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A Silicon Valley for Drones, in North Dakota
Post Date: Jan 06 2016

By The New York Times
“California and New York want what we’ve got,” said Shawn Muehler, a 30-year-old Fargo resident, gazing at a horizon of empty fields, silos, windbreak trees and hardly any people. A winged craft traces the air, mapping a field with pinpoint accuracy for his start-up, a drone software company called Botlink. “They like drones, but they’ve got a steep learning curve ahead.”

For years, entrepreneurs have come here to farm and to drill for oil and natural gas. Now a new, tech-savvy generation is grabbing a piece of the growing market for drone technology and officials want to help them do it here, where there is plenty of open space and — unlike in other sparsely populated states — lots of expertise already in place.

Silicon Valley has the big money and know-how, Mr. Muehler and others say, but North Dakota can take unmanned aerial vehicles, as the officials prefer to call drones, from a fast-growing hobby to an industry. And just as Silicon Valley got its start with military contracts, entrepreneurs and cooperative universities, they believe they can do the same with drones.

“The potential up here is tremendous,” said Jack Dalrymple, the state’s governor. “It’s not about supporting a company or two; it’s creating the leading edge of an industry.”

North Dakota has spent about $34 million fostering the state’s unmanned aerial vehicle business, most notably with a civilian industrial park for drones near Grand Forks Air Force Base. The base, a former Cold War installation, now flies nothing but robot aircraft for the United States military and Customs and Border Protection.

Right now, private sector drones are where personal computers were in the 1970s: a hobbyist technology waiting to become mainstream. The technology research firm Gartner says that, barring regulatory hurdles, the United States drone business could be worth $7 billion in a decade.

Companies are moving fast. Last month, Amazon released a video showing its planned delivery drone, and companies like Google and Facebook are working on big drone projects. DJI, a Chinese company that is the world’s largest maker of small drones, was funded last spring at a valuation of $10 billion.

Small drones may bedevil cities with privacy concerns, even landing on the White House lawn, but rural states with farming, oil and rail lines see many practical reasons to put robots in the sky. Infrared imaging can judge crop health. Cameras can spot leaks and cracks in pipelines. Smaller copters can inspect windmill blades. Livestock can be located easily.

Judging from Mr. Muehler’s proving grounds, if the occasional experimental craft crashes, it is unlikely to hit much beyond dirt. And with money, expertise and need here, people will keep trying.

Grand Forks Air Force Base, 80 miles north of Fargo, has been an all-drone base since 2013. Big Global Hawk unmanned aerial vehicles, made by Northrop Grumman, fly reconnaissance missions from the Yukon to Venezuela from there. 

In a smaller brick building in Fargo, Mr. Muehler was once part of a North Dakota Air National Guard unit that flies missions over the Mideast and Afghanistan.

Customs and Border Protection uses the Grand Forks field to patrol from Seattle to the Great Lakes with slightly smaller Predator drones. Sometimes those pilots take over from their Customs counterparts in Texas, patrolling the Rio Grande from screens 80 miles south of the Canadian border.

Where B-52 bombers stood ready with nuclear bombs in the Cold War, the country’s first commercial unmanned aerial vehicle industrial park is under construction. Northrop Grumman and General Atomics, the Predator maker, are taking space to train pilots for international sales of the craft.

Other businessmen are looking at modifying their craft for things like high-altitude surveillance of railroad tracks and pipelines. Involta, an Iowa-based operator of data centers that has already created a windmill inspection business in Grand Forks, is looking at building facilities specialized in collecting aerial information.

A company called Field of View, near the planned site of the industrial park, makes aerial sensing equipment. An outfit called the Unmanned Applications Institute is working with providers away from North Dakota on things like local drone manufacture and warehousing.

Nearby, the University of North Dakota, which already trains many of the nation’s commercial pilots and the air traffic controllers of some 18 countries, has 200 students learning to fly drones in a four-year program that started in 2009; 61 students have graduated from it. North Dakota State University, in Fargo, has also started teaching drone courses.

Besides military contracts and educational talent, North Dakota also has high-tech talent. In 1999, Amazon purchased an online seller of tools and home improvement gear in Grand Forks, and the company now develops customer service software there. In 2001, Microsoft paid $1.1 billion for Great Plains Software of Fargo, and it now has an office there.

The area has thousands of software engineers and not a few millionaires itching to get into the next big thing.

“Every top engineer in all of Fargo works for Botlink,” Mr. Muehler boasted. “We have the top 10 engineers in town.”

Mr. Muehler, who was educated as a pilot at North Dakota State, started on what became Botlink while flying missions from the brick building in Fargo. Governor Dalrymple refers to the military site as “once a well-kept-secret facility,” since its purpose has become common knowledge in the city of about 115,000 people.

One night in early 2014, Mr. Muehler saw a report on Fox News about a hobbyist drone that flew into the airspace at La Guardia Airport in New York. That’s when he hit upon the idea for his business.

“I figured there has to be some kind of software that can give awareness, let a drone know about things like boundaries and weather,” he said.

Alex Kube, a high school friend who was working at the same facility, started making the software. Seven months later, he spoke at a meeting of local entrepreneurs and collected $500,000 in angel funding from local investors. Botlink was formed several months later when Mr. Muehler met Terri Zimmerman, a former chief financial officer at Great Plains who grew up on a farm near the Canadian border.

“We want to be the Microsoft of the industry,” said Ms. Zimmerman, who is now Botlink’s chief executive, and runs another company, Packet Digital, involved in low-power semiconductors used for, among other things, military drones.

So far, the company has raised $3 million more from private investors. “That’s like $14 million in Silicon Valley,” Ms. Zimmerman said.

A Silicon Valley for Drones, in North Dakota - The New York Times
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