Michael Winn is the co-founder and CEO of DroneDeploy which is a cloud-based drone mapping and analytics platform to help businesses get things done. The company has raised $100 million from top tier investors which include Bessemer Venture Partners, Threshold, Redpoint, Data Collective DCVC, Uncork Capital, Scale Venture Partners, Emergence, AngelPad, AirTree Ventures, High Alpha, Drone Fund, and Energize Ventures to name a few.
In this episode you will learn:
- Lessons learned at Google
- How Michael Winn has approached hiring as they’ve grown to 140 employees
- Top resources for fast-tracking your learning and success in startups
- What’s next for drones
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Michael Winn:
Michael Winn is the CEO and Founder of DroneDeploy – the leading software platform for commercial drones.
DroneDeploy’s software is used by 5,000+ customers in 180+ countries, performing 1M+ flights/year. The company focuses on large enterprise use-cases, operating fleets of up to 500 drones, across some of the world’s biggest companies, in energy, construction, and agriculture.
Prior to DroneDeploy Michael Winn worked at Google in both sales and engineering teams. Michael Winn studied Economics and Applied Math at Rhodes University, where he met his two co-founders, Jono and Nick, both of which did their PhDs in Machine Learning at University of Cambridge and Edinburgh.
Connect with Michael Winn:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a founder from South Africa, so I think that we’re going to learn quite a bit about how he ended up landing in San Francisco and how he’s been operating a company where the market has been evolving, where it had hype, then didn’t have hype. It’s interesting to see how he was able to really face the environment when it comes to fundraising. So, without further ado, I’d like to welcome our guest today. Michael Winn, welcome to the show.
Michael Winn: Thank you very much. I’m glad to be here.
Alejandro: So originally from South Africa. I know you later moved to Kenya, but how was life growing up there?
Michael Winn: Wow. I lived in South Africa from, obviously, from being born until I was 12 years old. I think what’s interesting about that question is being able to compare. I lived in South Africa, and I lived in Kenya, and the Netherlands, completely different countries with their own reasons why they’re beautiful countries. Yeah, there’s a great advantage to live around the world and experience completely different cultures as a child.
Alejandro: How do you think that probably shaped your personality and your perspective?
Michael Winn: One thing it gave me is an ability to handle change. When I was 23 years old and moved to Kenya, that was a very traumatic move for a 12-year-old. I had left a lot behind and my friends behind, and things I was doing. That was difficult. But you face these difficult things, and they make you stronger. Now that I’ve moved around the world a lot. I’ve lived in about six countries, and I actually don’t just enjoy a change of scenery. I really enjoy the new challenges that you get, whether that’s going or moving to new countries in the future or seeking new jobs in new kinds of markets. I actually appreciate the change. That’s been very useful for being a founder because your job is changing all the time. Every year, I was very comfortably set up. I had a different job and had to learn new skills. Having moved around from the beginning of my life, I think that set me up quite well.
Alejandro: Was anyone in your family also an entrepreneur?
Michael Winn: No. My dad has worked for the same company for over 40 years. So, it’s completely opposite. Within the first two years of my professional life, I’d worked at more companies than he had. I would say, funny enough, my father-in-law is an entrepreneur. So, I’ve learned a few skills from him.
Alejandro: Very cool. So, this love for math and economics, where did this come from?
Michael Winn: Yeah, I don’t know. My mom has told me ever since I was a child that I loved numbers. We would go to the store, and I would calculate what the bill was going to be as she was putting stuff in the trolley. So, math has always been something I’ve really enjoyed pursuing all the way up through college and four years of it. Actually, that’s funny enough where I really got to know my two co-founders. I joined up with three good co-founders, all from South Africa, and all went to the same college together, and all of us did math throughout our whole time there. Jono and Nick did computer science and math. I’m in economics, and math, which has turned out to be rather complementary in the technology business.
Alejandro: Very nice, and after you graduated, you did a little bit of banking, which doesn’t sound very challenging, so that’s probably why you didn’t last long there, and then you did Google. What did you learn from being in a company like Google? Because I think that the people that typically go there and work there, it shapes the way they think about things and the way they think about problems. So, how would you say that shaped you, and then also, how did that trigger your entrepreneurial mindset?
