3D Robotics: Disrupting the Drone Market
3D Robotics: Disrupting the Drone Market
Resources
Author: Toby Stuart & Chris Anderson
Online Pub Date: January 04, 2017 | Original Pub. Date: 2015
Subject: Creativity & Innovation in Business, Entrepreneurial Strategies, Corporate Strategy
Level: | Type: Indirect case | Length: 9340
Copyright: © 2015 Regents of the University of California
Organization: 3D Robotics | Organization size: Medium
Region: Northern America | State: California
Industry: Manufacture of computer, electronic and optical products
Originally Published in:
Stuart, T. , & Anderson, C XXXXXXXXXX3D Robotics: Disrupting the drone market. The Berkeley-Haas Case
Series. University of California, Berkeley. Haas School of Business.
Publisher: The Berkeley-Haas Case Series. University of California, Berkeley. Haas School of Business
DOI: https:
dx.doi.org/10.4135/ XXXXXXXXXX | Online ISBN: XXXXXXXXXX
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Resources
Exhibit 1: 3DR Financials
Rudimentary, fictional income statement (in thousands $US)
Year XXXXXXXXXX
Total Revenue 20,000 10,000 5,000
Cost of Revenue 11,000 6,000 2,900
Gross Profit 1 9,000 4,000 2,100
Operating Expenses
Research/Development 10,000 3,000 1,700
Selling General and Administrative 4,000 1,000
Non Recu
ing - - -
Total Operating Expenses - - -
Operating Income or Loss -5, XXXXXXXXXX
Source: 3DR.
Exhibit 2: Funding History and Cap Table
Round Date Amount Investors
Self-
Financed $50,000
Series A 11/5/ $5.1 True Ventures, O’Reilly AlphaTech Ventures, and others
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3D Robotics: Disrupting the Drone Market
12 million
Series B 9/12/13
$31
million
Mayfield Fund ($6 million), Foundry Group, True Ventures, O’Reilly AlphaTech
Ventures, and others
Fake Cap Table:
1,000,000 shares total
Chris Anderson: 200,000
Jordi Muñoz: 200,000
True: 180,000
OATV: 90,000
Foundry: 80,000
Mayfield: 50,000
Other investors: 100,000
Options pool: 100,000
Source: 3DR.
Exhibit 3: Open/Maker Example: MakerBot Industries
MakerBot Industries is a Brooklyn, New York-based company that made 3D printers. It was founded in
January 2009 by Bre Pettis, Adam Mayer, and Zach Hoeken Smith (he was one of the founding members
of the RepRap Research Foundation, a non-profit organization that advanced research in open-source 3D
printers). Seed funding was provided by Jack Lodwick ($50,000) and Adrian and Christine Bowyer ($25,000).
In August 2011, the Foundry Group invested $10 million and joined the board. As of March 2011, the company
had sold 3,500 units and by 2012, more than 5,200 MakerBots had been sold. Revenue in 2013 was $75
million, and the company had sold more than 22,000 units. On June 19, 2013, Stratasys Inc. acquired
MakerBot in a stock deal worth $403 million based on the share value of Stratasys, making MakerBot a
subsidiary of Stratasys. Stratasys paid $403 million in exchange for 100 percent of MakerBot’s stock. The
emaining two-thirds of the deal (a $604 million total deal) would be subject to MakerBot’s performance over
the following two years.
Early on, MakerBot made the first mainstream $1,000 3D printers. Rather than using laser, the MakerBot
Thing-O-Matic printer built up objects by squeezing out a 0.33-mm-thick thread of melted ABS plastic, which
comes in multi-colored reels. MakerBots were personalized and decorated with Day-Glo letters.
MakerBot was designed by a community, built upon several previous open-source projects such as RepRap
mentioned above, the Arduino microprocessor board, and a series of software packages that turned CAD files
into instructions for the three motors that controlled a 3-D printer’s motors. Anderson said: “In this case, open
source means open everything: electronics, software, physical design, documentation, even the logo….It is a
shining example of how abandoning intellectual property protection can actually grant even more protection
in the form of community support and goodwill.” 2
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3D Robotics: Disrupting the Drone Market
By 2014, MakerBot had numerous products like the MakerBot Replicator Mini (compact 3D printer), MakerBot
Replicator (desktop 3D printer), MakerBot Replicator Z18 (3D printer), MakerBot Replicator 2 (desktop 3D
printer), MakerBot Replicator 2X (experimental 3D printer), and the MakerBot Digitizer (desktop 3D scanner).
