6 ms·

A Drone Company That Fell to Earth

84 points by noncoml 9y ago

grecy 9y ago
It's a strange article in that it focuses so much on how the Lily promotional video was not actually an accurate representation of how the prototype Lily worked at that time, but more of a "wish list" or demo of what it will work like when it's finished. We all know when Steve introduced the iPhone it was a complete fake - the signal bars were faked, the engineers were sweating that it would crash, Steve had to do things in precisely the correct order, etc.[1] Of course, it's a prototype, not the final product! [1] http://www.nytimes.com/2013/10/06/magazine/and-then-steve-said-let-there-be-an-iphone.html?pagewanted=all&_r=2& http://www.nytimes.com/2013/10/06/magazine/and-then-steve-sa...
- deleted 9y ago
  [deleted]
- yardie 9y ago
  No, Steve introduced a prototype. The screen was real, the digitizer was real, and so was the very buggy OS. A fake would have been a reskinned Nokia in an iPhone body.
- elmar 9y ago
  I found this opnion very interesting someone close to the company said. Balaresque and Bradlow were not polished enough to be able to secure further funding. “I felt sorry for them,” In the end the failure was not been polished enough for later stage VC, just reminds me of the fake it till you make it mantra.
  - imjk 9y ago
    I think it actually runs counter to that mantra. Here, it seems they weren't good enough at faking it with later-stage VCs.
    - elmar 9y ago
      exact they failed to fake it so they didn't make it.
elmar 9y ago
for me the main problem was the price point of $499 was impossible not to lose money on each drone, even today DJI doesn't manage to get a drone with similar Lily features at that price point. And after you made the pre-sale at that price point you can't go back and say now is $999, and that should have been a more reasonable price for the kickstarter campaign, but then probably they would have sold much less units.
- ehnto 9y ago
  They could have raised the price I think. Ship your presales at a loss at the original price, say "man this was way harder than we thought!" and ship the rest at $999. It's hard to argue with intrisic value. If it can't be made for $499 then that's a hard fact and I think this particular market is well suited to understand that. I might be super wrong though, it's not really my area of interest or expertise!
- mhb 9y ago
  Doesn't this $475 DJI drone come close to the Lily features? https://www.amazon.com/DJI-Phantom-Standard-Quadcopter-Camera/dp/B013U0F6EQ https://www.amazon.com/DJI-Phantom-Standard-Quadcopter-Camer...
  - zootam 9y ago
    Not at all. They are similar in that they both fly, and have a camera. The selling point of the Lily, and the holy Grail of drones is a self flying drone. One that anyone can throw up into the air, follows you around, and gets nice aerial shots while avoiding obstacles and landing safely. At the time, DJI didn't even have these features on drones that cost several times that, so it seemed ridiculous that a startup could provide these features at a price lower than anything else. Even now, there is no drone that exists that provides that experience, but that is what Lily was marketing.
  - elmar 9y ago
    The DJI Phantom 3 Standard is probably a Loss Leader and should be sold at the original price of $799. Not even talking about the self-flying funcionality Lily form factor and water resistant was probably more expensive to produce than DJI Phantom.
mcculley 9y ago
I never understood how the "follow" function would work if it became popular enough for something like a running race. Would the drones implement some kind of flocking collision avoidance behavior? It seems that eventually autonomous drones will need something like that.
dm319 9y ago
It doesn't sound like they set out to deceive - rather they had a vision which a lot of people, including themselves, bought into, promising far more than they could deliver. Even if they got to the stage of having a fully-working prototype that could do everything the video claimed, they then had the task of translating the prototype into mass-production. I remember when the raspberry-pi started to take pre-orders (6 years after the inception). They had massive public interest, and 100 of thousands of pre-orders taken within days. Despite being far simpler than an autonomous drone, they still ran into several show-stopping problems with manufacturing at launch[1]. Personally, I think it is the investor's responsibility (and that should be the term for someone who pre-orders the product) to be convinced that the project is feasible within the time-frame they were stating. Crowd-funding is disappointing because no questions are asked beyond watching a slick video and an FAQ. An investor would be trying out the prototype on a ski slope, and asking how they were going to translate their 3D-printed prototype into mass-production at a price-point of 500 euros within a year. And then not investing. [1]https://www.raspberrypi.org/blog/manufacturing-hiccup/ https://www.raspberrypi.org/blog/manufacturing-hiccup/
- jermaustin1 9y ago
  > and that should be the term for someone who pre-orders the product I'm sorry I can't agree with this at all. A person who pre-orders something isn't investing in the company, they are buying a product being promised. Now, long delays and things of that nature are perfectly acceptable, but you aren't investing. An investor gets a stake of the company. An investor (of certain worth) has a say in what is going on. A customer doesn't, they speak only with their desire to buy whatever product is being pitching. And after they hand over their money, their opinion doesn't matter anymore. Sure they can dispute the charge and get kicked off whatever crowdfunding site they are on, but they still have no voice in the company.
  - alekratz 9y ago
