Ag Tech Talk Podcast: Flying High with the Latest on Drone Technology

Arthur Erickson, CEO and Co-founder of Hylio, talks about how drones are changing the crop input application process and how these tools will change agriculture.

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Podcast Transcript:

AgriBusiness Global: So, let’s just start with some of the basics. Why, don’t you give me a little bit background on the company and the drones, and how you all got started.

Arthur Erickson: Sure. Well, my name is Arthur Erickson. I am the CEO and one of the original co-founders of the company. The company is called Hylio. There you go. It’s got a y in it, but we’re actually named after the Greek god of the sun, Helios, and the reason we have that name is because once upon a time our company first started off making a delivery drone. So, we made a hardware platform and software to control it, to make the point A to point B deliveries of small parcel goods very streamlined. And so, we envisioned, though Helios, the Greek God of the sun delivers the sun across the sky every day. And so here are drones delivering parcels across the sky every day. So that’s where the name comes from.

We did a drone delivery project in Costa Rica for about eight, nine months. Technically we pulled it off. So we were actually doing drone deliveries beyond line of site to people’s, backyards and driveways and stuff before Amazon and Google. We’re actually doing it for real. In fact, they’re still not really doing it, but it wasn’t making us much money simply put, and we didn’t like that. There was so much red tape, even though we were in Costa Rica, which was a lot more of a lax environment. We wanted to get directly to the customers with our technology, so we pivoted fully to agriculture by like early 2017. We were just doing ag. And that’s what we do now to this day. So nowadays what Hylio does is, we design manufacturer, and then sell these crop treatment platforms. These crop spraying drones. It’s not just liquid products that we can treat with our drones. It’s also solid products, so that could be seeds or aunt bait, for example. But basically, anything you could think of in the ag or adjacent industries, which involves delivery of some sort of chemical or product to treat something.

ABG: You mentioned the regulatory issues. Is that a concern still?

AE: Well, it is interesting. It’s a developing situation, right now. Every day is a little bit different, and the FAA, of course, is a few steps behind the industry, As is typical for a regulatory body.

It’s easier than delivery, because in the ag industry you’re not flying over-populated cities, so the FAA is a lot more lenient about it, more free flowing with the exemptions, the waivers you need to operate.

If you basically show, which is the case that you’re flying over 1,000 acres of corn with not a single human soul besides the operator in sight for miles, they’re a lot more amenable to you. Flying drones with larger payloads, more “dangerous payloads,” (i.e., chemicals and whatnot).

So, there’s a lot of gray areas, but it’s workable, right now. The regulations are certainly a lot easier than cargo or human transport over cities.

ABG: Let’s talk a little bit about just the concept of drones in general. I’ve been with this magazine for many years now, and drones have been talked about, from Day One, and they’re being used in places. But how would you characterize the adoption rate? Is it increasing? Are we at a plateau? What are we waiting for before it becomes more widely accepted?

AE: Drone is general, they are very ubiquitous at this point. Agricultural drones? There has been a lot of hesitation by the wider market in terms of the size that they can carry. Because most farmers you have to realize are coming from the perspective of like a 300- or 400- or 500-gallon giant tractor.

So, they’re used to those very large volumes. And so, when they hear that your drone can only carry only as they only like 15 or 20 gallons. They’re like, okay, cool, but that doesn’t seem like enough. It’s an education problem.

What they’re not realizing is that you get away with spraying a lot less volume per acre, using the drones, because the way the physics works out is you’re spraying a much finer, more penetrative mist, right versus what you would spread out of tractor. And because you have the down wash from the propeller, the wind from the propeller down, was pushing the droplets down into the crop, you get a lot more efficacy out of the applications.

So, you can basically do what you do with a 300-gallon tractor with a 20-gallon drone, which is what we have today. Farmers just don’t know that; not all of them know that. So, it is just a knowledge problem. So, in a lot of ways, Hylio, still is in the phase where we’re educating and informing the customer base.

It’s not entirely caught on, yet. Don’t get me wrong, there is incredible demand, and there are a lot of people ahead of the curve here a lot of farmers and tech service providers who have already understood this. So, drones are flying off the shelves. But to hit the middle of the Bell Curve we’re just probably going to need to continue to educate the market for a year or two more.

