Under the gun: how the perfect rifle missed its target

While building some of the deadliest rifles in the world, TrackingPoint employees say they went through hell

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Many former TrackingPoint employees say you can spell death with three letters: BRS.

TrackingPoint had a stunning product. Launched in 2011, the startup was a gun manufacturer building rifles designed to nail targets at extreme distances, even when it was an amateur staring down the scope. In an industry dominated by American companies nearly as old as the country itself, TrackingPoint seemed poised to be the one to change the game. The firearms brought the company media notoriety — good and bad — but some people at the gun maker wanted more. That desire manifested as the BRS, or barrel reference system, a laser-guided attachment built to ensure guns met “lifetime zero,” never straying from flawless, factory-set aim.

According to former employees, the system was a mess. The device could cause more trouble than it was worth, and engineers were spending as much time putting together the BRS as all the other parts of a rifle combined. Worse, if the BRS wasn’t working, you couldn’t fire the gun at all.

"Something spectacular would’ve had to have happened for us to survive that."

But John McHale, the mercurial entrepreneur behind TrackingPoint, had already made his bet on the BRS. After the company’s CEO ditched the system, according to a former engineer, McHale replaced him with someone else, despite the fact he was widely admired by employees. "Something spectacular would’ve had to have happened for us to survive that," the former employee says.

In public, TrackingPoint always put a smiling face on its prospects, while internally, the company’s situation looked increasingly dire. As the company made stratospheric predictions about its future, forecasting growth and earning fame with media tours and demos, former employees say they dealt with long hours, hostile work conditions, and broken promises, often before losing their jobs entirely.

With virtually every employee gone, TrackingPoint is now nearly finished, but for a moment, it looked, to anyone watching, like the company was devising a plan for a brave new world from a Texas office.

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TrackingPoint’s origin story is nearly unverifiable, a disruption tale bordering on the mystical, but according to company lore, it goes something like this: McHale was hunting gazelle when he missed a 300-yard shot, an event that jolted him with an epiphany. He would create a new gun, put "fighter jet technology in a firearm," and change the industry. Already wealthy from early bets on the telecom and internet industries, McHale certainly had the means to fund a new venture. He assembled experts from across disciplines to create his new machine, and began developing the "precision-guided firearm" — the gun that couldn’t miss.

McHale, according to former employees, wanted to bring the first weapon to market as quickly as possible. To ensure that happened, he made a deal with TrackingPoint staff in the summer of 2012. The terms of the agreement were simple: 10-10-10. If employees could produce 10 rifle scopes in 10 weeks, they’d earn a $10,000 bonus.

schauble
Jason Schauble (TrackingPoint)

The goal was ambitious, to put it lightly. Engineers on the team scrambled to make the deadline, as some worked 12 or 14 hours a day, seven days a week. "At one point we did a 26-hour straight shift, and that wasn’t entirely uncommon," a former employee says. But they still fell short of the goal and missed the bonus windfall. "The mood in the office was so bitter."

Well-intentioned or not, after the team missed the deadline, executives at the company put together a transportable "summer vacation": floaties and palm tree decorations in the office. Some at the company felt that was tone-deaf, as if management was saying, according to the employee, "But look at all this fun stuff we did for you! Look how fun the conference room looks!" Employees say they often weren’t compensated for working extra hours.

"At one point we did a 26-hour straight shift, and that wasn’t entirely uncommon."

Still, by early 2013, TrackingPoint was a hit, at least in the media. The company’s first gun was certainly quite a sight: a coal-black, Wi-Fi-enabled, video-streaming, severely precise rifle. You simply "tagged" a target from wherever you were, and the gun would deliver the target a bullet from about 1,000 yards away, even if it was on the move. Reports straddled the line between awestruck and abjectly terrified. An impressive technical feat, sure, but what would happen when the rifle got into the wrong hands? Was selling a gun like this to the public a wise move?

McHale would brush off the ethical implications, saying the price — thousands of dollars — would be a barrier to entry. By May, the company was shipping out its first "precision-guided firearms," with no less an attendee than Texas governor Rick Perry present for the launch event. And at his Mason, Texas ranch, according to sources present, McHale announced that he would be stepping down as CEO to become chairman of the company, passing the executive torch to an ex-marine at TrackingPoint named Jason Schauble.

ceo jason schauble was literally a war hero

Schauble was literally a war hero, awarded medals for, among other acts, suffering major wounds in Fallujah while trying to save a comrade. He presided over the company as it garnered more media attention and expanded production of its weapons, launching a plan for a "super gun" that could hit a target from 3,100 yards away, a goal that would eventually be scaled back. Plus, Schauble had come from Remington, which meant he had valuable connections to a major player in the firearms industry that might acquire the smaller TrackingPoint. "Everybody liked him," one former employee says. There was one other good reason to like him: "Schauble was the one guy who could tell McHale ‘no’ — to an extent," another employee says.

That could lead to tension between the two personalities. More than a moneyed financier, McHale had run tech companies before, and seemed intent on working directly on the guns. He would make changes, often disrupting production, according to former employees. When he was displeased, the TrackingPoint team knew it. "The guy would kick a hole in the wall," one former employee says. When someone said they could fix it, McHale stopped them: "That’ll remind people not to piss me off."

