UAS News Podcast — 2015-08-06
Transcript
Hello everyone and welcome to the UAS News Podcast Series where we speak to the people that are, let's say we interview the newsmakers of people that are using drones for good and whatever else. But anyway, kind of got caught a little off guard there. I'm your program host, Patrick Egan, and let's say hello and welcome to our cohost, Mr. Gene Robinson.
Hello, Mr. Egan. How are you, sir?
It's good to be back in the podcast. Right seat again. It is good. Things are busy, but well, I don't have to tell you that.
I know you always stay busy doing things in this field. But it's good to be back. We did pass 300,000, 301,000 listens just recently here, which we have to do a 300,000 download show with special music and everything and who knows what guests and whatever else. I'd like to celebrate that.
That's quite an accomplishment. What do you think, Gene?
We started this thing, this yakking about it, and it's kind of taken off on its own, no pun intended. There's been a lot of information come out in these little 45-minute segments. There have been. And it is good to, I noticed when you mentioned this to me before too, the eagle place, and people are like, hey, I recognize that voice.
Wait a minute. You're that guy, man. You're the dude on the podcast thing. I listen to that.
I know you get the same thing. It's kind of interesting, isn't it?
Yeah. Well, it's not like either one of us have this terribly distinctive voices, but maybe it's that Texas drawl that pulls them in or that clipped kind of Northern California accent. I don't know. Hey, watch it there.
No, I'm teasing. But no, it's good. I mean, I'm glad that people are listening and they're getting a lot of information out of the show. It makes me happy.
It takes a little bit of work to do these people. I mean, you've got to line folks up, and you've got to line the right folks up. And there's always a backlog of people that we want to talk to, but it's hard to get it all together and do everything that we're doing. Today's show is going to be good.
We're going to talk about the drone hype cycle in episode 91 here. And our guest is Colin Snow, but we'll bring him on in a minute. But first, I wanted to, as I always do, I ask you if there's any news stories that caught your attention. And there seems to be a lot of news stories about our unmanned friends that are making the news.
And I know you wanted to say something about it. So, Gene, please, if you'd like to. Yeah, you know, a lot of our friends out there are flying, or I don't know, you know, maybe people who are not as qualified as they should be out flying. And I'm afraid, and I'm going to predict this, I'm afraid that we're going to see a backlash, the likes of which nobody anticipated when it comes to operating unmanned aircraft out here in the NAS, as we so love to do at the most inopportune times and in the most inopportune places.
I mean, there's already, there in your state, there is a reward of some big money for a guy who was flying in a drop zone during a fire. Please, I can't imagine a worse place to be flying. I know you want to get pictures, I know that, but this is just ridiculous. Well, and they had to dump the retardant somewhere they couldn't land.
It's just bad all around. And I think, I don't think people understand. I mean, you know, there's also a lot of hype out there about, you know, I'm going to be, I'm a, you know, disaster drone guy, and I'm going to go out there and I'm going to help people. It's like, well, you're not really helping, you're hindering.
And I'm going to tell you what, I don't think people realize this. I think they need to, I think they need to stand down on the hype because as soon as one of these incidents happens and there's a lot of life lost, you're going to look at, somebody's going to be looking at criminal charges and some serious criminal charges. And the legislation that you talked about in each state now where this has happened, there's legislations already been written and going through and, hey, we got to ban drones and yada yada.
So it's not going to be good. It's going to be good. And again, with an international black eye, we don't want a black eye like we got over there in Nepal here. If you want to see this be an industry in the future.
But I don't think people understand the seriousness of this. I mean, I know you work in it all the time, but these people aren't out there horsing around. No, no, they're not. And these guys are flying low and slow and heavy and they're putting their lives on the line and we can't afford to cause them any more stress in their jobs.
It keeps them from the important thing of saving lives. And one of the things I'm going to start, this is going to be my mantra. If you fly, they can't. If you fly, they won't.
And a life can be lost. So just think of it that way. When you want to go get that picture, if you fly, they won't. Somebody could die.
I hate to be kind of very strident about this, but it's going to happen. Unfortunately, it's going to happen and it's going to be bad for the industry. That's serious. All right.
Well, you know, hopefully people will heed the warning. I would like to introduce our guest. I'm segueing right into something else. But our guest, Colin Snow, AKA the Drone Analyst, some time contributor to SUS News Colin, are you out there?
I am. And thanks for having me on the show. Hey, thanks for being on the show. We're going to, you know, I don't know if you listen to the show, but we talk about real stuff here.
It's not fluff. We're not talking about, you know, the hypothetical, it's all facts here. So I got to get this guy on here. I know, you know, in our off time, we meet up, we see each other, and we share some laughs.
We applaud. We talk about some of the industry stuff out there and how far from reality things are in the evaluation. You know, people ask me, they say, well, you know, what's this industry going to be worth?
I say, well, there's estimates anywhere from two billion to 92 billion and anywhere in between. It's your guess. And they usually laugh. And so we laugh about that.
So maybe you can tell the audience a little bit about yourself because I know who you are, but they don't know who you are. Well, sure. So my official title is CEO and founder of Drone Analyst Research and Advisors. And I've actually been a follower of the work that both Patrick and Gene have been doing over the years.
