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Interview by

Bianca Ghose

WOOL: Yvonne, thankyou for speaking to Wool. These are exciting times in terms of acceptance and usage of drone technology. Online marketplaces are promising home delivery via drones; Facebook wants to provide internet to remote areas through a giant drone; consumer drones are becoming cheaper; more advanced. If we were to live with drones in the future, how would you prepare us?

YVONNE WASSENAAR: There's a lot of conversation around drones, particularly on the consumer front. I often get asked, "Are drones going to deliver pizza in New York?" While those are easy to conceive ideas, drones can offer far more value. As you mentioned, Facebook is working to deliver internet connectivity to remote populations via a large drone. Sometimes, sitting in a developed country, we forget there's a significant chunk of the world population that can't tap into the internet, limiting their ability to exercise freedom of choice and accelerate economic growth.

We can create more safety for people, using drones to keep them out of dangerous work situations. This is particularly useful in the insurance and mining industries. Then there are already great examples of how drones deliver medicine and food in flood affected and remote areas.

WOOL:How do you respond to the apprehension, the general discomfort and even fear that people have with the idea of drones?

YVONNE WASSENAAR: I think future generations will be a lot less concerned about some of the issues that present generations have. Generation X and beyond seem more open minded about what they are willing to share and trade off for the benefits of innovation. I also believe that technology can evolve from being innovative to being effective. For example, should we capture an element unintentionally, we can use software to automatically strip that out of the captured image. Increasingly, things that aren't specifically supposed to be seen can be omitted, leveraging new technological advancements.

It will be interesting to see how this risk-reward trade off happens over time. It will be a combination between how we innovate and a community's societal risk perception. Collectively, I think, we will get to a healthy balance in the future, but certainly, this is a hot topic of discussion.

"Are drones going to deliver pizza in New York?" While those are easy ideas to conceive, drones can offer far more value.

WOOL: Common perception is that drones are either toys or war weapons. But interesting commercial uses are emerging in the middle. What has made this possible? What factors are driving the proliferation and acceptance of commercial drones?

YVONNE WASSENAAR: The concept of using drones to drive our day to day business was a lot easier to conceive than the reality of making it happen, because when you leverage drones in business processes, they need to be 99.99% reliable, not 50% or even 90% of the time. Compared to consumer uses, which is mainly led by hobbyists, the lag that you see in the use of commercial drones up to now has been due to three interconnected things:

  • Achieving sufficient reliability, performance and ease of use of the drone technology.
  • The need to have a supportive regulatory environment. In the US, until August 2016, you had to be a manned aircraft pilot to fly a drone, which was a heavy burden.
  • Companies needed to experiment more to prove - and believe in - the power of drones and the return on investment. The return on value has to significantly exceed expectations and cover the cost of adoption.

Good news is that the regulatory environment has evolved, hardware has become more performant and companies have found use cases that make sense. We are now at a tipping point where all three parameters can come together to accelerate the pace of adoption and growth.

WOOL: Which are the industries in which drones are particularly useful at the moment and where are the areas of futuristic opportunities?

YVONNE WASSENAAR: Drones are doing particularly well in industries that are ripe for development, offering a burning platform for change, and where there is a good alignment of regulatory support. For example, measuring stockpile in a mine, inspecting a roof top for the insurance industry etc. It's easy to see how a drone can replace much of the mundane and repeatable work humans do with a much higher degree of efficiency and safety.

Industry disruption can also throw up new opportunities. Remember what Uber and Lyft did to the taxi transposition industry? This may be the case for drones as well. When a new player does something so revolutionary and innovative that both economics and engagement change, competitors either follow or go out of business.

Industries such as mining and construction tend to have a high level of comfort with drones because some of their workers were initially drone hobbyists. I remember one customer of Airware who, years back, duct taped an iPhone at the bottom of a drone to start playing around with measuring stockpiles. This type of experimentation helped these industries find use cases for drones that, combined with today's more permissive regulatory environment, is driving adoption. The commercial insurance and property management sectors also come to mind.

Drones are allowing these industries to do rooftop and building inspections with both feet firmly on the ground, reducing the risk of casualties and fatalities. Additionally, these companies are starting to do predictive work using drone analytics and machine learning to better manage their capital expenditures.

The other sector, which stands to benefit tremendously from drone-use, is agriculture.

It's easy to see how a drone can do much of the mundane and repeatable work that humans can do, but with much higher efficiency whilst ensuring a far higher degree of safety.

WOOL: Airware entered the mining sector two years ago. Could you describe your experience in the industry so far and how has Airware been able to add value?

YVONNE WASSENAAR: Not many people have been to a mine so they don't necessarily understand the challenging work environment. In a given year, a mine might dig up 136 million tons to produce 1.2 million ounces of gold. This requires blasting, digging, loading and crushing, with lots of large equipment driving around an everchanging site that runs 24/7. Safety in these environments is critical. Part of creating a safe environment is the management of high walls and safety blocks along the haul roads, along with measuring the grade and width of the haul roads themselves. In the past, this had to be done manually. Now it can be done automated, leveraging drone imagery and machine learning.

Because mining is linked so heavily with commodities, operations economics are critical. Drones not only improve safety, they also make tasks more efficient. Measuring stock piles takes minutes, not hours. Managing the grade and width of haul roads can improve fuel efficiency. Sometimes a mine might spend 20% of its operating cost on fuel alone, so small percentage improvements mean big bottom line benefits.

WOOL: Drone inspection can yield extremely large data sets. How do you best store, use and analyse this data? Is there a more cost-effective method than the Cloud?

YVONNE WASSENAAR: I hear a lot of debate around the cost of data storage on Cloud. The Cloud is perhaps the only practical way to manage data, enrich and provide access to drone analytics in the long term, unless you are an extremely large company.