Eventually, a former employee says, Schauble was caught in "a yelling match" with McHale over the BRS, and in November of 2013, he was fired. That month, despite millions from outside funding and McHale’s deep pockets, TrackingPoint laid off more employees. A company spokesperson gave a statement about Schauble; the TrackingPoint board "felt there needed to be a change in direction."

"Basically," one former employee says, "because he told John McHale the truth."

***

The news wasn’t all bad. Employees were getting stock and were still looking forward to the day they could cash out. An acquisition by a larger company would be nice, but firing Schauble may have put any deal with Remington, which some presumed to be the candidate, in jeopardy.

employees were looking forward to cashing out

Meanwhile, another old hand at TrackingPoint, John Lupher, replaced Schauble, and the company still seemed solid. (Lupher wasn’t a bad guy, employees say, although he was more of "a yes man" than Schauble. He declined to comment for this story.) "One amazing thing about the company is that it collected the best talent in the industry — of any industry," according to one employee. Another called the team "bleeding-edge intelligent."

Moreover, the company was producing options for customers. At the 2014 Consumer Electronics Show, the company unveiled a new line of rifles, starting at $9,995. "We expect not only strong demand for the 500 Series AR products, but also a growing demand for our technology across the industry," Lupher said in a company press release. In January of 2014, the military reportedly bought six rifles for testing.

That year, the company, which now had both a retired admiral from the US Special Operations Command and a retired US Marine Corps colonel on its board, announced that it received more than $29 million in funding. Total outside funding, according to the company, was $64 million. (McHale Labs, which a source says is McHale’s funding arm, was reportedly one of the leading investors.) Lupher told The Wall Street Journal in June that the company was worth more than $250 million.

But some were concerned about TrackingPoint’s business plan. If hunting was a sport, surely precision guidance was cheating, akin to taking cues from computer chess and calling yourself a grandmaster. "Real hunters — guys that love hunting and spend their time hunting — they hated TrackingPoint," a former employee says. They could sell to the military — an option that might present less ethical baggage — but would they bite?

The company did score a deal with Remington, which was looking to partner with TrackingPoint on a project called Remington 2020. TrackingPoint produced the scopes for a new series of precision-guided rifles, but according to sources close to the project, it turned into a fiasco. The scopes shipped while still plagued by problems. "They were basically tagging a very high percentage of these things as having manufacturing defects, and a vice president said, ‘Ship it anyway,’" a source says, estimating that out of every 100 scopes shipped, about 40 were flagged by Remington as problematic. The scopes, it was rumored, did not connect with customers, either.

And the hammer kept falling. Lupher was fired in December, apparently following a row over the direction of the business.

***

Another CEO, Frank Bruno, soon took over. "We were promised more communication, but it went dead silent for five more weeks," a source there at the time says.

"We were promised more communication, but it went dead silent for five more weeks."

There are two stories about what happened next: the public and the private. On February 24th, 2015, the company put out a press release trumpeting "exponential growth for 2014." TrackingPoint, according to the release, was soaring. "Year-on-year unit growth was 281 percent and year-on-year bookings dollars grew 107 percent," the release said. The company made the astonishing claim that not only was the company growing, but that it was perhaps "the fastest-growing gun company in the world." The company said the Department of Defense was also interested in buying its weapons.

It was only buried in the release that the company announced "an internal restructuring to ensure and accelerate future growth." Bruno is quoted in the release: "With new markets opening up and growing interest in our products, our company needs to focus on operational excellence."

On the inside, that "restructuring" meant major layoffs at the company. Far from feeling like a streamlining move, it seemed to employees like TrackingPoint was suddenly in disarray. The research and development team was slashed. "That was a massive one," a former employee says.

The staff — up to a maybe a hundred or so at the company’s peak — had been winnowed down to less than 50. With TrackingPoint’s employees still shaken by layoffs, the company cut most of its remaining staff last month, down to a tiny crew. The company posted a note on its website: "Due to financial difficulty TrackingPoint will no longer be accepting orders. Thank you to our customers and loyal followers for sharing in our vision."

trackingpoint

What are the company’s plans? It’s unclear. McHale, in a brief phone interview last week, said there were still employees at TrackingPoint, but would not say how many or whether the company was broke. But TrackingPoint, according to former employees, is essentially dead, operating with a "skeleton crew," there to document the company’s intellectual property before a sale. Where that valuable — and potentially dangerous — information will go is also unclear.

Employees The Verge spoke with were angered over the stock they were given. Many took options, hoping it would pay off eventually, but the stock was restricted. As it became clear the company wouldn’t be finding a buyer, and as the layoffs came, it dawned on many that the stock would never have any value.

Employees The Verge spoke with were angered over the stock they were given

But despite TrackingPoint’s failure, the allure of a perfect gun might be too powerful an idea for someone — McHale, the military, or otherwise — to shy away from. DARPA, for example, has been developing self-guiding bullets. And even as TrackingPoint has sunk, it may not have left the earth without some kind of legacy. A talk scheduled for the Black Hat hacking conference in August will be about TrackingPoint. It’s called, "When IoT Attacks: Hacking A Linux-Powered Rifle."

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