I just got back from a few days in Orlando at BZ Media’s Drone Dealer Expo. This is a brand new event, aimed at – well you guessed it. Props to the BZ Media marketers’ who managed to hit their target – looked like between 400-500 attendees who came from 17 countries. Hat’s off to Katie Serignese and the content team who put together a very thoughtful program that covered all the bases. I am glad I got a chance to be part of it.
The Expo offered three days of keynotes from a wide range of industry luminaries about where the retail industry is at and where it’s headed, together with a bustling show floor. Smart scheduling made it easy to get a lot in. Stay tuned for the Interdrone Conference which is coming up in September.
I started things off having dinner with Colin Snow, the Drone Analyst. We wandered the landscape agreeing on most things. Like me Colin sees a lot of opportunity in inspection – GE’s 4 D’s – dirty, distant, dull and dangerous. Though Colin was quick to point out that distant was still some ways off. He also pretty much debunked the forecasts for precision agriculture suggesting that it would be a long time before it becomes anywhere as near as ubiquitous as the optimists would have you believe.
FAA Regulatory Update
There was no shortage of lawyers in town to present a number of sessions.
I spent a lot of time with Jonathan Rupprecht who is one of the two attorneys involved in the Taylor case. They are suing the FAA to revoke consumer registration as it pertains to model aircraft. This is aka the Christmas Rule or the hamburger rule on these pages.
Given the exploding retail interest in drone racing, Jonathan notes that by the letter of the FAA rules, FPV is not line of sight and is therefore illegal.
Talk about a buzz kill.
Racing is a huge percentage of the consumer market, and one of the few margin bright spots for the dealers. Plus, the need for speed tends to keep people coming back to hone their competitive edge. As do the crashes.
The fact that it is illegal brings into sharp focus one of the big aha’s that I came away with – it is clear that the FAA is going to hold the line – drones are aircraft and will be governed by aviation rules. There were a lot of pilots there and there was palpable displeasure at the lack of respect for aviation rules and tradition among the techies who have come to the space through other traditionally disruptive routes. There is the potential for a real culture clash.
Jonathan’s take is that the FAA will miss the June date for Part 107 (the NPRM rules.) He thinks it is six months to three years out – something guaranteed to make a lot of people waiting to enter the commercial space unhappy. He points out that it is unlikely that the NPRM will do away with the requirement for a pilot’s license – and that a 333 will still have a lot of uses.
Drone Marketplace Forecasts
This sets up a nice segue which is that one idea that got a lot of traction was ‘drone as a service’. The theory is, and I think it’s a good one, that compliance to the letter of the law is beyond the core competencies of most companies that have a business reason to use drones. For those who wish to comply with the law, hiring someone who is a licensed pilot to provide and operate the drone will make a lot more sense than trying to bring it in house.
It was also clear that people know that the easy pickings at retail are over. (I am sure there are those who would say “what easy pickings?”) Being successful is going to require an increasingly business-like approach with a lot of emphasis on education, training and after-sale support. All by the way very expensive things to do when your margins are squeezed and you average according to some of the research that was presented is $475.
The Future of Drones in Retail Distribution
The panel I moderated was on The Future of Drones in Retail Distribution. We had a well-filled room and some great panelists.
Steve Petrotto works at Horizon and is the product manager of their Blade line, a proprietary brand developed in-house. They have over 800 dealers so he has a really great perspective on what it takes to be successful in both brick and mortar and online. He brings the RC flying heritage piece from both a personal and corporate perspective. And the perspective of selling internationally. He sees that the companies that are successful are good at education, service and getting involved in the community where they can expose people to the fun.
Steve came to Orlando having just wrapped up a three-day event co-hosted with a group of Horizon’s Florida dealers where over 2,000 people got to see and sample all things drone. He’d like to do two of those events a quarter. We used to call people like that evangelists.
