cameras. Today we can fly 1,000 acre crop in a single flight and see the leaves on every corn plant. However as sensors become more miniaturized, there is growing use of thermal imaging, Lidar, chemical identification, and other applications. For example, today we can fly over a herd of cattle, count how many are there, identify which ones have an elevated temperature, and determine the quality of the grazing pasture. In addition, data is being collected from farm machinery, static monitors, and other sensors and integrated with drone captured data. In the future, combinations of data from multiple sensors will add a whole new dimension to our analysis capabilities.
How big is the Market? A number of studies indicate that the commercial drone market will grow at double digit rates for the next ten years and total anywhere from $5B to $50B+ in the next decade. While none of these estimates are very solid, we all believe that each of the market verticals mentioned above represents a multi-$B opportunity.
What are the risks? The truth is starting any business is difficult and most fail. You need to have special skills to be successful and particular expertise when working in a rapidly changing technology centric market. If you wanted to start an auto sales business, there is quite a bit of history and best practices from which to draw, but the drone business as a whole and the DAAS model in particular, have never been done before. Even the most obvious example of drone assisted crop scouting still needs to be proven to make money for the Agronomist. Here is an article I wrote on this topic a while ago: https://www.linkedin.com/pulse/20140824123748-41700-drone-implementation-in-agriculture?trk=mp-reader-card
Here are a few of the risks that I see on the horizon in general and at the end will comment on DAAS risks as I see them today:
The Market is Over Hyped! I did it myself in the opening paragraph. The truth is we have set expectations far greater than our
ability to deliver today. The operative word is ”today”. There is no doubt this is a transformative industry but it’s going to take a little time to mature.
Regulatory and related risks? Unlike many other emerging technologies, the drone industry has to operate in a highly regulated environment. The overriding concerns are ensuring safety and privacy. Many countries like Canada, France, Australia, and England have established rules for commercial use of drones. Most require some sort of certification of the operator, offer common sense restrictions about flying in congested areas, near airports, etc., require liability insurance, and address safety and privacy issues. Others, including the US have yet to publish final rules.
Right now key restrictions under debate include flying beyond visual sight of the drone, collision avoidance technologies, night flights, and flying over populated areas such as events and sport stadiums. Earlier this year I wrote about the state of the drone market here: https://www.linkedin.com/pulse/few-thoughts-state-commercial-drone-industry-john-blair?trk=prof-post and posited that we were right at the “peak of expectations” stage on the Gartner cycle. Now I believe we have moved past the peak and begun to do the earnest block-and-tackling value creating development that will be required to build a sustainable business.
The big question that still needs to be answered is: "What is the ROI? How much $$ can I save? How does it improve my customer service?, etc. Unfortunately, most businesses have very little operating history and only a few data points to prove end user value.
So the companies that are focused on applications that yield quantifiable ROI will ultimately be the survivors.