I'm not really surprised by this. At a drone conference in 2016, I first saw presentations from them among many other interesting technology vendors. They had a "vision" that they carefully presented on stage of what they would do, but everyone else at the show was either demoing technology or taking orders. Airware had a "call us for pricing" kind of attitude.
Meanwhile, its been a year since Verizon acquired Skyward - which was a force in the drone industry pushing for better flight management tools, better collaboration with ATC, and an affordable product for small-time commercial operators that got most of their money as contractors/service providers.
At the enterprise level, Drones just didn't solve a lot of problems. At the small farmer, construction contractor, gravel pit, etc, drones solved a lot of problems, but drones were the anti-scale solution. They Reduced the work so drastically, and improved the result so much that there was no need to scale up software licenses. In many cases, it just did the work better, in a 10th of the time, at a much lower cost. But, there was not a giant amount of work in the queue for those companies. Just a steady flow of the same jobs that used to take longer.
Now, beyond visual line of sight (BVLS) flights might change that for the enterprise eventually, Power lines, rails, pipelines, and roads are all good candidates for remote, automated drone inspection. But, I suspect that it will be either DJI hardware, Custom Hardware, and some amount of custom software that really integrates drones into the enterprise process. Flight planning is only part of the picture. Maybe Airware had it all, but, if so, they were too early - they couldn't outlast the slow (and rational) pace of aviation regulatory change.
It has less to do with the space, and more to do with the odd engineering decisions and multiple pivots.
There wasn't a SDK or platform to build on and we didn't take any actual orders for anything (so we had minimal success stories or $$$). The hardware we showed was built by us, and ran a custom OS (not based on linux) that was nearly impossible to work with. We had a very talented engineer rage-quit after spending a week attempting to figure out how the OS handled the internal message bus system to debug an issue.
The hardware was also crazy expensive. We built literally everything: the vehicles, autopilot, the autopilot OS, the comms board that connected to motors (and enclosures), the sensor boards (GPS, gyro, etc), the radio that talked to the autopilot, the flight planning software, and later an entire enterprise cloud stack written in only the newest of the new JS frameworks and containers. The team often decided to do things such as not use off-the-shelf processors like the Nvidia TK1 or existing embedded software solutions -- nothing was 'good enough' so everything was invented.
Oh, and did I mention we also cycled through recruiters like candy?
I'm not sure what conference you were at/what you saw presented, but there is drone software that creates a lot of value for construction, engineering, and mining companies. BVLOS may create a lot of value some day, but there are a lot more technical hurdles that will need to be cleared before it becomes safe and mainstream, just like Level 4/5 self driving cars. (unless you're talking about doing FPV inspections.)
Disclosure, I originally was the product manager for 3DR's flagship software product, Site Scan, which drove our transition from a hardware business to a software business, and I am currently VP of Marketing and Business Development here. Each mine that deploys our software saves, on average, 6 figures per year (after the product cost). This is on man-hour costs alone - the value is greater if you look at the increased safety of taking individuals out of active mines and increasing topography capture that enables analysts to identify issues before they turn into safety hazards on site.
That's just for one industry we serve - cost savings/time savings/improvements in project pursuit are all high for construction and engineering as well.
I think it's likely you saw some presentations from companies that had not done enough customer discovery or they were perhaps just very early in the process of identifying real problems and building the right solutions, but it's not representative of the industry.
One other usecase with a lot of potential is inventory control and counting in warehouses. Not small articles, but for industrial warehouses and larger products drones combining bar code scanners and visual artical identification can improve things considerably. Fraunhofer ran some first test like two years in Germany. No idea what came out of it.
I think automated drone inspection may be a more profitable niche than it first appears. My school had a couple grad students start up doing NDT analysis with drones. There seems to be a lot of interesting problems that could be solved with drones when they are treated as a platform for specialized equipment. And the specialization in equipment and analysis is good protection against commoditization. But I do agree with you that a lot of these problems don't really scale.
Back in 2015 Airware was pushing for its own technology stack, coupling an autopilot with mission management/ATC.
Only later they pivoted into a software-only solution.
Same goes for 3D Robotics.
> Airware launched its own Commercial Drone Fund for investing in the market in 2015
Lossmaking companies launching in-house VC funds while continuing to raise money is a huge red flag. It suggests operators who prefer to be fund managers, two very different roles.
Also that they have no clue what the real needs within the market are, and so would rather spread their bets around a portfolio of other entrepreneurs who they hope have better information than them rather than focus on one single market opportunity.
I know of at least two really prominent cryptocurrency ICOs that are in this boat.
