
Drone Bubble Bursts, Wiping Out Startups and Hammering VC Firms - prostoalex
https://www.bloomberg.com/news/articles/2019-08-30/drone-bubble-bursts-wiping-out-startups-and-hammering-vc-firms
======
benboughton1
I traveled to the US in 2014 on a sponsored trip to research drones for
agriculture. My report covered off on some of the technical challenges rather
than the business side of it. You could see even in 2014 everyone had great
ideas but profitable execution was going to be so hard. My report is here for
a look back in time
[http://www.nuffieldinternational.org/rep_pdf/1438074605BenBo...](http://www.nuffieldinternational.org/rep_pdf/1438074605BenBoughtonNuffieldReport_Final.pdf)
. I then went on to start a business processing and providing satellite
imagery in agriculture because I couldn't figure out a business model that
would work for drones.

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vsgzusnex
My guess is fully autonomous drone products will prevail. The capabilities
today are already incredible and the mobility lends itself to generalize to
solutions that weren't previously possible. They could be one of the first
kind of robotic agents that we regularly interact with in our lives besides
automobiles.

Skydio -
[https://www.theverge.com/2018/4/5/17195622/skydio-r1-review-...](https://www.theverge.com/2018/4/5/17195622/skydio-r1-review-
autonomous-drone-ai-autopilot-dji-competitor)

Shield AI - [https://www.shield.ai/nova](https://www.shield.ai/nova)

Battery life is certainly an issue but even before a major breakthrough
happens 10-20 minutes is a long enough flight time for a lot of autonomous
tasks. Plus what if they dock and charge themselves?

I think they're going to continue getting smaller, more power efficient, and
cheaper and it will continue to open up possibilities.

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neonate
[http://archive.is/COKtH](http://archive.is/COKtH)

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heyflyguy
Much of the drone industry circa 2009 - 2013 suffered from the exact same
symptoms...develop awesome tech and then find a use case. I know of 3 that ran
out of money before finding a way to even make money. sad but great lessons
for anyone involved.

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romwell
TFA in two sentences (quote):

* Federal regulation of the aircraft has been slow to catch up, and is holding back many businesses from expanding.

* Non-drone companies across industry pull their unmanned aerial operations in-house

In short: there is no drone bubble. There is a short-term investment bubble.

~~~
umeshunni
Another reason (the article didn't delve deeper into) is that the drone
hardware market itself consolidated and non-Chinese manufacturers just got
outcompeted and wiped out.

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ingenieroariel
Interesting that they did not mention 3DR.
[https://3dr.com/](https://3dr.com/) They went from selling the hobby 3DR Solo
(which I own and love) to focusing entirely on the government side.

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Fr0styMatt88
I have a first-gen Parrot AR.Drone collecting dust. Great fun initially until
I started reading about flyaways and then got too worried to actually fly the
thing outside. Even nowadays I get the impression this issue was never solved.
At the time it seemed like one of those widely-reported but never admitted-to
things. I never understood why the software wouldn't just go into a fixed
landing routine if the control signal was lost or if a watchdog tripped. Still
really curious about that actually, if anyone here knows more technical
details.

So yeah that and the battery was never good enough. Now I look at drones and
it seems like you have either really really cheap, subpar options or
incredibly expensive DJI-quality drones. Something that costs around $300.00
AUD and that could fly for half an hour at a time would be a great toy, but I
get that the tech isn't there. So I end up feeling like they're great tech
that's ultimately killed by a thousand little tradeoffs. At least for me; if I
was into video then one would be great for some things. That's a limited
market in the end though, I think.

~~~
closetohome
Man, I haven't heard of a flyaway in years.

I always assumed it was just pilot error that the pilot blamed on the drone.
Certainly saw enough of those situations that it's more believable than a
phantom software issue.

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emcq
The folks at Skydio are building something different. It's the first
autonomous thing (car, boat, plane, drone, etc) that's widely available to
consumers.

