Axon: Making Bullets Obsolete

Rick Smith set out to stop bullets in 1993 after two of his friends were shot dead. He discovered that TASERs – meant to be a safer alternative to guns – were unreliable and nearly impossible to buy. So he rebuilt them. This once struggling invention turned into Axon Enterprises – a $50 billion giant redefining law enforcement with TASERs, body cams, and AI-driven evidence management. But the road there was brutal. Lawsuits, mounting debt, and public skepticism nearly sank the company more than once. This is the remarkable story of how Axon survived, innovated, and made bullets less necessary.

• From multiple failures to dominance: The TASER began as an unreliable, struggling invention, but Axon transformed it into a global force in law enforcement.

• A relentless founder: Rick Smith's personal mission to reduce unnecessary deaths led him to revive the TASER in 1993 – overcoming bankruptcy, legal battles, and market skepticism to build a $50 billion company.

• Beyond TASERs: Axon has expanded from stun guns into a full law enforcement technology ecosystem, including body cameras, digital evidence management, AI-powered policing tools, and real-time situational awareness.

• The flywheel: Axon's success partly lies in its hardware-software integration, where TASERs and body cams serve as the entry point, locking in agencies with cloud-based evidence management and subscription-based services.

• A meteoric stock performance: Since its IPO in 2001, Axon's stock has soared ~1,000x, placing it among the top-performing stocks globally over the past two decades.

This article was written in collaboration with Speedwell Research and draws on their 77-page research report.

In 1967, NASA researcher Jack Cover was flipping through the newspaper and stumbled upon a strange survival story. A man had gotten stuck on an electrified fence, gripping the metal for hours after a downed powerline had charged it. The electricity immobilized him – but incredibly, it didn't kill him. He walked away without lasting injuries (Speedwell Research, 2024).

That story sparked an idea. What if electricity could be used to stop a person in their tracks without causing serious harm? And with crime on the rise, law enforcement needed a way to incapacitate suspects without resorting to lethal force.

Jack got to work. He designed a weapon that fired two wired darts, delivering an electric jolt that locked up muscles. He named his creation after a childhood favorite novel, Tom Swift and His Electric Rifle. Shortened to T.S.E.R., then tweaked for easier pronunciation, the TASER was born.

But invention is one thing. Commercial success? That's a whole different battle.

Jack and a private investor founded Taser Systems in 1975 to manufacture and sell the device. But just as they started making headway, they hit some speed bumps. Just months after launching the product, the U.S. Consumer Product Safety Commission temporarily banned sales over safety concerns. And once that hurdle was cleared, the TASER was regulatorily classified as a firearm because it used gunpowder to fire the darts. It even received a Title II classification, placing it in the same legal category as machine guns and rocket launchers. This was of course a death sentence for consumer sales.

And just when it seemed things couldn't get worse, they did. TASERs lacked the required serial numbers for firearms, meaning that all sold units had to be recalled and destroyed. With probably one of the worst product launches in history and no viable market left, the company went bankrupt.

Fast forward one decade, and the TASER would get another shot. In the mid-80s, a lawyer named Barnet Resnick saw potential in Jack's invention. He struck a deal to license the TASER patents and founded Tasertron. The company managed to land some big clients early on, especially in Southern California, where San Diego police officers started carrying the device. But there was a problem: it didn't always work.

Then came the moment that would define the TASER's reputation for years – the infamous Rodney King incident. Police used a TASER on King in 1991 but it failed to incapacitate him – a failure that played out in front of the entire country. Jack Cover's dream at making policing more humane by utilizing technology was slipping away. But just as it seemed like the TASER might fade into obscurity, fate intervened.

In 1993, Rick Smith was fresh out of the University of Chicago's Booth School of Business, weighing job offers. But his mind kept drifting back to an event that had shaken him two years earlier: a road rage shooting that left two of his high school friends dead in a hotel parking lot. The senselessness of it haunted him. He couldn't stop thinking about how easy it was for people to get guns, and that a split-second decision could result in often very unnecessary death.

Then one day, his mother told him she wanted to buy a gun out of growing concern over rising crime. Rick wasn't thrilled about the idea and suggested she get a TASER. But when she went to buy one, she found out she couldn't, so she went home with a revolver instead.