(As a side note, I wonder how often the opposite situation - an investor who gets so excited that they found a company - occurs, and whether that's a strong positive sign. I can think of at least 2 such big successes - Jeff Bezos with Amazon and Jim Clark with Netscape - and a bunch of more minor ones, like FriendFeed or TripleByte.)
> It suggests operators who prefer to be fund manager
It could be suggestive of that, but I'm not sure it is in this case.
Looking at the press around the CDF, they made a couple of co-investments (can't find anything where they led a round or were the first through the door), and it wasn't "in-house" as much as Airware branded: they had LPs and I think it's likely Airwave's involvement was simply being the technical due diligence on a deal and then somebody else doing the paperwork, legals, etc.
It seems like it was a beauty parade for talent, ideas, and future acquisitions.
There's a whole other argument around whether or not that's a sensible idea, but I think it's a big leap to suggest that a market leader in a nascent market setting up an investment vehicle specifically for that market is indicative that they 'prefer' to be investing not operating.
Usually when things happen this way it means that facts changed in some way. Either they presumed until today that some sale or financing deal would come through, or their investors met and decided they had had enough.
It's very traditional. The second you show that you're significantly scaling back you raise questions about whether you're a going concern. They could have canned the japanese office much earlier but then it's possible investors would say 'Hey, we thought the plan was to build strong links with Mitsubishi to prime for an acquisition for an exit, what's the plan now'. So the only real option is to push aggressively and hope it works out.
Fundraising might have fell through at last moment. Some major customer/partnership might've pulled the deal at the last moment. This all happens at startup level cashflow is tight. And all the investors thought there is no way this business with make sense based on the data they might have had on their hands. So they pulled the plug
Ouch. Sadly, not an uncommon failure mode. Raise more than you can easily be bought out for (> $50M) and spend it faster than you can grow into product fit.
That said, I am a bit surprised that there isn't more demand for a domestically developed drone operating system. Given the issues the Army has with DJI stuff it seems like it would be a natural support a local company that could provide a similar capability.
Presumably you meant hiring drone experts, but the idea Uber is kidnapping flight scientists and keeping them locked up in an underground lair has a certain attraction :-) It might even make the pitch deck - "How we are reducing competition in our space"
Out of curiosity, how much drawdown do the VCs typically deal with during these liquidations?
They get whatever's left based on their liquidation preference and preferred stockholder preference, leaving nothing for common stock holders including the founders themselves.
When VC backed companies shutdown, the logistics are typically outsourced to specialist firms like Sherwood Partners [1]. Instead of a formal bankruptcy in federal court, an alternative process called "assignment for the benefit of creditors" is used to distribute assets to creditors under state law.
Patents are usually sold to patent trolls or companies seeking a defensive portfolio. An attempt is usually made to sell tangible assets as a lot, but if there are no buyers, individual assets are auctioned. Silicon Valley Disposition[2] is frequently selected to manage asset disposition auctions.
i guess it depends on if they have anything to sell...i bet most software startups would have a pretty significant drawdown unless they've made some unique ip that's worth something.
Maybe this is a dumb question, but why is Techcrunch using a screenshot of Airwave's Slack channel in a news article about Airware? Is there some connection between the two companies that I'm not aware of? Or did they just not bother to read what their "source" sent them?
Looks like it's Airwave telling their employees about Airware being shut down. You can see in the first message that someone is telling the channel that Airware informed their employees of the shutdown, and the rest of the messages refer to Airware as "they".
In cases like this, I rarely see the code being shared open source. Is it because it’s worthless, or because investors sell it to recuperate some costs?
It’s because 1) nobody gives a shit and 2) it would need legal review to make sure that it wouldn’t expose the defunct company to further lawsuits over copyright or patent infringement. That’s expensive and not worth it for a dead company
a few ways to slice it
1) hardware is still really hard
2) hardware in it of it itself is defensible/a moat because apparently software first companies may not know how to do it well
3) software for hardware is particularly dangerous because its you can get pushed off of someones hardware platform in favor of a homegrown, good enough, alternative
Nope, never did. We build 2 OS(s): the first was based on linux with a rtos package (2013-14?). That was scrapped and a new fully custom hardware package was built with a fully custom OS (built by a team that never had done this) and was built for a low power arm processor. We were plagued by huge issues most of the time due to that OS being nearly impossible to debug or work with. Also doing that prevented any third-party from building anything because there wasn't a SDK or even a platform to build on.
A few customers listed here: Delta Drone, Drone America.
Sounds like the market didn't want or need a $2500/yr/drone software package for automating flights/data retrieval/storage. And there's simply no competing at the hardware level with DJI, even with $118M in funding.
