually find that clip. But he he was basically saying like prime is over in San Francisco cuz you're screwed. You know, like you steal a car, they're going to show the drone's going to show up in 30 seconds. There's nothing you can do. And it is, you know, it's it's satisfying for me and I think it's also, you know, for us as a company and for our customers, there's just an asymmetric advantage. like when there's a drone following you from above, like there's not a lot you can do. And you know, I was asking one of our customers, they were showing a video of a retail theft where somebody had had lifted 50,000 bucks from a store, $50,000 worth of goods.

And they the drone got there, it it IDed the person just as they were getting into the getaway car. They followed the getaway car to the person's residence and then he just arrested him. I was like, "Oh man, this is incredible. Can you use this video in court?" And the the chief said, "There's no way this is going to court, right? Like, we've just we've got this person cold. We've got video evidence of the whole thing from the drone. And so it's also just way more efficient. Yeah. Way more efficient for the system. You don't have to go through like a shows up and doesn't say, "Oh, there's a bunch of wiggle room." They just say, "Okay, they got you dead right." It's like you should just plead guilty plead it out and just and just do the you did the crime. Um talk to me about what's on an exponential and what's on a linear trajectory. What I mean by that is uh AI progress clearly on an exponential. When if you're trying to read that license plate, I believe that you're going to get better at reading that license plate twice as better. Like the the quality of your AI systems is going to just double constantly. Uh probably same thing with your your production capacity. You're probably, you know, exponentially growing the amount of drones that you can make. But, uh, battery technology, range, flight time, security, like what is still not on an exponential?

Uh, it's a really interesting question. So, the the way that I kind of think about it is, uh, we have a similar kind of dynamic to the self-driving car companies where we're building this really hardcore realw world technology that has to deal with the full complexity of what the real world can present. different weather conditions, uh, different operating paradigms, different visual lighting conditions. Um, and a lot of these, you know, AI is on an exponential curve, but I also kind of think the real world is exponentially complex. And so there's there's this very very hard real world grind that you have to go through to make this stuff work reliably and scalably. I mean, you can kind of think of our drones like self-running cars that fly. Um, and

yeah,

uh, that that is the hardest piece and and you know, we've been at it now for 12 years and and there's really unfortunately no shortcuts. I mean, it's it's taken us a long time, millions of flights, tens of thousands of drones we've built to learn a lot of these hard real world lessons and then incorporate them into our hardware and software to make the system reliable. So, we're benefiting now. You know, we made big bets on computer vision. That turned out to be right. We're on a great exponential there, but the the visual complexity of the real world is also exponentially high. Yeah, walk us through the the importance of like dockbased drones. Uh when did you start building docks? Because I imagine you started with drones and then eventually realized that you need to actually sell the infrastructure that there is not there there aren't just going to be sky ports with charging infrastructure that just pop up everywhere. So, uh walk us through what we're what we're seeing in that video and and sort of the the the roll out here.

Yeah. So, that that's a dock in action. Um so, vertical integration, there's different ways you can approach it. I think I'm a big believer in vertical integration, like building the dock and the drone and writing all the software that runs on it and writing all the cloud interfaces to to manage it. Um, like all these pieces need to work together to deliver kind of this solution. Like at the end of the day, we're kind of a boring enterprise solution to our customers. There's just a bunch of cutting edge robotics under the hood to make it possible. Um, and it's it's been a journey to get to where we are. We we were talking about docs when we started the company in 2014. One of the things I believe is you got to have for these really big technology plays, you kind of need you need an incremental business path along with the incremental technology. Like I think the biggest successes Tesla did this, SpaceX did this. You've got the grand vision, but you've got to find ways to make incremental technical progress and to unlock incremental business value along the way. So building the drone without the dock is is an obvious example of that. I think in 2019 is when we really like went all in and said like we think these enterprise markets are ready. We think the dock is the way to serve them. Um, so it's been a a six, sevenyear path from then to now have our products really being produced at scale, reliably, working at scale. Um, and uh, you know, there's a lot of little problems, little and big problems you got to solve along the way to make it work.

Yeah. Talk about a little bit about privacy, surveillance, regulation. Can you spy on me? Can the government spy on me? I I love the idea of finding my car if it gets stolen, but I'm a little bit hesitant about having a drone follow me around everywhere for no reason, just in case I go 2 miles an hour over the speed limit. Like, how do you grapple with those tradeoffs, the regulation, how you think the government uses this technology?

So, I I think these are civilizational questions and I think ultimately they are like policy and regulatory questions. uh this you know is a hot topic today of like what's the role of companies and in how their government customers use it.

Um so you know we have a voice in this conversation. We have a a strong posture towards I I think transparency is basically the key. Yeah.

Um especially in law enforcement because if the police are transparent and if people see

you guys hear me? I just lock my

earphones. No, we're good.

Uh if you take them out, you can probably just switch to the the computer audio. Yeah, we can hear the hum of your uh

your master facility behind you. Workshop makes it sound like it's like like Santa's workshop.

It is Santa.

It's a manufacturing facility, Jordy.

They have the biggest gun factory in the US.

Yeah, we can hear you now.

Okay, great.

You're good.

Yeah. So, I think transparency is the key because, you know, if people see what law enforcement is doing with drones, they can form their own assessment and there's natural accountability built in there. Yeah.

