Sunday 4 December 2016

High-flying Jay aims to put Ireland at the centre of drone world

Hailo co-founder Jay Bregman wants to revolutionise another mode of transport - drones. And the tech entrepreneur is so convinced about Ireland's part to play, he's set up base here. Our technology editor meets a man with his head in the clouds

Published 19/11/2015 | 02:30

Verifly boss Jay Bregman wants drones in our skies – but with tight regulations about their use.
Verifly boss Jay Bregman wants drones in our skies – but with tight regulations about their use.

A month ago, strollers on Dublin's Dollymount beach noticed a buzzing sound above their heads. They looked up to see a large quadcopter drone speeding along the breadth of the strand, rising and falling as it performed aerial acrobatics. In the southern car park section of the beach, a stocky man with a remote control followed its progress.

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"I'm trying to get video footage of the beach and the dunes," he said when asked what his drone was doing. "I'm putting a few videos together."

Under Irish law, what he was doing was illegal. It's also a little dangerous. The drone he was using, a DJI Phantom, can travel at speeds of up to 50 kilometres per hour. On a crowded beach, a mishap could cause an accident.

This is one of the situations that Jay Bregman's startup Verifly has been created to deal with. A co-founder of the popular taxi app Hailo, Bregman has been working on a system for the last 18 months to help regulate drone activities on a worldwide basis. Part of that research and engineering is happening in Dublin, where Bregman - a New Yorker - has established some roots.

The problem with drones is that they represent a new product category around which little planning or regulations exists. And they've exploded in popularity.

"The market for drones is booming," says Bregman on a recent visit to a drone conference in Mayo. "According to The Economist, there will be a million drones sold in the last quarter of this year. That compares to a million drones for all of last year. So the market is quadrupling in size."

The figures that Bregman quotes may be conservative. According to the US Consumer Electronics Association, the body that oversees the giant annual CES tech trade show, 700,000 drones are set to be sold in the US alone.

In Ireland, many drones sold have been toy varieties, under €150 in price. But the market for full-blown quadcopters with ranges of up to 2km and ultra-HD cameras built in is growing, too. Harvey Norman has just started stocking the 3DR Solo drone, which has a top speed of 88kmh and a flight time of 25 minutes.

The problem is that these devices, while fun and useful for some facets of business, can cause chaos.

Barely a week goes by without a news story of some drone-related mishap. In the last fortnight, for example, there have been several near misses with aircraft in England, Denmark and New Zealand, while an entire community's electricity was cut short in California when a drone crashed into a power line.

This is what part of the reason Verifly exists, says Bregman. "If you look at the rate of incidents, it's huge," he says. "In the US alone, there have been over 1,000 near misses [with aircraft] so far this year. And that's up on around 600 last year so it's increasing dramatically. We're now at the point where the rate of incidents is increasing faster than the really fast growth in the market."

This, he says, is to be expected. Those who flew drones when they first came out may have been enthusiasts, more skilled and dedicated at flying them properly.

"Early adopters were probably a little more careful where they flew it than the mass market consumer," says Bregman. "But look at it now. It's a mass market product."

Something has to be done, he says.

"You have this curve and inflection point where people realise that if they don't do something, incidents could kill the market, if not an actual human being. This is the same for Ireland, the UK, Australia, China or wherever."

What Verifly has created is to come up with a way for drone manufacturers and operators (including those seeking to use drones for commercial purposes) to use the startup's system of verification for the flying machines. This could be a geo-fencing solution that identifies restricted airspace and stops a drone entering. Or it could be advanced analytics that provides feedback on where a drone has been and what it has done.

Such a system doesn't exist at present because the market is growing too quickly for any of the manufacturers to pay proper attention.

"Manufacturers do actually care about safety," says Bregman. "But the thing is, they're in internet boom times right now. They can't produce the drones fast enough and they're breaking a gut to produce new models every year.

"It's like a smartphone cycle. So it's not that they don't have the will to do this safety stuff, it's a question of them trying to find the expertise. And that's where Verifly is positioned. We're faster than government regulators and we can be a helping hand to safety. Verifly as an entity is an organisation that exists between governments and manufacturers."

