Knightscope: We’re working ‘to fix’ injustices for security guards, CEO says

Knightscope CEO William Santana Li joins Yahoo Finance Live to discuss why retailers turning to robot security amid the rise in theft and labor costs, developing cutting-edge technology, and the outlook for robots.

Video Transcript

RACHELLE AKUFFO: Bringing out the bots. Home improvement retailer Lowe's rolling out Knightscope robots at locations in Philadelphia, this according to the Philadelphia Inquirer. And as we take a look at that, I mean, we're seeing retailers already facing pressure to cut down on both labor and theft by turning to robot security in hopes of solving both. But will robots be enough to turn the tide? Here with more is William Santana Li, Knightscope chairman and CEO. Thank you for joining me in this morning, William. So talk about this plan to really disrupt this $500 billion security industry.

WILLIAM SANTANA LI: Greetings from Silicon Valley. Thanks for having us. It's an exciting time to be developing brand new cutting edge technologies and taking all the crazy stuff that Hollywood had been streaming out and actually putting it in the real world. So Knightscope, we build autonomous security robots, as you mentioned. And these are intended to not only deter negative behavior, but just physically being there, you can stop a lot of nonsense from happening, but to give officers and guards really smart eyes, ears, and their voice on the ground in multiple locations at the same time.

And the math problem the country has is basically there is about 2 and 1/2 million law enforcement officers and security guards. They're running 24/7. So at any given time, there's only maybe 600,000+ humans trying to secure 334 million Americans across 50 states with the technological equivalent of a number two pencil and a notepad. And that is the injustice that we're working to fix, to give those brave women and men in uniform new tools so they can do their jobs much, much more effectively.

RACHELLE AKUFFO: So, William, obviously, this will end up being a deterrent if you do see it there, assuming you know actually what it is. I mean, will there be some sort of post-it around so that people know that that's what this is, it would actually deter them and be more of a security provider there?

WILLIAM SANTANA LI: Yes, that actually is right on point. One of our clients, who just renewed for the sixth year, did exactly that. If you put security or police on the side of it, it might greet you. It might make a sound. I mean, it's 5 foot tall, 400 pounds. It's roaming around on its own, fully autonomous, level five, hands off, not remote control. The strobe light's going. You have no idea what it does. You're probably going to think about maybe stealing the car down the street and not there, and that's literally what we've been seeing with our clients. If you go to Knightscope.com/crime, you can see the long, long list of positive things these machines have already done for society.

RACHELLE AKUFFO: So I want to ask about why you're starting with Lowe's in terms of having it in this big retail space and why Philadelphia. Why was that the test ground for this?

WILLIAM SANTANA LI: Oh, it's not the test ground. We've been operating now since 2015. We've done more than 2 million hours across the country and in full operation. Our clients are anyone from not just Lowe's, but ABM, a big facilities management firm that's publicly traded. We also announced PG&E doubled their order earlier-- later last year to better secure the national grid.

Our clients are also commercial real estate, corporate campuses, law enforcement agencies, residential, parking structures, schools. Basically anywhere you might see an officer indoors or outdoors or guard, typically outdoors, is certainly an opportunity for Knightscope, and as well as numerous casinos and hospitals.

RACHELLE AKUFFO: So who do you see as your biggest competitors in this space?

WILLIAM SANTANA LI: We're certainly first mover advantage. We're scaled across the country, operating across multiple time zones. I think we have an opportunity to work together. Instead of looking at competition, our long-term, slightly outrageous goal is to see if we can make the US the safest country in the world.

And we applaud anyone and everyone that's working to do that, and not just the humans, but all the technology companies that have been working behind the scenes to improve AI, more compute capability, folks in the marketplace, security integrators, guarding companies. It's going to take a whole lot to turn around the negative $2 trillion impact of crime and terrorism on the US every single year. It's a hidden tax we all pay in blood, tears, and treasure, and it has to stop.

RACHELLE AKUFFO: Now I do want to ask you, because people might be wondering, what sort of data are these robots collecting, or are they sort of just assessing risk, what sort of data is being collected? And where does it go? How is it being used?

WILLIAM SANTANA LI: Well, since we work for Big Brother, and the robots are coming to kill everyone and take everyone out-- I'm just kidding. The data is owned by our clients. That's anything security related. And anything, let's say, machine related or health of the machine is owned by Knightscope. And contractually, that makes it pretty clear where the data resides. And it's intended solely to be used for public safety, and it's not to be resold and used in any other manner other than times improving our algorithms.

RACHELLE AKUFFO: And in terms of what we see with retail theft, obviously, shoplifting huge. We saw it picking up during the pandemic. How much of a dent do you think these sorts of robots could make in that space?

WILLIAM SANTANA LI: It used to be, I think, shrink, stuff leaving the building. Either the patron took it or the employees took it. I don't know. I think it was like 1% to 3% of revenue. Not profit, but revenue. I think, now, some of the clients we've been speaking to is 4%, 5%, 6%, 8% of revenue literally walking out the door.

And I think a combination of software, hardware, and humans, again, to give the officers and guards new, what we call superhuman capabilities at their fingertips is-- will make a huge impact on not just on shrink, but you have to think about the patrons, the customers coming in, wanting to feel safe.

And I don't believe the founders of our country ever expected us to build a society where going to school, going to work, or going shopping literally came with the risk of being shot or killed. And that's why we're so passionate about making a big difference here and trying to get both the public and the private sector to work together to reimagine public safety.

RACHELLE AKUFFO: It certainly has been a while since we reimagined public safety. So an interesting space here, indeed. William Santana Li, Knightscope chairman and CEO, thank you for your time this morning.