    > A person who pre-orders something isn't investing in the company, they are buying a product being promised. I agree with this. I always saw pre-orders as a way to reserve your "spot" for a physical object. My first encounter with pre-orders was video games, before platforms like Steam where physical copies of a game aren't limited. The problem with pre-ordering now is that it's becoming a method of funding incomplete products, with the promise of a finished product. It involves the consumer in the production phase of a project, shifting the risk of "it didn't work out" from the investors to the consumers. And like you mentioned, > An investor gets a stake of the company. An investor (of certain worth) has a say in what is going on. ... A customer doesn't, they speak only with their desire to buy whatever product is being pitching. But, at the same time, it looks like they acquired a nice chunk of money ($14m in capital) only after they released their video. Would it have been possible to finish their product, advertise, and start shipping without that $14m, and however much they received from pre-orders? I can't say. To me, it seems like they started advertising to the public and accepting pre-orders before an actual product was ready for the mass market; but if they were running low on funding at the time, it may have been their only option to secure funds. (Take that with a grain of salt; I know next to nothing about business + entrepreneurship)
mannykannot 9y ago
"There were production hiccups. An engineer who led the software development team insisted on revamping the drone software to be his own original invention, several engineers told me. (The prototype had been made with open-source software.) The engineering team rebooted and the drone prototypes stopped flying. Production was set back about six months." There seems to be something about software that makes this a particularly appealing tarpit.
- bluejekyll 9y ago
  So many people want to do this. It's generally a really bad idea.
  - DigitalJack 9y ago
    for production. rewrites on your own time can be a great way to learn the ins and outs of a problem.
    - bluejekyll 9y ago
      Yes, it's great learning. But every piece of software introduces its own set of bugs or incompatibilities. You effectively are throwing out all the past learning that was encoded into a program. Sometimes it's worth it, but generally it should be done in bits and pieces. Not wholesale.
- tnecniv 9y ago
  There's a name for this phenomenon: https://en.wikipedia.org/wiki/Not_invented_here https://en.wikipedia.org/wiki/Not_invented_here
  - ghaff 9y ago
    While true, NIH can apply to a lot of things including hardware. But why especially software? A lot probably has to do with the fact that many/most people will recognize that rebooting a hardware design is going to be a lot of work and take a long time. Whereas with software, there's more of a temptation to think it's "just a matter of programming" and "how hard can it be?" even by people who should know better.
danso 9y ago
How much of this technology, particularly the impromptu self-flying aspect, is even doable at the sub-$1000 price range? There was the Hexo+, which raised $1.3M in 2014 [0] and delivered what sounds like a major disappointment [1]. [0] https://www.kickstarter.com/projects/sqdr/hexo-your-autonomous-aerial-camera/description https://www.kickstarter.com/projects/sqdr/hexo-your-autonomo... [1] https://www.pcmag.com/g00/review/343846/hexo?i10c.referrer=https%3A%2F%2Fwww.google.com%2F https://www.pcmag.com/g00/review/343846/hexo?i10c.referrer=h...
- PeterisP 9y ago
  I don't think there's anything in self-flying aspect that significantly affects the per-unit marginal cost. It's obviously a hard tech to get right, as shown by many companies failing, but a drone with shitty self-flying or no self-flying has pretty much the same hardware and manufacturing costs as a drone which can do that well; the main difference is in software and R&D capex which doesn't really affect the market price as much the per-unit economics.
  - mdonahoe 9y ago
    One counter-example: 360 collision avoidance is a big improvement to self-flying drones, and it requires additional cameras and a bigger computer to process them. You don't need to pay for that if your drone will only be flown manually.
sonyalo 9y ago
A cautionary tale for anyone who wants to start a startup. The individual story points such their $499 price point or their "fake" video are, in my opinion, not the cause of their failure. For one, many companies, especially early stage ones, operate and even sell at a loss to get their product and brand out into the world and in the hands of customers. Second, as has been pointed out here, products have been promoted before where the advertised features were not fully functional at the time of their promotion. I also think that the features advertised are possible to build, even if not as perfectly advertised (i.e. I never expected the drone to fly if I were to, say, chuck it off of the empire state building). I believe the root cause of the Lily's failure was in its founders execution. Releasing the drone with at least a couple of basic features may have pissed people off in that it didn't come as fully advertised but it would've have probably saved them a government investigation; and a well executed (as well as transparent and sincere) PR campaign would have quelled the masses. The lean startup process would have been perfect in this scenario. The two features I would've picked would have been the follow feature (even if the range was limited) and the throw and go feature (even if it could only function as a "light" throw). Comments like "It was a combination of hubris plus optimism" and "An engineer who led the software development team insisted on revamping the drone software to be his own original invention" are red flags that the founder's attitude and management was flawed and their ultimate downfall. The moral of the story for any aspiring entrepreneur as I see it is to stay humble, spend your money carefully, and above all, learn from those around you. Take heed of advice and warnings from others. Perhaps if they had done that, we'd all be watching them fly towards success.