The history of my flying drones goes way back to the 70s when I was in high school and I built radio controlled model aircraft with my father. And after college, I took a strong interest in photography and I did aerial photography from Cessna and the Noah Hurricane Hunters, the P3s out of Miami. But my work career, I started in manufacturing and I was a manager for many years at Olympus Corporation
and their medical device division. And I kind of participated firsthand when that industry moved from optical mechanical devices where they put film cameras on them and you had to physically attach it to video based devices.
So I kind of was in the transition of film photography into digital photography. And then later as a research analyst in Silicon Valley, I focused on enterprise software vendors and systems because prior to that, I'd worked for those firms like Oracle and PeopleSoft and most recently, SAP. And I've been an underwater photographer and video for years. And with the advent of quadcopters, I started looking on the forums and lo and behold, there was this guy named Patrick Egan and Gary Mortimer.
And I saw what they were writing and I thought, gee, I want to go into that business. I want to be a professional aerial photographer. I love photography and I love quadcopters. And I started building them and doing a flying of them back in 2010.
And I did what many hobbyists did back then, which was program flight controllers and attach GoPro cameras to capture aerial videos. And I was really hooked. But in 2012, I started Drone Analyst because of my background as a research analyst. And I started doing research on commercial drones and educating this with kind of with the goal of educating startups, investors in the industry and regulatory trends, because nobody else was doing that.
And plus I was reading, you know, suspiciously sounded pretty hyped as I began to read the reports on how big this drone industry is going to become. It sounded very Silicon Valley ish to me, which is and there's this cognitive dissonance here in Silicon Valley. It's called pro innovation bias. And that's when you have a proponent of an innovation that tends to overvalue its usefulness and undervalue its limitations.
And so I said, well, you know, I'm going to make that my mantra about my my my firm and let's do real fact based research and let's let's come up with data as best we can. So since that time, you know, I've been putting together a group of staff and a group of advisors. And as you mentioned, of course, one of the things I do is write a column for the SUAS News called The Market. Yes, and it's good.
Yeah, there was a few things I wanted to hit on there. And I think that's from the New Balance sneakers all the way up is one thing. Silicon Valley looks at things. And the other is I came up with a title for your book, underwater photographer.
Marketplace for drones. Yeah, because I feel like an underwater photographer is I can't go out and make money doing photography. Yeah, really. And I don't have a wetsuit.
So, you know, all of that makes sense. It's I follow what you do. I think that you have some some interesting insights that I do like to call them. But I want to want to march into the last time I saw you was at the NASA UTM.
And we got a lot of real estate to cover today. So I'm going to kind of push. But I wanted to get some of the takeaway from you. I did talk to PK this morning, actually, before the podcast.
I got I hit him with some takeaway, but I want to hear your takeaway. Let's let's hear some of your thoughts on those in attendance, if possible. Yeah. So let's give a little background maybe to your readers.
So the the NASA UTM conference with the unmanned aerial systems traffic management convention that was held last week at NASA Ames Research Center at Moffitt Field in California. And that's here in Silicon Valley. And it was kind of host co-hosted with NASA and the Silicon Valley chapter of AVSI. And they were there were presentations given by Amazon and Google and Cisco and the FAA and the NTSB and the DOD and the California DOT and some law enforcement and others.
And there were panel discussions and vendor displays and demonstrations. And it all started a few years ago when NASA has been kind of working to develop. Well, PK has been heading up the development and that's Dr. Paramo Kopadakar.
He's he's at the NASA Ames Research Center. He's kind of the person who's been spearheading this. And this unmanned aerial traffic management system is supposed to be this cloud based system that will help manage traffic at low altitudes and avoid collisions so that UAS are being can operate beyond the visual line of sight. And the concept is pretty simple.
But but the but the solution is complex. The concept is even though drones can be autonomous, you still got to have some roads, you got to have some track of lights, just like you do with cars. So UTM is this thing that's designed to incorporate geo fences so operators can know which areas to avoid. And it's supposed to help operators with a better understanding of predicting wind congestion and offer terrain and manmade object database to help them avoid collisions with buildings and stationary objects.
And it's a massive undertaking. And it's all built on a system that's supposed to tell you the UAS operator all these constraints you need to avoid and gives you the idea of where you can fly safely. And that's the idea anyway. So it's supposed to be a repository of all the information you need to operate in the airspace.
So if there's a constraint due to weather or traffic or airport or other operations, it'll tell you what you can do and maybe even help you choose a different path. And so this thing is supposed to come in four builds with four risk criteria. Right. The first build was is this thing just for unpopulated areas and and and all the way to the fifth fourth one, which will be kind of reserved for mission in urban environments.
So in between, you've got operations and builds of the UTM that will allow operations in sparsely populated areas and and and and you know and what will be the best option where there will be limited contact with manned aircraft. You know, for example, for package deliveries and that type of thing. And each build sort of enables a certain different type of mission and and provide services and supports those missions for the build. And again, it's a very it's a very complex thing.
And what I thought what I saw in the attendance, there was over about a thousand people and and and the last minute, you know, I was told 100, you know, 130 people were added to the to the attendance and they were NASA employees who showed up. And it was interesting to talk to folks that I'd never talked to before because I make the rounds to pretty much most of the major shows around the country, you know, East Coast and West Coast. And as you know, you know, most of the commercial show shows here are people that are in the industry.