And and really one of the like the things that I think our customers are doing an amazing job of is being maximally transparent on this stuff. Like one of when an agency watches their grown first program, they're not trying to like hide it in the back room. They're like hosting a press event. They're explaining what they're doing. They're showing videos like the one that I just showed you. And we actually have we do a bunch of transparency features of the product. So we have a transparency portal um that basically makes it easy to for an agency to publish all the flying they're doing. And citizens use this. you can log on and you can see like, oh, were they following me around to see if I was going through miles hour? No, they were like busting somebody who stole my car. Yeah.

Um, and uh, this is this is kind of a side, but one of the things that I've come to appreciate working with law enforcement is there's there's very high direct accountability there because

these police chiefs and sheriffs, I mean, they are they're either directly elected themselves or they're downstream from an elected official and if something goes wrong, they're on the nightly news explaining it and they don't want to be there. Uh, and so they take this stuff really seriously. So, it's it's not to say that there aren't legit concerns and that everything's going to be perfect hunky dory, but I think the the feedback mechanisms are in place uh to to get us to a healthy place. And the and the safety benefits are just incredible. Like when people see like the one that I show, they tend to get it.

Yeah. I've been pretty uh I've been pretty satisfied with the way local jurisdictions have been able to decide as a small community whether or not they want license plate readers or whether or not they want uh you know doorbell cameras to be accessible and it hasn't been something that's been forced upon every community or banned from every community. It's been on a city-by-city basis and that feels like the correct formulation structure based on what we know we're entitled to as Americans.

That's exactly right.

Yeah.

Like, sorry, just on that note, like when when you're selling to public safety and law enforcement, it's basically a community sale. Like all this stuff goes before city council before it gets approved.

Yeah.

And and they're the ultimate people that are carrying the purse string. So that's agency knows that. We know that. And that's part of that's they're our ultimate customer.

We got to talk about DJI. DJI got added to the FCC's covered list and at the end of last year how you know long time over long

just had a cool feature where I guess like anyone access any of them. So like if I have one like

Yeah, we had the guy we had the guy that h that hacked that basically coded his way into being able to control and look at the video feed of 7,000 DJ.

You found the back doors.

Yeah, he found the back door

and then he hacked into a vacuum and drove it to the back door of the house that he was in. You know, I say that Chinese drones come prehacked, but

hacked. Yes.

No hacking required.

But yeah, but how is the the FCC's action impacted your business? I'm assuming that's something that you felt would have been an obvious decision for the government for for many years prior, but uh give us the history.

Yeah, look, I think that part of what's happened here is like when we started the company in 2014, drones seemed like toys. You know, they were like kids toys. people flew them and they've been through this evolution from like toys to like useful tools for expert operators to to now I would argue like critical infrastructure and I think and then the the conflict in Ukraine war in Ukraine I think just demonstrated to everybody how important these small light drones are from a national security perspective. So I think there's been kind of just increasing awareness over the last 10 years that this is critical technology with with very high national security stakes. Um, and you know, from our perspective as a company, like our goal is just to win on the strengths of the product and the tech. And I think that the shift to doc and autonomy really plays to our strengths uh both as a company and as a country. And you you can see this in the market. Like historically, DJI had like 70 80% market share in in law enforcement. Um, and in the doc world, they're they're still our number one competitor. So like Vlock Safety is effectively a DJI reseller. Like all of their drone as first responders work is done with DJI drones today. Um but the the scoreboard is flipped. Um you know we are we are winning the majority of these deals. Uh even before the FCC action on the strengths of the product and the tech because it's it's just sort of a different recipe. It's similar but it's a different recipe to deliver the solution. Price people are a little bit price sensitive because the value is so high. You know price is probably DJI's greatest strength. So, look, from our standpoint, like our goal is just to have the best products and and tech in the world. We certainly benefit um from policy and regulatory tailwinds, and you know, I'm I'm not neutral on this. We have a business stake in it. But I think there's a lot of reasons why we want a domestic drone industry. Um and why that's important for our national security. I mean, this stuff is critical for military. It's critical infrastructure. It's critical for public safety. Um, and so it's exciting to see like huge momentum now towards domestic industry and and domestic manufacturing. But ultimately the only stable long-term solution is to have the best products in tech designed and built right here in the US. And and that's what we're doing. That's what the factory behind me is doing.

Um, I think this new ch new chapter of drones is infrastructure is is a huge opportunity for us as a as a country and one that we have.

How are you thinking about scaling manufacturing capacity over the next decade? Uh, I mean, we're all in on it. It's it's a fun set of problems. I mean, it's just a it's a it's all engineering of some flavor. It's a different set of engineering problems. So, we're adding more and more automation to our factory. We're investing in the systems and processes. I think that the like the combination of AI and robotics is changes the way manufacturing works. Like it's possible to automate more stuff. It's possible to have what happens on our factory floor be more software defined. Um, I think that's, you know, that's going to be more to our advantage versus just pure lowcost labor. Like that's not our strength in the US. We have phenomenal workers drones, but it's it's, you know, it's a different um it's a different labor equation than it is in Asia. Uh, so, you know, we're investing very heavily in like the software aspects of manufacturing in the automation around it. Um, and it's it's part of our core identity as as a company and we're continuing to scale. So, you know, we're in a 80,000 foot facility now. A year from now, we'll probably be in a 250,000 foot facility.

It's a huge facility.

Huge facility. Congratulations

and thank you for taking the time to come chat with us. Uh good luck with the great scale up get that. And I mean I I've I've met you over a decade ago. So a true overnight success.

Overnight success. Uh

uh come back on when you have news, Adam.

Yeah, we'll talk to you soon.

Really, really cool to to get the update.

Have a good one.

Cheers. Thanks, guys.

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