behind the crash of 3d robotics, north america's most promising drone company - document camera best buy

On a clear parade day last year, Ryan Mac and Aaron tilleychris led Forbes to the outdoor deck of a 3D robot in Berkeley, California.
Headquarters talks about the future of flying robots.
As CEO of the largest consumer drone manufacturer in North America, former editor Anderson-in-
The lead author of Wired, The New York Times bestseller long tail, explains why drones will be the next fusion of computing and electronics.
3D robots are ready to take advantage of billions
He said confidently, the dollar opportunity.
"Now there are no drones in the sky, which is so strange," he pointed to the sky . ".
"We're really looking for a chance when you talk about the chance of the blue sky.
"Drones may still prove to be a valuable part of consumer technology such as personal computers or smartphones, but the outlook for 3D robots is now overcast.
In 12 months, the company has moved from an industry-leading U. S.
A drone startup of a hard-to-survive organization-
The result of poor management, sick
Based on the prediction and failure strategy of a flagship drone destined to fail.
As a result, 3D Robotics has laid off more than 150 people, consuming nearly $100 million in venture capital, and completely changing the company's business strategy.
Forbes interviewed 10 former 3D robot employees to learn about the company's plight.
Many say they didn't realize any problems until the beginning of the year because bad holiday sales and the rapidly evolving technology of competitors forced Anderson and his executive team to abandon consumer drones.
Others say they saw the crash happen more than a year ago when 3D Robotics had a setback in producing its first mass market drone, Solo.
"This is the typical arrogance of Silicon Valley," said a former employee . " He asked for anonymity because he was still working in the drone industry.
"3DR is a $100 million mistake based on incompetence.
3D robots have offices in the Bay Area, Austin, San Diego and Tijuana at their peak;
More than 350 persons are employed;
Attention by investors-
Including Qualcomm, Richard Branson and real venture capital. -
According to Pitchbook, a private company research firm, the figure is more than $0. 36 billion.
Seeing that there are few competitors for drones, Anderson hopes to develop flying robots that attract ordinary consumers and businesses.
In his last story before he left Wired to run the 3D robot full time, he envisioned a future where children were driving robots in their local park, when farmers and construction workers use the same equipment to map corn fields or survey construction sites.
This drone should be a Solo for 3D robots, a stylish black quadcopter whose open source software platform will invite external developers to create a range of features.
However, Solo never got into trouble after its debut in April 2015, and it was the victim of sz dji Technology Co. missing product deadlines, wrong components and fierce competition
The Chinese company cut prices sharply and quickly developed new equipment.
"We realize that it will become more difficult for Silicon Valley --Software based
A company that focuses on competing with China's vertically integrated large manufacturing company, "said Colin Gunn, former chief revenue officer of 3D Robotics, who left office in September.
Anderson, 55.
At industry meetings, the old man who often delivers the drone vision in keynote speeches may have realized that this is too late.
3D robots spend almost everything it makes on its own, and while it has turned to developing software and service applications for partners like Autodesk, it's not clear how much money is left for startups.
Anderson declined to discuss the company's financial situation in an interview last month, but said 3D Robotics now focuses only on enterprise software.
"We pulled out of the hardware market, we pulled out of the consumer market, in part because it was a tough market," he said . ".
"DJI is an amazing company, and a lot of people have been hit.
"It's too cruel.
The 3D robot started with the idea of Anderson and 20-year-old Jody Muños. year-
A Mexican immigrant fiddled with a remote helicopter in his garage along the California river.
After Anderson's online community DIY drone conference for drone enthusiasts in 2007, at that time-
Wired magazine editor was so impressed with Muñoz's self
He sent him $500 to help with his work.
The strange couple founded the 3D robot in 2009.
Muños maintains the small operation of selling homemade drone kits and self-driving circuit boards, while Anderson stays on the edge, manages the bustling DIY drone Forum and keeps him on
At 2012, however, Anderson turned his attention to his drone adventure, writing an article in a technology enthusiast publication showing his optimism about the technology.