ABG: Okay. Besides using smaller amounts of chemicals, and there are lots of people that think that’s a good idea, what are the advantages of having a drone versus having that 300-, 400- or 500-gallon device.

AE: Cost is a big one. I’ll give you some quick numbers. Don’t want to get to into the weeds here, but a new high-clearance sprayer from John Deere or Case IH will probably run you at least $300,000, if not $450,000 for a new or slightly used one. Now, with that piece of equipment you could probably spray about 100 acres per hour on a given like decent type of field, with decent terrain.

Now, with two of our drones, you could spray the same amount. So, two of our largest drones that we offer right now, which is called the Ag272, you could cover 100 acres per hour, and that would only run you about a $150,000. So, you’re already half the price of those tractors from the get go. But you’re about three to four times cheaper as well from an operating cost perspective, so per hour per acre that you’re operating with our drones you’re looking at – I’d say like 30% to 40% of the cost of what you’d pay with the tractor. So, with the tractor, you’ve got the diesel, you got the maintenance, the cost of ownership of such an expensive piece of equipment, etc., so much cheaper, these drones. They’re also much more flexible in terms of where and how you can deploy them. A tractor is a terrestrial device. If the fields are muddy, if the fields have a lot of grade to them. If they’re very slopey, then it’s very difficult to get that tractor in and out of that field conveniently. The drones obviously don’t have any issue with that. They fly in three dimensions, so they can just fly over any type of field.

It’s very difficult as well to do effective or practical spot spraying with tractors. So yes, John Deere has newer tractors that will turn nozzles on and off. But that still means that you’re going over the entire field in a lawnmower pattern, and just selectively turning nozzles on and off. So that’s still very time inefficient. Now, with the drones you could just highlight – let’s call it 100 areas in a 1,000 acre field. Each area is only 2X2 feet, and they can go dot, dot, dot, dot, spray all those areas without having to do this very inefficient lawnmower pattern across the entire field so to summarize all that I know it’s kind of rambling. They’re cheaper, both initially and from an operating perspective. They’re more flexible in terms of when and how you can operate them in terms of terrain and weather conditions. And they’re also more precise. So, you can unlock further cost savings by deploying them just for problem areas, whereas you can’t do that with a traditional piece of tractor equipment.

ABG: Are there challenges like on a windy day? Is there going to be a problem or can these handle a nice breeze out there? Could be a problem?

AE: No, no, no; these drones are much bigger than a lot of people are imagining. So, you’re probably thinking of a camera drone, which is only two or three pounds. These things are 400 pounds when they’re fully loaded, flying in the air, so they’re very stable, very difficult to move from the wind, so they can handle 25, 30 miles per hour wind no problem.

Now there is a caveat you wouldn’t spray in too much wind, and that’s just like a typical ag thing, right? You wouldn’t spray in more than 12-15 mile per when depending on the product you’re spraying with.

The drone is not the issue. It’s the spray.

ABG: A grower is looking to spray specific spots – how are they finding out where that that issue is? Does it use satellite data. Is there something actually on the drone itself? Can they then discern where the weeds or the pests are?

AE: All of the above. So, there are plenty of people that do use satellite imagery. These days satellites are so advanced, and of course, like the military, has even better ones. But even civilians have access to really good resolution satellite imagery, which can pinpoint the browner areas or the areas that you can clearly see blight, fungus, or something like that.

So yes, a lot of customers pull that in. You can also have a camera mounted on the spray drone itself. You could do a scanning pass first with the drone without any payload in it, identify those areas and then go spray them. You can also use another dedicated scout drone, or a dedicated camera drone to go scout in conjunction. So, while you’re spraying one field, your camera drone could be scouting another field, and so on and so forth.

It’s a very flexible back-end data structure that we have in our software. So, you can pretty much pull in these prescriptions from anywhere you have them.

ABG: Who’s operating this? Does somebody have to be trained how to use this? Is it relatively autonomous. How are we saving labor doing this?

