About this episode

WhiteFox Defense Technologies is a drone mitigation technology company founded by Luke Fox. He was building an organization to manufacture drones in an affordable way for research and humanitarian efforts. In doing so, he started to see that drones were being sought out by people and organizations that had incredibly sketchy purposes for the use of drones.

From those observations, he developed a device that is no larger than a brick. This device is capable of identifying drones, assessing their threat, and then engaging them. The device will immediately force the drone to land, it can crash it, or it can send it back. I've seen the technology in person, and it is unbelievable!

Luke is a global leader in drone airspace security and pioneer of the safe integration of drones into society, WhiteFox products securely manage drones in sensitive airspace worldwide. While the technology Luke and his team have produced is impressive, it is Luke's personal story of triumph that is far more impressive. This is Luke Fox's startup story.

In this episode, you'll hear

  • About Luke's upbringing surrounded by siblings with both mental and physical disabilities. His responsibility and purpose were to help, which taught him to think of others first.
  • How his tendency to hide away and 'tinker' with things helped him discover his knack for technology.
  • His home responsibilities, entering foster care, and how it led him to fall so far behind that, he dropped out of high school.
  • Getting his GED, entering Community College at age 16, and receiving his first A, proved to him that he was intelligent enough to rebuild his life.
  • His drive to help people had him wanting to enter law enforcement, though his aptitude for technology had him thinking about combining the two.
  • His first organization, a non-profit, used technology to help fight against human trafficking.
  • Wanting to use the new drone technology for better law enforcement surveillance, humanitarian aid, and research led him to develop a more affordable drone; and start Drones for Change.
  • Drones for Change shifted into WhiteFox Defense Technologies as he sought to develop his universal drone controller. He hoped to give law enforcement tighter control over the air space with counter-drone technology.
  • At the time counter-drone technology was illegal, so Luke had to work to get Congress to pass laws to create a market for his technology
  • How his difficult upbringing has helped him strive for the success of his company as he wants it to be. He won't compromise for something lesser.

"No matter where you come from, the traumas you've endured and the mistakes that you have made do not have to define you or defeat you. It is because of those experiences that you are capable of seeing the world in a way that nobody else can." Luke Fox, WhiteFox Defense Technologies

Resources from this episode

WhiteFox Defense Technologies: https://www.whitefoxdefense.com/
Luke on LinkedIn: https://www.linkedin.com/in/lukerfox/
Luke on Twitter: https://twitter.com/lukerfox?lang=en
The Startup Story LIVE - Virtual Conference: http://startupstorylive.com
The Startup Story on LinkedIn: https://www.linkedin.com/company/thestartupstory
The Startup Story is now on YouTube: https://www.youtube.com/jamesmckinney
The Startup Story on Instagram: https://www.instagram.com/thestartupstory

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Special Guest: Luke Fox.

Episode transcript

The Startup Story - Luke Fox

Luke Fox: This is Luke Fox, Founder and CEO of WhiteFox Defense Technologies, and this is MY startup story.

Every wildfire began with a spark. Every superhero has an origin story. And every single startup has a moment that they point to as their beginning. And every founder has a purpose that drove them in the midst of all obstacles. THAT is The Startup Story.

James McKinney: Welcome to another episode of The Startup Story. All right everyone, next week is our epic two day livestream event and if you've been listening to The Startup Story for the past few months then you are very much aware of Startup Story Live presented by Entrepreneur Magazine. Yep, it is next week May 14th and 15th. For all of you who might be new to the show, let me bring you up to speed on what Startup Story Live is all about. Startup Story Live presented by Entrepreneur Magazine is an epic, two day livestream event with over 14 hours of incredible content to help you re-engineer and rethink about the way you look at your business. I know how much the shutdown to coronavirus has impacted The Startup Story, so I feel the challenge you're dealing with.

For that reason, I reached out to so many in my founder network that have built successful companies and asked them to join us for Startup Story Live to give us practical and tactical advice that we can take into our business. I'm not talking about self-proclaimed thought leaders, I'm talking about real founders who have built real businesses providing real tactics direct to you, and it's 100% free to register and attend the two day livestream event. You simply need to go to startupstorylive.com to claim your free two day pass. This is about entrepreneurs supporting other entrepreneurs.

Look, here's a quick snapshot of just two of the 13 founders who will be live with us to help us strengthen our business. We have Jamie Schmidt, the founder of Schmidt Naturals. Jamie attended a local recreational class on how to make her own shampoo and deodorant, and in just seven years she sold her company to Unilever for hundreds of millions of dollars. And she started her business during the greatest recession the US has ever seen. You have to believe she's going to be bringing some real tactics for us to navigate this current crisis moment.

We have Matthew Arevalo, the cofounder of Loot Crate. Loot Crate was created out of a local hackathon in southern California and within three years of that hackathon, it grew to $100 million in revenue. In their prime, they were shipping close to 500,000 boxes a month. Matthew believes that any business, and I mean any business, can capitalize on a membership subscription revenue model and he's going to share how to bring that model into your business. Tell me you would not have liked to have had that revenue stream during the quarantine? Of course you would.

And that is the type of real practical and tactical advice that will be provided at Startup Story Live next week on May 14th and 15th. Look, there are 13 unbelievable founders that will be joining us next week and you can check all of them out at startupstorylive.com. It is free to register and every founder who is joining us for the livestream event accepted the invitation because they want to see your business become stronger in response to this virus crisis. Do not miss out on this unbelievable opportunity to learn from some incredibly brilliant entrepreneurs. Register for free today at startupstorylive.com. All right, now let's jump into this week's episode.

Our guest this week is Luke Fox, founder of WhiteFox Defense Technologies. Luke is actually one of the founders that will be at Startup Story Live next week. WhiteFox is a drone mitigation technology company that Luke founded as he was building an organization to manufacture drones in an affordable way for research and humanitarian efforts. Yet in doing so, he started to see that drones were being sought out by people and organizations that had incredibly sketchy purposes for the drones. From those observations, he developed a device that is no larger than a brick that can assess and engage a drone based on its threat level. This device, the one that's no larger than a brick, is capable of identifying drones, assessing their threat, and then engaging them in one of three ways. The device will immediately force the drone to land, it can crash it, or it can send it back to where it came from. I've seen the technology in person and it's unbelievable.