Source: Various. http:
store.make
ot.com
eplicator-z18
Exhibit 4: 3DR’s Reward System
Source: Chris Anderson, Makers, 2012, p. 111.
Exhibit 5: DJI Profile
Products:
• 5 Ready-to-Fly drones ($499 to $1,200) available on DJI’s website
• 4 Flying Platforms (for high-level professional aerial photography and cinematography at $2,000 to
$6,000) available through dealers
• Multi-rotor and Helicopter Flight Controllers available through dealers
• Camera Gimbals, and Accessories ($2,000 to $3,000) available through dealers
Revenue: $131 million
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3D Robotics: Disrupting the Drone Market
http:
store.make
ot.com
eplicator-z18
Employees: 900 in China, Japan, Europe, and the U.S. with 30 researchers in Hong Kong (many of them
students or graduates of Hong Kong University of Science and Technology)
R&D: Unknown
Source:http:
www.scmp.com/news/hong-kong/article/1370451/apple-pearl-river-delta-dji-innovations-taking-
flight, December 2, 2013.
Exhibit 6: Potential Markets
Security and Monitoring: Drones could complement or replace static security cameras. In New York, for
example, former Mayor Michael Bloomberg said drones will ultimately supplement or replace the many
security cameras operating throughout the city. Security drones might also replace or supplement foot and
vehicle patrols at large commercial facilities like factories, office parks, and power plants. Another likely
application is the monitoring of ecologically sensitive areas for fires, illegal logging, poaching, and other
environmental threats such as invasive species.
Exploration, Aid Efforts, and Disaster Recovery: Drones and other robots could conduct searches to find lost
vehicles or enter situations that are too difficult for humans.
Entertainment: Recreational drone flying is already a fairly established category in the toy industry. The
quadricopter by Pa
ot was a trailblazer in developing technology that allows toys to be remote controlled by
an iPhone. And one gyroscope-equipped helicopter manufactured by Syma places routinely among Amazon’s
top 20 best-selling toys.
Delivery and E
ands: Drones could be deployed to deliver items such as prescription drugs from pharmacies,
meals from restaurants, and food from supermarkets, as well as corporate documents. While not able to fly
yet due to the FAA restriction, the “TacoCopter,” designed in Silicon Valley, is already able to deliver tacos
ight to doorsteps in San Francisco via unmanned helicopter.
Logistics: Theoretically, large drones could travel between Amazon’s warehouses (ca
ying heavier loads) for
use in inventory management, rather than just final customer fulfillment.
Journalism, Filmmaking, and Photography: The possibilities for using drones in the realms of video journalism
and documentary filmmaking are endless.
Farming: The Environmental Protection Agency is apparently already using drone technology to monitor
livestock farms, and some farmers will likely eventually begin using drones to manage agricultural crops (see
above).
Military: According to Peter W. Singer, a Brookings Institution drones expert, the military now has 8,000 UAVs
in the air and 12,000 on the ground. The U.S. Air Force now trains more UAV operators than fighter and
omber pilots.
Source: Shortened and edited from Marcelo Ballve, “Commercial Drones are Becoming a Reality, with Huge
Impacts for Many Industries,” Business Insider, April 28, 2014.
Note
1. 3DR estimated that industry gross profits were around 35%.
