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Airware is shutting down after raising $118M
- danso 8y agoI know the article says Airware attempted to go into hardware, but did its operating system (ostensibly its main product) have users?
- roymurdock 8y agohttps://techcrunch.com/2015/04/16/airware/ https://techcrunch.com/2015/04/16/airware/ A few customers listed here: Delta Drone, Drone America. Sounds like the market didn't want or need a $2500/yr/drone software package for automating flights/data retrieval/storage. And there's simply no competing at the hardware level with DJI, even with $118M in funding. "Across all prices in North America, DJI represented 50 percent of the market, Snow says. The price range where DJI is not dominant is drones under $500, which are mostly toys, and where there are hundreds of companies competing." [1] There's money to be made in industrial (non-warfare) drones - but not as much as everyone thinks, and competition is really tough. [1] https://www.recode.net/2017/4/14/14690576/drone-market-share-growth-charts-dji-forecast https://www.recode.net/2017/4/14/14690576/drone-market-share...
- anonairwavedev 8y agoNone of those customers ever got an SDK (because there wasn't one) or any software. They only provided vehicles.
- roymurdock 8y agosounds like a really frustrating experience. sorry to hear about all the pivots, lack of strategy and vision. a good/interesting idea killed by overengineering and tough competition. sounds like you learned a lot of valuable lessons on someone else's dime while the ride lasted
- anonairwavedev 8y agoThank you —- this makes me feel much better about the time I spent there :)
- ianiridium 8y agoanon: would be interested to chat if you can reach out: https://www.linkedin.com/company/iridium-dynamics/ https://www.linkedin.com/company/iridium-dynamics/
- anonairwavedev 8y agoNope, never did. We build 2 OS(s): the first was based on linux with a rtos package (2013-14?). That was scrapped and a new fully custom hardware package was built with a fully custom OS (built by a team that never had done this) and was built for a low power arm processor. We were plagued by huge issues most of the time due to that OS being nearly impossible to debug or work with. Also doing that prevented any third-party from building anything because there wasn't a SDK or even a platform to build on.
- ddtaylor 8y agoHow do companies raise $10M+ without having a product ready to use? (Real question I run a startup that needs funding)
- gonational 8y agoPlease when you find this out let me know as well, as I am also in the market for some free money.
- quickthrower2 8y agoYou need to cast the magic spell. The following spells work well: "Drone" "AI" "Blockchain" etc.
- notJim 8y agoAlso VR or even better, AR!
- anonairwavedev 8y agoWe actually did have something at that point -- it was based on existing hardware and it did work. I seem to recall the original CEO taking I think someone from A16Z (?) out to a parking lot and flying an aircraft around as a demo
- rasz 8y agoIts all about who you know and how shiny can you look to the outsiders (founders being MIT grads etc).
- abakker 8y agoI'm not really surprised by this. At a drone conference in 2016, I first saw presentations from them among many other interesting technology vendors. They had a "vision" that they carefully presented on stage of what they would do, but everyone else at the show was either demoing technology or taking orders. Airware had a "call us for pricing" kind of attitude. Meanwhile, its been a year since Verizon acquired Skyward - which was a force in the drone industry pushing for better flight management tools, better collaboration with ATC, and an affordable product for small-time commercial operators that got most of their money as contractors/service providers. At the enterprise level, Drones just didn't solve a lot of problems. At the small farmer, construction contractor, gravel pit, etc, drones solved a lot of problems, but drones were the anti-scale solution. They Reduced the work so drastically, and improved the result so much that there was no need to scale up software licenses. In many cases, it just did the work better, in a 10th of the time, at a much lower cost. But, there was not a giant amount of work in the queue for those companies. Just a steady flow of the same jobs that used to take longer. Now, beyond visual line of sight (BVLS) flights might change that for the enterprise eventually, Power lines, rails, pipelines, and roads are all good candidates for remote, automated drone inspection. But, I suspect that it will be either DJI hardware, Custom Hardware, and some amount of custom software that really integrates drones into the enterprise process. Flight planning is only part of the picture. Maybe Airware had it all, but, if so, they were too early - they couldn't outlast the slow (and rational) pace of aviation regulatory change.
- hef19898 8y agoOne other usecase with a lot of potential is inventory control and counting in warehouses. Not small articles, but for industrial warehouses and larger products drones combining bar code scanners and visual artical identification can improve things considerably. Fraunhofer ran some first test like two years in Germany. No idea what came out of it.
