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Hover Drone Delivery on The Startup Talk Podcast
Cameron Rowe founder and CEO of Hover is Live in Studio with The Startup Coach to discuss how they are doing food and cannabis delivery by drone in Toronto, scaling the business model, raising money, and much more.
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Transcript (automated) of Hover – The Startup Talk Podcast
SUMMARY KEYWORDS
drone delivery, people, drone, delivery, toronto, cannabis, startup, canada, big, money, deliver, company, food, thinking, hover, point, restaurants, important, talk, operate
SPEAKERS
Announcer, Craig Major, Cameron Rowe
Announcer
Direct from the sixth world renowned Canada’s largest city, with Canada’s biggest thinkers, visionaries and hustlers. This is startup talk featuring the founders, funders, innovators and community leaders who’ve led Canada’s startup ecosystem right here in Toronto. You’ll hear the challenges, the failures, the successes, Toronto StartUp podcast gives you the full story direct from the entrepreneurs and influencers who’ve made a difference. Now, the host of startup talk, the founder of Toronto starts this startup coach.
Craig Major
Welcome back to startup talk. I’m your host of startup coach, founder of Toronto starts one of the largest startup communities in Canada. And with me today is Cameron row, founder and CEO of hover the company current Lee doing drone delivery in Toronto. Welcome, Cameron. It’s great to have you.
Cameron Rowe
Thank you for having me. How’s it going?
Craig Major
Great. It’s going great. So why don’t you tell everyone about hover?
Cameron Rowe
Absolutely. So, hover is a four year old company that started off doing sort of typical drone activities that you might sort of know about, we’re taking pictures with photography for real estate, then we transition to commercial real estate. And then over the past year, we pivoted while still maintaining our core business to drone delivery. This is something I’m super excited about. And over the past year, I’ve been presenting, creating, applying for regulations. And over the summer, we’ve launched a pilot successfully doing drone deliveries to the Toronto islands. So this is something that has been a long time coming, I’ve been thinking about it a lot. And we’re live. And here we go. And now that that sort of portion of the company has completed and it’s been a big success, we’re now looking into the future to see where we can take it for Canada and eventually North America.
Craig Major
So you’ve been doing this, or you know, a version of this for four years. Now, when did you know you wanted to be an entrepreneur?
Cameron Rowe
Very early, I think I was very fortunate to have lots of entrepreneurial figures in my life. My father is an entrepreneur. And he’s still at his late 50s, it’s probably working as hard or harder than me traveling around. And so I he’s a constant source of inspiration. My grandfather, he was in the corporate world and my grandmother, they worked on businesses their whole lives. And so I had a huge influence people and sort of growing up and having my parents both working on the company together. And being relatively successful at it was something that I looked at that and they said, This is what I want to do with my life, I want to be able to create and build. And it also gives you a certain level of freedom. And I really liked that. And me having that constantly as a goal. I think it was something that always was in my mind. It sort of took off when I was in third year. And I decided I wanted to do a company part time. And we actually got into myself and some other people, we got into an incubator program at Queen’s University where I went to undergrad and masters. And it kind of it really developed my entrepreneurial spirit even more for me just talking about it and doing typical snow shoveling and sort of somewhat entrepreneurial activities into like, Hey, we’re going to wake up. And we’re going to do this all day long. And we’re going to go to sleep and repeat six, seven days a week. And so that was something that it really trained me to be able to say like, there isn’t always an immediate payoff, but like delayed gratification, having the patience to understand that what you’re working on, and kind of going in blind and trying to figure it out. It was something that I had seen it before. And so while it was still intimidating, it is something I knew I wanted to do.
Craig Major
Sounds like you’ve done a little bit of pivoting along the way. And I like to say that opportunity cost is infinite, but why you know, drone delivery versus any other opportunity.
Cameron Rowe
The main reason is because I really, like truly believe in all the data that I’ve consumed. And I really like to read and watch and like listen to podcasts, sort of the typical millennial everything is pointing towards a drone delivery becoming the next big thing in terms of like a technological revolution. We’re having autonomous vehicles on the road increasingly becoming more prevalent. I know in California over the past year, we started have the cruise vehicles where I think it’s with Lyft you just order a car, it shows up no driver and will take you to your destination. That trend was something that I started to notice back in 2017 2018. And I started brainstorming ways to potentially do drone delivery in Montreal for one of their Osheaga for example. And it back then it was kind of just an idea but because I was involved in the drone industry doing this real estate productions and a lot of that is just marketing. So it’s really just taking pictures. It was something that I’ve been constantly thinking about and then once we did enough volume to build to have some extra cash on the side, I decided to make the leap. I thought that like in Canada, at least the winter times are not really great for this, although it seems counterintuitive because in the wintertime might be an ideal opportunity to do drone delivery. But the main challenge is that we’re not at The point yet where we can be fully autonomous with no pilot anywhere. So that’s we’re almost there. And I’ll talk about that a little bit. But it requires the pilot to be out in the field. And so trying to be out at negative 30 degree weather on the Toronto Island, it just, it would have been extremely difficult and they would have been hard to stay up there for 1012 hours. So we decided that summer was the most ideal opportunity to do so. And so we pulled the trigger on it. And, and here we are. And I think although there are other opportunities I talked about all the time with some of my friends, too, we were making a lot of money downtown living in really nice places. And, and I’ve been really lucky to live with one of my friends really just be successful in my own field. It’s, it’s hard to kind of swallow that at times. But then I also see the progress that I’ve made not only professionally, but also personally, who I am how I’ve developed my my resilience, my sort of confidence in myself and what I’m capable of. And I know that I shouldn’t keep going. And if I had stopped earlier, I wouldn’t have been where I wouldn’t be where I am now. So it’s a it’s kind of a no brainer for me to keep going even with some of the other noise that sort of saying, hey, just stop and, and get a full time job, you’ll you’ll have a comfortable, nice life. So
Craig Major
saying drone delivery is, you know, kind of vague. Everyone pictures, all sorts of things coming. What exactly does hover do?
