I enjoyed your writeup. I was curious about some devil's advocate ideas for why Red Cat may not win the contract and Claude gave me some ideas--sharing here in case it's useful to anyone: Here's an outline of the devil's advocate position for why Red Cat may not win the SRR T2 contract:
Incumbent advantage for Skydio
Skydio won the previous T1 contract, giving them experience and established relationships
The government may prefer continuity rather than switching providers
Skydio's broader focus could be seen as a strength
Their experience in various sectors (law enforcement, border patrol, etc.) may be viewed positively
Diverse applications could lead to more robust technology
Skydio's superior funding and resources
Larger company with more capital to invest in R&D and production
May be better equipped to handle large-scale government contracts
Potential bias in the article's sources
Information from Red Cat's CTO may be overly optimistic
Industry experts consulted could have incomplete information about Skydio's capabilities
Skydio's claimed improvements
They state they've learned from shortcomings in Ukraine
New X10D drone may address previous issues effectively
Lobbying efforts by Skydio
While the article dismisses this, lobbying can have significant influence on contract decisions
Production capacity concerns for Red Cat
Despite claims, Red Cat may struggle to scale up production quickly enough
Potential overemphasis on Ukraine performance
While important, this may not be the only or primary consideration for the contract
Red Cat's financial position
Smaller company with less ability to absorb setbacks or delays in payment
Possible overestimation of Red Cat's technological edge
The true capabilities of each company's drones may be closer than portrayed
1. How hard is it to make these things so how much is factory a concern, or is it simple engineering?
2. How fair are governments really, and are there prior examples of larger incumbents losing? 3. How much are contracts given via drone v. drone versus "company v. company"?
Sadly I don't know realistically how best to get answers. It seems like the sort of thing you need GLG for.
I think it does. But this is already a complex enough industry and with it being a spinoff there's just enough added complexity that it turned me off of it for now.
Great article! I bought rcat previous to reading this, but your insights make me more hopeful. Nothing to do but sit back and wait. It will be an interesting month. Now I just have to read your other stuff.
Incredible write-up. I was wondering. Could you then not bet on both? If one of them could appreciate at 200% or 300%, it could offset a complete loss of capital of the other one. (That is if skydio would be able to appreciate in the same manner as red cat If it wins the contract)
I enjoyed your writeup. I was curious about some devil's advocate ideas for why Red Cat may not win the contract and Claude gave me some ideas--sharing here in case it's useful to anyone: Here's an outline of the devil's advocate position for why Red Cat may not win the SRR T2 contract:
Incumbent advantage for Skydio
Skydio won the previous T1 contract, giving them experience and established relationships
The government may prefer continuity rather than switching providers
Skydio's broader focus could be seen as a strength
Their experience in various sectors (law enforcement, border patrol, etc.) may be viewed positively
Diverse applications could lead to more robust technology
Skydio's superior funding and resources
Larger company with more capital to invest in R&D and production
May be better equipped to handle large-scale government contracts
Potential bias in the article's sources
Information from Red Cat's CTO may be overly optimistic
Industry experts consulted could have incomplete information about Skydio's capabilities
Skydio's claimed improvements
They state they've learned from shortcomings in Ukraine
New X10D drone may address previous issues effectively
Lobbying efforts by Skydio
While the article dismisses this, lobbying can have significant influence on contract decisions
Production capacity concerns for Red Cat
Despite claims, Red Cat may struggle to scale up production quickly enough
Potential overemphasis on Ukraine performance
While important, this may not be the only or primary consideration for the contract
Red Cat's financial position
Smaller company with less ability to absorb setbacks or delays in payment
Possible overestimation of Red Cat's technological edge
The true capabilities of each company's drones may be closer than portrayed
These are all great points! I completely agree.
I would love to have more color on:
1. How hard is it to make these things so how much is factory a concern, or is it simple engineering?
2. How fair are governments really, and are there prior examples of larger incumbents losing? 3. How much are contracts given via drone v. drone versus "company v. company"?
Sadly I don't know realistically how best to get answers. It seems like the sort of thing you need GLG for.
Does $UMAC deserve a look on its own?
I think it does. But this is already a complex enough industry and with it being a spinoff there's just enough added complexity that it turned me off of it for now.
Yep this is great to see
Great article! I bought rcat previous to reading this, but your insights make me more hopeful. Nothing to do but sit back and wait. It will be an interesting month. Now I just have to read your other stuff.
What a day for your recent ideas! Thanks again. Glad you introduced me to this and others.
Good result - https://www.sec.gov/Archives/edgar/data/748268/000155479524000172/rcat0723form8k.htm?utm_campaign=website&utm_medium=email&utm_source=sendgrid.com
Incredible write-up. I was wondering. Could you then not bet on both? If one of them could appreciate at 200% or 300%, it could offset a complete loss of capital of the other one. (That is if skydio would be able to appreciate in the same manner as red cat If it wins the contract)
My.bad. I missed that skydio is not a public company. And buying their shares privately isn't easy so...