"Just as 1970 people see the birth and rise of personal computers, this decade will see the rise of personal drones, he wrote in a Wired cover article entitled "How did I accidentally start the domestic drone boom.
"We are entering the era of unmanned driving.
By November that year, Anderson received $5 million in venture capital and resigned as editor.
3D Robotics has expanded its business, with Anderson acting as CEO in charge of Berkeley's operations, while elmuños has set up offices in Diego and Tijuana.
In the second year, the company raised another $30 million.
As 3D robots begin to fly, Shenzhen-
DJI, based in DJI, began claiming to be an early consumer drone leader.
Founded in 2006, DJI is a company that built flight controllers for RC helicopters and released the Phantom in 2012, a complete non-the-
Will become the standard shelf equipment for consumer drones.
Unlike other Chinese tech companies that stay on the Pacific side, the Phantom has targeted the global market, setting up an American office with the help of Colin Gunn, A drone fan and a former reality TV star
As a spokesperson for marketing, Gunn took the Phantom to the trade show and sold the product to amateur retailers.
By the end of 2013, Guinn's relationship with DJI had deteriorated and he was forced to leave after the company closed its Austin business.
Guinn suedand joined the 3D robotics company in the next February, further retaliating against him. (
DJI and Guinn later settled out of court. )
As chief revenue officer, Guinn, along with his former DJI America staff, has set up a 3D Robotics office in Austin for marketing and sales.
"At meetings, he always said 'I want to fucking kill DJI,'" recalls a former 3D robot employee '. ".
Together with Anderson, Gu en designed a solo to challenge Phantom hegemony.
The Solo will be black and will provide features instead of white-
For example, script flight path, developer open code, and responsive customer service--
What DJI was missing at that time.
Although relatively stable,it-
3D robots bring themselves $10 million a year in parts business, concentrate all resources on new drones, and acquire Sifteo, a consumer video game manufacturer without drone experience, set up the project core engineering team.
When the 3D robot launched Solo at the National Broadcasting Association conference in Las Vegas on April 2015, the Verge said it was "probably the smartest drone ever", praising the device
Driving function and on-board GoPro.
Followers of drones are also celebrating that there is now an alternative Phantom scheme, a prospect that worries major competitors of 3D robots.
According to a person attending the meeting, in the spring, Frank Wang, founder and CEO of DJI, went to Berkeley to talk to Anderson and offered to acquire the company directly.
The CEO of the 3D robot who is about to start shipping alone refused.
3D robot technology is long term.
Former employees told Forbes that they noticed the problem with Solo after Best Buy went on sale in June 2015.
"Things will never be planned after a separate release," one said . ".
The GPS system of the drone is sometimes not properly connected to ensure a stable flight, causing the drone to fly away or crash.
Universal frame or camera
Stable Unit, facing production delay, first Solos listed without this additional function
This makes it unsuitable for photos and videos, the main use of most consumer drones.
"It's harder to make a universal frame than a drone," Guinn said . " He noted that the devices did not reach customers until August, exactly two months after the release of the Solo.
Still, executives at 3D Robotics are bullish on the potential of Solo, predicting huge sales during the holiday season.
According to an employee, chief financial officers John Rex and Anderson have pledged to work with contract manufacturer PCH International to produce 60,000 Square aircraft, which they decided in the medium term
In June, sales data were less than a month and an additional 40,000 units should be built.
Another person who helped the Solo engineer said it was a major commitment because the cost of each drone and its universal carrier to be manufactured and shipped to retailers exceeded $750.
The source told Forbes that while the company was able to raise $64 million in 2015, most of them fell into manufacturing costs.
Many blame the bold prediction of the 3D robot for causing the failure of Solo, including a former employee, who said the fatal mistake was to base the prediction on "selling" and "selling.
The company incorrectly predicted personal sales based on its inventory assigned to retail channels such as Best Buy-
Poor indicator of consumer demand as retailers can return unsold inventory-
Not the number of devices that customers actually buy from these stores.
A person working for the 3D robot marketing team also questioned the company's approach when presenting drones to the media.