Cameron Rowe
We currently deliver food, groceries and prescription pills to a set location where you’re able to pick it up with a drone. So it kind of is intuitive. But at the same time, there are a couple of small nuances where initially, for us to be able to launch in as short of a timeframe as we did, we required to have two fixed points. So a lot of people when they picture drone delivery, they think of point A which is a fixed one and then a point x. And so what we’re really trying to say is that’s not going to be possible for at least a couple of years, we really want to be able to have it where if we want to launch and do this, we need to have a fixed point that is a controlled, not only landing and takeoff, but it is it is operated by one of our team members so that you have safety tick considerations taken into account so that you have people are aware of what’s going on. So you don’t people surprised, I would say safety is likely the biggest aspect that we’re trying to prioritize here, where we’re trying to push the boundaries, but not in an unsafe way. And I would say that I wouldn’t compare it to when Zuckerberg talking about breaking, sort of break things first, because it just as a different sort of model and style that we’re doing. But we really just decided even though there was a little bit of like hesitancy to launch, we said, You know what, we need to do this, even if it’s an imperfect system, because we’re gonna learn more from doing this than we are from not. And so this is where the drone delivery, it is slightly different from how people think, where there’s one pickup point. And this model worked very well in Toronto islands, because there’s the beach or close to a cafe. And we have sort of areas where lots of people walk by, so we’re getting a lot of organic foot traffic coming through. And it was wonderful it was everything worked fantastically, we didn’t even use an app, we use a texting service. I’m a big believer in testing something out before trying to implement on wide scale and having something that doesn’t have to be scalable at first, if something doesn’t need to be perfect, like I’ve been mentioning, and that’s something that you’ll likely hear me say again, is because it it doesn’t have to be perfect, and we don’t want it to be perfect. We want to get as close as we can, considering all our time and effort, because we can put a ton of effort into making the best app possible. But if nobody’s using it, then it just has a complete waste of time and money. And so we are really excited about this and we really believe this is going to pop off soon.
Craig Major
I didn’t think about you know the fixed point versus fixed point when you you see you know I took I met you at the CNE the emerging innovators Pitch Competition always takes me a while. That’s a mouthful. I did the Oculus tour, you know, watching the drone. Seeing that coming down might surprise people, you’ll probably have to get some lights and some stuff and you know, little warning music or something so people get out of the way or whatever. Getting back to the drone delivery situation. And the fixed point versus variable point. Yeah, I would have assumed that it’d be variable. But I guess, based on everything you said, the fixed point makes a lot of sense for safety reasons. And I guess the question I have now is are you thinking next year to be more at the Osheaga or at the CBC music festivals at the wherever there is these places where you go i Osheagaa something like that. I think this would do extremely well.
Cameron Rowe
Definitely. So we’ve actually already done the Latin sparks festival. A friend of mine had founded it and I chatted with him we we kind of have the word lucky because we have the ability to also operate a commercial drone photography photogrammetry 3d modeling portion, which brings in cash flow so that we’re able to do this because the reality of drone delivery is it will be profitable at scale, but as of right now and we’re only doing Have a handful 10 deliveries 20 deliveries a day, it’s not profitable enough for a team of three to be doing this full time, Anthony making a lot of money. And so that’s kind of the reality of business and something that I’m very aware of. So we were lucky to be able to kind of pair the two where we do photography and videography of the events while also doing drone delivery. And so you can now justify having a team of people actually still make money and do the drone delivery, which is something that I’m really proud of that we kind of figured out a way to do it. Because I think that a lot is a lot of what entrepreneurship is that kind of figuring out a system that works in an imperfect environment, which is what we are in right now. But just going back really quickly is the the fixed point is something that I foresee only happening for the next year or so, the main two reasons why that’s happening is the regulatory aspect, and the safety aspects. And so it’s unlikely in the next five years that there will be an environment where you can just drop a drone anywhere, if you’re on a beach, there’s so many factors involved, the environment will always have to have some sort of vetting, whether it’s someone going out like some of the companies in the states are doing and looking in someone’s backyard and saying yes or no, or somebody on their phone, it’s like pointing it around and saying, Hey, is this a good spot to be able to land. And then you can have somebody on the other end, sort of manually making a decision. The goal is autonomy, because autonomy is where you can make money and where it scales. And the only way that you can have this working when you’re delivering a $30 meal is that scale. Because if you’re only charged $2 for delivery, it’s like there’s there’s no possible way that you can have somebody piloting the entire thing. And so for us, we definitely want to be doing more festivals, I think we’re still very focused on the regulatory aspect. And so we’re currently in the process of hopefully, we’re going to get that shortly, I think we’re really on the goal line, we just have to kind of cross it, there’s just a few things that we have left to get that approval to be able to do multi site, drone delivery. So that would be an individual’s backyard, for example, or your driveway, where if you are there, you just open your app, or something and within 1520 minutes, you’re gonna be able to get something that you ordered, whether it’s like an Xbox controller, or a burger and fries delivered to your driveway for a fraction of the cost with fewer people handling it. So we’ll go straight from the kitchen to the drone to you, you can easily keep it stable as well, we have some gyroscopic controls where you’re able to keep the actual payload underneath the drone, right side up. So you can put drinks and soups and stuff and you’re not really worried about having it spill everywhere or kind of just when it’s kind of shaken up, there is an element of presentation that restaurants really value. So we’re really trying to juggle a lot of these things. But as of right now, we’re really just focused on doing it learning from our operations. And actually, tomorrow, we’re doing the angel investors, Ontario golf tournament, we’re gonna be doing some drone deliveries out there. So that’s something we’re really excited about. I have to prepare for that a little bit after, but I think I’ve figured out a lot of things like tweaking it, because we’re gonna be doing gift baskets, as opposed to a lot of food delivery. So you kind of have to modify it to fit what the demand is. And when they’re saying, hey, we want this, we’re going to make it happen, regardless of if it is exactly how we planned it over the summer. But we have the experience, we have the ability to do so in the technology. And so we’re really excited to be able to deploy this wherever we can, basically.
