Scott Larson: I’ve been a little more involved in that one, of course. A little bit of color on this. We — over the last 18 months, 12 months, we’ve received calls from Indian companies, a number of them. I — some of the largest multinational companies in the world, in fact, have called up and said, we’re looking to explore drones in India, what that means and just kind of called in and started to talk about partnerships and things like that and what that might look like for the Indian market. For a little bit of background, India of course, is a huge market. The government has come out and said that drones are going to be a significant part of a number of different initiatives that they have moving forward. We have made a couple of trips over there once last October and once just a few weeks ago to kind of dig into that.
We did announce a partnership with a company called RSI, which is a geospatial company. It’s been in India for the last 15 years to 20 years, I’d say. And they have started to move into the UAV sector. So specifically with regards to the market or the opportunity over there, we think it’s massive. They’re looking for large drones that are specifically designed for 20,000 foot-type altitude, which isn’t us on one hand. On the other hand, there’s a huge opportunity for mapping, cadastrol, light deliveries, coast guard, water petrol. India has a number of active borders, of course, both north, south — north, west and east. And so agriculture, spraying, mapping, forestry, disaster management, monsoons flooding, things like that. They can’t get deliveries across borders and bridges that are washed out over rivers.
And so when we were over there just a couple of weeks ago, they were talking about orders for, the government is looking for tens of thousands of drones, in fact, across some of these different sectors, and in some cases, no limit on those. So certainly, more than would have the ability to deliver on in the near-term, but the plan is to pursue India as heavily as we can. We think we have the right partner. We’re going to keep going down that trail and look to get as much of this market as we can, working with the local provider, drones that are built over there who can better navigate some of that market over there for us. Moving on to another question here. Cam, can you provide a little more color on the sales cycle? How is the pipeline looking currently in the macroeconomic environment?
Have you been expanding the sales team? Maybe we’re not — just keep in mind, of course, that we’re not giving guidance here, but talk a little bit about the sales cycle and what some of our efforts look like?
Cameron Chell: Yeah. So the sales cycle is about six months to a new customer and it’s still a big education process. So the decision to purchase drones seems to be imminent in the inbounds that we have coming in and — but the sales cycle really does take some time. So some of that sales cycle has been a bit longer for us, because we’ve had the new product coming out and so people have wanted to wait for the new product. And then once it comes out, they like it, and then they want to demo it and then we got to test it and so it’s just taken some time. So the new flight center in Texas has been fantastic for us, because we’ve been able to start to make that quite efficient and use the same systems over and over again and bringing people in, organizations in for these demos.
But it’s still about a six-month cycle. To existing customers, the cycle is still — it’s really only about three months. It’s really like when the budget — when their budget cycle is and when and how things come up. Now this is on the 3XL. The sales cycle on the demining has been a year and that’s even pretty short and sped up because of, I think, the circumstances involved. And so those engagements just kind of start falling into testing orders now going forward, so some of those types of services and things, we’ll see it shorten up a bit. We have beefed up our marketing and our sales teams more — there’s been a lot of training going on and now that the products are starting to come online with a little bit of volume, I mean, they’re kicking into actual sales more.
But we take training quite seriously. So whether it’s training on the product or product training or regulatory trading or regulations training, two very different things, we’ve put that in place and we — I wouldn’t say we have a fully built-out sales team, but we have a — we can take more sales anyway. So we’re pretty cognizant of not over building it at the same time. But we brought new — we brought leaders sales — leadership on in the last two quarters and we’ve got a sufficient number of the right sales folks who are really specialized in the particular areas that we’re selling into. Inbound wise, I think, we’re probably upwards of a couple of thousand inbounds a month at this point, probably, more than that if they weren’t called so much.
So you have to be very selective about who we work with and what we can promise right now.
Scott Larson: Paul, let me give this one to you here. What operational improvements are you embarking on at a company level to make things more efficient from a cost perspective, what does gross margin look like moving forward? How does this improve? Again, keep in mind that we’re not giving guidance here, but maybe give a little bit of high level comments on from an operational standpoint and efficiencies, what is the company doing?
