Key Takeaways

  • Rick Smith started TASER in a Tucson garage in 1993 alongside inventor Jack Cover after two high school teammates died in a road rage shooting.
  • The business suffered through two failed consumer launches over seven years, accumulating $2 million in bank debt with a $500,000 personal guarantee.
  • A final $1 million friends-and-family investment funded a shift away from personal defense to police departments, which caused sales to accelerate.
  • Silicon Valley Bank nearly foreclosed on Smith before the company generated traction by selling to law enforcement.
  • TASER executed an IPO in late 2000 during the dot-com collapse because investment bankers wanted a business with physical products and verified revenue.

Seven Years of Dead Ends in Consumer Tech

Rick Smith started building non-lethal weapons because of a personal tragedy. In 1993, two of his high school football teammates were shot and killed during a road rage dispute. While studying in Europe, he watched classmates hesitate to visit the United States because of American gun violence. His reaction was practical: find a way to stop an attacker without taking a life.

He tracked down Jack Cover, the original inventor of the electrical stun weapon, by digging through patent filings. In a Tucson garage, Smith pieced together early prototypes with hardware store parts. He imagined giving civilians an alternative to firearms, comparing the goal to a science fiction weapon: “And the simple insight was if we had Captain Kirk's phaser, like people would choose not to kill other people because they'd have a more civilized way to stop somebody who's threatening them.” (play from 3:52)

The consumer market did not care. For seven straight years, the business went nowhere. Smith launched two separate consumer defense products, and both failed to gain traction. By 1999, the company was near bankruptcy. It owed Silicon Valley Bank $2 million, backed by a personal guarantee that put Smith at risk of financial ruin: “Well, you know, it would have been nice to figure that a couple years ago because we owe Silicon Valley Bank about $2 million. I have $500,000 and I'm on the hook. So, if we shut down, the bank has taken everything.” (play from 8:24)

Selling to Police and Surviving the Dot-Com Crash

With zero margin for error, Smith raised a final $1 million round from friends and family. That money funded a shift in strategy. Instead of marketing to regular citizens, Smith brought the hardware directly to law enforcement agencies.

“So after 7 years of struggling and failing we pivoted into the police market in late 99 and that's when the business took off,” (play from 7:12) Smith said. His reasoning was straightforward. If police officers would not trust the weapon during violent calls, everyday consumers would never believe it could protect their families. Police departments provided immediate feedback, high-stakes testing, and clear buying criteria. The product worked, and orders finally followed.

The timing seemed brutal. By late 2000, tech markets were imploding as the dot-com bubble popped. Investors were dumping cash-bleeding software companies with no earnings. Yet TASER found a path to Wall Street precisely because it avoided the internet bubble.

An investment bank attended a training demonstration and offered to underwrite an initial public offering. As Smith recalled: “And in late 2000 an investment bank came to one of our training events and they basically were like, 'Oh my gosh, you're not internet. You guys make a physical product. You have real revenue. We're taking you public.'” (play from 9:23) The company floated shares on public markets while speculative dot-coms vanished.

What to Do With This

Audit your customer list this week. If you are struggling to sell to consumers, look for an institutional buyer whose daily survival or job safety requires solving that exact problem. Sell to professional users who will test your product to destruction before you try marketing to the general public again.