Michael Winn: Obviously, Google is a wonderful place to work in your career, especially early on. What is amazing about Google was there were just so many great people. I came from a bank where it was very easy to be a highflier, but you go to Google, and everyone is better educated and smarter than you are. So, it was a great place to transition my career. When I started in banking, I was on the sales strategy side, using my economic and math background. When I went to Google, I actually ended up doing account manager, so I was going into sales. It was my first sales gig in my career, and I was able to learn a lot quickly because Google is just a machine. They hire a lot of people. They train them up fast, and they release a great system to help people learn and get mentored. It was a great place to work. I worked there for about 2½ years. The only reason you’d leave a job like that was because you want to start something yourself.
Alejandro: Of course. I want to ask you. Before you got started with DroneDeploy, there is an interesting founding story there, and I’d like to touch on that. But I’m sure that when you left Google and gave your notice, perhaps there were three key takeaways that you learned with Google that you knew that you were absolutely going to implement those three key insights or takeaways with this new business. What would those be?
Michael Winn: Yeah. I think Google’s got a great set of ten tenants, what they hold to be true, and there is great wisdom in them, and they enable a great business. I think that’s the key thing that I’ve brought with me to DroneDeploy, which is if you build a truly great product, it makes the rest of your business look easier. It’s easier to market; it’s easier to sell; it’s easier to support all the great business it will help you scale. It’s an essential thing, and we put that forward at DroneDeploy. We have invested a ton in products. We have the best products in the market. We’ve got the biggest engineering team, and that enables us to scale faster and to sell faster. The product and the love for marketing work for us as well. So, that’s a key learning. Invest, there are two learnings that I took away from Google: to enable that one is to put the user first. Obviously, customer focus everyone talks about that, but truly putting the customer first will also follow. The other thing that I learned, which is actually very hard to do is to focus on simplifying, simplicity. The more you can simplify experiences both for your customers and for your employees, the more they can focus on what’s brilliant and important and creating value.
Alejandro: Yeah. Then, the founding story of DroneDeploy – tell us about how the idea comes knocking and how you go about the incubation of it, then bringing it to life, and giving your notice at Google.
Michael Winn: Yes, I’ve been flying drones most years from about 2010. Actually, I used my first bank bonus to buy myself a decent drone. Back then, you had to build the whole thing yourself. It was a transition [0:08:59] that enabled them to fly in a reasonable amount of time without having a gas engine. It was really early on in that market. In fact, quadcopters, people think [0:09:09] as quadcopters didn’y really exist. They were just be invented. I had a passion of flying these RC Helicopters. Eventually, I got in contact with a bunch of [0:09:26], people in security for the wildlife of South Africa. We have a very large problem in South Africa with rhino poaching. I don’t think it’s gotten much better yet, but at the time [0:09:44], rhinos were being killed every day, and they’re an endangered species, and South Africa has the largest population of rhinos. It was very difficult to secure these rhinos on these huge tracks of land. The Kruger Park, which is the largest wildlife center in South Africa, is bigger than Israel, and there were only about 500 people on the security side there for these huge tracks of land. As I was engaging with these people working in security in the park, it became clear; I was flying RC Helicopters. Drones could be very valuable and would enable them to get eyes in the sky very cheaply, very efficiently, and be able to see what’s going on down on the ground. They would be able to see the rhinos and be able to identify poachers that shouldn’t be in the park at night, and it would be helpful, and equip them with a camera that would enable them to see the unseen. So, as a founding team – this was before we started DroneDeploy, we identified that we were going down that path and identified that somebody needs to build software to make this technology accessible and productive to a normal person. At the time, the hardware was being worked on. There were a lot of hardware companies, but no one was making simple software that made drones into industrial tools. We pursued that for a while. We actually learned it was incredibly challenging to solve that problem. The first thing we needed to do was to teach the Rangers how to use laptops before they could use a drone. We actually stopped that, and about a year later, we founded DroneDeploy with that intention of making drone simple tools, making them a mobile-first product that we could deploy across industries. Seven years later, our software is managing over a million flights a year, all over the world, and in about 200 countries across pretty much every industry under the sun, construction, mining, energy, agriculture, enabling our customers to use drones in a simple and productive way.
Alejandro: Then, how did you convince the co-founders, Nicholas and Jono, to really jump on this. This is quite a leap of faith, too, because here you guys are in 2013. This is a market that almost doesn’t exist. The commercial drones are not even legal, so how do you guys really get a line to make that leap of faith?
