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News & Notes

China-Based Drone Company Skye Intelligence Shuts Down

Buyer beware

March 1, 2017

Skye Intelligence
Updated March 2, 2017

Another drone company has (quietly) fallen: China-based Skye Intelligence, a company with venture capital funding that sold its Orbit drone on Kickstarter, has shut down its operations.

The Orbit drone showed promise, with the company even exhibiting at last year’s InterDrone industry conference. This drone has (or should I say had?) a flight time of 20+ minutes, 1080 p 30/60 fps video, and was marketed toward both hobbyists and commercial users.  It was also recognized for its “follow me” tracking capabilities.

But the Skye Intelligence website is down (it’s unclear for how long it’s been inactive). Its Facebook hasn’t been updated since Oct. 16, 2016. It hasn’t tweeted since Oct. 12, 2016. Its PR firm stopped working with them in November. 

“One day we were all set to launch in several countries, the next it all went quiet and we had to pull out,” said Ella Roche, the company’s former PR manager, in an email.

While other crowdfunded drones like Lily, Zano, and Fleye have also shuttered their operations ― let’s be honest, a failing crowdfunding drone is not a shock ― the events surrounding the Orbit’s demise are a bit different. While the Lily, Zano, and Fleye drones never made it to production, the Orbit drone did. All the backers from the Orbit's Kickstarter received their drones. Plus, since the company had investors it mainly used its Kickstarter campaign for marketing and product testing. So…
"They were spending money like they were printing it in the basement."
What the hell happened?

“They were essentially mismanaged at the highest level,” says David Sliwa, the former director of sales and marketing for Skye Intelligence.

Sliwa stopped getting paid in October, and left the company soon after.  He received a final company email from the CTO of Skye Intelligence (after he was no longer employed) on Dec. 29, 2016, declaring the end of the company. Just two days before, he received an email about the holiday period for the Western New Year, which Sliwa says shows how the end of Skye Intelligence “happened very quickly and without warning for most.”

Skye Intelligence was spending a lot of money on marketing, he says. While marketing is certainly a necessary expenditure for a growing business, Sliwa says, “They were spending money like they were printing it in the basement.”

After arranging millions of dollars’ worth of orders with distributors in North America (Sliwa later ended those deals), Sliwa says he came to understand that Skye Intelligence had “some limits.” Initially, its executives made it seem like they were worried about not being able to produce a large number of orders. But Sliwa quickly realized that wasn’t the case ― apparently, most employees hadn’t been paid in months and the company owed some of its executives tens of thousands of dollars in travel expenses. Plus, the company was having problems paying suppliers.

To top it off, Sliwa says a new investor came aboard and wanted to shift the company into the commercial space. Skye Intelligence obliged, basically abandoning its research and development for the Orbit in favor of drones for a new niche market: telecommunication line inspections in China.

“The real sad thing about it is that just as the company imploded, they released a software update — which was really poorly advised,” Sliwa says.

That software update alerted people that they had to upgrade the Orbit’s firmware in order to fly ― which would have been fine, if the firmware update was functional.  The firmware update is, however, not functional, ultimately rendering many Orbits useless, including Mark Wharry’s.

“Unfortunately, on its last flight after the final update, it malfunctioned so badly I had no choice but to crash it into a field to stop it losing control completely,” Wharry, a backer of the Orbit and founder of British drone company Onlook Aviation, said in an email. “It's beyond repair now. I'll stick to the aircraft I have from DJI and Yuneec now!”
What we can learn

Obviously, there are no guarantees when it comes to crowdfunding products (even if a company has substantial funding). Kickstarter’s Trust and Safety page explains, “Kickstarter is not a store. People aren't buying things that already exist — they're helping to create new things.”

Sliwa echoes that sentiment. “I think that a lot of it is a ‘buyer beware’ issue with anybody that’s a crowdfunding backer ― you know that there’s no guarantee that there’s long-term customer support,” he says.

But that doesn’t mean that all backers understand that risk — nor does it make the eventual failures suck any less. This is especially true considering that Skye Intelligence (as a company) never came forward to let its backers and reviewers know that the company closed its doors. The Orbit's Kickstarter page has numerous comments from backers who are upset and want answers as to what’s going on with both Skye Intelligence and the Orbit.

“All people want in this sort of situation is a degree of openness and honesty,” Wharry said in an email.

Before backing crowdfunded products, Wharry believes it’s important to understand potential risks and legal obligations of the company to its backers. He doesn’t think people should expect refunds ― Kickstarter makes it clear that refunds are not a part of its business model. Though, some campaigns do refunds (Lily, Zano, and Fleye all said they would refund backers).

“However, there were some people who bought the Orbit on the promise that an Android app would be available in the very near future; those people are now left with expensive paperweights, with no app, no chance of one ever appearing, and no support,” Wharry says. “If there was a queue for refunds, I'd put them at the front.”

Considering how Skye Intelligence has severed communications with its backers and doesn't really exist anymore, refunds seem highly unlikely. Sliwa says, as far as he knows, there won’t be any refunds.

Wharry said in an email, “I have no doubt that the individual programmers and engineers at Skye Intelligence believed in their product, but it just wasn't to be.”

Correction: In a previous version we said Skye Intelligence used Kickstarter to fund the Orbit, but the company had venture capital funding and mainly relied on Kickstarter for marketing and testing purposes.
Featured image: Pixabay/takeshiiiit