“The Fyre Festival of Aviation” will be an accurate name if JetSmarter fails, especially because they have the same model and problem as the doomed music festival. As human beings, we learn more from failures than successes, which is why DUE DILIGENCE is important. “Valued at $1.6 billion two years ago, the so-called Uber of the skies is said to be in ‘rescue talks’ that could result in a sale for as little as $20 million”, two industry insiders told The Post. Both insiders identified roll-up artist Vista Global as the likely buyer. However, if talks between the two parties break down, and JetSmarter fails to secure additional funding, the sources said it could be forced into bankruptcy. What can we learn from this?
1. Don’t believe the hype: Instagram celebrities promoting it doesn’t make it a great company.
2. The fundamental business model has to work, and this one didn’t.
3. They tried to pivot 5 times with their customers, but kept their marketing the same. The service changed so much that there was an exodus.
4. They threatened to sue customers who spoke the truth about their bait-and-switch tactics. The customer is always right, and always comes first.
5. They issued a press release for everything, which lead to an 80% marketing to 20% product investment at the end.
6. If it sounds too good to be true, it is too good to be true. Unlimited private flights for $10k annually is unrealistic, especially because a single private flight costs more than that.
7. This is actually not flying private; private is when you have a plane to yourself. Here you have to share with 11 strangers like a commercial airline.
8. JetSmarter set their own valuation; never believe that! They were a self-proclaimed unicorn. That is why you must have a lead investor who does due diligence and sets the valuation with the terms. Without this foresight, anyone can say that they are a unicorn.
I hope they don’t go out of business because Jay-Z invested. This would be a major Ponzi scheme if it’s busted, but I am not surprised given the article in the NY Post.