They're releasing a new product soon and if it's better than what they had
before DJI or anyone else won't be remotely close to having a similar product.

Maybe a lot of the weaker companies have folded, hardware is hard, but would
be very sad to see the innovation happening there collapse at this point.

~~~
blt
Skydio has really good tech, if anything I guess they need to figure out how
to get the price down.

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carc1n0gen
It kept getting harder and harder for me to legally use my drone. I own a
parrot drone that weighs 500g. That uses to be the upper limit to not need an
aviation license or certificate of some kind, and Insurance. Now 250g and up
have those requirements, so I just stopped using it. I only used it once every
few months for some arial footage anyway.

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Qu3tzal
ACSL (acsl.co.jp) is the first drone-making startup to enter Tokyo's exchange.
They seem to have clients and are making money.

They do B2B drones though, maybe this article was too focused on B2C
companies.

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appleshore
Zipline raised a $190m at a $1.2b valuation. Someone who seems credible (works
for the government) told me their business model was questionable.

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buboard
People talk a lot about the tech bubble and forget the VC bubble

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zelly
Next is deep learning.

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breck
I was very excited about drones until
[https://www.boringcompany.com/](https://www.boringcompany.com/) came out.
Moving things underground makes 1000x more sense.

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erobbins
We are now entering the trough of disillusionment. In a few years some real
novel and amazing companies will emerge and drones will find their useful
place in society.

~~~
danboarder
This. Now is a great time to innovate drones. The developments in FPV drone
tech are happening fast and it's mind blowing. For example, 50sec into this
clip: [https://youtu.be/-AL5S3g03qw](https://youtu.be/-AL5S3g03qw) Stay tuned,
drones are just getting started.

~~~
meheleventyone
That doesn’t seem to be so much an innovation in tech as innovation in
piloting and video editing?

~~~
danboarder
No, we have had great pilots and editors for years. The new gen FPV hardware
has low latency HD for the first time this year, with better dual gyro flight
controllers on faster chips, faster ESC chips and new FC & ESC software for
superior filtering. Lots of developments like Neuroflight firmware are also
very new, it's all amazing when you dig into it. Also new this year are tiny
fpv racing cinewhoops that are 4k capable and fit in the palm of your hand,
and fly around 100mph...
[https://github.com/wil3/neuroflight](https://github.com/wil3/neuroflight)

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droithomme
The FAA's licensing requirements for even toy craft killed this sector.

Good news though, it's going incredibly strong overseas such as in Yemen where
they've bought Chinese made drones and rapidly upgraded them into a domestic
high tech military drone manufacturing capability... with 1000 mile ranges and
bomb carrying capability.

So drone fans might not be able to do their thing in the US, and the US might
thus not have anyone locally that has a passion for drones, or is able to
advance US drone technology, but the tech advances ... elsewhere.

~~~
itsyaboi
Do you have any links that talk about this in more detail? Modifying a off-
the-shelf drone (assuming you mean quad copter here, not a fixed wing craft)
to have a 1000 mile range seems like quite the feat...

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acollins1331
Drones are huge in my department at school for collecting data with lidars and
multispectral cameras. New drone techs for VC firms to invest in are going to
need better technology, but a huge rollout of drones being used by everyday
companies to do this is still in it's infancy. It's a good time to be someone
graduating with experience with UAVs.

~~~
nomel
> for collecting data with lidars and multispectral cameras

What's the use case for this data?

~~~
acollins1331
The numbers of uses are too large to count. I'll give one example: The DOT in
my state has given large grants to use lidar from UAVs to be able to
automatically identify wetlands.

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_bxg1
> Unmanned aircraft are still seen as a pillar of the future. But for now, all
> that over-heated enthusiasm is getting a cold blast of reality.

Just waiting for the same to happen with AI.