84 points by noncoml 9y ago

It's a strange article in that it focuses so much on how the Lily promotional video was not actually an accurate representation of how the prototype Lily worked at that time, but more of a "wish list" or demo of what it will work like when it's finished. We all know when Steve introduced the iPhone it was a complete fake - the signal bars were faked, the engineers were sweating that it would crash, Steve had to do things in precisely the correct order, etc.[1] Of course, it's a prototype, not the final product! [1] http://www.nytimes.com/2013/10/06/magazine/and-then-steve-said-let-there-be-an-iphone.html?pagewanted=all&_r=2& http://www.nytimes.com/2013/10/06/magazine/and-then-steve-sa...

deleted 9y ago
[deleted]
yardie 9y ago
No, Steve introduced a prototype. The screen was real, the digitizer was real, and so was the very buggy OS. A fake would have been a reskinned Nokia in an iPhone body.
elmar 9y ago
I found this opnion very interesting someone close to the company said. Balaresque and Bradlow were not polished enough to be able to secure further funding. “I felt sorry for them,” In the end the failure was not been polished enough for later stage VC, just reminds me of the fake it till you make it mantra.
- imjk 9y ago
  I think it actually runs counter to that mantra. Here, it seems they weren't good enough at faking it with later-stage VCs.
  - elmar 9y ago
    exact they failed to fake it so they didn't make it.

elmar 9y ago

for me the main problem was the price point of $499 was impossible not to lose money on each drone, even today DJI doesn't manage to get a drone with similar Lily features at that price point. And after you made the pre-sale at that price point you can't go back and say now is $999, and that should have been a more reasonable price for the kickstarter campaign, but then probably they would have sold much less units.