Mike Blades is an industry analyst with Sullivan and Frost. His perspective on UAVs is in the larger context of how commercial UAVs fit in with civil and military, how it fits with space etc. He is a 20 year USAF officer and command pilot so he is intimately acquainted with the NAS. He wrote a terrific report (the kind that sell for $6,000) the headline of which was Overhyped Market to See Significant Growth Despite Regulatory and Technology Hurdles. This is the market segment that everyone writes magnificent forecasts about…
Mike’s view is that a drone is like a military truck – it’s job is to get wherever there is and back. He sees construction and inspection as category leaders, and also sees a lot of opportunity for dealers in maintenance and support.
Kevin Kelly founded and runs Stampede, a large electronics and audio visual wholesaler that added a concept called Drone Video Systems to their offering. Stampede works with dealers, system integrators and national solution providers who in turn sell into companies of all shapes and sizes using a variety of go to market strategies.
“This is the biggest opportunity in electronics since the cellphone.”
Kevin sees this as the biggest opportunity in electronics since the cellphone – a terrific story that begins with large clunky military field phones the size of a brick – sort of a peace dividend – and ends up with today’s app stores. Kevin’s point is that at each transition (inflection, tipping) point in this evolution there were opportunities to make substantial profits and that he expected the drone market to provide the same kinds of opportunities.
I set up the duck with the idea that at one end of the spectrum you have people who enjoy flying and taking pictures – and on the other end those who simply want to use a flying robot to get a sensor over a subject of interest. In many ways, this parallels consumer
My favorite question was “Chris Anderson now says that as a result of the pricing pressure DJI has put on the industry their strategy is to go upstream after enterprise customers. Should you be thinking about going upstream too?”
This really set the table for the panel to talk about the differences between consumer and commercial customers, what they are buying and how to sell to them. The audience stayed on after we finished peppering panelists with questions so I think it hit the mark.
There were two keynotes that broke new ground.
The first was by Steven Reese, Director of Business Development and Commercial Solutions at Yuneec USA. He crammed an enormous amount in, (OK way too much) but the interesting slide is reproduced and addresses his (Yuneec’s?) vision of “drone equipment as a platform.” This is a mature approach that goes well beyond SDK’s and API’s, and runs counter to the tried and true “innovate to boost sales” that characterizes consumer electronics. What Yuneec is saying that we understand that the people who buy and support our platform need consistency. Smart. And very reassuring to a commercial prospect who is obviously looking way beyond the cost of the drone itself into how the drone integrates into their total workflow.
“We like to be in the middle of everything.”
The mind blowing presentation that reframed everything was by Geoffrey Stewart, who runs Amazon’s Camera, Photo & Video business. The quote of the day was “we like to be in the middle of everything.” What can I say except oh boy do they ever.
What was noteworthy about Geoff’s presentation, is the breadth of their vision which gives a clear idea of what a mature marketplace will look like.
One of the more interesting moments came when Geoff said that they were looking for partners to handle refurbishing the returns. Sugar plum fairies definitely were out dancing as people contemplated just how many units a month that might entail, as well as the proffered resale opportunities.
Sugar plum fairies definitely were out dancing as people contemplated just how many units a month that might entail, as well as the proffered resale opportunities.
Ladies and gentlemen, problem solved.
Finally I absolutely have to give a shout out to Jeff Chookazian from Case Pro.
Ever since I began my career as a photographer, a rite of passage involved preparing your Halliburton camera case – a beautiful hunk of aluminum filled with foam to your exact specifications.
There were two challenges. First laying out the items so that you could get everything in and still have enough space between each item for the foam to do it’s job. And then you had to cut the foam with an Exacto knife, carefully tracing the contours of the lenses and bodies, knowing that you would have to face your mistakes every single time you opened the case.
Ladies and gentlemen, problem solved. What you are looking at is a layout tool that presents the exact dimensions of every case. The red indicates a no-cut zone. There is a library of existing shapes (popular drones, Nikons, Canons, batteries etc.) you can drag around to arrange. You can also use your iPhone to measure objects that are not in the Case Pro library. Each object has a “bumper” zone that maintains a safe distance the adjacent object.
When you are happy with the layout, you place your order. After your credit card clears, your layout is converted into cutting instructions for a CNC machine. And presto shazam, a perfectly cut case is on it’s way to you. This Phantom 4 case is cut so precisely that it closes without removing
So you arrive on location RTG – ready to go. Slick.