But here in this conference, it seemed like to me is that I talk to people and you can tell me who you talk to. I was kind of taken back that there's sort of this new group of people that are interested in drones that been in aviation. They're in NASA. So you've got aviation.
I got some vendors. It's sort of with a different crew of people than I had seen from previous shows. Well, I would concur with that. I don't know.
You know, from my experience, I've been at this almost 12 years now, 10 years, definitely for their integration. It seems like every two to three years, there's there's kind of an ebb and a flow and people that you have seen around kind of flow out. New people come in. New.
These ideas are talked about. Oh, God, it's groundbreaking. Oh, you know, and all the rest of it. Maybe it's a little bit more of a cynical view that definitely the group is growing.
There are new people. I think that there's people that, you know, I mean, you did a pretty good Eclipse notes version of what the UTM is. And I guess I assume we've talked about this too, but I assume that a lot of people know what this this is and the general premise of it is or whatever. There's information out there on the UTM.
But, you know, I do think there's a lot of people that are coming in and they're and they're very optimistic about what they saw there. And did you know my next question for you is, did you see anything new in groundbreaking groundbreaking?
No pun intended on that one. But anything new?
Well, not really. You know, besides the airware demo, there was nothing really new that wasn't to me because I've sort of been following it. You know, I've seen a demo of airware software before and at their launch earlier this year. And the demo at UTM was more of a proof of concept integration between airware flight control and mission planning and the UTM system.
But it's really not a live ongoing system. It's sort of, you know, what what we call in Silicon Valley concept where right?
There's not actual. That's terrible. Very terrible because I was going to call it something else. But OK, good to have a cat on here.
Yeah, everybody's doing. And remember, I come from the enterprise software space. So, you know, I'm guilty of setting these things up because we did these kind of demos all the time. You know, we did hear from Google and Amazon and you might consider that new.
It was new. You know what they were talking about. So Google talked about the role of the airspace provider, you know, under this concept, operators would fly plans and which would then coordinate these with other A.S.P. or airspace service providers and ensure non-conflict flight.
And but Google, you know, Google's been saying that that they're going to develop this lightweight, low cost dual band A.D.S.P. transceiver and free flight systems was there. And they prototype the lightweight one. And, you know, Amazon sort of detailed its plans for the first time.
So we thought, you know, Gherkin, Kim Chi describe Amazon's idea for the drone traffic management system. And Amazon's view is that, you know, they basically said, well, let's segment class G airspace, you know, airspace under 200 feet would be designated for low speed local drones and drones in that zone wouldn't require as much sophisticated collision and avoid technology and airspace from 200 to 400 feet. Well, we'd reserve that for high speed transit, you know, and that's the highway for drones.
And but you can operate there. You've got to have a sophisticated sense of the void technology. And finally, you'd have this buffer between 400 feet and 500 feet. And that buffer would then prevent that, you know, create that separation between drones and manned aircraft.
So, you know, if you want to call that new, that's that's sort of a it was at least it was that they were it was new that they were putting their idea public. Well, that in the what they were calling it. It's not really new. And, you know, spoiler alert, you know, I'm going to start raining on the parade.
But, you know, people talked about that little feedback on the altitude separation. And I heard Gene over there going, whoa, and hey, and yeah, yeah, he's not the only guy because people are like, hey, what about between 200 and 400 feet?
I want to use that. What about the hobbyist?
What about it seems to me that what we're having here is this, you know, I heard, you know, best equipped, best served. And I and I hear these things and you're like, OK, you know, you know, obviously, I haven't been around that long. I do say, OK, it's good. You know, you get the heavyweights in here.
Heavyweights have a lot of political whores power and tons of money, but I think that they're buying their own propaganda. The other thing with the cheap and lightweight ADS-B is it already has existed since 2000 and I don't know, mid 2000s. There has been lightweight ADS-B that's $200. Miter came up with it, marketed it to R3 or R3.
And people have been working on it. OK, so what are the issues with ADS-B?
Equipage, you know, everybody's going to have to be equipped with it. And, you know, that doesn't even there's not even a mandate till 2020 and it's not everybody doesn't have to have it. And then the other big kick in the shins is that the FAA doesn't plan on supporting a public algorithm for the detect and avoid, let's say, using ADS-B for detect and avoid. Huge liability exposure.
And somebody like Google could, you know, shoulder that because we're talking hundreds of millions of dollars. I mean, I've talked to people about assurance on this. And if one of these things did bring down, you know, you know, let's say a big part 121 aircraft, it would be on the lines of the payout would be like something like terrorism. It'd be so much.
You probably bankrupt a company like Google or Facebook or Amazon. That's how much the payout would be. So those are some big barriers for that to work as far as I'm concerned. Yeah.
And the other thing I got as far as takeaway is people are saying, oh, you know, and again, I don't think that we're really looking at the scale. And this is going to come into the second segment here, which we've got eight minutes left. We're probably going to run over today. But people keep saying we need all of these things.
The industry needs to do things to kind of offer themselves up as being involved in this. And industry needs to build this UTM. Industry needs to design it. Industry needs to run it.
Industry needs to maintain it. Industry needs to catalog and keep all of the data. Industry needs to do the aircraft registration and industry needs. Well, it just keeps going and going.
