Over the course of the past decade or so, software companies have been the darlings of investors, media outlets and consumers alike. We live in a digital era, and as the internet has become inextricably woven into our lives it has shifted our perception of product development. While American companies have honed their skills in app development, the manufacturing sector has witnessed a steady decline over the past few decades.
It’s clear why a high level of hype has persisted around SaaS companies. Software development has a low barrier to entry, especially when compared with hardware development which is often costly and time-intensive.
“Naturally I very much want to be iterative in product development, but if you’re spinning custom boards and writing an immense amount of custom software and everything else that’s hardware-specific, you can’t really do that,” said Blake Resnick, the 23-year-old founder and CEO of BRINC.
A technology company focused on the development of public safety products, BRINC drones have been deployed globally in over 400 safety agencies. The LEMUR 2, the latest iteration of a drone originally built by Resnick when he was just 17 on his mom’s kitchen table, has applications including but not limited to search and rescue, hazmat responses, bomb disposal operations, barricades, and negotiations.
According to Resnick, he believes BRINC drones are one of the first in a new generation of hardware startups. Costs and complexities are found throughout the entire hardware development process, but the political, economic, social and environmental disruptions that have occurred in the past few years have also revealed the importance of investing in hardware as well as software.
The category of hardware extends well beyond “gadgets.” The term covers a broad array of physical products from simple screws to MRI machines. Scientific and medical hardware has the ability to facilitate transformative discoveries across the field, and everyday tools and devices can improve efficiencies, contributing to the betterment of lives across the board.
New developments in machine learning, robotics, and artificial intelligence have also allowed us to rethink how we develop new products for a new era. Below, we explore with Resnick some of the challenges he has encountered running a hardware company, as well as his thoughts on the industry as a whole.
Investing in hardware
Resnick emphasizes that one of the biggest challenges that comes with developing a hardware product such as BRINC drones is the impracticality of iteration. In software development, feedback can be gathered on a product to gain insights, allowing for modifications that refine or evolve it, all without being very cost-prohibitive. “But trying to iterate three, five times on a new drone system, it just makes it not viable to develop these types of products,” said Resnick.
This is just one reason why even in great times for the startup economy, it can be difficult to raise money for hardware venture capitalists. It takes a long time to build hardware, bring it to production, and get it to the point where it can be field-tested. However, Resnick points out that in public safety where BRINC drones operate, in addition to other verticals in the hardware industry, the products being built out and scaled have a meaningful impact on millions of lives.
For Resnick, the applications for BRINC drones have the potential to eventually make the police helicopter obsolete. Just as technologies such as police radios and more recently body cameras have become increasingly standardized, he asserts that drone technology can and should become a ubiquitous tool for many applications of public safety such as responding to 911 calls or rapidly delivering life-saving medicines like EpiPens.
Indeed, the concept of impact as an investment metric has grown more popular in recent years. Investors are increasingly considering ESG factors – how an investment handles its environmental impact, social impact, and in general ensures it is operating in an ethical, responsible and sustainable manner – when determining what companies they will add to their portfolios. Similarly, the size of the impact investment market continues to increase, recently surpassing $1 trillion assets under management.
“I just think the positive societal impact of the right hardware technologies can be enormous,” said Resnick. “And I think a lot of investors are, to some extent, looking to have that sort of positive impact on the world. I mean, obviously they’re looking for returns, but they want to do good. And I think hardware enables that in ways that software can’t always match.”
Industry competitors and BRINC’s response
In addition to navigating the world of venture capital and funding, Resnick said he has also run into challenges when it comes to regulatory compliance. “We have to be NDA compliant, meaning that we can’t utilize any electronics from China, which is a major issue because the entire global drone supply chain is really based out of one city, which is Shenzhen,” said Resnick. So when we go to develop one of these systems, we have to design and manufacture custom camera systems, radios, and kind of do all of that from scratch, which adds some complexity.”
As a result, BRINC has developed a large amount of autonomy software and hardware which has actually provided the company with a strategic advantage. Resnick points out that Ukraine is currently consuming 10,000 drones a month, a number that the United States isn’t currently able to scale its production up to. By building out that supply chain stateside, both for use cases within and outside public safety, BRINC expands the market for its hardware developments.
Although there are a number of large, well-established companies already doing public safety technology, Resnick points out that drone technology specifically is notoriously difficult.
“They’re fundamentally challenging to manufacture, to make reliable. I think the big incumbents in our space largely don’t want to build a drone. They don’t want to take on that hardware component. They’re very interested in building out software solutions that might integrate with off the shelf, but for the most part they just really don’t want to take on the hardware lift,” said Resnick.
On the other side, while incumbent companies such as DJI already hold a massive share of the drone market, the United States federal government has implemented restrictions and guidelines on the procurement and use of certain drones, especially those manufactured in China. Aiming to safeguard sensitive data, protect national security interests, and ensure the integrity of the country’s drone systems, these restrictions mean that there is a significant hole in the market for drone production in the West. “ [It’s] fascinating because basically the largest drone manufacturers on the planet, these big Chinese companies cannot sell to the largest drone buyers on the planet, which is the U.S. federal government,” said Resnick.
Navigating the pandemic and beyond
Covid-19 and the subsequent global shutdowns as a result of social distancing caused huge shifts in practically every industry, and hardware is no exception. With an inherently physical component, transitioning to remote working in the cloud and through applications like Zoom was not an option for companies such as BRINC.
“It’s hard for a mechanical engineer working on a drone to be effective without access to the drone or access to CNC machines or 3D printers,” said Resnick. “Same for electrical engineers working on boards needing $100,000 oscilloscopes, right? It’s hard to send every “Double E” an oscilloscope for them to bring up on a board.”
To navigate this, Resnick instead utilized pods in the early days of Covid-19, and today continues to operate in a singular space. While the debate still rages as to whether a hybrid work scenario is the direction the future of work is heading, in terms of hardware there will always be a necessity for centralization.
Resnick also points out that as a young company, BRINC has always existed in the climate of supply chain difficulties. For him this has meant baking a strong process into his business plan from the start, and the company adopted a strategy of risk-buying components. “It’s really excruciating to be in a position where multiple electrical engineers are working on something for a few months, then you realize you have to throw all of that away because you just can’t buy the chips. So that’s been our strategy and it’s worked pretty well,” said Resnick.
Today BRINC has attracted the backing of some of the biggest names in venture capital, and Resnick himself was the youngest awardee on the latest Forbes 30 under 30 list for social impact. BRINC drones have been used for countless SWAT tactical missions, the condo collapse in Surfside, Florida, earthquake relief in Turkey, and thousands of other public safety scenarios.
Software companies may be attractive due to their flashy ability to create consumer-driven services, but hardware has the ability to drive innovation in ways that software can’t. Companies like BRINC serve as a reminder that barriers to entry such as higher initial costs should not be seen as insurmountable obstacles by entrepreneurs and investors alike.