Paul Sun: Sure. Yeah. Thanks, Scott. So, yeah, from a company cost operational outlook, we’ve centralized the company, if you will. So we have the parent and then three operational entities underneath it. We’ve gone through a robust centralization where we’re looking to eliminate any potential duplication and then, of course, gain synergies across the functional units, whether it’s sales, as Cam just mentioned, we have sales finance, marketing. So basically, not only are we looking to eliminate duplication, but we’re also looking to get those synergies, which will improve efficiencies. We’ve also put in an ERP across the entire organization, which will also help processes make things a lot more efficient. And also now decentralization, we’re cross-pollinating opportunities across the various units.
So you have innovation, you have Dronelogics or Candrone, you have in the U.S. So now it’s a very holistic approach to the business. As we’ve always talked about, we’re moving towards very much a solution-based business and these are the things that we’ve put in place to not only make the company more efficient, but also save costs moving forward.
Scott Larson: Okay. Good. Cam, maybe I’ll — it’s 45 minutes here, we just try — which is how we try to kind of measure these or keep these calls to you. There’s a couple more questions here that I think we can get that — get to and maybe even one or two that have come in online, of course. But Cam, back to you, why the revenue is not increasing if demand is so high, we’ve been talking about increase in revenue — increased demand for a long time. Why are the revenues not increasing to meet the demands that you talk about? Yeah. Can you answer it?
Cameron Chell: Yeah. The period will stop, yes. Yeah, just building out capacity to meet the demand. So maybe the first half of that was really understanding the product that we’re building out to pick our lane. And once that was done, then probably get product out, test again, all that type of stuff, which we’ve done and then having the capacity on hand, the right machine, the right tooling, the right people, there all that type of stuff. And so that seems to be well in hand and close to being unleashed if I can use that word and so we’re pretty comfortable with where things are going.
Scott Larson: Okay. Let’s take — how much more time do we — do we have time for one or two more.
Cameron Chell: I think we will probably do it.
Scott Larson: Let’s take one that’s come in here, which is, with regards to the LiDAR and optics and imaging. Based on what we have seen and read, what out, based on what I’ve seen and been reading, it’s easier for the LiDAR, optics, imaging companies to take over a drone company than it is for a drone company to attempt to building a comprehensive imaging offer. How big of a threat do you think that is? What is adding a little bit of color here, but we did come up with the LiDAR. So what are your thoughts on that, Cam?
Cameron Chell: Yeah. So, again, we’re in a really privileged position where we’ve got such an experienced bench, probably, the stretch for us to go from building drones — to building sensors that we use on the drones, that we have used on drones for years and years, probably, isn’t as big of a stretch for maybe some other drone companies. Now that said, we have to — we can’t build any sensor, right? Like, I mean, there’s — and there’s very good sensor builders out there. And a lot of those sets, so we have to pick and choose, we have to really pick our spots there. And so this particular LiDAR unit, we had demand on the services side. We — it fits into a particular part of the market and on our drones in a way that it was immediately cash flow positive for us even if we just use it on our own services.
It also enables us to generate proprietary data that other LiDAR systems don’t necessarily produce. And in doing that, we can come up with a unique data set that our competitors in the services business can’t provide that same customer. And at the end of the day, it’s all about that unique data and then the analysis that you can provide from it. So that’s why that particular LiDAR was important to us. We can’t do just every sensor and so and nor would we want to. Also, every — a lot of those other sensor companies, they’re looking for a platform to be on. So they’ve got a great sales channel, they’ve got demand and so us integrating and doing that software work where their sensors work well with our and they really become our customer. We want to over-service them and provide them the best capabilities down to their customers, now they become a sales channel for us.
So we don’t necessarily want to do all kinds of sensors. In terms of a sensor company, building a drone, I would actually say, it’s probably somewhat the opposite. When you start getting into the regulations of flying something over people’s heads, the certifications that are not required, this isn’t — you’re right, you could buy a hobby drone and put some propellers on it and think you’ve got to draw. But when you’re talking about something that’s got applied thousands of hours with liability and reliability and integrate with other sensor products and on and on and on, it’s an incredibly complex business, notwithstanding the engineering behind it. So anyway, the point of the question doesn’t escape me and you’re right, and we’re not going to go build every sensor out there and nor should we.