AE: Yeah. Specifically, my company Hylio since Day One back in 2015, when we started, we were very much focused on making this as hands-free as possible, because humans are great, but they’re flawed, right? So, we want to take out as much human error as possible from the process flow. So, our drones specifically, are very automated. You are literally outlining an area. We have a Google Maps-type of interface. It’s actually literally a link to Google Maps.

So, you’ll see the area you’re trying to treat. You’ll outline the boundaries, which is a similar process. Flow for a bunch of like tractors these days, and then you’ll just say, hey, I want two gallons per acre dosage. I want to fly at this speed. You’re assigning some top-level parameters sending to the drone click and go, and that’s it.

So, you’re given the drone instructions. You’re not manually controlling the drone in any sort of way. The drone will go spray it once it’s out of payload, or once it finishes it’s given polygon, it’ll come back home automatically, land. And then yes, you are manually, as the operator or an assistant of yours, a colleague, is going to go and swap batteries and swap the payload.

But they’re not going to manually fly the drone again. They’re just going to click. Take off again.

ABG: I think I remember reading somewhere. Correct me if I’m wrong, that the battery last about 15 minuyrd or so. Is that right?

AE: Yeah, it’s 12 to 15 minutes, depending on weather conditions and payload. It’s essentially tied to the payload. What I mean by that is, you will dump one battery cycle in the time you dump one payload cycle. So, you’re coming back to refill pay load, anyway. At that time, you just swap the batteries as well.

ABG: So, in terms of timing, and again you said, a sprayer might cover the entire field, even if it’s turning on and off it’s got to cover the entire field, whereas the drone can pinpoint those spots… and just cover that. Whether it’s a tractor covering the entire field or the drone covering spots within the field. Is the drone quicker, because it only has to come back and go out again?

AE: Drones are generally much quicker. It can fly. I mean it’s flying usually between points to spray at about 30 miles per hour. So, it’s really zipping to all these different points.

And especially when your spot spraying the largest drone. We have 18 gallons. That’s usually more than enough, because you’re putting down a fraction of a gallon on each little individual spot that you’re targeting. So, usually with one of those full-tank loads, you can go and spray hundreds if not like 1,000 different points, depending on how you optimize the mission.

ABG: How are these being used. Are they purchased or rented. They go directly to the growers or are people working through retailers who take care of that for the growers. How does the process work?

AE: This is another, all-of-the-above type of situation. The majority of it looks like this. About half the customers are growers themselves, who directly bought the drone for their own land. So, usually they’re larger farmers, let’s say, between 2,000 to 10,000 acres and they have been spending enough money on either third-party spray services, or running the tractors. They feel that this drone purchase is justified; and furthermore, they feel it’s justified to have, like their son or a ranch hand be the drone guy on their ranch or on their farm.

So, they typically buy 2, 3, 4 drones, dedicate them to their own land, and that’s it. Then the other half of our customers are service providers. So, they are buying the drones going on, servicing multiple farmers for X amount of acres per year per season. It’s about split 50-50.

ABG: You mentioned education being one of the keys to getting growers or customers to use these. Are there some other challenges that you’ve just come across? Or is it the old, “I’ve done it this way for 30 years. So why do I need to change?” What are you hearing about that?

AE: There is a lot of skepticism around the capacity like we already talked about. It really comes down to that. It’s crazy because the thing is. Once you show a farmer, you go and do a field day or demonstration. Maybe just do some burn down herbicide on a few strips of grass to demonstrate just how even and effective this is, even at low dosages, at 2 gallons per acre, even less than that sometimes. Once they see it, they’re like, “okay, I’m sold.” So, it’s not usually a hard sell.

They just like “on paper” tt sounds a little far-fetched to them, but once they’re there, and they’re feeling it, seeing an action, they’re usually coming around pretty quickly.

ABG: Drones are used all over the world. You mentioned the U.S. is a little slow, a little behind the scenes. Where have you seen adoption, growth? What markets are you really interested in?

AE: Latin America is huge. Well, okay, it’s a bit of a complicated subject. Latin America doesn’t have the purchasing power that the U.S. has, of course compared to other more developed Western nations. They have a strong need for drones, though their infrastructure is very poor. Typically, they have farm lots that are three to two acres, even on average, and they’re usually nestled on mountainsides or valleys. There’s a lot of trees. There are a lot of power lines crisscrossing their areas.

