Edited for length and clarity.
Brian Kenny: In the split second that it takes to fire a handgun, three things occur: a visible flash when an explosive charge is ignited to propel the bullet from the chamber of the weapon, a muzzle blast that generates an impulse sound wave, and a shockwave that occurs as the bullet moves through the air at 1,700 miles per hour. At 140 decibels, the sound wave generated by a typical handgun is louder than a military jet. In the quiet of night, it can be heard up to a distance of two miles. Today, we'll hear from Professor Mitchell Weiss about his case entitled, ShotSpotter. I'm your host, Brian Kenny, and you're listening to Cold Call.
Mitch Weiss is in the Entrepreneurial Management Unit at Harvard Business School, and he created and teaches the school's course on public entrepreneurship. Prior to joining HBS in 2014, Mitch was the chief of staff to Boston's legendary mayor Thomas Menino. You probably called him Tom, is that right?
Mitch Weiss: Mayor, all the way.
Kenny: I'm sure that with the role you had before, you bring a lot in terms of understanding of how municipalities work and how police departments work. Set up the case for us. Who's the protagonist and what's going on?
Weiss: The case starts with Ralph Clark. It's been about 30 minutes since gunfire erupted in an Oakland neighborhood, actually about 30 minutes from where he lives. The gunfire is picked up by sensors that ShotSpotter, Inc., his company, has deployed in Oakland. They've been picked up by the sensors, analyzed, and confirmed as gunfire. The police departments, the social workers, others, have been notified that there's been gunfire in this neighborhood.
Ralph Clark is sitting there watching all these personnel who have showed up because his technology works, the technology of his company. He's feeling somewhat gratified by that, that people are being responded to, that a community is being responded to. But also on his mind are all the other requests he's been getting for ShotSpotter technology in the wake of mass shootings in schools, in the wake of terrorism. People are saying, "Isn't there more that ShotSpotter can do?"
He and (Vice President of Security Solutions) Damaune Journey, an HBS MBA, class of 2005, are wondering what should the company do? Should they extend the product in other markets to address these mass shootings as terrorism, or should they stay focused on serving urban markets?
Kenny: What prompted you to write this case? How did you hear about ShotSpotter?
Weiss: I had originally heard of ShotSpotter when I was in Boston, where it’s deployed. It's a technology that's deployed in 90 cities across the United States, many cities with highly concentrated instances of gunfire. Neighborhoods where there's unfortunately a prevalence of gunfire utilize that technology.
”In truth, if you look at the number of products that have been deployed in cities … that actually make a difference in people's lives, it's not that many these days. ShotSpotter is one of those”
I was keenly interested in writing a case on it for a couple reasons. One is, there's a lot of talk about smart cities these days, and smart cities is maybe a multibillion-dollar industry and on its way to becoming a multi, multi, billion-dollar industry. In truth, if you look at the number of products that have been deployed in cities, connected devices that actually make a difference in people's lives, it's not that many these days. ShotSpotter is one of those.
I thought it would be interesting to look at that, and as well, I’m keenly interested in the question of can [companies] move from selling to government to selling in adjacent industries ... This was a question that Ralph and Damaune were wrestling with.
Kenny: Before we go there, some of this case is ripped from the headlines. Gun violence is very much in people's consciousness, and we see it on the news every night. Can you give us the landscape of gun violence? How prevalent is it?
Weiss: I think there's three important things to know. One is that violent crime in this country is at a low from its peak in the 1990s. It's down from those moments, but still high, and acutely high if you compare us to the rest of the world. In 2015, there were something like 13,000 people killed and 27,000 injured by gunfire, if you don't include suicides. This is data gathered by the Gun Violence Archive. That problem becomes especially acute when you look in cities, and in certain neighborhoods where they are plagued by gun violence.
In addition to the data that we know, there's a lot of data we don't know. How much gunfire is there? ShotSpotter believes, based on their data and data other scholars have done, that maybe 20 percent of all gunfire is reported at all.
The question then becomes, what are the costs of that? Gun violence, we know its costs. We know the physical and emotional toll it takes on people injured, killed, and on their families. Gunshots themselves, even if they don't hit people, still lead to trauma in those neighborhoods, stress in the kids who live in those neighborhoods, and on that we don't have such a great handle on. The best data probably comes from ShotSpotter themselves.