Look, I can geek out about the technology for quite a while because I love drones and I love what Luke is doing, and the story is unbelievable. But the technology is impressive, but what's even more impressive is that Luke's personal story of triumph is so much more impressive than the technology. But I don't need to sit here and tell you about it. Let's jump into this week's episode.

Luke Fox: Aim it to the word entrepreneurship. I've until very recently connected with that term. Prior to that, there's like entrepreneurship club at the college I want to, Cal Poly, and for whatever reason I never associated oh I should be part of that club. The funny thing is somebody is like hey, you're running a nonprofit and you've had one successful startup and you're transitioning into another. Why aren't you part of the entrepreneurship club? Well, I'm not an entrepreneur. Looking back, I associated entrepreneur with like these tech figureheads, and I was like well that's not me. I'm just doing my part in the world and there was a need and I'm helping to fill it. So it's interesting. So until recently just because entrepreneur is something I've had to embrace more identified with it. So definitely did not grow up thinking I want to be an entrepreneur.

James McKinney: As a child though, I mean a lot of our influence comes from our upbringing. What was your upbringing and how did it flavor or steer your future? Let's just walk through kind of the early days through high school.

Luke Fox: Yeah, absolutely. So for me I consider myself very blessed in my upbringing in that I had a unique upbringing. Very unique filled with a lot of great things but also a lot of trauma and a lot of things that made me what I am. Fast forward today, I see how all those things that had the opportunity to break me made me stronger and gives me a different perspective. So I learned from a very young age resiliency. Looking back, I recognize that when I was young I grew up in a home where pretty much all my siblings were mentally or physically disabled, and I learned from an early age that life wasn't about me. I was told by my mother I was brought into this world to help take care of them, and that's what my, that's just how I grew up was thinking my job and responsibility is to take care of my siblings, and to help them survive.

So in doing so, the funny thing is even now it's hard to recognize what wasn't normal, but especially back then I just thought that was normal. I grew up with this ethos of I'm here to help people and help serve them, and in doing so there also there was a lot of this constant fear growing up. My mother was a paranoid schizophrenic, had a lot of other mental health challenges. And so there was this constant like paranoia. There were people that were watching us, people that were trying to heard us, people breaking in the house. So I learned from this very young age that my role in life was to help people and to protect people, and to create this sense of safety and security. From my earliest memories going forward, it was always what can I do that uniquely can help people who need help.

James McKinney: Where was your dad in all this? Because you've only mentioned your mom so far, so when you talk about the disruption of your childhood what was the story with your dad?

Luke Fox: Yeah, so I was quite literally intentionally brought into the world to help take care of my siblings. I was born through artificial insemination.

James McKinney: Oh, okay.

Luke Fox: So it was very intentional.

James McKinney: That is a super unique part of the story. So what-

Luke Fox: Technology has been part of my life from the beginning.

James McKinney: Part of your life from the beginning. Again, back to that origin story right? So as you were growing up and this idea of just you're here to help with your siblings and this level of fear that kind of just really hovered among your childhood, there's a lot of things that we can do with that as a kid. We all, we may not have your story per se but we all have a story that has layers of complexity to it. As you were coming to the end of high school, which in a family dynamic the idea is this child coming out of high school is leaving the house. What was your story as you came to the end of high school? What did you want to do? How did you feel empowered or hindered to do so in the pursuit of whatever that was for you based on your family dynamic?

Luke Fox: High school years were a little difficult I have to say. So when I was about 15 I was put in the foster care system due to the mental, emotional, and sexual/physical abuse from my mother and with me and my siblings. So that eventually led me into going to foster care and going to foster care realized that I failed school so much in the years leading up to that, that I was so far behind that it came to the point where what's the point of continuing going to school. So dropped out and was able to take a test to get my certificate. So my high school diploma technically, officially. From there then when I was 16 registered for community college. I really wanted to, I'd grown up thinking that I was dumb, that I really didn't know that much. Everything around me was kind of telling me that and I was literally failing. So in doing so, going into community college I thought this is my chance, I'm finally free from the chaos that I grew up in. I now have a chance to kind of reclaim my identity and to prove to myself that I can get an A. Getting that first A it was like a drug. It was so exciting, like wow, okay I can do this. I passed that first test, it was wow, just incredible. So then from there, I'm going to just soar through and study, and work hard and end up with a high GPA coming out of community college. I was like okay, I did it. Then once I proved that to myself, then I started slacking because there were so many other things in life.

James McKinney: Like okay, I know I can do it, next.

Luke Fox: Exactly, that's exactly it because it was like college is important and has a lot of value, but there were so many other things that I wanted to pursue.

James McKinney: What were those things? And again I want to frame up the things that were… because now we're talking you were probably what 18?

Luke Fox: Yeah, 17.

James McKinney: Yeah, 17 or 18. A few community college courses under your belt. You've proved that you are a very intelligent person.

Luke Fox: Well at least I know how to make the system work for me.

James McKinney: Correct, yeah there you go, exactly. What were the things on your mind as to what you wanted to do now?

Luke Fox: Yeah. So my passion, like I never planned to be an entrepreneur. That was never the plan. It was just I believed that I had a duty that if there was something that needed to be done, something that I remember just hearing as a small child from I think some sermon or something, if not me then who, if not now then when. It's something that stuck with me because when I was 17 one of the things that I really wanted to pursue was how can I help people. I wanted to go into like law enforcement or security or something like that helping people, combined with I had a knack for electronics and technology, and spent a lot of my childhood hiding away tinkering and playing with things, breaking things. That scar on my hand is from a robot that I built with razor blades.

James McKinney: A robot built out of razor blades?

Luke Fox: Yeah, razor blades and popsicle sticks and have the scars to prove it, literally. But I knew that I had this knack for technology and wanting to help people so I thought I wanted to go into cybercrime or somehow find the ways to bridge the gap of the technology that people use to hurt people combined with the ways that we can use that technology to help people. So for me that was first done when I was 17. I started to learn more and more about human trafficking and labor trafficking, sex trafficking, internally as well as domestically. I saw that it was something that was very much misunderstood in a lot of ways. There's not a lot of focus on how can we really take an analytical approach and use technology to help the people who've been hurt, especially by technology. So started to get together with some people, and we eventually started an organization to help human trafficking victims and to help identify them using technology and using the technology that people were using to traffic them.

