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The journey of the modern-day Wright brothers disrupting the norm

December 9, 2021
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The “Black Swan” theory has been developed and popularized by the Lebanese-American author Nassim Nicholas Taleb. The term refers to an unexpected event of large magnitude that disrupts the current norm and knowledge of what is possible and plays a dominant role in history.

Back in 2014 Svilen and Konstantin Rangelovi embarked on a journey to create a new type of unmanned cargo airplane addressing the mid-mile delivery demand. They named it The Black Swan. At first, it didn’t sound possible, but they keep proving it is. And on December 7, after 7 years of hard-work and growing long beards, the two brothers showed to the world that the Black Swan exists and is on its way to revolutionize cargo and logistics. 

The Rangelov brothers.

Before the big day of the unveiling we met with Svilen, co-founder and CEO of Dronamics, and took a trip down memory lane. We remembered the early days when they used to make a mess with mechanical parts at Eleven’s shared office, we analyzed some of the major milestones in their journey and we looked at the exciting developments which the future holds for Dronamics.

📍Where it all started - transporting Bulgarian cheese and improving the supply chain of developing countries

The idea of the Black Swan was born seven years ago, when Svilen and his brother Konstantin, who was in the Netherlands at that time, were talking over the phone. Konstantin was asking his brother when he would visit him so that he could bring some Bulgarian cheese and got a challenging reply – “Since you are the engineer, why not invent a drone that can ship it for you?”. At the time, small drones for hobby use were beginning to gain popularity, while ecommerce giants like Amazon were entering the field to do last-mile deliveries. But the two brothers asked themselves – why is no one addressing the middle-mile problem? After all, that’s where there are fewer regulatory and public acceptance hurdles and the technology for bigger aircraft is already largely known and validated.

Then they did their research and realized that this is a huge unserved need. They also found out that there is plenty of economic research demonstrating that improving its supply chain was the single best thing a developing country could do. And that’s when they saw the true potential of this technology – to enable economic opportunity to be more evenly distributed geographically.

“From day one we knew that this is what we want to do for the rest of our lives. On the first day of Eleven’s program, my brother said he is not going to shave until we get the drone flying and I decided to support him and not shave either. That’s why we have these awful 7-year-old beards now – and we hate beards! This demonstrates how stubbornly we believe in Dronamics.” 

📍The early days with Eleven

“Eleven shared the same fate with us from day one and were among our loudest ambassadors and advocates, connected us to many of our future investors, and helped us become what we are today. They have been with us for the longest and had a reckless dedication from the beginning.”

Dronamics was at a very early stage when they received their first investment from Eleven in 2014. The founders had preliminary designs for the airplane, which they had validated with their advisors, while on the business side they had done extensive research and had a business plan. The brothers’ focus during Eleven’s program were the two most important numbers for the Black Swan: the 350 kg of cargo it can transport over 2,500 km of distance. 

During these early days, Svilen and his brother bought the first engine for the aircraft – a second-hand Subaru Impreza WRX engine and they brought it to “The Roof” –  the big shared office Eleven had back then. Svilen remembers with nostalgia:

“There were all these software startups with their fancy Macs and in the middle of the office a crane holding a 150 kg engine with its cables all over the place. It was inspiring to see how different teams are approaching similar challenges be it from marketing, company building, branding or engineering. It’s a ton of great memories we have.”

The famous Subaru Impreza engine at Eleven's shared office.

Svilen’s advice to early-stage founders is to start from what they think will always be true. This is how he and his brother established the core principles Dronamics is built on. A specific example in their case is that cargo transport is a market where the price will always be the number one determinant of who gets a contract. Therefore, their task was to create a new airplane that meets that principle. Another principle is that for it to be cheap, it needs to be small in size so that it can land at more locations that are not necessarily the big airports. 

As a founder you need to start lining up what you hold to be true today and what you think will still be true 10 years from now. However, you also have to keep your ears to the ground and see if some of these conditions change. You have to be ready to forget about the ego, the sunk cost, or years of development and long beard, and just adapt.

📍The route to 40 angel investors and how to survive when low on cash

After the Demo Day of Eleven, the two brothers applied to pitch at the startup competition of Pioneers Festival (one of the most prominent tech conferences at the time) and were among the 15 startup founders chosen to present in front of investors. The competition winner 1st place prize was a potential investment by the Austrian VC firm Speedinvest. Long story short, Svilen and Konstantin won 1st place and this way secured their second institutional investor.

Svilen and Konstantin winning Pioneers Festival back in 2015.

Dronamics’ fundraising journey is slightly different from the rest of the startups out there. Their product is not common for a typical early-stage VC fund, so throughout the years the founders have also spoken to numerous angel investors. Today, they have 40 individual investors on board but actually have pitched to thousands over the years and have heard hundreds of NOs. Svilen’s advice to founders for finding the right investor is to just be 100% open and frank about where you currently are and what are your future plans. You may need to speak to 1000 investors and that means you need to be ready to hear over 950 rejections.

