In 2004, the United States Marine Corps (USMC) began preliminary work with Insitu. Our ScanEagle unmanned aircraft systems (UAS) would be implemented as a “technology insertion demonstration project,” with the mission of providing troops with surveillance from a bird’s-eye view in the Iraq War. During early discussion with General Conway, then the commander of the 1MEF, he expressed a concern to me that he did not have extra personnel available to operate the ScanEagle system. I also held a concern that our very new system (at the time) would face a challenging debut in the harsh environment of war, not made any easier by less-experienced and distracted warfighters operating the technology.
With the ultimate goal of delivering the best possible solution to our customer in a high-stakes environment, General Conway and I arrived at a symbiotic solution: Insitu would provide operators to deploy with the Marines and provide UAS services for the troops on-site. This solution would not only allow the 1MEF to utilize our technology without requiring the delegation of extra personnel, but it would also place Insitu’s experienced operators on-site to provide services and report back to our engineers with any issues that needed improving upon.
With that, Insitu’s UAS Services were born.
The services business model turned out to be extremely successful and ultimately unrivaled in the industry; however this success did not first come without risk. At the time, the U.S. Marine Corps did not own Insitu’s UAS. Rather than purchasing the technology outright, Insitu was initially paid as a “performance-based contractor,” meaning that we only received payment if and when our team delivered valuable imagery to the customer. This took the financial risk off the customer, making it a popular program that would soon allow us to begin work with militaries in other countries, as well as the United States.
Performance-based contracting gave Insitu the opportunity to prove our worth to new customers, and was highly motivational in improving and perfecting our product. In a program where performance dictated 100 percent of our team’s revenue, everyone was extremely motivated to perform at the highest level possible. If our product performed poorly, our UAS would not be used and would not accumulate billable hours.
One example of a challenge that our team encountered in the early days was that the imagery from one of our systems seemed to degrade as the aircraft heated up during long flights at lower altitudes. With our team operating in a hot desert, you can see how this quickly became a priority to fix. Our engineers immediately got to work on finding a solution so that we could continue to perform optimally in the field.
Because ScanEagle was not a fully military owned system, we were able to quickly and easily implement changes in the technology. When we inserted changes that made the system better, we were rewarded. Conversely, if we inserted a change that broke the system, we would not get paid. This environment turned out to be so motivational that, during the first two and a half years of providing UAS services to the military, our team made around 188 total improvements to the product.
When drones were originally brought into the field prior to ScanEagle, high-ranking officers would often “borrow” them mid-flight for their individual mission objectives. There was a culture of mistrust in the military that if the local unit didn’t own and operate the asset, they were unlikely to have the surveillance when and where they needed it. As expected, early contract expansion discussions were originally driven by each unit wanting to own and operate their own assets.
It became clear that the services model pioneered by Insitu coupled with a Hub and Spoke operational configuration could be used to resolve this organization issue. ScanEagle drones could be scheduled and operated from the hubs for whichever units carried a budget for such services. Although there was some anxiety at first, the program decided to allow units to reliably schedule their surveillance support without fear of losing their asset “up the chain” and allowed missions to progress with fewer interruptions.
Frequently aviation assets are owned by a unit, which requires relocating every time the unit relocates.
Having the drones on contract, rather than owned by one unit, also allowed our team become a fixture to the base and provide services to various units as they rotated in and out.
Any government contractor in the aviation industry knows that the military has a room full of manuals, committees and rules that dictate how to acquire airplanes. In the early 2000s, the military was struggling as they tried to apply these complicated rules to UAS acquisitions.
Through our UAS Services, Insitu was not actually selling UAVs, but rather the information that those vehicles gathered. It turns out that there is no room full of manuals, committees or rules on how to buy pixels services. Contracting offers were given flexibility to use common sense for buying such services, especially if they were performance-based and reduced the risk to the US taxpayer. Offering a service that provided pixels as our product allowed for us to evolve faster and quickly improve the reliability of our systems.
When we first arrived at theatre many years ago, our average time between failures was around every 100 hours. Losing a drone every 100 hours became very expensive for Insitu, so we dedicated ourselves to improving reliability. Within 18 months in Iraq, our average time between failures was over 2,000 hours. These rapid improvements were made possible by the fact that the military was paying for our UAS services, rather than for the vehicle itself.
Conventional acquisition programs rely on planning, designing, testing, and many other systems engineering methods for improving reliability before getting to theater. Given the immaturity of both the small UAS technology and the acquisition guidelines and standards, trying to hypothesize reliability standards and cost tradeoffs (what are acceptable loss rates for lower cost drones) would have proven to be futile, in my opinion. Going to the theatre and being able to experiment while providing services proved to be invaluable. Fortunately, our investors and partners were willing to take the risk with as we evolved our systems while not forfeiting our commitment to the warfighter.
While the list continues, I will stop myself here. As you can see, the early days of Insitu’s UAS Services led to significant innovation and progress, making Insitu an industry-leader both in manufacturing aircraft and in providing superior information services for our customers. A sustained culture of pioneering and optimal performance arose through the swift evolution of products and services while our team operated beside our customer in the field. Over the past years, this business model and the technology available to customers have continued to evolve immensely.