~~~
streetcat1
AI is hyped from the fifties. It might be the real thing today.

~~~
_bxg1
It was hyped in the 80s, and real advances were made, and then it crashed. Now
it's hyped again, and real advances are being made, but it's still set to
crash again. The problem is that "AI" is too big and romanticized a term.
Symbolic reasoning is a real technology; neural nets are a real technology; AI
is at best science fiction, at worst marketing fluff. So despite having some
real substance, the hype still outpaces the reality.

~~~
streetcat1
How is it set to fail again.

Previous times the hardware was not there, now it is.

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lacker
DJI is still valued at around $15 billion, right? To me it seems less like a
drone bubble burst, and more like a single winner has emerged from round one.

~~~
RRRA
They just got into FPV and I really hope they fail with their lock-in DRM, for
the sake of keeping the maker spirit and FOSS innovation around in that
field...

~~~
gear54rus
Anything to read on that DRM? Google doesn't give much.

~~~
mlevental
they used to have an open platform so you could bring your own flight
controller. the most recent gen of their platforms locks you into their flight
controllers (and their shitty api).

~~~
ahartmetz
Heh. I have seen someone doing incredible maneuvers with crazy accelerations
using a homebuilt drone. Compared to commercially available drones it's like
an F1 car versus a tractor.

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asteli
Most of the good ideas are either massively competitive (aerial inspection/ag
support/photography), a pain in the ass due to safety regulatory issues (drone
delivery, passenger flight), or just bad ideas overall (consumer camera that
flies around and tries to follow you).

There are occasionally bursts of genius in the field though. A few years ago I
met a guy (Sergei at Fotokite, I believe), who was developing a tethered drone
for photojournalism. Solves many problems at once: you don't run out of
battery, you could control the drone via a stick or just pulling it around by
the tether, people don't hate the drones as much when they can see the
operator. He demonstrated it by deploying it in the reception area of an
office building, probably 15x15ft. Now apparently they're developing a
tethered drone for first responders that automatically deploys and gives you a
150' vantage point for situational awareness.

BTW: No relation to Sergei or Fotokite, just impressed with their tech.

~~~
fisherjeff
I’m fairly familiar with one of the businesses in the article and it’s just
fascinating to me. They took a solid product that would’ve absolutely made a
perfectly good, sustainable business line, added a ton of VC money, and got
utterly swallowed up by buzzwords.

~~~
Gibbon1
Reminds me of someone bitching about spending a decade developing a solid
business and then a bunch of VC funded companies came like locusts, eating
everything, and then promptly died.

~~~
jacquesm
This happens quite a lot. There are some advantages to be had here if you play
it clever but you better have a very solid play on how you plan on staying in
business while the VC funded companies burn through their capital. At least
you'll have a few opportunities to buy cheap Aeron chairs ;)

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ChuckMcM
This is a typical startup contraction. Remember when the "PC bubble burst" and
dozens of companies went bust, all with similar but slightly different
business plans. It turned out that being able to execute efficiently was the
winning strategy, not features, not fancy graphics, not custom cases. Just
ruthless efficiency.

A couple of years ago I went to UAV expo in Las Vegas and even then it was
clear that a lot of drone companies were technology looking for a use case.
And there were demonstrations of drones that did things much better (like
mapping a traffic accident scene) than existing technology that saved both
time and got the highways re-opened faster.

Racing them with PoV cameras continues to be a lot of fun, it just isn't the
multi-billion dollar sport yet, give it time.

~~~
dehrmann
> technology looking for a use case

Did someone say blockchain?

~~~
faissaloo
Blockchain already has a usecase: currency That's it, it's that simple

~~~
Cthulhu_
Except that that's already failed; it's used as an investment product, a get-
rich-quick scheme, dealing in illegal products and services, untraceable
exchange of currency (e.g. ransomware) and money laundering. Nobody pays with
crypto. Except people that made a lot of money off of crypto and have a vested
interest in its success.

~~~
Erlich_Bachman
If you look at transaction number and volume it has been basically constantly
rising, so I'm not really sure what you're on about. "Haven't replaced all
other currencies in all use cases" is not the same thing as "has failed".

