Ahead of planned IPO, Knightscope's CEO discusses opportunity and controversy

After months of waiting, Knightscope this week announced a January 27 date for its planned IPO. Founded in 2013 by William Santana Li, a Ford executive, and Stacy Stephens, a former Texas police officer (the co-founders of police vehicle firm Carbon Motors), the Mountain View-based firm has risen to national prominence with its high-profile surveillance robots.

According to Li, some 80-90 Knightscope robots are currently under contract in the U.S. (the company’s sole market for the foreseeable future). In our conversation, Li, a New York native, says being "profoundly pissed off" by the 9/11 attacks was a key driver in the company's creation. In previous interviews, the CEO has also mentioned the Sandy Hook shooting, which occurred a year prior to the firm’s founding.

Knightscope’s rise has been a steady one. Many law enforcement agencies have been quick to embrace the technology to augment their own presence, running 24/7 and cross-checking things like license plates and even your smartphone’s MAC address in a bid to detect and deter crime.

Though, the company entry on the scene has not been without controversy. Some high-profile incidents, including one robot driving into a wading pool and another colliding with a toddler, have made national headlines (some, Li suggests, may have ultimately been a net positive for the company’s profile). Electronic rights firms like the EFF, meanwhile, have called such technology “a privacy disaster waiting to happen.”

We spoke to Li about the company’s journey, future and controversy ahead of its planned IPO.

The interview was edited for clarity and length.

TC: Can you tell me a little about yourself and why you founded Knightscope?

WL: I’m a former car guy. I spent a good about of time at Ford Motor Company, which is an awesome training ground. Over a decade, I held 12 different positions on four different continents in every functional area. I couldn’t be more grateful. Why I started Knightscope -- I guess there’s a personal and a professional answer. Building on the automotive bit, I strongly believe that self-driving autonomous technology is going to dramatically change the industry. The other thing I should say is I’m not necessarily in agreement on the path to commercialize the technology. I hope that everyone gets to where they want to, but right now, what’s going on is the aerospace equivalent of, ‘I want to go to Pluto, but I don’t want to stop at Mars, and I don’t want to go to the moon.’

There’s an expectation that accidents are going to happen when these things are deployed in the real world. The magnitude is a different order when we’re talking about a multi-ton vehicle barreling down the highway. But there have been a handful of incidents that have been highly publicized.

Come on, that was like half a decade ago. Pre-COVID, what happens every day for mature industry -- 15,000 accidents happen every day for a 100-year-old industry. We have a couple of minor incidents on a novel breakthrough technology half-a-decade ago, let’s put things in some context.

Is there a certain level of expectation that, once these things are deployed publicly, that these sorts of accidents will happen?

Absolutely. I’ve said to the media, our underwriters, our lawyers, our teams, our clients, our investors -- more incidents will occur. It’s not an unreasonable thing to say accidents happen. In a lot of cases, we have the evidence to prove that humans are not perfect and maybe have issues driving. In many cases, it’s maybe not the robot, it’s accidents happen. Will more incidents occur in the future? Absolutely. Guarantee it. The most important thing is: How do we handle it? How do we conduct ourselves? How do we take care of our clients? Do we make sure everyone is safe and, wherever possible, make whatever revisions need to happen?

It does make an impact when these incidents are many people’s first time hearing about the robot.

You can assert that. But you can also assert that if it was such a black eye, we wouldn’t hold contracts from Hawaii to Texas to Rhode Island. We wouldn’t have our fourth and fifth year renewals. We wouldn’t have a long list of crimefighting wins. You cover the tech industry, and as you know, building a demo is really easy, building a prototype is kind of easy, you might get lucky to sell one or two. But if you can get a client to pay full price to work with you for a year, renew the contract and add more machines, you actually have something. I’m not trying to be cute here, but in some cases, the supposed black eyes from five years ago actually ended up getting us more clients and investors.

You feel they raised the company’s profile and got more people on board?

I don’t feel it. It’s actually happened, which was a bit weird to have family members say, ‘is everything okay?’ We did get a bit more visibility or exposure.

Is there a point in the future where you see [the robots] taking a more active role in, for example, the apprehension of suspects?

Absolutely not. The most powerful solution is software+hardware+humans. You need the technology to do the monotonous, computationally heavy stuff and provide the deterrents, as well. You need the humans to do the law enforcement and decision making. No one in the history of mankind has done this at scale. If you want society to ‘trust’ a new way of doing things, the last thing you need to be doing is something on the offensive.

What is the robot looking for, exactly?

Short term, they have a handful of key things. Some of them might be as benign as a person. Say you’re a commercial property owner and between 10 at night and 5 in the morning there should be no one waltzing around your property. If you see a person, send an alert. That can be text, phone call or notification on the user interface. We can read several hundred license plates per minute, so you can put a BOLO [be on the lookout] or blacklist a license plate of a person of interest on the system (you can use it for parking enforcement, as well). You can also run a thermal scan of an environment. For the stationary machines, we can run facial recognition and that can be really helpful for ingress/egress locations. We can also, within a few hundred feet of the machine, detect any mobile device in the area and treat your phone as a kind of license plate.

