Drone Proposal with Olaeris Needs To Crash and Burn

olearis pie in the skyThere comes a point in time when the politicians of Macon-Bibb have to start dealing with the actual problems facing the county.  Instead of cooking up pie-in-the-sky proposals that sound too good to be true, let’s instead look at why Bibb county has been stagnant for so many decades and start addressing the areas that really matter and could have a real impact of making this a better place to live.

The biggest problems facing Macon-Bibb in my humble opinion are the quality of the schools and graduation rates, poverty, blight, crime, unskilled labor force, lack of good jobs, and the high number of long-term under-employed and unemployed people who have given up even looking for work.

Drones, corridors, roundabouts, and pretty much anything else not addressing those key issues are distractions and are simply trying to put a band-aid on a compound fracture. At the end of this article I also make a suggestion for a technology investment in fiber gigabit internet that unlike drones could have a major impact on jobs, growth, and a realistic revitalization of Macon as it did in Chattanooga, TN.

Around a month or more ago we learned about a company called Olaeris and a deal to buy and possibly build drones in Macon. It sounded too good to be true and it now seems it was.  I am what you would consider a very geeky guy, so my  immediate response was one of excitement and cautious support. But that excitement soon waned the more I learned about this shady deal and the company behind the deal.

A local TV station called WMAZ did  some excellent reporting on why we should be concerned and skeptical of this deal.  They reported about months of secret meetings, concerns were raised about the need for so many drones, the real cost of a $5.7 million deal, the efficacy or need for so many drones of this size, and many other concerns culminating most recently in the discovery that Don Druitt, Macon-Bibb’s EMA director, received a written reprimand for sending a resume and cover letter to Olaeris which is the company proposing to bring drones to the county. I held off on an article until I had time to do my homework and write an informed opinion. That time has now arrived.

My initial enthusiasm over drones didn’t wane, it crashed and burned and so should this deal with Olaeris

The more I learned, the more skeptical I became about the need for any drones and specifically if we needed drones why choose a startup like Olaeris instead of an established company. I decided to do my own research into the drone industry and the company behind the proposal. My main two concerns: 1) Why do they think we need so many drones or indeed any at all? 2) Why we would need drones of such a large size and expense as the ones proposed by Olaeris instead of fewer and smaller cheaper versions?

If these drones were able to carry a first responder to save the life of a person drowning, choking to death, help rescue people in a house fire, arrive at a car accident, or other such emergencies…. that would be one thing.  But exactly what real good can come from having a camera in the sky above a house on fire or above a serious accident when the drone can offer no actual assistance? I would think more helicopters would be a far better way to spend money if there is a real need to save lives.They can at least transport and assist and rescue people in need.

However, the real reason for my skepticism became apparent is when I looked at the Olearis website.  I have built a lot of commercial websites for relatively small companies around the size of Olaeris. My first clue that something was a bit off is the fact that they allowed the designer of their site to advertise their company in the bottom right of the screen. That is generally something I have never done for any of the sites I created because it cheapens the brand and image of the business.

When I snooped around the website a bit more I saw red flags everywhere I looked. The About Us section fails to even list the last names of the executives. Not a good sign. There are no videos of actual product demos. The Geek Space section is anything but and very sparse on details. The Partners section fails to list any partners at all. This website completely flunked the smell test of what I would consider to be a legitimate and trustworthy company. It reeked as very amateurish and a desperate company trying their best to inflate their company by glossing over no sales or even a real product.

My second clue was this crowd funding site.  Their “partners” seem to just be companies like Sprint where they use Sprint 4G services for internet backhaul. Sounds more like a client relationship than a partner. I saw no evidence of actual partners. Under the section called “The Customers” they write we have over $50 million in potential sales contracts waiting in our pipeline, with the first $18M in sales on track to close by end of summer 2015. There’s a big difference between potential and actual sales! 

Would Olaeris get a Deal on Shark tank? Hell to the No!

If this company were on Shark Tank, how do you think the sharks would describe those potential sales contracts with no actual sales or sales contracts or even a working model or a product?  You don’t have to go out on a limb by saying Olaeris would not be making any sort of deal with Kevin O’leary or any other shark because they aren’t idiots. One of the very first questions a shark will ask is how much profit is the businesses generating. Again, notice the emphasis on the numbers. This is business, not a game. For Olareris that would be a big fat ZERO or actually a large negative number on the research and salaries already spent. How much in debt is Olaeris? How long can they even keep the lights on without a deal soon?

The other big valuation metric that sharks use is the revenue multiple. This works the exact same as the earnings just with revenue numbers instead of earnings. The sharks ask every entrepreneur what their revenue numbers are. What this does is to help make sure investors will have a chance to earn their money back and assure them the company is viable. Did I mention that Olaeris has no sales, no profits, and no revenues that I can find???

For $5.7 million dollars, Macon-Bibb should own around half of the company if not the entire company. The idea that we would hand this company $6 million as a customer is preposterous to me when their actual valuation for the entire company is probably only worth half of that. And since Macon-Bibb isn’t in the Shark Tank business, that means we need to step away from this deal entirely.

