Startup Spotlight: Interview with Amber McDonald CEO of Indemnis

Unmanned Aerial Vehicles (UAVs), popularly known as drones, have been with us for a while. Per the FAA, as of January 2018, there are 100,000+ Part 107 commercial pilots in the US using drones in business and their numbers grow by 300 each day.

A lot of issues have been raised, including that of security, privacy and public nuisance,but to date one of the biggest issues has been safety.

Different companies have invented cutting edge technologies in an attempt to solve the safety issue.

One such company is Alaska based startup Indemnis (whose name means suffering no damage or loss in Latin) who has come up with a reliable and proven UAV parachute recovery system.

Indemnis is currently raising funds on republic’s crowdfunding platform and we were lucky to speak to Amber McDonald CEO of Indemnis, a woman who is currently the top raising female CEO for 2018 to raise on an equity crowdfunding platform, and the 2nd female overall since Reg CF was approved in 2016.

Amber has lead Indemnis business operations since the beginning, Amber is one of six co-founders who came up with idea of the startup while working in the film industry. She tells us a little bit about their journey.

We were all drone operators in the film industry. Alan Erickson, CTO, developed the idea for the first generation and saw the longer vision..Mackenzie Banbury is currently our media person but solved the material science problem. The other three do not currently work with us anymore- Mitch Monnett (machinist), Mike Collier (embedded systems), and Matti Dupre (web developer).

According to Amber, despite not being formally educated in any technical subject the six co-founders are all tech savy.

I would say that I’m not formally educated from a technical perspective, but I am a vey tech savvy individual, self taught I guess – scrappy.None of the 6 founds are formally educated from a technical background, we are all self-taught and have critical thinking skills.

On her responsibilities in the company, Amber had this to say:

Majority of my professional history has been in Alaska natives politics and business. I came across this (Indemnis) because I was doing a different project with one of my business partners and it kind of formulated out of something else that we were doing.

Indemnis is a start up that provides safety solution to UAV community. This is how they did it.

The dynamics of rotary aviation are very different from that of fixed wing and it is something that the aviation industry has never seen before. A drone has four rotors, and when it fails it goes into a high speed roll and tumble scenario.  And so for that reason a conventional parachute would never work on a drone.

We developed a proprietary method to be able to launch the parachute at 90 miles an hour, thirty milliseconds and do so with an inflatable apparatus. We move the attachment point of the parachute outside the roll radius, thus solving the technical problem that people have been trying to solve for a long time.

Indemnis provides an all-inclusive package that is comprised of the physical hardware, pilot training program, waiver template, and safety case data (including technical engineering and human impact studies) that makes the integration of drones into the national airspace possible, expanding the commercial use of drones and enabling services such as drone deliveries.

On legislation or lack of it Indemnis has faced mixed blessings trying to have them enacted.

It’s definitely not easy. It’s frustrating when you are trying to change regulation but it’s been a good stable process. I think we were in the right place at the right time and we have a technical solution that is allowing the industry to expand.

What we are working on has given the government the ability to trust that something can work whereas previously there was nothing that was proven to work, so people were being told maybe you can’t do this with a risk mitigation tool.

While we would like it to move faster in some aspects, in the other aspect it has been a steady stable discussion where we have been able to gain the trust of the industry and the trust of the FAA.

There are many startups trying to tackle safety issues when it comes to UAVs, but Indemnis has managed to star well ahead of the pack.

It’s true there are other companies that have come up with parachute recovery systems for drones. The difference is all other companies on the market sell a parachute recovery system that attaches the parachute to the airframe. Indemnis has created an inflatable tube that gets inverted, then they stuff the parachute inside. When it deploys, it launches the parachute at 90 miles an hour in 30 milliseconds, and avoids entanglement. To further that, that tube inflates to a pressure of 30 PSI and remains rigid – you can literally pick the drone up by the tube.

Keeping that tube rigid holds the parachute lines right outside the roll radius which allows our system to be functional and reliable. So while other systems on the market may work in some scenarios, they have very limited capabilities. This is what sets us apart from our competitors – the ability to test all areas of the flight envelope, which is a requirement to meet the ASTM standard and prove reliability.

Indemnis has a team of sixteen employees, twelve whom are full time while three are contractors.  The team has a number of projects in the pipeline but just to highlight a few.

We have been focusing on the standard process. We have spent the last two years writing and authoring in collaboration with industry and the FAA. The small parachute standard passed on September 1st, and so now there is something we can point to for a benchmark of safety.