Disappointed and surprised, Rick dove into research, studying the TASER's history and its technical flaws. Then, one day, he picked up the phone and dialed the name he'd seen on every TASER patent: Jack Cover.

The two hit it off. Rick convinced Jack to work with him on a new version of the device – one that didn't use gunpowder. The plan was to swap out gunpowder for compressed nitrogen, which meant the TASER would no longer be classified as a firearm. In 1993, Rick and his brother Tom founded ICER Corp. – short for "Incapacitating Electronic Restraint." But the name didn't sit right, sounding like something designed to kill. So they rebranded, and Air Taser was born, setting the stage for a revolution in non-lethal weapons.

And this time, the world was finally ready.

Air Taser had secured a crucial win by 1995: the TASER was no longer classified as a firearm, making it legal for consumer sales. This opened the door to a massive market, or so they thought at least.

The company initially focused on selling TASERs to the millions of gun owners who might prefer a non-lethal option, but sales were modest. Then came an idea: if law enforcement agencies adopted TASERs, it would validate the product for everyday consumers. But there was a problem. Tasertron, a competitor, had claimed exclusive rights to sell to North American police forces. Air Taser disputed this but couldn't afford a legal fight, so they had to stay out of the law enforcement market until 1998. They then traveled across the world to demo their product outside of the U.S., but with little success.

From left to right: Steve Tuttle, Malcolm Sherman, and Rick Smith in Stockholm, Sweden, 1995.

From left to right: Steve Tuttle, Malcolm Sherman, and Rick Smith in Stockholm, Sweden, 1995.

They were now left stuck in the consumer market, trying to sell a device most people had never heard of and few retailers were willing to push. And to make matters worse, the early TASER models weren't entirely effective. The AIR TASER 34000 (the first "non-firearm" version to be sold) could cause pain, but it didn't always deliver enough of a charge to incapacitate someone.

A 1995 demonstration in Prague made that painfully clear. Co-founder Rick Smith fired the device at a volunteer from the Czech National Police Academy. The TASER hit, delivered a shock… and did nothing. The volunteer, unfazed, proceeded to put Smith into a wrestling lock (Speedwell Research, 2024).

It was clear: the product needed improvements.

As they fine-tuned the TASER's electrical output to reliably incapacitate an assailant, the company experimented with another product – one with a touch of revenge built in. Shaped like a steering wheel club and designed to protect cars, the AUTO TASER delivered a 50,000-volt shock to anyone attempting to steal a vehicle. It gained plenty of attention, but not for the right reasons. It had high defect rates, a flood of returns, and ultimately, little commercial success. Yet another failure.

The company was bleeding cash and had several million dollars in accumulated losses at this point, mostly funded through debt from Smith's father and friends. In fact, Rick's family bet everything they had to get the company off the ground, nearly driving his parents to financial insolvency. But in 1998, Taserton's exclusive rights to sell to North American police forces finally expired.

The company shifted its focus, this time with a refined and more powerful TASER – the TASER M26. Police departments, unlike consumers, immediately saw the device's value. Officers had few non-lethal options at the time – either pepper spray (which didn't always stop an attacker) or batons, which are quite brutal and risky for both parties.

The TASER offered something new: the ability to instantly incapacitate someone without inflicting permanent harm. One of the biggest use cases? Reducing 'suicide by cop' incidents. Yes, some individuals in extreme distress would provoke officers in hope of being shot. Before the TASER M26, police had few options – either allow someone to continue wielding a dangerous weapon or resort to lethal force. Now, officers could subdue threats without causing lasting injuries or taking a life.

More departments quickly took notice. By 2000, more than 500 law enforcement agencies were testing or using TASERs (Speedwell Research, 2024). The company was still small, but momentum was clearly building.

The company went public in 2001 – now rebranded as TASER International – raising $8 million under the ticker TASR (now changed to AXON). Half of that money went straight into inventory and marketing. The commercial timing couldn't have been better since safety became a top priority nationwide after 9/11. United Airlines purchased 1,300 TASERs for its fleet, police orders surged, and the business, which had spent years on the edge of survival, finally found its footing.

Sales skyrocketed from $7 million in 2002 to $68 million in 2004 – a 10x increase in two years. In 2003, TASER International bought out Tasertron to eliminate its only direct competitor. The company was now a monopoly, partly protected by patents, serving an exploding market.