2. Chris Anderson, Makers, 2012, p. 94.
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http:
www.scmp.com/news/hong-kong/article/1370451/apple-pearl-river-delta-dji-innovations-taking-flight
http:
www.scmp.com/news/hong-kong/article/1370451/apple-pearl-river-delta-dji-innovations-taking-flight
https:
sk.sagepub.com/cases/3d-robotics-disrupting-the-drone-market##i282
https:
sk.sagepub.com/cases/3d-robotics-disrupting-the-drone-market##i288
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3D Robotics: Disrupting the Drone Market
Resources
Resources
Exhibit 1: 3DR Financials
Rudimentary, fictional income statement (in thousands $US)
Exhibit 2: Funding History and Cap Table
Fake Cap Table:
Exhibit 3: Open/Maker Example: MakerBot Industries
Exhibit 4: 3DR’s Reward System
Exhibit 5: DJI Profile
Exhibit 6: Potential Markets
Note
3D Robotics: Disrupting the Drone Market
3D Robotics: Disrupting the Drone Market
Case
Author: Toby Stuart & Chris Anderson
Online Pub Date: January 04, 2017 | Original Pub. Date: 2015
Subject: Creativity & Innovation in Business, Entrepreneurial Strategies, Corporate Strategy
Level: | Type: Indirect case | Length: 9340
Copyright: © 2015 Regents of the University of California
Organization: 3D Robotics | Organization size: Medium
Region: Northern America | State: California
Industry: Manufacture of computer, electronic and optical products
Originally Published in:
Stuart, T. , & Anderson, C XXXXXXXXXX3D Robotics: Disrupting the drone market. The Berkeley-Haas Case
Series. University of California, Berkeley. Haas School of Business.
Publisher: The Berkeley-Haas Case Series. University of California, Berkeley. Haas School of Business
DOI: https:
dx.doi.org/10.4135/ XXXXXXXXXX | Online ISBN: XXXXXXXXXX
www.princexml.com
Prince - Non-commercial License
This document was created with Prince, a great way of getting web content onto paper.
javascript: void(0);
javascript: void(0);
javascript: void(0);
javascript: void(0);
javascript: void(0);
https:
dx.
doi.
org/10.4135/ XXXXXXXXXX
© 2015 Regents of the University of California
The case studies on SAGE Business Cases are designed and optimized for online learning. Please refer to
the online version of this case to fully experience any video, data embeds, spreadsheets, slides, or other
esources that may be included.
This content may only be distributed for use within George Brown College.
https:
dx.doi.org/10.4135/ XXXXXXXXXX
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© 2015 Regents of the University of California
SAGE Business Cases
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3D Robotics: Disrupting the Drone Market
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Abstract
This case study focuses on 3D Robotics, a drone company with UAV platforms. The case study
focuses on what 3DR should pursue at its critical inflection point within its history. The case study
highlights what is unique about 3DR, particularly when compared to a more traditional non-open,
non-Maker company.
Case
Keywords: Corporate Strategy, Entrepreneurship, Innovation, Crowdsourcing
Ultimately, the way society best figures out how to think about a powerful new technology is to set it free and
watch where it flies.
—Chris Anderson, 3D Robotics CEO 1
Chris Anderson is incredibly special because he is not just creating a product, he is creating a movement.
—Jon Callaghan, True Ventures 2
On a sunny,
isk spring day in 2014, Chris Anderson, CEO of 3D Robotics (3DR), a developer of drones, was
squinting as he looked towards the sky at a small flying black and blue object with four spinning propellers.
He was in the grassy patch outside their office testing the IRIS, a small drone that flew autonomously 3 via an
Android tablet, phone, or laptop. Remarkably, it could be programmed to takeoff and fly from precise point A
to B, avoid obstacles through sensors, and land on its own.
While the word “drone” (or Unmanned Aerial Vehicles—”UAVs”) conjured up images of stealthy military
crafts zipping around in secret unmanned missions, Anderson, former Wired Magazine Editor-in-Chief, 4
was changing that perception through 3DR, the company he had co-founded in 2009. 3DR was an example
of the manufacturer of the future—a modern-day hardware designer that coordinated a large community of
open source software developers who supported its devices. Anderson described the company as “using the
software of today to build the hardware of tomo
ow.” 5
The company, which initially targeted ho
yists, was exploring commercial uses in market segments that did
not require FAA 6 approval. At the time of this case, drones were only permitted for personal use in the U.S.
and were restricted to heights of 400 feet, to be within visual line of sight, and remain away from populated
areas and airports. However, the FAA did offer special permits for commercial use (since 2009, the FAA has
issued 1,387 of these Certifications of Authorization for limited UAV flights to government, educational, and
esearch entities, and as of December 2013, there were 545 active permits). 7 The FAA was considering
commercial use of drones to begin in 2015, but was cautious due