At last week’s InterDrone Conference, DroneUp CEO Tom Walker delivered a clear message to the drone industry: the time to make money and provide services is now. Don’t wait for regulation, don’t wait for industry maturity – but focus on the opportunities available today, because there are plenty of them out there.
A former military officer, Walker has acted as advisor to the White House on innovative technologies and their impact on the emerging workforce. The data from the research, combined with his military search and rescue experience, led to the creation of DroneUp.
Normally, we summarize keynote speeches for you – but with Tom Walker’s characteristic blend of humor and home truths, we really couldn’t do this one justice. So here, republished with permission of the author, is the transcript from Tom Walker’s InterDrone Keynote.
Lightly edited for readablity.
“Recently, I was being interviewed for an upcoming event. The gentleman asked me what I called folks in our industry, revolutionaries, pioneers…? I replied, I call them bat-shit crazy… myself included. We started businesses
not knowing what it was we would be selling to customers who didn’t know what they were buying, in an industry that nobody has figured out how to regulate.
You see, we aren’t just start-up businesses and organizations in a young industry. We are a start-up industry. Whether you are a small one- or two-person drone shop trying to build revenues, a drone services provider
managing a global pilot fleet, a brave early-adopter fighting to integrate drone services into your organization, a member of academia racing to design curriculum to ensure we have a sustainable workforce, or one of the
poor souls tasked with trying to regulate us misfits, you are part of a team. That team, OUR team, is working together each and every day to build one of the fastest-growing industries of our lifetime. And I am immensely
grateful and proud that I’ve been allowed to be a member of your team.
For many years, psychologists have studied young men and women who, by circumstance, have been forced to assume adult responsibilities at very early ages. In layman’s terms, we call it “growing up way too fast.” A
common trait among these young folks is they tend to behave a little awkwardly. Understandably, psychologists explain that this behavior results from their pressure to make decisions that will impact the future while they
are still trying to understand how the adult world around them functions today.
Industries also have a “growing up” process that starts at birth, or introduction, then growth and ultimately, hopefully, maturity. Less than three years ago, only a handful of the top companies in the
largest industry sectors in the world listed the integration of unmanned systems as a key initiative. Today, that has increased to more than half. This rapid demand for adoption has forced us, our industry, to begin
delivering actual services to these customers sooner than some expected. In other words, our industry has been forced to grow up. Quickly. So it should be of no surprise that we are a bit… awkward.
We are not the first industry to face this issue and as such, we not only have the ability to recognize what’s happening, but maybe. Just maybe. Our team can learn from the lessons of the past and prepare for the
turbulence we are about to face. Apologies for the pun.
A key trait of maturing industries is the shift from a vision-driven industry to a market-driven industry. In traditionally-paced industries, that transition occurs gradually and somewhat peacefully. However, in rapid-paced
industries like ours, that same transition is often fraught with turmoil and the unfortunate demise of the very visionaries who sparked the industry. It is, at the same time, unfortunate and predictable.
As the new technology is adopted and growth begins, early-market companies, often weighed down by enormous amounts of investor dollars, cannot compete with their smaller, more agile competitors. Having grown
faster than the market, they find it nearly impossible to “reel in” and align their business models to market realities. Instead, they fight to maintain market profile and influence through lobbying, marketing, meaningless
break-through announcements, and unusual investments that often include pointless acquisitions. We all know how this story ends, and we all know why. Their exit of the market allows for the necessary shift of leadership and influence essential for a long-term, sustainable industry.
Am I saying that companies in our industry must fail for us to be successful? My answer is absolute, explicit and direct. Maybe. Let me be more succinct. Vision is necessary to ignite and grow any industry and it will continue to transform ours by developing new products, expanding service applications, enhancing production models, and opening new market opportunities. However, vision and hype will not sustain any industry without eventual product demand. When that demand arises, it is incumbent on the industry to deliver effective and valuable products and services that create recurring and increasing revenue. Only then has the industry achieved market validation.
Now, I know that some folks are not going to like what I am about to say. Perhaps even a few people in this room.
Product demand has been generated. Very real signs of market validation are emerging everywhere. This is incredible. We should be having serious discussions about that. But we aren’t because those points do not support
desired narratives. Narratives that are too often the soapbox foundations of the very same folks we have entrusted to promote our industry. As you may imagine, I am involved with dozens of industry boards, alliances, committees, and organizations. All of which are in one way or another committed to promoting the commercial UAS industry. So far this year, I have received more than 7000 emails covering every imaginable topic. BVLOS, Large UAS, UPP, IPP, and as always, membership dues. The fonts and words have minor differences but the message is consistent.
Help us influence policy to facilitate adoption of drone technology. Help us shape a regulatory environment that will pave the way for industry emergence and growth.
The implication is subtle but clear. Only through continued efforts to guide policies and regulations will our industry ever really get off the ground.
Change slide: This is now on the overhead “I agree this is worth discussing. But, nobody is making any money yet and doing anything to suggest otherwise could jeopardize our future funding.” Sometimes the message is not so subtle. Take a look at this quote from a recent advisory group email exchange. After someone asked if they should
shift some of the group’s efforts to promoting the accomplishments of commercial companies in the region. Awkward. And yes, I know you are in the room and no, you’re safe.