James McKinney: I want to unpack that. The reason I want to unpack that is in January was Human Trafficking Awareness month and we had Destiny Rescue as our sponsor for the month, and we told Tony Kerwin's story and we unpacked really how he started Destiny Rescue and how they've been saving I think last year was over 5,000 people out of human trafficking. But I never would have pictured a technology play inside of this. So can we spend a few minutes talking about how you saw technology helping within that? Because it is something that my listeners are very well aware of because we spent January talking about it. But how were you leveraging technology for that?

Luke Fox: The overall, the broad spectrum of services that we provided ranged from safe houses to emergency advocacy when victims were identified, to legal advocacy, legislative advocacy, so across the board. But the key area that was my passion of it was how can we use this technology when people are exploiting people using technology? So very specifically that's through areas like the Dark Web. There's all these incredible appearances of barriers to technology. So whether it's the dark web, whether it's bitcoin or other crypto currencies, whether you're using technology to enhance surveillance, especially pre investigative surveillance. So trying to leverage as much as we can rather than the traditional law enforcement approach to crime, because human trafficking is when you take the traditional law enforcement approach to it, you can end up more often than not re-traumatizing the victim but also misidentifying victims, or not identifying them at all as potential victims and putting them in the bucket of illegal immigrants in terms of labor trafficking and/or sex trafficking as well as prostitutes or others on the sex trafficking side. So how can we use technology to build that trail to identify and separate out those victims from the perpetrators?

James McKinney: Is that an organization that you are still operating and working with or did that close shop and you've move onto something? What is the life cycle of that?

Luke Fox: Yeah. I have to be sensitive with some of those descriptions of what we did and what that looks like, largely because the organization is still running which is actually one of the things I'm most proud of in my life is that I was very intentionally insure that organization and that nonprofit, that it was not about me and that it wasn't about any single person that was a part of it because we had a lot of very passionate people that were a part of it, to insure that any one of us could step away and the organization would be able to continue to thrive.

It's a lot harder said than done and that's something that I think about with anything I pursue, so that's something that is important to me because it's easy to, as it becomes part of your own identity, to make your identity not part of it. So to this day the nonprofit still continues and is thriving.

James McKinney: Awesome. So from that, let's start putting some timestamps on it because you've accomplished so much as a young adult and now adult. You've accomplished so much in your life. What years were you building that?

Luke Fox: So that started when I was 17. The funny thing is nobody ever worked with me knew I was underage, and I didn't think it was a problem until I turned 18 and then people were like oh boy, but that's a separate story. So from 17 I did that for about three years.

James McKinney: Okay. So at age 20 now, you've built an organization that can sustain without you. One, what was the reason for wanting to move onto something else, and then what was that next step?

Luke Fox: Yeah. So part of the focus on the human trafficking side was also looking at how we could use drone technology to potentially provide for lower cost surveillance.

James McKinney: What year was that? Because I think when we think drones, I think a lot of people don't understand really when drones became for the general consumer versus the commercial side of drones. So what year was this?

Luke Fox: So this was about 2012 timeframe.

James McKinney: And where was the drone space at that point? Was it most of it commercial use or could consumers get them in 2012?

Luke Fox: It was kind of neither. So it was very much centered around most drones were military and high performance commercial, and then there was this small segment of DIY drones, do it yourself drones, as that emerged from the RC model aircraft community. And then there were very few drones that were commercially available to consumers, but they lacked… they were very much toys.

James McKinney: So for my listeners, the framework of where you're about to enter the drone story, incredibly early on. From a consumer perspective we can think of the $80 drones on Amazon to the $2,500 drone that we can get from VJI. So I mean from a listener perspective I want to frame up that you were very early on in this space, especially at 20 years old too.

Luke Fox: Yeah, and that's one thing that when people ask oh, how do I get into XYZ, it's like you've just got to find something you're passionate about and pursue it, and like make that your niche.

James McKinney: Why was this something you were interested in? Because again it wasn't mainstream at the time, so why did this pique your interest, and how did you become aware of drone technology?

Luke Fox: We've got to go back to the Red Woods, California Red Woods for that. So I was working with some friends up in the Red Woods, they were scientists up there that were studying the world's tallest, largest trees. Worked with some amazing people doing that and we were looking at how could we do this better, safer, instead of having to send somebody out for a week, a week and a half into the deep bush of the Red Woods. How can we launch a drone and have it collect the imagery we need to analyze the crown spread of the tree and measure the tree from ground to the crown, and then return home within an hour? And instead of having to put someone's life at risk going out there. So in doing so, we said obviously drones. Well, actually not so obvious. We were using manned aircraft which is extremely expensive, doing LIDAR imaging from manned aircraft. So looking at that, how can we do that better, faster, cheaper, safer? Drone technology takes the man out and we just fly the drone. Problem is drones were really, really expensive back then so we were looking at a drone and it cost about $500,000.

James McKinney: Wow.

Luke Fox: Yeah, so very, very expensive.

James McKinney: It's amazing to think that hearing that number just eight years ago to where we are today, that's crazy. Crazy.

Luke Fox: And so we said that's way outside of our budget. There's no grant money that can support that. So one of the things that it's been a blessing and a curse in my life is, and it goes back to I think really realizing that I and no one else really knows the potential that I or anyone else has, especially because everybody told me I was going to go to jail. Coming from a single mother household that was abusive, going to foster care system, I had a very clear path and as soon as I realized that actually I can divert from that path. Once you divert from that very narrow path, it's like the world's your oyster and you're too stupid to know what you can't do. So you're like let's make a drone.

