3DR is a privately held technology company that offersglobal consumers hardware and software solutions for small-unmanned aerial systems (sUAS) and unmanned aerial vehicles (UAV) that are commonly used for personal exploration and a variety of business applications (3D Robotics, Inc. [3DR], 2020). Headquartered out of Berkeley, California, with a second office in Tijuana, Mexico, 3DR was founded in 2009 by Chris Anderson (former Wiredmagazine editor-in-chief) and co-founder Jordi Munoz (at the time…19-year-old electronics Wizkid), with a vision to bring commercial-off-the-shelf drone technology to global consumers. 3DR’s drone technology platforms capture aerial imagery of the ground for consumer use and performs secure cloud-based data analysis, enabling area mapping, surveying, 3D modeling and more. Both their hardware and software solutions are used across multiple industries around the world, including agriculture, photography, construction, search and rescue and ecological study to name a few (3DR, 2015).
Between 2009 and 2016, 3DR became recognized as a leading North American dronemanufacturing company for pioneeringone of the world’s first smart drone technologies (i.e. Solo) and developing anopen aerial analytics software platform (i.e.Site Scan) (3DR, 2020). During that same timeframe, it was also the early growth stages of the rapidly evolving yet uncertain commercial drone market, which brought challenges to early drone start-ups like, 3DR. From the lack of Federal Aviation Airspace (FAA) regulations to guide consumers on proper drone use within the national airspace, to the spawn of fierce market competitorsacross the globe, 3DR was struggling to keep their head above water. According to Mac (2016), Forbesvisited founder Chris Anderson at 3DR in California in 2016 to discuss what the company’s future business strategy was going to be and learned that theircurrent struggle was due to company mismanagement, ill-advised projections, and a failed strategy that relied on a flagship drone. Mac (2016) goes on to say, as a result, 3DR laid off 150 employees (almost a 50% reduction from previous 300+), exhaustedroughly $100M in venture capital (VC) funding (roughly 56% of total funds) and completely changed their business strategy.
So, how did 3DR change their business strategy?
Good question! With clear market insight on future opportunities, 3DRfinally realized that the drone manufacturing market (e.g. drone production; hardware solutions) was no longer where their focus needed to be as they could never keep up with the rapid growth of their #1 competitor, Da-Jiang Innovations (DJI) out of China. Instead, 3DR decided to realign their business processes tofocus a bit more on drone data processingand analytics (e.g. Site Scan; hardware/software solutions) (3DR, 2020).Today, according to 3DR (2020), “the company is focused on the sales and development of secure UAV hardware/software solutions for Government and other security-minded customers and working with companies interested in understanding the regulatory landscape of sUAS and Type Certification” (pg. 14).Since theirstart, 3DR made severalwise business pivots and even decided to partner with a couple of its original competitors (i.e. Yuneec and DJI) in order to adapt to consumer demands and dodgerocky market shifts. For more details on the mergers, check outthe ESRI post and 3DR company profile on the Craft.co website.
What’s the market look like in this landscape?
The market is filled with new start-ups and corporations alike seeking to leverage aerial data to capitalize on business opportunities.Because 3DR is a private company, it may be a challenge to find free, updated and accurate market analysis data online. Unlike a public company, private companies are not required to disclose financials (Majaski, 2019). Nonetheless, it’s important to notethe statistical data presented in the remainder of this blog series will be collated from relevant online source reporting with qualitative and quantitative data reflecting accordingly.
Currently, the market is saturated with competitors seeking market share within various segments associated with but not limited to drone manufacturing, data services, pilot/operators, insurance, and training.With a specific focus on hardware and software solutions linked to data processing services and training, 3DR’sfour major market competitors are Skydio, Parrot, Yuneec, and DJI (Craft, 2020). In comparison, without paid market report access, it’s hard topinpoint the exact dollar amount in terms of market share for each company. However, here’s a frequency polygon chart that depicts the comparison between these market competitors from an employee standpoint.
According to Black (2011), frequency polygons are like histograms but instead of using rectangles for display, frequency polygons use dots connected by a series of line segments to show class frequencies. From lowest to highest number of total employees, as outlined in the graph for 2020,Yuneec has an estimated total of 86 employees (i.e. 9% increase from January 2019), Skydio is at 110 (i.e. 23% increase from January 2019), 3DR is at 118employees(i.e. 27% decrease from April 2019), Parrot at 585 (i.e. 41% decrease from last record in May 2017), and DJI at 1,667 (i.e. 18% increase from March 2019)(Craft, 2020). From a strategic perspective, you may notice the difference in frequency distribution here that could potentially help consumers identify when major events occurred within the market and/or at the tactical company levels. Such indicators can be found in the highs and lows of each company’s metrics.
According to Schroth (2019), a contributor at Drone Industry Insights, the drone market size at the end of 2018 was estimated around $14.1 billion (USD) with a compound annual growth rate (CAGR) of 20.5%; resulting in a projected market size of $43 billion (USD) by the year 2024 (i.e. 32% increase in value over 6 years). Below is an overview of these metrics created by the team at Drone Industry Insights (Schroth, 2019).
For education purposes, you can see how the CAGR calculation was determined by viewing the calculator created by the company, Vertex 42 (n.d.).
Black, K. (2011). Business Statistics: For Contemporary Decision Making. Wiley.