Craig Major
Yeah, and when I think of festivals, I think not have $10 or $20 food delivery, I’m thinking, why are we not thinking about a high end experience where you’re talking about $120 thing, at least that you’re delivering, plus, you’re gonna get that person a video of the drone coming down and delivering them, they get that email to them, they’re in the VIP lounge, you’ve got a different kind of feel for what you’re offering somebody? Because,you’re not going to make a lot of money, you know, offering food at the same price as a food trucker.
Cameron Rowe
And that’s the biggest thing that I think is it is more of an internal discussion, but it is also something I’m wrestling with a little bit of like, just because we can do something that is cooler that eventually will be more efficient, doesn’t really make sense to do. And so that’s the big crux of how I think about some of these things where if you can have something that is different. So is it faster, is it warmer, is it cheaper, those are three major things that we would want to do for home delivery. And combining them really makes it compelling where you say, of course, I’m going to choose the faster, cheaper and, like more efficient way to do it where the food tastes better. It’s like that’s, that’s a no brainer, but when you’re on a initial stage like we are now it’s it is more of a struggle to find. So we wouldn’t just be doing sort of taco drone delivery because you know, a taco truck and also if you just think even if you like it, I’m going to be someone who would love to order this but I don’t want to wait 2030 minutes for it. And then what if the restaurant takes her time or there’s wind and we have to post hold the drone up for like 20-30 minutes like there are too many factors and So trying to simplify my life and saying, Okay, well, what if we do like bottle delivery service with the drone, like that would be exciting, is there a way for us to be able to do that where we would drop it or lower it to the people at that table, that’s kind of a really exciting thing. So it really is now about the experience and creating something so unique, where it just, of course, they would want that. So one of the other things we were thinking of doing is having a, almost like a contest, and I’ve been thinking about this for a while and having the drone drop, sort of like confetti almost onto a big crowd of people. And it’s almost like the Charlie Chocolate Factory golden ticket type thing. And if you’re able to like scan with the QR code, your little piece of paper that you get, you could win like an upgrade to VIP or like 500 bucks or something like that. So there are there are lots of creative things that we can do with it. And I think a lot of it now is like picking one that’s going to have the highest ROI for us because it is expensive and time consuming. to even go to these events, you know, we have a team of like three full time and five part time. So it’s like who’s coming, we got to pay them so and then as well juggling, saying, you know, we also have to focus on bringing revenue in. And so spending some time on our commercial side of the business does bring in money, even though the drone delivery is more exciting, it’s like, it’s a bit of a balance, where I would say most of my time is spent on the drone delivery, but it’s going to ebb and flow. Like if there’s some big contracts, that’s going to help extend our runway, it doesn’t make sense for me to do that. And I don’t want to get too ahead of myself. But that’s a part of why I’m really pleased with the situation where we’re in is because we don’t need funding, we’re bootstrapped. We have enough runway to kind of last indefinitely because our contracts are recurring. Meaning it’s we’re not really worried about the urgency of it. And it puts us in a really nice position when we are talking to potential investors, because it’s more of a casual conversation, introducing ourselves, we’re chatting with one another and, and sort of just learning about one another, as opposed to me sort of demanding, or saying like, hey, I really need this, you know, I’m inquiring and like, we’re really looking forward to it.
Craig Major
So up to this point, we’ve basically been talking about food. But you also on your website, and we were talking about before we get started, are talking about cannabis delivery. Is that going to be a reality soon?
