Florida-based BlackJet raised north of $2 million last October from backers like Ashton Kutcher, Jay-Z, Will Smith, Salesforce.com CEO Mark Benioff, and Ryan Sarver, an ex-Twitter executive who earlier worked at Boston-based Skyhook Wireless. It planned to sell individual seats on private jets flying popular routes like New York — Los Angeles or Boston — San Francisco. (The company's site quotes a BOS — SFO one-way trip at $3,766.) But in order to buy those seats using BlackJet's website or mobile app, you'd have to pay an annual membership fee of $2,500. Members also had to give two days notice when they wanted to fly.
BlackJet was the new incarnation of a West Palm Beach company that had tried something similar as early as 2010, called Greenjets. But less than a year after BlackJet's splashy launch last fall, its chief technology officer had departed, and founder Garrett Camp — also chairman of Uber — was no longer even mentioning the company on his LinkedIn profile.
A former BlackJet employee, who requested anonymity, said that "you can't fly somebody for $3500 coast-to-coast and guarantee them a seat when it costs you $20,000 to fly the plane." Often, planes flew mostly empty. "And if you had eight people on the flight, nobody was happy and it was crowded."
"We were losing $200,000 a week," the ex-Blackjetter told me. Most of BlackJet's employees were laid off in September, this person said, after "the investors weren't willing to put in more money."
BlackJet CEO Dean Rotchin tells me via e-mail that he expected additional funding "in the second quarter of this year which did not come through." He says the company continues to offer a more traditional whole aircraft charter service, but has "curtailed" the per-seat offering "over the last few months."
"Many flights were already profitable, many were not," he says.
Rotchin says the key to operating the per-seat service profitably is, quite simply, attracting enough members who want to fly to the 10 cities BlackJet serves. "We spent almost nothing on membership acquisition [attracting members], and yet still reached decent flight-level economics," Rotchin writes. "We are leveraging this data, and looking for additional capital. We will acquire sufficient members and restart the service."
It'll be interesting to see whether BlackJet can find a way to take to the skies again...
About Scott Kirsner
Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.
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