Airware leverages Cloud very effectively and the benefit reaches well beyond just the storage of data. In the past, we had a customer who had terabytes of drone flight data sitting on storage drives in the corner and ultimately had to stop the drone program because all that data was meaningless. By leveraging Cloud, data collected via drones becomes accessible. It is easy to compare it from one date of collection to another. The data is also easy to visualize, annotate and collaborate across a site and around the globe. Moreover, Cloud makes it easier to access burst compute power required to do value added machine learning.

WOOL: Apart from drone capability, you said the other important component of drone adoption is regulation. What is your working relationship with the Federal Aviation Administration (FAA) because in a dynamic, fast growing segment such as the commercial drone industry, regulations can be the game changer.

YVONNE WASSENAAR: The regulatory environment is crucial. The issue is that the advancement of drones has been challenging for regulators to understand and manage and that is holding back innovation. Thankfully, there is awareness that should the challenges surrounding regulation not be addressed, as a country, we will become less competitive in this shapeshifting industry.

Airware has a regulatory expert on its staff and from the beginning, we have been actively involved in helping drive commercial drone regulations by testifying as an expert before Congress and serving on standards committees both in the United States and abroad. What we're pushing for is a more agile approach and hopefully we'll get to what I call the "common core". Every country will have its unique set of regulations but if we can get to a place where there is uniformity in basic and minimum standards that companies can expect, it will be a tremendous win!

To achieve the value that drones can bring, businesses need to have the ability and regulatory permission to fly beyond the visual line of sight, for instance. Another pressing insistence is that one operator should be allowed to control multiple drones and fly over areas that might have people. Significant work is being done around tagging of drones - how do you identify specific drones flying in a particular airspace? There's also a lot of work being done around advanced airspace management, drone flight path, anti-collision ability, etc. Hopefully, all of these things combined, will make regulators feel confident that a flying robot can be effectively controlled in any scenario and that quick corrective action can be taken should something start to go wrong.

WOOL: In an industry as nascent as yours, collaborative actions and being in a trusting ecosystem can provide thrust in a meaningful way. Talk to me about the importance of peer to peer learning and possible collaborations?

YVONNE WASSENAAR: This might be a surprise but I personally know the CEOs of Airware's top competitors and speak to them on a regular basis. That's really a reflection of how early we are in the market. We all realize the tremendous potential for growth ahead - we are just at the tip of the iceberg of what's possible. The biggest barrier for a commercial drone company's success today is the lack of large scale adoption. We do not necessarily want to fight over the same piece of the pie but expand the pie itself. The successful expansion of drone usage into new companies is a win for all of us.

A great example of our collaboration is the future of mobility group pulled together at the World Economic Forum (WEF) so that a variety of different players can work on regulatory recommendations.

WOOL: You were one of the panelists at "Future Workforce: Reworking the Revolution" at the World Economic Forum 2018 in Davos. In this panel, one of your fellow panelists said that while 60% of CEOs in the US have invested in digitization programs in 2017, only 3% invested in any retraining programs. Is that not alarming? How would you advise companies to prepare for the future?

YVONNE WASSENAAR: Technological progress will fundamentally reshape our work, our companies and our society. I'm a strong advocate that we need to rethink not just what we're doing with our workforce but also how we educate our youth and prepare them to be workers of tomorrow.

What we need to do is embrace the potential for change early on versus running away from it. In my experience, people avoid change. It makes them feel uncomfortable to think about things differently or reimagine life.

WOOL: How much of this reluctance do you feel is coming from having to perform on a quarter on quarter basis because some of the adoption will not translate to numbers as fast as one would like them to?

YVONNE WASSENAAR: There is financial pressure but I think much of this comes from the psychology that the new future is going to have horrible outcomes so it's better to ignore it. Ironically, if people think creatively and start early, they can craft a much more positive outcome.

I would advise companies to plan early, think about reinvesting some of the benefits and be thoughtful about engaging the workforce because workers are creative. They help identify new innovations if they don't feel burdened by physically challenging tasks, which technology can easily replicate.

Every country will have its own unique set of regulations around drones, but if we can get to a place where there is an uniform minimum standard that companies can expect across geographies that they operate in - that will be a tremendous win!

WOOL: Digressing from the possibilities and challenges of drone technology, Airware is a start-up, well-funded by reputed venture capitalists. But in recent times, investors seem far less gung-ho. Why do you think the risk perception of the commercial drone industry has changed?

YVONNE WASSENAAR: As easy as it is to conceptualize the amazing things drones can do, it is far tougher to execute. The sector initially attracted immense funding based on its potential. Subsequently reality set in. The proliferation has been driven by sophistication in drone technology but that has taken time. The regulatory environment was not permissive enough and as a result, businesses weren't convinced that the benefits were crystal clear for them to start writing big cheques. The market did not materialize as fast as people had expected.

But the market momentum is accelerating now because we are at that sweet spot where regulations are beginning to change in favour of drone technology. Hence business cases are stronger and machine sophistication is far more reassuring. You will see consolidation; the less productive firms will be weeded out.

WOOL: So what will be the differentiators? Is it going to be reaching new geographies, foraying into newer sectors or funding that will shape the future of firms?

YVONNE WASSENAAR: We have now moved from the experimentation phase to the value realization phase. Already, repeatable solutions have been proven so customers are working towards capitalizing the benefits.

Innovation will dominate the next phase of growth. We will not only replace processes with ones that add better value, but also start integrating data streams and building predictive analytics.

I firmly believe that winners in this marketplace will be those who capitalize on the value realization component and drive up revenue to that $100 million mark while demonstrating their ability to lead the next phase of innovative change.