Michael Winn: Yeah. In hindsight, we think we were a little crazy back then. As a founding team, we always had a passion for starting a company. We’d looked at many projects. We were involved in some hobby startups on the side. Actually, we had this intent that when we started a startup, we would spend every Friday, kind of the Google 20% time on drones and figuring out how to build a drone company. We thought it was too early initially. Eventually, we all had passion, particularly Jono and myself. I was the only one with a road job building [0:12:49]. I gave both of them a drone, and they were flying them. Yeah, we got into a position, and we thought, “Hey. We’re experts in this technology that’s inevitable.” In the long run, there are going to be robots on every industrial site. Some of them are going to be flying. Some of them are going to be driving; some will be capturing data; some will be taking actions. And behind all of them, there needs to be software that orchestrates those robots. We have the opportunity to start right at the beginning and build a company that would do that and eventually win that market. So, we started with the grand ambition and a lot of naivety, and fortunately, we got into AngelPad in San Francisco. So we were all in Europe at the time. We moved to San Francisco, started the company, and we saw the really long journey. It took a long time to really figure out and to experience the market. We were here right at the birth of it.
Alejandro: For example, with AngelPad – you know those pictures of the before and after when we’re talking about plastic surgeries? What was the before and after of being on AngelPad and coming out of AngelPad?
Michael Winn: I’d recommend a good incubator to anyone. AngelPad, in particular, was great for us. There were 12 companies in an office all together experiencing the early stages of a startup. Being in the community with Thomas, the founder who really drives the companies hardest, we worked for three months, 100 to 120 hours a week just driving the business forward and getting a better understanding of the problem you’re solving. I think the interesting thing that Thomas makes you do is just stop working in products and focus entirely on customers and the business needs of the market. We spent a long time talking to people and trying to figure out what the future of the software would look like. From talking to the early experts, we were able to identify – we needed a software that was simple, that supported drone flight, and then was a platform for all the data that was going to be created. It was really crystallized what that market was, what the problem was we were solving, and how best to go after that and begin a platform for the next seven years.
Alejandro: What ended up being the business model for the people that are listening?
Michael Winn: We built software, a subscription product. It’s a SaaS model and starts from about $1,000 a year for a single user. The biggest customers being seven figures for the software. I think one thing that was interesting that we learned early on is that the flight compliance of the software is the starting point, the top of the funnel, and we should try and build great software there that is accessible to everyone because flying a drone is just the starting point; it’s not enough on its own. What you need is a full back-end to process that data to make the data useful to businesses, and that’s what we were going to monetize. So, we have the most popular flight for commercial drones, and it’s free, and it’s great. We invest a lot of money on that free product, and it’s the basis for everything that comes after it, and it’s a really big driver of the marketing for us that we have the strongest flight platform, and it creates the bedrock for everything that comes after it.
Alejandro: It’s very interesting, the story here, and it reminds me of certain stories that I have experienced myself as an operator too because when you’re an entrepreneur, not only are you dealing with the uncertainty of building a business. But when you’re also part of a new industry that is forming, you’re also dealing with double the uncertainty because of also the potential regulations and how those new regulatory frameworks apply to your business. So, what kind of challenges did you experience in building a company like this, given the timing as well?
Michael Winn: Certainly, there have been lots of challenges. I think the earliest challenge for many startups, the hardest part, is right in the beginning as you’re getting this thing started. What you’re doing is, you’re building momentum, and that momentum builds up over time, and it carries you through. You’ve just got to keep the momentum up. Right in the beginning, it’s really hard because you’re trying to build drone software, but to actually run the software, you need a drone. And you couldn’t just buy a drone off the shelf. You have to build it yourself. So, our first employees actually had to glue drones together; they had to set them up. That was a tax on the business, and it was a bunch of work that needed to happen to get us to the next stage. We were really fortunate. It took about two years, and in 2015, the market really opened, where 3DR and DGI were fighting for dominance at that time. You could actually use – it published SDKs, and so we transitioned to just building software. But right in the beginning, we needed to actually build the drone hardware, which was an expensive part of the business. It just took a lot of time. It took away focus. If we did it again, we would have to find a way for us to not have done that. So, those are some challenges early on. Another challenge, actually a huge challenge was that even given that you had a drone that had a camera, it worked with an SDK if you had the right software, it was not yet completely legal to fly a drone commercially. That only came in August 2016, about three years after we started. So, how do you build a company when the product that you’re building is not yet – it’s in the legal grey area? That was a challenge for us initially. One of the things that happened for us is we, of course, weren’t flying the drones, but we built software to make these drones safe tools, and so we focused on the S&B market because large companies weren’t going to adopt technology that was not yet completely legal. It turned out that there were some disadvantages to starting an S&B, but there are a whole ton of advantages too. We got the most scale, the quickest, and we learned the most from our customers who were deploying drones in the field. Those companies that focused just on big companies that couldn’t deploy drones, so we had to jump through massive legal loops and legal processes just to fly drones just couldn’t scale up in the same way our customers could. So, we had an accelerated learning part that has really helped in the long run.