"Across all prices in North America, DJI represented 50 percent of the market, Snow says. The price range where DJI is not dominant is drones under $500, which are mostly toys, and where there are hundreds of companies competing." [1]
There's money to be made in industrial (non-warfare) drones - but not as much as everyone thinks, and competition is really tough.
SV didn't lose to China; everyone lost to DJI.
Their competence was staggering (I think they kind of slowed down lately being that they're so far out from everyone; throttling their innovation a bit).
If DJI represents the future of Chinese corporations[0], many people on the other side of the ocean should be very wary.
[0] edited from "products". In fact what's so impressive with DJI is not just the products themselves, but also the design, marketing and branding, which is kind of an Apple/GoPro hybrid. They are not just creating immense value - they are packaging it the right way.
SV is good at Software, UI/UX and, historically anyway, Silicon.
But it can't do end hardware.
And the stuff it has been successful at is designing consumer hardware but outsourcing the manufacturing to another country.
Arduino is Italian. Samsung is South Korean. TSMC is Thai. ARM and RPi is British. Shenzhen is the hardware place to be now. It didn't even steal that crown from SV. It stole it from Akihabara.
When you say Airware I think of two things: they seemed like they could fall into military contracting or whatever, and -- perhaps related -- they had job ads on Craigslist SF for years, which was another kind of signal about them.
Any Airwave Kubernetes / Infrastructure engineers looking for new work? Our Core Platform team is always looking here at Mulesoft, shoot me an email at [email protected].
[+] [-] abakker|7 years ago|reply
Meanwhile, its been a year since Verizon acquired Skyward - which was a force in the drone industry pushing for better flight management tools, better collaboration with ATC, and an affordable product for small-time commercial operators that got most of their money as contractors/service providers.
At the enterprise level, Drones just didn't solve a lot of problems. At the small farmer, construction contractor, gravel pit, etc, drones solved a lot of problems, but drones were the anti-scale solution. They Reduced the work so drastically, and improved the result so much that there was no need to scale up software licenses. In many cases, it just did the work better, in a 10th of the time, at a much lower cost. But, there was not a giant amount of work in the queue for those companies. Just a steady flow of the same jobs that used to take longer.
Now, beyond visual line of sight (BVLS) flights might change that for the enterprise eventually, Power lines, rails, pipelines, and roads are all good candidates for remote, automated drone inspection. But, I suspect that it will be either DJI hardware, Custom Hardware, and some amount of custom software that really integrates drones into the enterprise process. Flight planning is only part of the picture. Maybe Airware had it all, but, if so, they were too early - they couldn't outlast the slow (and rational) pace of aviation regulatory change.
[+] [-] anonairwavedev|7 years ago|reply
There wasn't a SDK or platform to build on and we didn't take any actual orders for anything (so we had minimal success stories or $$$). The hardware we showed was built by us, and ran a custom OS (not based on linux) that was nearly impossible to work with. We had a very talented engineer rage-quit after spending a week attempting to figure out how the OS handled the internal message bus system to debug an issue.
The hardware was also crazy expensive. We built literally everything: the vehicles, autopilot, the autopilot OS, the comms board that connected to motors (and enclosures), the sensor boards (GPS, gyro, etc), the radio that talked to the autopilot, the flight planning software, and later an entire enterprise cloud stack written in only the newest of the new JS frameworks and containers. The team often decided to do things such as not use off-the-shelf processors like the Nvidia TK1 or existing embedded software solutions -- nothing was 'good enough' so everything was invented.
Oh, and did I mention we also cycled through recruiters like candy?
[+] [-] bpirruccello|7 years ago|reply
Disclosure, I originally was the product manager for 3DR's flagship software product, Site Scan, which drove our transition from a hardware business to a software business, and I am currently VP of Marketing and Business Development here. Each mine that deploys our software saves, on average, 6 figures per year (after the product cost). This is on man-hour costs alone - the value is greater if you look at the increased safety of taking individuals out of active mines and increasing topography capture that enables analysts to identify issues before they turn into safety hazards on site.
That's just for one industry we serve - cost savings/time savings/improvements in project pursuit are all high for construction and engineering as well.
I think it's likely you saw some presentations from companies that had not done enough customer discovery or they were perhaps just very early in the process of identifying real problems and building the right solutions, but it's not representative of the industry.
[+] [-] hef19898|7 years ago|reply
[+] [-] chris11|7 years ago|reply
[+] [-] JumpCrisscross|7 years ago|reply
[+] [-] flyinglizard|7 years ago|reply
[+] [-] crubier|7 years ago|reply
[+] [-] JumpCrisscross|7 years ago|reply
Lossmaking companies launching in-house VC funds while continuing to raise money is a huge red flag. It suggests operators who prefer to be fund managers, two very different roles.
