A Q&A with Flytrex CEO and Cofounder Yariv Bash

We just published our guide to drones. If you haven’t already checked it out, read the guide here.

Flytrex got its start in 2013 making black boxes for consumer drone tracking and flight analytics. The company sold 20,000 units, but in 2016, “realized the killer application for drones would be deliveries,” CEO Yariv Bash tells the Brew. Thus, his company “started to focus on restaurant deliveries and retail.”

• The company’s drones fly at 32 mph and 230 ft. in the sky. When they reach their dropoff point, they lower the goods via wire from ~80 feet above the ground.

For Flytrex to succeed, it must be comfortable working with regulators around the world. As it works toward FAA certification, the Israeli company is meeting with a revolving door of agency officials. But it’s also working closely with states, the laboratories of democracy, for early deployments of its technology.

• Recently, Flytrex and Walmart announced a drone delivery pilot for groceries in North Carolina. It’s also delivering snacks and drinks to golfers at the King’s Walk course in North Dakota.

We’re including the full convo with Bash below, which touches on regulation, go-to-market strategies, and drone delivery writ large. NB: This Q&A has been edited for clarity and length.

Walk me through the more recent chapter of your company—the pivot to delivery, if you will.

Drone deliveries sound simple and unsegmented, compared to ground deliveries. You don't expect FedEx to bring your pizza even though they’re a delivery company. The pricing and business model are off. The vehicle is wrong. FedEx is not like DoorDash.

Flytrex is mainly focused on food delivery, which means we have to perform a lot of high-bandwidth, super local deliveries. They’re short ranges (Flytrex’s max service area is three miles) and very low margins. You're not paying 50 bucks for burrito delivery.

How do your drone deliveries work?

We want to perform a precision delivery. We hover up to 80 feet in the air and load the package on a wire. We’ve delivered coffee from Starbucks, blizzards from Dairy Queen, and eggs from Walmart. It’s a lot more delicate than an average human courier.

What about pricing? Yours start at 80 cents a mile. What do the unit economics look like when the technology takes off and scales?

It’s really about designing a system that can support that. Our drones are the cheapest on the market. We compensated for that by developing a cloud-based system that really handles everything. If you've got a driver's license, you're over-qualified to fly the drones.

How so?

We don’t have a joystick, backup joystick, remote control, or virtual cockpit. All an operator has is a tablet, which says: ‘Please put the package from Walmart in drone 18 and press the green button.’ If the weather isn’t good, or the batteries haven’t been charged, or the package hasn’t been placed correctly, that button is greyed out.

Operators aren’t allowed to even mark a point on a map. Everything is automatic and autonomous.

Logistically, what does the drone have to deal with in flights in your target markets?

The nice thing about suburbs is that there are no skyscrapers or 200-feet antennas. We don’t have any cameras on board, which solves the privacy issues. The drone stays up higher in the air, which is safer and quieter.

Our drones have two GNSS receivers. GNSS is the new term for GPS, that includes four different satellite constellations. While we’re cruising in the air, we’re seeing between 30 and 50 satellites, so you get to very good accuracy. If your backyard is 10x10 feet, you’re good to go.

Tell me a bit about the regulatory picture.

We’ve been doing beyond-visual-line-of-sight flights above Reykjavík, Iceland, since 2016. The easy part is building the drone and programming the software. The hard part is certifying the airplane. That’s what separates most companies from the few who've been working with the FAA for more than three years now on certification.

I talk with the same teams that Boeing speaks with. We’re in different risk categories, but I have to jump through the same hoops. The good: At the end, you basically get federal approval to start flying in the national airspace. The bad: It takes three to five years.

How often do you meet with the FAA?

*chuckles.* This week, we had a meeting with the FAA on Monday and last night [ed. note: our conversation took place on a Thursday]. Tonight, we have a meeting. These are recurring meetings. We have between two and four meetings on a weekly basis with dozens of FAA employees.

What does the regulatory picture look like outside the US?

We’ve been speaking with regulators in places like Israel, Panama, Costa Rica, Ukraine, the UK, and a bunch of others. The FAA decided to take a different, very mature approach.

Drone flights today are based on waivers and exemptions, which isn’t built for scale. The FAA is designing a framework that will let you fly drones like airplanes. It’s not something that many regulators would be able to tackle, but it also puts the US in a leadership position. Internationally, other regulators will be copy and pasting the FAA’s with some adjustments.

I’ve always thought suburban delivery seems like a difficult use case for drones, compared to rural areas. Am I wrong about that?

The best user experience for drone deliveries in the near future will be people with backyards. You can stay in your pajamas and go to your backyard to get your order.

In terms of suburbia vs. rural, in both cases, most of my flight is done above open areas. In the suburbs, the competition from human couriers is not almost nonexistent. In suburbs, where population and restaurant density are lower, those services are currently losing money.

How about your partnerships and customer base: Who are you working with, beyond the companies you’ve already announced?

I can’t get into some newer partnerships under NDA. But the largest retailers and chains are already looking at this and interested. In 2021 we’ll start seeing some very interesting deployments, and rapid expansion in 2022.

Once the FAA approves you, you can start spreading faster than electric scooters.

Amazon—are they helping move the industry forward?

Once they start with drone deliveries, every retailer that won’t be able to match that will be in trouble. 20 years ago, Amazon started doing online ordering and everybody missed on that. Now Amazon is evolving the other side of the equation on the fulfillment side. If you're not on the wagon, your customers and investors may give you a hard time.

We just published our guide to drones. If you haven’t already checked it out, read the guide here.