Three years after its 2001 IPO, the stock had risen ~50x. But as quickly as fortune arrived, trouble wasn't far behind. Bad press started flooding the news by 2005 – the so-called "non-lethal" TASER was being linked to deaths. It wasn't however the TASER alone that caused fatal incidents in most cases – factors like drug use or pre-existing heart conditions played a role. But lawsuits piled up. Speedwell Research adds:

The negative publicity spooked police departments, leading to a sharp drop in orders. Revenue consequently plunged 30% and net income collapsed 95% year-over-year in 2005. To make matters worse, shareholders filed a lawsuit claiming executives had overstated the TASER's safety. The company settled for $21 million, and the stock crashed 80% from its peak.

Most companies in this position would have gone into damage control, settled lawsuits quietly, and cut spending. But TASER International took a different approach. They fought every lawsuit they believed was unjustified and they doubled down on research & development.

The company introduced the TASER Cam in 2006, a small camera that automatically recorded whenever an officer drew their TASER. Designed to protect both officers and the company from wrongful use-of-force claims, this innovation became a defining moment. It wasn't just about legal defense – it marked the company's first step beyond TASERs.

The TASER Cam was a game-changer. Not only did it provide critical evidence in legal cases, but it also helped shift the public perception of TASERs from dangerous weapons to accountability tools. Sales hit $100 million by 2007 and the company returned to profitability with $15 million in net income. But TASER International was thinking bigger at this point.

The TASER Cam was a start, but it only captured what happened after an officer pulled out their weapon. What about everything that led up to it? That question led to the launch of the AXON HeadCam in 2009 – the first attempt at body-worn cameras for police. It came with Evidence.com, a cloud-based platform where officers could securely store and manage footage.

The name AXON was chosen as a reference to neurons and the nervous system, specifically the axon, which is the part of a nerve cell that transmits electrical impulses. This name symbolized the company's shift from purely manufacturing stun guns to developing technology that enhances law enforcement’s ability to record and process critical incidents – essentially acting as an extension of the officer's sensory perception.

Adoption was slow at first. Many officers saw body cameras as an invasion of privacy and police departments were reluctant to trust third-party cloud storage. But the company kept innovating, introducing the AXON Body in 2009, the first body-worn camera that truly took off. Departments that tested it saw complaints against officers drop by up to 90%, along with a significant reduction in use-of-force incidents (Speedwell Research, 2024).

The road to this point had been anything but straight. In the nearly half a century since Jack Cover first conceived the idea of the TASER in 1967, the journey had been marked by ups and downs and relentless innovation to survive. But by 2009, one could finally argue that TASER International had evolved into a great business – one that fundamentally changed the way policing worked.

By the mid-2010s, TASER International wasn't just a weapons company anymore – it was a technology company for law enforcement. The TASER brand became so closely associated solely with non-lethal weapons that in 2017, the company strategically renamed themselves Axon which better captured what they really did – transforming public safety with technology (a phrase frequently used by Axon themselves).

Today, Axon's TASERs, body cameras, and digital evidence software are used by police forces all over the world. Quite an impressive ride given that it all started with products that didn't work, one bankruptcy (nearly two), bad demos, public skepticism, and a relentless belief that the right technology could change policing forever. Axon Enterprises is today essentially an operating system for public safety, whose slogan echoes, "Protect more lives in more places", and has at the time of writing a market cap over $50 billion.

Alright, so here we are in 2025. Revenue has increased ~280x since its first full year as a public company in 2002, with profit margins holding steady between 6-10% over the past three years. What started with the visionary and now iconic TASER stun gun has evolved into a full-blown technology ecosystem, all designed to make policing smarter, safer, and more efficient. Axon is now the leading provider of law enforcement technology solutions worldwide. The company reports its revenue under two business segments (sourced with Quartr Pro):

Axon's revenue growth and segment split.

Axon's revenue growth and segment split.

During Q3 2024, Axon's TASER segment accounted for 41% of total revenue, with the remaining share falling under Software & Sensors segment. The TASER segment primarily consists of TASER devices which constituted 59% of this segment as of Q3 2024. The rest includes related products like cartridges and Axon Evidence & Cloud Services, both integral to the TASER ecosystem. Under the Software & Sensors umbrella we have body cams, fleet cameras, cloud-based evidence management, real-time situational awareness tools, and even virtual reality training simulations.

