Flying Past The UAS Startup Stage

Matt Dunlevy and his UAS team have ground their way from a startup stage to a proven entity. With a new era in UAS history here, thanks to Part 107, Dunlevy’s story has helped reveal the positive state of the UAS service industry.
By Luke Geiver | August 18, 2016

Matt Dunlevy exemplifies everything you would expect from an unmanned aircraft systems (UAS) startup CEO that launched his business in a city that has become synonymous for its support of drones.  He wears running shoes and jeans, not loafers and ties. On a Monday morning he could be meeting with city leaders on a new drone initiative to bring more UAS firms to North Dakota from as far away as Finland. By that afternoon, he could be driving to a job site to fly and inspect a transmission line for a paying customer. If he’s not flying for profit, you’ll most likely find him and his crew at their city-approved UAS airfield that resides just on the edge of town overlooking a man-made pond and a massive ag field. If you happen to be standing with him during a UAS flight demo, you’ll most likely hear him say, “Man, I want to fly that thing.”

Dunlevy can talk shop with angel investors, UAV manufacturers, payload designers, local business owners or any air traffic control tower personnel that happens to be on shift at the time of Dunlevy’s call.

Like thousands of other U.S. Federal Aviation Administration section 333 exempt UAS companies, Dunlevy and his company have experienced the adrenaline rush of opening that first pack of logo-printed business cards, the agonizing wait for the FAA’s 333 approval to arrive and the grind of phone calls, emails and meetings with potential clients or partners that are interested in drones but unsure what they truly want to pay for.

Throughout the past two years, UAS Magazine has followed Dunlevy and his team in their trek from little-known UAS startup to what the company has become today. As their timeline and story reveals, young UAS entities have experienced the excitement of operating in a new industry, along with the challenges. With the regulations of Part 107 now in place to allow a multitude of commercial operations to take place without the regulatory hindrance many—Dunlevy included—experienced during the past few years, it appears that the stage is set for thousands of UAS firms across the country to thrive—especially if they can match the abilities of the CEO, who if you had to guess, is probably at his airfield south of town right now in his jeans, running shoes and logoed polo, watching his pilots fly multi-rotors against the backdrop of a big blue sky that could someday look similar to operations his team flies anywhere in the world.

July 2015
SkySkopes is headquartered in the Center for Innovation, which houses startups and entrepreneurs, seated on the outskirts of the University of North Dakota campus. Room sizes vary from single suite offices to spaces equipped for multiple cubicles. After spending time in the entrepreneurship program at the Center before starting the precursor company to SkySkopes, Dunlevy felt comfortable setting up shop there. Currently, 23 UAS-related firms from around the world claim the Center as their regional headquarters.

In July 2015, Dunlevy’s office had enough room for four people, as long as the desk space and non-chair space could be covered with large hard-cases for his small fleet of multi-rotors. On the upper cabinets attached to the desks there were small drones and controllers. On the floor, yellow battery packs. On the center of each desk, computer monitors. On the walls, nothing. The meager July office set-up was actually impressive compared to what Dunlevy could have claimed only a year earlier.

Through multiple grants gained in 2014 from the state, University, and private entities like Bobcat Corp., Dunlevy was able to raise roughly $40,000 to fund his venture into UAS. “That left us with a future, but no pilot and no aircraft,” he says. And when he refers to “we,” Dunlevy means himself and a semi-revolving stable of interns and students from the business classes he teaches.

Through a random conversation at the front desk of a local hotel frequented by aerospace researchers and personnel in town to visit UND aerospace and UAS faculty, Dunlevy got a tip on what turned out to be his chief pilot. After talking with Connor Grafius about his experience flying and interacting with drones and remote-controlled vehicles, Dunlevy quickly tagged him to be his main pilot. Soon after, Dunlevy penned a 333 exemption request in November. “When our exemption was pending, we had a prayer and no wing,” he says. During that time, Dunlevy kept his instructor’s role at the schools’ entrepreneur center and Grafius remained in school.

By July 2015, SkySkopes was nearly a month removed from receiving a 333 exemption. Dunlevy calls the day his team received the positive 333 news in June of that year, their best to date. “We didn’t know what we would do without that exemption,” he says. “The morning I woke up to the 333 exemption in my inbox I remember calling Connor,” he says. “All I remember him saying was, ‘So it begins’.”

When we visited their offices that July last summer, the team had only flown a handful of commercial jobs for cell tower inspections and realty companies looking for videos of new apartment buildings. Dunlevy hadn’t taken a paycheck yet, and to date, he still hasn’t. When he looks back on that time, he’s quick to point out what a grind it was to educate potential clients on the services his small team could provide, and that he still works against the same two constant challenges: pilot recruitment and cash flow.

That summer, the focus of SkySkopes was in the midst of a major pivot. After transitioning away from an idea that would have made the company a boutique drone manufacturer in 2014 when the vision for the company was still just past a brainstorm session, Dunlevy knew he wanted to look past a future of wedding photography and marketing images at golf courses.

“Our picture for UAS kept getting bigger,” he says. “We wanted to become part of the larger UAS ecosystem.”