Alejandro: How much capital have you guys raised to date?
Michael Winn: I think we’ve raised about 95 million.
Alejandro: Very nice. And the fundraising journey for you guys has been also quite interesting because this market had the hype; then lost the hype; then got the hype back again. How do you deal in an environment like that where, all of a sudden, investors are listening, and all of a sudden, basically the investors go away, and they don’t continue to reply to your emails and things like that? Tell us about this.
Michael Winn: It’s been a rollercoaster. As we started the company, there was no hype to the degree we were concerned about even starting it, but luckily during AngelPad, the hype began to form. There was a company called Airware, which is very early in the market, and they pushed really hard. Just as we were getting to AngelPad Demo Day, maybe the week before, Airware raised 10 million dollars, Series A. I think it was from Andreessen at the time. When I first heard that, I was, “Oh, my gosh. Is Airware going to crash us? Are they going to build everything we wanted to build?” That was a first lesson understanding competition. Actually, it was the best thing that ever happened to us at DroneDeploy as we were raising. We talked to all the big VC funds and explained the future of drones, and obviously, only one VC couldn’t invest or give, but there was a ton of appetite was built, which was fortunate. As we came out of Demo Day, the market had just started. I think our first term sheet was within three days. So it was really exciting upfront. As we went through a Series A and a Series B, just as drones were becoming legal, we were the only software bet in the market, pure play software. So, we got the advantage of a market that was full of hype. It’s one of these stories where it’s easy to get hyped about something that’s just on the cusp of happening, but when it does happen, it’s not quite as exciting as people thought. As the market opened up and became legal, and people realized, “Hey. This is a new product. It’s a new market.” It’s going to take time. These things don’t happen overnight. We’re not going to transform every business of flying robots in the year 2016. From 2016, the hype started dying down, and the hype cycle. We started going on the downward curve. As we started to raise our Series C in 2018, the market was like ah-hah. Airware was just in the process of failing as a company. The investors knew that a lot of money had been spent by a bunch of companies and not really getting that much traction. So, things became difficult for us even though our metrics were strong and the strongest in the market, it was still a challenge for us. Luckily, we found great investors that understood the value, and we raised a Series C. It was much tougher round, and as we went into doing our Series D last year, we were fortunate that the market had started getting into that plateau of productivity, and the venture investors could see [0:22:21], and it helped us. The market may not be as hyped as it was. As a market leader, there’s always going to be a bit of hype around you, and that really helped.
Alejandro: It’s interesting, and one thing that comes to mind is that typically investors already have their theses formed. There’s history, benchmarks that they use when they’re looking at companies to make an investment, but how did it work for you guys when the market didn’t have that much history for them to form their theses and have them be as robust before making a bet? How did that work in your case from some expectations and so forth?
Michael Winn: I’m thinking that’s our Series A. The benchmark now when you do a Series A as a SaaS company about a million dollars of ARR. We were not even a tenth of that. We were raising before it was legal, and we were raising from a company emerging, which is [0:23:22] as a Series A investor. There are choices. As a company, you are generally fundraising on your strengths. One of the things that your company is unique in your company and tells a great story about how you’ll create great value in the future. At that moment in time, the story was broadly about – think about this huge market in the long run. Industrial robots are going to be on every job site, every construction site, every farm, every mine, and who’s going to power this? Watson – just building that story, that vision about being the software that can do that, and being the only software [0:24:06] in our space. I think it became – I wouldn’t say obvious, but it was a leap of faith that our earliest investors could make. DroneDeploy had a really good shot at being a leader in what is inevitably going to become a giant market. Even though we didn’t have the data to back us, we actually had the red market story, we had proven ourselves as a team, and we had a product, a rather sophisticated product, and we were able to give what our investors still tell us is the best demo that they’ve ever seen of flying a drone over their building and producing real-time measurable data from that drone flight.