[+] [-] nostrademons|7 years ago|reply
I know of at least two really prominent cryptocurrency ICOs that are in this boat.
(As a side note, I wonder how often the opposite situation - an investor who gets so excited that they found a company - occurs, and whether that's a strong positive sign. I can think of at least 2 such big successes - Jeff Bezos with Amazon and Jim Clark with Netscape - and a bunch of more minor ones, like FriendFeed or TripleByte.)
[+] [-] georgespencer|7 years ago|reply
It could be suggestive of that, but I'm not sure it is in this case.
Looking at the press around the CDF, they made a couple of co-investments (can't find anything where they led a round or were the first through the door), and it wasn't "in-house" as much as Airware branded: they had LPs and I think it's likely Airwave's involvement was simply being the technical due diligence on a deal and then somebody else doing the paperwork, legals, etc.
It seems like it was a beauty parade for talent, ideas, and future acquisitions.
There's a whole other argument around whether or not that's a sensible idea, but I think it's a big leap to suggest that a market leader in a nascent market setting up an investment vehicle specifically for that market is indicative that they 'prefer' to be investing not operating.
[+] [-] pbarnes_1|7 years ago|reply
Unless literally no one is looking at the bank balance?
Did someone log in this morning, see the balance at a negative, and shut down the company?
[+] [-] propter_hoc|7 years ago|reply
[+] [-] Soundest|7 years ago|reply
[+] [-] throwaway_trust|7 years ago|reply
[+] [-] haaen|7 years ago|reply
https://blog.ycombinator.com/airware-yc-w13-raises-10-dollar...
[+] [-] ChuckMcM|7 years ago|reply
Ouch. Sadly, not an uncommon failure mode. Raise more than you can easily be bought out for (> $50M) and spend it faster than you can grow into product fit.
That said, I am a bit surprised that there isn't more demand for a domestically developed drone operating system. Given the issues the Army has with DJI stuff it seems like it would be a natural support a local company that could provide a similar capability.
[1] https://arstechnica.com/gadgets/2017/08/army-tells-troops-to...
[+] [-] jplayer01|7 years ago|reply
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[+] [-] lifeisstillgood|7 years ago|reply
[+] [-] gammateam|7 years ago|reply
They get whatever's left based on their liquidation preference and preferred stockholder preference, leaving nothing for common stock holders including the founders themselves.
Whats a typical drawdown look like?
[+] [-] bmurray7jhu|7 years ago|reply
Patents are usually sold to patent trolls or companies seeking a defensive portfolio. An attempt is usually made to sell tangible assets as a lot, but if there are no buyers, individual assets are auctioned. Silicon Valley Disposition[2] is frequently selected to manage asset disposition auctions.
[1] https://www.shrwood.com/
[2] https://www.svdisposition.com/
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[+] [-] danimal88|7 years ago|reply
2) hardware in it of it itself is defensible/a moat because apparently software first companies may not know how to do it well
3) software for hardware is particularly dangerous because its you can get pushed off of someones hardware platform in favor of a homegrown, good enough, alternative
[+] [-] danso|7 years ago|reply
[+] [-] anonairwavedev|7 years ago|reply
[+] [-] roymurdock|7 years ago|reply
A few customers listed here: Delta Drone, Drone America.
Sounds like the market didn't want or need a $2500/yr/drone software package for automating flights/data retrieval/storage. And there's simply no competing at the hardware level with DJI, even with $118M in funding.
"Across all prices in North America, DJI represented 50 percent of the market, Snow says. The price range where DJI is not dominant is drones under $500, which are mostly toys, and where there are hundreds of companies competing." [1]
There's money to be made in industrial (non-warfare) drones - but not as much as everyone thinks, and competition is really tough.
[1] https://www.recode.net/2017/4/14/14690576/drone-market-share...
[+] [-] jakelarkin|7 years ago|reply
[+] [-] flyinglizard|7 years ago|reply
If DJI represents the future of Chinese corporations[0], many people on the other side of the ocean should be very wary.
[0] edited from "products". In fact what's so impressive with DJI is not just the products themselves, but also the design, marketing and branding, which is kind of an Apple/GoPro hybrid. They are not just creating immense value - they are packaging it the right way.
[+] [-] Fordec|7 years ago|reply
But it can't do end hardware.
And the stuff it has been successful at is designing consumer hardware but outsourcing the manufacturing to another country.
Arduino is Italian. Samsung is South Korean. TSMC is Thai. ARM and RPi is British. Shenzhen is the hardware place to be now. It didn't even steal that crown from SV. It stole it from Akihabara.
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[+] [-] tehlike|7 years ago|reply
Hi buddy, if you are seeing this :)
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