Case Study: 3DR - Company Profile
Between 2009 and 2016, 3DR became recognized as a leading North American drone manufacturing company for pioneering one of the world’s first smart drone technologies (i.e. Solo) and developing an open 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 competitors across the globe, 3DR was struggling to keep their head above water. According to Mac (2016), Forbes visited 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 their current 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+), exhausted roughly $100M in venture capital (VC) funding (roughly 56% of total funds) and completely changed their business strategy.
Good question! With clear market insight on future opportunities, 3DR finally 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 to focus a bit more on drone data processing and 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 their start, 3DR made several wise 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 dodge rocky market shifts. For more details on the mergers, check out the 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 note the 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.
Market Competitors
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’s four major market competitors are Skydio, Parrot, Yuneec, and DJI (Craft, 2020). In comparison, without paid market report access, it’s hard to pinpoint 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 118 employees (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.
Market Share
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.).
References
https://www.oreilly.com/library/view/business-statistics-for/9781118213957/
Craft.co. (2020). 3D Robotics. https://craft.co/3d-robotics
3D Robotics Inc.[3DR]. (2020). About. https://www.3dr.com/company/about-3dr/
Geology. (2020). India Map and Satellite Image. Geology.
https://geology.com/world/india-satellite-image.shtml
Majaski, C. (2019). Private vs. Public Company: What’s the difference? Investopedia.
https://www.investopedia.com/ask/answers/difference-between-publicly-and-privately-held-companies/
Schroth, L. (2019). The Drone Market 2019-2024: 5 Things You Need to Know. Drone Industry Insights. https://www.droneii.com/the-drone-market-2019-2024-5-things-you-need-to-know
Vertex 42. (n.d.) The guide to Excel in everything. Vertex 42.
