in denver today Exponential 2023a panel of experts discussed topics that come to mind for everyone in the industry.
Over the last few years, there has been a significant increase in investment in the drone industry. However, that investment comes with expectations. Ultimately, regardless of manufacturing challenges, regulations, technology hang-ups, or adoption hurdles, companies must find ways to make money.
In January 2018, early industry player PrecisionHawk received $75 million, the largest funding round in the industry at the time. Over the next five years, however, the company struggled to find profitability, and he eventually merged with a European geospatial firm in March 2023. Other early industry names such as AirMap, Skyward Verizon, CyPhy Works and Airxos all had several years of success but were not profitable.
More recently, the amount of investment has increased. His Skydio, a US drone maker, has earned over $562 million to date for developing and manufacturing autonomous platforms. The U.S. government supports U.S. manufacturing, and regulations have evolved significantly since Part 107 was introduced in 2016, legalizing commercial drone operations in the U.S. The fundamental issues of technology, digital twins and profitability remain the same.
Bob Brock is Director of Aviation and Unmanned Systems for the Kansas UAS Task Force. Professor Darryl Jenkins, a manned aircraft pilot and co-founder of the Aeronautical Research Institute at George Washington University, has literally written a book (and 15 others) on the economics of drones. He is the president of Titan Aviation Global. What lessons can the drone industry learn from manned aircraft and other traditional industries? What will drone companies need to survive in the long term?
“We spend a lot of time talking about technology…” Block says. “But if we don’t make money, nobody will be here next year.”
economies of scale, economies of scope
To make a profit, Jenkins says, some fundamental aspects of economics apply. “In any industry, economies of scale are very similar. More output means less cost.” Jenkins applies this idea to his second principle that can be applied to the drone industry: economies of scope. Extend with . He uses, as an example, his DroneUp, his provider of drone services, which operates drone deliveries for retail giant Walmart. “DroneUp he’s a mile away,” he says. “But if they can get [permission to fly out] 2 miles, increasing its range by about 300%. 3 miles out, it expands exponentially.to profit [in this industry] You need to be able to fly longer, you need to be able to fly higher. “
Jenkins makes an additional point about scale (m:N operations). “For many drones, he needs one pilot. To achieve economies of scale, he needs one pilot to fly 10, 20, or 50 drones.”
Joint use infrastructure
Steve Willer says one of the keys to achieving economies of scale in the drone and aviation industry is infrastructure, both digital and physical. “Everyone in this room needs to thrive hard because we need to fund and deliver the infrastructure we need to scale.”
“Imagine if you had to fly on United Airlines and go to United Airport, or if you had to fly on Delta and go to Delta Airport.
But Toni Drummond points out that companies can’t focus on a perfect future infrastructure. “In terms of profitability, we need to start these businesses within our current infrastructure,” she points out. Willer agrees. We’re handcuffed about the kind of business we’re doing now, so we have to find a value proposition in the current environment that will allow us to stay there when good things happen. . “
rule
As a wishlist, all panelists agree that regulations and outdated design decisions are holding the industry back. “If I could wave a magic wand and completely redesign the airspace, I would,” says Steve Willer. “Methods that were designed long ago may not work today.”
While agreeing that regulations must adjust to the speed of technology, Jenkins ended the session with optimism. “We have a lot ahead of us,” says Jenkins. “What I have seen so far in my life has been amazing. I got to see the first jet flight! Things are moving fast.”
Miriam McNabb, editor-in-chief of DRONELIFE and CEO of professional drone services marketplace JobForDrones, is a fascinating observer of the emerging drone industry and drone regulatory environment. With her 3,000+ articles focused on the commercial drone space, Miriam is an international speaker and recognized figure in the industry. Miriam has a degree from the University of Chicago and high tech she has over 20 years of experience in sales and marketing of new technologies.
For drone industry consulting or writing, please email Miriam.
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