Esther Dyson’s Flight School

Check out Virgin Charter and meet the founder Scott Duffy (photo) at Flight School next week.

Virgin Charter (formerly Smart Charter) is going to shake up the air charter market in an interesting way, doing on a grand scale what a number of start-ups are doing in a smaller way. (This is distinct from “true” air taxis, where a single outfit controls and manages a fleet.) The big question is: Will prices or costs go down faster?

To quote from the press release:

Virgin Charter is a full-service marketplace that brings together buyers who want to book private air travel with safety-rated charter operators. Through Virgin Charter, sellers make their inventory available to a large customer base without changing the way they currently do business, and buyers search for available aircraft, negotiate pricing, purchase private air travel, and manage their entire trip online. Virgin Charter does not own or operate aircraft, and it does not act as a broker.

The Virgin Charter team is led by founder and CEO Scott Duffy, a seasoned Internet executive and private aviation veteran who served as a managing director for one of the largest charter brokers of private aircraft in the world. The team also includes technology and aviation executives from Google, Expedia, eBay and the Jet Propulsion Laboratory (JPL). Said Duffy, “Virgin Charter’s centralized marketplace will revolutionize private aviation by providing tremendous efficiencies to what has been a highly fragmented industry.”

Please do take a look at our speakers page… I have finally posted most of the bios. It’s a really interesting crew….

http://www.edventure.com/flightschool/biographies.html

Last week I went to visit Stephan Hanvey, the CEO of SATSair. he’s one of the speakers at Flight School, and I wanted to learn about him and his business up close.

The first thing to understand about SATSair is that the model works. If you offer people reasonably priced “air cab” service ($595 an hour for up to three passengers) that lets them get their work done faster – or to do more work – they will take it. The service flies short hops, usually 100 up to 500 miles, throughout the Southeast.

Disclosure: I received about $300 worth of “air cab” service from SATSair, but it seemed like a reasonable way to sample the product. Next month, when I need to fly from Orlando to Sea Island – about 150 miles or 40 minutes as the crow or air cab flies, and probably about 4 or 5 hours by car – I will most likely use SATSair’s service and pay for it (or rather, charge the organization for which I am giving a speech).

My pilot was Dan Morgan, a friendly but not too chatty redhead who used to fly for a commercial roofing company. He showed up early, and I showed up early, so we arrived in Greenville (pronounced Greenvul) almost before we were supposed to have started the 20-minute flight (from Charlotte, NC).

Steve Hanvey co-founded SATSair in 2005, taking over a moribund charter company whose founder, Tim McConnell, is now happily running the revived company’s flight training and safety departments. McConnell is more of a pilot/operator, whereas Hanvey is a natural businessman. He has a sunny but disciplined nature that has enabled him to assemble an impressive team to run a modern airline in this corner of the country that looks like a gingko leaf: Florida is the stem, Atlanta is in the center, and the edge curves west from Virginia through Kentucky and Tennessee, and then south through Mississippi to the Gulf of Mexico.

The company’s business is a home-spun version of the sexy new air-taxi market. Hanvey calls it air-cab: no-frills but serviceable, available more or less on demand, in a single-engine, single-pilot Cirrus (which has a whole-plane parachute for safety).

Doubling from 26 planes

He won’t talk revenues, but the company’s fleet has grown from 15 last year to 26 currently, and he has 40 more on order with an option for an additional 50. It’s also still handling most bookings manually, even ones ordered over the Web, but is in the middle of figuring out how and with what software to get more automated. Dispatching likewise is manual, though there’s lots of modern software for tracking planes, positioning them and the like. As far as I can tell, the company still needs to get greater density to support its growth – but its great will support that greater density. Right now, its planes are averaging more than 1000 hours a year – not quite at the goal of 1400 per year, but way beyond the charter average of about 300.

But what I liked most about SATSair that it isn’t all about the planes. I’m afraid of sounding sappy, but the company exudes a kind of southern folksiness in its concern for its customers. Those are the stories that resonate.

The customers are primarily local business people – lawyers, consultants , land developers and the like. The company also has contracts with universities, who send professors out to visit various research projects and bigwigs out to visit donors. You can pay by the hour, says Hanvey, or you can buy 50-hour chunks at a discount. Many clients have gone in gingerly, and quickly moved up to the discount packages.

It’s nice to see that lawyers, for example, find it cost-effective, but a sizable number of SATSair’s clients say that the service has enabled them to expand their businesses. Instead of driving for up to five days per week to see clients, many SATSair customers find they can be home in less than two days. The other days can be spent catching up and making additional sales calls – or playing golf!

…because now it’s more than just business. The company began as a five-day-a-week operation, but now it flies on weekends as well. People who try it for work end up using it on shopping trips, golf outings…and yes, at least two blind dates so far.

….(and if you’re near Dallas) you may want to attend Thursday’s Space Venture Finance Symposium, the venture-capital offshoot of the International Space Development Conference in Dallas, which starts this Friday. Yes, that’s the day after tomorrow - Thursday May 23.