- mikepurvis 8y agoDoes that really benefit from a drone vs a wheeled vehicle with a bunch of fixed cameras on it? I would think a gigantic planar environment is pretty much ideal for an industrial SDV; a lot of things get easier when you're no longer worried about weight— you can carry a full day's worth of batteries, not to mention having higher quality optics and safety lasers. (disclosure: I work for OTTO Motors, which has customers in this space)
- gammateam 8y agoOut of curiosity, how much drawdown do the VCs typically deal with during these liquidations? They get whatever's left based on their liquidation preference and preferred stockholder preference, leaving nothing for common stock holders including the founders themselves. Whats a typical drawdown look like?
- jgh 8y agoi guess it depends on if they have anything to sell...i bet most software startups would have a pretty significant drawdown unless they've made some unique ip that's worth something.
- jedberg 8y agoIf they have an office they have stuff like chairs and desks and computers that are at least worth a little bit. But it’s true most of the money went to employees.
- captain_perl 8y agoOffice liquidators typically offer 2% to 5% of retail on office furniture, although an office manager can try to direct sell the Aerons or new modular units.
- acjohnson55 8y agoWow. That's way less value than I'd expect. I guess no one really wants to work at a dead company's used desk.
- bmurray7jhu 8y agoWhen VC backed companies shutdown, the logistics are typically outsourced to specialist firms like Sherwood Partners [1]. Instead of a formal bankruptcy in federal court, an alternative process called "assignment for the benefit of creditors" is used to distribute assets to creditors under state law. Patents are usually sold to patent trolls or companies seeking a defensive portfolio. An attempt is usually made to sell tangible assets as a lot, but if there are no buyers, individual assets are auctioned. Silicon Valley Disposition[2] is frequently selected to manage asset disposition auctions. [1] https://www.shrwood.com/ https://www.shrwood.com/ [2] https://www.svdisposition.com/ https://www.svdisposition.com/
- bertil 8y agoIn cases like this, I rarely see the code being shared open source. Is it because it’s worthless, or because investors sell it to recuperate some costs?
- fipple 8y agoIt’s because 1) nobody gives a shit and 2) it would need legal review to make sure that it wouldn’t expose the defunct company to further lawsuits over copyright or patent infringement. That’s expensive and not worth it for a dead company
- deleted 8y ago[deleted]
- shpx 8y agoWould it be legal to release an encrypted archive and then release the key after 6 years (or whatever the statue of limitations for patent infringement/copyright is)?
- jiveturkey 8y agocopyright is many years, too many. and NDAs generally never expire.
- deleted 8y ago[deleted]
- jakelarkin 8y agoso it seems like Drones is one of the first big nascent industries, SV utterly lost to China b/c of their dominance of manufacturing?
- flyinglizard 8y agoSV didn't lose to China; everyone lost to DJI. Their competence was staggering (I think they kind of slowed down lately being that they're so far out from everyone; throttling their innovation a bit). If DJI represents the future of Chinese corporations[0], many people on the other side of the ocean should be very wary. [0] edited from "products". In fact what's so impressive with DJI is not just the products themselves, but also the design, marketing and branding, which is kind of an Apple/GoPro hybrid. They are not just creating immense value - they are packaging it the right way.
- jakelarkin 8y agothis is my concern as well. on the hardware side, a Chinese startup can iterate faster & be the lowest cost producer. if design, UX, software, marketing is on par with SV/US competitors. SV is toast (in that industry)
- smacktoward 8y ago> In fact what's so impressive with DJI is not just the products themselves, but also the design, marketing and branding, which is kind of an Apple/GoPro hybrid. They are not just creating immense value - they are packaging it the right way. This is what always struck me as so short-sighted about Western corporations offshoring their manufacturing. Japan and the Asian Tigers proved that it's possible for nations to successfully climb the value chain, starting off by doing low-skilled work and then using the experience gained from that to gradually take over more and more of the overall product development process. China is just taking that approach and applying it at a larger scale than anyone has ever done before. When a company like Apple contracts out its manufacturing to a Chinese firm, it's betting that Apple will always be able to produce better design and marketing than that Chinese firm can. But based on history, that doesn't strike me as a very good bet. Eventually the Chinese firm will climb high enough on the value chain where they don't need Apple's designers and marketers to make objects that sell anymore. The Western companies are training their own replacements.
- deleted 8y ago[deleted]
- JumpCrisscross 8y ago> Airware launched its own Commercial Drone Fund for investing in the market in 2015 Lossmaking companies launching in-house VC funds while continuing to raise money is a huge red flag. It suggests operators who prefer to be fund managers, two very different roles.
