Cashing in on the Commercial Drone Industry

To say that there are numerous organizations and individuals predicting how much money is available in the commercial drone industry is an understatement. Just as a quick sampling of what’s out there in this regard, we’ve got PwC claiming that the global market for business services using drones is over 127 billion dollars, Business Inside Intelligence projecting revenues from drones sales to top $12 billion in 2021, and the one that essentially started it all, AUVSI’s The Economic Impact of Unmanned Aircraft Systems Integration in the United States which said that the economic impact of the integration of UAS into the NAS will total more than $13.6 billion. Sounds like we should all be taking to the skies!

The thing is, most of these reports detail potential uses and future applications of the technology, rather than focusing on how an industry or even a specific company has been able to realize an actual economic impact. That fact has gotten many experts to be justifiably skeptical or outright dismissive of these forecasts. As Colin Snow explained in great detail, the research in such forecasts can’t rely on historical data and often uses invalid proxy info, which means they’re basing everything on little more than guesses and hope.

That said, these forecasts aren’t just hype for hype’s sake, and they’ve had a tangible impact on the industry. They’ve gotten various professionals excited and interested in the real-world implications of the technology. They’ve pushed experts to figure out how the practical application of a UAV should be approached, but they’ve even gotten people to think about especially lucrative concepts like the mine of the future.

By and large, these are positive developments, but the headlines and forecasts have also helped cultivate an attitude of “look how great drones are, go buy one!” from certain commercial drone advocates. This kind of talk and hype eventually gives way to results and reality though. You can argue that transition should have already happened in the commercial drone space years ago, but until very recently, the regulatory environment in the United States gave everyone a reason to stay focused on the hype. That excuse no longer exists.

Issues with the Section 333 Exemption process are well documented, but all of that is in the past now. Part 107 has streamlined and defined a process to fly a drone for commercial purposes, which in turn has created countless opportunities for individuals and organizations. So that means those billions of dollars are now just waiting to be collected, right?

The truth is that anyone solely focused on those billions of dollars is missing the forest for the trees, because those numbers mean absolutely nothing to individual operators and organizations. What matters to them doesn’t even relate to details around how drones can impact issues like real-time awareness and accuracy. That fact alone is proof that we’re past the hype phase, because it’s no longer a question of potential or even around capability. Professionals want to know how using a drone will impact their bottom line – not tomorrow or some point in the future, but right now.

ROI with UAVs in Utilities: Creating and Scaling a Commercial Drone Program

ROI with UAVs in Utilities: Creating and Scaling a Drone Program

It’s a question San Diego Gas & Electric has been able to answer in specific detail, since the technology has allowed them to do things like send a drone out to take the same set of pictures at a structure time and time again to establish when and how repairs need to be made. It’s a question the Idaho Transportation Department has answered in terms of the ideal fits for drone technology in their organization. They’re not interested in simply gathering data or focusing on how their investment in UAVs is going to make financial sense in the future. They’re making the technology work for them, logistically and financially, today.

These kinds of stories are all over the place. Drones are helping mine operators make better business decisions, and can represent a difference of $160,000 in terms of investment dollars. Professionals at one of the biggest construction companies in the world quantified a 2 to 1 cost savings over traditional survey methods. These are the sorts of results that many people are just now realizing they can get under Part 107.

It’s all well and good to detail these kinds of success stories, but in some ways it brings us back to the pie-in-the-sky, billion dollar predictions for the technology. It’s great that some professionals are seeing financial success with their use of a drone, but how are you going to be able to do the same? What does that mean to someone when they need to get the same results with a UAV, but realize they’ll have to take a totally different approach?

Despite what some advocates might want to admit, there is no “easy” drone button. Any operator who wants to cash in on the commercial drone industry needs to dig in and quantify how the technology will actually be used and implemented. It means realizing that securing a Part 107 certificate is just the beginning of their journey, not the end of it. It means making a commitment to an industry and being able to provide a specific type of service to stakeholders in it.

Any organization that wants to understand how and where UAVs can make sense needs to make a similar commitment in terms of their process and approach. A drone might not make something faster, cheaper or safer in everything it does, but the differences can be seen across an entire project. Those are distinctions that show up in different ways for different organizations, and being able to quantify and qualify them can be a project unto itself. Effectively leveraging a drone means talking to and understanding the approach of companies like Sky-Futures, who deeply immersed themselves in the industries they wanted to serve to ensure that they were solving real business problems. It means having an understanding around what the drone can and will be doing for the organization before, during and after a given project.

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Which Commercial Drone Show Should You Go To?

That “easy” drone button might be the future, but right now, it’s a matter of operators and stakeholders being able to work together and figure out what makes sense. All of that might feel like a daunting task, and few of the people who have gone through that process will tell you it’s easy. It’s why connecting with those types of people at industry events and online to establish where you’re at and where you need to be is essential. There are numerous physical and online platforms to do just that, along with countless individuals and organizations that will help provide a starting place with and for the technology. As a worldwide drone market begins to emerge, taking those steps now is becoming more and more important.

Those professionals who go through this kind of process might admit it’s not an easy one, but they’ll just as quickly say it is worthwhile, not only from a financial perspective but from a personal one as well. The hype that drove these billion dollar predictions centers on the sheer joy of taking a drone into the air, and that sensation is still very much a part of the experience. That sensation cannot and will not sustain a product, process or market though, which is something we’ve already seen proven.

Are drones a potential billion dollar industry? Sure. But so is a service that allows subscription customers to sign up for unlimited classes in Pilates. Cashing in on the commercial drone industry is a question of commitment rather than potential. There are real people learning how to get cost effective results for themselves and/or their clients right now, but they’re also the sort of people that couldn’t care less about predictions and forecasts. They’re too busy flying in every sense of the word.

 

About the Author

Jeremiah Karpowicz always envisioned a career as a screenwriter, but found the autonomy and freedom he was looking for in the digital space. He has created articles, videos, newsletters, ebooks and plenty more for various communities as a contributor and editor. He has also worked as the Executive Editor for ProVideo Coalition where he was first introduced to UAV technology. You can get in touch with him on Twitter: @jeremiahkarp

  1. Wayne Tinlin

    Thank you Jeremiah for the informative and provocative article – and the hyperlinks. WRT your link for online resources, you identified four blogs from a year ago. Would you care to add any further online resources? A year in the UAS industry is almost a generation in more staid technologies…

    Reply
    • Jeremiah Karpowicz

      My pleasure!

      Part 2 of that series also has a handful of sites, but it’s just about a year old now as well. (http://www.expouav.com/news/latest/the-top-commercial-drone-blogs-part-2/) As you said, things change fast in this space. One of the most complete resources I’ve come across is the 70 Drone Blogs to Follow in 2017 list. There are definitely some in that list which are more relevant than others, but it’s very thorough. (http://dronebusinessmarketer.com/drone-blogs-2017/)

      Additionally, I’d recommend setting up Google Alerts for any specific terms or technologies that you might be interested in. I’ve personally found that to be one of the best ways to keep up with everything.

      Reply
  2. Thomas Gorski

    This is so true. This is exactly what you go through every single day as a provider of drone services – how to make money or safe money for your customers with drone services? Your article is absolutely spot on.

    Reply
    • Jeremiah Karpowicz

      Thank you for saying so. I’m hoping it’s something I can further explore in some future pieces.

      Reply
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