So spent about six to twelve months figuring out how can we make a drone that can do everything that we need it to do. And at the end of that we had a drone that flew 100 miles fully autonomously and created a pseudo LIDAR sensor with a cheap camera that we got from Walmart, and it worked beautifully. It did exactly what we needed to do. We had created this high performance, highly affordable drone that cost less than $500 to make, so 1000% cost reduction. People started to hear about it, and they're like hey, because we started posting on scientific forums and people started to hear about it. They said, "Oh, I need this, I want this." I started to think, going back to that safety and security and helping people, started to think how can we use this technology to help people?

Especially with technology back then, like you said drone and everybody thought drones dropping bombs on people. However you feel about that, there's still a lot of value that turns outside of that. So had this vision of let's take this high performance, highly affordable drone technology that we created and make it available to people who are doing good work in the world. So humanitarian aid, researchers, scientists, nonprofits, and democratize this technology that's limited to very high end, commercial use or military.

In doing so, we created a company Drones for Change.

James McKinney: Now we're in probably what, 2013 or 2014 at this time?

Luke Fox: Yeah, 2013, yeah around then. And the focus was never lets create a company, it was like we need to create a company to be able to get this to people, sell it. It wasn't like I want to start a company.

James McKinney: But again, just in the name itself, the vision was drones for change. It wasn't just I want to make drones.

Luke Fox: Yes.

James McKinney: You had a very specific purpose and vision for what the use of these are.

Luke Fox: Precisely. You get the pun too also, right?

James McKinney: Yes.

Luke Fox: Highly affordable too. I still am very proud of that and most people just roll their eyes, but I'm very proud of that. It's still pun.

James McKinney: I love it, I love it.

Luke Fox: Had these drones. We're selling them for around $500. Again, just ridiculously priced. This is the first sign that I was not trying to be an entrepreneur because I wasn't trying to make money, and it was like, "Let's cover our costs." Didn't truly appreciate cover our costs and our time, so that we can have like food, but not like let's make something big. I just wanted to get the technology out there. I love what drones enabled us to do and I wanted to share it with the world. Turns out that the majority of the world that wanted the technology were really sketchy people.

James McKinney: Before we continue on with Luke's incredible startup story, I want to expand a bit more about the incredible opportunity that you have with Startupstorylive.com. Many times I hear from listeners about how fortunate I am to sit with these incredible founders, how I get to pick their brain and learn directly from them. And I'm not going to lie, I am fortunate. But that is exactly what Startup Story Live will provide for you. Every single founder will be live and there will be a Q&A session with each of them. You get to sit with founders like Luke Fox from this episode. You can engage with him direct, referencing something you want to talk to him about from his episode. We're going to have Jason McCann of VariDesk, now rebranded as Vari. We're going to have Jamie Schmidt of Schmidt Naturals which we talked about at the top of the episode, sold to Unilever for hundreds of millions. We're going to have Christina Stembel from Farm Girl Flowers, you might recognize her from the Capital One commercial series. Matthew Arevalo, we talked about him at the top of the episode. Meghan Asha of FounderMade. Davis Smith at Cotopaxi and so many more. The list of founders that we have is unbelievable and you can see all of it at startupstorylive.com. This type of opportunity to get direct access to these amazing founders would cost close to $1000 in any live setting, but at startupstorylive.com it's absolutely free. Yes, the entire livestream and Q&A is free. You can get face to face with these founders for free. Do not let this opportunity pass you by. Visit startupstorylive.com for all the details and register today. All right, enough of the announcements. Let's get back to Luke's amazing episode.

Luke Fox: Turns out that the majority of the world that wanted the technology were really sketchy people, so it's this whole wonderful utopian vision I had for the technology turned out to be in high demand from people that had very likely criminal-

James McKinney: And were you seeing this upon the ecommerce site, when people were ordering it and you were saying okay wait this is not what I envisioned for this?

Luke Fox: Right, and the questions they would ask. Have you tested it dropping a kilogram payload, what happens, what's the flight time on that is. People buying it from parts of, or wanting to buy it from parts of the world that were in heavy conflict. We were an easy target of oh, these guys are probably just going to sell it to us and not care. But the money was never part of it. For me, again, we barely covered costs.

James McKinney: When did you start seeing this demographic?

Luke Fox: Instantly.

James McKinney: Instantly? Wow.

Luke Fox: Yes, very, very quickly. So then set out to how can we… we have a responsibility to ensure our technology is not used for harm, especially when the whole reason we're doing this and it's to get this technology in the hands of those that most desperately need it. And so we had this small percentage of people that were using it, like researchers from Texas, we had some people test migration patterns of animals in northern Africa, like these nice little stories, but then the vast majority was either very clearly somebody with criminal purposes or not. So we said okay, what can we do? Well, we can do background checks, we can try to figure out okay well it turns out doing a background check on someone in foreign country is next to impossible and also really expensive, so it's like okay that doesn't work.

So we started to realize this technology, no matter how much we sell this technology and if we only restrict it to people who can prove their identity, prove that they're affiliated with a nonprofit or university, we can go to all the lengths in the world and at the same time these people who want this technology are going to get their hands on it one way or another, through us or through someone else. Really that's where WhiteFox was birthed, was this realization that right now we could have accidently sold this drone to somebody and had it end up lodged in the side of the White House. Not only would that be horrible from a destruction stand point, but also it would destroy the commercial industry and all the potentials I saw. All these researchers and all these people I wanted to get access to the drone technology, I knew the public would go up in arms and say, "Oh my gosh, drones are running wild, we need to stop them."

So I wanted to preempt that and I knew the only way to preempt that was to create trust. So that we need to created trusted airspace where people can look in the sky, see a drone, and not panic, not be concerned, but also that they can look in the sky and if they have proper authority say this drone should not be near this airport, should not be near the White House, and therefore it needs to be landed. Really that's where WhiteFox birthed from website this notion of how can we prevent drones from doing bad things, but also enable society to be able to embrace the technology so it can be used for good.

James McKinney: So now we're in 2014. Drones are being made commercially, can get access to drones. If I'm not mistaken from a date perspective, didn't the FAA start this whole registering of drones and licensing of drones like 2016 or something?

Luke Fox: Yeah.

James McKinney: So from '14 to '16 there wasn't really any federal governance.

Luke Fox: It was the Wild West.

