In our last article we talked about how Elon Musk uses “First Principles Thinking” (FPT) and about the “Idiot Factor,” Elon’s super-sensitive way of describing lazy engineering and, as examples, the massive impact of the Idiot Factor on the cost of rockets and batteries.
How does the Idiot Factor apply to drones? Well, the materials and components of a drone are cheap: plastic, some extruded metal components, and some basic electronics, so a very small percentage of the overall cost of the drone, in most cases less than 10%. And that means, just like in batteries and rockets, the Idiot Factor drives all the cost in designing and manufacturing standard drones.
We at Modovolo think that the Idiot Factor in drones is best measured by something called the Cost Per (Flight) Minute calculation, a concept that we first put forward in this article published in Commercial UAV News: The Future of Data and Drones: AI and Big Data are useless unless you have the Key Metric for your drone program or drone business.
What is the “Cost” part of CPM? This is all the obvious direct cost things like your labor costs for the day(s) of the project, the time spent planning for the project, and the cost of gas and the vehicle to get to the project site, but it should also include the full cost of your drone and batteries.
What is the “(Flight) Time” part of CPM? This is the time your drone spends in the air providing the service (and not getting its batteries swapped or flying to and from the site).
Now let’s apply this to an example where the project price (or budget) is $10,000.
Cost:
Direct Labor Costs: $4,000
Travel Costs: $1,000
Drone Cost: $15,000
Battery Cost: $1,000
Total: $21,000
If I’m using a DJI Matrice 300, then (Flight) Time: 20 minutes (30 minutes total flight but 10 minutes for time to fly back and forth and battery swap).
CPM for a DJI Matrice 300: $1050 / minute.
You may have noticed that the “Drone Cost” line is $15,000 and the Battery Cost is $1,000. That’s not a typo. You need to use the full cost of the DJI Matrice and the battery because each flight could be the last. And, because the DJI Matrice 300 is very limited in can be repaired, most crashes result in a complete loss of the drone. An insurance underwriter would make the premiums almost equal the cost of the DJI Matrice 300 for that very reason.
If you are doing a traditional “Profit & Loss” analysis, this project is clearly in the red by $11,000.
But CPM opens up a lot of possibilities for understanding how to drive cost-cutting analysis – and it just so happens it makes a very compelling and shameless promotion of the Modovolo Lift.
So, for example, if by chance you have a Modovolo Lift, which costs more than half as much and flies for 120 minutes, then your CPM plummets to $95.83 – over a ten-fold decrease. And that doesn’t even take into account repairability. Unlike the DJI Matrice 300, if a Modovolo Lift crashes, you simply replace the damaged Lift Pod. No
That in turn means you may need fewer employees to run a project because you are swapping batteries less – and then CPM drops even more – which in turn drives profitability.