For example, the "edge" demo in the spring of 2015 showed a drone that was "processed and flavored" and didn't show the typical parts you found off-sitethe-shelf Solo.
"We know the drone will work," he said . " He noted that there was an improved GPS component that was not shipped in the regular Solos.
Positive reviews, however, did not save the solo.
By the end of 2015, only about 22,000 3D robots had been sold-
Half of the original projection-
A person familiar with sales figures said there was a backlog of inventory on the factory floor and containers.
DJI also began to turn the screws.
While the personal cost of having a Wanxiang and GoPro camera is over $1,700, the vertically integrated Chinese company, which controls its own factory, has sold similar sharp price cuts for $1,300.
At 2016, the Phantom with a universal frame and a camera cost $1,000.
"I have never seen such a market where prices have fallen," Anderson said . ".
"Everyone lost except DJI.
With DJI falling out of the bottom of the market, Anderson and his executives have no room to breathe.
They killed a small car prototype code called "Nemo" at the end of 2015, and after visiting the Consumer Electronics Show in Las Vegas in January, they realized
Dozens of Chinese competitors and four of their similar drones will soon be flooded.
Propeller flying gadget
After returning from Sin City, the leaders of 3D robots changed the route, put on hold a plan for a larger industrial version of the individual code called "Blackbird" and drew them out
"Back in the summer, I asked the question: does the lemon product work like this?
A former employee at the Austin office of 3D Robotics said.
"Will this bankrupt the company?
"In less than a year, the resources of 3D robots have been greatly reduced by their dependence on Solo.
By February, the company had more than 60,000 drones and had no money. it closed the San Diego office and the Tijuana factory and quietly took cofounder muinoz out of the house. (
Muños contacted him at his new drone company, mRobotics, who declined to comment on the story. )
3D Robotics also was unable to pay for the contract manufacturer PCH, but instead entered into a loan agreement that was detailed in the document submitted to the United StatesS.
Website of Patent and Trademark Office.
Anderson declined to discuss the details of the agreement, but two employees familiar with the agreement told Forbes that the 3D robot handed over the remaining inventory to PCH and agreed to help sell and sell drones.
Most of these proceeds are used to pay the manufacturer's expenses, and the manufacturer has also obtained shares of 3D Robotics and observer seats on the board of directors in the transaction.
A spokesman for PCH declined to comment.
Including chief financial officer Rex, 3D Robotics laid off about 30 people in the third quarter.
Soon, Guinn, the company's president, chief operating officer, design vice president and chief revenue officer, followed suit.
Most of the engineers who built the Solo through Sifteo acquisition have also left.
Gunn said in an interview that he knew from the beginning of the year that he would leave and Austin would close.
Anderson said that most people related to the 3D Robot consumer effort are gone, although there are still some customer support staff left in Tijuana to help customers use Solos when transitioning to the enterpriseFocused Company
He estimates that there are about 80 people left, most of whom are now working on the on-site scanning software that helps companies capture and analyze aviation data.
While this may prove fruitful, the 3D robot's Alexa lets it compete directly with many Silicon Valley startups, including Kespry, for the company's original intention to develop software solutions, droneDeploy and other companies have raised millions of dollars.
The 3D robot has to catch up and it may not have the resources to do so.
On June, a document submitted to the Securities and Exchange Commission showed that the company raised $26.
7 million of debt and warrants.
"We don't make solo, we don't make another drone," Anderson said . " He advised 3D Robotics to start developing software for other drone manufacturers.
"I like the idea of other companies making hardware so we don't have to do that and we can focus on software and services.
We are a Silicon Valley company. we should do software and hardware.
At the same time, consumers can still buy drones that help Anderson reach this conclusion.
While the manufacturing and shipping costs of Solo and its accompanying Wanxiang racks exceed $750, which used to retail for $1,400, savvy shoppers can now find it at a big discount.
Best Buy now offers both products for $500.
Follow Ryan on @ RMac18 or email him on rmac @ forbes. com.
Follow Aaron on @ AATilley's Twitter or email him at atilley @ forbes. com.