Meet Drone Racing League

Eric Hippeau shares the story behind our seed round in DRL

Eric Hippeau talks with the LHV Team about Drone Racing League and the rise of a new, non-traditional sport.

For those who don’t know, what is Drone Racing League (DRL)?

DRL organizes, runs, and shoots professional drone racing events — they handle the whole thing from creating the courses to producing the footage. It’s the brainchild of Nick [Horbaczewski, CEO], and it’s been operating in stealth mode for about a year.

For a first look at what DRL is about, check out their launch video:

How did it land on LHV’s radar?

DRL was introduced to us by Adam Rothenberg over at BoxGroup. They’re a co-investor we work pretty closely with on a regular basis, and it seemed like it was a very natural business.

What do you mean by “natural?”

Well, drones were one of the big holiday gift items this past year, and you’re going to see a lot of them in 2016 and beyond. They come in all shapes and sizes, and a lot of them carry cameras, so there’s a very visual aspect to them. The more consumers have shown interest in using them to take pictures and capture aerial views, the more the technology has advanced, and you can now stream drone videos and aerial images live.

All of this goes to say that DRL is a “natural” business because it’s at the center of a four-part intersection: it’s got a strong visual aspect and appeal, a lot of interest on the part of the public, powerful and accessible technology, and the promise of fast-paced competition. It’s natural that there should be a racing league for people who are professional or semi-professional, who are exceptionally skilled at maneuvering drones. It makes for a spectacular spectacle.

Speaking of new spectacles, we’ve seen a huge rise in professional esports leagues and at-home coverage over the past few years. Do you see a relationship between esports and DRL?

There are definitely strong parallels, and we believe there’ll be a similar attraction; much in the same way gamers want to see what gaming pros are doing and how they stack up in a professional tournament, we feel DRL’s audience is invested in watching the really skilled pilots compete at professional and semi-professional levels. In fact, Nick believes that there’s an opportunity here to build a league very much like Formula 1 over time.

So, DRL is pulling from industries like car racing and esports to help build a new non-traditional racing platform.

Completely. It’s a different skill set and a new kind of athlete. If you’ve ever seen videos of airplanes racing, they race in triangles or fly a course around aerial pylons. In drone racing, the moves are tighter, the skills are more precise, and there’s a ton of adrenaline — there are tricks where drones zoom in and out of buildings and windows, make insane turns, and generally make the impossible possible.

There are other competitors in the drone racing space, so what made DRL appealing to you?

We’re seed investors, so for us, the concept has to be very compelling and it has to be a big idea, but ultimately, it’s all about who the founders are. First off, Nick [Horbaczewski], the founder of DRL, has a lot of relevant professional experience. He was the chief revenue officer at Tough Mudder, a bootcamp-style competition that’s about a $100 million business. It has a lot of revenue streams — concessions, merchandise, broadcast — and he envisioned DRL with organizational similarities.

Secondly, what differentiates DRL from some of the others is that DRL is building its own drones. Nick doesn’t believe that commercially-available drones are robust enough and have enough technology to perform at a consistently high level, particularly when it comes to range of frequency and ability to stream live without interruption. He solved the problem by creating his own specs and building his own models. I think he’s right; go to YouTube and look at some early competitions using commercial drones, and you’ll see they lose control, they break easily, they fall. It doesn’t make for a good show. By implementing their own design and hardware, DRL will be similar to Formula 1 and IndyCar racing. They each have their own views about what cars should do and how they should perform, and their chassis and engines are all custom built for their particular leagues. Nick is taking the same approach.

Up close with a custom DRL drone

Thirdly, we asked ourselves, is the timing right? You can have the best idea, but if you’re too early, it’s just not going to work, and if you’re too late, you’re just going to be a “me, too” business. In this case, it all clicked together. Nick has the right background, he’s thought through a lot of the issues, he has a plan, and it’s well-timed to suit consumer interest and awareness.

You can have the best idea, but if you’re too early, it’s just not going to work, and if you’re too late, you’re just going to be a “me, too” business. In this case, it all clicked together.

There’s definitely an appeal to drone racing, but some consumers also seem to be wary about drones in general. Are there any privacy concerns with DRL?

The FAA is putting rules in place, and as of February 2016, you won’t be able to fly your drone without registering it with the FAA. It’s not going to be a big deal — you’re not going to have to put a license plate on your drone — but there are natural, common sense things that you want to avoid, like flying drones near an airport or over your neighbor’s property.

None of these concerns will be an issue for DRL. Races are going to be in very contained venues — empty buildings or factories, and even arenas. DRL recently did a beta race in Miami at Sun Life Stadium that went great, and there were no conflicts with aerial traffic or privacy issues. Just amazing speeds and lots of excitement.

On the broadcast side, how will people spectate DRL races?

There’ll be various ways you can be part of the experience including a cross-platform live stream, but there’ll be an innate link to virtual reality. Unlike any other sport, you’ll be able to put a headset on, pick your competitor, and “fly” with the drone, seeing exactly what they see. But if you don’t have a VR visor, you can also follow that person on your laptop or mobile device in 2D.

Unlike any other sport, you’ll be able to put a headset on, pick your competitor, and “fly” with the drone, seeing exactly what they see.

If you had to give an overall forecast for DRL and the drone racing industry, what would it be?

We’re seeing the birth of a new sport. It’s very exciting and compelling, and it holds appeal for such a broad audience — for both amateur pilots and people who just want to see a spectacle. We can’t wait to see where it takes us.

Founder Nick Horbaczewski speaking at the Drone Racing League launch in January 2016

Read more about Eric Hippeau and the rest of the LHV team, and check out other Lerer Hippeau investments.

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