I’ll be there, leading a panel and gathering background for Flight School. There’s still space for walk-ins, says organizer Burt Lee. And he adds (in writing, no one talks like this!):

* Convergence themes: space and information technology, space and aviation, space and nanotechnology.
* A stellar line up of speakers from the global finance community, many of whom are new faces on the space finance circuit, including Lon Levin, co-founder of XM Satellite Radio, and now Chief Strategic Officer of Transformational Space Corporation; Tom Pickens, CEO of SpaceHab and Managing Partner of Texas Nanotech Ventures; Bill Gail, Microsoft “space czar” and Director of Strategic Development for Microsoft Virtual Earth; Mike Lyon, Managing Director of Spaceport Singapore; John Higginbotham, Chairman (retired) of SpaceVest Capital; Peter Banks, General Partner of Red Planet Capital; and yours truly of course, among many other distinguished speakers.
* Showcasing of 17 featured space startup companies from the US, Canada and Europe, spanning space-IT markets, satellite servicing, entertainment, microgravity research, and space tourism.
* The first National Space Society Space Finance Award, to be announced in Dallas.

The National Space Society is sponsor and organizer, along with Innovarium Ventures of Washington DC. See you there!

Just in case you were wondering:

The Aspen Airport, currently closed for repaving, is still scheduled to reopen on June 7, according to Kiewit Western, the construction company doing the repaving.  (The airport’s own site has only a press release from July 2006, speaking of ?effective? customer communications!)

Yeah, I would be skeptical too, but the Aspen Food and Wine Festival is scheduled for June 15 to 17 (the week before Flight School), which gives me great confidence the schedule won’t slip too much.  The FaWF is Aspen merchants’ equivalent of Christmas week.

The title alone may put you to sleep, but read on. This post is a targeted version of advice I’m giving to outfits in three areas: personal information as in personalized search or advertising cookies, space travel and medical information. You can read that version at the Huffington Post.  

 You are probably familiar with the process of informed consent, especially on the web:  You click a button, a small window opens, and a few lines of text are visible out of what may be nine or ten pages of text.  You can page through it if you want, but it is almost impossible to read, often all in upper-case text.   Here’s a sample. 

 In a typical consent-form scenario, the offering party’s goal is to get the user to click yes, whereas the user’s goal is to get on with it.  But there’s an opportunity to do something quite different. 

So here’s the message I’d like to see, for example, on a site offering space travel.  The sections in italics are my commentary.

*********************

Our service is not just something we give you; it’s also something you have to do for yourself.  Part of it is educational, and so before you buy we want to give you a free sample. 

In fact, we want you to be an informed consumer.  If you buy our service and feel disappointed or wronged, you will tell your friends and we will lose business.  We don’t want to sell to you unless you actually want what we offer.  So rather than rush you through this, we want you to take the time to understand what we are offering.  

And to make it fun even while we make sure our message is clear,  we want you to take a quiz!

 There are some right and wrong answers, but other questions are there simply to raise questions we want you to consider. And some questions are for us: We want to know your interest/opinions concerning certain services or activities we may want to undertake at some later date.

 Marketers know that consumers rarely go to, say, a car site and buy a car. They go to a car site and explore. They come back again, visit other car sites, talk to friends….and then perhaps they buy a car.  That’s not necessarily the pattern when they give up personal data…but they do give up personal data over time, across many visits. And it certainly is likely to be the pattern for people getting their genomes sequenced or buying risky space travel.

So, assume a description of the service and questions.  The questions may come within the description or at the end. Here are some examples:

 What is the risk of dying in a space accident? 

It’s not insignificant, but it’s probably not much worse than habitually driving drunk. 

 From the Personal Spaceflight Federation: 

 4 percent of people who have attempted flights to space have died - BUT only 1.6 percent  of the “seats” on flights to space ended in death, since several people have flown multiple times.   In total, 19 of the 460 people who have ever flown in space have perished in spaceflight:  7 each on Challenger and Columbia, 4 on Soyuz flights, and 1 in the X-15.

How does that compare to my risk of dying in an automobile, if I drive as much as the typical American?  Of course, one is a one-time risk and the other is a lifetime risk.

 What is the accident profile of the specific space craft I would be flying in? 

By the way, until comments from the Personal Spaceflight Federation got the regulations changed late last year, letting a foreigner know these details could be a breach of ITAR, the US military export regulations….

Okay, you get the picture.  The copy would of course include the answers to all these questions.

 Do try this on your own site!

 This kind of quiz would be beneficial to everyone, I believe – especially if the marketers paid attention to the answers. 

It would ensure that there were no nasty surprises.

 In the case of space flight, it might actually attract a certain segment of risk-seeking customers, and might steer others to safer activities (such as flight training) that they would enjoy more.  It would also dramatically reduce legal risk, since customers could not claim they were not informed of the dangers.

Informed customers are better customers: Not only are they more engaged,  they also will not become disappointed customers.  Moreover, the responses to the quiz could   guide vendors in deciding what services to offer.

 Yes, it would deter some customers, and it would certainly slow down the buying process.

