Clive Jackson strides through the airy operations room of Victor, the private jet company he founded, pointing out various essential departments and introducing key staff members. The office occupies the top floor of a smart South Kensington building that was once the car park for department store Harrods but more recently was the European HQ of NetJets, the giant rival private jet firm owned by Warren Buffett’s Berkshire Hathaway.
The irony is not lost on Jackson, an energetic startup specialist who is enthusiastic about an industry his business has managed to disrupt since arriving on the scene a mere five years ago. He refers to the previous occupier of his office as the ‘500lb gorilla’ due to the dominant position NetJets has enjoyed.
A serial tech entrepreneur, Jackson made his money with digital marketing agencies Global Beach and spin-off AutoTorq, which provided website design and build for FTSE 350 and Fortune 500 companies, particularly in the automotive sector. He entered the private jet business after discovering his regular commercial flight to Majorca, where he owns a second home, was being axed. Jackson collected business cards from frustrated fellow passengers and promised he would set up a replacement service, investing £1.1 million of his own money in the start-up. This morphed into Victor, which launched in 2011. It owns no jets itself, but what Jackson created was a classic digital disruption of an established industry where the brokers — the intermediaries between aircraft owners and passengers — had all the power amid an opaque system of pricing. Victor, Jackson explains, sought to shine new light on this cosy industry where passengers found it hard to figure out exactly why they were being charged what they were, and often found the jet which arrived to collect them wasn’t quite what they were expecting. Its rapid success, especially in America during 2015, was certainly not welcomed by everyone in the jet business.
‘Disruption always brings with it controversy and a huge amount of scepticism, and not least from those that are in the market trying to defend their current modus operandi,’ Jackson says. ‘How are we regarded? Sometimes hated, sometimes admired because we’ve dared to change the ground rules, and envied because we’ve had access to capital to do things that the old guard haven’t. What we’re looking to do is come to the market with a consumer proposition that disrupts the intermediary, with real people, but has transparency at the heart of its core-value proposition. We are asking the consumer to trust us from day one in an industry where there is little trust.’
With Victor, the level of detailed information that can be accessed prior to booking is staggering. You can choose the precise aircraft you want to fly on, with information such as the colour of the interior available alongside essential data such as when the aircraft was last serviced. Providing such open access to thousands of jets carries its own risks: the consumer could just go straight to the aircraft owner and cut their own deal. Nevertheless, Jackson insists this openness has only rarely backfired.
‘The number of people who have abused that trust is in low single digits per calendar month,’ he says. ‘That’s been one of the most surprising and satisfying parts of the Victor value proposition. We list every major operator in the world, every aircraft they have, every tail number, every age, when it was last overhauled or maintained — there is the complete directory listing and, four and a half years in, we haven’t had to say, “No, that transparency is killing us.” We can deliver this quality of service to you, we are empowering you, we are giving you that transparency — of course you can do an off-book deal behind our back with the operator. We’re actually giving the information to you without locking you into an upfront payment.’
What has made Victor an even more attractive proposition is a sophisticated app. The proprietary technology led the business to be labelled the Uber of private jet companies. Although accurate in design, the moniker is somewhat lazy, but it has suited Jackson during the past year as Victor launched into the US, the world’s largest private jet market.
‘In the US people like labels — they want to know are you a bit like X and Y, or are you a combination of A and B,’ he says. ‘It just helps people contextualise what you do. But fundamentally, labels aside, what we strive to prove is that consumers of private jet travel, their appetite, their demands, and their behaviour, can be changed — and are changing. Consequently, those that can foresee how it should change can effectively disrupt a well-proven and well-trodden market where things have been pretty much the same for the last 25 years.’
Scaling the heights
The global market for private aviation is worth around £14 billion a year. Over half of that is in the US, and some £4 billion is attributed to NetJets. Around 85 per cent of the total, Jackson reckons, is generated via the reseller channel — not via the people who necessarily own the aircraft.
‘2015 was a year of being able to demonstrate that we could scale the business, what was an early-stage, fast-moving technology business that was serving the HNWs. We’re a tech-enabled service business.’
Expanding does, of course, require capital, so Victor sought fresh funds from its existing shareholder base and new investors, raising a further £13 million of capital, all from UHNW investors and family offices. That capital was used to launch the US operation, acquiring a footprint by buying an established, traditional aircraft broker on the west coast. ‘It gave us a capability, people know-how, local knowledge, relationships, credibility in a new market,’ Jackson explains, ‘and this year will be about scaling in the US.’ Victor’s rapid progress has ‘scared the living bejesus out of the market’, according to Jackson. ‘If you can deliver a new value proposition and if you can demonstrate that you can disrupt, then your expectations go above and beyond 10, 15, 20 per cent per annum growth. They go into super-growth. 2016 is about hyper-growth. We’ve proven we can disrupt, we’ve proven we can acquire customers from our competitors, and we’ve proven that we can retain them, and we’ve made a big, monumental investment in the underlying supporting technology so we can transact to the lower cost more efficiently than any one of those old-world competitors.’
Jackson is especially proud that Victor featured in the Sunday Times Tech Track Top 100, which measures Britain’s fastest-growing technology companies. It was the only aviation brand in the list and was included thanks to an annualised growth rate over three years of 142 per cent in revenue. And there’s more to come. He’s forecasting growth despite fears about a protracted global economic slowdown and the sagging price of a barrel of oil, which in itself is good for aviation companies because fuel is cheaper but has worried investors.
‘I wouldn’t say HNWs are immune, though to some extent they’re insulated,’ Jackson says. However, global market volatility can impact who’s flying when and where. The occasional customer is likely to be more susceptible, he adds, although past a certain net worth people care more about the fact that private aviation is effectively on demand, enabling them to achieve more in 24 hours than they could on commercial flights, and is regarded as an essential tool for competing on the global stage. ‘Overall we’ve been really encouraged by the reaction to Victor.’ In the nine months it’s been in America, Victor has been able to raise the profile of its brand, allowing the chief executive to meet almost all the major US players personally. ‘We’ve talked about whether we’re on a path of convergence, a path of collaboration or a path of conflict.’
So what’s next for Victor? Firstly, another fundraising round, which will seek to tap Victor’s existing and new shareholders, and later an institutional round to finance further expansion, with the Middle East and Asia next on the radar.
Jackson remains confident. ‘I haven’t come from the aviation space, but what I have been able to bring to the table is an understanding about how to build tech platforms, to do it pragmatically so that you build as much as you need when you need it, and to recognise that in some instances, no matter how good the tech is, there’s always going to be and will remain a human element in that process.’ Any remaining doubters should look away now.