Cameron Rowe
Yeah. So the cannabis and alcohol is something I’m really excited about. And you know, just at the beginning, we were chatting a little bit about it. It’s cannabis, by weight, is the most profitable thing that we’re going to deliver like it, there’s no question, there’s no comparison, it just, it just is. And so for us, we really decided we wanted to prioritize that because it almost would make sense to not even worry about food, groceries or anything else. And focus solely on cannabis, if we can make that possible. The biggest challenge, like had mentioned before, is the alternatives. It’s typically something people buying advanced kind of like groceries. And so people do have sort of like a stockpile, and they are more prepared. But if we can make it so it’s so convenient, like I was mentioning earlier, that’s something we want to do. And it’s so heavily regulated right now the way that we have to do this, for some of our test flights is we basically partner with a store, and our whole staff get on the payroll for that store, which means that we are now employees of that store. And so the whole delivery operations is done in house with them. And so there are some prohibitive regulations that prevent us from being third party entities. And we’re okay with that. Because what we’re really trying to do is implement these best practices for this store independently. And so everyone has their can sell. And so this means that the chain of custody is never broken from store to individual. And the reason why we think this is really exciting is because especially for the Toronto islands, when you have an inaccessible market, you now have certified delivery people maintaining this chain of custody, which is really important for all the regulations so that the cannabis doesn’t get into kids hands like the idea of being checked at the end delivery point. And it just, it’s a very innovative creative thing. The one difficulty that’s going to arise is the ID verification when there is no individual when it just does dropping off. And so while you might think, oh, we can’t deliver cannabis or carry cannabis by drone, we’re technically considered the same as Air Canada cargo. We have the same cargo license, which was kind of a pain to get. But there’s no it’s cannabis. It’s federally legal in Canada. So there’s no regulations for us to be able to like as long as we’re following the Transport Canada guidelines set out for safe operations. We can carry as much cannabis as the drone can manufacture specs allowed to do. So it’s like seven pounds for our drone, which is a lot of cannabis. So that’s that’s really not an issue for us. But the bigger part is how we’re going to be able to do sort of a remote ID verification, which is the next step. So that’s something that we don’t want to hold our breath too long on this because it’s gonna require some, like, work with the provincial and potentially federal government on this. And so this is something that a lot of what we’re doing right now is marketing. And so we want to be actively delivering it as soon as possible. And a part of us talking about it is positioning us so that we are one of the leaders in the market, and we’re pushing for this to happen. So it’s, it’s never, it’s never going to be easy. And it’s not going to be widespread at first, but it’s going to be something that we are really going to push for because it just from a business point of view, it makes the most sense. Although the regulations are hard actually view those as barriers to entry. So when people are kind of looking at it and saying, Oh, wow, this is really hard, maybe you should focus on something easier if we’re able to overcome some of these challenges. It’s something that is going to be immensely beneficial for us in the long term in the same way, like online banking, I remember when I still had to like put my little logbook in the teller when I was withdrawing or depositing stuff. And then we went from that to, you can just log on to your bank account or vote over your phone and move money around. And so it’s like, a lot of people were kind of saying, Oh, how do I know that somebody else isn’t going to access my bank account. But we’ve developed ways to verify your identity, even like something like a dating app, for example. You can like it’ll, it’ll take pictures. And either it’ll use some sort of basic M ml AI recognition, or it’ll send it to somebody. And so there are lots of companies that do this sort of identity verification, I guess the trick is not the tech, it’s more of the regulatory aspect. And that’s part of our specialty. To be honest, that’s a little bit of how we’re different. We understand this market very well, we’re experts in not only the Transport Canada and Canadian Federal Aviation guidelines, but specifically for drones. And so this is only there were very few people who would know more about it. And when we’re talking about it in a group setting, a lot of the experts are are asking me for explanations on how we’re doing this legally. But it’s not in a negative way. It’s more of like, people are curious to know how we’re compliant. Because it is it’s a bit of a niche. And that’s something that we’re really proud of figuring this out. And hopefully we’re going to be able to walk deploy that widespread and continue being one of the people that push the boundaries on it.
Craig Major
Yeah, it sounds like there’s a lot changing regulations and a lot to think about in this market. Now, with cannabis, I would be thinking that you might there might be a membership model somewhere where somebody’s already i Sorry, let me take a step back. Know your client model very similar to crypto or banking, where somebody’s already got their ID pre registered with you or whatever company, so you know who they are in their system, when they make their order, you have all their information already, and they’re pre validated. Is that something that might be looked into? Or that’s not regulatory right now?
Cameron Rowe
Oh, yeah. Like KYC is so important. I think it’s funny, because we’re starting to get into stuff that I always laugh about, it’s that almost could be a company in itself, you know, creating KYC, or identity verification for sort of controlled substances, is likely going to be something and and we’re cognizant of that, you know, and I’m very much in love with drones and what we’ve got going on, and I really believe we’re solving a problem. But it’s also a good lesson for me to sort of constantly be looking and saying, is this? What should I be working on this? You know, should I be giving this my attention? Is, is this worth pursuing? And I think, definitely it is. But I have to sort of balance it in, I know that I can operate the drones now during delivery under the current model. And so if I have to sacrifice cannabis short term for a year or two, and then eventually we’re going to be in the best position possible to be able to deploy, I’m okay with that, as opposed to trying to be reliant on the schedule of a government, which, to be honest, that was actually one of my pivots earlier me trying to sell to police services, and the budget cycles. And it’s crazy. It’s I don’t, it’s bizarre to me being a young guy. I know, I’m a little bit naive in this, but it just is, it’s confusing the way things work. And there are more modern and innovative systems that aren’t being deployed, simply because it’s a lot of work to be able to do that. But that causes a lot of barriers for people like me who come in and say, Hey, I have some really cool solutions that can help save lives. And people are saying, Okay, let’s talk in six months, and it’s like, okay, but like, that’s a six month window. That doesn’t, wouldn’t it make sense to prioritize it and talk and even if we did, the bill, like the budget cycle wouldn’t operate like that. So we tried to innovate that and have it where it’s almost like a monthly payment, but it’s so much effort for, like, the private versus public sector. There’s a bit of a difference between them. And if you can figure out the public sector, which I don’t think that we were unsuccessful, but it just, there were fewer barriers to entry when we’re doing the drone delivery, and it’s more of the path of least resistance. I’m already making my life so hard trying to do a hardware and software company. I might as well try to like give myself something easy to go through, which is sort of a consumer and almost a b2b. We kind of do a lot of different things that when you kind of look objectively at this, it’s like, holy crap, there’s so much that is going on. And I think I’m trying to simplify that as much as possible and pick which areas I should put my attention towards really efficiently.