The People in Winston-Salem, North Carolina Knew Better

It seems Olaeris tried the same hard sell tactics on Winston-Salem and they didn’t bite.

Ted Lindsley, Olaeris’ chief executive, has urged for several months that the state Commerce Department pledge to invest $6 million in his company, or else risk losing a potential $20 million project with 150 jobs likely at Smith Reynolds Airport.

Luckily for Winston-Salem they had some smart  people like assistant city manager Greg Turner that raised the kind of questions we should also be asking. “If you fly one, how do you prevent it from hitting a building? How do you prevent it from falling from the sky? How much noise would it make when taking off and landing?” Turner said.

“The bottom line is that although the technology is exciting and the business prospect is enticing, we should await a demonstration of some sort of an actual product and an indication of public acceptance before committing the city,” Turner wrote.

Has anyone actually seen one of their drones? From what I understand all they have are animated images. Where are the working prototypes and demonstrations? Why would any city, let alone one as impoverished as Macon-Bibb risk around $6 million on a startup company that has no sales or any guarantee it won’t be bankrupt soon?

Final Thoughts

I could probably write another 5,000 words or more explaining why this is such a ridiculously bad idea. Mayor Reichert and the commissioners just step away from this deal and don’t look back. I realize few if any of you are geeks like me, but luckily you have some smart people here in Bibb county that can offer you some sage advice if you would just listen. Call Olaeris up and tell them you have no interest in their drones or anything else to do with their company. This deal stinks to hog heaven so just walk away with OUR $6 million while you can. 

This is also indicative of a bigger issue of Macon-Bibb continuing to use the lipstick on a pig strategy of revitalization and development instead of addressing the fundamental problems. Roundabouts, Second Street corridors, a water park at Tobesofkee, and all the other distractions won’t cut it. Blight is certainly an area that needs to be addressed but only if we come up with a plan to reduce or stop new blight faster than we can repair existing blight. Without some incentives for people and business to avoid letting their properties turn into blight we are fighting a losing battle. There has to be some penalties, repercussions, or remedies to abandoning property and we need a quick fix to reclaim that property and repurpose it quickly before we have to spend big bucks on complete demolition.

We need a Planning and Zoning board that has a vision that looks 30 years into the future and not 3. How many more strip malls spread all over the county do we need? One of the very first articles I wrote was called Zebulon Rd. Development Symptom of a Larger Problem and it goes into more detail on the vital role a P&Z board plays in the renewal of cities and how it effected plans in other cities when they had long-term plans for growth unlike what we have in Bibb County. We need to completely revamp our P&Z board entirely and work on our own longterm vision like the Envision Eugene plan. 

We must also ask ourselves if Macon-Bibb could not spend $6 million on projects that will return a lot more value for that investment in terms of jobs or tangible returns. Or better yet not spend that money at all unless it is absolutely necessary. We must also start asking ourselves what can we do together as a community to address the real elephant in the room which are failing schools with low graduation rates, high poverty and crime, an unskilled workforce, and a very large long-term unemployed populace. How can we train and get these people into the workforce? Drones, corridors, recreation centers, and all the other things are just smoke and mirrors that leads no where while you have unemployed people without the skills to get a job at a drone plant.

It’s possible the slick talking Ted Lindsey who is the CEO of Olaeris might sucker some other desperate city into a foolish agreement to invest $6 million or more with the promises of jobs and prosperity, but I hope Macon-Bibb leaders have the same horse sense and wait-and-see attitude of the good people of Winston-Salem, NC. This article seems to suggest Ted Lindsley and Olaeris have a history of embellishing the truth. This article about Greensboro also looks very similar to the one proposed for Macon complete with the hard sell tactics.

If Mayor Robert Reichert is truly interested in bringing jobs, growth, and technology to Bibb county I would suggest he consider looking into bringing fiber municipal gigabit internet into Macon which was largely responsible for the complete turnaround of Chattanooga TN.

Everyone could benefit from faster and cheaper internet but especially the schools and businesses. The economic  impact of gigabit internet on Chattanooga, TN has been enormous which helped them attract many large businesses and startups, improvement to their STEM programs at schools, selection by Amazon as a distribution center, a smarter electric grid with faster repairs during power outages, thousands of new jobs,  hundreds of millions in new investment into the city, and a complete revitalization of the entire city. From this link:

Chattanooga has experienced the third highest wage growth of all mid-size U.S. cities and has added many high-tech jobs paying an average of $69,000 a year, noted Mayor Andy Berke of Chattanooga at GIGTANK Demo Day on July 28……Charles Wood, vice president of economic development for the Chattanooga Area Chamber of Commerce, notes that some companies make the decision to locate in Chattanooga because of an indirect benefit of the city’s fiber infrastructure: The fiber network also supports the city’s smart grid infrastructure — and according to EPB, that infrastructure enables the company to restore service to most customers within just a few minutes, an improvement that can be measured in days over what the company experienced previously.

Gigabit internet and a smart power grid is what Macon needs, not some bogus deal with drone startup company desperate to make a deal before the creditors seize their assets. 

 

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