And when you're talking about 800 or 1000 aircraft or 10,000 aircraft, that may be doable. When you start talking about how many of these aircraft are going to be out there, if we get the right regulation, you're talking about something. My estimate privately, probably an investment of about 200 million dollars. And if it's public and it's NASA and SAA, you're probably talking about 600 million to a billion dollars.
Anybody want to add to that? You got to triple that if the government's involved. Exactly. I mean, you know, I even hear, you know, I mean, you know, this is not the first time that NASA set aside money for integration of aircraft into the into the net.
And, you know, it seems like a lot of money, but, you know, by by let's say private standards, yes, it's a lot of money. Public standards, not so much. So, I mean, I don't know. That's how I see the issue.
And, Gene, you want to you want to add on any of these comments? I'm sitting here nodding my head up and down with these dollar figures. And you're right. It's amazing how quickly the money goes away and nothing gets done.
Well, that's one of my I have a you know, I don't know if you guys know this. I'm vocal now and again about the problems that I see. And I'm still I'm like fit to be tied, to be honest, that we've come this far and both of you gentlemen have seen the timeline that as you as news done. And some people think, oh, well, this is kind of started, you know, a couple of years ago and things are getting now.
Twenty three years, even longer than that. This problem has been being worked on. It's like next year, you know, 25 years. They're not really connected.
They are big problems. But what has not been established is what the risk is to the Nass. What risk do these aircraft pose to the Nass?
And I'm almost blue in the face with this one. How can you even build a system or talk about integrating anything if you don't have you have no idea what the risk is to the Nass?
Like the cornerstone here. So that needs to be done in both the aircraft and people on the ground and then the visual acuity baseline for seeing a void and then detect an avoid. I didn't hear any of that at from anyone that I could talk to there. A lot of people told me, oh, yeah, you're right.
This needs to be done. But it seems like anything that's like, you know, difficult just kind of gets pushed in the wayside. Any comments on that?
No, I don't see, you know, it is difficult. And you know, the question again, who's going to run it?
Who's going to run the UTM? And what's it going to be based on?
What's the risk strategy? You know, I think of the risk strategy and I think what the European Aviation Safety Administration is beginning to do, right, is looking at introducing sort of a regulatory framework for UAS based on the risk. But again, I don't see data based on these, right, that they have three categories and you know, there's a low and medium and high risk certification category for operating, you know, limitations. But I don't understand where they're getting the data based on that, right?
Yeah, it's empirical. It's empirical data. Well, I mean, you know, let's let me I want to see it. I've seen some good studies come out of Australia and I've passed those around and they're kind of like reports about reports.
But nobody's really just like buckled down and say, OK, here's what we this is how we're going to do it. And I'm trying this in my spare time. I'm actually trying to secure private funding to start doing this. So maybe we can start getting the ball rolling.
Just has to be done because the thing is, is I tell people, you know, like there was another statement came out from Alpa today talking about, you know, equivalent level of safety and equivalent level of certification. And, you know, maybe you saw this too at UTM. I started to see DO178 certification now in print on flyers in the room. Did you notice that, Colin?
Yeah, yeah. Yeah. That's a real. Yeah.
Yeah, this is that's a real change. Most people, even if these are the big companies that are in the news all the time, even I don't even know if they've even bought into this yet. I mean, I've asked them, what are you going to do with the software certification?
What's that? You know, I can't find anybody in the Civil Aviation Authority role globally who's like regular beyond visual line of sight operations without software certification. Are you going to go with that?
No, not happening. So again, it goes right back to what is the risk to the NASA?
I think some of this we might be overthinking it. You know, when you get to stuff that's like made of foam and under two pounds. Now, I can't say with any certainty because I don't have the data myself, but, you know, we may be overdoing it. Do we need the equivalent level of certification both for pilots and aircraft if they don't pose the equivalent risk?
That's my question to the community. Again, I mean, I meant to say we need empirical data, not that that, you know, those categories were based on empirical data. We need to get out there and do the experimentation like you have discussed in the past, Patrick. You just can't pull numbers out of the air without some sort of scientific validity to back them up.
Impact studies, kinetic energy studies, and none of that's been undertaken. Now, nobody's going to buy feelings. You know, I don't care. You know, you can't go to the Congress and say, hey, we want to do airspace integration.
And well, is it safe? Because if I sign off on this, I could lose my career. Well, yeah, I think it's safe or I feel like it's safe, worthless. And then, you know, we are going to run.
I want to talk about some more numbers, some of them real and some of them fake. And I think that's a good segue because we could go on for another hour about that deal. But I want to talk a little bit about the thousand section three thirty three exemptions. Now, I'm going to throw it to Jean first, because I know, Jean, you're you're in for one.
Right. Yeah. And I just got noticed today that it's not going to be coming as quickly as I thought it was going to be, which was a surprise. But under the circumstances, they're they probably have thousands that they have to review.
I was a little disappointed since I wrote one of the first COAs that they ever accepted back in 2008. You know, I kind of thought I might fall into that category of already having been reviewed so it could be expedited. And apparently I was dead wrong on that one. So, yeah, I think a lot more coming.
Yeah, but I want people to understand this, too. I don't think people understand the history part of this, too. And I want to I got to pause here and hit the history part of this. Now, when they came up with this whole COA non- I mean, this COA scheme and the website and the FAA was like, yeah, we're going to make this.