As for the geographical split, 89% of revenue was derived from the U.S. in Q3 2024, with the rest from "Other countries," which primarily includes Europe.

Let's take a look at the key components of Axon's product portfolio and explore how each contributes to modern policing and public safety (sourced with Quartr Pro).

As you've understood by now, the core of Axon's offerings are TASERs. The latest in this lineup is the TASER 10, introduced in early 2023. This model has an extended range of up to 45 feet, enhanced accuracy, and the capacity to deploy ten individually targeted probes, allowing officers greater flexibility in high-stress situations. The TASER 10 can fire 10 times, whereas the previous version could fire only twice – a big step toward the mission of making bullets obsolete.

Preceding the TASER 10, Axon released the TASER 7 in 2018, which improved close-range effectiveness with dual laser sights and adaptive cross-connect technology, ensuring higher probe accuracy.

Recognizing the growing demand for transparency in law enforcement, Axon launched the Axon Body in 2009 with great success. The latest version of its body-worn cameras, the Axon Body 4, was launched in 2023. It captures high-resolution video with a 160-degree field of view and offers real-time support features, including live-streaming capabilities. This ensures that critical incidents are documented comprehensively, fostering accountability and public trust.

Earlier models such as the Axon Body 3, which was launched in 2019, introduced live location tracking and alerts, enhancing situational awareness for officers and command centers alike. These devices have become integral to modern policing, providing objective records of encounters and aiding in evidence collection.

Axon's Evidence.com is a cloud-based digital evidence management system that allows law enforcement agencies to manage, review, and share digital evidence, particularly video evidence captured with Axon cameras. It includes an automated redaction tool, audit trails for chain of custody purposes, and integrated evidence-sharing features. Complementing this is Draft One, an AI-powered tool that generates report narratives from body-worn video footage, significantly reducing the time officers spend on paperwork.

Axon expanded its real-time operations capabilities by acquiring Fusus in 2024, a leader in real-time crime center technology. This integration allows for the aggregation of live video, data, and sensor feeds from various sources, providing law enforcement with enhanced situational awareness and investigative capabilities.

Launched in 2018, Axon's Air program leverages drone technology to improve situational awareness, offering real-time streaming and remote deployment capabilities. This is particularly useful in large-scale events or critical incidents where ground access may be limited.

In June 2024, Axon partnered with Skydio to deliver a scalable Drone as First Responder (DFR) solution. This collaboration combines Skydio's autonomous drones and docking stations with Axon's real-time operations and evidence management systems. In October 2024, Axon acquired Dedrone for about $500 million to further enhance its capabilities in airspace security. Dedrone's technology enables detection, tracking, and neutralization of unauthorized drones, integrating with Axon's platform to bolster the DFR programs.

Understanding that effective training is crucial for law enforcement, Axon offers VR Training modules that immerse officers in realistic scenarios. These virtual reality experiences prepare officers for complex situations they may encounter in the field, enhancing decision-making skills and promoting de-escalation techniques.

U.S. market penetration by product category.

U.S. market penetration by product category.

The revenue for Axon's different product segments in the third quarter of 2024 was divided as follows.The Software and Sensors segment generated $323 million, accounting for 59% of total net sales. Key contributors included:

• Axon Body Cameras and Accessories: $70 million (13% of total sales)

• Axon Fleet Systems: $23 million (4.4% of total sales)

• Axon Evidence and Cloud Services: $203 million (37% of total sales)

• Extended Warranties: $17 million (3.2% of total sales)

• Other products: $8 million (1.4% of total sales)

The TASER Segment generated $222 million, accounting for 41% of total net sales. Key contributors:

• TASER Devices (Professional): $131 million (24% of total sales)

• Cartridges: $60 million (11% of total sales)

• Axon Evidence and Cloud Services: $14 million (2.5% of total sales)

• Extended Warranties: $10 million (1.8% of total sales)

• Other products: $7.5 million (1.4% of total sales)

What truly distinguishes Axon is its ability to marry hardware innovation with a software-driven business model. At the heart of its strategy is a recurring revenue model. Instead of selling TASERs or body cameras as one-off purchases, Axon offers an all-in-one package: weapons, cameras, training, warranties, and automatic upgrades, plus a suite of AI-powered software tools.

