Townshend

Where do you see that?

millions

Basically everywhere tiers are mentioned on the website.

https://jetsmarter.com/membership-tiers/

backdoc

I hope they stabilize their business model soon and stop altering their "contract" with us every few minutes.

gold23

At an affair over the weekend, several Jetsmarter members were discussing the service. One of them, a fairly successful businessman who recently sold his small company, mentioned he had the opportunity to meet the senior execs of Jetsmarter about six months ago.

He's also a member of wheels up, and he said the difference in "quality, intelligence, and understanding of basic building concepts" was night and day between the two (understanding that their businesses were not apple/apple). Jetsmarter execs had a bravado about them, discussing unrealistic growth. Most importantly to him, there was nobody at the helm who had experience building a business, had to overcome obstacles or failure, etc. He asked whether anyone with that experience would be brought on board as they grew, and he said they were almost offended by the suggestion.

Interestingly, of the three separate members, two of them are quite happy with the service. They travel single, with the goal of getting from point A to point B without airport hassle. To them, Jetsmarter is perfect. One described it as managing expectations- it was not so much a private flying experience as it was an experience to severely mitigate hassle.

Gabrca

Some good insight. Do you think the reason they are happy with the service is because it just represents (as I do) an insane value for money? The general consensus on the flights I've been on is that that the model is just not sustainable and they must be burning cash. The empty legs I can understand, as they can negotiate a cheap rate with the brokers as the flights are flying anyways. The shuttles on the other hand must cost a fortune + helicopters (for all the grandfathered members) + empty seats eating into costs.

Doing the math in my head, even if they are getting a good rate on the NYC-LON GIV, I doubt they are paying much less than $60k each way. If they theoretically manage to fill the shuttle full with 10 people paying $2k thats $20k total, so they are eating $40k on each shuttle. Assuming each member has an average of $10k membership fee, that's 40% of the annual revenue from the passengers going towards the extra cost of ONE shuttle.

*Note: Very rough numbers* - Someone with more insight can probably provide a more accurate statistic behind high-volume charter costs.

As an aside, as a European Social (access) member. I'm also very happy. I've now travelled to Geneva, Luxembourg, Frankfurt, & Malaga on empty legs in the past 3 weeks. One Citation Mustang, Two XLS+'s, One Legacy 650. All great experiences. The ground and in-air experiences have been great including tarmac transfers, high quality alcohol, and very professional pilots. Don't know if the operators for the empty legs are aware of how JetSmarter operates (as in they always seem a bit surprised we don't know the other passengers on the jet), but we get treated like regular passengers all the same.

gold23

That was the general consensus- it was impossible to sustain. They each thought that there was an actual end point/goal for management that capitalized on a large customer base. That they were operating similar to a web start up, where they were looking to add members as quickly as possible and either sell or worry about sustainability later. "There's no f-in business plan here, but I've gotten my money's worth" was a direct quote.

I mentioned I had seriously considered the service, primarily based on all of the empty legs I saw out of the NYC area several months back. They all quickly congratulated me on not doing so....said that while they were great, unless I was retired or completely unfettered, most of the empty legs turned into forced trips for them where they ended up taking advantage of the trips solely because of the value of the empty. They each had business or homes on two sides of the shuttes, and one of them also has a daughter in school in Chicago. They're bracing for the day when this comes to an end, but really taking advantage of the service for now.

The one guy kept coming back to his experience with charter, jet card, and corporate flying over the past 15 years. Said the quality and service of all of them differs greatly (and by operator), but that you usually understand what you're getting/paying for. With JetSmarter, he said it was the only time he felt as if he was either a) being lied to or b) in the company of people who really had no idea what to do with a great original idea.

Gabrca

I can see that for sure ... While there are a lot of empty legs in the US, many seem to go to quite random places.

I can work remotely most days, and am still relatively new to Europe, so for me the European empty legs work well and go (sometimes) to more exotic destinations than say Boise, Idaho (No offence to anyone from Boise). Today saw London-Madrid, London-Geneva, London-Reykjavik and London-Paris on the app.

Kagehitokiri

JetEdge is for the shuttles?

3,500 x $7,000 = $24.5m
4,500 x $7,000 = $31.5m
5,500 x $7,000 = $38.5m

$50m / $7,000 = 7,143

mwood20

Jeeze they need to get it together and stop changing things to frequently. Pick something and go with it.

gold23

I've definitely noticed the EU empty legs. Could certainly see that falling into a sweet spot, with so many great destinations in a relatively small footprint.

Sykes

In news related to them changing the benefits frequently, helicopter transfers in NYC are now $249 for new members. I'm curious if that will affect existing members at renewal.

salanki

That is pretty much sustainable pricing for heli transfer counting on full heli all the time. Now we'll just have to wait for the actual shuttle prices to go from $0 to $2k per person to Miami and they might have a sustainable business model (until all users leave and/or class action).

KurtR

For disclosure purpose:

My name is Kurt Rayners – I live in Southern California – I do not own any stock nor have any investments in JS. I have never been employed by JS and am not a consultant for JS.

I am a “smart” member- (October 2014)

I just completed my 75th jet deal/shuttle/heli flight with JetSmarter last night on a G200 to SFO – I am a JS FAN - I WANT THEM to Succeed – so should all of you, right!

I run a consulting firm focused on small to medium business turnarounds and serve as the CFO/Investor of CROWDZ an online e-commerce group buying app.