Svilen remembers that Dronamics funding in their early days used to resemble throwing a pebble on the surface of a lake – as long as the pebble keeps going, it keeps bouncing off, if it stops going, it sinks. He and his brother never stopped going, even when their cash was really low or zero. 

“You have to be resourceful in the early days. If a mechanical part you need is too expensive, you find it cheaper. If your warehouse needs a ventilation system and other companies give you a quote for €5,000-10,000, you go out there and you build it on your own for €500. If you need a certain tool, but don’t have the money to buy it, you try to make it yourself or borrow it. Building a startup requires creative decisions.“

📍First prototypes and a team of 100 people

Dronamics had their first small-scale flight with a 1/10  scale model back in 2015. They learned a lot so the team continued working on a 1/4 scale model. A few years later in 2018, the test campaign with this larger size airplane also turned out a success and it validated the aerodynamics, avionics communication center, and the performance. The team had met key targets and knew they were ready to start building the full-blown plane. This is also the moment when they had to move yet again to another location as they needed more space. Dronamics’ new home (where you can find them today) was the former DHL warehouse next to the Sofia Airport, which they converted into an office and a workshop.

Right around 2018, Svilen and Konstantin started thinking more about the corporate structure of the company, the talent growth, and creating a more streamlined framework of the organization. They had to focus on the team, learn how to structure operations, how to recruit new people, and decide what talent they needed. Are they building a team of champions or a champion team? In simple terms, it is two-sided self-selection, Svilen shares. 

“You find the right kind of people who believe in the same kind of future you believe in. You don’t need every single smart person in the world, there are too many of them anyway.” 

More focus on structure, talent and processes since 2018 proved to be a good decision, because over the past year, Dronamics’ team grew from 20-25 people to close to 100, distributed around the globe with, among many, a Chief Operations Officer based in Hong Kong, Chief People Officer in New York, and Chief Legal Officer in the UK. 

📍The first key corporate partners - Hellmann and DHL

In the middle of 2021 Dronamics announced their partnerships with Hellmann and DHL, and is currently on track to start operating flights for both companies in 2022. Serving only these two customers would require more than 4,000+ aircrafts in the skies by 2030.

An interesting fact is that the process of securing the partnerships with the two logistics giants took years, Svilen shares. Over this period, while Konstantin and his engineering team were focused on building the airplane, Svilen and his business development team were focused on establishing relationships with customers, regulators, and partners. They did a lot of traveling, a lot of speaking at conferences, they became widely known in the cargo world, and made a lot of great relationships, which played a big role in securing the partnerships with Hellmann and DHL. And although such companies recognize the potential of unmanned technology, there have been many people who have tried and failed, so there is a natural skepticism built-in on the corporate side. The secret to success with such partners, Svilen says, is numbers. 

“The conversation always accelerates when you show them the numbers – if right now they are doing this job this way and are paying X, we can do that for either half the time or for half X. And that’s what really gets the ship moving faster.”

DHL took 18 months to analyze all upcoming solutions on the market regarding autonomous middle-mile deliveries. With the signed partnership Dronamics is selected as the first UAV (Unmanned Aerial Vehicles) cargo operator for long ranges and the team has already kick-started developing a custom network for their customers in the mining industry in Australia. The Hellmann case emerged from the need for serving routes for urgent deliveries in Europe.

📍Key milestones achieved: unveiling of the full-scale Black Swan and IPO on Beam

First and foremost, on 7th of December Dronamics just showcased their first full-scale Black Swan aircraft during a special event at Sofia Airport. The unmanned drone is a few months away from flight authorization approvals and first flights.

The second big achievement is that on the December 2, the company conducted an IPO of their Dronamics Capital subsidiary on the Beam Bulgarian market, oversubscribing it 4.5 times and raising €3M. Through this step Dronamics addressed the interest of individual investors and offered an opportunity to join them in their mission in this crucial moment, just before they hit their big milestones and fundraise for a bigger Series A round.

Watch the recording of the The Black Swan unveiling event. 

📍What’s next for Dronamics? - first flights, authorization process, serving commercial routes and world domination

With the funding from BEAM, they will be able to scale the team in several geographies, finalize the authorisation process and deploy the first commercial routes to demonstrate the service.

Now with the first unit being ready, Dronamics’ team will start technical flight tests. They are also setting up an airline out of Malta and applying for a light UAS operator certificate (LUC), which ultimately will give them the possibility to fly to all EU countries. Once the approval process is completed, in 2022 they will start the first commercial routes connecting Malta to Italy, followed by other destinations in the Mediterranean. In the meantime, they will be starting an authorization process in Australia as well, where the next manufactured units of the Black Swan will be shipped to serve commercial routes for DHL.

The founders’ grand vision is to become a leading aircraft manufacturer and operator, in terms of units of aircraft built and operated. Dronamics aims to democratize air cargo as we know it by building smaller aircraft on a large scale that would be easy to deploy and operate in any geography. 

“We see the potential to build Dronamics as a globally recognised brand that could eventually list on a major stock exchange as a public company.”

Want to follow Dronamics’ journey? Keep an eye on their website for the latest news – https://www.dronamics.com/

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