David Gardner: Tom, one reason we are excited to have you on this show is because of the volatility and excitement surrounding your stock. Two years ago Taser
Tom Smith: This is just a guess. I think it is because Wall Street is really having a hard time understanding what the value-add is, and they see the lives saved and they see the media reports on these tragic in-custody deaths.
I think they are also trying to understand how big this market really is because law enforcement is the one we are focused on today. We only have a 10% penetration of law enforcement officers just in the United States. They are not really sure how to factor in what is going to happen with us on an international level. Just in September we got approval from the ... minister of the United Kingdom to go forward with this technology.
Then there is also the private security market that is starting to take an interest in this, and then the big one out there that we really don't have our hands around and neither does Wall Street is, what is going to happen in the consumer marketplace? We have been selling in that market for 10 years. We haven't been extremely successful at it, but I think a lot of things have changed since 10 years ago with law enforcement using it today and its success.
I think with all of that uncertainty and not really understanding this market niche, because we are new and it is not something that people pick up and understand it right out of the gate. I think that has contributed to this quite a bit, but obviously with the huge increase that we have seen in the stock price, we do have a lot of investors out there that believe in where we are going.
Our numbers are very solid. I think the report that we just put out for our third quarter again emphasizes the continued growth that we have seen. So we are a real company that is making a real product, and I just think the hard time people are trying to deal with is what is the potential for us as we go into the future and how big could we really get?
David Gardner: Thank you for your perspective and helping us demystify things a little bit. Let me ask you, Tom. As CEO of a company that has had such a great stock and with such volatility, is it easy for you to avoid looking at the stock price?
Tom Smith: A year ago it was a lot tougher. It has gotten really easy now. I mean my brother and I really do stay focused on the business. It has been a challenge certainly. For the employees it is something they get excited to watch every day, but we keep reminding them and we keep telling ourselves that we have to focus on running the business. The stock price, while it is a great side benefit for everybody, we need to make sure we are running a solid business here and keep focused on that. That has made it easy to not have to look at it. Obviously we look at the closing price, but during the day we have been pretty good about not having to watch it because we stay focused on the business, and that is keeping us plenty busy.
David Gardner: If you were giving advice, Tom, to another corporate manager who was himself involved in a start-up. Let's say something that was about to IPO; what would your own experience of being a manager of a volatile and exciting stock cause you to counsel this young fellow with?
Tom Smith: The thing that I have learned going through this experience is you really have to continue with what your heart believes. Obviously with short positions, we have a very large short position. Our stock, we get a lot of negativity with the media. You really have to focus on what you believe in and go forward with that, and you have to stick with it. There were a lot of lean years in there where we didn't know if we were going to make it, and it was just a lot of hard work and focus and a great team. We were very, very fortunate to get some great team members to participate with us and believe what we were doing and see the vision of being able to go out there and save lives, and for somebody else that is trying to live their dream, there is going to be a lot of adversity along the way, and you have to really try and fight through that and stay focused on your core values and where you are going with that. It is a lot of fun, and it is something I wouldn't trade for the world.
David Gardner: Can you let us peek under the hood for a sec at Taser International; pick it up there. At Taser International's core values? How about one of the core values of your company that you preach in your culture to your employees?
Tom Smith: Saving lives every day. That is what we are about. We got into this business to make a difference in this world. What got my brother and I looking at this was having two friends get shot and killed in an unfortunate drive-by shooting and taking a look at how we could make a difference. Our big thing is that we are manufacturing a product that saves lives every day. It is helping police officers not get hurt. It is letting them go home to their families at night, and it is forcing them not to have to make a life-or-death decision with the suspects that they face out on the streets that are influences with drugs or alcohol or emotionally disturbed, and it is allowing them to get those people help.
So really what we emphasize to everybody at our facility and the customers that we talk to is the fact that this was made to save lives, reduce injuries, and the results really are speaking for themselves when you look at cities like Cincinnati Police Department had a 70% reduction in officer injuries and a 70% reduction in officer assaults and a 60% reduction in suspect injuries. So we really thrive on seeing those types of results out on the streets.
Catch up on the first part of David Gardner's interview with Tom Smith.
Tomorrow: Is Taser's success sustainable?
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