I have met with Sergey in person and on the phone - because he has passion and is entrepreneurial. He understands the opportunity and recognizes the gains from failing forwards. He has paradigm shifting vision, which I respect. He understands startups and I was in the middle of building my own startup, so we connnected.

My 10 cents (not two cents): this is a long post, but hopefully an educational message and focused message to help everyone understand the importance of constructive messaging in the vain of helping JS succeed and continue on the growth trajectory reported in the WSJ.

Membership Tiers – rumor is that the highest tier membership is going “private” meaning you have to be “invited”. Maybe they are doing this to capture share from NetJets, Wheels Up, etc. This could be a good deal for all “smart” and “access” members since the higher fee probably brings in greater margins for JS. Bad side, the Sophisticated members are no longer flying with our level, so the networking could diminish. Could be other downsides, but I can tell you that I have been on jet deals with other passengers and their comments are - " I hope they continue to raise the rates" that will keep the "groupies" from joining.

Business Model – Shuttles and Charter – Self Sustaining Possibility Story First – a fellow JS member told me last month that he is using the charter services with JS. In fact, he told me he booked a super heavy Jet for a trip out of South America and paid JS $65,000 for the Charter – there has to be good money in that Charter for JS.

In fact, I know people are buying seats on the jet deals and the shuttles and JS makes money for sure on the seats they sell. During one conversation with Sergey he hinted to the fact that the average spend over and above membership levels is increasing dramatically. I think he said the average is nearing $20-$30k per active member. These are probably members buying extra seats, members booking on demand shuttles, and the concierge products. I have used the concierge services and they are making money on the tickets I have purchased…and they should.

The shuttle seats are for sure selling on the Eastern corridor flights – and I know that KHHR to KSFO is selling seats, because I talk to those passengers all the time. I also was on the KMDW to KVNY shuttle last month and a family of five was on the plane and they only had one membership in the family, so the math on that is an additional four seats @ $3990 each and that is just one example. I bet the margin on the individual seats is at least 50% and probably higher.

Business Model –
Scheduled Shuttles – OF COURSE they are burning money – every startup burns money – so that argument is just a restatement of the fact of startups. If the startup does not burn money, then the investors wonder why. But just like Uber is burning money in china, so to JS must burn money in order to capture share, attract customers, and build organically. However, maturity in a strong business model sets in over time. The trick is to keep that maturity curve steep, by moving fast and furious and working 25 hours a day and 8 days a week on customer acquisition, revenue build, and customer loyalty efforts. I am willing to be my membership that NY – FL – NY is very mature and seats are being purchased more often than not. Side note - do any of you honestly think the prince of Saudi Arabia and Jay Z would invest in a model they do not believe in?

On Demand Shuttles – this has to be a money maker and when I look at the shuttles on the app – I see more and more “member shuttles” popping up. The math is that at least 3-4 seats are paid for to get the shuttle going and then others join in (albeit some free). That shuttle is not paid for my membership fees, its paid for by Credit Cards 

So let’s assume the best case scenario – 50% of the shuttles created by users are not paid for by the membership fee, they are paid for by the initiating member…that means at least 50% of the shuttles are “self-funded” not membership funded.

Economics – My experience tells me scale will work There is always economies of scale in this business called aviation – the more people fly, the more the jets are used, the more money is being made on a per seat basis. The growth of 0-4000+ members in a matter of 3 years is a testament to the demand.
The number of seats/hours that JS is buying is pure dollar cost averaging – meaning – if you are looking to charter a plane (with XO or TMC) then you might pay $3500-$10,500 per hour, however if JS is “guaranteeing” 250 hours for a year their cost per hour is way lower – in fact, I bet you it is at least half of the individual buyer. You all can do your own Math.

This is my message to all of you:
If you are not a member, then stop posting. If you don’t vote in the election, then do not complain about who gets elected president.

If you are a member – then post your complaints, questions, and your praises. If you have a complaint – post it – and offer a solution and idea.

My mantra with my teams – “if you have time to complain, then you are wasting valuable time that you could be spent producing”.

I WANT JS TO SUCCEED AND SO SHOULD ALL OF THE LOYAL MEMBERS OUT THERE THAT HAVE AN OPPORTUNITY TO FLY PRIVATE THAT WAS NEVER POSSIBLE BEFORE.

I welcome all constructive and insightful comments and am open to discussing over the phone. Just remember, I am a loyal member, fellow passenger, and visionary.

Kurt

oenophilist

Sorry, but no. You don't get to dictate who can post to this thread. This thread is for any Flyertalker that wants to post. As long as it meets the TOS.

My message to everyone: continue to post regardless of whether or not you are a member.

While I do want JS to succeed, that is NOT the purpose of Flyertalk nor of this thread. I think we do, however, all welcome JS to contribute to this thread.

This thread is to discuss JetSmarter and share experiences. Anyone can contribute.

As to the rest of your post, I think it raises some good discussion points. But this is NOT a thread designed to help JetSmarter, this is a thread to help Flyertalkers understand JetSmarter, the good and the bad.

That being said, I do hope that JetSmarter listens to some of the things being discussed here. In my experience, JetSmarter is good at promoting but hasn't been all that good at listening to its customers.

Herb687

Absolutely. I've seen investors far more sophisticated than the prince of Saudi Arabia and Jay Z lose heaps of money in private aviation.