Blogs

I wrote a blog post about my high-level thoughts on the current state of the commercial drone industry and wanted to post it here in case others wanted to chime in. For those interested in past and future posts, I will try to update our blog at senseme.io/blog on a weekly basis.

Commercial drone operations is like a gigantic jigsaw puzzle whose pieces have yet to come together. As a result of the industry being so young, the concept of operating a drone commercially is largely misunderstood by even some of those who are in the space. Military drones have been in existence for over the past decade. With over a million drones expected to be bought this Christmas, it’s clear that consumer drones have already hit the mainstream market (having its own South Park episode might be the best qualifier for that). Commercial drones....well, that’s a gray area that on the large scale of things has barely begun to sort itself out.

Perhaps what is most interesting is that drones operated for commercial purposes will likely be bigger than both military and consumer drones combined (per Chris Anderson and others' predictions). At the moment, however, that’ doesn't seem to be the case by a longshot. Buddy Michini, CTO of Airware, said in a recent talk that “If anyone tells you they’re making a lot of money on commercial drones – they’re lying.” At first, I was incredulous. There is an incredible demand for what drones can do in the commercial space, so shouldn’t a lot of people be making a sh**load of money? If Buddy is right and the profits of commercial businesses aren’t currently lining up with the potential of commercial drones, let’s look at some possible reasons why that is the case.
 
One possible reason is that the technological ecosystem isn’t completely there yet. Most – if not all – manufacturers and service providers are still optimizing their products and services for commercial purposes. Those who are able to offer a full-fledged and mature product or solution are those who are experts in the space and have been in the game since the very beginning. Those who don’t qualify for that distinction are in the beginning stages of their businesses. The demand-side might be there, but the quantity of mature supply-side operators might not be.
 
Even early adopters don’t want to pay top dollar for a system that doesn’t 100% work yet. Drones in many instances are replacing operations that construction companies, farms, etc. already have in place. Even though drones clearly present an optimal solution, integrating drones into everyday operations is a big leap. Sure, people are extremely eager to get their hands on the technology. As soon as the issue of money comes up? Many scurry away. On the demand side, end-users trying out this technology (justifiably) want free demos and discounted services for being an early adopter. On the supply side, many businesses are strapped for cash and resources, making it difficult for them to meet the demand side’s needs.

Another big reason that I’ve heard from other operators and that we’ve experienced ourselves is the massive gray area that exists for insurance and compliance, as well as the gap that exists between the compliance piece and the actual operations piece. This makes end-users of the technology even more wary. Big companies who are willing to pay top dollar want to see that it’s done correctly so that they’re not liable – right now that’s not entirely possible (especially in some locations, which I’ll get to shortly), or at the very least it’s more difficult than it should be. Smaller firms might be willing to fly under the radar, but they’re much more strapped for cash and can’t hand out the $$$ that many commercial operations require to be profitable.

One of our partnered service providers who holds a 333 always voices to us that their highest priority is flying in a way that’s compliant with the FAA. Their compliant is that they don’t have access to tools that allow them to do so. Their particular issue is that they are located in Las Vegas, Class B Airspace that according to their 333 requires them to have a 2-way transponder on-board their drone. In order to clarify how he should be flying within Class B Airspace he contacted all the FAA officials and local Flight Standards District Offices (FSDO) he knew of. No one had an answer for him. Clearly something is wrong when those who should be implementing the rules can’t offer advice for how to follow them.

Another relatively new piece of the puzzle in the commercial industry is insurance. In manned aviation, insurance dominates. In unmanned aviation, this isn’t the case (yet). One reason for this is that there is no protocol in place for service providers to follow – what are best practices? As a service provider, what is expected of me to mitigate risk? And if I follow these practices, will I be rewarded in the same way as if I consistently drive my car safely?

Below is a representation of what we believe service providers often juggle for their projects – the “service provider triangle,” if you will (forgive my poor drawing skills). This is comprised of meeting client’s needs through the most up-to-date technology, while making sure you’re doing so in a fashion that’s insurable and compliant. Each one of these pieces is maturing on its own. Technology is improving rapidly. Clients are slowly beginning to understand the technology. Regulations and insurance are also making strides at their own pace (albeit, not fast enough to keep up). The biggest issue is that these pieces don’t currently fit well together. Service providers have to jam them together hoping that they fit. Without a standard protocol and best practices that a commercial service provider can easily follow, this becomes a slow, inefficient, and often ineffective process where safety & compliance falls by the wayside.
 

NVdrones is working together with all corners of this triangle to bridge the gap between them to make the lives of commercial operators easier. We are hoping to grow and evolve our newest product, SenseMe, to integrate with powerful pieces of software and provide operators with an easy solution to satisfy their clients while getting the best insurance and flying the most compliantly.

Like any other jigsaw puzzle, the individual pieces must come together in order for the entire picture to be realized. If you think the problem we’re solving is a viable one, visit senseme.io to learn more or e-mail me directly at kmukai@nvdrones.com.

Thanks for reading and hopefully I was able to provide some insight to those who spent the time!

Kevin