SkySpecs leaders reflect on success after $8 million investment

SkySpecs, an Ann Arbor-based company co-founded by University of Michigan Aerospace Engineering alumni Danny Ellis and Tom Brady, secured $8 million in investments for international expansion in January 2018. The first and only company to offer automated inspection of wind turbine blades, SkySpecs is the fastest-growing inspection service in the wind energy sector. Co-founders Ellis and Brady attribute their Ann Arbor startup’s success to its unconventional beginnings.

The SkySpecs origin story

Danny and Tom, who met in a summer engineering internship in Kalamazoo, started the Michigan Autonomous Aerial Vehicles (MAAV) student team during their senior year. The project team stemmed from their Aerospace 405 project idea, also pertaining to drones. Today, the drone-building team competes annually in the International Aerial Robotics Competition (IARC) and is sponsored by big-name companies like Northrop Grumman, Lockheed Martin, and Dà-Jiāng Innovations Science and Technology Co. (DJI). A little-known fact about Ellis, however, is that he had started another student design team prior to MAAV. It was called Experimental Aircraft, and it began after he took the popular Engineering 100 blimp course with Professor Peter Washabaugh. After that initial experience with designing, building, and testing a makeshift aircraft, Ellis “quickly realized that [he] wanted to keep building things that flew.” However, Experimental Aircraft met a series of challenges, including not being allotted a space in the Wilson Center. Although funding was secured and hiding-places for the prototype aircraft (under the Gorguze Family Laboratory wind tunnel, for example) were found, Experimental Aircraft only lasted for two-and-a-half years. Despite its short lifetime, Danny ascribes his experience with founding his first design team to MAAV’s later success:

“That’s what led me to the Wilson Center, student teams, and creating student teams. I was always a huge fan of the extracurricular stuff – like physically building something as opposed to sitting in class. I enjoyed really building stuff, and I try to tell students to do that because it made a lot of my classes easier to apply theory when I actually had a real-world problem to actually solve on the side.”

Tom, who was seeking positions in big-name space companies, was not successful in securing a position right away. He reflects that although rejection from those companies was difficult, it allowed him more time to learn from MAAV:

That’s what led me to the Wilson Center, student teams, and creating student teams. I was always a huge fan of the extracurricular stuff – like physically building something as opposed to sitting in class. I enjoyed really building stuff, and I try to tell students to do that because it made a lot of my classes easier to apply theory when I actually had a real-world problem to actually solve on the side.

Tom Brady, University of Michigan Aerospace Engineering Alumni

“I got a couple of interviews and totally failed and didn’t get any of them, but as all of these things go, it was probably a blessing in disguise because it kind of gave us more time to focus completely on MAAV. And that was like startup round one. In the same way that going to business school prepares you for business, MAAV in a way prepared us for real-life engineering because in real-life engineering, you don’t get to apply your theory and have everything just work.”

Danny’s and Tom’s dedication to MAAV was essential in their next step: turning experiences from a student team into a business venture. During preparations for MAAV’s fall competition, the SkySpecs co-founders went on the UM Center for Entrepreneurship spring break trip to San Francisco, where they participated in mock pitches for business ideas. After receiving interest from a leader in TechArb, the University of Michigan’s student venture accelerator, they applied and were accepted. While he was studying for his Master’s degree, Danny pursued other avenues of funding for a drone business. He competed for a two-year, $150,000 contract with the state of Michigan’s Department of Transportation, for which the drone would conduct bridge inspections. The idea lost. In hindsight, Danny is thankful that he didn’t win the contract: it would have ultimately resulted in loss of rights to the company.

At first, losing out on the Department of Transportation contract seemed to signal the end of Danny and Tom’s business. That was when an adviser, Norm Rapino suggested that they apply to the Michigan Clean Energy Venture Challenge. The only caveat: the drone needed to inspect wind turbines instead of bridges in order to qualify. This time, the duo was met with success; they won $50,000 and used their momentum to attend the Wind Energy Conference in Chicago. Thus, the foundation of SkySpecs’ business model was born.

“MAAV in a way prepared us for real-life engineering because in real-life engineering, you don’t get to apply your theory and have everything just work.”

