If you haven’t seen the news already, the once giant $1.6b valued company providing “the Uber for private jet” experience has been bought by Dubai based Vista Global for an undisclosed fee, paid in stocks.
Rumour has it that the deal was worth a mere $20m in stocks, which is a huge leap away from the $1.6b valuation of 2016.
Where did it all go wrong?
With the app being downloaded more than 2 million times, and the private jet charter industry still being worth over $20b a year, you’d think JetSmarter would be pole position to clear up. So what went wrong?
Obviously, this is all my opinion on the matter based on people in the industry I have spoken to, ex-employees and my own thoughts. Don’t sue me, sue JetSmarter to try and get your money back instead.
First and foremost, their model was beyond flawed from the start. For $50,000 you could access all you could fly travel on private jets. Yes, that’s right. They looked good on paper when the membership sign ups were flooding in. The balance sheet looked excellent in fact, and it’s easy to show an investor your huge hockey stick chart off to the right when that’s happening, but the neglect came when it came to paying for those flights. If you know the cost of a private jet flight, it’s not cheap. You’re talking c.$10k from Basel (where I’m based) to Geneva for example, or Paris. One way.
It wouldn’t take me long to get my moneys worth in that deal if I had $50k up front. In fact, I could do that in a week, let alone a month. Over the year… you’re talking crazy money. Which was precisely the problem they faced. They were burning through $5m a month. A MONTH! Trying to pay for their model. $60m a year!
When you consider that, like VolAir, JetSmarter owns no planes. They’re a middleman, just like we are. Billed themselves as a technology company, much like we do. So how can you position yourself to burn that amount of money as a middleman in this?
It starts before the business model in their mission; with their aim to be the “Uber of Private Jets” and making private jet travel accessible for all is, for me, not what we’re about. At least not VolAir. We know we’re a niche market. If you want to fly on a private jet, you do it for the pure and simple fact that time is valuable to you and you want to maximise your output and it’s worth that to you to not waste at least 6 hours in airports and dealing with all the processes that go with regular air travel.
We’re not trying to make it accessible to everyone. What’s more, I don’t think that’s a problem. Do Lamborghini try and make their cars accessible to everyone? No, they do not. Their cars cost what they do and the cater for their market. What they do, is ensure that the service they offer is inline with that market. Which is where we think VolAir has positioned ourselves in a much better place to cater for our market.
We’re a technology company that specialises in putting the customer experience first. We want to ensure that our customers get the experience that they expect, but also feel valued, too. This is why VolAir wants to add value to our customers, not just in the introduction of VOL tokens for their custom, but through other services. Complimentary value add for our customers on goods and services that match their wants and needs.
A focus of ours going forwards will be to understand the wants and needs of you as our customers and provide not only the best services when it comes to private jet charter, but other things that you find important. We’ve already been in touch with partners around the globe to provide added value to our VolAir tiers on sectors including luxury resorts, car rental and more.
While it’s taken us longer to get where we want to be, what we have achieved already is beyond expectation in quality and instead of launching version 1 as we’d have hoped, we’re bringing much more for both customers and partners.
We have some huge things planned this year, and look forward to you all being VolAir customers.
Ross Jones – CEO, VolAir