Currently the next steps are to complete the impact studies, human injuries studies, and flight testing with by a third party administrator. All of this is needed to be able to prove that if the drone falls out of the sky due to technology failure,our system can bring down the drone at an impact energy that is acceptable to the FAA. The Nexus brings an Inspire 2 down at 6.8 miles per hour, which is not harming someone – you can easily catch that.

All this has not been without challenges.

We solved a material science problem –that is what makes our product possible.

The orange tube (deployment tube) is made from ultra-high-strength material called Dyneema Composite. Dyneema is the strongest fiber in the world. It is twice as strong as Kevlar, fifteen times stronger than steel, and it is an ultra-high molecular weight polyethylene. It has no dielectric properties – that is they can’t be bonded.

The electrons will not excite to form together. The first technical hurdle that we overcame was we created a proprietary bonding method to be able to create the inflatable tube. DSM has been making the fiber for over forty years and they had not developed the technology to bond it, or that it could even be bonded to the strength equal to itself.That was the largest hurdle we had to overcome,without that technology we would have never been able to achieve what we do today.

What of future plans?

The next two years are going to set the tone for our entire future. I cannot honestly tell you where as individuals we’ll be five years from now, but I know that the technology will enable the industry to expand. The technology is going to allow everyday users – from Joe the construction worker to Amazon, to be able to operate commercially over and above people, something the FAA currently will not allow them to do freely.

So for the next two years we’ll be pushing to meet the standard, working with regulators and making a templated process that allows the civil aviation authorities across the world,a level of comfort that they are okay saying, yes if you have a Nexus system – it is an acceptable level of safety.

Indemnis has so far raised $3.4 million from high net worth individuals they’ve met through their networks, and from friends and family. At the moment, Indemnis seeks fresh injection of funds to complete testing and to button up their documentation. To achieve this, Indemnis has been raising funds on Republic’s crowdfunding platform and has so far raised over $500,000 from 885 investors in just 85 days, with 5 days remaining on the clock. For this latest round, Indemnis has opted to crowdfund for several reasons.

The number one reason for choosing crowd funding was because we knew we were at a point in our history where we need a larger amount of investment in order to go to manufacturing. And that would be going to a VC.

So, in order to get there we need two things – we need to prove our market and we need to be able to show that there many people who are engaged and involved in and believe in the future of what we are doing. So by having the crowd funding we’ve gained a following and a sub-set of investors that can support us.

Secondly, because we are proving out our concept, and meeting the FAA requirements we don’t have any revenues. And so going to VCs is difficult because many do not see the long term potential the same way we see it, so it is a difference of evaluation.

By utilizing crowd funding, we are able to get to a point where we are able to have revenue streams before we go to a VC and therefore receive the best possible valuation for our series A for our investors.

How do the two processes -crowd funding and going to individuals – compare for Indemnis?

They are so different. Crowd funding has been a lot of things like this – a lot of interviews, a lot of getting in front of the cameras, media, ads – you are hustling to get ten people to give you a hundred dollars each.

When you are pitching to high-net worth individuals, you can pitch to ten people but you only need one of them to give you a hundred thousand dollars. It’s very different – a different mental shift would be the easiest way to describe it. You have to be flexible enough to understand that difference.

There has been a lot of talk about there not being enough women in the tech industry, and that more needs to be done to bring more women, how has the process been for Amber, being a woman in this industry?

I have a strong foundation and understanding in technology and I’m not extremely siloed into one area. I understand a little bit of everything and that makes me very agile and allows me to work with all my different teams.

I would say being an individual in any startup the space we are working in, is difficult. Being a female, I don’t necessarily think the job is any harder – you are doing the same tasks as if you were a male – but you are perceived differently. The biggest challenge would be to just not let people get to you. You are going to have people who are supportive and you are going to have people who are against you. You just have to keep going regardless of whatever perceived influence or perceptions are out there. It can be frustrating, but it can also be more of a reason to keep going.

So many people told us that we were just a bunch of crazy kids up in Alaska and what we were working on could never be done from a technical stand point, that was our motivation to keep going.

Advice for startup coming up.

Look in the mirror and say you can do this over and over and then get out there and do it. It isn’t going to be easy. You are going to lose, you will have to make sacrifices and you have to make a decision – if you are not in a position where you can realistically work seventy hours-week, then running a startup is not for you. You have to be completely dedicated to spending all your time building a business. You essentially have no life for the first two years -sometimes longer.

On team work

I would say the only other thing is if you have a startup you can’t do everything yourself. And one thing that has made us extremely successful is everybody has their own job and they are exceptionally good it. Find your team and treat them fairly. Indemnis would not be where it is today if we didn’t have an amazing team.

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