Drones have been sneaking up on us. I don’t mean that in a they-are-coming-to-get-my-tinfoil-hat kind of way. The drone industry has been growing at light speed, and yet most business leaders and entrepreneurs have no idea how much money and opportunity is hovering just above them.
I was first introduced to the business potential of drones by a company that brought me on as a board advisor. The company was not a drone manufacturer, but they were using drones in their business. Subsequently, a few other companies I was advising revealed that they, too, were using drones in unexpected ways.
I had thought the use of drones was confined to the military or suburban backyards, but I was shocked to learn that the drone industry is projected to exceed $100 billion industry by 2020.
A Goldman Sachs report predicts the fastest growth area for drones comes from the commercial and civil sectors, which are just starting to using drones to do everything from inspecting roof tops to fighting fires.
Drones are already monitoring climate change and patrolling our borders. In June, a drone helped the Douglas County Search and Rescue department locate and rescue two hikers who were lost in Colorado’s Pike National Forest.
Amazon, UPS and Federal Express are already experimenting with drone delivery. Drones are starting to check power lines and pipe lines for utility companies, improving utility workers’ safety and reducing costs. Even the staid and stable State Farm has launched a fleet of drones – a move that is not only saving the insurer money but helping it to seem “cool” to millennials. Existing companies appreciate the safety and versatility of unmanned aircraft.
But more interestingly, drones are going to create a completely new economic landscape. Much the way the automobile industry spawned an entire ecosystem of ancillary business opportunities a century ago, I believe drones will inspire industrial empires that don’t yet exist.
This is what excites me the most. There are not too many times in history when a brand new industry emerges. Personal computers and the Internet represented gold-filled mountains for enterprising techies and venture capitalists. And many VCs are starting to see the same potential for drones.
Full disclosure: When I saw the potential firsthand, I joined the board of a company in the drone industry and have begun investing and advising for companies in this industry.
Big opportunities exist for eco-system companies that develop drone support services (like the “OnStar for drones”, drone air traffic control systems, or drone landing space management). There are huge opportunities that are not immediately obvious, creating a unique opportunity to build massive companies out of nothing more than a slick idea. That rarely happen, but it’s happening now.
In fact, I am sure someone reading this already has their wheels spinning, and I am so excited to see what our most enterprising people come up with.
The sky is no longer the limit.