 But I think it’s just the next generation of marketing, in a world where many services are simply not comprehensible at first glance.  The remainder of the proof (= design) is left as an exercise for the reader.

Last week I also met with  Alex Hall, former CEO of the Chabot Space and Science Center in Oakland, and Brian Hall, CEO of Mark/Space, a software company (not a space company, despite half the name!).  They  have started a company called Airship Ventures  to operate a Zeppelin NT (new technology), most likely based in the San Francisco Bay Area..

 Unlike a lot of business plans I run into, this one can point to a model: the Zeppelin company itself is  currently successfully operating such a business, flying a Zeppelin NT around southern Germany, where (let’s be real) the attractions aren’t quite as varied nor the available market of tourists as large as in San Francisco. Zeppelin offers 30- to 60-minute sight-seeing tours, flying at heights between 500 and 1000 feet.  It charges teh equivalent of  a few hundred dollars per person, with a capacity of 12 passengers. Bringing something like this to the USA and operating it somewhere scenic sounds like an absolutely fantastic idea, both in the positive sense and as in “pure fantasy.”

Airship Ventures faces the usual challenges of the air-space start-up check list: finding some kind of debt or equity financing for the airship (not quite the same established  market as for a Gulfstream), securing further equity finance for the company itself and dealing with regulatory issues – potentially the biggest challenge, though Alex Hall points out that the FAA is currently certifying the Zeppelin NT and the operational requirements are under discussion.

 This is a cool and unique idea… And of course it could also generate large advertising revenues – starting with its journey to the USA from Germany, which could be as early as the summer of 2008. 

Imagine the visibility: It would fly lower and is longer - at 246ft vs 192ft-  than the Goodyear blimp, which you can’t buy a ticket on. Its arrival in the Bay Area would be in time for Zeppelin’s 100^th birthday, and  also just 75 years since the commissioning of the major airship base in the area, Moffett Field (now operated by NASA Ames). And last of all, it would be   NASA’s 50^th birthday. Undeniably auspicious timing.

 Sign me up, please!

Yesterday I met with Jane Reifert of Incredible Adventures, the  company that has been organizing MiG flights and other adventures since the mid-90s. Incredible Adventures is a small outfit – just four people full-time, including one in Russia. But it has an impressive range of partners, from the Russian Space Agency to Hollywood Movie Makers.

“I live and die by waivers!” says Reifert, who spends almost as much time with insurance agents and lawyers as with customers. For some reason, she notes, you can insure people swimming in shark-infested waters, but you can’t insure people inside shark cages. Presumably, that’s a pricing problem: The cages don’t have a record (yet) to persuade the insurers to lower their prices, so the insurers simply don’t set a rate. But it’s a good example of the challenges all these providers face.

She adds, “The space people keep trying to convince everyone that space is safe. But it’s not! And I’m not sure that the people who sign up for edge-of-space trips want it to be. You don’t go bungee-jumping because it’s safe! You go because it’s exciting!” So it may be that space marketing – at least until it goes mainstream – doesn’t need to or even should not stress safety – though of course the operators should do their best to provide it anyway.

Reifert also scoffs at the notion that space travelers will need ground arrangements for their families. Over the years, Incredible Adventures has arranged more than 2000 MIG flights for its customers, quite a few of them repeats. But most of them travel to Russia alone, she says, or with a sporting buddy. But of course the MiGs have room for only one passenger, whereas Virgin Galactic can take up a whole family. I suspect both models will work… Of course there’s more money long-term in the value-added one, but I suspect that Incredible Adventures’ profit margin would put that of most companies to shame.

Hello, all!

This is the first Flight School post. Let me encourage you to sign up to attend and to post comments and queries here, so that others can participate. Today is the deadline for you to sign up early and get the $400 discount (from $2000 to $1600), so I will try to explain why this is such a useful event.

For starters, I have been spending much of my time lately traveling around to meet speakers and other industry players. I’m educating myself to be an informed and active moderator…

I have been impressed with how much the “customer experience” theme resonates. From the outside, air and space look like two markets; from inside, each comprises a range of segments.

In planes, there’s the high-end sporty Javelin, the utilitarian Eclipse (if your boss is paying for you to take an air taxi, you don’t want it to sound too luxurious), the single-owner Eclipse (I had a non-air friend ask me about getting one of his own yesterday), the mass-market Icon… What will the messaging for all these be? (Freedom from TSA lines is certainly one refrain.)

In space, notes Alex Tai of Virgin Galactic, there’s the space adventurer… and the family who may accompany that person to a space port and spend their time at a spa… A lot of “air and space” activity will actually take place on the ground, requiring the buildout of airports and spaceports.

At Flight School, I want to explore what’s necessary for all this to happen - in terms of marketing, ground facilities, legal and commercial infrastructure, as well as just flight operations…

In future posts, I’ll start with posting snippets from my conversations… Coming up: Brett Alexander of the Personal Spaceflight Federation and Bruce Holmes of … well, formerly of NASA and I’m not yet sure if I can say where he is about to hang his hat…..