Drone Security

Here’s a “Portfolio PoV” from Luke Fox, CEO of drone security company WhiteFox Defense Technologies sharing his thoughts with us today……

As of February 23, 2019, drone owners must begin displaying their FAA ID numbers on the outside of their drones, a new requirement in response to fears of terrorism. Previously, the FAA allowed registration numbers to be placed on the inside of drones. While this is a step in the right direction, the industry still has a long way to go with drone identification. There are over a million unregistered drones in the US, and the current system is manual and easy to exploit. The solution for drone remote ID should be digital, automated, and cryptographically-secure. The importance of cybersecurity in remote ID Is two-sided. Smart cities should be confident that authenticated drones operating within it are well intentioned, while also honoring the privacy of drones operators. Why must drone remote ID be secure? Without necessary cybersecurity in place, forging a digital identifier is easy. Anyone can claim to be any identify, from any location. Tampering with another drone’s identity is easy, as well. As drones proliferate, the manual registration process will need to be phased out. It’s imperative a system is implemented that both sends and receives data we can trust.

Screen Shot 2019-02-21 at 9.57.27 AM.png

Portfolio Company Spotlight: Misty Robotics

Occasionally we turn over this page on our website to guests. Today we turn it over to Tim Enwall, the head of Misty Robotics……

Misty’s Jobs

Robots doing “everything humans can do” is still decades away— so which jobs can Misty fill?

The single most-asked question we at Misty Robotics get is: “what can Misty do?”

This question comes at us from consumers, developers, investors, and other robot companies. And there are as many answers as perspectives, but the shortest answer is “probably not as much as humanity expects a robot to do.” And that’s just fine.

If you think about all of the actions that humans perform on any given day, the human “Task Space” pie chart might look something like this:

Screen Shot 2019-01-09 at 9.51.34 AM.png

Looking Around Corners....

At Frontier, and every early-stage venture capital firm like it, it’s our job to look around corners to theorize about what the world could look like in the future.  Our partners look through lenses that are filtered by certain thematic beliefs that drive our fund investing (click here!), but also inspired by a world of creative entrepreneurs who are often already ahead of us.  As we look around these corners to the future, we always want to be convinced that we can see that the product market possibility is actually imminent.  We have been wrong on this many times, I assure you, sometimes resulting in challenging commercialization experiences!  But sometimes, we predict accurately.  We have been watching the autonomous vehicle market for several years.  In 2017, we looked around a corner believing that such vehicles were closer to market than most people knew or believed.  A lot of investment capital has flowed toward the technologies required to bring this vision to life.  For that reason, autonomous vehicles are right around the corner: (click here!)

With this in mind, at Frontier we backed Driav, a business focused finding a solution to mitigate insurance risk for just this eventuality.  This is a complicated problem to solve and requires all kinds of insight, driven by a combination of technology in the automobile, integrated with a completely new road map for insurance companies and auto manufacturers.  We think the team at Driav is poised to help the autonomous vehicle vision come to life, safely, and we are excited to have given them the important fuel they required for timely commercialization.  More to come soon on autonomous vehicles. 

Profile of the Progression of a Portfolio Company

By David Cremin

The link below takes you to an interview with the founder and CEO of one of our previous portfolio companies, Ryan Born, from AudioMicro. His interview tells the story of AudioMicro and the twists and turns it took on the path to a successful exit. If you're listening to the recording, you can hear the humorous story of how Ryan met us at about minute 17.

Click here for the interview.....

Inflection Point

By David Cremin

The wrong answer: “we’re raising money for 18 months of runway.”  The other wrong answer:  “we’ll hire sales and marketing and engineering…”  

Let’s play Jeopardy, what is the question?  

The question is: “how much money are you raising and why?”  But your answers above aren’t quite what we’re looking for when we ask that question; however, they are the answers I most often receive.  

Building companies is not about months. It’s about achievements. Milestones. Completion of major goals. Everyone around the table must understand and believe in some set of goals that, if achieved, will likely raise the perceived value of your company.  A next phase. A moment of optionality.  That is your company’s inflection point. You’re raising capital to achieve this inflection point!; btw, you should also be raising enough capital to have cash in the bank at that moment, so you have time to think about your options and execute on them.  If everyone agrees on the goals, then imagining and executing on the tactics to get there is transparent, and trackable, which keeps everyone on the same page from the top to the bottom of your company.  Only then, when your goals and tactics are clear, should you work backwards on the time you need to achieve these important goals, and tactics required to achieve them.  It may be 18 months, it may be 6 months.  Tailor your capitalization strategy accordingly.  

Therefore, when asked the question, how much and why, here’s the sort of answer I wish we received:

  • Here are the 2 or 3 goals we are going to achieve; if we achieve them we will have proven that our business is valuable because…
  • We will then have options to raise more capital, or sell the company, (or also be cash flow positive, unlikely in most companies, but provides the most complete optionality)
  • Our cash flow forecasts suggest we can achieve these goals, and we will have 6 months of cash in the bank at the time they are achieved, so we’ll be in great shape to make important strategic decisions

When I hear this kind of response from an entrepreneur, I know she is thinking about value creation, and how venture capital relates to it.  She is thinking about the inflection point.