Jon Tull is the founder and President of FarmSolutions and operates a commercial avocado orchard where all FarmSolutions hardware, software and high resolution crop image data is collected. Prior to Farm Solutions, Jon founded and ran a successful software company for over 10 years, which he later sold to RealPage, a public software company. Jon remained at RealPage as Division President and corporate SVP prior to starting FarmSolutions.
The world of drone software solutions is evolving fast. The problem for commercial users is selecting the software that is right for the job, and flexible enough to run their business on it. We sat down with Jon Tull of Dronifi to get his perspective on the Drone software market, and how his company plans to solve some of the pressing issues facing end-users.
InterDrone: How is the drone industry shaping up so far? What's your perspective coming from the software side of it?
Jon: The marketplace is expanding rapidly. There are many software offerings out there and we hear of more in development. The initial wave of software offerings were focused on image stitching, building pilot networks and flight compliance. On the image side, it is clear customers do not need another “pretty picture,” software tool, they need insights and actionable data.
Everywhere we look it is clear the next generation of software focuses on increased levels of analysis and actionability. I believe analysis is the place where the entrepreneurial money is, long term.
That said, uptake of drone technology has been inconsistent so far. A lot of opportunity, but few companies are making serious money, no matter how they spin it to appear otherwise.
How do you mean?
There has been a lot of VC investment in this space, driving companies to acquire users as fast as possible, often at a financial loss. VC investment does not always breed success and a lot of these customers produce minimal revenues. I think everyone understands that developing new customers is an effort with a new industry, customers will explore and kick the tires a lot, standard early adopter behavior. There has been an exceptional amount of that. As a result, many companies have generated product interest and users, but insufficient revenue-based market traction, compared to their operational spending.
Why have revenues not followed growth?
In my view, the scale of commercial flight adoption is the main culprit. The real commercial market, those willing to pay regularly for aerial services and tools is still very small, relative to the market opportunity. Tools are evolving to add more value to aerial imagery, which will drive commercial scale, but the process has been uneven and many companies are still evaluating the technology, with few jumping in large-scale. Frankly, I think all the drone hype has skewed our expectations. The marketplace for drones and line of business analytical software is still very young and immature. We’re getting our footing now, as an industry, but it has been a choppy start.
What does industry research say about market growth?
Goldman Sachs recently published a piece predicting that commercial drone hardware sales will accumulate to $13B by 2020. I believe the hidden scale in these numbers is the software component, which they did not address. Drone hardware will have a multi-year life. Most software is sold as a subscription or license plus annual maintenance fee. Software spending on data management, image storage, analysis and reporting represents an ongoing investment for commercial drone users and, in my view, will eclipse the hardware market’s scale, perhaps by a wide margin. However you slice it though, the accelerated growth in the drone software market creates exceptional opportunities and declining risks for software companies and investors.
So what are the key trends in the drone software market?
Actionability is critical. Early on, Dronifi elected to focus on converting aerial data to actionable form. No one cares about raw aerial imagery - if they can have actionable information instead. As with any software market at this stage, evolution is rapid and the market must be quick to adapt to meet customer needs. If your data is not actionable, you are yesterday and missed the opportunity.
What’s the cutting edge tech for drones software?
There is a lot in the new tech basket; computer vision tools, machine learning and object detection technology will drive image actionability with AR following these tools. As additional value is added to imagery, the business justification for drone data dramatically increases. As a second step, the meaningful patterns in the aerial data, objects and image “signatures” need to be easily reported and connected to projects and tasks. This information must solve a valuable business problem and provide meaningful ROI.
We have golf course customers, as an example, that don’t want to see aerial pictures of their golf course, they want to find and measure invasive grass encroachment, measure the relative responses from various fertilizer applications, and to place boundary markers on the course for tournaments and send these locations to their ground crew for staking. Golf course superintendents want to find issues, report and send this information to anyone of their choosing, management, vendors or greenkeepers, to solve a problem.
Can you do all that?
Absolutely. It is live today. We call that Dronifi application Turf.Solutions. www.turf.solutions. Dronifi has taken the perspective that many business verticals need to be served, most requiring similar base tools and capabilities, bundled into processes, workflows, analysis and reporting as appropriate for each business vertical. To do this, Dronifi developed a platform to serve a wide array of industries; golf, ag, real estate, inspections, city and county governments, among others. Each tool functions for its designated industry and purpose – this is not generic functionality. Different tools are available for each vertical and they operate as that industry requires. It’s the power of the platform.
Interestingly, it turns out, aerial imagery, even analyzed imagery, is not enough for many customers. Businesses need a wide variety of external data and workflow integration to efficiently make use of their new aerial data. Customers push back if the tool is incomplete – they want to solve a problem, and that often requires additional non-aerial data.
How does that work?
Dronifi integrates, analyzes and presents a wide range of 3rd party data provided by the customer, aerial and otherwise. In the golf example, Dronifi imports sprinkler head GPS locations, allowing the golf course superintendent to see turf stress directly related to irrigation issues. Ag customers want their fertilization and irrigation data to be available concurrent with aerial imagery. Real estate companies want a property video plus tracking of identified maintenance issues, which can be which can be integrated with other software systems. Dronifi provides all these tools and industry solutions because aerial imagery is often not enough to adequately solve the targeted business problem.
This is a lot for customers and partners to absorb.
True. And it presents another market challenge and key market need – sales support.
As a whole, flight service providers struggle to communicate the value of flight services in the sales presentation process. Customers have a lot of challenging questions they must address. On top of that, most flight service providers are ineffective sales people. They don’t have the industry or technical knowledge to be effective on their own. I believe vendors need to serve as a resource and partner to flight service providers to aid them in this effort.
You sell for them?
No, but we provide tools and support. We answer our phone and help our customers articulate a clear sales message to their customers in the industries that we serve. As an example, Dronifi has built marketing materials and videos that tell the value story for the business verticals we service. Our customer, let’s say a real estate flight service provider, may know how to fly their drone but does not have the tech tools to count parking spaces or analyze roof thermal imagery, nor the sales materials to convey the value of these functions. We provide these sales tools as PowerPoints and PDF booklets, communicating the value story page by page.
Additionally, and I think this is a huge value, the whole Dronifi system from the website to reports can be white-labeled for our business partners. It may seem odd that this is a sales tool, but it is. Companies like to sell themselves, their own products and brand. Dronifi’s platform allows our partnering companies to make our product theirs, integrate their data and customize the user experience as little or as much as they want. We provide the technology, sales materials and support to help them sell effectively.
That’s a lot of tech.
Absolutely. We have been working diligently behind the scenes to build this tech, have commercial products and sales traction and are ready to scale.
So, how is the business going?
Business is picking up briskly, finally, though it has admittedly been a choppy ride. Dronifi’s tech has been sold for 3 years now and we have commercial customers who love our tools. I expected the business to take off sooner, but I under estimated market adoption time. That said, if our 3rd quarter sales are an indicator, we will be profitable this year. This is a significant milestone for a young company in a young industry, and we are eager to continue our growth.
So what’s next for Dronifi?
Simply put, selling and growing in scale. We are raising capital now, Series A, and aggressively pursuing partners to employ our tools. I think we have a strong story; market traction, very strong tech and service teams - truly outstanding teams - a previous successful software exit that shows that we know how to build a company, and defendable technology. We are ready to scale.
Dronifi is a platform with a suite of software products serving a wide audience from ag to inspections to real estate with end-to-end data processing and analysis. The company has been in business since 2012, operating out of Southern California, and has sold products for the past 3 years under several brands.