It's going to be kind of a digital thing. You could come to the website and fill out this COA application. Who helped them with that, Jean?
I spent a weekend debugging that system using my my program or analyst skills, as I recall. Yeah, I guess. Yeah, I helped with that. And you're still waiting for your Section 333 exemption.
Yeah, I think, you know, that's one of the things here at S.U.S. News. I talk about this all the time. People are like, oh, you know, this guy's an expert and that guy's everything he's got.
And I'm not deriding you now, Colin, but, you know, drone in your Twitter handle. I have it in my Twitter handle and I make fun of it all the time. But when I say empirical knowledge and know how and all the rest of that, this is exactly what I'm talking about right there. And that's the people that you hear for this, S.U.S.
News. So you're still waiting. And I'm you know, we're waiting for the day when that happens. But Colin, do you think that constitutes an industry a thousand of these or let's say even just the way these are trickling out at 50 a week or whatever?
What's your observation on that? Well, so, you know, they've got more than twenty three hundred exemption applications. But whether it's an industry or not, technically it's not right. Right.
But but you know, technically right. There's no NAICS standard. There's no sick code for for drones or, you know, there's one aircraft and you know, but a commercial drone, you know, is it a camera?
Is it software? Is it electronic hardware?
Is it an aircraft? You know, I'm not sure that code is really going to help and make it an industry. But but we tend to think of ourselves as an industry. Let's just think of it as an insider for a second.
We tend to think of it, you know, as an industry, albeit a nascent one with, you know, a couple of hundred or so manufacturers and, you know, a few thousand service providers worldwide. But but it's important to think of it as an industry, on the other hand, because, you know, this is how you study things. You you you understand the factors and limitations for growth and you look at, you know, like to like companies. So you compare them to evaluate their attractiveness for for investment purposes or acquisition.
So in that sense, the answer is yes, because we do have similar companies operating within a value chain. You got a dedicated ecosystem of legal and insurance and education software providers, hardware providers. You got data service companies. You got press and analysts.
Let's not forget analysts. You got dedicated research analysts. So, you know, in that sense, it's sort of a it's a and you got news providers, right?
S.Q.A. news have been around a long time. So in that sense, it is sort of an industry. But but, you know, a thousand come, you know, a thousand approved Section three thirty three really doesn't make it a viable, you know, economically thriving industry.
We're still telling it. And we have to remember, too, this is a regulated industry. That's the first thing I try to tell people is, you know, the drones are great. It's like the PC's.
It's like the Apple was way back in the day. I'm going, hmm, no, no, it's aviation and it's regulated. And yet that's a highly regulated. Yeah.
Right. So keep going. Well, I mean, you know, you're hitting on on all the right points. You know, it's again, we got to go.
We can get data now. We can model things. I'm not really a modeler and in the scientific, I mean, models are good. But boy, you know, I think it's going to be hard to get data on a thousand people or operators or whatever.
The other thing with that is is I am just not happy with the way it is all put together. I'm not happy with the Pathfinder thing. If you've got criteria for the three people that got better part of the Pathfinder thing, there's criteria for those those people. And I'm not going to name names, but I'm going to say one of the companies that's got a cobbled together RC aircraft, then you should have criteria for everyone or anyone that's credible and actually has more experience in the field.
There should be criteria for them to also be Pathfinders and work on beyond visual line of sight. That's me. My big thing is, you know, do we really want to build a system designed around Amazon retail domination play?
Well, just because I mean, again, I look at that and, you know, this is going to be another economic thing, but I look at their aircraft. I think the aircraft is going to be the easy part. I think it's the software that's the hard part. Yeah.
You know, again, we're talking about numbers and reliability and something, you know, OK, if the alpha is listened to and we're going to do commercial operations, we're talking 10 to the minus nine. That is that's like almost no failures. You know, it's a crazy high number. But, you know, I don't know.
But as we're running along, I want to hit this one. Do you think out of these, you know, I've seen reports of the first five hundred and a thousand. And I mean, you don't think there's enough data to discern any real economic value in this industry?
No, not yet. No. And and it's what's interesting about it is when you actually look at the data and you actually look very deep into it. Let's get beyond the hype again.
You know, and the spin, you look down into the data and you look at the activity. You have to look at where that activity is taking place. So when you look at the first five hundred or the first one thousand and you look at where what are most of the data?
Well, they're aerial photography and video. OK, so let's do some simple math, right?
Simple math regarding, you know, how much money they make. And you have a like industry. Photography has been half. You know, that's a small business that's been happening for years.
You have all these independent photographers on the ground. You do have some aerial photography businesses. But you look at that in general and you look at how much money they they generate. You know, the average operator and this is average.
Remember, it's not the high end and low. It's just some people are going to make more and less of this. It's about 100 to one hundred and twenty five thousand dollars in sales. Well, when you do the simple math and you say, OK, well, you got a thousand operators.
And they say, well, there's going to be 25,000 commercial operators in five years. OK, let's just say they're right. Let's do the simple math. If the average operator makes one hundred and twenty five thousand dollars in sales, you only get to about three point one billion dollars.
You certainly don't get to the big, you know, eighty nine or, you know, eighty two billion dollars that they say is going to happen. You know, the other thing that's fuzzy about this too, and sorry, this is what drives me crazy, because I see these four times all the time and they just drive me absolutely nuts. And, you know, you see that that you're all well, if I think that, you know, Ag is going to be 80 percent of the market. Right.
