Of Dronies and Dronics
Drones have been all the rage for enough years now that we can actually analyze this emerging industry. We will discuss below the past, the present and the future to understand better the big picture.
The Past: How did we get here?
First we have to actually define drones — they are unmanned aircraft or ship that can navigate autonomously ie without humans. Which means also drones are hardly a new invention, the military was using them a hundred years ago. The reason drones have become so dramatically popular in the last decade is because of a perfect storm.
We have huge breakthroughs in technology that have lowered component costs. Batteries last much longer, processors have much more computational power, and sensors are much cheaper. In fact one can easily assemble a basic drone from off the shelf parts — and many startups have indeed done so.
What that has allowed is the creation of a civilian market for drones. Military was, is and will remain the biggest market for drones but now we see companies like DJI (founded 2006, worth $10B) that have really created a consumer use case. And the commercial applications, from mapping construction sites to delivery packages, are immense. VCs have followed suit by investing $860M in drone companies in the US, China, Europe and Israel in 2015, a ten-fold increase from 2014.
The Present: What is big?
How many individuals will really buy a drone to take personal photography and videography? Obviously there are many hobbyists and enthusiasts but that market is fast saturating and the hardware game of manufacturing around that use case is essentially won at this point. A few companies will succeed given their sheer volume but will be fraught with depreciating margins in a race towards the bottom. VC investment is one imperfect signal of the activity in a sector and we can see hardware has definitely been built up considerably more than software.
The more interesting opportunities in drone today are around imagery since they unlock a myriad opportunities. Prenav has developed precise automated navigation close to cell towers for 3D mapping, demonstrating it in this beautiful video:
Startups like DroneDeploy and Kespry are providing high resolution maps for agriculture and mining respectively, and companies in the space can now benefit from more images at much lower cost, with the additional benefit of getting analytics and image processing that will help them analyze those maps better. Drones decidedly will also put some people such as surveyors out of a job; like many innovations we must not fight technology but instead steer it to create create new industries and opportunities. There is also an argument that low orbiting satellites will soon take over but I find that unlikely and instead see on-demand drones still being more cost-effective in many cases.
The Future: What is coming?
The biggest impetus for companies in the future will arguably be delivery, which will save tremendous costs. Amazon has publicly stated they will use a combination of drones and planes to do 30-minute deliveries in 2017. But don’t think that means pizza delivered in New York or San Francisco, the biggest application of delivery drones is in places with poor infrastructure. The same technology can help an oil company in Texas trying to deliver a part 50 miles away save costs and a doctor looking to send medication in rural Rwanda save lives.
The challenge for delivery drones worldwide is ensuring safety. Drones must be able to avoid collisions, be able to safely land autonomously in moments of distress, and coordinate with fleets of drones for longer range. The US has the busiest airspace in the world and likewise the Federal Aviation Association (FAA) has been conservative in its regulations with good reason. They have been expanding the boundaries of what is permissible and the industry is widely expecting 2016 will be the year that delivery drones will truly become feasible.
In reference to the title of this article — “dronie” is a selfie taken using a drone and “dronics” is the science behind drones. These are terms I am trying to popularize, let me know what you think about them and anything else about drones!