James McKinney: Absolutely. So as you're trying to solve this idea of insuring safety in the skies from a drone perspective, there are other makers of drones though. How are you able to solve something that is, at this point very mainstream with makers everywhere? As you are trying to frame up what WhiteFox would become, what were those first steps and how did you solve such a complex problem?

Luke Fox: So it started with a technology that we created at my company, Drones for Change, which was a universal controller so you could fly all your drones one controller. The intention was people flew different types of drones because there wasn't really any monopoly like we have today with DGI, s there were a lot of drones flown different ways, so we created this universal controller so people could fly drones safer, better, and easier. And in doing so we analyzed the protocols that were being used by drones and realized that we could use our universal controller, tweak it, make it a master controller.

So you could have for example law enforcement has this master controller and a drone is flying in a space that it shouldn't fly in, and they can simply land it, remove it from the airspace. But they can also do things like see where the pilot is so they can go and talk to the pilot. So we took this approach, this was before there was now it's called the counter drone industry, or counter UAS, CUAS. But this was before there was even an industry. This was just we're trying to solve a problem that nobody believes even exists.

I can't tell you how many people laughed in my face saying drones are military aircraft or they're toys. I said, "Well, maybe but we see convergence of the two because every single year that passes, we see drones..." We saw this first hand in the drones we were making growing in both capability and accessibility at an exponential rate combined. When you have capability and accessibility growing, that is the theory of Luke Fox is what creates an emerging technology which means a huge amount of potential. That huge amount of potential means that people are going to abuse it. And if it's abused then they kind of ruin it for everybody that wants to use it for good.

James McKinney: You're no older than 20 years old when things start to move from Drones for Change to what becomes WhiteFox. You're now moving from just a drone manufacturing business to something that is shifting into security which myself and all the listeners, if we were to think about security we're thinking old white men. And you are, again, no older than 20. What were some of the challenges breaking into that industry trying to solve something so complex where there's this narrative, like you said, it's either for military or a toy at such a young age?

Luke Fox: Yeah, it's actually interesting because it parallels my time in the human trafficking world. I never noticed it but people would tell me about it but I was at least half the age if not a third of the age of everyone around me, and the only male in most everything that I did, like most every meeting, like everything. And so it's funny because it runs parallel to fast forward where I'm half to a third the age of everyone around me, and again I'm too stupid enough to realize it that it just doesn't click with me. For me, it's like I have just as much reason to be here as everyone else. It still exists to this day. In a meeting and somebody will point out, "You realize you're literally probably a third of the age of everybody here." It's like okay, so what? We're all here to solve a problem, who cares how old we are, what ethnicity, what age we are.

James McKinney: Do you find that gives you credibility in this space because I think a lot of times we think of disruptive technology being created by younger founders versus the older? Or do you think, especially because you're in the Department of Defense, I mean you're in an area that has a very clear demographic as far as age and status, what have you. Do you find that you get a larger voice because of it or-

Luke Fox: No, no. My widow's peak helps. Well just people, they don't believe what age you are so they just assume I'm older, so and my ex is like, "Yeah, your widows peak helps you in some cases, right?"

James McKinney: That's awesome. So as you're trying-

Luke Fox: The widow's peak is from all the stress of the startup.

James McKinney: I get it, I get it. So here you are, 20 years old, WhiteFox is taking shape. You come up with this concept of a master controller. That is not where we stand today with WhiteFox and the master controller side, correct? As we see it here.

Luke Fox: It's just gotten bigger.

James McKinney: yeah, it's gotten bigger. Excellent. What were those steps? Because now you're in a space that I assume you're looking at okay how do I fund this? This is something bigger than just an order and manufacturer, one drone at a time. How are you looking at starting this and funding it?

Luke Fox: Sure. At a high level, the vision was very much centered around how can we enable this technology to be trusted. The initial solution as this master controller. But I also knew that we needed to be able to provide accountability for those who were, and transparency, for those who were operating properly. So we came up with this notion of license plate, like a secure license plate. So we'll get back to that later, but came up with this how do we manage the unauthorized, that's with this master controller and that lets us do it safely without having to shoot surface to air missiles, which are very expensive.

James McKinney: I can imagine.

Luke Fox: Yes, $2 million until recently brought down to now only using $140,000 surface to air missiles per $300 drone. That's a separate point. On the master controller for unauthorized, this secure digital identify for authorized. But beyond that, it's not just drones, it's how can we use this center of trust for all autonomous technology because every autonomous technology is going to face this. That's when I realized very early on that big visions are really exciting but sometimes they're actually not helpful when raising money. I still, like I still don't share the full vision of the company upfront because it's I think too much for people to swallow. It seems too outlandish. But it's interesting over the years, I've slowly rolled out more and more and shared more and more of the vision. The nice thing is it keeps inventors excited, current investors, but then as the appetite grows for that awareness. So I learned very quickly big picture is good, but focusing on the very here's what we're doing today and like just belief that we can do what we have today.

The funny thing is that going back, I sat down with some mentors, startup mentors. Here's all the numbers, pull it all out, they said, "All you need is $15,000." I said okay great, $15,000. I have no idea where I'm going to get that. That's more money than I have any awareness of that's a lot of money, and it seemed like this just ridiculously high number. Now, it's very different but where are we going to get this from? So I remember going and I sat in on this presentation about somebody talking about convertible notes, because I had no idea how to raise money. They're like, "Convertible notes, and this is how it works." So about three-fourths of the way through that presentation, I was like okay, I'm out of here, and going to go call somebody. So I actually called up my foster grandpa. Fast forward to today, and I was adopted and he's now my grandpa. He just passed away last week.

James McKinney: I'm sorry to hear that.

Luke Fox: Got to keep going for him. So he became our first investor.

James McKinney: That's awesome.

Luke Fox: He invested a little bit and I realized getting that initial traction was like the hardest thing, because then I went out and was like hey, does anybody know anybody with money? Because I need money. I've got this great idea, let me tell you about it.

James McKinney: I love that I have tens of thousands of listeners that have probably said those exact same words many times. Like great idea, anybody got money?

