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Published: May 28, 2013
 / Summer 2013 / Issue 71

 
 

Flight of the Drone Maker

How a small firm named AeroVironment is changing the course of airplanes, automobiles, and warfare. See also The Drone Maker’s Story—In Pictures

The late Paul B. MacCready earned his reputation as an inventor, a pioneer in environmentally friendly technologies, and a daredevil. In 1979, he oversaw a triumphant flight over the English Channel in a seemingly impossible machine: a human-powered aircraft kept aloft by pedaling. He also left his adventurous mark on AeroVironment Inc. (AV), which has had a rich history of seemingly impossible innovations ever since MacCready founded the company in 1971. Today, more than 40 years later, AeroVironment may be poised to lead the next wave of major change in the way people fuel their vehicles, go to war, and make use of flight.

AeroVironment holds dominant, market-leading positions in two seemingly unrelated technologies: unmanned aircraft (including those commonly known as drones) and charging systems for electric vehicles. These might seem like products for niche markets, but they are also the kinds of products that can gain broad impact when networked into a new and expanding infrastructure. Developments like these, because of the way they fit with other technologies, end up changing the way people live.

Indeed, the executives and researchers of AeroVironment, who regard MacCready’s bold, experimental approach to life as a core cultural element of their company, have deliberately set up their battery systems and unmanned aircraft to be quietly disruptive to conventional industry. They believe this disruption is similar to what occurred as personal computers forced change among a host of other technologies, from mainframes to typewriters to recorded music. AeroVironment’s inventions offer the prospect of a systemic transformation, potentially akin to the transition from sailing ships to steam, which spanned more than a century and led to broad advances such as sweeping changes in military power and the globalization of the market for meat.

If roads full of electric cars and skies full of pilotless aircraft seem like a relatively distant prospect, remember that the substitution of steam for sailing ships once did as well.

AeroVironment’s first-mover status, its relatively large installed base (compared to those of its direct competitors), and the 85 to 90 percent share it claims in each of its markets allow it to define standards in both unmanned aircraft and electric-vehicle charging. But the path to more widespread adoption of AeroVironment’s products is anything but clearly marked, and the twists promise to be as political as they are technical. In addition, as a relatively small company that answers to shareholders, AV may struggle to scale its operations adequately to seize the opportunities inherent in its products.

And yet, the firm has some powerful assets to draw from. AeroVironment is a small, nimble company with a catalog of breakthrough innovations belying its size. It possesses a distinctive and systematic approach to R&D that extends deep into its customer relationships. It remains committed to a culture that promotes individualism as a means of enhancing collaboration. It knows what to knit and sticks to it.

The AeroVironment story is not a playbook for other companies to follow wholesale—for one, its heritage cannot possibly be duplicated—but it’s a fascinating tale rich with lessons for any company. Most of all, AV shows how disruptive technologies can evolve and shake up their industries, even when multiple market forces exist to hold them back. It also offers companies guidance about when to evolve to meet the needs of the future and when to stay true to their history.

Makers, Builders, and Dreamers

 
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Resources

  1. Paul Ciotti, More with Less: Paul MacCready and the Dream of Efficient Flight (Encounter Books, 2002): A reporter’s take on the story of human-powered flight and the characters involved in it, along with the MacCready team’s accomplishments in solar-powered aircraft and flapping-wing ornithopters, including a life-sized pterodactyl replica.
  2. Scott Corwin and Rob Norton, “The Thought Leader Interview: Lawrence Burns,” s+b, Autumn 2010: More insights from the coauthor of Reinventing the Automobile.
  3. Morton Grosser, Gossamer Odyssey: The Triumph of Human-Powered Flight (Houghton Mifflin, 1981): An insider’s account of the development of human-powered flight, culminating in the launches of the Gossamer Condor and the Gossamer Albatross.
  4. For more thought leadership on this topic, see the s+b website at: strategy-business.com/innovation.
 
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