Are there any "suspicious activities" that would set it off?

I mean, if there was someone who put out a BOLO for any of those things, that would be the suspicious bit. I think for the future, what I would really want us to do -- the thing I’m most fascinated with is figuratively putting a dog’s nose on a chip. I’m super enthusiastic about one day being able to put that on a machine. Nearer term, there’s no technological hurdle, other than people want time and resources to get the machines to learn things like sound. Glass breaking would be suspicious. A car starting, car door slam, gunshot. All those things, and then being able to localize sound.

We were speaking earlier about some of the inevitabilities in terms of automation. Are there inevitabilities, as well, in terms of AI profiling people?

If you’re inferring issues with racial bias -- and I might get in trouble for saying this -- but to me, it’s garbage in, garbage out. You tell a kid, when they’re growing up that pistachio ice cream is really bad, when they grow up, pistachio ice cream is really bad. If you feed an algorithm all the wrong data or an incomplete set of data, that’s an engineering bad input problem. That’s not that the technology is biased. I’m hoping that over time, that gets corrected over the natural course of engineers always making things better and better.

I don’t have that, ‘the AI is going to cause us more problems than people realize.’ I think from a robotics industry standpoint, that’s certainly not the case. I find it humorous and disturbing that a lot of people do worry about the robots and the like. If you ever want to figure out is something works or doesn’t work, follow the money […]

There's not enough capital, and there's not enough roboticists or engineers around the world to justify the concern of what's on the screen. And maybe folks don't want to hear that, but from where I sit, I can’t put the two together to see that happening.

I would caveat any of this conversation obviously by saying that implicit biases and profiling are not something that are .unique to machines or robots, obviously. And certainly it’s up to the people who are imputing these things, as well, but these have to be things a company like this has to really be conscious of. Is that something that you feel like you can work to -- if not correct -- then at least improve over time?

Two comments -- the first part-serious and part in jest. People worry about robots. Honestly, I worry about humans. The madness that happens across the country is insanity. The second thing is simple etiquette and manners. A good example would be, if you don’t properly introduce yourself when you show up at a new location, you’re going to have a problem, because of everything we talked about. What we try to counsel, encourage or strong arm clients into doing is, ‘hey, before the robots show up, we need to have an intro, the robot's coming, a robot lunch, cake, robot naming contest.’ Come meet the robot and understand why it’s here, what it’s doing.

If you do that, most humans are pretty rational. They’re like, ‘oh, this is pretty cool.’ If the client won’t allow you to properly introduce the robot, you’re going to end up with a problem. Part of it is the positive and negative things of Hollywood brainwashing everyone about what robots can and can’t do over the last 40 years. Part of this is communication, spending the time doing interviews with someone like yourself, spending time in the community, answering questions online, whatever it might be to engage. The more people know, the more they’re like, ‘okay, this can be really helpful.’

I wouldn’t entirely conflate some of these underlying concerns about AI biases with big robopocalypse concerns. Maybe there is some overlap, but there are very reasonable concerns around implicit biases being baked into AI.

I think I said my piece on that. I’m not sure I have more to say on that.

Why is IPO the right move?

Doing a public listing, there are a lot of pros and cons. In the manner that we raised the capital in the last several years, we report to the Security and Exchange Commission every six months as if we’re publicly traded, but the stock is not yet on a national exchange. Said differently, we have all the negative consequences of being a publicly traded company, without any of the benefits. I needed to get the company ‘out of purgatory.’ I’ve bought a lot of companies in my prior life, as has my CFO. Maybe the public markets might provide us the opportunity to be a bit acquisitive.

Second, from a recruiting standpoint, we’re competing against a lot of big players, and having something that has an actual market value, as opposed to a phantom, ‘maybe one day it will happen,’ when 95% of startups fails. In some cases, larger clients don’t like to deal with smaller, private startups. They need to deal with fully audited, public companies. And the company is going to need financing as we continue to grow. As much as everyone loves what happens here in Silicon Valley and how things get financed, if you look at it from the global capital markets perspective, it’s a tiny little bit of the opportunity, and I think this opens the chance for us to access wider capital markets.

The market isn’t in the best shape right now. Why is this the right moment to do this?

These things don’t happen overnight. It takes a long time to get everything in place. I’m going to get in trouble for saying this too --

You say that a lot.

Because I do an interview and I get all kinds of ‘love letters’ back. I’m just going to be myself, but at least I’ll put the disclaimer that I’m gonna get in trouble. I’m not a quarter-by-quarter guy. Nor am I a time-the-market guy. This is going to take two or three decades to fix, and me worrying about, ‘oh, the market’s down x-percent’ or whatever, is like, ‘folks, can we please focus?’ We have clients, we have a country we want to fix, we need the resources, we want to put people to work, we’re hiring. We’ve got something that we’ve proven works in the marketplace and has been proven to help society. Do I care that the market's up or down? Either way, we kind of need to get going here.