Drones: Red Hat founder Bob Young's latest investment


Bob Young helped found what would become Red Hat (NYSE: RHT) in 1993. Now, more than 20 years later, he has found a new project - a company he calls “the Red Hat of big data” - and it’s all about drones.

Young, whose other roles include heading Raleigh self-publishing firm Lulu.com and backing Raleigh-based Needlepoint.com, doesn’t classify himself as “a tech guy.”

But that didn’t stop him from investing in PrecisionHawk, a company exploring ways to use drones to make life easier for farmers. And the company is developing technology here in Raleigh.

Young was PrecisionHawk’s first investor. At its small office off of Glenwood Avenue, he tells me how Ernest Earon, PrecisionHawk president and a fellow Canadian, talked him into taking a big bet on drones - or as the company likes to call them, Unmanned Aerial Vehicles (UAV).

“PrecisionHawk is a data collection company as much as anything,” Young says. “Primarily, it’s agricultural industry data collection, and we use drones to do that. Our drones are computer-controlled drones, so the computer tells the drone where to go and what to survey, and the attraction to these unmanned planes is they can fly at a low altitude over a farmer’s field.”

He shows me a video in which a man in a field holds the 3-pound plane and tosses it like a paper airplane. The plane soars over the field with scanning technology capable of counting individual corn plants. But it’s not just about taking photos, he says.

The drones can be equipped with infrared, heat-sensing technology that helps collect the data points that farmers need - a task currently handled by planes. That’s the inspiration behind the word "precision" in the company's name; no longer is a pilot estimating how dry a field is or how many seedlings have sprouted.

“So, it’s like a smart paper airplane?” I ask.

“Exactly,” he says. “These guys desperately need better data on their fields, and none of the drones that were available were capable of flying and giving that precise data.”

So Earon and his team created planes to fill that need. But planes cost money, and that’s where Young came in.

“You get into investments exclusively because they are good ideas,” he says. “In this case, the two guys who started PrecisionHawk (Earon and CEO Chrisopher Dean) ... When they were trying to explain to me what they were doing in the drone or UAV business, it just seemed like a crowded business initially. When I first looked at it, I said, ‘Why would you waste your time doing that? There’s got to be other markets, other places that will do airplanes better than we can do them.’”

But the founders explained that what’s out there can’t perform the data collection farmers require. So Young took another look. He saw something he really liked in Earon - his emphasis on customer use.

“Most of the drones you’ll see look really slick,” he says. “They’re beautifully designed. They are very sexy things. Our drone - and Ernie (Earon) gets really defensive about these things - is easily the ugliest drone on the market place.”

Instead of having its circuitry on the inside, the fuselage is actually made of circuitry. That way, instead of taking the plane apart when there’s a problem, you have easy access.

“(Aesthetics) aren’t the point,” he says. “They built a drone that’s incredibly easy to use.”

Currently, PrecisionHawk flies where their customers are, primarily in Canada.

“We don’t even bump into all the privacy and regulatory issues because we don’t fly over cities,” Young explains. “We have no interest. We don’t fly over other people’s property. We don’t fly without permission.”

And privacy is something Young thinks about.

“I’m an open-source guy,” the Red Hat founder says. “I’m as nervous about personal privacy in the modern age as any citizen in the state. This isn’t a device for spying on people. That’s just not what we do.”

Right now, the state of North Carolina has very limited permissions on where companies can fly drones, partly due to privacy concerns. State regulations being developed right now could determine whether PrecisionHawk stays in North Carolina, Young says.

“For us, the ability to fly over specific places is our lab,” he says. “So, much like any other technology company, you need a lab to test. So we have requirements that our customers have, and for us to meet those requirements, we’re going to need a testing environment.”

And they’d like it to be North Carolina.

In the meantime, they’ve been communicating with N.C. State University on its drone efforts, eager to advance the technology. And as a platform technology, there’s a lot of ways PrecisionHawk technology could be applied.

"What that means is, for every person at PrecisionHawk working on this, we’ve got a couple of dozen partners who have employees using our planes to serve customers,” he says. “Our goal is not to be the McDonald's of the data collection world. We’re more interested in being the Red Hat of the data collection world, where we build the platform that other people do innovative things with.”

The company started in Canada and was incorporated as a Raleigh company last year. Research is still conducted in Canada since PrecisionHawk has permission to fly there.

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