Ushering in the Drone Age

If you’re reading this, then you probably follow general tech news to some extent and have seen an increasing number of news articles on UAVs as of late. I’ve done a fair amount of homework on the subject and have been following it closely for a few months. This post is a light summary of my findings.

What are Drones?

UAV, synonymous with “drone” for our purposes, stands for Unmanned Aerial Vehicle. UAVs began as big, expensive aircraft, initially developed for USAF and CIA surveillance. The military later began attaching weapon systems to the UAVs, which explains some of the negative association that drones have in popular media today. The current conversation on the civilian drone opportunity, however, primarily centers around subsections of the larger definition. One of these subsections is sUAVs (small UAVs), which represent a growing market with a variety of commercial possibilities. sUAVs have become a hot topic very recently, with tech entrepreneurs and VCs beginning to target it in 2012. Quadcoptors (holicopters propelled by four rotors) represent the most common form that these sUAVs are taking. Because of the stable nature of the platform, quadcoptors are ideal for real-time imagery and precision movement. Typical sUAV quads use an electronic control system and sensors to stabilize the vehicle. With the small size and agile maneuverability, they can even be flown indoors. With the sUAV industry in its early stages, the marketplace is fragmented with a large number of competitors serving a variety of customer use cases. DJI-PHaaVIS


There are three main reasons why everyone is getting excited about UAVs:

  1. Congress passed legislation in 2012 ordering the FAA to streamline commercial drone licensing by 2015. We’ve seen the first fruit of it this past week with the FAA approving BP to use drones for surveying.
  2. Moore’s Law for drones is accelerating. There has been a steep drop in the cost of sensors, which have been mass produced for smartphones. One way to think about sUAVs is as a flying mobile computer. Processors, batteries, and sensors are all part of the package.
  3. Better real-time, data-processing and cloud management solutions. With these tools becoming more abundant and accessible, more and more drone applications are possible.

Several sectors are poised to be disrupted. The move to drones in mapping and imagery has already begun. Google announced several acquisitions recently for Maps and Google X, most notably Titan Aerospace which is a maker of solar-powered drones. These drones are capable of collecting real-time, high-res images of earth, as well as carry other atmospheric sensors and support data devices. Disaster relief, logistics, and even the movie industry are all waiting for drone technology to bring major change. Other applications include agriculture (Monsanto), internet coverage (Google’s Project Loon, Facebook’s Connectivity Lab), and fulfillment services. The latter use case made headlines at the end of last  year with Amazon announcing that they are working on Amazon Prime Air. Both sUAVs and larger commercial UAVs capable of carrying larger payloads will be able to transform the economics of shipping. Amazon aims to use drones to solve the “Last Mile” problem, where a lightweight package going to a single destination cannot be aggregated and is thus expensive from an energy efficiency standpoint (gas, traffic, etc.). The ratio of vehicle to payload weight is dramatically reduced with drones; in fact, the CEO of FedEx even revealed that the price premium for air over sea shipping could fall from 10X to 2X with all of the speed advantages of air. prime-air_high-resolution01

DIY Drones

Another interesting angle in the drone story is the growing community of amateurs building drones and drone technology. DIY Drones ( has 30K members that fly drones that they assemble themselves or buy pre-made from dozens of companies that serve the amateur market. In many ways, this is reminiscent of the early computer days (ie. Homebrew Computer Club). To quote one WIRED writer – “The military created the Internet, but the people colonized it and created the web for their own purposes. The amateur UAV community is hoping to do the same with drones—demilitarize and democratize them so they can find their full potential”. With declining cost and numerous applications, many people in this community believe that the next decade will usher in the “drone age”.

Startups and VC Engagement

Interesting fact: There are more VC investors in drone-related startups than actual investor-backed drone startups. This alone does not directly say anything, but there is only one other industry that this can be said of and that is Bitcoin. Now, whether you’re a supporter of Bitcoin or not (and there is plenty of support for either opinion), there are certainly parallels that can be drawn in terms of current growth and world-changing potential. dronefunding As of Dec 2013, VC investment in drone-related startups totaled $79M. While we don’t have official numbers for the first half of 2014, the string of recent announcements suggest we may have already surpassed the historical total in this year alone. Major VCs investing heavily in the sector include Andreessen Horowitz and Google Ventures. As of my research on May 12, there are currently a total of 32 drone-related startups that aren’t operating in stealth. Here’s what they typically look like:

  • 3D Robotics – Manufacturing arm of DIY Drones, signing and manufacturing electronics and aerial vehicles with $35M in funding to date
  • Matternet – “Drones for good” company, developing network infrastructure for UAV systems targeting third world communities and disaster relief with $500K seed funding from A16Z and Singularity Labs
  • Airware – Sells customizable UAV autopilot systems, as well as specialty systems for commercial purposes including anti-poaching, infrastructure inspections, and precision agriculture with $33M in funding


Despite all the promise that this technology holds, there are significant challenges that can slow down the progress. Regulatory hurdles are one such challenge. Despite the FAA’s commitment to streamlining commercial drone licenses, >90% of US states have already introduced state-level regulation. In addition, UAVs are already illegal in many countries due to blanket laws intended to protect privacy and ensure public safety. For the drone enthusiast, the association with military drones and government surveillance continues to be a big worry. A video of a woman assaulting a 17 year-old for flying a drone on a beach went viral this week, giving the conversation national attention. There will need to be a shift in public opinion in order for reform and wide-spread adoption to take place. Security is another concern. In 2014, a company called Sensepost demonstrated a quadcopter UAV with software which could steal data from smartphones in the vicinity. Information such as identities, passwords, and banking data would be vulnerable to such a threat. The cost to bring reliability and security to drones will be high, which will also limit the rollout. Matternet, for instance, estimates that it will take at least $100M to get their key technologies to a reliable level. For Amazon and FedEx, a great deal of time and money will be spent to make sure drones are safe enough to meet the eventual FAA standards before operations go live. I believe that we’ll see an explosion of growth in drone hobbyists as the DIY movement becomes more mainstream in the next few years. By the end of the decade, drones will be a major player in the same-day delivery market. And when the market fully matures, I see drones being fully integrated into an organized system of robotics that will include autonomous cars, planes, and homes. Exciting times!


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