The Larry Page-backed drone guru sees you as a future passenger. here’s why
An employee moves a fixed-wing unmanned aerial vehicle (UAV) at 3D Robotics’ research and development center in San Diego, California, U.S., Monday, January 5, 2015.
Bloomberg | Bloomberg | Getty Images
In this weekly series, CNBC takes a look at the companies that made the inaugural Disruptor 50 list 10 years later.
For Chris Anderson, co-founding one of the first notable drone companies in the United States, 3D Robotics, didn’t start with the grand vision of a billion-dollar market, but simply a community of drone enthusiasts. in 2007 that imagined empty skies filled with autonomous innovation.
“We started as an open source community,” Anderson recalls today. “It was the dawn of the release of the iPhone and the movement of manufacturers and the unbridled enthusiasm in Silicon Valley for a pace of innovation that could affect all industries.”
Aviation was, and remains, a great opportunity. The thesis: the one-to-one aircraft-pilot model is ripe to be disrupted.
The drone software community turned into a business, and the business into a business model that planned to supply a booming market with the hardware it needed, but the drone market did not experience a growth allowing 3D Robotics – a member of the inaugural CNBC Disruptor 50 list in 2013 – to thrive, if not survive.
Afraid to fly?
The anticipated increase in flight automation that would reveal new use cases and give rise to new markets, could not overcome a major headwind: regulation. The permissions the drone industry needs to fly beyond line of sight, to fly at night, over people, and to break the 1-to-1 ratio, all at scale rather than phase of test, have still not been carried out more than a decade later, although there have been approvals in recent years for fly beyond visual line of sight, including Amazon Prime, UPS, and Alphabet drones.
Says Anderson, who knows as much about the FAA’s process for drones as anyone, it could still take the FAA years to get comfortable with the safety profile, and that means the pace of innovation at which Silicon Valley is used to working will remain second in pace to Washington’s regulatory review. “The fact that the sky is empty is always an FAA problem,” he says. “Anyone in aerospace would probably have said, ‘Of course it would take that long, that’s how it works’, but we were technologists and we were kind of naive. It works on Washington time, not Valley time.
“We thought that once it wasn’t just a toy, but we demonstrated more use cases, there would also be higher prices, the sandbox would grow. And that day hasn’t come yet,” Anderson says.
Instead, 3D Robotics was forced into a playoff for the consumer drone market, primarily shooting photos and videos. “Which has never been our strength,” says Anderson, but played directly into the strength of market leaders in consumer electronics, namely Chinese companies, and most notably DJI, which today holds between 90% and 100% of consumer drone manufacturing. Marlet.
“We had super advanced drones that were really optimized for robotics and they had a simple drone with a fantastic camera and that’s what consumers wanted, and it was cheaper. The drones didn’t do much, but what they did was so good,” he says.
A partnership with GoPro designed to tap into a high-end consumer opportunity became an engineering challenge and, from a market perspective, the GoPro brand did not materialize into the differentiator allowing 3DR to charge the bounty she needed. In fact, in the space of nine months as he launched his Solo drone, prices for high-end drones went from over $1,500 to $500-$600.
“It was a race to the bottom,” Anderson says, and a race in which the Chinese supply chain had an unbeatable advantage.
Today, there is a big commercial drone success story: autonomous crop spraying in China, which is a big industry. The domestic The commercial drone market is growingas does U.S. drone manufacturing, up to 16% of commercial hardware, according to DroneAnalyst.
“We’ve seen a lot of new US hardware start-ups gaining market share,” says David Benowitz of DroneAnalyst.
His research shows that U.S. companies making drone hardware have fallen from 7% of the market in 2017-2018 to 16% in 2021. While on the consumer side and the attempt to compete with DJI, “everyone has given up” , Benowitz said. “Dji owns the market, but they don’t operate in as many categories,” he added.
This provides an opportunity for new hardware entrants, but he doesn’t think the hardware opportunity alone will ever grow into a market juggernaut. “These are not booming, growing companies, but we don’t see the next Airbnb or Uber happening in the United States. drone equipment.