A key part of this ecosystem is Evidence.com, sort of an operational nerve center where law enforcement agencies manage workflows, securely share evidence, and leverage tools like automated transcription and AI-powered redaction. By bundling everything into a seamless subscription, Axon ensures that its products aren't just tools but an essential part of how modern law enforcement operates.

The flywheel effect in Axon's strategy is very powerful. The company's hardware – from TASERs to body cameras – serves as the entry point. Once an agency adopts Axon's hardware, the natural next step is to integrate the software. Agencies face high switching costs, not just in terms of budget but also operational disruption, which means Axon retains customers for the long term. This stickiness is a formidable competitive advantage. One can also argue that Axon's client group in itself serves as a competitive strength – there's lots of trust, processes, and regulations involved to be able to sell to police and law enforcement. Axon should know since it took the company about 30 years from idea and vision to having a commercially viable product.

But the brilliance of Axon's business model lies not just in retention – it's in expansion. Once a police department adopts Axon's body cameras, the need for storage and evidence management follows. Then comes AI-driven analytics, fleet management tools, and even virtual reality training simulations. Each product seamlessly feeds into the next, creating a self-reinforcing cycle of adoption. This is sort of a razor-razor blade business model with several steps, each one making the end-customer even more sticky by both creating more value for them and by an ever-increasing switching cost.

This strategy has paid off heavily. In 2023, approximately 70% of Axon's revenue was derived from recurring subscriptions. This mix of hardware and SaaS places Axon in a unique position: a technology company that bridges physical tools with digital transformation. Axon's success in this area mirrors giants like Apple, where the hardware hooks the customer, and the ecosystem keeps them loyal.

Still, Axon's growth isn't just about smart business decisions – it's a lot about timing. Law enforcement agencies are under increasing pressure to modernize, and Axon offers a ready-made path forward. From cloud-based digital evidence to AI-powered policing solutions, the company has positioned itself as an indispensable partner for agencies navigating current and future public safety challenges.

But as Axon expands, so do the ethical questions. How much and what data should be collected? Who should have access? And how do we ensure these tools are used responsibly? These are all growing societal concerns.

Rick Smith's vision when he revived the TASER in 1993 was never just about selling a product, it was about changing the way law enforcement operates and giving them more options than the gun and the baton. Since then, the question has shifted from whether technology can improve public safety to how it can be used responsibly. That conversation is ongoing, and Axon is right at the center of it.

Axon serves a diverse range of customers, each playing a crucial role in the company’s growth story. Here's how the customer base breaks down:

Public safety agencies across the U.S. – over 17,000 in total – make up Axon's most important customer segment. Given the long sales cycles and the mission-critical nature of its products, Axon builds deep, long-term relationships, often securing five-year (or longer) contracts.

Axon has made a strong push into the federal market, where security and compliance are becoming increasingly paramount. The company achieved FedRAMP High status for its SaaS solutions in December 2022 which has been a game-changer, allowing it to compete for high-security cloud contracts. The result? Double-digit growth in this segment with momentum expected to continue.

Axon isn't just a U.S. success story – it's expanding worldwide. The company has been aggressively pursuing international markets in recent years and the numbers in Q3 2024 speak for themselves:

• 40% quarter-over-quarter growth in international bookings

• 40% year-over-year growth in total international sales

In much of Europe, even police officers aren't allowed to carry guns, making the TASER an increasingly popular alternative. With near-record levels of international demand, Axon's global footprint is becoming a bigger piece of the puzzle.

Businesses and other non-governmental organizations are increasingly adopting Axon's solutions. This enterprise segment is a key part of Axon's strategy to diversify beyond traditional law enforcement and tap into new verticals.

Axon's ability to retain and expand within its customer base is reflected in its 123% net revenue retention – a sign that existing customers are not only sticking around but also spending more over time. With multiple high-growth segments and a strong competitive position, Axon is well-positioned to scale even further.

As we've addressed, Axon's customer base has grown far beyond law enforcement. While the company started by serving police agencies and to a minor extent consumers, it has since expanded into federal agencies, private security, fire & emergency services, and even the U.S. military. So, how big is this opportunity?