Kenny: Talk a little bit about ShotSpotter. What's their business?
Weiss: ShotSpotter Flex is their main business, and essentially they are acoustic sensors that are deployed … basically above the ground, on buildings and on other fixtures. They sense gunfire. They're essentially able to discern gunfire from other kinds of noises by sensing the ambient audio in the neighborhoods and then, if they think it's gunfire, relaying that into the cloud where their algorithms can help differentiate whether it was gunfire, whether it was a car backfiring, whether it was fireworks, whether it was construction noise.
Then they're relayed to an incident response center based in Newark, California, at ShotSpotter's headquarters. There are trained experts who listen to the noise and see the wave forms, and confirm whether or not they were gunfire, and relay that to 911 dispatchers in those municipalities that have purchased the ShotSpotter Flex service. From there it's up to the cities to deploy personnel, etc., etc.
Kenny: How long does it take for all that to happen?
Weiss: It's a matter of seconds. I was there in the incident response center. To be honest, it's a bit haunting. It's like tuning into the gunfire epidemic in this country. I thought, Brian, it would be interesting if we could see if you can discern gunfire from other things, give a little test and see how this technology works.
I have a couple of clips here, and you have to tell me whether they're gunfire or not. (Plays recording.)
Kenny: I am going to say that's not gunfire.
Weiss: That is gunfire. We'll give you another try. (Plays recording.)
Kenny: That sounds like hammers on a roof or something.
Weiss: That's gunfire, too.
Kenny: Wow. I'm doing really badly.
Weiss: No, it's hard. It lets you see just how precise the technology is, and also how well trained their experts are. Okay, one last one. (Plays recording.)
Kenny: I've got to go with the law of averages and say that that's not gunfire, because the other two were.
Weiss: That's not gunfire. That's actually my daughter stepping on an Amazon packaging bubble. You can see how hard it is to pick that up, even outdoors. In the case, the company is thinking about moving indoors [and you can see] just how difficult it's going to be to discern gunfire from other noises.
Kenny: We've all been outside during the warm months and you hear some kind of a pop and you think it's got to be a firecracker, it couldn't be a gun. I would imagine in an urban setting that takes on an entirely different complexion.
Weiss: It does, and the issue there is that even if residents are confident that it is gunfire, they're in many cases unlikely to call the police about it. There's a fear of retribution. They think, "I don't want to be the one to call the police." Because in some cases there's tension that exists in those neighborhoods between the police and the neighborhoods, some residents don't want to invite the police into the neighborhood at all. This is where ShotSpotter comes in.
This is why Ralph Clark is so committed to the mission of his company in terms of de-normalizing gun violence, making sure that even when these gunshots aren't reported they're at least sensed, and that authorities can respond and can try to build trust with the communities they're in.
Kenny: The police like it. Based on the case, it gets great results.
Weiss: Overwhelmingly positive response by the police departments who use it. Many of the cities where it's been deployed have seen significant reductions in gunfire over the first couple of years. A couple of caveats to that. First of all, Ralph would be the first to tell you that you can't say it's because of ShotSpotter. ShotSpotter is one tool in a toolkit of strategies that law enforcement can use with the community to try to bring gun violence down. Knowing of it, being aware of it, responding to it, being proactive about it, is key.
The second point is that it's not just about knowing about it, it's also about doing something about it. While most cities have seen overwhelming success in it, a handful of times cities have said, "It's not for us." Usually, I think in ShotSpotter's estimation, it's because it hasn't been part of a comprehensive crime reduction strategy, community policing strategy, and it won't work on its own.
Kenny: For ShotSpotter, there were challenges they encountered when trying to figure out the sales process behind this, and the procurement process on the customer side.
Weiss: In the early going, I think it was harder than Ralph thought it would be. He had experience in a number of technology firms, but not really ones that had such a focus on selling to cities. Over time though, they developed an expertise navigating the municipal sales process. I think there's a number of real challenges to those processes, and a number of myths of impossibility. They're not impossible to sell into, and if you've got a product that is delivering real value to cities, and you have some sense for how the process works, you can be fairly successful.
