By Carolyn Gray Anderson
Andreas Neuman (EMBA ’14) was one of the five Anderson EMBA students whose Strategic Management Research (SMR) project constituted Anderson’s first-ever formal review of an overseas military operation, in which the team analyzed NATO’s training program for Afghanistan’s air force to create a business plan to improve training and cut costs. Neuman discovered then the challenges for a business school student to achieve credibility among primary research sources in government and defense. But, as a former U.S. Air Force pilot, he finds that his business credibility is bolstered by his military knowledge and training. His experience with the Global Hawk, the world’s most advanced unmanned aerial vehicle (UAV), led him directly to a nascent business plan for non-military applications.
UAV-IQ is Neuman’s veteran-owned and -operated company specializing in bringing UAV technology to market. Bringing it specifically, says Neuman, to the “precision agriculture industry.”
What does this mean? Fixed-wing and quad-copter style UAVs with mounted sensors are launched to scout a crop growing area and create multi-spectral, high-resolution images during the flyover. The images are uploaded to UAV-IQ’s servers, where they are subjected to various analyses, resulting in a list of recommended inspection locations for more detailed analysis. The data and recommendations are delivered to growers through mobile-enabled platforms, equipping them with information for more precise management of their crops.
Neuman is concentrating on developing this service specifically for wine growers. But why viticulture and not, say, hay or legumes?
“Wine grapes are unique in the world of agriculture,” asserts Neuman. “While many crops can be priced differently depending on the level of quality, price improvements tend to be incremental. For example, the best potato might command a 20 percent higher cost per pound than the average potato, but the best wine grapes can yield prices 100 percent or higher than average. This provides a strong incentive to maximize average quality, but many premium vineyards are currently limited in their ability to accomplish this goal.” In other words, wine requires the kind of precision monitoring that UAV-IQ specializes in providing.
Neuman and his partners, who include researchers from UC Davis’s revered agriculture program, are using Normalized Difference Vegetation Index (NDVI) technology, involving a simple graphical indicator used to analyze remote sensing measurements, most often from a satellite to collect data in space. NDVI images and data enable growers to improve crop yields, says Neuman, in part because they have timely access to the imagery and can also make better decisions by looking at crop behavior over time through archived data. “Even more exciting,” he writes in company literature, “is that growers have realized double-digit yield improvement due to their enhanced ability to nip problems in the bud and tailor their techniques crop by crop rather than plot by plot.”
The venture is starting in Chile, the eighth largest wine producing country. With more than 500,000 acres of wine grapes, the available market size is comparable to UAV-IQ’s other beachhead market, California. Neuman says, “Starting in Chile allows us to earn revenue and improve our products and services prior to the FAA’s fully authorizing commercial UAV operations in the U.S. Chile is renowned for producing high-quality wine. Success in that market will provide domestic customers even more confidence that UAV-IQ can help their operations as well.”
Not irrelevant to Neuman’s decision to begin in Chile is that UAV-IQ was selected for funding by Start-Up Chile, a program created by the Chilean Government that seeks to attract early-stage, high-potential entrepreneurs to bootstrap their startups in Chile, using the country’s markets as a platform to go global. Since its pilot program in 2010, Start-Up Chile has funded and accelerated more than 500 entrepreneurial projects, among them startups proposed by other Anderson students. “The resources provided by Start-Up Chile will propel us toward our goal of full operations in California this spring,” says Neuman.
Indeed, it will pay to be working both halves of the globe for year-round business. “One of the big issues of an agricultural services business is seasonality. By building operations in the Southern Hemisphere we are balancing our California season.”
Start-Up Chile is, of course, a government program, and UAV-IQ will not continue to be supported through public funds. But Neuman says the Chilean government’s endorsement carries the kind of credibility that angel investors are persuaded by: “We’re closing in on a $500,000 seed round that we may oversubscribe as we find angels who can help the company grow by providing instrumental connections along with their investment support. We are not going to slip our launch in California for this opportunity; in fact, we will be better prepared for it.”