Craig Major
Yeah, there is lots of parts in this chain from the products that are being selled. Should you look into you making your own food? Should you you know, be your own cannabis licensed delivery? Or should you be partnering with the big person or all of the people?
Cameron Rowe
Like it’s a whole, these are never in all the places in between? Right? It’s no more and more actually think we shouldn’t be making our own food. There’s a couple of companies in the States, I’m very, I’m very aware of our competitors. And the majority of them are in the states and the way that they’re operating. I like I know, I don’t know everything. And so for me to look and say, how are they doing it because the states are much more advanced than us, they have what I’m talking about that I would like to do in six months to eight months, they’re already doing in the States. So there’s like probably a dozen locations and five, excuse me, companies off the top of my head that I know of that are actively doing home delivery. So they’ll pick like a radius of n, I can start talking about this as well, where it’s you essentially pick, essentially a commercial Plaza like smartcentres, where you’ll have five or six different restaurants. And you don’t even need a partnership with them. But it does make sense eventually to have that. So that’s what we did. We didn’t even negotiate partnerships with restaurants, we would just order from the restaurants on behalf of people. And so what the companies in the states are doing, some of them are doing that some of them have partnerships will they’ll have like a shipping container in the parking lot. And this is similar to what we want to do. And they’ll order food, people will then deliver it to the shipping container, the drone will launch and go to people’s backyards. And they pre cleared a spot in that individual backyard. And they found in not only the people that they’ve done, like deliveries to already, but also potential expanding neighborhoods, people are willing to permanently or semi permanently altered their property. So their backyard or or wherever to accommodate drone delivery, which I believe is a really big positive indicator that is pointing towards this adoption. You don’t don’t really need that much space. But you just need a small landing pad, maybe the size of like a desk that we have in school where the package would drop down to that the drone would recognize a no. And so there are a couple of different methods. And this is where it’ll get a little bit technical. But we want to lower the package down with a winch similar to fly tracks, or drone up, which are two of the main ones, Walmart and Amazon. They drop it from the drone, which is hilarious if there if you see YouTube videos of it. And it just, it looks so chaotic. It’s almost like a in, in video games where you have like a plane dropping like a care package through it’s like, it’s so confusing why they chose this. But to them, it was like a winch mechanism can be heavy. And so they said, You know what it makes more sense to simply have like, a hinge mechanism on the drone door opens, package drops, outdoor shots, you’re good to go. And I think that’s another reason people ask, why aren’t you trying to do packages, why the food that you’re looking at. In Canada, I don’t really order that much from Amazon, or from one specific retailer, a lot of times, I’m still going to a store, or it just I’m not as I don’t really shop that much online. And when I do shop, the packages that I ordered are so varying in terms of size and weight, it is very difficult to have a drone that can accommodate all of the multitude of different package sizes and weights. And so that’s something that is Amazon’s already on top of it as well, UPS had a demo that they had tried to do some of this food delivery is relatively consistent in terms of weight and can be under five pounds, and packaging, it’s not gonna be more than a suitcase. And we can fit a lot in our drone. And so we found we’ve never been really restricted by the size or the weight. And then there’s also scalability like I think I’ve ordered food delivery four times in the past week. So you’re having a repeat, like you have a lot of volume essentially with this, which is something, again, to achieve profitability, which is something that I am thinking about. Even if it’s in the long run, you’re going to need that volume. And I just don’t think at least initially, the cargo is going to be the one to do it. But Amazon has all the money in the world to be able to make it a reality and and that’s why I’m saying you know, I’m gonna let them handle that we want to focus on other aspects.
Craig Major
Have you talked to ghost kitchens? Like I know the founders of kitchen hub here in Toronto, they’ve got three or four locations in the GTA now I think they’re opening one soon there’s a grand opening party. That type of thing seems like it would work well with hover.
Cameron Rowe
Yep, absolutely. actually spoke with Oren, one of the founders of kitchen hub and I like a follow up with him and hopefully we’re going to take a tour of that place shortly at To reschedule our initial meeting, those are going to be ideal at first, I think the trick is finding the right balance because the drones have a 15 kilometer range. But finding the right mix where you’re far enough away from the airport, you get the approval, and you have enough volume. So you can even pick the most popular restaurants like McDonald’s, for example. I think that trying to do everything all at once might be a mistake, but the the ghost kitchens are really on our radar. It, it is something that we’re really excited about too, because I really see that as one of the ways that we’re going to be able to make this possible, where you still have some choices. It’s not really restricted to one small venue, but it’s more convenient for us to be able to do.