They built a core competency inside the firm to help figure out, where are we going to get the money? Which outside partners? What federal funding in order to get the buy-in from the mayor, from the city councilor, the police chiefs? Actually, also to build mindshare. They developed their national gunfire index to build mindshare each year about the problem. They got pretty good at selling to cities. I think it's a good message to companies that want to sell to cities that you can get good at it.
Then Ralph, because he's ambitious and interested to see how his technology can be used elsewhere, starts thinking, “Now that we know how to do this, where else should we or could we be selling this technology?”
Kenny: There's a market, clearly, for this, but there are some challenges that they encounter in terms of … having it work indoors.
Weiss: As Ralph is thinking about what is next for the company, he's got two things on his mind. He's got horrible tragedies like Virginia Tech, like the school shooting at Sandy Hook. He also has the sense that, at the end of the day, there's maybe fifteen-hundred public safety agencies he can sell ShotSpotter Flex to, and then that's their market. He is thinking about where do we go from here, and how do we respond to these horrible tragedies?
He and his team thought that we can do a couple things. We can sell the outdoor sensors to other places that could make use of outdoor gunshot detection, like universities that have large campuses and want to know what's happening outside their buildings. Then they thought, we can also perhaps sell them to be used indoors--inside those university buildings, inside other school buildings, inside other private real estate assets like shopping malls and movie theaters, inside public assets like airports and train stations.
”Gunfire sounds much different outdoors than it does indoors. It's much more inconsistent”
That's where some of the technology gets a little bit interesting. Gunfire sounds much different outdoors than it does indoors. It's much more inconsistent, it turns out, indoors than it is outdoors, depending on the architecture and the flooring and the ceiling and the heights and everything else. In addition, there's an aesthetic interest for people who manage real estate. They want to know what things are going to look like. They had to make these ShotSpotter sensors smaller and better looking if they're going to deploy them indoors.
There was a question around cost, because the truth is, when you buy ShotSpotter Flex system to work in an urban environment where there's lots of gunfire, you're going to end up using it. There's also a question of what are you going to price these things at, how are you going to charge for them, and they're interested to get the cost of the sensor down.
Kenny: They're not the only player in this space, right? There are other people that do what they do, and then there's ancillary types of services.
Weiss: Right, so that's the other big shift. They haven't experienced almost any kind of competition in the outdoor urban gunfire sensing business. Basically, if you want outdoor gunshot detection for your city, ShotSpotter is the company you're going to go to. Indoors, it's a very different story. There have been a number of companies trying to sell indoor gunshot detection, and trying to sell security products more broadly.
Kenny: You've discussed the case with your MBA students?
Weiss: We actually had Ralph and Damaune in class in my MBA course, Public Entrepreneurship, in the fall. It was, as you can imagine based on the questions and the topic, just a riveting discussion.
Kenny: You mentioned earlier that there are lessons to be learned here for any businessperson that's listening to this podcast. Could you cover those at a high level as we finish up.
Weiss: I think the one thing is for businesses that want to sell in general, but especially to organizations that have long sales cycles, lots of barriers inside to getting stuff through. You have to make sure the customer value proposition is truly, truly, truly there. A lot of times, people blame slow sales cycles in government as the [reason] they can't get their product into government. I think oftentimes it's because the thing isn't existentially needed.
A lesson from this case is that it turns out that urban gunfire detection is existentially needed, unfortunately, given the crisis of gun violence and gunfire we have in this country. The other lesson here is around moving to adjacencies. There's been, I think, a good amount of scholarship on how you move from being in one business to being in another business, and I think one of the important things to realize is that for a company like ShotSpotter, to go from selling to cities to selling to shopping malls or universities, is not one adjacency. It's probably two or three or four adjacencies. It's going to be a different product, it's going to be a different market, and realizing just how hard each of those adjacencies is going to be.
What Ralph and what Damaune and the company do is end up experimenting each step of the way as they move from one adjacency to the next, and try not to leap at the whole thing all at once. I think it's a valuable lesson. Moving from one thing to the next is like doing six things all at once, and you need to test each step along the way.
Kenny: Great insights. Mitch, thanks so much for joining us today.
Weiss: Thanks for having me.
Kenny: You can find the ShotSpotter case, along with thousands of others, in the HBR case collection at HBR.org. I'm your host, Brian Kenny, and you've been listening to Cold Call, the official podcast of Harvard Business School.