The Drone ‘Bubble’ – How to survive in a competitive market
The latest number of UK CAA organisations certified to conduct unmanned aircraft operations for commercial purposes currently stands at 1080 with an estimated 20-25 new companies per month adding to the list. To meet the need for new remote pilots, the number of CAA approved training schools has risen from 2 to 11 in just 9 months as exponential growth takes hold in the small UAS industry. The vast majority of permission holders are in basic aerial imagery using entry level drones to provide products such as generic marketing videos, estate agency imagery and golf course videos fly-throughs. The appetite of other industries such as Survey, Renewables, Engineering, Construction, Agriculture and Energy to use unmanned technology in support of their day-to-day business is increasing and so many are asking the question: where is the market saturation point and how can my business survive in this industry?
The saturation point will differ according to sector but in all there will be a natural selection process driven by more choice and the competitive pricing it will generate. The more vulnerable will be the ‘lone operators’, those small companies with 1-3 individuals, 1 or maybe 2 UAS and limited resources. They operate in a band where competition is pushing prices lower and lower and this is ultimately unsustainable for ‘resource poor’ organisations. So what strategies should they employ to survive and thrive in the future marketspace.
PLAN – The common axiom is that ’a plan never survives contact with the enemy’, but often smaller organisations do little or no planning at all, they simply exist on a week to week basis. Decide on your strategy, outline it so that you and everyone in the business is clear on the plan and revisit it regularly. Having a plan shows that you can be agile to the constant changes ahead.
FOCUS – The pace of business in the UAS sector is increasing all the time and our sources of information have swelled accordingly. Emails, posts, tweets, webinars, tenders, adverts and other offers serve to clog up our ‘cognitive inbox’ with white noise, inhibiting our ability to see our path clearly. Look at what your core strengths are, place your efforts into ensuring that you can deliver and focus on that. Learn to identify what is a distraction and what is a valid opportunity and go hard after the latter. It means you may have to choose to drop some opportunities if you don’t have the skills or bandwidth to manage them but better to spin 5 plates well than spin 20 plates poorly and let most of them drop.
INNOVATION – This is a word that is regularly used but not often practised. Don’t follow the herd, if you have PLAN and FOCUS and are able to move beyond the norm then examine what most of your competitors are doing and look to do something different. The path less travelled can be more difficult but often brings the most rewards.
BE AGNOSTIC – ‘It’s not about the drone’…..Whilst many operators have entered the industry because of love for flying technology this should not be the key selling point. Most clients do not care what method of capture you use as long as it is safe, limits their risk and provides a cost effective solution to their specific requirement. Enter every client engagement with that principle, speak to them in their language and be results driven.
COLLABORATE – In an industry that is moving towards a consolidation point, organisations should look to collaborate with companies of a similar size providing complimentary skills. The aim is to provide a more comprehensive offering, to make the overall effect greater than the sum of the parts, to make 2+2 = 5, or ideally 25. Companies often don’t want to share what they see as a unique offering but genuinely being unique is very rare in todays market. As the old saying goes, ‘there is safety in numbers’.
2015 was a year of market excitement and anticipated growth and 2016 is shaping up to be a year of market consolidation. Evolution is constantly in motion and the weaker entities will find it unsustainable unless they change. What is your business doing to adapt and survive?