~~~
PeterisP
Some 2 years ago quite a few services and shops were trying out bitcoin and
offering it as an actual option for real-world payments. This trend has
reversed, new offers are very rare and many companies who offered it in 2017
don't support it any more, as for any 'normal' business the amount of Bitcoin
transactions they got (wherever I've talked with them) was extremely low after
the initial buzz at launch.

The current number of transactions is _not_ constantly rising. The current
short term trend ([https://bitinfocharts.com/comparison/bitcoin-
transactions.ht...](https://bitinfocharts.com/comparison/bitcoin-
transactions.html)) is downwards. It's now about the same or less than it was
in peaks of 2017 and early 2018, and whatever the growth in 2018-early 2019
was made of, it doesn't seem to be in consumer purchases of goods and services
(i.e. being used as a currency).

~~~
faissaloo
Sure, because it's still unstable, as more and more people use it the price
will become increasingly stable.

------
tylerchilds
Anecdotally, I never got into drones because of the batteries. Everyone I met
that had them absolutely loved them, but had like 4 batteries they needed to
keep charged for about 15 minutes of flight time.

And quite a few tried pushing that a little too long an ended up with crashed
drones. So my half cent is that batteries need to get better before people
like me even consider them. Mentioned 0 times in that article.

Alternatively, drones need to get efficient enough to be solar powered, which
is maybe the intent behind the acquisitions by PrecisionHawk Inc.

[https://www.precisionhawk.com/blog/media/topic/precisionhawk...](https://www.precisionhawk.com/blog/media/topic/precisionhawk-
acquires-both-hazon-inc-and-inspectools-inc-becoming-the-leading-provider-of-
drone-technology-and-analytics-for-the-energy-market)

~~~
coin
With petrol’s energy density, why not make gas powered drones? Gas engine →
generator → small battery (backup power) → electric motors. This is what
manned drones (still in development) do.

~~~
i_am_proteus
Great idea if you have robust controls! Terrible idea if you don't, because a
crash can handily result in a fire or an explosion.

~~~
dredmorbius
Heavier fuels (kerosen, a/k/a jet fuel, diesel) have equivalent energy density
to petrol, but are far less flamable. You might get a small fire, but not an
explosion. And there are a lot of RC aircraft already.

They are _noisy_ , however. Drone buzz now is simply from spinning fans.
Adding a reciprocating motor to the mix is all the louder.

The alternative is lighter airframes and solar power. For quads / octos,
probably not viable, but for a prop-driven fixed-wing craft, a very small
amount of thrust to counter gravity could be quite effective. Expanded
polystyrene or similarly light body, solar cells over all horizontal surfaces,
and an ultra-lightweighted controls and imaging payload. That would allow for
long-duration flights at least in daylight.

The low-energy use would also make battery-powered night flights more viable,
certainly beyond 15 minutes.

The principle cost is loss of hover capabilities.

~~~
i_am_proteus
Yes, but the motor (turbine) to run kero is more expensive than the motor
(piston) to run petrol.

~~~
grogenaut
The motor to run the drones was expensive till they became mass produced and
dropped in price. Same for the batteries. DJI Drones aren't exactly cheap
either.

also I believe if you want to be pedantic, if it runs on combustion it's a
engine. if electric then a motor.

~~~
eitland
> also I believe if you want to be pedantic, if it runs on combustion it's a
> engine. if electric then a motor.

I think that might be less general than you think: General Motors hasn't
exactly been known for their electric motors the last few decades.

Also see:
[https://en.wikipedia.org/wiki/Engine](https://en.wikipedia.org/wiki/Engine)

~~~
twic
"Motor" is commonly used for rockets too, eg:

[https://en.wikipedia.org/wiki/Model_rocket_motor_classificat...](https://en.wikipedia.org/wiki/Model_rocket_motor_classification#Motor_impulse_by_class)