Craig Major
Also just off the top of my head, I’m thinking birthday cakes would might be interesting. Delivering to birthday parties, a birthday cake for people would be or anything at a birthday party, but it’s experience, right.
Cameron Rowe
I think that I want to, I want to I want to do experiences, at least initially. But I’m very cognizant that experiences are not scalable. Like, we like what we’re doing tomorrow. It requires a little bit of planning. It requires like we have to scout at the location, trying to do an experience, if we can have a repeat one that we can do over and over again. That’s great. I also just like the idea of having the drone efficiently dropping a package and leaving. And it’s almost like putting on a show is something people like they like the drone coming down. Everyone goes, ooh, wow, it’s so cool. It really has that wow factor, which is why we set it up when we go out to certain locations. Like when we were at the event. Last week it people love looking at it, they like seeing the tech it’s a really cool thing. It’s so it’s so fun. When we see it flying around, I still kind of get excited about it when I see it. And I’ve been doing this for so long. So
Craig Major
just on a side note, you Arad our startup investor drinks last night we didn’t last like last week, we didn’t get a chance to talk, how was the experience?
Cameron Rowe
It was fantastic. Everything went smoothly. It was a beautiful spot. I thought it was really cool. I really liked the it was well planned. But I liked the improvisational sort of aspect of it, where if anybody wanted to come up and talk about what they were working on, it was great. And I think it’s fun to see sort of the different styles of people what people are passionate about some people who are a little more nervous and don’t have much experience pitching versus others who kind of nail it on the first try. And it’s really exciting to see. And while I’ve done a lot of pitches, and I still have a lot of improvements to make, you know, and and seeing some of these people that I’m like, Oh, wow, I liked how he said that the intonation that everything is it’s a really fun time. And I’m a huge like, socializer I love networking. I love meeting new people. And I get my energy from that. So for me, it was a really positive experience. I was able to talk about my company, but also learn about other people’s.
Craig Major
You mentioned your funding situation. Sounds like you’re bootstrapped. Are you looking for funding now, it’s
Cameron Rowe
it’s funny that you mentioned that because I had a couple of weeks ago, I was at an event and I was meeting some VCs and I had told them, oh, we don’t really need any funding right now. And at the CME event, I met a couple investors who, when they’re actively pursuing you, and saying, like, hey, let’s talk, I’m really interested in this, it definitely changes your mind because we’ve been operating. So like we’re making good amount of money. But we’ve been operating relatively lean for the drone delivery portion, knowing that it’s not immediately profitable. Considering the effects that quarter of a million half a million dollars, which is what we would likely raise as a precede would have on our business is pretty substantial. And I think it really makes me pause and think about it. And he’s actually going to come tomorrow to the angel investors, Ontario. And that’s part of the reason why I’m attending these events, is to sort of make myself known, I really believe relationships take time to build, and it is a two sided thing for everyone involved. And so making it known, this is something we don’t really need. But we would like to talk about it because it would speed up our development, it would also enable me to focus 100% on the drone delivery, while because they’re lower in the market, it’s having the freedom associated from having cash flow and is great, but we’re also spending time on that. So as a team, if we can take everyone’s attention and say, we can like, even sell these contracts, so we can make some money off of that there are lots of creative things to do. But we definitely are open to it. I think that if we were to raise it would likely be at the end of the year to be to early spring, where we wouldn’t probably do a quarter million to half a million dollar precede. And I think that it really would be likely angel investors or precede VC funds, who are really investing in more of the idea because although we have 200 deliveries and like a couple 100 test flights, it they were still early stage, and we did this to prove that it was possible. We did it to determine unit economics, which are surprisingly good on a per delivery basis. We’re way You better than Amazon. And the text, the specs on the drone itself are surprisingly matching, and exceeding Amazon in some capabilities. And you’re like, like, you guys might be thinking, oh Cameron, like that’s, that can’t be true. But it really is, their drones are $200,000 each, ours are $25,000. Each, we have a similar range, they’re both cellular connected, our payload is actually six pounds. And there’s this five pound initially. So while there’s has the, they’re almost future proofing it, right now we’re able to deliver five pounds. And so to me, even though there’s has some clear benefits, and obviously, they have a probably a more refined system, we’re still winning in some of these small areas. And to me, I’m taking those in that I’m using that as encouragement to say, You know what, we’re not that far behind. Even though we’re not Amazon, and we haven’t put 2 billion into our drone delivery program, we’re still capable of doing this because a lot of it is based off regulation and finding a model that works, which we believe we found.
Craig Major
Yeah, it’s amazing to hear startups like you got basically going head to head with what Amazon is doing.