Well, so you look at these first one five hundred or one thousand. Huh. Holy cow. Very small percentage that that.
Well, you know, it's a very small percentage. Well, that's because if you really were following it and if you really looked at what people were doing, you would notice that no matter how you spent it, film, photo and video, it's the largest application market for commercial drones. So and that's proven out now. Right.
You're proving it out by seeing who's applying. And if you look at the from five hundred to one thousand, those people that have come out in the last have been approved in the last, say, month or so, the majority of those now are are are are aerial photography and film, photo and video. And they're doing real estate and they're just doing, you know, except because these are people. And they're they're taking Phantom Visions.
You know, when you look at the numbers and you look at the numbers, you look at it together, taking cheap aircraft, then with, you know, OK cameras and putting them up and they're adding it to their business and people are doing it. That's great. That's economic activity. But it is not like a lot.
Right. It's not that, you know, that was predicted. Well, this is true. And the other thing is, I noticed in the first five hundred report, not that I'm being critical, but I did know it looks like somebody might have lifted the data from one of the universities that went out first and and did a report on this, because I'm seeing another instance of where there's a if you total up all of the dimensions and the percentages were back up to one hundred and forty six percent of the market.
Yeah, I don't know if you know. They may not teach it at that college, the difference between a percentage of total and the percentage chosen. Right. So just saying, I don't know.
You know, you want to qualify that, but I know I'm giving it a hundred. We we corrected that, you know, we we said, hey, we questioned it. We questioned the label on the column total and said, you know, this doesn't add up. Well, you know, the way you have.
Well, that's new math, guys. Come on. It is new math. And it's funny is Veronica, my assistant, caught that one.
And she's like, wait a minute. And then he emailed them and said, hey, I want to do that. And then they tried to lambaste her on Twitter like she didn't know what she was talking about. Good thing she grabbed screenshots before they put the two disclaimers on there.
But anyway, it looks like somebody else lifted that. But, you know, one of the reasons we wanted to have you on is, you know, and I'm sure you've seen my tweets where I've got the source material, a stack of telephone bucks when I'm making my my predictions of what this industry is going to be and how much it's going to be worse. Totally crazy. I don't I think it's a disservice to me.
I think it's a disservice to talk like telephone numbers about the industry. Although I will say it's kind of funny people talk about the numbers that the FAA came up with. And I one of the first guys that got called on that was me. Hey, how many are we going to have?
How many how many commercial operators are we going to have in five years or whatever? And I said, well, you know, I can't even give you a number. Well, why not?
Well, I can't give you a number because it's regulatory dependent. You know, if you guys come out with something that's in the like in the SUAS arc recommendations, which were horrible, then you're really not going to have a lot of people doing this. You know, if they're more liberal and you you know, you don't let's say the barriers of entry aren't really expensive and aircraft certification and commercial pilot license. So that's done away with.
Then you're going to have a lot more. But I can't give you any real number, you know, or even a good educated guess because yes. You know, you don't know you can't you just you know, we don't know what it is. It's like we're open in the dark.
So it is regulatory. It is regulatory dependent. Oh, totally. And people say, well, you know, and here's the deal.
Here's how Washington works, too. It's funny. I mean, I on my own personal thing, I do some political tweeting because, you know, I've been inside the belly of the beast here with the federal thing and it's a complete and it's not even a dog and pony show with the curtain and all the rest of that. I mean, this thing is I've got an I've got an education, but I will say that basically everything is like made up numbers to drive people to do stuff.
And it's like if you don't give a high enough number, then no one's going to be interested. What's the point of that?
You know, it's total nonsense. And, you know, they think that they're doing some the right thing because there's some made up numbers. Well, there's going to be this many operators. Well, then Mr.
Coney and regulation, there's still going to be that many operators. So let's just go ahead with what we got. I think it does a disservice to the community overall. And I tell people, I don't know what you tell people, but I tell people, be careful the forecast you use in your business plan, because if somebody does even the cursory search or a little bit of research on that forecast, they may think that you're a flim flam person.
Colin, what do you say? Well, I get emails all the time from people who find me either on Twitter or just doing a search. And they say, look, I'm going to go all in on this thing. Tell me what I should be doing.
No, really, they say they're life savings. Their wives write me and ask me questions for what drone school should I go to?
And really, they are. And it's heartbreaking to me because, again, it goes back to that issue of hype and this cognitive dissonance that we've got with the bias that we have in Silicon Valley. And it's heartbreaking because I see people and I tell them, no, don't, be careful. Don't do it.
Don't judge everything. Start small. See if you can get a job working for somebody who's providing a service. Learn.
Come into the industry slowly. But don't, please, don't put all your chips on the table and go in. Well, at least you have an upfront deal. I usually get the call.
I do some consulting, and I usually get the call after they've already been flim flammed out of their money. I paid some guy, you know, and you're like, oh, Jesus, you paid him. Yeah, and he told me that this was going to be, and I bought this report. And then I went and I did a business plan, and I mortgaged the house, and I got an SVA, and I'm like, oh.
Now, those reports are expensive. Those reports are expensive. They're anywhere from $2,000 to $5,000, and I've written about this, and it's on SUAS News. And you can see it.
