Why I invested in Inflights

In this post, I want to share why I’m incredibly excited to be able to invest in inflights started by Hugo De Blauwe, using the framework described in Mental models for Angel investing. 

Inflights delivers insights from drone flights to their clients all over Europe.  The platform matches professional drone pilots with assignments from clients while automating and enhancing various parts of the process. In their words: “Measuring the world in 3D. One drone flight at a time”. inflights is becoming to professional drone pilots what Uber/Lyft has become to drivers. This market segment is large and growing fast. Commercial drones have been one of the fastest-growing sectors in the past decades, expected to reach $31B in the US alone (according to McKinsey research).

The video above sums it up nicely: Generating a 3D model using a professional drone is much cheaper and faster than having a surveyor inspecting, measuring, drawing up plans for the roof. It’s just one example of many use-cases in which professional drones can make our world more efficient. It’s also one of the primary use cases on which inflights is currently focused. 

1) Incredible Founder-Market Fit 

The first time I met Hugo De Blauwe, I was immediately blown away by the incredible founder-market fit. He’s an aerospace engineer by training (KU Leuven and Georgia Tech) and versed in business as well by spending some time at McKinsey and studying at LBS and Berkeley. Furthermore, he has created something out of nothing before: by co-founding the non-profit Humasol that helps to create clean energy for underserved communities around the world. I’ve been impressed with Hugo’s domain expertise, technical skills, and mission-driven mindset to make the world more efficient and sustainable using drones. 

2) Product-Market Fit 

Inflights clearly has product-market fit in a segment of a much larger market: the creation of 3D models that help with the installation of solar panels on roofs of large buildings. Not only are more and more solar panel installers using inflights every month, but the existing client base also keeps coming back for more. This results in a significant portion (~80%) of the revenue being “recurring” in practice, and a pay-back on sales efforts is very fast right now.

What’s truly interesting is that the network and technology developed by inflights can be leveraged for more use cases over time, and the network of pilots in combination with their technology create a sustainable and defensible competitive advantage. I personally like these 2-sided models, as they can create a network effect that’s hard to stop. DataCamp also leveraged an outside network of expert instructors to create courses in a different market, and I got to experience the benefits of getting the flywheel effect of a 2-sided model (in both cases, it’s a highly curated model, and not a true market place, but nevertheless the flywheel effect is real).

3) Product-Channel Fit & Model-Channel Fit

2-sided models are always inherently more challenging to get initially off the ground as you need to generate growth on both sides. inflights was successful in building a network with professional drone pilots early on of about 100 pilots. After trying out various strategies, they also achieved success scaling their client base with an outbound sales strategy. Even though clients pay for one flight at a time right now, most clients actually end up using inflights on a recurring basis. This allows the company to invest more into sales efforts as the ARPU is relatively high even though their pricing on a per flight basis is very sharp. inflights is also more than just a platform of drone missions. The team has built expertise to transform the raw data from drone pilots into accurate 3D models, which is not easy to copy.

4) Investor-Founder Fit

 I’ve personally been fascinated by how drones can help automate difficult, expensive or dangerous tasks, currently done by people, and by how drones can help enable new use cases.  While I’m excited to learn more about this sector from Hugo in the years to come, I’m also optimistic I can be helpful to the company given my experience with a 2-sided model, fundraising, and international expansion. 

5) Barriers to entry

I always try to think through how defensible a company’s position will be in case they become successful, in other words: what’s the cost for new entrants to access this market at that point? This is not formally part of the framework, but a crucial aspect nonetheless and an area where I think inflights could be particularly strong. Inflights is creating distinctive IP for processing drone data and for efficiently matching drone jobs with clients, as well as a database of high quality drone pilots. It will take a significant amount of time and money to develop for existing/future competitors. Furthermore, the recurring nature of its revenue and client happiness in combination with a sharp price point will make it hard for competitors to come after their existing client base. All of this makes it likely that if inflights can achieve its ambitious goals, it will also be a sustainable business. 

Finally, I always enjoy thinking about reasons not to invest, in other words, likely future challenges for the company. Based on my current understanding of the company and the market, this would be the top 4: 

• Ability to transition from founder-led sales motion to predictable and scalable sales effort, especially in other countries.
• Ability to break into other market segments over time and achieve model-channel fit.
• Ability to grow a qualitative drone pilot network in a scalable way.
• Regulatory changes to the drone industry as a whole.

If you enjoyed this article, consider following me on twitter or on Medium. I’m also planning to use crunchbase to track all my future investments.