Layoffs Reflect New Turbulence at High-Flying 3D Robotics
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consumer-friendly camera drone with popular features like visual tracking and object avoidance. 3DR introduced its Solo quadcopter last April, at about the same time that DJI introduced its Phantom 3.
But a key gimbal frame for mounting a GoPro camera was initially not included with the Solo, and cost an additional $400, which brought the Solo’s total price to $1,400—significantly higher than a similarly equipped Phantom 3. Some drone enthusiasts were not impressed. As Solo sales faltered and the inventory piled up, Anderson came under pressure from at least one investor, according to Craig Issod, a drone blogger and founder of Droneflyers.com.
Anderson said yesterday that 3D Robotics was hardly alone, saying, “The entire industry kind of overbuilt” in 2015. He said 3D Robotics more recently has cut the combined price of its Solo and gimbal to $1,000. Anderson said Solo sales are recovering now, and the inventory has been shrinking.
At the same time, Anderson said 3DR has moved to focus more narrowly on enterprise customers that are interested in using drones for such projects as utility line and pipeline inspections, and construction site inspections. As part of that move, 3DR announced the release of its Site Scan aerial analytics platform earlier this month. The technology enables corporate customers to conduct inspections and scan work sites with the Solo smart drone, and transmit the data to the cloud for processing and analytics.
Still, problems with the Solo product launch necessitated a deeper-than-expected retrenching last year, according to the former employee, who said, “My estimate is that 3DR has laid off or terminated contracts with at least 200 people. They are basically trying to sort out their cash flow and burn rate.”
Anderson declined to confirm the layoff numbers, but said 3DR now has about 100 employees. He also declined to confirm that the company’s workforce had peaked at somewhere between 300 and 350 last year as it prepared to introduce the Solo. (A spokeswoman for 3D Robotics told me last March the company had 300 employees.)
“2016 turned out to be a hard year for consumers, but a great year for enterprise,” Anderson said yesterday in a phone call from the rooftop of 3DR’s Berkeley headquarters. He cited three reasons: aviation regulations have been changing to allow commercial use of drones; 3DR is now ready with products like Site Scan that reflect the company’s move to more of a software-as-a-service business model; and agriculture, construction, utilities, and other industries are ready to use drone-based services.
Nevertheless, these have been trying times for Anderson.
Before joining 3D Robotics as full-time CEO in November 2012, he was the respected editor in chief of Wired magazine and a book author. His star power immediately made 3D Robotics one of San Diego’s up-and-coming companies, and enabled it to raise capital with seeming ease. Last year, 3D Robotics raised $50 million in a financing round led by San Diego-based Qualcomm’s (NASDAQ: QCOMM venture arm—bringing total funding for the company close to $100 million, according to CrunchBase.
If it seemed initially like the sky was the limit, the future at 3D Robotics is more clouded now.
In a memo on “organizational changes” sent to 3DR staff Tuesday (and posted on an RC Groups online forum), the British-born CEO wrote of “the need to consolidate and accelerate our transition into being an hyperfocused machine… this acceleration means that today, we will be saying goodbye to some of our team in Berkeley.
“These situations are tough, there’s no point in sugarcoating it. But we know in our hearts that the right thing to do is to manage the company so that it can continue to realize its potential, react to change, and stay on sound financial footing.”