So, they desperately need the drones, and it represents a leap for them, as in you people always forget the example. Africa didn’t get landlines. They just went straight to cell phones.

It’s kind of the same way for lots in America, and I should mention Southeast Asia as well. They’re not getting your John Deere tractors. They’re not even getting spray helicopters. They’re going straight from spraying by hand with a backpack to drones. And yeah, that’s an interesting market. I think what we need to figure out as an industry is just how to service it better, and how to deal with economics, because they’re certainly different than here in the States.

People are just looking for very, very, very cheap options, very cheap hardware, and there’s not a lot of expertise around there to support the drones once you’ve sold them. For that market to be tackled properly, our company or other companies need to actually set up a stronghold there, so to speak, and have a service center that can that can maintain these drones for the customer base.

ABG: There was something recently about the owner being able to repair devices. My Apple iPhone sitting next to me, here, is one of those things. I certainly can’t do it. But even if I wanted to, they make it in such a way that is really, really hard to open up, and for me to get into it, and to play with to fix. Is that what we’re talking about. If something goes wrong, is that something they can fix on their own? Or is that something you really need to talk to the company for?

AE: No. Generally speaking, it’s something they could fix on their own. We are the opposite of Apple in that regard. We are very much a right-to-repair, right-to-upgrade type of company. So, we’re not saying that we’re going to necessarily honor the warranty if you go in there and hack everything up without talking to us. But yes, we encourage you because a lot of times it comes down to speed. “I need this drone backup today because I’ve got, 2,000 more acres to spray, and only a two-week window to do it.”

So, instead of like having them ship the drone back here, or us even flying someone out there to repair drone, it’s usually just faster for that person right there to get on the phone with us, if need be, and we walk them through, maybe like an hour, two-hour repair for even the most complicated stuff typically. And then they’re back up in the year. So, it’s relatively easy to service.

It depends, like you can really push them so the harder you push them. They are very durable, but the more you’re going have to maintain them, and so to bring it back to like the Latin American market, those people run their equipment very differently, very hard. So, it’s challenging sometimes because they’ll even drop it into puddles. They’ll drop chemicals on it sometimes, just because it’s a little bit more disorganized over there, and I’ve worked a lot down there for several years, so I know how it goes. There’re things you see down there in terms of wear and tear that you don’t see up here.

So, that’s why I’m saying that there might need to be an additional layer of support down in those in those countries to make that market really stick.

ABG: You mentioned different solutions, different products can be delivered using the drone. Are there any limitations drones can handle?

 AE: Drones are good for virtually everything and anything except for your heavy fertilizers. So, your early or preseason fertilization that you’re doing NPK stuff, it’s too much weight per acre to make it efficient for drones at the moment. The drones aren’t big enough for that; but besides that, drones are an adequate replacement, if not an improvement on pretty much every other application, I would say.

ABG: And it doesn’t matter whether it’s a row crop or a specialty crop?

AE: No, no. We went into the ag industry years ago, thinking that specialty crops would be the money maker right because it’s smaller acreage, higher value crops. But most of our customer base has actually been row crops. So, 85%, 90% of our customers service row crops, using our drones. There are specialty people. But I suppose there’s a fewer percentage of those farmers overall versus row crop farmers. So, most of the people we end up talking to are just row crop farmers. But it works both ways.

ABG: You mentioned, right now, the drones aren’t capable of really handling, or it’s not efficient for them to handle the fertilizer side. Where do you see this this part of the industry, this segment of the industry, this drone technology going 10 years from now. What are we going to be seeing?

AE: Two main tenets – bigger and more automated, so I envision the drones essentially almost getting to the size of small helicopters, so we’ll probably get up to 50 to 100 gallons of payload in the next few years. That’s a whole other thing, because you’re getting into a lot of disadvantages of a helicopter at that point, because you have such a large, expensive piece of equipment that’s difficult to transport, more difficult to maintain.

