Drones Lead To New Business Ideas
BY Alan Perlman22 August 2015
Source: Argus Leader
By: Jodi Schwan
Entrepreneurs find creative uses for aerial images taken with drones
Shortly after he became the proud owner of a Phantom drone, Tom Simmons realized he had a cutting-edge new toy, but not necessarily a tool he could use for his business.
“I said, ‘OK, we’re going to go out and take some pictures of our real estate listings,’ ” said Simmons, a broker with Nelson Property Consultants. “After a little research, I discovered technically, according to the FAA, you can’t do that according to the regulations that are in place.”
With his new aircraft temporarily grounded for commercial purposes, Simmons saw what he calls “a heck of a business opportunity.”
About a year ago, he founded Aerial Horizons and became an authorized dealer for a Chinese company, DJI, which makes a growing line of drones for hobby and business uses.
“I’m trying to get ahead of the curve and learning,”
– Simmons said.
He’s not the only one. A growing number of entrepreneurs is wading into the world of drones, with its changing regulatory landscape and vast number of potential business implications.
The Federal Aviation Administration, which has its South Dakota office in Rapid City, hears from up to 10 people each week – a number that picked up after Christmas.
“Most people who are inquiring want to operate them legally,” said Steve Hoogerhyde, an aviation safety inspector. “They’re concerned about doing something they shouldn’t, and there’s a process in place for them to go through to operate for commercial purposes.”
Simmons sells the unmanned aerial systems – or drones – from a new office that he shares with MPI Video at 814 N. Western Ave. The price tag ranges from $1,100 to $13,000.
The drones haven’t been flying out the door for a variety of reasons, he said. Potential business users are starting to realize the FAA is cracking down on illegal operators, so many of his sales have been to people who want to use them for agricultural purposes or hobbies.
Other customers also buy online, Simmons added. He includes instruction and servicing to help distinguish his business.
“So many people buy these things online, take them out of the box, charge the battery, take them out and fly it, and it flies away,” he said. “And they don’t understand why.”
Simmons educates customers about how to operate the drones and can help repair or replace them when they crash – “which unfortunately happens more than most of us would like to admit.”
He still doesn’t use drones to photograph real estate listings because that would be using them commercially, and he hasn’t yet received an exemption from the FAA. To receive that requires a sport pilot certificate earned through a ground school and flight time.
“Over the last few months, I’ve been telling all my customers they need to go to the FAA’s website and read the rules and regulations,” he said. “And if they’re going to be using these for commercial purposes, they need to go through the process.”
Click Rain is going through the same process.
The marketing firm bought its first drone earlier this year after hearing interest from clients.
“We bit the bullet, went out and bought the latest and greatest one we could find after we sold our initial project,”
– partner Eric Ellefson said.
Eric Ellefson, a partner with Click Rain, runs a test flight with a DJI Inspire drone at The Country Club of Sioux Falls before a client’s golfing event.
The firm last week used the drone to take footage for the First Dakota National Bank Pro Am Jam at The Country Club of Sioux Falls.
It also uses the aerial camera to capture video for tourism-related marketing and to help contractors assess construction projects.
One person flies the drone, and another person focuses on collecting the footage. The firm likely will buy at least one more drone because of demand and to get different angles, Ellefson said.
“It’s beautiful (footage),” he said. “Since I bought my drone, I found out three of my neighbors have them. They’re becoming a hobby.”
The project that drove Click Rain to buy the drone was for Norwalk Landing LLC, the ownership group of a development called Discovery Bay in the Ozark Mountains not far from Branson, Mo.
The property is designed to appeal to people with small planes because there’s a landing strip in the middle of it and it’s near a lake with access to boating, hunting and fishing.
“A number of people in Sioux Falls own lots there,” said Joel Dykstra, president of RMB Associates, which represents development co-owner Rob Broin. Dan Lemme of C-Lemme Associates also is an investor.
“It’s just a fantastic location, just unbelievable,” Dykstra said. “If you are a hobby pilot, you kind of look for places like that.”
So in marketing the property, aerial footage seemed to be a natural fit. The owners first tried flying over in a hot air balloon with a camera several years ago, but “technology has moved so quickly in the last two years with small cameras and drones, it’s just made it so much easier,” Dykstra said.
Click Rain flew a drone over the land and gathered footage for online marketing.
“I thought it was terrific,” Dykstra said. “We actually have footage from the drone of an airplane landing and taking off.”
Xcel Energy also is finding unique ways to use drones after gaining FAA approval in May to operate them commercially.
The utility provider had used them inside boiler plants for visual inspections, which helped workers avoid using scaffolding, ladders and suspension systems.
“A boiler is massive. It’s 10 stories high and a huge inside building with thousands of components,” said Michael Lamb, vice president of operating services. “We used a drone to do it in much less time and just as effectively.”
Xcel is in the middle of determining what type of monitoring it could do with drones, Lamb said. That might include using them to inspect substations from the sky or using drones with additional technology to fly over underground gas pipes to look for leaks.
“Traditionally, you do that with people with sensing devices,” Lamb said. “We think that will be much more efficient and effective.”
The utility plans to carry out such test cases in the field before winter. Locations haven’t been determined, and not all tests might be done this year. Xcel wants to try out how to use drones following severe weather, for instance.
“Traditionally, you’d send people out to visually inspect the damage. We want to try a drone. But we’ll have to wait for a storm,”
– Lamb said.
Customers likely won’t see drones flying around their neighborhoods, however. Most inspections are in rural areas or inside structures.
The company’s initial take on using drones is “extremely positive,” Lamb said. “There’s a lot of promise.”
Brian Rotert flew a drone over Falls Park taking footage for himself when he thought of a business concept.
“I came up with the idea that this would be great for golf courses,” said Rotert, who went on to start PinVista Tours. “I wanted to get ahead of it before it really took off.”
That was two years ago. Since then, he has used drones both in that business and another he founded, Cipher Imaging, which does architectural photography.
Clients have included Sioux Falls developers wanting to see their projects from above.
“When you go up 100 feet in the air, you see it in a whole new way,” Rotert said.
He has a partner in the golf business, so someone can drive a golf cart while he controls the drone.
“We’re still trying to get people to buy into it and understand it and how they would market it,” he said. “Pictures of a hole are one thing, but a video is like what you see on a PGA Tour on TV. It’s amazing.”
Entrepreneur Glen Hedstrom is starting small but finding a positive response to his new business, Dakota Drone Aerial Photography.
He started it in January after being intrigued by a real estate listing that included drone footage.
He takes photos and video for real estate agents and footage for special events. He went through flight training and said he’s paying attention to FAA guidelines.
“It’s pretty amazing what it can do,” Hedstrom said, adding he plans to upgrade his drone for a better camera and sensors.
This aerial photograph of the University of Sioux Falls stadium was taken by Birdseye Productions.
Another small-business owner, Justin Quigley, also is finding a market for his services. He started Birdseye Productions in September and is speaking at an international drone expo this fall about how to build a successful business using drone technology.
“I saw somebody at LifeLight last year with a drone, and I immediately became intrigued with it,” he said. “It really took off from there.”
He’s working part time out of his house but sees the business expanding fast.
“It’s springboarded into other things,” Quigley said. “I initially bought it to do aerial still imagery for real estate, but it spun off into doing video work for companies, corporate videos, weddings and that kind of stuff.”
He estimates he flies the drone five to 10 times a week.
“There’s a ton of potential,” he said. “The biggest caveat is just understanding the guidelines. Obviously, the FAA is trying to crack down on everything, so I’m doing everything I can to follow the rules.”