Alejandro: What about the team? How many people are you guys right now?
Michael Winn: We’re about 140, mostly in San Francisco.
Alejandro: Wow! And then, how did you go about building the team for a company like this? How did it gradually progress in terms of like jumping from one department or maybe like one set of skillsets to another?
Michael Winn: It’s interesting. That changes over time. There’s a saying that I love in the startup world that should apply in many places is, “What got you here is not going to get you there.” Every stage of your company, you need to do different things, and that stage could be every fundraising, every developing of revenue, every developing of employees. You actually adopt fundamentally different – you have different needs. So you can imagine building a team early on. We built a team of smart generalists, a group of hustlers that could figure things out and get things done. It was an early market. We needed everyone on the team to be able to be agile and smart and enjoy the challenge of figuring out how to grow in a new market. So, they were generalists. But now, as a company, we focus entirely on specialists. We’re looking for the best salespeople that just do sales and the best engineers that just focus on being experts in the one thing that they do. [0:26:22] generalists; knowledge that’s highly valuable to be able to understand the context that focuses on having the generalist hustlers to now having more of the specialist operators. It has completely changed. One thing that has been super exciting is that the company is seeing this: early employees as generalist hustlers who found their own companies. So we bought at least three companies out of our former employees, the first 15 employees that are doing really exciting things and doing very well.
Alejandro: Where do you think that this market is really going as a whole?
Michael Winn: Every year, we see greater adoption of drone technology across all industries. The exciting thing that we’re seeing right now, in this moment, is the scale of adoption. It has taken a few years, but now we actually have our first company of over 1,000 drones operating in their fleet. That actually makes them the largest commercial aircraft fleet in America and potentially, the world. There are more drones than American Airlines has planes. We’re seeing true scale. That’s the story of 2020 is a story. The longer-term story is that robots are infiltrating job sites, and while we’re seeing drones, flying drones is the first ubiquitous industrial robot that’s mobile. We expect to see ground drones in the future. We’re seeing exciting things from Boston Dynamics. It’s still in the early market, but there’s some amazing technology that will be great platforms to capture data. We’re seeing core companies like [0:28:03] Products, and their flag of products in the ag space building tractors and earthmovers that are completely robotic and self-driving. So, as a company, we’re very excited to see the hardware continue to evolve and to be able to do more things, and we’re excited about the opportunity of software to orchestrate all the data collection, and in the long run, all the actions that are happening on industrial job sites.
Alejandro: Got it. I mean, data collection. There’s nothing like being able to make informed decisions. I totally get that.
Michael Winn: Exactly.
Alejandro: So, Mike, imagine you had a superpower, where you were able to go back in time and have a chat with your younger self, maybe that younger Mike that was thinking about giving the notice at Google and envisioning creating a business. Knowing what you know now, because you’ve been at it for a while with this company. If you could go back in time before even launching DroneDeploy and you could give yourself one piece of business advice before launching a business, what would that be and why?
Michael Winn: I kind of cheat on that question. I’ve been listening to this podcast by [0:29:23]. I would suggest to consume information. There’s so much great information out there, nuggets of wisdom that’s just available about startups. In 2013, there were some great resources: reading The Four Steps to the Epiphany, The Lean Startup, and all those books. There’s great content out there to better understand how to build a startup. What’s important? How to understand markets, customers, and competitors. I would go back and try and really internalize that wisdom that others have gone ahead before you and figured out. That would save a bunch of time as we probably relearned things that potentially we could have just learned from others even faster than we did back in 2013.
Alejandro: Of course. No need to reinvent the wheel.
Michael Winn: Definitely.
Alejandro: I can totally get that, Mike. So for the folks that are listening, what is the best way for them to reach out and say hi?
Michael Winn: Before I did this, I was going to say one of those resources is your podcast, sir. I’ve listened to a couple of them, and there is some great information on there for any founder.
Alejandro: Thank you.
Michael Winn: Any way to get ahold of me – just follow me on Twitter. I’m getting pretty active on that – message me @mikewinn. I’d love to communicate with any founder that’s out there that’s in a new market that’s in the robotics market, aero data market. I would love to chat.
Alejandro: Amazing. Well, Mike, thank you so much for being on the DealMakers show today.
Michael Winn: Thanks for having me. I really appreciate it.
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