But anyway, I think it’s going to happen regardless, but that segues to the second point, which is further automation. So, I had mentioned earlier that the operator is still there, swapping batteries, swapping payload, but we will soon, as an in industry and as a company, get to the point where you’re automatically charging and refilling between flights. So that’s why, to bring it all home, I don’t personally believe that you need huge, huge drones when you could have three or four of them in like the 20- to 40-gallon range that are all completely hands off autonomously treating your fields? Because then, what if you’re the operator? Why do you care if it’s one device or one device that’s split into four devices technically flying out over the field, if it’s the same zero amount of work for you right? So, you just bring the hive, so to speak, of drones out to the field, assign all the missions, and then just click, go, and they’re all going to go do their work. That’s what it’s going to look like pretty soon, here. It’s completely hands off even for the in between stuff.

ABG: So, you could have a fleet of three, four, whatever is necessary for a given size?

AE: It’s not like there is an upper limit like the farms are only so big. So, you don’t need a 10,000- gallon drone. There is an upper ceiling on what’s actually effective here or practical. It’s in the order of dozens, or possibly low hundreds of gallons not more than that.

ABG: You mentioned education being a problem, a challenge. Are there other challenges that you’ve come across, or objections from growers other than just needing them to see it.

AE: Regulations are always like a big, a big question, mark. Of course, they’re understandably worried. “This is so new. What’s the FAA going think. If my neighbor tells on me, or something, what’s going to happen? What licenses do I need?” So, we get those questions a lot. But we have been through the ringer. We’ve helped hundreds of people at this point get their licensing in place, so we’re pretty well versed in it. We’re not lawyers. Of course, we do work with some lawyers, but long story short, it’s a bit labyrinthian, if you don’t know, if you haven’t looked at it. But we give you a checklist. For example, if you’re a customer saying here are the three or four licenses you actually need. Here’s how to apply for them, and it becomes a fairly straightforward process.

ABG: Okay, you mentioned Latin America and Southeast Asia are regions that are interested because those farms are smaller that maybe these devices are cheaper than those big machines that that they’re interested in this?

AE: Yeah, that’s absolutely right. They’re cheaper. It’s like they don’t even have a choice in a lot of cases. It’s either you’re going out there and spraying it by hand, which is just dangerous and very inefficient. You can’t use (heavy) equipment on these terrace rice paddies. On this coffee plot that’s grown on the side of a 45 degree slope. You just can’t get a tractor out there. So, you have to use drones or you’re doing it by hand.

ABG: And I imagine, because you can operate several drones at a time, or at least a couple of drones at a time, and it’s so automated, or at least a large part of his automated that it’s a labor issue, right? One of the things we hear about constantly, especially in in rural areas – Southeast Asia, India – people are moving to the cities. They’re not staying on the farm like they used to.

AE: Yeah, correct. And there’s just there’s fewer people willing to work in on the farms. And so, it also becomes a problem. Growers don’t want to have to invest so much money and time training someone how to use this extremely complicated piece of tractor equipment right, which has, like all these knobs and dials. They’ve streamlined it a bit recently, but the drones are still like so much more intuitive to use, because it’s a very simple point-and-click interface and just click take off, and that’s it versus having difficulty finding a farm hand. You finally Find someone, train them for about a week or so, and they’re still a little green around the gills. And then you just throw them on your $1 million tractor, and they run it to a fence post or something. It’s pretty devastating. If you take someone a relatively untrained person, and they crash a $15,000 drone. It’s a lot different. Our drones only cost like a few 100 bucks to repair, typically, so they’re much more forgiving. They’re easier to train up on in. And so they’re solving the labor issue in a lot of ways. You need fewer people to operate more of them, and they also need to be less trained, and they’re less able to damage things.

ABG: Maybe I’m being oversimplifying or stereotyping here. But younger folks are used to playing video games. It’s not a video game, but the interface is more like that. So, they’re comfortable pushing buttons and levers, or whatever. Tell me about the interface? What is it people are looking at? Are they doing it on their phone; are they doing it on a computer screen? How are they controlling these devices?

AE: Technically, our software needs Windows 10 or 11 to operate. So, you would have to use a tablet or a laptop or a computer that runs on Windows 10 or 11. A lot of times we recommend the Microsoft Surface Pro as a good hybrid option. It’s a folding Microsoft tablet laptop thingy. Those are pretty good.

