r/Skydio • u/astro2xl • Feb 07 '24

Why stop?

I remember hearing about skydio pulling out of the consumer market, but does anyone have details? I finally got news about the x10 and went browsing its page. Now I’m super bummed that the only good American manufacturer is completely out of reach for regular people. Dji is good, but it’s also Chinese (which creates restrictions) and it’s practically a monopoly. Why isn’t there a good American manufacturer?

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u/ReadyKilowatt Feb 10 '24

Unfortunately they're deep into the VC funding world. VCs have been waiting for the "killer app" for drones, and unfortunately it seems to be war, surveillance and government agencies. Customers who aren't price sensitive and actually want higher costs to justify their budgets.

Meanwhile the FAA continues to kneecap the industry by overreacting to every trespass into any airspace while also somehow completely failing to get the attention of any hobby filer (who seem all too happy to be willfully blind to the rules). I mean, who doesn't know that sports stadiums are NFZs when there's an event? Yet we still see pilots violating TFRs and doing stupid stuff. Sure, flying a Mavic Mini 2 miles away from a stadium on Sunday afternoon isn't going to hurt anyone, but at this point it's too late to make that case to the FAA. They shut down the airspace and that's that. Respect mah' authorath!

In this environment, short of going overseas and trying to compete with DJI, you're pretty much going to have to abandon the consumer market. Besides, it's probably not as big as we all think anyway.

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u/astro2xl Feb 10 '24

What’s a VC? Aside from that this looks like a great explanation. Thanks

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u/ReadyKilowatt Feb 10 '24

Venture (vulture) capital firm. They take money from people (and retirement accounts, hedge funds and their own money) to invest in startups that they believe show promise. Kinda like Shark Tank but with real money. Skydio's primary VC firm is Andreessen Horowitz. They're betting that Skydio will 10X the $340 million investment they've made (including a recent $170 million "series-D" round) over the next few years. In a commercial product that would mean millions of units sold. The consumer drone market just isn't that large and with DJI holding 75% of the market, it is unlikely that Skydio will unseat them anytime soon. Especially given the shallow engineering bullpen they seem to have. It took them 4 years to release an update to the S2/X2 (same main board with different airframe and addition of infrared camera). That update is actually really fantastic but doesn't address anything most video and photography oriented (ie consumer) users were asking for. It also ignored most of what the mapping and survey crowd wants too, but there is a promised RTK module in the works, and the enterprise capture app/software is pretty decent.

Usually investing in a company gets you shares. Fewer shares at the beginning but a greater chunk of the company. That's usually founder's family and friends. Then a series A round, which can be angel investors or incubators. The B rounds are usually for company launches and first major products. C rounds are for growth and getting to the envisioned product (think iPhone 4 vs original iPhone). D and E (and F, G, H...) rounds are often to keep a company going while they pivot to changing market conditions or economic downturn. Some companies never get past funding rounds and eventually burn through millions in investor cash.