Experts Give Startups Advice, Hope at AUVSI’s Startup Connection
Investor Mike Abbott, general partner at Kleiner Perkins Caufield & Byers. AUVSI photo.
Unmanned systems company startups need to be able to answer a few fundamental business questions if they want to attract investor attention, according to a panel of experts speaking at AUVSI’s Startup Connection, held July 18 in San Francisco.
“Every good company can answer three questions,” said Gareth Keane, investment manager at Qualcomm Ventures. “What problem are you trying to solve? Who are your customers? How will you get your product to market?”
David Austin, general manager of startup programs at PCH, said he has another question: Why now?
“How are you hitting the right cycles at the right time?” he asked. “How is now the right time to make this investment?”
There are perils to waiting too long to jump into the technology game, Keane said, but there are also perils from being too early.
“It’s almost worse to be too early than to be too late,” he said. “If you’re too early, the market just isn’t there.”
Kate McAndrew, an associate at Bolt, said she’s not sure where the drone market is in that timing.
“We are at a weird moment in drone investing,” she said. “We’ve seen companies with first mover advantage take ownership but haven’t really seen the drone market happen in maybe the way we thought it would three years ago. … I think you will need to convince investors of the true market opportunity, and especially now.”
The investors closed out the speaking portion of AUVSI’s first startup conference, and the afternoon was devoted to matchmaker speed networking, where companies and potential investors got to know each other.
Before that happened, however, the crowd also heard from Mike Abbott, general partner at Kleiner Perkins Caufield & Byers; Rick Clonan, vice president of innovation and entrepreneurship at CenterState CEO; Jesse Clayton, product manager of autonomous machines at NVIDIA; and Dave Vos, project lead at Google X’s Project Wing.
Vos said this is a “phenomenally exciting moment in technology and aviation history,” and change will be coming fast, not in decades, but in a matter of years.
Money should flow into the technology business world, at extremely low interest rates, to accelerate this change, he said.
“The cost of that money needs to be basically zero, and those who need it can get it,” he said.
Around the world, he said, people are going to be able to take part in a newly connected world.
“We are on the cusp of two or three billion people becoming middle class partners in world society,” he said. “The opportunity is so much greater than the risk.”
Part of that means being able to go up and make use of an airspace that often doesn’t have much in it, Vos said. “There’s a big dimension, which is up, which is about to open up.”
The pace of regulation has been slow, but it’s speeding up now, he said, with more progress happening in the last couple of years than was made in a decade or two previously.
“The level of attention today is right at [Federal Aviation Administration] Administrator Michael Huerta’s level,” Vos said. “It’s firmly in his viewfinder that this is the new emerging sector.”
Abbott said he’s not looking for companies that might have a great idea or product but are just looking to get bought up by the likes of Google. He prefers entrepreneurs with “a chip on their shoulder, with something to prove,” who are willing to slog it out for however many years it takes to succeed.
“I gravitate to people who are mission driven instead of mercenary,” he said. “Just wanting to be bought by Google is not a good case for a venture company of our size.”
One company that caught his eye is Airware, the California-based AUVSI member that makes an operating system for commercial drones. Another is a company he didn’t name that builds a sensing system that “goes beyond lidar, solving a very narrow problem in a vertical [market] that can expand.”
