“It was classic Silicon Valley hubris. 3DR was a $100 million blunder based on ineptitude.”
Chief Revenue Officer Colin Guinn and CEO Chris Anderson dreamt up the 3DR Solo to challenge the DJI Phantom’s hegemony. Instead of white, Solo would be black and offer features–such as scripted flight paths, open code for developers and responsive customer service–that DJI lacked at the time. Despite its relatively steady do-it-yourself parts business that was bringing in $10 million a year, 3D Robotics focused all its resources on its new drone and acquired Sifteo, a consumer electronics game maker with no prior drone experience, to form the project’s core engineering team.
When 3D Robotics launched Solo in April 2015 at the National Association of Broadcasters conference in Las Vegas, The Verge said it “may be the smartest drone ever,” extolling the device’s self-piloting features and its control of an on-board GoPro. Drone followers also celebrated that there was now an alternative to the Phantom, a prospect that worried 3D Robotics’ main competitor. That spring, DJI founder and CEO Frank Wang traveled to Berkeley to talk with Anderson and offered to buy the company outright, according to one person who witnessed the meeting. The 3D Robotics CEO, who was about to start shipping Solo, declined. 3D Robotics was in for the long haul.
3D Robotics spent nearly everything it had to manufacture Solo, and while it has pivoted into developing software and service applications for partners like Autodesk, it’s unclear how much money the startup has left. In an interview last month, Anderson declined to discuss his company’s financial situation, but said that 3D Robotics was now solely focused on enterprise software.
“We exited hardware and we exited consumer partly because it was a tough market,” Chris said. “I’d never seen a market with price declines like that. Everybody other than DJI lost. It was just brutal.”
While it may prove fruitful, 3D Robotics’ pivot puts it in direct competition with a host of Silicon Valley startups, including Kespry, DroneDeploy and others that have raised millions of dollars on the original intent of developing software solutions for companies. 3D Robotics must play catch up and it may not have the resources to do so.
“We’re not making anymore Solos and we’re not going to make another drone,” said Anderson, who suggested that 3D Robotics would start developing software for other drone makers. “I love the idea of other companies making hardware so we don’t have to and we can focus on the software and services side. We’re a Silicon Valley company and we’re supposed to be doing software and there are Chinese companies that are supposed to be doing hardware.”
It is easy to imagine that a rearview mirror presents a clear vision of the road ahead. Still there were any number of red flags waving in the breeze.
For obvious reasons, 3DR took too long to get out of Mexico and move manufacturing to China.
Colin Guinn was overly motivated to one-up DJI, his previous employer. The bards remind us that revenge is a dish best served cold. [Since I wrote this, Colin has gotten 6.5M for his new venture Hangar.]
One has to believe that trying to be the organizing force behind the DIY and Open Source movement at the same time as launching a manufacturing business was a distraction.
Because of the “guppy-eye” lens distortion, the GoPro 3 and 4 weren’t great cameras – but they were a significant part of the Solo purchase price. After DJI parted ways with GoPro and developed cameras that offered rectilinear images (straight lines and flat horizons), GoPro became a negative for 3DR.
Finally, the Solo simply wasn’t very good. It did not work reliably. People complained a lot – so units sold did not turn into referrals. In the world of buzz and social media that’s a problem.
The smoke and mirrors magic, was and continues to be that Chris Anderson is a master of PR. (This should not come as a surprise given his long tenure as the Editor of WIRED.) Chris is the unrivaled king of the industry sound bite, and to give credit where it is definitely due, has framed the future that we are all piling into. He is also a wonderful writer, which I can assure you is not entirely a blessing.
I moderated a panel at Drone Dealer Expo in April on the future of drone retailing. Anderson had just made his famous statement that 3DR was going to pivot and go upstream after the enterprise market. I asked the assembled retailers how many of them planned to follow him. And then we had a discussion about how selling to enterprise is very different than selling to consumers.
So where does that leave us?
The success of 3DR’s pivot depends on being able to convince inherently conservative corporate buyers that despite 3DR’s very public collapse, they should still choose their software. This is not a gimme. And it is certainly nowhere that 3DR has gone before though their investors know the way.
Like any corporate software sale, it depends on a well-developed VAR channel. It depends on a highly integrated solution tightly tuned to the specific needs of a vertical market. And it requires staying focused on that market and providing exemplary support long enough to actually get referrals.
Can 3DR do it? Let me answer with my summary of Chris’ keynote at
“If there was a theme, it was the continuing collision between aviation culture and the high-flying venture fueled vision being pushed out in keynotes by Chris Anderson from 3DR, Greg McNeal from AirMap and others. The vision of a world filled with autonomous drones constantly flying hither and yon begs the question of what the business propositions are that will fuel all this activity. We may well get there, but we’ve got a few other things to take care while the “ifs and whens” get sorted.”
Like whether 3DR is the company you want building the software that your business depends on.
UPDATE A podcast interview with author Ryan Mac on how he wrote the story.