Cameron Rowe
And some people also talk to about the like, Uber Eats or skip the dishes and DoorDash. And I view us as a complimentary service to them. I really don’t think we’re competitors simply because we don’t have relationships with existing restaurants, they have the negotiations, they have the drivers, they have all these things, which it just makes sense to work with them. But at the same token, it we don’t really have to, there are multiple ways for us to achieve this goal. And so while we talked with a lot of these different parties, and when, like I’ve mentioned with building relationship, making our presence known, it’s the type of thing where we’re not really trying to force anything. And if it makes sense, that’s something we would look at. But I really like the idea of constantly making progress. Because even if somebody doesn’t believe in you, let’s say the guy that skip the dishes won’t talk to you. They’re like, Oh, this guy is like, whatever, he’s not going to do anything or they’re not sure. The more progress I make, the more that they start to say, oh, okay, well, maybe you know, this works. And then we expand to another area. And all of a sudden, that very cheap startup that you guys could have partnered with early on is now a very expensive deal to be able to make. So to me, it’s a, it’s kind of a win win. And I think a part of that is also I’m a bit of a die hard optimist, where it’s like, I like thinking positively, I think it’s really important. It’s a good mindset, especially in a difficult environment as an entrepreneur, you really just kind of have to. And so for me, that’s it, we’re going to make it work. And I’m like, I’m confident of that. And how we’re going to how we’re going to do it is going to be something that it yet to 100% Figure out. But that’s okay, too, as a part of the journey is seeing whatever makes the most sense, and whoever’s responding and going, where it is working and where people want to work with you. Because I think that’s important, instead of trying to force something when companies are hesitant, it’s like, we’ll wait until they aren’t hesitant. We’ll send out newsletters every couple of months to be able to ensure people are staying up to date with what we’re doing, maybe we’ll take some funding to be able to accelerate that advancement. So we’re really excited. And we’re kind of an open book as well about what we’re working on. I really don’t try to hide anything from anyone because I think it’s the more open i are i am the more likely it is that somebody potentially watching who maybe could help us is going to say, You know what, it’s great that he was talking about this, I know exactly this problem or the cost per delivery comparison, you know, there’s a way to reduce that 50 cents. So for us it we’re really trying to we try to be transparent and building and public and something that I’m a really big fan of
Craig Major
completely agree. Now there’s the odd occasion to not build them public but building them public. Look, just you’re a classic example, you went to the CNE did a pitch competition, one of the judges or someone else there is interested in investing and may end up giving you a bunch of money or connecting you based on you know, you just happen to be building this probably wasn’t what you were looking for. You know, that’s why I encourage the pitch competitions and getting out there and talking and networking with other people because the networking, the connections, the people that are six months or a year ahead of you that can really help leapfrog you forward so that you’re not struggling for the next six months over something is so invaluable.
Cameron Rowe
Definitely. Yeah, I really like to see me that was a really great event. It was it was an interesting thing to have sort of people who just were here vacationing with their family trying out we are for people watching that don’t know we have a 360 camera that we put on top of our drone for delivery. And it’s about a three minute long video. You can look it up on YouTube, just that hover dot direct. And when you put the Oculus on watching a 360 video on YouTube, it’s a very immersive experience or looking around with a headset on. And it just is something that I’m like, wow, this is a really exciting, innovative I’m trying to think of I actually have that somewhere close by. I think it’s in the other room but the funny picture to have the will take me that after. And people love it. And so I know Craig you tried it and we’ll Have strangers who try it as well. And it’s a it’s a cool experience talking to people who aren’t in the tech or startup world and getting their opinion because I think it everybody has an opinion. And so hearing it, it’s another data point for me to help make a decision on what’s going to happen.
Craig Major
Yeah, and this is a good lesson learned for anybody who’s doing trade shows, at this end, people aren’t there for you. But you had something to make them stop and take a look at their vacation with their family. They’re going from point A to point B, there. 99% of them aren’t interested in startups, but you have Oculus Rift, and, hey, come take a look at his demo. And all of a sudden, people are stopping, it was super immersive. If you remember, I was afraid to turn around and look because I couldn’t see the floor underneath.
Cameron Rowe
It is incredibly immersive. I saw on your website, your there’s planning expansion into more into area Toronto in the future York or something? What’s happening there. So your kids, the best region, in my opinion, there’s almost like a, I wouldn’t call it the GTA, but it’s almost the surrounding region outside of Toronto. So there’s a lot of people when they think of drone delivery, and what drone delivery Canada who actually don’t believe it, the competitor, maybe more indirectly is doing is they build essentially many helicopters for long range deliveries, which are like one to 200 kilometers. And again, trying to be super positive about it, that there are so few instances where that makes sense. Not only financially but even just, if you think of a use case, sure medicine. But if you’re a person who needs a certain type of medicine, you would order 10 of those and have it in the next shipping container and constantly have it around the idea that this is something that is going to be used that scale is something that I debate. And that’s why I’m focusing more on the last mile delivery portion of it, I I really think that it’s we’re not trying to do long distance. And we’re not trying to do out in remote areas, because it just there isn’t enough volume, or scalability to this. And that, to me is what’s important, where even if you have an amazing solution, which I believe they do it just how often is it going to be used? Is my question, are people actually going to purchase it? How much for each delivery to make sense for the company to run. So for us the reason we’re looking at the York Region, while we did downtown, we were very close to an airport. And so the, from an aviation standpoint, the risk level is at the highest that possibly can go, which means it’s much more difficult to get permission to do what’s called autonomous beyond visual line of sight flights. So right now the drones are fully capable of time. The question is, whether they’re capable of it, the question is, legally Are we allowed to do it, which is why we had people there monitoring it, what’s called Visual observers. And so everyone has a certified pilot with Transport Canada. And so we all have the licenses to be able to legally do this. And the reason we’re picking the York area, and potentially even downtown is because you’re far enough away where it’s, it’s not necessarily a very dense built up area. But you are far enough, where there’s still you’re not far, sir, excuse me, you’re far enough from the airport where you’re not worried about the drone randomly flying into and hitting a plane. But you’re close enough that you have the density, where you have a large number of people with a relatively high income who are willing to do this. So this is the tricky part is finding those. And it has to be within a close proximity to restaurants that we can purchase food from and then sell that to individuals such as yourself. So there are ranges that we picked, and York had a lot of them. So that’s north of the 407. Like Richmond Hill, Vaughan King City area, they have lots of like, people have a little bit of money there, and they have homes and driveways to be able to deliver it to. But there are enough homes in a close enough area where it would make sense to do that you’d have a high likelihood of people using even if only one in 10 used it.