Even with a steady increase in funding, Danny and Tom had to adapt to challenges in their business. In SkySpecs’ early stages, all drones were manufactured in-house. Although expensive, producing their drones from scratch reduced reliance on off-the-shelf products. The founding members believed that the product would be ultimately better if they were responsible for its entire design and construction cycle. Now, Tom is able to look back and joke, “given infinite time, I think that’s true.” Danny reflects: “One of the things that really hurt us was that we were trying to be the best at everything, and therefore, we ultimately became mediocre at everything.” As a result, SkySpecs halted in-house drone production in 2015. The following year, the resources saved from that decision allowed the co-founders to set a new goal: to achieve completely automated inspection of a wind turbine, launched live at the world’s largest wind conference in Germany, all in nine months. Shortly after, Ben Marchionna was hired onto the team.

Ben Marchionna’s path to SkySpecs

Today, Ben Marchionna is a leader in the startup. Before signing onto the team, he was at the Lockheed Martin Skunkworks in Palmdale, CA. For aerospace engineering students, the Skunkworks is considered to be the cream of the crop: only the best get to work there. Yet, Marchionna decided to leave his five-year career there for a job at a nineteen-person startup. His journey to SkySpecs is composed of a series of seemingly-chance encounters with its founders.

Only two months into his freshman year at the University of Michigan, Ben became President of the University of Michigan chapter of the American Institute of Aeronautics and Astronautics (AIAA). The organization was much smaller than it is today; by Marchionna’s memory, there were only fifteen members when he joined. He reflects on his first leadership position at UM:

“I got pretty interested in how you put together teams of people. How do you put together a really smart team, set them aside to do something that everyone else says you can’t do, and let them go do that and see what you can build out of it? And how can you really change things from that?”

After leading AIAA for his entire undergraduate career, the organization’s membership increased over tenfold. He acknowledges that “doing AIAA was the inflection point. Had I not done that freshman year, everything I know today would’ve been totally different.” One of those differences could have been never meeting Danny Ellis, to whom he was first introduced during Aerofest, an event where members represent their aerospace organization at a booth. While Danny was representing Experimental Aircraft, Ben struck up a conversation. Although it was seemingly inconsequential, this was the first chance encounter of many on Ben’s journey to SkySpecs.

Ben, being a self-described serial planner, kept a notebook full of visions for the future, plans, and strategies to achieve those plans and visions. Like many other students, he put a great deal of thought into his life after graduation. He relates:

“When I graduated, I wanted to do one of two things. I want to start a commercial UAV business – because there’s a reason that you guys ended up doing that, right? The environment was right, the technology was out there, you could see where it was going. Either I wanted to do that, or I wanted to work at the Lockheed Skunkworks. And that’s very specific, right: those were the choices.”

Lockheed Martin won out. The market for large aerospace corporations was so poor when Marchionna graduated that Skunkworks wasn’t hiring. Even so, after only four months at Lockheed Martin’s Fort Worth facility, Ben worked his way into Skunkworks, where he would stay for five years. Initially, the experience of working on top-secret projects was a dream come true for Marchionna. He was also enrolled in Lockheed’s three-year leadership development program, which built on his learning experience on management and team-building from his years in AIAA.

If I said in twenty years, which one would I regret not doing, it would have been this. If I had stayed and didn’t go try out the startup thing, I would have regretted not giving it a shot.

Ben Marchionna, University of Michigan Aerospace Engineering Alumni

Despite the excitement of working on ground-breaking projects at the Skunkworks, Marchionna was wary of being pigeon-holed into a career at a large corporation. Fearing loss of project mobility and a life of guarding defense sector secrets, Ben began to revisit his interest in the UAV industry. In 2012, he represented Lockheed Martin at a booth in an Association for Unmanned Vehicle Systems International (AUVSI) Conference. Again by chance, he ran into Danny. A few years later, he meets up with Danny again; this time, the Lockheed Martin booth at the UM fall career fair was directly across the hall in the EECS building from SkySpecs. Ben finally realized that he needed to scratch “the itch for the commercial drone industry” after attending an impressive UAV conference in Los Angeles. He relates:

“I was walking around and I realized: if I don’t do something now, then I’m stuck in defense. Defense was interesting, but because I had that written goal, if I didn’t make the change now, I would never have the option of even trying it out.”

Ben’s decision came down to one major question: in hindsight, what would he have wished he’d done. He explains his thought process: “If I said in twenty years, which one would I regret not doing, it would have been this. If I had stayed and didn’t go try out the startup thing, I would have regretted not giving it a shot.”