It's diversity and hype in the drone forecast. And, you know, the first conversation I have with people, either as you've done, you know, with people who have already made the investment or are thinking about it is, look, the proposed rules are going to, are one of the gating factors in the adoption of whether it's going to be successful in the industry. And it impacts each individual market in a different way. And so I'm just going to put in a shameless plug for myself.
I just did a report and put it out there, the state of the industry, you know, and it's a cheap report. You know, it's less than $500. You can go and buy it and see what industries are going to do well and what industries are not going to do well. So I give a good overview of the entire industry and the regulatory environment, what, based on the proposed rules, which industries and segments will do well and which one are going to be challenged.
And, you know, and that's what I tell people when you start to do forecasts. If you want to get into this business and you want to offer either a drone service or a piece of software or something that's specific to an application or a data service or something, think very carefully about what segments you're going to go into because of the regulations, because each, you know, it's going to impact the outcome and the forecast. And if you want a real forecast, if you really want one, right, you're going to have to do your homework.
You're going to have to sit down and look at the gating factors that determine the adoption of drones in a particular market. And ag is the one that I always point to because it isn't just about drones. Drones aren't going to transform agriculture. People have been doing NDVI for years.
They've been doing that since Landsat, you know, back in the late 70s. That data has been available. So, you know, drones aren't going to transform. There's other things like the adoption of variable rate technology that's going to actually be the gating factor in determining whether the data from drones is even usable, right?
You can have all the greatest data usable in the world. But if the farmer or the grower doesn't have variable rate technology, it doesn't do much for them. Sorry, get off my mic. Sorry.
No, no, it's true because I see, you know, this is another thing I've watched. I actually, you know, at first I wasn't not an early adopter of Twitter, but now I love Twitter and I see these declarations. Oh, drones are going to, you know, it's not really about drones. It's about data.
You know, and I'm like, oh, thank the good Lord. Somebody figured it out. You know, I'm sitting over here thinking it was about the drones this whole time. I'm going to have farm drones and have like space drones and all these other drones, you know.
You know, again, I think people need to get educated about the market. It's exciting. And I watch people. It's funny as it cracks me up as I watch people and they see friends that they haven't seen in years and they're like, oh, what are you up to these days?
Well, I'm the drones. Really?
Wow. It's like, you know, it's like you're like some, you know, you know, I don't know, like, you know, Richard Branson or something, you know, this technology guy. But I think it's kind of funny. And then but I wanted to back up just a little bit.
Jane, what are the phone calls that you get? When do you when do the people call you?
All of the stuff that you guys have touched on is exactly it. You know, where do I start?
How do I do it? And I get it from the law enforcement end of it. I get it from the search and rescue end of it. I mean, obviously.
And as a matter of fact, I just met with a sheriff just day before yesterday and what they wanted to do. And you get down to the mission profiles and you get down to it is it's really the data. Well, all we're doing is, you know, pick your truck, pick your vehicle, pick, you know, which one gets you near from point A to point B. And that's your data collection platform.
And, you know, I like the flying wing. But by the time I got done talking to the sheriff, the best thing that I could tell him to do was go get a quadcopter because that's what you need. So, yeah, I mean, you hear it all. And it's unfortunate that, you know, there are folks that are really putting out some hard earned money that they're going to end up, you know, putting out more hard earned money to try to get back.
So I've got it. One of the things that, you know, I mean, I'm one of them. I mean, anybody that wants to learn about making money with drones can send me a check for a thousand dollars and I will tell them how to make money with my contact information is on the issue is news website. I'm available at all times.
So, you know, anyway, I don't have any snake oil for sale. This is the real deal. But all right. And then one last thing we went real long, but that's okay.
That's the beauty of the podcast being recorded. You can shut it off and go feed the dog or whatever you have to do. You touched on the EOSA thing, Colin, real quick. I want to touch on that, the proposed amendment.
This is another, let's say, milestone in the many milestones of how far ahead the Europeans are in front of the FAA. And now just even a couple of years ago, in the first some historical perspective, the FAA, we're leading the way. We're leading the way. And I told both groups that you might want to tone that down on when you go to Europe on the junket because you're going to sound stupid because you're not leading the way.
And there was even I think there was a little bit of a low in the in the global travel because people started to realize that we were not making the progress here that they were making in Europe. And so without really getting too deep into the proposed amendments, which people are asked to give feedback on, what does it say to you, Colin, face value?
What is this saying to you? Well, it doesn't surprise me that the Europeans are already ahead of it because they've already had commercial operations going for a while. So, you know, we are behind. I mean, it's just this is we're way behind.
You know, you're aware that I did a study in 2014 that looked at, you know, whether people were operating or not operating. And one of the things that I see is that it because we're behind it, we're lagging and we're not we don't have these, you know, open categories, categories of risk, you know, and for safety. What it what it's done is it's forced the businesses underground. You know, Section three thirty three's come forward and, you know, a lot of people are are, you know, going that route because they want to sort of quote be legal or, you know, unquote.
But even there, there's sort of a fuzzy line because there's really no follow up that says, are you really do you really have your pilot's license? But then there's this huge amount of operators that are out there that are flying, quote, under the radar, unquote, but are operating in, you know, in in in the gray market or the black market, whatever you underground economy, whatever you want to call it. The longer it goes, the longer we don't put that in place, the more there is of that. Now, what
I heard from people in Europe and and in Australia and elsewhere is because there are regulations in place, you have less of that underground economy.
