TheRichest recently had the opportunity to interview Sergey Petrossov, CEO and founder of JetSmarter, a mobile community for shared and private flights. Petrossov discovered a gap in the aviation market and created a realistic solution that is suited for people of wealthier means as well as the middle class meaning that certain prices for private jets can be as low as $100 to $300. You can learn more about this incredible new service as well as how Petrossov got the idea for it by reading our exclusive interview.
TheRichest: Sergey, you created JetSmarter with an extreme sort of “waste not, want not” mentality. By putting thousands of private jets that previously sat unused and depreciating in value to good use. Thanks to an untapped market, you’ve created a way for the middle class to fly like first class. How did you find this niche in the market?
Sergey Petrossov: I discovered it in 2009. I met a private jet operator and he walked me through how the booking process work used to exist or still does exist in many cases. You’d have to call in and talk to somebody, there were no digital means. There was no website, there was no app, you’d have to call somebody and they would send you a physical piece of paper and that was kind of astonishing to me. Being inquisitive, I asked questions about the market and realized that this seemed to be the only travel industry that hadn’t gone online. That was kind of the first niche. Over the course of the next three years, I went to a number of trade shows with this company and I was in a different space, I was involved in education and technology and was doing this kind of as a hobby. The second niche that I discovered before I started JetSmarter was not the fact that it wasn’t online, but the fact that the airplanes were highly underutilized. The average airplane was only flying about $200 a year while commercial airplanes were flying like $3,000 to $4,000 a year. And the number of people per plane was only about 25 to 30 percent. Not only were the planes not flying enough, there weren’t enough people on the plane. Probably the biggest thing was the sharing economy. I discovered that, over the course of those three years in getting to know this industry, in 2012, I tried to enter into this space and we finally went to market in March 2013 and launched JetSmarter. It really started to take off in 2015.
TR: How does the service work?
SP: When you think of JetSmarter as the new transportation alternative, it fits right between with what you know as traditional private aviation and commercial aviation. So traditional private aviation is completely on demand meaning you can call up, or now with us, it’s on our app. You choose the airport, the date, the time. You pay for the plane, but it’s completely on demand. It will take you to any airport that you want to go but you have to pay for the whole plane. Commercial Aviation, on the other hand, it’s already on a fixed schedule, so you’re aggregating around what an airline published and you can book a seat on a flight that’s going from Point A to Point B but it’s very consolidated. You’re only going to specific airports at specific times. With JetSmarter, it’s a new sharing economy alternative that fits right between those two and it’s a crowdsourcing mechanism where a flight initiator can choose the airport and choose the time but instead of having to book the whole airplane, they only choose the seats that they need and the prices are based on that. And with the seats that they don’t need, they get published on a schedule that they set and other customers can aggregate around them. So it’s a community-driven schedule and it’s essentially a crowdsource aviation solution where the community drives the frequency, the flight times, etc.
TR: As we understand it, JetSmarter fliers can create a flight on a private jet with other fliers, if they wish, all with an app on their phone. If the flight does not book seats completely, would the other fliers pay the same price as a full flight?
SP: The answer around pricing isn’t a two-dimensional answer. It depends on the route. The way that our model works is that on certain routes, the creator may be responsible to pay for all the seats and only as other people book, they get rebated money. On other routes, when we have higher critical mass, JetSmarter actually underwrites the risk and will say, “hey, you only need to buy three seats on this day and time” and JetSmarter will take the risk on the rest of the seven (seats). So those three seats will be the known risk to the creator and we’ll take the risk on the rest because our algorithms are making a prediction that it will sell. So the creator, depending on the route, depending on the day and time, is required to underwrite anywhere from 10 to 100 percent of the flight. Even if they bought 50 percent of the plane and they were only needed one seat, they could still sell back three or four seats. The proprietary algorithm depends on the route, day and time.
TR: What advice can you give a startup trying to find their own niche?
SP: Don’t give up and be comfortable pivoting.
TR: What makes JetSmarter more beneficial to the customer than using a regular airline?
SP: The benefits of flying on a private aviation are that you don’t have to go through the clunky commercial aviation process where you have to go to a massive airport, walk through a terminal with hundreds of thousands of people, you save a significant amount of time because you can show up ten minutes before your flight with JetSmarter. You fly at a higher altitude so it's often times faster. The flight, depending on the distance, can be anywhere between 15-20 percent to 50 percent faster. It’s a much better process, it’s much healthier. Physically, you won’t have to go through a highly congested airport with stress and germs. You won’t feel jet lag (as with commercial flying). You’re sitting on a plane with ten people, usually, it’s a similar demographic. You can actually build on that community and use JetSmarter as a networking tool.
TR: Can you tell us about your target audience? Who is JetSmarter geared to?
SP: The answer is that we are geared toward anyone who needs to travel in the sky. So, if you’re going from Point A to Point B. Depending on the route, the pricing differential, it can get significantly different Flights that are under 90 minutes, can really be mass market between $100 to $300 a seat, but as you start to go the longer distances, the price points reflect that the audience is a bit wealthier. I would say that under 90 minutes, we do target a mass market. After around 90 minutes, it starts to become a premium offering.
TR: Where do you expect JetSmarter to be 10 years from now?
SP: I expect us to be flying millions of people a year and to be more global that we are now in places like Asia and South America and we would be a definitive alternative to the current air transportation tools.
TR: How big of a role does technology (specifically the JetSmarter app) play in the business model?
SP: It’s huge because it’s a mechanism that we use to let people crowdsource each other, create flights, notify people in real time so the advent of what’s called a sharing club or a flight club existed long before technology in cities that were underserved when aviation was just starting. People would have these flying clubs and they’d try to get out of their city and they’d try to aggregate enough people. The problem with that is the lack of speed with information and the critical mass. Only through technology, can you get millions of people in a system and notify them at the same time. Because our flight frequency is directly correlated with the community creating flights. So the more people in the ecosystem, the lower the pricing can go for the people who are creating the flight because others want to take the flight with them at the same time. You can only do that with technology and get enough people to be notified about certain events in seconds.
TR: JetSmarter is such a bright idea! In your opinion, why hadn’t anyone executed this business idea before?
SP: As I was saying, flying clubs have actually existed for about 60 to 70 years, since the beginning of aviation. The idea of getting people to crowdsource planes has existed, it’s just that you couldn’t execute the crowdsourcing tool, as just described, in scale before the advent of technology. This isn’t a new thing for people to crowdsource airplanes, but we were able to go to the market, build a technology tool, have enough access to airplanes and get enough people together to build critical mass. So a lot of puzzle pieces had to come together and I think a lot of it has to do with timing and we have a good team and the resources that we have behind us so a lot of it is execution and timing.
TR: Would you say that JetSmarter is the Uber/Lyft of the open skies?
SP: I’d like to refer to us as in a class of our own. We are a new transportation alternative. The form of flying with JetSmarter really has made exceptional, unique and different from the ground transportation solutions.
TR: What would you say to someone on the fence about trying JetSmarter?
SP: I would recommend that next time they’re going through the TSA and they’re getting frustrated with commercial airlines, to pull out our app because I think that will help them pull the trigger.
TR: Speaking of your app, our readers can find your app, JetSmarter, easily? Is it available on Android and iOS?
TR: Can you tell our readers what your favorite book is?
SP: I like the book called “The Seven Habits of Highly Effective People” (by Stephen Covey).