Craig Major
We’re getting close to our end to the end here. Do you have any tips for founders?
Cameron Rowe
Yeah, I mentioned build in public, I would say, be open about what you want to do, I think be like, Listen to yourself, and don’t lie to yourself, if that’s important as well. I think at times, it can be easy to be very idealistic. And be it’s okay to have wishful thinking. But I think then implementing it and saying instead of me thinking in five years about doing balcony drone delivery, which is what I want, how do I get there? So how like, that’s step 10, I need to start with step one. And step one might be to do a pilot on the Toronto islands. And then step two might be to do backyard drone delivery in Richmond Hill, for example. And doing that for a while, even though I really would love to be able to roll this out. It’s something that you have to kind of take those lessons that I learned and and not lie to yourself about it and say how do I do this? And how do I launch and then focusing on the customers because you need customers paying? That’s important. And so you can’t you can’t lose money forever. So that’s something that I would say is don’t get too stuck. into the culture of like just raise raise raise, also say there is an option to not do that. If you can make money, you retain equity ownership, it’s very freeing to not have to answer to anyone I know some, some of my friends who do have VCs, they have more obligations, you have a board, now you’re getting people checking in. And it obviously depends on the investor. But it people might not like that pressure. So it’s something important for you to consider all these things prior to do because there’s a lot of smart people out there. And then last thing is have confidence in yourself. I really think that like it compounds, and the more confident you are, the more you learn, the more people want to approach you have the competence to approach people yourself. Don’t be shy, this is definitely the entrepreneurship is not. It’s not something where you can kind of just be a passive individual, you have to actively be seeking out asking for things. And that’s something that I’ve learned the hard way from not asking enough. It’s hard to over ask and people will tell you, others say no. And I think building up a bit of a thick skin to say Can you introduce me to this person? Oh, no, sorry, are no responses, that’s more frequently, what happens. But I would say keep going as well. Time is one of the biggest factors time in is the best thing. If anyone talks and follows the market. trying to time the market, if not just never works. Or if you do you get really lucky. And then that becomes now an outlier. The longer you are working on something, the more likely it is for things to happen. And just random things happen. Like I meet cragen. And Craig says, Hey, Cameron come to this. And then at the event that we have a meeting some really cool people, and that could turn into something. So it’s, you never know what’s gonna happen. Being optimistic about it, I think is also important.
Craig Major
So I know you can’t predict the future. But when are we likely to see cannabis drone delivery in Toronto?
Cameron Rowe
between one and two years, I think you’ll you’ll see it soon, we’ll be posting about it for more marketing stuff, but for you to be actively using it. It’ll be one to two years and and then I think not only cannabis, we didn’t talk too much about alcohol, but it it’s gonna go to your balcony as well. And, and then the drones are just going to start popping up everywhere within I would say five years, it’s gonna be much more common than people think it’s gonna be kind of normal place. And the same way we noticed planes flying by and eventually we’re going to notice driverless cars, and that’s going to be a phenomenon. And we’re like, Wow, that’s crazy. There’s no driver in the car. 10 years from now it’s gonna be normal, we’re going to be sending the cars to pick up the kids from school and, and Ubers are going to be like that. So it’s going to be really exciting. Yeah, alcohol is a good place to I guess I didn’t focus on that, because of the weight around that. And thinking that you know what cannabis, generally being sold by the gram type thing, you really got a lot of weight to flight ratio and profitability around that. So it just seems like it’s when you can a big thing. And last mile delivery is batch ordering. And this is something that when you can do multiple deliveries in one go. And that’s something that we had taken away for our last couple of weeks, we scheduled the deliveries. And so that enabled us to kind of pair deliveries together which means you have the costs or with cannabis, you could you could kind of infinitely Do you could deliver tenant on at once if the battery life is able to and people live close enough. So instead of going back and forth and back and forth, so it’s the that’ll be the key to basically driving the price as low as possible for the consumer and also helping us make some money.
Craig Major
So if people are interested, they want to find out more they want to follow you where did they go?
Cameron Rowe
For myself, it’ll be cam r r o w e on every major social media platform camera not covered up direct for emails. For the company. It’s just hover dot direct or googling hover drone delivery will pull up or one of the the top searches ranked by Google for that. So we’re drone delivery and hover is probably the main keywords as you can see, I don’t know if it’s flipped on screen here. But it’s HOV, er, a lot of people call it Hoover. And so I was like, Oh crap, did I like spell this wrong? But I think hover is clever. Yeah, yeah.
Craig Major
And all those links will be in the show notes and the chapter links if you’re listening on the podcast, I know you can’t see his hover shirt. But all those links will be in the show notes if you want to follow Thank you very much to take the time out of your day today, Cameron to talk about hover and drone delivery in Canada.
Cameron Rowe
Well, thank you so much, Craig, for having me. Thanks, everybody for listening in. I really appreciate it.
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