So I don't know. You know, this is this is where I just think we're behind. They also have enforcement, though, as well. Yeah, yes.
Yeah. They do have enforcement. But you are you're on, you know, it was funny. That was one thing of the UTM.
One of the I would call the old guard guy I've known for many, many years since I started in this thing there was like, well, you know, pretty soon you're going to probably be able to get back to aerial photography. And it's kind of what I told the FAA. It's like, look, there are people out there that are buying all this equipment. They're out there doing the jobs.
They got the market share. All the rest of that for me to restart a business, relaunch a business I had going in 2003, I'm going to be at such a disadvantage. It's not even going to be funny. I got a learning curve.
I got an equipment curve. I got a marketing curve. You know, it's going to cost me more money to get into the business than it's worth. And that's not really where I'm at anymore.
That was where I was at, you know, 12 years ago. Not there really now. And I think that that's kind of funny. But again, that's another thing is the enforcement part of this.
Got to tell you, I called over to the JFK FAA office and left a message. You know, they had three sightings in one day. It was like a four-hour span. Okay.
I left a message. Did anyone go out?
Did we pick up the binos and look? Did we go out there?
Did anybody do anything? You know, did we take statements from the pilots?
You know, no callback. No, but it made the press. It's in the press. It's in the press.
But you know what? To me, it's like, look, you wanted this. I told the JFK this early on. You want all this stuff.
You want to grow the business. You want to include everything in the aircraft, yada, yada, yada. Be careful what you wish for because this is not going to be ramp checking, people. And it goes back to people saying in the industry, well, we need to curb this.
We need to do that. We need to geofence. We need to geofence. And if the geofencing is anything like with cell phones and the rest of that, that's not worth anything as far as I'm concerned.
But that's not my job to limit my industry or police my own industry. The FAA wanted that. They begged for it. They fought for it.
They got it. Get out there and take care of it. And the same with the industry. You know, if I go out there and start my business as an aerial photographer and I get the license and that $333 and the insurance and all the rest of that, you have another 3,000 guys behind you that don't have the license, don't have the insurance.
You know, it's a totally unfair economic disadvantage because the FAA is not enforcing their own policy. So I just don't there's so many sliding scales. And that's another thing I think feeds right back into analyzing the market and what it's worth. You know, you can't, you know, nobody can tell you how big it is.
Nobody has any idea. All I know is that the Chinese are selling these things like hotcakes and everybody's buying them and they're all over the place. I see drones everywhere, man. So I think with that we'll kind of close it.
So Colin, you have a closing comment? No. Well, I'm just going to add to that. Yeah.
Yeah. I think it's it is one of the things we're seeing from the data that's coming out from the Section 333 is the overwhelming amount of, of Chinese aircraft that are getting registered in N numbers and are being used in businesses. And I don't think that the regulators or even the people who, you know, the experts have looked at that yet. And it'll be interesting to see what happens when we come to that.
And Gene. And to add to your comment, Colin, that all of those aircraft are unsecured and they send information back to their host on every flight and every place that you take that aircraft off. Most law enforcement agencies and other agencies don't know that, but we need to get the word out there as well. Well, I mean, those are those are some more, I think, let's say, things that people don't understand about this technology that we could talk about into the future.
It is. I've said that too, because now there's, you know, there are rumors floating around at UTM that there may be some issues working with Chinese companies and stuff. You can you cannot have it both ways. You just can't.
I mean, the manufacturing, I tried to think about this. So this is one other thing I want to take a guess. And I don't want to just single out one company, but say the consumer grade drone that goes for, let's say, fifteen hundred dollars now that it's imported. What do you think that would cost to manufacturing in the United States?
Colin. Oh, gosh, it would be three times that. And if it had to follow any kind of certification as an aircraft, ten times. Oh, yeah.
Oh, yeah. Gene. So, yeah, because that's what I said. You tried to do this domestically.
You're looking five, seven grand for just a consumer based deal. But that's how you do it with certification. I don't think people the certification, the deal one seven eight certification that we were talking about estimates are and this is not development or writing or anything like that or verifying certification. I asked one company how many lines of code they had and they told me they had five very long ones.
Very good. Very good answer. Is that going to keep the certification cause down?
But I mean, it's it's it's monumental. It's a ton of money. But anyway, we've got to wrap it up because we're almost at an end of the day. I mean, it's it's it's monumental.
It's a ton of money. But anyway, we've got to wrap it up because we're almost at an hour. We're going to have to have you back on call. Thank you for being here.
And it was a good conversation as they always are. Great. Thank you for having me. Well, one thing before you go, give people the website.
Come on, shameless plug. OK, shameless plug. It's drone analyst dot com. Very simple.
Drone analyst dot com. Well, we know my dad didn't come up with that website name. It's going to be something totally obscure and long. That'd be hard to mention.
But anyway, that's another story for another time. Gene, thanks for being on as always. A great conversation again today. This stuff, every episode is just gold.
You know, you can't miss. A lot of good information. All right, gentlemen. Exactly.
I will. We'll see you again soon. Thanks, everyone, for listening. Have a good one.
OK, bye. Bye.