But the main page you’re looking at – the planning page of our software –is a Google Maps overlay. And then you’re just drawing. So, it’s like, Microsoft Paint, right? You’re just like drawing a polygon over your field. You close the loop. It defines that area. It’s on the right side of the screen. In the dropdown you could say for this area. I want two gallons per acre. I want 15-foot altitude, 20-mile-per-hour speed, and then you give that to a drone. So, the drones show up in the interfaces different little like cards where you can select them and configure their settings. It is very much like a video game. I think you nailed it.

I’m 30 years old. So, I grew up in the relatively modern age here, and so did all my co-founders. I think we took a lot of those lessons subconsciously from video gaming, PC gaming, and stuff and put that into our software. So, it feels like that gamified a bit.

ABG: And do they get a report once it’s done and comes back. Does it report back on that initial plan that was put into that tablet?

AE: Yeah, that’s right. Every single drop that you spray is recorded. So, we’ve got flow meters on board. That’s all feeding back in. There are data reports that are filtrable, searchable, savable, transferable – all the “ables” that you would want.

ABG: What else do we need to know? What didn’t I ask you about?

AE: The simplest thing people need to know is that people are using drones right now effectively. We were discussing all this. They are effective at the current payload. There is no need to wait for giant drones. They are already doing thousands and thousands of acres per season.

People have been doing this for years. So, if you’re having pain points, if you feel like you’re paying too much for your spray plane provider, or you were really ticked off because last season it rained, and you had a bunch of fungus take out 10% of your yield, then drones could be a very valuable option for you. Look into them. If you’ve been hesitant, based on the volume, I would say, ignore that, and just look into them.

ABG: This is a relatively new industry or segment of the industry. There’s a lot of people getting involved in drones, and certainly automation in general. Are we going to be seeing a shake out, or I mean are some of those big players saying, ‘You know what? Hylio, we like what you have. But maybe we want to incorporate you into our offerings. Are you hearing that kind of thing, or are you concerned about all the different competition out there.

AE: So we’re talking about like consolidation in general, of new industries, right? It’s interesting. We’ve been talking too, of course, a lot of the big players.

They are all very interested in drones, but they seem at this point to all be very conservative and afraid of them. Because you fear what you don’t know. They have a lot to lose, and we were talking about giant flying machines. They’re not aerospace engineers at these companies that John Deere, Case, etc. So, I think they’re all just waiting to see what happens. So, to answer your question, I see consolidation happening, but probably not as soon as you might think. They’re going to let us duke it out here in the Wild West for at least a few more years.

There’s going to be, I’ll say, there’s going to be little press releases of like people claiming that they’re doing a drone project. But it’s going to be like Amazon, where they just laid up 80% of their staff, right? It’s just like you were really doing drone delivery. You just kind of pretending to do it, or it was like a little tax right off, maybe.

ABG: Or the experimental area where they did one block of a community or something?

AE: I don’t see any of these big guys taking the risk of actually trying to roll this out for real. They would let one of us do it, and possibly catch all the flack if something goes wrong.

ABG: So, if somebody wants to learn more about Hylio, how do they find out more about you?

AE: They can go to our website. It’s HYL.IO or hylio.com. There’re two domains. That’s the best way. The website is very thorough. There’s a lot of info on there you can sit and read about drones for hours, and it’s not just like Hylio-specific information. It’s just tr and spraying information in general. So even if you’re not buying from us, you could still learn a lot so definitely recommend going to the website just as a learning opportunity.

ABG: What should the industry know about the products that the drones and the products they carry?

AE: I’ll echo a little bit what I said already. You turn away from the drone industry for like six months, a year and you turn back. It’s much different, and I live and breathe it every single day. From when this company started in 2015 to now, the drones have increased like in quantum leaps, in terms of flyability, capabilities.

So, if you’re a larger ag company, or just a larger equipment company in general who has been thinking that they need to wait five years before this develops. That’s not the case like these.

Every three months these drones could do so much more than you would expect them to. It’s an extremely fast development curve in this industry right now.

Don’t wait. Don’t wait to look into it at least.

ABG: Okay, Arthur Erickson: Thank you very much for your time today. We appreciate the insights on drones and how they’re going to change the future of agriculture.

AE: I appreciate your time as well. It was very nice to chat with you.