- nostrademons 8y agoAlso that they have no clue what the real needs within the market are, and so would rather spread their bets around a portfolio of other entrepreneurs who they hope have better information than them rather than focus on one single market opportunity. I know of at least two really prominent cryptocurrency ICOs that are in this boat. (As a side note, I wonder how often the opposite situation - an investor who gets so excited that they found a company - occurs, and whether that's a strong positive sign. I can think of at least 2 such big successes - Jeff Bezos with Amazon and Jim Clark with Netscape - and a bunch of more minor ones, like FriendFeed or TripleByte.)
- throwawaymath 8y ago> I know of at least two really prominent cryptocurrency ICOs that are in this boat. Which two are you talking about?
- nostrademons 8y agoEOS and Tron. There are probably others. I went to a couple cryptocurrency meetups recently that were sponsored by a startup, 6 months old, which had offices in 3 cities, 2 different product lines, and was launching a venture capital fund. To me, that's a red flag that they have too much money and no idea how to deploy it.
- roymurdock 8y agoOff topic, but is there anything interesting going on in the cryptocurrency space? I stopped following circa 2015 after seeing Bitcoin/blockchain co-opted by a bunch of hucksters for a bunch of get-rich-quick schemes (including internal projects at more than a few major technology companies). I've heard stirrings about a few "stablecoin" project with more solid economic underpinnings, but am skeptical anyone can come up with a better design than the USD, EUR, or CHF for keeping a currency pegged to a broad basket of goods. I ask because you're clearly not a crypto shill and it's hard to find unbiased opinions on cryptocurrencies these days.
- danimal88 8y agoa few ways to slice it 1) hardware is still really hard 2) hardware in it of it itself is defensible/a moat because apparently software first companies may not know how to do it well 3) software for hardware is particularly dangerous because its you can get pushed off of someones hardware platform in favor of a homegrown, good enough, alternative
- haaen 8y agoAirware raised money from Y Combinator and Andreessen Horowitz. https://blog.ycombinator.com/airware-yc-w13-raises-10-dollars-dot-7m-from-andreessen-horowitz-and-google-ventures-for-commercial-drone-autopilots/ https://blog.ycombinator.com/airware-yc-w13-raises-10-dollar...
- teraflop 8y agoMaybe this is a dumb question, but why is Techcrunch using a screenshot of Airwave's Slack channel in a news article about Airware? Is there some connection between the two companies that I'm not aware of? Or did they just not bother to read what their "source" sent them?
- dasil003 8y agoYeah that jumped out at me as well, I googled the two terms to see if there was some connection or renaming but couldn't find anything.
- lbotos 8y agothe article mentions that it was their "alumni slack" so I guess it's a portmanteau of "Airware" and "wave goodbye"?
- romski 8y agoSlack of Airware alumni
- dx87 8y agoLooks like it's Airwave telling their employees about Airware being shut down. You can see in the first message that someone is telling the channel that Airware informed their employees of the shutdown, and the rest of the messages refer to Airware as "they".
- snug 8y agoIt says in the article. It's a slack channel for previous employees, not from the actual company.
- pbarnes_1 8y agoHow do you go from opening a new office in Tokyo to shut down in 4 days? Unless literally no one is looking at the bank balance? Did someone log in this morning, see the balance at a negative, and shut down the company?
- propter_hoc 8y agoUsually when things happen this way it means that facts changed in some way. Either they presumed until today that some sale or financing deal would come through, or their investors met and decided they had had enough.
- gk1 8y agoYep. I've seen this happen to another startup. They leased a massive (for them) office space only to shut down a few months later after a funding round fell through horribly.
- jonwachob91 8y agoA few months later is a lot different than 4 days later.
- timr 8y agoBig office deals take a long time to start, and have inertia once they're going. I can easily see someone starting a moderately speculative office expansion project and then getting distracted with fundraising, only to have everything fall apart at the same time, many months later. Said another way: given the number of liabilities at a company that has taken hundreds of millions in funding and is flying low over the ground, a lease is probably not you biggest concern.
- Soundest 8y agoIt's very traditional. The second you show that you're significantly scaling back you raise questions about whether you're a going concern. They could have canned the japanese office much earlier but then it's possible investors would say 'Hey, we thought the plan was to build strong links with Mitsubishi to prime for an acquisition for an exit, what's the plan now'. So the only real option is to push aggressively and hope it works out.