Luke Fox: Exactly, like anyone got money? And I was very fortunate, and this is one of the things that I learned early on that helped a lot is like okay, I'm a fourth of the way there how much money I need, and I had an investor who said, "You know what, I'm really excited about it. I want to invest but I only sign checks for $25,000." And I said, "Well I don't need $25,000, all I need is $15,000." He's like, "Well, it keeps the accountant happy." So I was like, "Okay fine, so we'll increase the amount we're raising." I was like if I'm going to do that, might as well increase it to more than that because then I can tell people I'm 75% there. So we did the math and okay, now we're raising $50,000. It's funny how quickly that $15,000 was turned into $50,000, turned into $200,000.

But the funny thing is go back like a year ago was the date that we raised $15 million. It's funny because going back to the advice I received which is all you need is $15,000, it's like well is it off by a factor of 1000, going back to the factors of 1000 sometimes it helps, sometimes it doesn't. It's incredible the bigger, this is a horrible analogy but it makes sense to me. Startups are like babies. The longer you go, the more you need to feed the baby. And the more that you feed the baby, the bigger the baby gets. The bigger the baby gets, the more you have to feed it and it just keeps growing. And then you have to keep raising more and more money, and it's like $15,000 it's hard to even empathize with myself of thinking how much money that was back then, which now we're raising, we've raised for $25 million.

James McKinney: That's incredible, that is incredible in such a short amount of time. In the initial raise when you were seeking $200,000 how many people did you pitch until you were able to accumulate that? If you were to guess.

Luke Fox: Over 100, yeah.

James McKinney: That's the reality pitching.

Luke Fox: Pitched to a lot of people. One of the things that I learned early on was I want to be that guy. I want to stick in people's minds. WhiteFox became my passion. That's why I stepped away from the nonprofit because it was my every single living, breathing moment. Nothing else in life mattered at all. Because of that, I became very quirky and very obsessive, and all I thought about and talked about was drones. That's all I could talk about. The best part of that is that inadvertently by doing that, I became the drone guy. So everybody knew, anybody who met me and they thought about drones, they thought of me. That's how we raised a lot of money.

James McKinney: That's great from branding perspective.

Luke Fox: Right, and so like every time something would happen in the news about drones I'd get 50 emails, all from different people forwarding me this. For a long time, it's like annoying. Obviously I've already seen this, I already know this or I was involved in this. But by them sending it to you, it's like wow it's very clear they think about drones, they think about me and I'm staying in their minds. So then when they think oh I have a little bit of extra liquidity and I want to invest in startup, wow this drone thing even though I thought it was like very nascent at the time, they might think it was nascent at the time or didn't think it was popular enough, now they start to see it everywhere, and they start to send it to me. It's like when you buy a specific car or something, you start to see it everywhere. I never did it intentionally but that just became how I raised a lot of the money.

James McKinney: So raising money is one thing, but we've had past guests that prove that raising money does not guarantee success. Chris Brownridge raised $4.5 million very quickly for GawkBox and in 2019 he had to close it down. We were able to interview him just a month after shutting it down so we really got to walk through that journey. And I remember from my own personal journey how painful that season is. Being that raising money doesn't ensure success, what things have you seen that you use mile markers as we are doing the right thing, we are making progress, we are getting traction, this has potential to succeed. What are those markers for you?

Luke Fox: Yeah. So raising money, it's easy to get in the startup world. It's easy to get hyper focused with raising money, but raising money isn't even necessarily a good thing. Raising money shows that you're not making money that you need to raise money. One thing is just continuing trying to remind yourself that yes, your job as a founder is to ensure that the mission and vision is spread and communicated, and the company has the money and needs to be able to do what it needs to do, and accomplish that vision.

But at the same time it's executing and ensuring that the company is executing towards the vision. The easiest metric to use in that is just revenue. Revenue is important. It's by far the easiest metric to say look, we're successful because we're making money. But you can measure things outside that. Like so we measure defensibility, how defensible is what we're doing, how difficult would it be for someone else to create, what barriers to entry can we put up, like what exclusive partnerships can we enter into. What type of partnerships can we publicly announce or customers that we can publicly announce that demonstrate our credibility and validate who we are and what we're doing.

It's been interesting being in emerging tech field in that again we started a counter drone company before there was counter drone an industry. One of the first, if not the first, company to specialize in this. It was difficult to figure out how do we communicate to investors that we're being successful when nobody has a budget for this. People laugh when we bring up the concept that this is a problem and it's going to be even more of a problem. What metrics can we use, and so that's building a strong team, a team that gives you strategic positioning in the broader industry that enables you to be able to share the vision and help really make the industry. So we talked about like the license plate for drones. That's something at the time was just this realization that we need but a lot of my mentors said that's ridiculous, tell anybody that and you'll never get a penny, which some of that maybe is true. But also we said well somebody made a joke this is going to take an act of congress. Like okay.

So we started working with the industry and started to gather coalitions and talk to people. Again, just always talking about here's our vision, here's what needs to be done. Fast forward and written into a congressional bill and passed. Now there's a whole concept of remote ID, which is now what it's called, a digital license plate for drones. So we worked with a lot of amazing people to do that and none of that was revenue generating. But what we did is we literally took an act of congress to create an industry. Not only that, but on the counter drone technology side, it was quote unquote illegal for anybody to be able to use counter drone technology.

James McKinney: Oh wow.

Luke Fox: So trying to raise money when your technology is illegal, and it literally takes an act of congress to change that. So we've been a part of two congressional bills, one in 2017 and again in 2018, to change federal law in the United States to create a market for our technology.

James McKinney: There's so many questions that spin from just that quick story of how you were able to move congress to establish a few bills. The first one I want to talk about is the idea of being first to market. Again, does not ensure success. Look at Friendstr, that didn't go anywhere, we got Facebook now, right? So just because you had a counter drone company before there was a counter drone need, before the congress had passed the bill does not ensure the success. What do you see internally, what do you see within yourself or within the organization that yeah you're first to market, but you're ahead of everyone else and you're not going to become… you're not going to lag in any way, shape, or form? How are you leading though that?

