Startup Interview Series – Thanos

Courtesy: THANOS - Pradeep Palelli & Prathyush Akepati with 5 L Agricultural Drone

Who is not fascinated by drones – the excitement of seeing a flying robot that can be remotely controlled or fly autonomously through software-controlled flight plans? And what if you are able to design, test and fly these drones every day as a part of your regular work? Startup Dunya in conversation with Pradeep Palelli, CEO & Founder, Thanos, a drone-technology company.

What is Thanos all about?

Thanos is an Aerial solutions provider using drones to offer innovative solutions to conventional problems. Using a mix of Hardware and Software platforms, we redefine services which are conventionally catered to by terrestrial solutions.

When did you start this company?

I started working on this idea in August 2015 and incorporated the company in May 2016. It took close to 10 months from the ideation stage to its concretization.

Who are the other partners and key team members of Thanos?

I am responsible for business and operations at Thanos. Prathyush Akepati is my Co-founder and CTO. He takes care of designing and building our Aerial platforms.

Suman Sekhar is a mechanical engineer by education but has designed, built and flown numerous drones. He is a core member of our technical team.

We also have 2 drone pilots on board.

The total size of our team is 5 currently and we expect to expand to 12 members by July 2019.

How did you meet your co-founder, Prathyush Akepati? What is the common bond the two of you share?

I did not want to wait for a co-founder, so decided to start working on this new idea with my father as a Director. A few months down the line, I met Prathyush. He was working on a somewhat similar but higher-end model of drones. We met up a few times and then decided to join hands.

Our shared passion for drone technology is what holds us together.

What is your current product?

We are mainly focusing on our Agricultural Spraying Drone as on date. We have spent the last 1.5 years designing, building, testing, doing demonstrations and commercial pilots across Telangana, A.P. and Maharashtra. This solution has already started generating revenue as of August 2018 and we intend to scale up the operations in the coming Kharif season.

Courtesy: THANOS – 10 L Agri Drone

What are your revenue streams?

Providing Agricultural Spraying service using our drones and sale of Agricultural Drones are our primary revenue streams while our auxiliary revenue comes from custom drone building, drone repairs and drone renting.

Courtesy: THANOS – 10 L Agri Drone in Action

What are the advantages that drone-based spraying offers over more conventional techniques?

Drone-based spraying is 5-6 times more productive in terms of the work rate. The result is highly uniform and efficient, so customers can avoid issues such as over- or under-dosage. It is also extremely safe (when done the right way and under the right conditions) compared to manual spraying which can cause a lot of health hazards.

What are the challenges you faced in your entrepreneurial journey so far?

Lack of market access, lack of regulatory clarity and lack of capital are the 3 major challenges we faced. While the first has been solved and the second is slowly being resolved, lack of capital continues to remain as our biggest challenge as a hardware company.

Hardware companies are highly capital-intensive during the product development stage as well as during scale-up. We bootstrapped the capital requirement during the product development stage and were able to successfully validate our solutions in the market. This helped us to start generating revenue.

We are now looking at a larger amount of funding to be able to scale up. Given the capability of our tech team, there is so much more we could be doing with additional funds. We are in the process of raising this capital and frankly, it has been challenging.

What are the highlights in your journey so far that reiterate you are on the right track?

The fact that we were able to build our product based on the problem statement given to us by our potential customers was our initial validation. Post prototype development, we participated in Agri Expos and Field Demos. The response that we received from potential users helped us to validate most of our assumptions. This helped us to refine our product further.

Eight months ago, B2B customers started hiring our drones on a payment basis. Six months ago, farmers not only started paying us for our spraying services but we also saw repeat services. Both these developments further reinforced our belief in our product.

Thanos also won the “Supply Drop Challenge” at the Defence India StartUp Challenge organized by the Defence Innovation Organization in association with Atal Innovation Mission during the premier biennale air show and exhibition, Aero India 2019 which was held between 18 – 21 February 2019 at Bengaluru. This was a big one for us.

Courtesy: THANOS – Prathyush with Drone Olympics Prize Money

What gave you that initial nudge to help you continue with your idea?