Axon's total addressable market (TAM) has ballooned over the recent years (Speedwell Research, 2024):

• 2020: Estimated at $27 billion, with law enforcement making up 54%.

• 2021: Expanded to include consumer safety, pushing TAM to $50 billion.

• 2024: Raised again to $77 billion, driven by SaaS ($34B) and Axon Air + VR ($22B).

For perspective, Axon's 2024 revenue guidance is $2 billion – suggesting enormous room for growth.

TAM estimates are always tricky, but one thing is clear: public safety spending rarely slows down. Even when budgets tighten, investment in technology tends to remain a priority, often as a way to offset labor shortages. As a consequence, Axon's business proves to be remarkably uncyclical – insulated from the usual economic ebbs and flows. The purchasing power of its core customers, law enforcement agencies and governments, is unusually stable, giving Axon a level of demand reliability that many companies would envy.

Here's Axon's breakdown of U.S. public safety spending over time (access all Axon's IR material in Quartr Pro):

Axon Q3 2024, Slide 17: Quartr Pro

Axon Q3 2024, Slide 17: Quartr Pro

In 2019, Rick Smith published The End of Killing – which is not just a book, but a manifesto of sorts. It wasn't your typical CEO-penned corporate fluff or leadership playbook. Smith took a bold stance instead: that killing isn't a moral inevitability, but a technology problem waiting to be solved.

At the core of his argument is a simple but powerful premise: we don't kill because we want to – we kill because our tools don't give us a better option. Police officers, soldiers, and individuals defending themselves often face binary choices: lethal force or no force. Smith argues that the real challenge isn't ethics, politics, or even crime itself – it's the lack of viable alternatives to firearms.

The TASER, once seen as a gimmick, is now a standard-issue tool for law enforcement worldwide. But even Smith admits it's not perfect – it works in many situations, but not all. His goal? Make non-lethal weapons more effective than guns, reliable enough that law enforcement, military, and civilians naturally default to them instead of pulling a potentially lethal trigger.

The book is also a window into Smith's leadership philosophy. It reveals his long-term thinking – he's not interested in just making "better gadgets." He wants to fundamentally reshape how societies approach conflict, safety, and law enforcement. Axon's push into AI-driven policing, drones, and real-time intelligence solutions all tie into this bigger vision.

Of course, it's easy to be skeptical. Can technology really solve something as deep-rooted as violence? Smith's vision depends on both rapid tech advancements and deep institutional buy-in, which is a steep hill to climb. But if nothing else, The End of Killing cements one thing: Rick Smith isn't just running a company – he's on a life mission. And as long as he's in charge, it's safe to say that Axon will continue pushing the boundaries of what public safety technology can do.

Axon CEO Rick Smith's tattoo was shown at a shareholder meeting.

Axon CEO Rick Smith's tattoo was shown at a shareholder meeting.

What started as a vision of reducing lethal force and a struggling invention has become a $50 billion ecosystem of law enforcement technology. The TASER was just the beginning. By integrating body cameras, cloud-based evidence management, AI-driven tools, and real-time analytics, Axon built a system that reshaped public safety.

The company's success wasn't inevitable. It's in fact super rare with this level of success after so many setbacks. Without a relentless founder and some strokes of luck – there wouldn't be an Axon today. The company fought through bankruptcies, regulatory hurdles, public skepticism, and lawsuits over and over again. Each setback forced innovation, pushing Axon beyond weapons and into the broader mission of making policing smarter, more accountable, and ultimately safer.

Rick Smith's original mission was to make bullets obsolete. Whether that vision becomes reality remains to be seen. But Axon's evolution – from a last-chance startup to a $50 billion force in public safety – proves one thing: the future of policing is being rewritten, and Axon is holding the pen.

Further reading: 10 Lessons from Rick Smith

• Speedwell Research (2024): This article draws extensively from Speedwell Research's 77-page report on Axon, which provides deep insights into the company's history, business model, product development, and financials.

• Quartr Pro: Earnings call transcripts, investor presentations, and financial data from Quartr Pro were referenced for details on Axon's business performance, competitive positioning, and product roadmap.

• Axon.com: The company's official website, including product specifications, provided direct insights into Axon's product ecosystem.

• Rick Smith's The End of Killing (2019): This book, written by Axon's CEO and founder, provides insight into the company's long-term vision and mission to make bullets obsolete.