The Significance of a Complete Drone Solution Now That the FAA has Issued Part 107

To say that June 21^st, 2016 was a big day for the commercial drone industry is an understatement if there ever was one. That’s the day when Part 107 of the Federal Aviation Regulations was released by the FAA, which will make flying a drone for commercial purposes that much easier and simpler for operators of all types and sizes.

While it was an important day for the industry as a whole, it was also an important one for Kespry, a company that creates automated drone systems for aggregates, construction, insurance and mining. Kespry announced the close of a Series B equity-financing which will, among other things, allow them to hire more engineering and service teams to ramp-up production and serve their customers.

In light of such critical news I wanted to connect with Kespry CEO Paul Doersch to not only find out his thoughts around the impact of Part 107 but to also explore how the financing his company secured is going to impact the present and future of Kespry and anyone who wants to fly a drone for commercial purposes.

 

Jeremiah Karpowicz: Many people have talked about the abundant opportunities that will be opened up by 107, but it feels like this announcement is really about something bigger. Broadly speaking, how significant is Part 107 for the industry as a whole?

Paul Doersch: FAA Part 107 is an inflection point for the commercial drone industry. The US Government is officially opening up UAVs for commercial use. By implementing Part 107, the process has become significantly more efficient and simple, allowing all companies to benefit from commercial drones and aerial data at scale.

 

I’ve encountered a lot of professionals who have taken a "wait and see” approach around utilizing a drone because of regulation. Do you think Part 107 will compel those sorts of people to finally explore what UAVs can do for them and their business?

Yes, drone technology has such a high value for companies, that we already have many customers benefiting from aerial data, but some of the market have been waiting for clear regulations to make the process simpler, and that is exactly what FAA Part 107 provides.

 

I know there’s a lot of justified enthusiasm about what Part 107 will allow people to do, but it’s important to note the things that were not part of the ruling. Will the continued restrictions on operations like nighttime flying and beyond visual line of sight (BVLOS) operation cause many to continue to wait?

Kespry customers in aggregates, construction and insurance will all benefit directly from what FAA Part 107 allows. As the technology evolves, we expect regulation will evolve, and in the future address beyond visual line of sight, nighttime flight and larger aircraft, but FAA Part 107 meets most of the current market needs.

As I mentioned, June 21^st was a big day for the industry as a whole, but also for Kespry specifically. The Series B funding is what was announced that day, but why are both rounds of the funding you’ve been able to secure so significant?

Kespry’s $10M Series A and $16M Series B funding events are validation that the commercial drone industry and Kespry are on the right track in a rapidly growing market. Kespry has been able to deliver an automated drone system that is hitting the mark with customers in our target markets. The additional funds will help Kespry expand development, service and sales.

 

Speaking of that expansion, the release mentions that this will allow you to be able to hire more engineering and service teams to ramp-up production and serve customers. In what ways will you be able to provide your customers with that better service?

Kespry is unique in that our automated drone system is designed for companies to use on their own with limited training and support. That level of hardware and software integration requires a high-level engineering team, which we’re growing. But we’re also learning from customers about new drone applications, so our larger sales and service team provide that valuable market insight back to our product and development teams.

 

I was listening to “The Premise” podcast where you were interviewed about this news, and it was great to hear you talk about the value that can be created for entire economies with enterprise drones. How and why is that value tied to the data that Kespry drones can capture?

The Kespry Drone and Kespry Cloud are integrated to work together to collect and analyze aerial data. The simplicity of the process enables companies to significantly increase the frequency and scope of data collection, from quarterly and annual surveys to monthly and weekly. In fact, the average Kespry customer flies over 10 times per month, that’s every 3 days on average.

We’re already seeing that frequency and scope open up new opportunities with construction customers related to inventory planning, excavation projects, mine planning, and surveying prospective sites. But each new customer and market opens up more opportunities. For example, in the insurance industry, roof inspection is an incredibly manual, slow and expensive process on a huge scale, which can largely be automated with drones, which directly impacts the accuracy and speed of claim reporting.

I also thought it was enlightening to hear you mention that you saw the consumer drone market as being limited, while the enterprise market did not have those same sort of limitations. The appeal for consumers is unlikely to change too much as we move forward, but in what ways do you think organizations will continue to find and create value with these tools?

The consumer drone market has been huge, but does seem limited by mostly video capture use cases. In the commercial drone market, there are just so many more potential applications, from capture to measurement to analysis and delivery and more.

There are typically two stages of finding and creating value with a disruptive technology in a commercial environment. The first is fitting directly into the existing workflow and providing a direct benefit, a cost savings or precision improvement for example. The second stage is establishing entirely new workflows and applications that were not previously possible or broadly considered.

An example of a less obvious application a bit further in the future is demonstrated with Kespry’s deep learning prototype, which was created in collaboration with NVIDIA. We developed a system to locate, classify and track vehicles on a construction site in real-time. Which enables real-time logistics optimization of vehicle routes, fuel consumption and asset management in general. This does not obviously displace a single current method but is a much more disruptive and far-reaching advancement.

 

Does the fact that you’re offering your customers a complete drone solution make you stand out from your competition? What kind of a difference does it make when you can talk to clients about this kind of a solution, as opposed to one they have to put together themselves or hire a service provider to configure and even operate?

Kespry provides a full automated and integrated solution that clearly makes us unique. The Kespry drone flies autonomously over industrial sites, and then automatically uploads the data to the Kespry cloud, where it is stored, processed, analyzed and visualized with applications specifically designed for the markets we serve. No third-party service provider is required, which has meant less frequency of collection and higher costs. The Kespry drone is operated directly by the same people who are already on the site because it is entirely autonomous and extremely easy to use. Other approaches that require companies to piece together various components from different providers is just not scalable or practical, and too complex for companies to make it work on their own.

 

Staying on the concept of autonomy, how comfortable should we be as an industry in terms of where automation is at? That is to say, do we still have a long way to go, or can organizations solve real problems and challenges with their ability to automate drone systems and tasks right now?

The way our customers use the Kespry Drone System is as simple as outlining the property and clicking takeoff. The Kespry drone automatically flies up over the site, captures information at the right locations on the site and it then transfers the data wirelessly to the Kespry Cloud, where the data is then processed, so that our customers can directly use our tools and reporting systems for their businesses. The level of automation achieved in the Kespry drone system is already so advanced that Kespry has been able to rapidly scale to customers all over the world.

Looking to the future, Kespry views the drone as a node on the internet, that just happens to move in space and time. This is a powerful approach to the problem. You can expect to see vast improvements in autonomy and automation over the next several years. Including drones better understanding their environments, being able to make intelligent decisions in-flight, and increased precision of data captured. The data processing automation at Kespry is already completely automated, completely scalable and provides the fastest field to finish in the industry. That being said, there is still a lot more work to be done developing data processing applications for specific needs across all industries.

How does effectively integrating a drone into a workflow impact the bottom line for your customers?

In a recent ROI case study of a Kespry aggregate customer, it was shown that by using Kespry’s drone system, the company is measuring all their inventory twice as frequently and spending four times less time overall. That same customer claims the drone pays for itself, but opens up entirely new applications in mine planning, quarry operations and excavation projects.

 

Now that it’s official, what’s the best way the people who were waiting on Part 107 to explore using a drone? Where can and should they begin?

I would invite readers to visit Kespry’s FAA Part 107 page, which provides a great overview and explanation of the new rules, including links to other great online resources.