00:00:23 · Adam Bry
[00:00:23] S1: Yeah, so a couple things there. So, DJI actually can still sell into The US. This is not broadly understood. The largest restriction in place is they can't introduce new models, that came into effect earlier this year, but they can still sell everything they've developed up until January of this year in The US, they are selling it, so we actually compete head to head with them in The US all the time, and this is not broadly understood, but on a total sales basis, by the best available public data we can find on them, and we know our numbers, we will do more sales in The US to civilian customers than DJI this year, which is a pretty staggering fact. You know, when we started the company in 2014 and certainly 2016, 2017, 2018, people thought there were just gonna be no US drone industry, there were US companies couldn't compete, and the fact that we're going to do more sales than them in The US this year, honestly, is surprising, even to me. There's a lot that goes into that. We're not selling to consumers now, we're selling to professional users, public safety, energy utilities, construction companies. Most of DJI's revenue, as we understand it, is consumers, so we have basically zero there, but we're much bigger than them with professional users in The US. We certainly benefit from a overwhelming preference for our customers there to buy from a US company, which we are immensely grateful for. But I think the real story is the shift in the market from manually flown drones, which DJI is very good at, towards dock based autonomous solutions where you have the drone live in a network connected charging base station, it can be operated remotely, it's an entirely software defined device, that's a huge bet that we made when we started the company, and that has really revolutionized the market in the last few years, and that's the basis of competition now that we are winning and succeeding on. So, you know, I'm a competitive guy, I generally love competition, I think it's great to have competitors out there of all different sizes, stripes, shapes, and there's couple of US companies that we compete with as well, but I certainly view DJI and the Chinese companies as our most formidable competition, and whether or not they're allowed to sell in The US, I think that, you know, that's...
00:02:33 · Adam Bry, Ty Morse
We want to be competing against the best, we want to be winning against the best, and so, they're the ones that we pay the most attention to. [00:02:41] S0: I remember there was a talk that Jeff Bezos did a long time ago where he said that he wants to be informed by competitors, but he wants to be customer obsessed. So, does that kind of equation work in your mind?
00:02:53 · Adam Bry
[00:02:53] S1: So, I think it's all context dependent, right? And I think in the best sense, competition pushes you to just be the best version that you can be of yourself. In enterprise markets, it's very kind of head to head, know, there's a specific number, you know, in public safety, there are, you know, a given number of agencies out there and they're generally going make a decision one way or the other on what drone solution provider they're gonna use. And so, know, it's a very like head to head kind of competition. Like you can look at the scorecard, you can win or lose them. You know, we have a very strong internal view on where this technology is going, what needs be developed to unlock the most value for customers, and that's where most of our focus is. Know, the grounds that we want to win on is just being the best partner for our customers, having the best overall solution. It's also natural and I think healthy that competitors are learning things from each other, like DJI over the years has copied a huge number of the things that we do. Like, if you look at our drones, they have fisheye cameras that see everything in every direction. We really introduced this idea of a computer vision centric drone, and DJI products, lo and behold, kind of look similar today. That's something that really started with Skydio. We publicly demonstrated a doc before DJI announced a product. They are now, I think, borrowing a lot of the things that we've done from kind of a software vertical integration standpoint. And look, that's just the way it goes. You know, competitors are gonna learn something from each other and ultimately it's to the better of the customers that we're working to serve.
00:04:29 · Ty Morse
[00:04:29] S0: There's kind of this interesting dynamic in most hardware companies where it takes a very long time, like with Elon's companies, it's typically like a ten year banking period, where you don't really ship the first car until year eight or nine. Same thing with the first three rockets blow up, and then the fourth one goes up, and that's about seven years in, and I think it's the same thing with Boring Company and Neuralink. Yeah. With this sort of thing, the business is starting to inflect, but it's been, I don't know, over a decade in the baking process. So, what is it kind of like going in those first few years to suddenly flipping a switch and saying, okay, now we scale and now we're actually gonna like really start manufacturing?
00:05:06 · Adam Bry
[00:05:06] S1: Yeah, well, I would say overall it's a lot more fun, you know. It's fun to be like in this mode now where we've got just this expanding incredible suite of products and we've got customers using them at massive scale. So, you know, our, just our online customers, so not including our military customers, they're averaging about 2,000,000 flights per year now. It's about 40,000 flights per week and that number's doubling year over year, and it's just awesome to see that happening with our customer. Every one of those flights has a story behind it, right? Like in public safety, these are finding a missing person, de escalating a dangerous situation, and in energy utilities, it's critical inspection work that helps them operate more safely and efficiently, so it's like, it's, I think it's just super motivating to get to be a part of that. It's fun to have a factory like we're in today that's running at substantial scale, and we'll, over the course of this year, we'll triple the output from our factory. So, there's a lot of challenges that go along with it, but it's super fun moment for us, but as you say, it's a journey to get here. Like, we started almost thirteen years ago, it took us four years to ship our first product, which was a consumer oriented drone, the Skydio R1, which was, I kind of describe it as like technology marvel, but commercial failure. Like everybody that saw that thing and what it could do thought it was incredible, but nobody bought it. And so it was like, it had great autonomy capabilities, and everything else about it kinda sucked. And it took us another couple of years of iteration to get to kind of like a more complete product, and then we decided to focus on the enterprise and government customers in 2020. And I'd say it took us probably three to four years to really get all the product ingredients right there, and then it's the last couple years that things have really kind of gone exponential, and I still think we're very near the beginning, like even in our most mature markets, I estimate we're around like 1% penetration with our existing products in terms of the use cases they can serve and the impact they can have, so we still got a lot of work in front of us.
00:07:02 · Ty Morse
[00:07:02] S0: If you take a factory like this one and you're suddenly going to be like doubling, I don't know, production in the course of a year, what are the biggest challenges and pain points that come along with that?