There could be additional growth as U.S. businesses and government look to diversify drone supply, Benowitz said, but “it’s still pretty small, and early days, and I don’t think it’s a key element that stimulates the market”.
There are more and more business models tapping into various niches, from Skydio – the newest drone unicorn, and the first in some time – focusing on cell towers; to the Disruptor zip line on several occasions and to medical deliveries in emerging markets, a model that could yet turn into a broader global strategy. But more than a decade after the drone industry debuted, these verticals remain in the early stages of development.
Walmart and Amazon are scaling their efforts in last mile delivery and investing in drones, Alphabet has its Wing business, but nothing is at scale today that solves all the problems in rural environments, suburban and urban.
Anderson thinks commercial drone gamers may still have a brighter future than 3DR, but that will depend on regulatory changes.
“We need to have opportunities to try things out in the real world to figure out which are the most important,” Anderson says.
Benowitz says commercial customers like utilities are moving slowly, but the real test for drones on the commercial side will be when there’s an internet of things system that combines both ground-based robots like Boston Dynamic’s Spot , already used by public services, with aerial drones. “The future is more integration with other industrial robots,” he says. “We are seeing companies start to see drones as just another robot in the fleet. …Spot is really good at mapping indoor areas and drones so much better outdoors.
Air mobility, an even greater opportunity
Anderson, meanwhile, has set his sights on a new opportunity. Much of 3D Robotics was sold to Kittyhawk, the autonomous air mobility startup funded by Larry Page, where Anderson now serves as COO alongside CEO Sebastian Thrun, a former Google engineer who was among the founders of online education company Udacity. , a former Disruptor company too.
Kittyhawk has just gone through its own commercial pivot, more in line with Anderson’s dream of autonomous aviation, moving from a pilot-directed air mobility model to a remote model.
“The economy of the unmanned flight unit is so much better,” says Anderson. “That’s one more seat.”
And the idea of a remotely piloted network, with an operator spread across multiple vehicles, sounds exactly like the model drone Anderson has long wanted to build. “I’m a drone guy, and that was the perfect and obvious next chapter, just bigger drones and the use case is so much more obvious, getting people from A to B faster and cheaper than a car is the kind of mission I can fall behind.
The market saw the introduction of the first publicly traded air mobility company, Joby Aviation. Electric planes are mechanically simpler and cheaper, and the range also removes the cost of pilots from the equation.
“Technically, there’s no reason why we can’t move a significant fraction of people off the roads and into the skies,” Anderson said.
Kittyhawk is aiming for 10% of current miles traveled in cities.
Benowitz says the idea of advanced air mobility remains an unproven business model. “It’s still very early to think this is a viable business model,” he said.
Anderson says the company is well funded and declined to talk about a specific timeline for the public market.
“It can work really well, but everyone also thought we’d be using helicopters every day like we use planes, so it’s going to take a while to jump,” Benowitz said.
And China is also leading on this opportunity. Chinese autonomous air mobility company EHang already operates sightseeing flights that Anderson describes as “very impressive” from a technology and safety standpoint, but in this case the regulations make the competitive threat non-existent compared to DJI, which for other reasons remains heavily guarded by the US government. Commercial autonomous air mobility will evolve on a nation-by-nation certification basis, and unlike DJI drones that invade consumer markets around the world, EHang will not easily be certified in the United States.
“I’m convinced this is a time of revolution in aviation, and I was convinced ten years ago on a smaller scale,” says Anderson. “Now we can see that the same thesis applies on a larger scale,” he says, but added, “We still have regulatory challenges ahead of us.”
The difference this time? “I’m going into this one with my eyes wide open this time,” he said.
Kittyhawk works with a former FAA chief, and Anderson was on the phone with the FAA the morning of our conversation. “The FAA has learned a lot and it will be a long road, but it will happen,” he says.
CNBC is now accepting nominations for the Disruptor 50 2022 list, our annual look at private innovators using cutting-edge technology to transform industries and become the next generation of great public companies. Submit your application before Friday, February 4 at 3 p.m. EST.