Why let facts get in the way of a good narrative? Let’s get back to my earlier comment about product demand and market growth.
I’ll share some DroneUp data over past 12 months.
- Inbound inquiries for services have increased over 1000%
- While inbound marketing budget has remained unchanged
- Deal size has increased by nearly 20%
- Client expectations of pricing are showing alignment
- We have raised core pricing
- To control and maintain our growth at roughly 100%. Month over month.
Demand. Performance. Premiumization. And even a bit of Commoditization.
Ladies and gentlemen, we have product demand and market growth. Textbook. Without BVLOS. Without Counter-UAS. Without the perfect traffic management system.
And without any notable incidents. So, what are WE doing special? I will come back to that later. In fact, I’ll open the kimono and share the ingredients to the “secret sauce” that is driving our growth. But before that, I want to point out that is not just DroneUp. I can name dozens of other companies with services ranging from flight operations to processing, data integration, analytics, security and more, all of whom are identifying and pursuing current market opportunities that are feasible to deliver under existing regulations. Companies who understand that the best way to ensure our industry’s stability is to remain steadfastly focused on operating responsibly while providing tangible value. BVLOS, asymmetric data protocoling, AI-enabled dispatch and the many other technologies on the roadmap will extend our capabilities and contribute to our industry’s growth and sustainability. Let me say that again, they will extend our capabilities and contribute to our industry’s growth and sustainability.
Companies and organizations who develop platforms and technologies to enable longer flights and heavier payloads have a valid interest in policies that will enable the realization of their business models. And we should be
continually evaluating policies that safely provide for that. But we must invest an equal amount of time and effort ensuring that that in doing so, we do not inadvertently cause a negative impact to the existing and growing business operations.
The value of the product demand and market growth I mentioned earlier is paramount to the future of our industry. It shifts the conversation from what can be, or what should be, or what will be, to what is. It shifts the narrative of how drones and their operators are often portrayed in the media and on the hill. It creates a sustainable industry. And that lowers the barriers to longer range autonomous opportunities that will vastly expand what we are doing today.
And from our perspective, we simply ask that consideration of any policy changes that could potentially impact our ability to conduct business or that of our partners be delayed a bit.
Because if we are going to finish inspecting and complete:
- The nearly 4,000 square miles of parking lots and the roofs of over 6 million commercial buildings in the U.S.,
- The more than 600,000 bridges,
- The more than 120,000 acres of solar panel farms,
- The roughly 128,000 railroad crossings,
- The development of 3D models of over 130,000 schools in our country. Models that are invaluable situational awareness tools during emergency situations,
- And the other valuable services we provide to both the private and public sector every day..
To do that work – All of which CAN be done – and IS being done today: and which, by the way, will generate around $7B in revenue for our industry -well, we are going to need a little bit of time. Drones are changing the world and the pace of that change is and will be driven very little by the number of new policies created or by how many advocacy groups are assembled. No, real, long-term change will be the result of how quickly the market adopts our services. Nothing will promote that better than a proven record of safely delivering services that are more valuable than what is available today.
And for that, we are going to need a little bit of time. Last week, a Bloomberg headline story stated “Drone Bubble Bursts, Wiping Out Startups and Hammering VC Firms”. News highlighting unrealized expectations of our industry, companies shutting down suddenly after burning through millions of dollars, and announcements like the troubling number of layoffs from one company just last week. These things are a bigger threat to the future our industry than any 3 letter acronym you, or your lobbyists are currently concerned about.
I stated earlier that I would share what we are doing. Our secret sauce. We have cool technologies, innovative processes, amazing people, and a motivation to succeed. But, so do many other companies, including some of those who have left the market and a few others that will shortly. No, the seven differentiators that I believe drive our growth are simple, repeatable, and most of all, shareable.
1. We answer the phone.
2. We undersell. Affordable, Achievable, Actionable.
3. We operate lean.
4. We value partnerships, like the LAANC- VA Contract
5. We care for our people, our brand, and our industry’s reputation.
6. We are financially agile.
If you are thinking to yourself, none of these seem to be unique to our industry, I agree with you.
But, if we, our collective team, are to ever reach our potential, we must stop being drone people trying to build businesses. And start acting like business people who are trying to build a drone industry.
Yes, there is one more and it is, to me anyway, perhaps the most important. It is something I wrote a long time ago to serve as a daily reminder to myself. Still today, I share it with every new member of my team. I realized as I was preparing my comments for this morning that it is also good advice for our industry
Be Confident, But Not Cocky,
Proud, But Not Arrogant,
And Never Tell Anyone How You’re Better.
Tell Them How You Are Different. Let Them Decide If That’s Better.
And it is the last part that I think is most relevant. Our solution is new to most of our customers. So new that some prospects approach us as you would an unusual stranger whose presence made you a little uncomfortable.
See, Number 7 is that we are patient. We do not proselytize how drones are better. We discuss how they are different and we let the market make the choice. Turns out, that works better than policy bashing or a flashy
Thank you again for the opportunity to speak to you today.”