Your Business Model, not Ours!
Published On: March 08, 2016
We have invested a tremendous amount of resources (monetary, development, knowledge) into developing technology and services for mapping sites using dense image matching collected with small Unnamed Aerial Systems (sUAS). Our focus is applications suitable for an sUAS (non-populated areas, smaller sites) that require near survey grade accuracy. The most common example is small open pit mine sites such as quarries. We have not considered agricultural applications since these tend to be very large areas where radiometric analysis is the focus rather than geometric correctness.
Like most other companies involved in this emerging market, we are trying to predict the most palatable business model. However, I would say that unlike many other technology providers, we are seeking the business model that makes the most sense for the customers, not for us.
AirGon LLC has a very big advantage over companies funded by venture capitalists. We are funded both by GeoCue and by investments from our small group of inside shareholders. This allows us to focus on a long-term vision of the market. We plan to become the "go to" company for sUAS mapping, much as GeoCue has become the "go to" company for airborne and mobile laser scanning.
One of the big questions that Venture Capitalists have in funding a startup is that of scale. If the venture will not scale up to a sufficient size to provide a comfortable multiple on the initial investment, the venture is not considered financially viable. In the sUAS business, it is hard to devise a model that will scale that does not require significant involvement on the part of the customer. The most popular model is a leased plan where the customer flies the drone and uploads the image data to a cloud-hosted system provided by the vendor. In some of these models, the customer may even do the data extraction such as defining the base of a volumetric stockpile.
These "self-service" business models proliferate in the rollout of new technologies that are generally called "Web 2.0" (or are we Web 3.0?). You now see it with everything from reservation booking systems to the Uber taxi concept (in the Uber case, the job of "dispatch" has been handed over to the customer). Even grocery stores have gotten on this bandwagon with self-service checkout kiosks.
We certainly believe that self-service will play a major role in the emerging sUAS mapping business. However, at the current time one size does not fit all. This is particularly true in light of the draconian FAA regulations that currently exist for commercial sUAS operations. A mine site leasing a "fly-it-yourself" drone would require an FAA 333 exemption as well as an FAA licensed pilot. This is a fairly significant barrier to adoption of the technology. In addition to the legal hurdles, many customers want to nibble into this new approach to mapping rather than wolf it down in one gulp.
We launched our CONTINUUM program as a way to address these customer needs. CONTINUUM allows a customer to pick from a menu of hardware, software and services that best suit her needs. A few customers want to buy a mapping kit and do it all themselves. For this customer we offer the AV-900 Metric Mapping Kit (in both base and RTK versions). Other customers want to fly their own equipment but have the data processed as a service. Still others want to have us provide full services where our Field Service Analyst shows up at their site and performs the complete job. Under CONTINUUM, we can provide what the customer wants, not what we think might be the best business model for us.
One of the real values behind CONTINUUM (and the reason for the name) is that most customers do not know what they will want to do as a final business model. They would like to be in an environment where they can experiment a bit. This is exactly what we provide through the CONTINUUM program. A customer can modify the business model from one of AirGon doing everything to they, themselves, internalizing the entire process or any mix in-between, all without the need to change vendors.
I am not sure what will be a profitable business model for AirGon. We are still very heavily in the Research and Development mode. However, one thing I do know for sure - the successful business model will be the one that is deemed successful by the end-use customer. We intend to be the provider of that ultimate solution!