Hylio CEO Talks Drones in Agriculture
30 March 2023
AgriBusiness Global Senior Editor Jackie Pucci hosts the AgriBusiness Global Report, a 10-minute show that brings you interviews with executives and experts working in the agrochemical, biological, and plant health industries. For this show, Pucci interviews Arthur Erickson, co-founder of Texas-based Hylio. The startup is taking on the mass-produced, one-size-fits-all drone market with drones that are much more tailor-made, autonomous, and come with a high level of customer support.
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ABG: Can you tell me a little bit about Hylio and how you got your start in the business?
Yeah, sure. My name is Arthur Erickson. As you mentioned, I’m the CEO and one of the original co-founders of the company Hylio. Our company started back in 2015. I was attending UT Austin, studying aerospace and engineering. Me and my roommates at the time saw some articles about Google and Amazon doing drone delivery. We got excited. We decided to start a drone delivery company. That was again back 8 years ago. We did drone delivery for about 8 or 9 months, realized that it was fun, but wasn’t making us a lot of money. We didn’t really like it. There was a lot of red tape. So then we rather quickly shifted entirely into agriculture. By May, 2016 early, 2017, we were doing 100% agriculture focused applications, and we’ve been doing that since.
ABG: Labor efficiency is often talked about as one of the major benefits of utilizing drones and agriculture. We don’t often hear about the angle of climate change, and how it can be used to address that challenge. Can you talk about drone use from this angle and how your company is approaching that?
Sure, so the climate is changing. I’m no expert in that. I just know it’s it’s like, they say in Texas, you don’t like the weather? Just wait 5 minutes, right? So the point is, drones are very flexible physically. A tractor, for example, is a big piece of equipment. If there’s some rain, if there’s some sleet or something, it’s very difficult to get that tractor out into your field to actually do work to put your crop inputs in or treat your crops. The drone doesn’t have any issues traversing over graded terrain slopes. It can go out even when there’s mud when it’s rainy. It’s a very flexible tool to just go out and get the job done, no matter what’s happening. The climate’s going to change, you know. It’s gonna get hot or cold, or whatever. The drone is always going to be a more flexible tool for getting out there and tackling the job.
ABG: What about in terms of water management, too?
Yeah. So there’s a general rule. What we’ve seen is that the drone can use about 10 times less water per acre of application than an equivalent terrestrial vehicle. So again, with the tractor, for example, it might call for a 10 to 15 gallon per acre of total solution volume. With the drone you could have just as good results spraying only one to one and a half quarts per acre of total solution volume, so that’s typically a few ounces worth of chemical, and then the rest of that volume water. So maybe 1.3 gallons of water point, 2 gallons of chemical.
With drones, like I mentioned, it’s about 10x difference, 10x water savings versus ground vehicles with planes and helicopters. It’s usually 3 to 4 times water saving because the helicopter or a plane might spray 4 to 5 gallons per acre, whereas the drones doing again one to one and a half.
ABG: Are you working with companies on formulations specifically for your drones? Can you talk about some of the partnerships that you’re working on or have in place?
It’s an interesting topic, I’m not actually allowed to talk too much about it due to some agreements we have. There are a number of companies in the industry that are working with regulators right now, I can say that much, to try to formulate chemical labels and standard operating procedures that make more sense for drones versus planes, tractors, and helicopters. Because right now, the way the regulations work is, they’re trying to shoe-horn drones onto existing structures. But drones are just fundamentally different. We are trying to fine-tune those regulations and make them actually applicable to be more effective from a conservation perspective. So actually coming up with labels that state, you, as the operator, using a drone, can use fewer chemicals in less water per acre legally. So there’s a lot of gray area right now, because the EPA does define a minimum dosage that you’re supposed to spray of chemical and solution per acre. The trick is to convince the regulators that you’re getting good results, and it’s safe spraying less of those inputs.
ABG: What kinds of formulations are they using right now? Are they existing ones out there, or what’s compatible with Hylio drones?
Right now what is quote unquote on label or legal, is to spray using the aerial labels. So whatever the airplanes and the helicopters are utilizing. Drones are allowed to utilize, as well. In fact, like in the FAA’s eyes, the drones are considered the same thing as planes in helicopters for crop dusting. There are a lot of private and public entities that are doing research, so they’ve been giving given special exemptions for licenses to spread off label in controlled settings. And that’s where we see a lot of this very promising data, showing that you can get away with much less. You could even get away with half a gallon per acre. I was mentioning one to one and a half earlier, but it’s shown to be as low as a quarter, half a gallon, which is just tremendous volume savings, of course.
ABG: So what I’m wondering, too, is with kind of an explosion in this space and the drone space, how do you set yourselves apart from your competition?
Well, Hylio is a little different. There are a lot of foreign made drones at the market right now. DJI is a very large company. I’m sure you’re familiar with them. They make 80% of the world’s drones. They also make spray drones. So that is our number one competitor in terms of like, you know hardware versus hardware. They have a handful of resellers of their product here in the States.
The difference between us and them is a pretty stark philosophical one. DJI is very good at mass producing relatively cheap hardware and don’t get me wrong. It’s decent hardware. The drones do the job, but they are not going to go out in and create tailor-made B2B solutions. That’s where Hylio tries to stand apart. So we are approaching bigger companies like nutrient and like larger government entities, large corporate farms, and saying, hey, you know what systems are you already utilizing on your farm or in your operation? How can we better assess or access that data integrated with our system to make your process flow that much better, and to give you more ROI at the end of the day.