July 2016
We are standing on top of a man-made grassy hill overlooking the pond that edges the SkySkopes airfield south of Grand Forks. The morning sun is filtered out by a blanket of thin clouds that almost look to be the remnants of a passing storm. From where we are standing, we can see the entire edge of the city and the vast ag fields in every other direction. It is clear Dunlevy has everything he needs to test-fly near, around or over from this spot. We are there for a photoshoot of Dunlevy and his team and lighting is almost too perfect. When he answers his cell after we call to check on his status for arrival, he tells us he’s almost there and that his SkySkopes convoy is right behind.

A year after we officially met with the SkySkopes team of four in that cluttered office, much has changed. When Dunlevy pulls in behind our vehicles, the side of his vehicle reveals a company logo emblazoned on the doors. Behind him, a string of vehicles lines up. By the time his whole team arrives, more than triple the amount of people are there in SkySkopes attire than there was a year ago at his offices. As we talk over the photoshoot plans, a steady stream of young men continuously walks back and forth from our shoot location to their trucks and cars, bringing with them high-end UAS equipment with each long-walk.

Today, Dunlevy says he is still performing one-and-two-flight jobs like he was a year ago, but he has also established long-term contracts with clients seeking UAS services. The company has performed more than 200 commercial jobs with many more scheduled this year. Their office in the Center of Innovation is still there, still cluttered with UAS equipment, but also expanding. Across the hall, Dunlevy has secured another office suite for his business development team so that they can stay separate from the noise and daily workings of the operations and pilots team led by Griffith.

Ryan Ach, a former student of Dunlevy’s has taken over the business development role for the company and helped expand the list of SkySkopes clients into a multi-stage, multi-end-user list. The company has flown thermal payloads to inspect solar panels for warranty claims, run hyperspectral sensors for survey work, captured vegetative analysis data and construction update imagery, videoed weddings and other buildings for marketing. For ESPN, Dunlevy’s team helped put together a piece for the NFL during the NFL Draft. When the local newspaper runs a UAS story, chances are Dunlevy is in the story or is somehow linked to it. When a big data company needed a UAS flight team to fly wind turbines to test its data analytics software, they called SkySkopes. When Xcel Energy, a major utility provider based in Denver decided to test small UAVs in its regional operations, they used SkySkopes to fly.

Dunlevy bills clients on a flat rate basis or by the hour. “We just want to be easy to work with,” he says. Data firms and payload providers have flown into North Dakota this summer just to meet with him regarding their hopes of working with his team.

Even though the revenue is now consistent and a hierarchy of roles established, he still partners with regional firms and flies pro bono when there’s a chance to do something he deems as a first feather for the proverbial achievement cap. “If you can be first to do something” he says, while describing his affinity for history, “how can you pass that up?”

July 2017
As the era of 333 exemptions comes to an end this year, Dunlevy knows the competition with other UAS service providers will increase. Since the FAA first starting issuing 333 exemptions, more than 5,000 have been granted. By the time it stops issuing 333 exemptions, there could be more than 6,000. And, after Part 107 becomes official this year, entities no longer have to earn an exemption to fly commercially for the same client’s providers like Dunlevy are going after. For some flights, like beyond visual line of sight work, night flights, multi-UAS and others, the FAA will still require Dunlevy and the rest to file for permission.

While Dunlevy believes his 333, like the 6,000 others out there, will provide a competitive advantage to bigger clients looking for long-term work, he knows certain segments of the UAS service industry will be flooded, namely aerial cinematography.

The thought of a flooded market hasn’t deterred him from talking of the future with optimism. In fact, one of his greatest qualities, he believes, is his ability to stick to the everyday grind of running a business, searching for operational efficiencies and making flights pay.

With Part 107 here, Dunlevy says he has never been so excited. Like several of his peers operating in the region or those he speaks with in other regions, Dunlevy seems to bring a clear vision and sentiment to his respective team that is easily identifiable. “We aren’t operating on faith anymore,” he says. “You can see a significant increase in our moral.”

The team’s optimism, combined with a bit of ambition and a growing client list seems to be pushing Dunlevy to speak, and little-by-little, plan for the future of SkySkopes. In an effort to create a competitive edge, Dunlevy has invested heavily in pilot training. “Our greatest assets really are our people,” he says.

Several pilots employed by Dunlevy have been sent to multiple training locations. At Kansas State University, the team got flight training in the DJI S-1000. At Embry Riddle University, the team learned about aerospace regulations and safety management. In Ohio, at Sinclair College, the team flew specific platforms new to the team. In North Dakota, the team brought in SkyOp to hone their craft of flying indoors and around obstacles. The team has also been too or made plans to Texas and Nevada for training. The goal is to create an unrivaled pool of pilots certified by the top training networks in the entire U.S., he says.

As the team continues to build its skills and network—in part, through its training missions—with UAS experts around the country, Dunlevy is also preparing to expand his offices outside of North Dakota. The team is also working to begin the path towards earning angel or Series A investment into the SkySkopes vision. “The scale and vision we have for the company now,” he adds, “requires outside investment.” Until Dunlevy’s team reaches that point, he will keep investing in new equipment, more business development, expanded flight time and even more training. The time to be a company like his—a UAS service provider—has never been better, he proclaims when we asked him how he views his place in the UAS world. “We [successful UAS firms] are the pioneers,” he says. “Every time we fly a high-profile job or others see what we can do, it happens without fail: Our phone rings with a new contract.”

Author: Luke Geiver
Editor, UAS Magazine
[email protected]