Editor's note: This article is part of Inc.'s 2016 Best Industries report.


At first glance, CyPhy Works seems to be taking a giant step backward with the design of one of its small military  drones, which is tethered to a power source by a microfilament. Why would you want a drone on a leash?

Because CyPhy founder Helen Greiner knows it's the best way to overcome the biggest impediments to the military use of small drones: Most can stay airborne for only 20 minutes (which isn't enough time to accomplish much in a military setting) and their wireless communication is easily hackable. CyPhy's drones, thanks to that anachronistic tether, provide unlimited flight time and secure communications.

CyPhy's Persistent Aerial Reconnaissance and Communications system, a 15-pound drone, "goes up in the air and it never comes down," Greiner says. A patented microfilament wire, which supplies the drone with power and Ethernet connectivity, allows the drone to fly autonomously and for as long as it needs to be aloft. From surveillance to security, the applications for a small, tethered, 24-hour drone are nearly endless. 

"It sounds counterintuitive for a drone to be on a wire," Greiner admits. But backed by $32 million in venture capital from investors and partners as diverse as the U.S. Army, General Catalyst, Motorola, and UPS, CyPhy is set to cash in on the idea. The PARC recently passed the Army's rigorous "torture" testing, which means the military service can now start purchasing it.

Greiner says CyPhy is still developing an even smaller military drone called the Pocket Flyer. Weighing only 80 grams, the craft is designed to fit in a soldier's cargo pocket. It flies via tablet or smartphone and is meant for reconnaissance in indoor locations. The Pocket Flyer, says Greiner, can fly through doorways, tunnels, and caves while securely transmitting video and data over the 250-foot-long microfilament.

"Imagine there's a dangerous hostage situation, or a fire, or a booby-trapped tunnel," says Greiner. "Anytime you have a dangerous situation indoors and you want to know what's happening, before risking someone's life by sending someone in, you send in the pocket drone."

A second act.

Drone manufacturing is already a $3.3 billion industry, according to research firm IBISWorld, and is set to get a huge boost when the Federal Aviation Administration loosens its rules for the use of commercial drones, a development that is expected to happen this year. Drones are "the most accessible business opportunity we've had in aviation in 60 years," says Keith Kaplan, the CEO of the Unmanned Aerial Vehicle Systems Association.

Of course, that accessibility means that CyPhy's competition is constantly increasing. Other companies in the space include military drone makers AeroVironment and Prox Dynamics, as well as consumer and commercial manufacturers such as 3D Robotics and DJI.

If CyPhy's drones catch on, it will be the second time that Greiner has created a product that saves military lives. Before Greiner founded CyPhy in 2010 in Danvers, Massachusetts, she spent 18 years making ground-based robots at her company iRobot, including a war-tested bomb-disposal and surveillance robot, the Packbot. iRobot, which she started with colleagues at MIT in 1990, sold more than $1 billion worth of product over two decades. It also brought robotics to the forefront of American popular culture with consumer products like the Roomba robotic vacuum.

CyPhy's drones are not focused solely on military applications. Greiner says the company also has partnered with Motorola Strategic Solutions, the telecom's investment arm, and is building commercial tethered drones outfitted with 4G LTE networks to create temporary cell towers. The cell-tower drones can potentially provide immediate cell phone service during emergency situations, in rural areas, or at big public events like concerts where thousands of people are trying to connect to a network at the same time. UPS, another investor and partner, is exploring other applications for CyPhy's drones, from monitoring activity to package delivery.

Greiner also is developing an easy-to-fly, untethered drone called the LVL1, which had a successful crowdfunding campaign on Kickstarter earlier this year, raising nearly $900,000 from 1,500 backers (surging above the $250,000 goal). Designed with stabilizing technology to prevent tilting, which is a problem for most drones, the LVL1 is built for average consumers, not serious tech hobbyists. To address FAA rules that limit drone flights to under 400 feet, LVL1 users will be able to create a virtual barrier, which the drone will not be able to cross. The drone is still in production, but Greiner says it will hit the market this year.