ehnto 9y ago
They could have raised the price I think. Ship your presales at a loss at the original price, say "man this was way harder than we thought!" and ship the rest at $999. It's hard to argue with intrisic value. If it can't be made for $499 then that's a hard fact and I think this particular market is well suited to understand that. I might be super wrong though, it's not really my area of interest or expertise!
mhb 9y ago
Doesn't this $475 DJI drone come close to the Lily features? https://www.amazon.com/DJI-Phantom-Standard-Quadcopter-Camera/dp/B013U0F6EQ https://www.amazon.com/DJI-Phantom-Standard-Quadcopter-Camer...
- zootam 9y ago
  Not at all. They are similar in that they both fly, and have a camera. The selling point of the Lily, and the holy Grail of drones is a self flying drone. One that anyone can throw up into the air, follows you around, and gets nice aerial shots while avoiding obstacles and landing safely. At the time, DJI didn't even have these features on drones that cost several times that, so it seemed ridiculous that a startup could provide these features at a price lower than anything else. Even now, there is no drone that exists that provides that experience, but that is what Lily was marketing.
- elmar 9y ago
  The DJI Phantom 3 Standard is probably a Loss Leader and should be sold at the original price of $799. Not even talking about the self-flying funcionality Lily form factor and water resistant was probably more expensive to produce than DJI Phantom.

mcculley 9y ago

I never understood how the "follow" function would work if it became popular enough for something like a running race. Would the drones implement some kind of flocking collision avoidance behavior? It seems that eventually autonomous drones will need something like that.

dm319 9y ago

It doesn't sound like they set out to deceive - rather they had a vision which a lot of people, including themselves, bought into, promising far more than they could deliver. Even if they got to the stage of having a fully-working prototype that could do everything the video claimed, they then had the task of translating the prototype into mass-production. I remember when the raspberry-pi started to take pre-orders (6 years after the inception). They had massive public interest, and 100 of thousands of pre-orders taken within days. Despite being far simpler than an autonomous drone, they still ran into several show-stopping problems with manufacturing at launch[1]. Personally, I think it is the investor's responsibility (and that should be the term for someone who pre-orders the product) to be convinced that the project is feasible within the time-frame they were stating. Crowd-funding is disappointing because no questions are asked beyond watching a slick video and an FAQ. An investor would be trying out the prototype on a ski slope, and asking how they were going to translate their 3D-printed prototype into mass-production at a price-point of 500 euros within a year. And then not investing. [1]https://www.raspberrypi.org/blog/manufacturing-hiccup/ https://www.raspberrypi.org/blog/manufacturing-hiccup/

jermaustin1 9y ago
> and that should be the term for someone who pre-orders the product I'm sorry I can't agree with this at all. A person who pre-orders something isn't investing in the company, they are buying a product being promised. Now, long delays and things of that nature are perfectly acceptable, but you aren't investing. An investor gets a stake of the company. An investor (of certain worth) has a say in what is going on. A customer doesn't, they speak only with their desire to buy whatever product is being pitching. And after they hand over their money, their opinion doesn't matter anymore. Sure they can dispute the charge and get kicked off whatever crowdfunding site they are on, but they still have no voice in the company.
- alekratz 9y ago
  > A person who pre-orders something isn't investing in the company, they are buying a product being promised. I agree with this. I always saw pre-orders as a way to reserve your "spot" for a physical object. My first encounter with pre-orders was video games, before platforms like Steam where physical copies of a game aren't limited. The problem with pre-ordering now is that it's becoming a method of funding incomplete products, with the promise of a finished product. It involves the consumer in the production phase of a project, shifting the risk of "it didn't work out" from the investors to the consumers. And like you mentioned, > An investor gets a stake of the company. An investor (of certain worth) has a say in what is going on. ... A customer doesn't, they speak only with their desire to buy whatever product is being pitching. But, at the same time, it looks like they acquired a nice chunk of money ($14m in capital) only after they released their video. Would it have been possible to finish their product, advertise, and start shipping without that $14m, and however much they received from pre-orders? I can't say. To me, it seems like they started advertising to the public and accepting pre-orders before an actual product was ready for the mass market; but if they were running low on funding at the time, it may have been their only option to secure funds. (Take that with a grain of salt; I know next to nothing about business + entrepreneurship)

mannykannot 9y ago

"There were production hiccups. An engineer who led the software development team insisted on revamping the drone software to be his own original invention, several engineers told me. (The prototype had been made with open-source software.) The engineering team rebooted and the drone prototypes stopped flying. Production was set back about six months." There seems to be something about software that makes this a particularly appealing tarpit.

