A Pilot’s Heroic Journey: Jonny Nicol, CEO of Stratajet (Part 4)

Sramana Mitra: Is there a convenient way to get the database of all the private jets’ flights just like an online travel agency for commercial flights can access such a database? Is there an equivalent of that database available somewhere or did you have to create that?

Jonny Nicol: I had to build it from the ground up.

Sramana Mitra: That is one of the key differentiated value that you created.

Jonny Nicol: That’s correct. It was highly fragmented, and it was very difficult to get all the data needed. So we had to build it. It took me four and a half years. I never heard of R&D taking so long. It was brutal. There were two big challenges. Challenge number one was not actually getting the data on the aircrafts. It was a challenge but it wasn’t the biggest. It was getting the data on all the different fees that you get charged when you fly privately.

When you fly an aircraft, you have to pay 15 sets of fees. One of them is the aircraft. The other 14 are completely outside the aircraft owner’s control. These include things like landing fee. Each one of those varies on the kind of day, day of the week, sunrise, or sunset. That was challenge number one. That was a huge undertaking. Then came the bigger challenge. We had to build something that could work out all these different fees and capabilities of each aircraft and do it sufficiently fast.

To give you an idea of that, when we simulated 500 aircrafts, it took 16 minutes for a fast server to crunch every single number that we need. Nobody is going to sit in front of the web for that long. It took two more years to get that search down to 10 seconds. That’s why it was a four and a half year journey. Quite famously, a senior VC said, “Stratajet is the world’s most sophisticated price comparison site.”

Every time you do a search for a single flight from Stratajet, we have to do 2.5 million calculations, and we’ve got to do them for 500 aircrafts in under 10 seconds. Lots of people had this idea and lots of people failed to realize the idea because they can’t build the technology.

Sramana Mitra: Is this a venture-funded company?

Jonny Nicol: Yes.

Sramana Mitra: Talk to me about what stage you got this financed. What did you finance it with?

Jonny Nicol: In the beginning, I did the classic entrepreneurial mistake. I took all the money that I got from my last company and decided I was going to spend small amounts of it building my new one. In the end, I spent every last penny. It wasn’t anywhere near enough. I was fortunate. Over the next two years, I needed $1.5 million to get the engineers and build the thing. I did two meetings.

I bumped into a guy at a startup event. We went to a drinks reception. I happened to be talking to one of my friends about this airways routing problem. Before we can price an aircraft, we have to figure out how it’s going from A to B. You don’t go in a straight line. As you change altitude, you fly faster and burn less fuel but to get to that altitude, you need a lot of fuel and energy. It’s quite technical.

I was talking about how to change this routing algorithm. I was overheard by another guy. I was telling him about the company. We did a meeting and he offered me $400,000. I also met another guy who gave me another $400,000. That was the first round. When I decided I needed another $800,000, we did the second round with one of his friends, who I met once. The fundraising was relatively  easy. When you’re looking at $30 million rounds, it’s a bit more complicated.

Sramana Mitra: It’s very complicated regardless. You just happened to run into a couple of people. Hedge fund investors are not necessarily the angel investors who invest in startups. More often than not, these are not the people who are investing in startups. It’s a corner case; not a regular happening in the startup business.

Jonny Nicol: I agree. Sometimes when you’re running a company, you just have to take the rough to the smooth. That was just part of the smooth.

Sramana Mitra: Luck is a huge part of success in anything. For sure, in startups.

This segment is part 4 in the series : A Pilot’s Heroic Journey: Jonny Nicol, CEO of Stratajet
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