Luke Fox: We're very fortunate in that we, I guess taking it back. People talk about startups pivoting. I think pivoting is wonderful, you need to be agile. But the key is even though at WhiteFox our individual focus and prioritizations have shifted over the years and we've been agile, our core vision has always been the same. That north star that we follow has always been the same, and in doing so we don't get swayed by the breeze maybe as others might be in terms of people saying try to be responsive to the industry, we're helping to define what the industry is.

So our vision of a safe and secure air space in which drones can be surgically removed from the airspace and you can trust the identity of a drone in the airspace has been that guiding light. Whereas if you go back, the majority of counter drone systems are kinetic systems for example. So there's a drone in the sky and people don't like it there so they launch something at it, shoot something at it, launch an eagle at it, shoot it down with a surface to air missile. Or they're jamming, they just jam everything around. So we've never went that path even though it's very tempting to go down that path because that's not the reason we exist. We don't exist to sell product; we exist to solve a solution which we are betting is going to enable us to address a much larger market, even if that market didn't fully exist but now is exploding.

And so because we've kept that guiding light and created the technology that we knew people would need, even before they knew they needed it, and even when they realized that they needed a solution and they wanted a different solution, we stuck to our guns and created the technology that now today is helping to lead the world in how we look at counter drone technology and how we ensure drones are safely operating.

James McKinney: That's incredible. When you think about all that you have done, and I know our listeners are thinking holy smokes, the guy is 25, he's done this amazing things, he's at congress to move bills. He's created a license plate for drone, there's so many things you have done. Is there still any part of you that you have to fight what that narrative of can I really pull this off?

Luke Fox: Well first off it's not me. I've been very fortunate to work with just incredible people and bring people together that have their specialties and their thing that they're passionate about, and align those common interests to be able to surgically execute on our vision. It's been a lot of people involved in making all this happen. I grew very comfortable with the notion that I'm stupid, that I'm incompetent, that I'm incapable.

James McKinney: Because of your upbringing?

Luke Fox: Yeah, because of my upbringing. I think I'm just comfortable with it. I don't have anything to prove because I already accept it. Similar to how fear, and the fear of failure. If I had a fear of failure, I'd have made different choices for the company and those probably would have killed the company. Looking back, that fear of failure it will kill you. At the end of the day, I know what living in my car is like. I know what having nothing is like. I will not compromise for anything other than success of the company and its biggest, truest, most authentic form.

James McKinney: That's incredible. That is unbelievable, that perspective. I love that you pointed back to those past markers that you knew what it was like living in a car. It gives you a perspective that most people will not have. Not that they necessarily want to have those, but it definitely gives you the ability to see things differently and most people just can't, and you've made it such a strength to who you are now and how you move forward. I absolutely love that.

As our time gets close to coming to an end, when you look back on the WhiteFox story, let's just say 10 years from now when we have a where are they now kind of episode, what will you want to see in the rearview mirror and say that was an amazing success?

Luke Fox: Yeah. Well, WhiteFox will still be going strong. But looking back, it's ensuring that we collectively are able to create a world that embraces autonomous technology that will help people is one key part. For example, we look at drones, we look at autonomous cars, we look at robotics, all these technologies have incredible potential to save lives, make our lives easier and better in so many ways, and yet we're afraid of them. That's because we don't trust them. That is a problem that 10 years from now will just make sense to people. It's amazing seeing year after year like how my pitch changes and how it more and more makes sense to people. It's like oh, well obviously we need that. Like yeah, you didn't say that a year ago. So that's one part.

But the other part is that WhiteFox itself can be a platform to help people. Not just in what we're producing for the world and how that impacts the world and other industries, but also WhiteFox has been built from the beginning to be a place where people can bring their unique talents, and bring their unique selves and personalities, and unique problems and challenges and backgrounds to come together to create something bigger than any of us, and bring those unique experiences, whether joyful or painful or anything in between, to unlock so much more, to create that safe place for the world.

James McKinney: That is awesome. Well as our time comes to an end, there's three questions that I need to ask every founder. It's something that one I look forward to asking, and the listeners love it as well. But that first question really I think is flavored by our own story, and that with is about entrepreneurship. Do you believe that anyone can be an entrepreneur, as in it's a learned skill, or do you believe you are born with the ability to navigate entrepreneurship?

Luke Fox: I know anyone can be an entrepreneur. I don't think everybody should be or wants to be an entrepreneur. Entrepreneurship, when people say okay entrepreneurship so what's it like working for yourself? It's like if that's what you think entrepreneurship is then you're wholly mistaken. I work for every single employee that's here. People talk about nitpicky managers, like okay one picky manager. I have a lot of people who I'm accountable to. Every single thing I say, everything I do, and it's good, they should hold me accountable.

And then not just the employees but every single investor, the board, my leadership team, and the public. Working for yourself is no, I don't work for myself. I can't even, for example, leave for a doctor appointment. It's this sense of am I leaving early, there's these questions. You don't work for yourself, you work for every single person that is a stakeholder in what you're creating.

The other side of that is I constantly have people who are like, "Oh, entrepreneurship, you're going to make loads of money." If you're doing this for the money, which is fine, I hope this works for you, but if you're either doing it out of fear or striving for money, it's the wrong industry. If you're doing this, you're at least decently smart. And if you're decently smart you can probably make a lot more money and be a lot more happier. I use happier as an ongoing happiness, day to day. It's a joy, it's the passion, I love what I do, I wouldn't change it for the world. But I'm not doing this for the money because for a long time, and even still I'm one of the lowest paid employees because that doesn't make sense to pay yourself a lot. It's probably not going to end up with you making a lot of money but even if it's successful, that shouldn't be what you use to make your decisions.

James McKinney: Absolutely.

Luke Fox: So anybody who can I think buy into those notions of you're going to work your butt off and work for everybody else that you ever interact with, because they could be an investor, their uncle could be an investor, and that you're not going to make money and that you're going to have to constantly pursue your passion recognizing at any moment it can fail and die, if that's you and if you want that for your life, then entrepreneurship is for you.

James McKinney: What I love about that is that is the real narrative. That is what the narrative of entrepreneurship should be. It's not what we hear out there, but that's just truth. It is something that we love. It doesn't make logical sense for many, many people but it's just something we can't avoid either.