- ngoel36 8y agoAnyone at Airware looking for a new gig, our aviation team at Uber is holding drones experts -- shoot me an email, ngoel@uber.com.
- lifeisstillgood 8y agoPresumably you meant hiring drone experts, but the idea Uber is kidnapping flight scientists and keeping them locked up in an underground lair has a certain attraction :-) It might even make the pitch deck - "How we are reducing competition in our space"
- dbuder 8y agoThat sounds like how Uber would operate.
- mvpu 8y agoA VC friend once told me that _all_ money coming into VC via LPs represents <5% of their total assets, so even if all the VCs loose all the money their raised from their LPs nobody loses breath - only damage is to reputation. So fund raising is mostly about storytelling and showtime. Fund losing is about back luck. Better luck. Next time.
- gatsby 8y agoHuh?
- bigbadgoose 8y agoVCs take money from Limited Partners (LPs). For the LPs, they spread less than 5% of their investable assets across a venture strategy. If it doesn't pan out, no big deal. So from their perspective, fundraising is spectacle and excitement, and losing investments are part of the loss model. -- Side note, a return model heuristic for LPs: 1 in 10 yields 10x, 1 in 100 yields 1000x
- nostrademons 8y agoFrom the perspective of the LP, sure. From the perspective of the VC, if they have a bunch of losers in their portfolio it means that they're not going to be able to raise another fund in 10 years, they won't have any carried interest (which is where VCs make the bulk of their compensation - it's their 20% of the total profits), and they'll have to content themselves with the salary they drew from the fund management fees. BTW, most LPs are things like pension funds and university endowments, along with hedge funds that pensions & universities invest in. So if you're ever wondering why your parents' retirement has suddenly vanished or your kids can't afford to go to college, this is why.
- ChuckMcM 8y agoThey spared no expense ever. Ouch. Sadly, not an uncommon failure mode. Raise more than you can easily be bought out for (> $50M) and spend it faster than you can grow into product fit. That said, I am a bit surprised that there isn't more demand for a domestically developed drone operating system. Given the issues the Army has with DJI stuff it seems like it would be a natural support a local company that could provide a similar capability. [1] https://arstechnica.com/gadgets/2017/08/army-tells-troops-to-stop-using-dji-drones-immediately-because-cyber/ https://arstechnica.com/gadgets/2017/08/army-tells-troops-to...
- jplayer01 8y agoIsn't DARPA investing in this space? Seems like the kind of thing they're usually interested in.
- hef19898 8y agoAnd then you have your usual suspects: Boeing, Lockheed Martin, Northrop General Dynamics in the US, BAe Sytems in the UK, Dassault and Airbus in France and Germany. Not sure wether the military is really interested in a civilian OS.
- ChuckMcM 8y agoSure, but DARPA and their contracts don't move the technology like a bunch of enthusiasts hacking on DJI drones. I presume that is why the Army has been doing things with the DJI drones (I'm sure they do stuff with Boeing drones or equivalents as well but I am also sure they aren't $1500 off the shelf at WalMart). It just seems like having a vibrant domestic drone market would be a strategically useful thing.
- jplayer01 8y agoPretty much all modern technology is based on stuff DARPA and other government institutions have funded over the past decades. I'm not sure what you expect a couple of hackers to be able to do without a similar amount of funding. Research and development is ridiculously expensive.
- tehlike 8y agoThe founders were capable engineers, i am sure one of their next gigs will stick. Hi buddy, if you are seeing this :)
- burdzwastaken 8y agoAny Airwave Kubernetes / Infrastructure engineers looking for new work? Our Core Platform team is always looking here at Mulesoft, shoot me an email at matt.burdan@mulesoft.com.
- madengr 8y ago“Airware was ahead of the game trying to build their software. So far ahead that the drone hardware on the market wasn’t sophisticated enough to actually produce the granularity of data they needed to test out their software/train their algorithms” I think he means their software was not sophisticated enough.
- isuckatcoding 8y agoDodged a bullet here. I didn’t make it pass the first interview call back in 2016 lol.
- acct1771 8y agopast
- isuckatcoding 8y agoNoted
- brian-armstrong 8y agoI guess in the end that air was just vapor
- rhizome 8y agoWhen you say Airware I think of two things: they seemed like they could fall into military contracting or whatever, and -- perhaps related -- they had job ads on Craigslist SF for years, which was another kind of signal about them.
- deleted 8y ago[deleted]