SaaS Interviews with CEOs, Startups, Founders
1270 Napa Valley Vineyards Use His SaaS Drone Tech To Detect Potential Lower Crop Yield
15 Jan 2019
Chapter 1: What inspired Brendan to start Skycision?
founded Skycision, throwing his hat into the ring of the very popular drone industry. It can be dangerous. You can get lost very easily and find yourself competing with big companies. He's hedged that risk by going and hyper-focusing on high-yield crops, where if he solves the problem, it's worth a lot of money.
Specifically, he's focused on Napa Valley, and even more specifically, obviously, they're on vineyards and vineyard production and output, especially on indicators that farmers or folks working these vines can't see by themselves visually. So Good stuff.
They're currently working with about 11 different brands across many hundred different farms, thousands of acres, each farm or each brand paying about a grand per month. So 11 grand in revenue growing fast, hoping to double or triple that here by the end of the year. This is the top entrepreneurs podcast where founders share how they started their companies and got filthy rich or crash and burn.
Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company. It was $160 million, which is the size of many IPOs.
Chapter 2: How does Skycision enhance crop yield detection?
We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Brendan Carroll.
He's the co-founder and CEO of Skycision, an award-winning technology provider that helps enhance the productivity and profitability of the global agriculture industry. Brendan, are you ready to take us to the top? Absolutely. All right, man. Tell us about the company. What are you guys doing? How do you make money? Yeah, absolutely.
So we help farmers enhance their productivity of their crops and their fields, as well as the profitability of their operation. And we do that by basically giving them more of a real time view and control of their operation. So traditionally farming, it's very labor driven and reactive.
So they would have manual labor walking their fields or driving it by pickup truck, hundreds of thousands of acres. They take a sample, generalize it. But a lot of times when they go to generalize that sample, things go miss and that's when pests, disease, weed, mold infestations happen.
And that's when they lose crops and ultimately lose potential yields or profitability that could be driving revenue for their operation. So we leverage imagery collected by off the shelf drones as well as global satellites and fuse that with sensor data from their fields to give them an idea of exactly how props are performing in real time. And also what are the driving factors behind that?
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Chapter 3: What is the revenue model for Skycision's services?
So does everyone, your customers have to buy one of these drones then, or no, you rent them or something. So, so that's something that we, um, kind of iterated on this year. So originally, um, We integrated with the world's largest manufacturer, the DJI, who actually created the drones.
And we originally depended on them having one, and they were very affordable, but we've actually started contracting basically third-party pilots or like drone service providers that are using our analytics to serve farmers, or we even have some pilots on staff that will go and fly for them for a little bit more. So really we want to get them the data and make that as accessible as possible.
Is that expensive to have your own staff of kind of drone flyers spread all across the world to service your customers? So it is in, it would be if it was just drone pilots. So what we've done is we've actually kind of fused them with the customer success role. And so basically they'll have customers that they're managing. They also have a territory that they might be flying for.
And in the meantime, we're basically building out a pilot network of third party that we also have a different customer success team for where we can basically match up almost like an Uber for imagery. I see. I see. So what's the, what's the team size today? So right now we're only a full-time team of six. Okay. We're in our third year of operation.
We started in September of 2015, 2015 and our six of you, where are you guys all based? So we're spread out a little bit. There's three of us here in Pittsburgh, one in California, one in North Carolina and one in Boston. Okay, and walk me through kind of the revenue model. So is this a pure play SaaS company? What do the farmers pay per month on average?
So on average, so it's based on per acre and then the number of flights that they have per acre. And so we'll start at like, say $3 per acre, but if they want to do a 10 or 25,000 acre contract, that might break down to closer to a dollar per acre, kind of building like data economies of scale, if you will. That totally makes a lot of sense, tying it directly to those numbers.
So what would you say the average is per month? So the average per month per customer? Yeah. Um, I'd say they're probably paying about a thousand a month per customer. Okay. That's great. And so does that mean the average from is about a thousand acres that you're scanning? About 500. 500. Okay, great. And then there's just different volume discounts, which, which make up for that.
Um, all right. So 2015 was launch date. Uh, what are you at today in terms of total customers you're working with? So we're, we're deployed over 200 different operations through, um, 11 different customers. So several of those are very large channels. We have, over 50, that's in our kind of contract stage of our pipeline.
We're kind of just going into a year now where the technology's built, it's been validated, it's been verified, and we're kind of moving into that sales funnel as we speak. So we're starting to see, we're seeing 25 month over month growth since January. And so we're probably looking at 35 to 50 by year's end. Yep.