Today, Ben Marchionna is a valuable member of the SkySpecs team. He realizes that if “any number of those weird little things” like “running into [Danny and Tom] at career fair, or at AUVSI years before that, or doing Experimental Aircraft stuff, [he’d] probably be sitting at the Lockheed desk instead.” Ultimately, Ben doesn’t think that it was simply chance that led him down the path to SkySpecs. Although he coincidentally met with Danny and Tom on numerous occasions, it was his decision to join the company. He makes the distinction between chance and design:

“I think the difference is that, especially for entrepreneurially-minded people, whether you’re entrepreneur starting companies or an intrapreneur navigating your way through a big company to make changes that way, I don’t think you’re just lucky. Those kinds of people create their own luck. They put themselves in as many of these interesting places that you have the opportunity to have these things happen. A lot of people at Michigan say, I have this degree, where’s my job. No, Michigan opens the door and gives you the keys – you have to go open up all the doors and see what’s inside them. It opens up all these doors, but it’s up to you to put in the sweat equity to actually go make those opportunities turn into something, and I think for the commercial side, all those little random things that end up totally influencing the endgame: you’re creating your own luck. And for someone to say, oh, I was just lucky is, I think, putting it too lightly.”

Advice to students, from the pros

Danny, Tom, and Ben all attribute SkySpecs’ success partially to the decisions that they made in college, and they encourage prospective and current students to do the same. Ben’s main piece of advice is to challenge yourself outside of the classroom:

“100% if you’re a prospective student coming to Michigan, don’t waste the opportunity. Do everything it takes to make the most advantage of your years – yes, have a social life, but don’t make that your number one priority. If you can align those two things – the thing you want to build, whether it be a technical product or an organization – if you can align that with the people you want to hang out with, you’re going to be way better off wanting to dedicate time to it, because you’re basically just hanging out with your friends.”

Ben further explains that a student who challenges his or herself outside of the classroom will solve the “chicken or the egg problem” that many students face: the need for experience in order to secure an internship. He advises that by building one’s own organization or experience within an organization, one can have fun and gain the technical skills needed for an engineering position.

Michigan opens the door and gives you the keys – you have to go open up all the doors and see what’s inside them. It’s up to you to put in the sweat equity to actually go make those opportunities turn into something.

Ben Marchionna, University of Michigan Aerospace Engineering Alumni

Danny remembers that he underestimated himself as a student, and warns current students against adopting that mindset. The majority of SkySpecs employees were UM students in either undergraduate or graduate studies, and for most of them, the Ann Arbor startup gave them their first full-time job. Danny advises that although it is easy for students to feel underqualified for internships or full-time positions, they should keep in mind:

“Our core team is comprised of some of the smartest people in the drone industry. I don’t think there’s anyone in the drone industry who’s been working as long as we have – at least not on the commercial side, just because the industry’s not that old. The caliber of talent here is insane, but it gets overlooked. Yes, Michigan as a whole is an elevated university, but the students that are actually in the classes are far more capable than a lot of people give them credit for. I want the students to realize that if you put your mind to it, you can do a lot of things.”

Tom assures students that as an employer, he values the passion he sees on a resume more than academic achievement, alone: “If you cared enough to go do that [side project] on your own and to learn about that stuff, that almost means more than if you have an internship at Google.”

Looking to the future

The leaders of SkySpecs look not only to the past for their success, but also to the future. After securing $8 million in investments, the SkySpecs team seeks to “be around long enough where [it is] taking the next steps in robotics,” creating large-scale automation processes in industry. Danny explains that “[SkySpecs’] core has always been automation,” and that he sees “a future where robots can do a lot more. We see a world in which renewable energy or any large industrial site could be run, maintained – all operations done without a human onsite.”

Tom backs up his co-founder’s vision, citing worldwide issues in energy and infrastructure:

“It’s clear that the world at large has an energy problem, and we have an infrastructure problem. Energy is dirty; it pollutes the air, of course, and also you’ve got natural disasters wiping out entire energy grids. On the infrastructure side of things, it’s way too expensive to maintain roads, bridges, and the only way that you can really fix the problem is by creating room in those budgets by making operations and maintenance more efficient. I think that’s where we come in, and I think we’re trying to play that role in the renewable space for now and for the future.”