It is with deep sadness that we have to say goodbye to Airstoc. A business started almost 5 years ago from scratch, we have just not been able to sustain the endless financial pressures and market fluctuations, and as a result, Airstoc has officially closed. Below, we thought it would be important to share the journey with customers, pilots, investors and partners and say a huge thank you for all of your support.
Andre Ferreira, a Design engineer by trade, used to have remote control aircraft as a hobby and in 2012 quit his engineering job to start VuAir, a drone operating business for broadcast. When he started quadcopters weren’t common place and DJI was a small startup developing autopilot systems and gimbals. In two years Andre grew the company to work with the BBC and other UK broadcasters, as well as independent films and marketing companies.
However with low client awareness of the technology and sales coming hard, 2 years in he had the idea of creating a stock footage company dedicated to drone captured stock.
To test the idea he invited his former colleague and friend Giles Moore (a sales and management specialist) to get behind the idea and take it to Startup Weekend Sheffield. There the idea was chosen to be worked on for 48 hours as well as welcoming Manu Matute to the team, an expert developer.
By the end of the weekend Airstoc took first place in the startup competition and the company was born a month later with all 3 quitting their jobs and going full time. At this point and for the following 18 months the company was 100% self funded with the founders taking all the strain of not having an income.
Stock and Struggle
A few months after starting the company the first version on the website was live. It was a fully working website where drone companies could reach us and join as footage contributors, upload their video clips and sell them directly. Onboarding was still quite a manual but a large amount of professional pilots got onboard in the UK and Europe mainly and entrusted us with their footage backlog. It was an amazing thing to see, us coming up with an idea, building it from nothing and have people we looked up to with respectable businesses join and put their trust behind us.
The process was not scalable to start with and sales came slow because the catalogue was small so we upgraded the website for pilots to do self-onboarding and submission of footage, with a tailored backend for us to approve/reject clips and make them live on the site.
With most of our efforts being put acquiring pilots and footage to grow the product critical mass, pilot take up saw a considerable growth.
However with the lack of clients and sales we were forced to start looking at other avenues.
When acquiring customers for stock footage we noticed a recurring theme, customers wanted to hire the drone operators. This happened because they had a specific stock requirement or because they were working on specific project that needed aerial camerawork.
We seized this opportunity and started an agency model, where the customer would hire us to fly a drone with certain specs for a job and we would fly the mission ourselves or subcontract the relevant pilot in the area. This returned a healthy margin but was very labour intensive as each customer needed to be managed individually. At this point we were a year in, and running dangerously low on our personal finances. The people and support structures around us crumbling as we had begged and borrowed our way to keep the company alive.
Investment and Marketplace
We had been looking for investment for 12 months, and being completely inexperienced at it we knocked on a lot of doors and just got turned down time after time. Until the day that, on one of our last attempts, Andre and Giles got invited to Berlin to talk with a potential investor and much to our disbelief they made us an offer there and then. Not only it was an amazing offer but everyone that worked there seemed great and all the other founders backed by them had nothing but good things to say. So still in a daze, we returned to Sheffield with our seed round in our pocket and the dream was more alive than ever.
After numerous months of negotiating, paperwork and admin the deal was finally done with Point 9 Capital, Launchub Ventures and TFH Capital. The name of the game was no longer survival, it was now growth and scale!
So we ramped up our efforts, both on onboarding pilots and servicing customers. But one bottleneck became apparent it took too much man-power to service existing customers and this left no room to grow so we had to change business model yet again.
The idea was to create a marketplace where a well designed platform would allow pilots and customers find each other and communicate in a way that fulfills their needs, without us getting in the way of that process.
At first we would take an automated amount from each stock sale and the same from each custom job ordered.
A few months and a few hires later we realised that this wasn’t efficient enough, so we killed the stock part of the business as margins were too low and focused solely on the job serving part.