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Chapter 4: How does Skycision integrate drone technology with agriculture?
What makes this, why can't you grow this four X between now and the end of the year? Yeah, absolutely. No, that's a good question. So I think right now at this stage, there's so in our third year, there are certain inefficiencies that we need to basically build out in terms of automation. Right.
So there are certain things in the back end processing that basically allow this to infinitely scale where someone can just log in and automatically do this versus us having to somehow intervene manually. Right. So we're automating that. And then also the sales process. At this point, we have to have a manual touch point.
Um, and so eventually that's going to move to more of a subscription model online as opposed to quoting everything out based on utilization. Why have you made the decision to kind of own the whole stack?
In other words, the on the boots person representing the locale, the customer support, the actual scanning versus just owning the tech and then putting the tech in the drone app stores for farmers. Right. Yeah. So, um, For us, it's really important to have the interface with the customer.
So when we're thinking about actually delivering value to the customer, if we remove one of those links that abstract us, say, from the mobile app, whoever's flying, or whoever's securing that contract with the person who's realizing the value from that data, we're removing ourselves from the value realization of the client as well. And so...
what you're driving at is correct, that it may slow us down initially, but down the road, it's going to substantially, and we've already seen it, enhance our ability to ensure the success of our customers' deployments, overcome hurdles that others in the industry may be experiencing. Is your tech really, really remarkable? Does it do something that no other drone technology can do? It is.
I say that there's probably about three or four companies that are competitive with what we do today. But it's one of those four in the market that are on the cutting edge, correct? I ask just because this seems like, I mean, you're an ex-football player. You know about competition. This seems like you're competing on many different fronts. And these aren't little battles.
These are multi-billion dollar battles. So here's my other question, right? So if you don't feel like
your tech if you have if there's other tech options three or four that are like yours but you know the challenges that they're also probably having with getting all the local farmers across the u.s and the country what if you did the other and you just actually did a roll-up strategy and you owned and you built a team that owned essentially all of the relationships with every farmer in the u.s and then you sold through and licensed other people's tech that way you're only competing on one front i'm trying to get in your head and understand why you're competing on two fronts here
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Chapter 5: What challenges does Skycision face in the drone industry?
Correct. So what you see is a lot of times you have a manager, like contract labor, like a vineyard manager, pest control advisor, so on and so forth. And so these customers will actually a lot of times deploy our solutions to 80 to a hundred different forms at a time, or, you know, 40, 50, depending on the size of them.
And so we have at half of our clientele is basically those kinds of channel types. That's interesting.
Um, let's talk about, let's go macro level here for a second, real quick, the drone industry overall, you know, there's an opera, you know, you know, when, when photography and photos came out, now you have all these sites, uh, like snapper, where you can go hire a photographer on demand anywhere in the world. Uh, the opportunity cost is then you don't have to go buy your own camera. Right.
um do you think there will be i mean or it doesn't already want to exist will there be a network like that but for go you know rent a drone anywhere in the world whenever you want versus consumers buying them directly that man that vineyard manager just buying their own drone so so there's two elements here one is um the impact of commoditization drones are becoming so affordable and accessible um that any kind of grower could go and buy their own drum the problem is because
comes when they really want to use this like an enterprise scientific tool. You have to use the right types of sensors. You have to calibrate. There's certain data collection standards that you have to follow that can be painful. And at that point in time, there's more so, instead of a drone rental network, there's a drone service provider network where there's basically licensed pilots.
These guys are professional, basically, surveyors. And really quality results are delivered. And so you hire a pilot to come in and then fly for it. X amount of hours, X amount of acres or however they price. Um, and that's kind of more so the model that you'd be looking at.
And can you, so someone who owns a vineyard listening right now might be thinking, well, listen, I'll just get like a basic drone with a camera on it. I'll fight over my vineyard and I'll see that without having to walk every morning, each row, I'll see that row three in the first 200 feet, like things are turning Brown, right? Something's wrong there. Let me go walk out and look at it.
Name something that your tech can do that. It won't, that it's not, it's not a visual indicator. It's some other indicator you've picked up. Yeah, so an off-the-shelf drone would be great for that use case exactly to basically give you a bird's-eye view of visual imagery just the way you and I see.
What we are looking at, though, is actually a near-infrared light spectrum that the human eye cannot detect. And it's in this spectrum that is hypersensitive to chlorophyll content and photosynthetic activity in the crop. And so what happens is we're actually measuring reflectance profiles.
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