So we are making purpose-built B2B solutions. Our competitors, DJI namely, are just making one size, fits all drones. They’re selling in the drone like Apple would sell you an iPhone. They’re expecting you to buy another one in a year or 2, and it’s kind of the cycle they want you to be on.
ABG: Do you differ on the support offered also, and do you work with retailers in that channel in the US and how else? What other markets are you into or are you looking to get into?
Yeah, we do sell direct and through dealers. We very much value support. This isn’t me talking crap about DJI, but I will say DJI is known to not have the best after-sales support. If you ask DJI customers typically, they’ll have a lot of friction. It’s a foreign company. So that’s someone understandable. But we are US based. If you call us, you are going to speak to a real person who, chances are, has actually physically built or maintained one of these drones here in our headquarters. So you’re talking to very knowledgeable people. We pride ourselves on being available, and being very concise and effective with our support.
On top of that, I mean, there are some concrete tech differences. On DJI, I won’t get too much into the weeds, but their system is less so built for swarming and automation. Ours is the opposite. So they have decent manual controls because they are a company that specializes in making a little racing and like, camera drones right? That’s their legacy. We wanted to make the most autonomous business solution possible. So our drones are very much about one operator, multiple drones, and how can you reduce the user friction as much as possible and make that one operator as effective as possible. So our software architecture is all about swarm control, you know, designating missions or crop treatment plans for these drones more efficiently, and deconfliction of these drones so they know where one another is, so they don’t hit each other. These are all things that DJI lacks in or doesn’t have at all.
ABG: So what about the markets? Are you only in the US right now? Are you looking to expand?
We are primarily in the US. We have customers in the US, Canada and Latin America. The US is our biggest market by far. Latin America is a rapidly growing market, as is Southeast Asia. Both are very promising, but they have different economics. Latin America and Southeast Asia have a lot of difficult terrain, so they have a stronger need for the drones. You could argue it’s either you’re spraying by backpack or by hand, or you’re using the drones. There’s no real in between over there because you’ve got these rice paddies. You’ve got these 45-degree slopes and they’re in their farms, and their fronts are typically 2 to 3 acres in size on average, versus you know, hundreds here in America. So it’s a stronger need, but they also have less purchasing power down there. So you need to approach that market with, I’d say more of a leasing model, or maybe a rent to own type of situation.
ABG: Are you primarily in row crops?
Yeah, almost entirely here in the States. It’s probably 85% row crops, 15% other, so specialty crops, but also there are a fair amount of non-ag operators utilizing our drones for vegetation management so clearing out pipelines or right away things of that nature.
ABG: So you guys have a new launch I was reading about. Can you just tell us a little bit more about that?
Yeah. It’s pretty simple to explain. It’s a big, big, big drone. So that’s the selling point. It’s a much bigger drone than most everything else on the market. I’m not gonna say it’s the biggest, because you can always find an exception, no matter where you look. But it is, I would argue, the largest commercially available drone for crop spraying, so it has an 18 gallon capacity, nearly 20 gallons. It’s about 400 pounds all up, when it takes off. It has a max thrust of 600 pounds. So in effect for us, it’s a miniature helicopter. It’s a very, very large drone, or you could call it a small helicopter.
ABG: And that is launching this year in in ’23?
Yeah, it’s already launched. We are shipping the first patch in about 5 weeks in March to the first batch of customers. But it’s been tested internally for about a year already, and it has internal systems that we’ve been utilizing since 2015. So it’s a very tried and true platform in that sense. I’ll list like the specs the important one is, it could do about 50 acres per hour at a 2 gallon per acre rate. So at a standard rate for a lot of herbicides and fungicides that you’d be applying, you can do 50 acres per hour.
ABG: What are the biggest developments that you’ve seen of late, just in the space, and how you see the role of drones in agriculture moving forward?
Drones in agriculture has been an extremely, extremely fast moving industry. You can turn away for 3 months and turn back, and it’s completely different, and the drones are much more capable. They’re bigger. They’re more autonomous. The movement nowadays in the industry, or at least what it is trying to do, I think most people want is to further automate the processes. So right now, typically in between flights, you are still as the operator manually refilling and recharging the drone.
But the entire industry is trying to move towards complete hands on process flow. So drones come back to a central hub, a hive of sorts they auto-refill auto recharge, go back out, and they’re just continually working till the job is done. So imagine like a shipping container, right? But this is like a hive built for the drones. You drop it off on a property that’s 5,000 acres. You leave it there for 3 to 4 days. You come back, it’s sprayed everything, and then you bring it to the next property, and so on, and so forth. That’s the direction of the industry right now. Slightly bigger drones, too. But on that point you don’t necessarily need a massive like truly helicopter size drone, if you have 3 or 4 working in tandem as a swarm constantly. That sheer size of one unit becomes less important.
ABG: I’m wondering, too, what some of the feedback you’ve gotten from your customers has been. And are they typically upgrading to a system like yours? Or is it first time trying out a drone?
It’s both. The industry is still so new that yeah, at first, let’s say from 2018 to 2020, it was definitely a lot of first time, this is my first drone I’m ever owning type of customer. But recently in the last year or so, now that the market is a little bit more advanced, there are a lot of people that have bought DJI who are for whatever reason looking for a different option. They’re looking for our features that DJI doesn’t have, and they come to us. So we’re seeing like a good mix nowadays. I’d say maybe 30% of the customers have had a drone already before when they contact us.
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