Constant feedback from the market and the growing applications of drone technology across the globe kept us going. They made us realize that there are endless business possibilities in leveraging this technology.

Is your product tech- or domain-agnostic?

Courtesy: THANOS – Delivery Drone Prototype

Our product is independent of the domain. It is purely technology-centric, which gives us the advantage of applications across multiple domains. The usage of the drones can be varied based on their application sectors like agriculture, defence, transport, to name a few. For example, we have a 10 Kg Payload Drone that is fitted with certain spraying mechanisms/components to serve as an Agricultural Spraying Drone. If you remove the components, it can be easily adapted to carry 10 Kgs of Payload.

Who is your primary customer? Where else can your solutions be applied?

Agricultural Spraying is the target application we are focusing on currently. We work closely with farmers and agrichemical companies for this service.

For Agricultural Spraying Drones, we are employing both ‘Sale and Service’ revenue model. We are targeting farmers through our B2B2C channels for the spraying service. We are also working with a few agri-chemical companies for our B2B service channel.

We have started the drones as well and expect the market to grow this year due to incredible advancement in the tech space coupled with increased awareness among potential consumers. Large farmers and agri-service providers are our potential customers for this product.

Which are the new products that are in the offing?

Our future products (Payload Delivery Drones and Surveillance Drones) are multi-domain relevant and we shall start exploring and demonstrating them shortly.

What kind of support have you received from the Telangana government?

We have been part of the 1st Government Mentorship Programme through which we have received opportunities to interact with a few government personnel and understand certain mechanisms and processes. We have also been able to connect to the right officials and pitch them our solutions for which we received precious feedback.

Does the new drone policy impact your business? How are you prepping your product within the constraints? Are you looking at alternate product use cases?

Though the Drone Policy implementation is yet to start, we certainly think it is better than it was a year ago when we did not have a policy. So, there was more uncertainty then. We expect things to become more clear over the coming few months. We expect more use-cases and applications to open up for our products/solutions.

A case in point is our Agricultural Spraying Drone, which has other use cases such as for Mosquito Control, Urban Pest Control, etc. The Payload Delivery Drones we intend to launch in a year’s time will have applications across multiple business verticals such as the military, healthcare, E-commerce, food industry to name a few.

Who are you planning to hire in the near future – freshers with the right college credentials or is it experience that will matter?

At this stage, we are not looking to hire people with experience as that means a higher salary package. Having said that, what is of interest to us is hiring the right team with relevant experience in technology. We are open to college dropouts too, provided they have the relevant knowledge and skill-set.

Where do you see your company 3 years from now?

Three years from now, we see ourselves as both a Product Manufacturing as well as a Product Service company. We are gearing up for 3 Product Lines (Agricultural Drones, Payload Drones and Surveillance Drones) and 2 different Service lines to be active by then.

We expect to be a Rs. 100 Cr+ revenue profitable company over the next few years. A team of 300+ would be required to accomplish the same and we will only keep growing further.

What kind of funding are you seeking? Will it vary based on the different applications of your product?

We are looking to raise about Rs.2.25 Cr (USD 300K) to scale up our Agricultural Drone Spraying operations. Close to 50% of the funds will be spent on starting operations in 4 different locations in Telangana and A.P., while the remaining 50% will be spent on R&D, HR, infrastructure and marketing.

We are also working on 2 new product lines which have an additional budget. We expect to be ready with field-ready prototypes of these products in the next 9-12 months and intend to start raising next round of funds for all products and services together. That would be a bigger round with a need for close to Rs.14-15 Cr (USD 2 million).

Any lasting thoughts for budding entrepreneurs?

I would like to share thoughts about my own journey. While I am still in the process of building a successful startup, I have learnt that it is very important to be patient and persistent in your journey. Support of family members and friends as well as by your team is also of utmost importance to keep you grounded at all times.

Starting a company and running it is not at all fancy and not always fun. It requires a lot of hard work and commitment. Availability of resources (financial, time or emotional) is also important to keep going.

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