bluejekyll 9y ago
So many people want to do this. It's generally a really bad idea.
- DigitalJack 9y ago
  for production. rewrites on your own time can be a great way to learn the ins and outs of a problem.
  - bluejekyll 9y ago
    Yes, it's great learning. But every piece of software introduces its own set of bugs or incompatibilities. You effectively are throwing out all the past learning that was encoded into a program. Sometimes it's worth it, but generally it should be done in bits and pieces. Not wholesale.
tnecniv 9y ago
There's a name for this phenomenon: https://en.wikipedia.org/wiki/Not_invented_here https://en.wikipedia.org/wiki/Not_invented_here
- ghaff 9y ago
  While true, NIH can apply to a lot of things including hardware. But why especially software? A lot probably has to do with the fact that many/most people will recognize that rebooting a hardware design is going to be a lot of work and take a long time. Whereas with software, there's more of a temptation to think it's "just a matter of programming" and "how hard can it be?" even by people who should know better.

danso 9y ago

How much of this technology, particularly the impromptu self-flying aspect, is even doable at the sub-$1000 price range? There was the Hexo+, which raised $1.3M in 2014 [0] and delivered what sounds like a major disappointment [1]. [0] https://www.kickstarter.com/projects/sqdr/hexo-your-autonomous-aerial-camera/description https://www.kickstarter.com/projects/sqdr/hexo-your-autonomo... [1] https://www.pcmag.com/g00/review/343846/hexo?i10c.referrer=https%3A%2F%2Fwww.google.com%2F https://www.pcmag.com/g00/review/343846/hexo?i10c.referrer=h...

PeterisP 9y ago
I don't think there's anything in self-flying aspect that significantly affects the per-unit marginal cost. It's obviously a hard tech to get right, as shown by many companies failing, but a drone with shitty self-flying or no self-flying has pretty much the same hardware and manufacturing costs as a drone which can do that well; the main difference is in software and R&D capex which doesn't really affect the market price as much the per-unit economics.
- mdonahoe 9y ago
  One counter-example: 360 collision avoidance is a big improvement to self-flying drones, and it requires additional cameras and a bigger computer to process them. You don't need to pay for that if your drone will only be flown manually.

sonyalo 9y ago

A cautionary tale for anyone who wants to start a startup. The individual story points such their $499 price point or their "fake" video are, in my opinion, not the cause of their failure. For one, many companies, especially early stage ones, operate and even sell at a loss to get their product and brand out into the world and in the hands of customers. Second, as has been pointed out here, products have been promoted before where the advertised features were not fully functional at the time of their promotion. I also think that the features advertised are possible to build, even if not as perfectly advertised (i.e. I never expected the drone to fly if I were to, say, chuck it off of the empire state building). I believe the root cause of the Lily's failure was in its founders execution. Releasing the drone with at least a couple of basic features may have pissed people off in that it didn't come as fully advertised but it would've have probably saved them a government investigation; and a well executed (as well as transparent and sincere) PR campaign would have quelled the masses. The lean startup process would have been perfect in this scenario. The two features I would've picked would have been the follow feature (even if the range was limited) and the throw and go feature (even if it could only function as a "light" throw). Comments like "It was a combination of hubris plus optimism" and "An engineer who led the software development team insisted on revamping the drone software to be his own original invention" are red flags that the founder's attitude and management was flawed and their ultimate downfall. The moral of the story for any aspiring entrepreneur as I see it is to stay humble, spend your money carefully, and above all, learn from those around you. Take heed of advice and warnings from others. Perhaps if they had done that, we'd all be watching them fly towards success.