The Latest from the ABM Experts
July 15, 2019
The Journey From A Garage To A Publicly Traded Company: Overcoming Startup Challenges
Written by Sangram Vajre
We have been interviewing some incredible guests in the last few months. We had Seth Godin. We had Daniel Pane. We had Kim Scott. And all in all, I think there’s been a lot of great feedback.
One of my good friends recently told me about a company and a person that I had never heard of before. But as soon as I learned a little bit more, I realized this person would be an incredible guest to have on the #FlipMyFunnel podcast.
So, invited Rick Smith to join me on the latest episode of the show. Rick is Founder and CEO at Axon, formerly TASER. What began as a company run out of Rick’s garage has become a publicly traded company that has saved over 100,000 people’s lives. Rick has also authored the book, The End of Killing.
Here’s what we’re unpacking today:
- The personal story that prompted Rick to start his company
- How Rick struggled with, and overcame, the challenges of entrepreneurship
- One practical idea you can implement to get through challenges in your business
I’d love for you to share the story of how Axon came to be:
Rick: The journey started about 26 years ago. While I was in graduate school in Europe, two of my friends were shot and killed back in Arizona. And they weren’t killed by some gangster or some career criminal, but by a business man who had a gun and a temper. The situation probably just spun out of control.
I realized that we live in a place that’s more violent than it really needs to be. And what really struck me was that this person chose a weapon that fires lead shrapnel at people to defend himself — but the fact is that’s the best we can do today. We’re still using the same technology we used to fight the Revolutionary War 250 years ago when transportation meant riding horses and medicine meant a couple shots of whiskey and a saw. Every other industry has been overwhelmingly changed by technology. But not the art of self defense.
So, I started a company. I found this former NASA scientist who had been working on energy weapons since the 1960s. And what we wanted to do was simply bring Captain Kirk’s Star Trek Phaser to life. Because if we can have weapons that can legitimately stop a threat, allow you to get away, and not have to hurt anybody, the world would be a much better place.
Can you share your startup journey with us?
Rick: For a variety of reasons, our first TASER weapon was a commercial failure. We then sort of scrambled and launched a second product that also bombed. So, by ’99, we had two failed products, we were totally out of money, and we had never raised any outside funding. We had tried, but all of the private equity guys thought we were crazy to try to build an electric weapon. So, my father had been funding TASER.
When I realized we didn’t have the money to make it, I told my dad to stop funding the company. Somewhere along the way I found myself crying in my apartment. I realized I had wiped my parents out financially. Not only was I a failed entrepreneur, but I also had the distinction of having had the advantage of a family that could afford to support me, and I took them down in the process. It was pretty depressing.
But, back to the story. When I told my dad to stop investing, he responded by saying: “Hey Rick, guess what? I actually only have about $500,000 left and we owe the bank a million and a half. And I guaranteed the loan. So you do the math — if we fold the company, they’re going to come and take everything.”
So, he put in the last $500,000 and got a friend to match that investment so we could do one more pivot. And we made it. We barely made it, but we did it.
I know that must be a difficult story to share.
Rick: I love talking about it now, though, because we made it. And here’s something that helped me get through it at the time:
When you get to those really hard moments when it looks like you’re not going to make it, dust yourself off. Look at yourself remotely and realize that you’re the protagonist in a great struggle. You’re living an amazing story. They don’t make movies or write books or television series about people who have uninteresting, non-challenging lives. It’s a much more interesting life story to have lived through adversity.
So, here are my three big takeaways from this interview.
Number one, hopefully everyone paid attention to your story. It just shows that nothing great has ever been created without the sacrifices of people that have gone the distance. For everyone who has been remotely successful, there was someone there believing. So, bring together people that actually believe in you. Stay close to them and be open and transparent with them.
Second, although we didn’t take a deep dive into this, you mentioned that the next generation of leaders is going to have an undeniable curiosity for learning. I just love this idea.
Third, we talked about leaders who go above and beyond. I think you have clearly demonstrated that principle through your own compensation plan, by really tying your success to the success of the company, and by giving everyone in your company an opportunity to share in that, too. That speaks volumes for what leadership really is in today’s day and age, which is authentic and transparent. As CEO of a public company, you’re a role model for a lot of people out there, including myself.
Rick: I would challenge you to be vulnerable. When I was young, I had this idea that I had to be the smartest guy in the room. I needed people to think I had all the answers. But that’s not a very effective leadership style.
But if you open up, if you allow yourself to be vulnerable, it humanizes you and you get more buy-in. The wise leaders are those who are vulnerable, and not so much authoritarian.