Luke Fox: It's a drug. If you want to become addicted to it, if you want it to consume your entire life, if you are willing to sacrifice relationships, friendships, and opportunity, and you want to be that obsessed about one thing for years and years in your life, and recognize that statistically it's going to lead to a failure, then sign up and buckle in, and enjoy the ride.

James McKinney: Yes. But can you imagine? Think about that. Everything you said is just pure gold. But can you imagine having two doors in front of you, and one is painted with that, choose this door and here's what it is, and the other is stability. Can you imagine the mental processing that the individual would say there's so much opportunity behind this one, the what if's. I can change the world, there's a lot of things just that we're wired differently. It's truly a different wiring.

Luke Fox: And that's okay.

James McKinney: Absolutely, 100%.

Luke Fox: It's like based off of all experience. That's the thing people will say if you could go back what would you change, or are you upset about what happened in your childhood. All the trauma from my childhood made me who I am today, and in doing so enables me to be stupid enough to pursue entrepreneurship.

James McKinney: I love it. I absolutely love it, and I love the transparency and sharing that, your childhood journey and the challenges that came from that. But as our time comes to an end one of my final questions is about gratitude. I ask this question and my listeners know this because I believe that if we are not always aware and keep ourselves aware of all the shoulders we stood upon, or all the people that contributed to our story, we begin to isolate ourselves because we thought we did it ourselves, and that will ultimately lead to our failure always. I believe entrepreneurship is not something you can do alone. So when you think back to your journey who are the people that you point to with such incredible gratitude for their contribution to your story and your journey?

Luke Fox: That's a really, really hard question because there's so many people that have come into my life, and sometimes in very small ways but made a profound impact. In some ways stuck with me and supported me for years. With all of the incredible people who have been along for the journey they know who they are, and they hopefully can know how much I appreciate them. I'll highlight two people.

One is my adopted grandfather who was the first to believe and to invest money when he is far from wealthy, but to put in that initial money that really sparked… that initial few thousand sparked the $25 million that followed. And then also my adoptive mom, because she gave me that sense of purpose and believed in me, and really helped me to realize that the narrow path that everybody thought I was on that would lead straight to prison, or straight to drugs or violence, just all of those aspects of life, she's the one who believed in me. It was common sense to her, like well you can go that way and I'll still love you but there's so much other opportunity and just common sense. The world's your oyster, just enjoy the ride and pursue what you love. And that just unlocked something inside of me to realize that truly we are capable of anything that we believe we are, and if you're not hopefully enjoy the ride along the way.

James McKinney: Oh my gosh, that is incredible. That is unbelievable. So as our time does come to an end, there's a final question I always ask every entrepreneur. I'm going to throw a curve ball on this one because there's a unique element to your story with the hardship of your childhood and going into the foster program, and the challenges that come with the foster program as it stands, and obviously the love that your adopted family brought to you. There are probably listeners that have a childhood that is all normal metrics would point to the fact that they should be in prison, or violent crimes, or drugs, or whatever the case may be. Whatever the cultural narrative is because of their hardship and their upbringing, success is not on their radar so just give up hope. Don't even pursue it, just try to stay out of prison, try to stay off drugs, try to stay nonviolent.

We've been talking to tens of thousands of people but I just I believe there are listeners that are in that bucket, and I would actually like you to speak to that listener group. What do you have to say to them?

Luke Fox: I want you to know that no matter where you come from, no matter the traumas that you've endured, the mistakes that you've made, the aspects of your life that haunt you, whatever it might be, it doesn't have to define you. And it doesn't have to defeat you. And that you can choose to embrace what's happened to you, and to use it to empower you and to recognize that's what makes you unique. That makes you special. It gives you an ability to see the world in a way that nobody else can because nobody else has had that experience that you've had. In doing so, you can take that and see the beautiful blossom that can come from very dark corners of your life, and from things in this world that ultimately when somebody meant to hurt you, you can use to give you strength and just open up a whole world of possibilities that only you uniquely can see and uniquely you can achieve because of your past.

James McKinney: Once you've had a few moments to process all the value Luke brought us in this week's episode, please hit me up on LinkedIn, Facebook or Instagram and share with me your thoughts on the episode. If you've been around The Startup Story for any length of time then you know how much emphasis I put on the idea that entrepreneurs support other entrepreneurs. So if you are a startup, then there are two very easy ways for you to support Luke. The first is to engage with him on LinkedIn or Twitter, and we'll include those links in our show notes for you to grab easily.

Another way to support Luke is that after you connect with him on LinkedIn, connect him to those in your network that are investors. Maybe you just closed a round of funding. Well WhiteFox is in the middle of another round of funding, so all the introductions like you know a lot introductions to investors are greatly appreciated. So let's show up for Luke Fox and WhiteFox Defense Technologies in a huge way for all the value he brought us in this episode of The Startup Story. Remember, entrepreneurs support other entrepreneurs, so let's make this happen. And now for my personal ask.

The Startup Story community has been so incredible about sharing our podcast with others, but we have more stories to tell and more people to reach. We too are a startup and word of mouth is everything, so please follow us on Facebook and Instagram @TheStartupStory or on Twitter @StartupStory_. If you're on LinkedIn, please search for The Startup Story and follow our company page. LinkedIn is a really powerful way to raise awareness of the show. But the most impactful way you can help us grow our audience is to leave a review on Apple Podcast. Or if you listen to the show via Spotify, then please simply share the podcast directly from your Spotify app or wherever you listen to the show.

These simple actions can make a huge impact in getting these amazing founder stories out to the masses. And please make sure to tag or mention The Startup Story when you do share so that we can connect with you and say thank you directly. I'm so incredibly appreciative of the fact that you listen to the show each and every week, and I look forward to sharing these amazing stories with you every Tuesday with hopes of encouraging and inspiring you to start your story.

If you like this podcast and are thinking of creating your own, consider talking to my producer Danny Ozment. He helps thought leaders, influencers, executives, and authors create, launch, and produce podcasts that grow their business and make a real impact in this world. You can contact him today at emeraldcitypro.com/startupstory.

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May 05 2020
Luke Fox, founder of WhiteFox Defense Technologies

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