In a further attempt to make it streamlined we changed who our customer was. Instead of charging customers when they ordered services from pilots, we put the customers’ jobs behind a paywall and asked the pilots to pay a monthly subscription fee to access those jobs. This worked well to a point, but the limiting factor was still the number of clients and the jobs that they posted on the site, since from the beginning the supply had always been far greater than demand. Being able to balance supply and demand was extremely hard and demanding, and whatever tests we tried, we were unable to make any significant increase. This lead us to modify the website and business model many times to try and find a scalable solution.
Runway management and Decline
Even with careful management and low salaries for everyone, the investment money got used up quickly and the demand had plateaued despite our best efforts. We developed multiple different marketing strategies, tried every avenue and trick in the book and attended every customer facing conference and tradeshow we could think of.
As far as drone marketplaces go we were doing pretty well, but that wasn’t enough to keep us afloat and our numbers were too inconsistent to seek more funding, so we had to become more efficient again and try and wait for the market to come to us. We went down to the core team again and concentrated our efforts to achieve the most return for our time.
In this way we tried to focus our efforts in a handful of big customers that if we won their business it could save our company. These were mainly in the inspection and insurance sector but in the end converting big and complex or ganizations to change the way they operate to include mass use of drones proved very difficult and above all, slow. Between first contact to final yes/no decision we’ve had partnerships that have taken 6, 12 and even 18 months to come to a meaningful conclusion.
Ultimately these long decision cycles and number of stakeholders involved in these big partnerships were what depleted our runway and meant our only option was to close the company we all worked so hard for.
It was an extremely hard process, albeit necessary, to close the company but we have done it now to make sure we closed it cleanly. We wanted to have zero debt in the company (or as close as we can get it) to make sure no companies or individuals had a direct loss from us owing them money.
For others interesting in Startup knowledge and insight we thought we’d put together our biggest takeaways from the last 4 years with Airstoc.
By far the biggest take away for us was the impact of people and relationships in a startup.
We’ve read time and again that your business is only as good as it’s people and for us this couldn’t be more true. From finding out first hand the devastating effect of having the wrong people as well as how the right people can push the business so much further than you ever could on your own. Never underestimate how important people are.
There will be good times and bad times, but in startup life the amplitude is bigger than anything we experienced before. The highs are very high and the lows and extremely low. Sometimes you feel like quitting every day for weeks and even months, and again it’s the people you work with that will tip the balance between pulling the plug or doubling down and pushing on.
Anything is possible, but it’s hard work. Yes you can start a company from scratch, yes you can get a big round of investment, yes your product can reach thousands or millions of people, but seldom it will come by chance. Making anything happen, even a failure is extremely hard work for a really extended period of time.
Knowing the right people and hitting the right timing can make the work above be half as hard. Sometimes a side step in direction or a different way to do things will make a huge difference. Always be open to new ideas. We realised more than ever that timings is one of the most important elements to any start up. If you time it correctly, then it’s all about your product and marketing, but if you dont, you end up forcing it and that will eventually deplete your runway.
If you’re on the inside of an industry and you see it “booming” because it has gone from zero to X it doesn’t mean that from the outside that’s also the case. Furthermore even if you really are in a rapidly growing industry it doesn’t mean that your clients are rapidly growing too.
There are a lot of dead ends in the things you try in your business. It’s important to be ruthless and objective in how you measure success but also fast acting when something’s not working and you need to move in a different direction.
The future of drones
We couldn’t make it work with the time and resources we had access to, but make no mistake, drones are here to stay.
We’ve seen amazing developments in this space year after year and one way or another drones will continue to find their way into everyday life to somewhat disrupt the status-quo but overall improve people’s’ lives and open a world of opportunities.
It’s good to see other companies riding the drone industry wave and putting drones to good use in the broader world. Certainly longevity will be key in determining which companies become the key players in the drone service market.
Our family and friends
Everyone that has helped us along the way
We want to say a huge thank you to everyone who has been there throughout our journey, because without you, we would never have made it this far. We are extremely proud of what we have been able to build, but at the same time, extremely devastated that we were not able to deliver on what we set out to do.
Always happy to share our experiences, knowledge and answer any questions, if you may have. If you are part of the Drone Industry, we wish you all the very best and hope to see drones become the norm in the very near future.