The DroneUp Drone Delivery Model: Why Second Mover Advantage Has Put Them Out in Front

The DroneUp drone delivery model is different than the approach other drone delivery and retail giants have chosen.  In a DL Exclusive interview from the floor of last week’s Xponential 2022 show in Orlando, CEO Tom Walker and CSO Carl Smit explain how the “second mover advantage” and a collaborative approach has worked to put them out in front in the race to dominate the last mile.

DroneUp is the primary partner for Walmart’s drone delivery service.  More than 90% of U.S. citizens live within 10 miles of a Walmart, making retail drone delivery a reasonable proposition – and a totally different effort than that of online giants like Amazon,  whose warehouses are located relatively sparsely throughout the country.   Even more different is the choice that both Walmart and DroneUp made to buy vs. build, giving them the flexibility to respond quickly to regulatory and technology changes.

Walmart’s decision to outsource drone delivery by partnering with a drone services firm like DroneUp has put them ahead of Amazon, which started earlier but made the choice to build a program entirely in-house. “It shows huge self-awareness for a large company like Walmart to work with a smaller company that can deliver faster than large companies like Amazon,” says DroneUp Chief Strategy Officer Carl Smit.

It showed forward thinking for DroneUp to decide to work with U.S. drone manufacturers to get their program up in the air.

“We’re not drone manufacturers, we’ve focused on the software,” Smit says.  “Over the last few years, we’ve seen the tech get better and better – we’re seeing a lot of technology that borrows from the automobile industry trickle into the drone industry at a much lower price.”

Getting technology at a lower price – without the sunk development costs that the manufacturers have to bear – is a major edge in a competitive industry.  But perhaps more important is the flexibility that the approach offers in a rapidly evolving regulatory environment.

“We have the “second mover” advantage over large companies who locked in their tech around what they thought the certification process looked like a couple of years ago,” Smit points out.

Tom Walker is DroneUp’s Founder and CEO.  “The regulations are changing quickly, and often, manufacturers just couldn’t build a technology solution to a particular regulation,” Walker says. “We’ve been able to review technology and see which manufacturers were emerging to fit the technology and the regulation needs as they stand today.”

“If you go back even two years ago to the drones and sensors that were available in 2020, not all of them still align with what’s happening on the regulatory front.  Regulators are leaning in to enabling operations on a larger scale.”

“A collaborative approach is something we’ve been working on for a while, and it’s served us well.  Given the breadth and depth of the tech that needs to be served, we start by looking for who we can partner with.”

The approach isn’t just good for DroneUp, it’s good for innovation.  “By having multiple partners, collaborating with them and giving them the opportunity to demonstrate their technologies on a large scale, we’ve evolved a better solution,” Walker says.

“There are a lot of small companies out there who have amazing enabling technologies.  When you put two or three of them together, they enable BVLOS delivery, or infrastructure inspection.  By giving these companies a customer and a longer runway between [funding] raises, we’re able to support innovation in the industry.”

The Future of Flight Services

Next, DroneUp is working to allow local communities to also take the outsourcing approach.  With Drone Hubs developing at Walmart properties, soon there will be a drones ready to go – with a pilot ready to fly – all over the country.  That creates an ideal solution for one big problem in deploying drones for emergency services.

Drones that can be deployed to get situational awareness before a crew is sent out can save communities time and money. The vast majority of fire calls are false alarms, whether intentional or due to mistake: fast accurate aerial surveillance of a site could help determine the level of appropriate response.  Equipping and staffing a drone program, however, is a major challenge, especially in smaller communities.  “18,000 municipalities all over the country are trying to make independent buying decisions,” says Smit.  “They have to invest in the drone, the maintenance, the licensing – but many things that get infrequently used go out of service,” he points out.  “When the person that got the license retires, or the drone needs to be updated, often they just go into storage.”

“That’s what we’re offering to public safety agencies – we handle the hardware, we handle all of the people, and we’re on standby.  With drone hubs we could have a first responder drone on call at that hub with a pilot at all time.”

In the meantime, DroneUp is building out hubs and refining the standards for residential drone delivery.  Walmart has provided them with the ideal partner to develop a flexible, best of breed hardware solution and the platform to demonstrate that drone delivery is both practical and safe.

The DroneUp drone delivery model, says Walker, has allowed DroneUp to sustain rapid growth – and compete and win against retail titans.  “A lot of companies have the technology debt, but they don’t have a big customer,” says Walker.  “We don’t have a lot of technology debt, but we do have a big customer.  That’s providing a gateway to scale.”

Read more about DroneUp:

• DroneUp Acquires Airmap: Another Move Towards Drone Ops on a Very, Very Big Scale
• DroneUp Launches Multi-Site Walmart Drone Delivery Service in Arkansas
• Smart City Drone Delivery: DroneUp in Ontario, CA Community, Connectivity, and Convenience
• DroneUp Selected for FAA BVLOS ARC
• Walmart Drone Delivery: Investment in DroneUp Could Change the Race to Dominate the Last Mile