Bregman has turned to Irish expertise to help build out some of these systems. Although based himself mostly in New York, he has located much of the research function of Verifly in Dublin and Maynooth.

He also tapped some serious Irish aviation entrepreneurs for support. Declan Ryan, son of the late Ryanair founder Tony Ryan, recently became an investor in the startup through his Irelandia Aviation vehicle.

Ireland, says Bregman, is a natural place to set up what he expects to be a global aviation enterprise.

"There's no question about it, Ireland is one of the centres," he says. "If you have aircraft, you get it certified here. This is acknowledged around the world. Regulators here are respected around the world, too."

Other than Declan Ryan, Verifly is backed by some significant investors. These include Robin Klein, who is also a partner in the venture capital firm Index Ventures. (Klein has invested in a private capacity.) The founder of Virgin Mobile USA, Amol Sarva, has also invested in the startup as has Serkan Piantino, Facebook's site director in New York.

Bregman also attracted, as co-founder, a serious ecommerce player in the shape of Eugene Hertz. Hertz sold diapers.com to Amazon for $540m several years ago.

Bregman hired Hailo's general manager for Europe, Colm O'Cuilleanain, as the venture's lead presence in Ireland and its vice president for Emea. O'Cuilleanain's role includes developing commercial models for the new startup as well as engaging with regulatory bodies here and abroad.

One of the key markets that Verifly could hit is insurance.

"The insurance industry is waking up the fact that this is a big market for them," says Bregman. "Traditionally the insurance response has been that drones are just too risky. But being able to offer policies if their customers have a system or infrastructure in place is another thing."

He says that similarities to usage-based insurance abound. "You might get a much cheaper insurance policy if you let them install a GPS box on your car that reports back. That sort of technology might be possible here with drones. At the moment, you can't get insured. It's an aviation problem. But through a conduit like us, they [insurance companies] are interested in that. So we want to roll that out as early as next year. You could have a Verifly subscription to include insurance and maybe pay a premium to be covered while flying. We're making some good progress in this area."

Who might take out such insurance? This goes to the heart of the commercial model underpinning the market that Verifly is going after. In the US, the world's most developed market for drone usage, the flying robots are deployed commercially by a range of businesses from huge agriculture and construction companies to professional photographers to real estate firms looking to market properties.

"You're talking about multi-billion dollar construction sites where the virtual models might change," said Mark Heynen, a former head of client operations at US drone data firm Skycatch.

"So they constantly need to make sure they're not making mistakes. And so the ultimate market is for real time data but a lot of companies are working from outdated information. It's basically indexing and allowing the real world to be queryable. Large and small companies all want that."

But virtually all such usage requires appropriate licensing or regulatory approval. This is difficult to get. In Ireland, for example, only a handful of licenses are given out each year.

And the Irish Aviation Authority has yet to provide clear, comprehensive guidelines on exactly what, where and how drones can be used here. (It does stipulate rules on flying drones with proximity of airports and over some types of crowds. However, it is vague on what parts of an "urban area" a drone is allowed to fly over.)

From December 21st of this year, the IAA will require all drones that weigh over 1kg to be registered with the agency. The move follows a US Federal Aviation Authority initiative to have drones their registered also.

However, registered drones will only be of use in preventing accidents and abuse if the devices are recovered following a crash. And it is unclear how the Irish Aviation Authority intends to enforce rules preventing unregistered drones from flying.

But Bregman sees a time when drones will be a lot more interactive than they are now.

"In the beginning, the drones were very closed systems," he says. "No apps, no integration. Now the software manufacturer's chip give you total control of the drone if you're an approved developer, so you'll see apps made for drones to control and access drones. You'll also see drone services, something a bit like an app store for drones. Our view is that we view Verifly as one of the base apps. If you want to fly safely and don't want to get into trouble, you'll find it overwhelmingly enticing to use."

Bregman says that the company is now in "active discussions with global manufacturers".

"The next step you'll start to see is us partnering with manufacturers to help develop systems to make their products safe. We're going to make sure that in future, it's really hard to make a mistake."

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