How to buy (access) to a drone fleet.

· logistics and systems

 [This was originally sent to my logistics email newsletter]


Hello and welcome to this instalment of edutainment that nobody asked for; today, I'd like to start by saying that drones are amazing. When used well, they can do cool stuff like deliver life-saving blood, make videos, scan your warehouse to help manage inventory levels or deliver pizzas to millennials playing videogames. 


Here are three questions to help you understand how you'll end up buying and using drones in your business.


Question 1) Are they cool?



Question 2) Why would your business buy a drone?

To answer this, I've attached a small script (which you download by pressing here) written by some mystery person that... I mean, it's almost as if they were in the room as a fly on the wall. It's so accurate.


Question 3) How will I end up using drones in my business?

You're going to download an app to your phone or to your computer, and [insert Big Company Name here] will provide you with the service that makes arranging a drone delivery as easy as hiring an Uber. 


Their pitch will be something along the lines of 'drone delivery fleet for hire' or 'all the flight you need without the overheads'. A cheap and cheesy version will be 'helping your deliveries take off without your costs .. err.. taking off'. 


The point is that you'll buy access to someone else's drone fleet because A) we live in a world where the user experience needs to be this seamless. And B) after reading my last two emails, you'll know that most of the companies trying to make a drone network and said experience right now will fail (because they are trying to build a system when they don't know how to). 


The exciting part is trying to work out who will win the game because getting to this point is a lot tricker than the end result that I've just described.

Because [insert Big Company Name here] won't be the ones to start things. The challenge of making a drone delivery fleet work will be taken on by [insert Small Company Name here]. It'll be a bunch of tech-focused nerds with no social skills and, therefore, all the time in the world to deliver a technology that works. 


This is only one half of the puzzle though, once you work out the tech, you need to work out the service part. This presents two problems; the first is that they won't know how a transport company operates and the associated expectations, which leads to the second problem of learning about stuff like Chain of Responsibility or insurances or lead times. 


How a technology company will merge the 'being a technology' thing with 'being a logistics service provider in the value chain' thing. This is the exciting part. Seeing who and how this marriage is put together. 


It's the equivalent of buying a BMW and then BMW having to work out how to drive you around. It's a big job to do - especially when you scale that problem across thousands of customers and millions of order lines. 


What I suspect will happen is that there will be lots of [insert Small Companies Names here] that will try to make this work in the short run. In the medium timeframe, companies will form partnerships because neither have the resources or skills to do both properly. 'Small Company' will outsource the service elements in a 4PL-like scenario where a veteran logistics company does the operations and fleet planning and customer service - and they focus on the technology.


Eventually, once there is a solid offering that is delivering consistently (both literally and figuratively). It will be bought out and integrated into a larger company like Amazon, Walmart, Apple, or Woolworths... Or Bunnings. Leading us back to the point we started on about how you'll access a drone fleet.


The good part of this is that a big company will have the resources to keep everything running correctly, like a utility provider, keeping drones in the air and the app fully functioning predictably. Note: predictable in the world of 'supply chain' is a good thing.


The bad part is that once these things have been worked out and bought out, the barriers to entry will go up, and we will spend a long time finding ways to break them down again. Then again, such is the cycle of innovation. Something gets built, becomes safe and secure, then to progress, you have to find people who are willing to break what works and see if there's a better way (in other words, for the next Small Company to come along). 


Note: I believe you'll buy access to a fleet of autonomous trucks or cars or ships or planes in the same way.



Have a great day.