Meet the 29-Year-Old CEO Who Turned His Hobby Into a $1.5 Billion Business That's Backed by Jay-Z
The first time Sergey Petrossov flew on a private jet in 2009, he was surprised. Not just by the luxury but by how complicated and archaic the process of booking it could be.
That revelation inspired the 29-year-old entrepreneur to launch JetSmarter – a start-up that allows people across the globe to book trips on a private jet using its mobile app.
Today the company -- which bills itself as the Uber for private jets -- has 14,000 paid members paying up to $15,000 a year for perks that include the ability to schedule flights and share seats on jets scheduled by others.
With investors that include the Saudi royal family and Jay-Z , JetSmarter is valued at $1.5 billion. Petrossov talked to us about how he founded his company, the struggles of building it, where he hopes it goes, and his tips for being a successful young entrepreneur.
Petrossov was motivated to create companies in his teens
Petrossov, who was born in Russia but moved to Florida at a young age with his family, struggles to define what has made him hustle through his 20s. For him, it seems innate.
“I don’t know. I think some people just have drive and passion for what they’re doing. That’s the most important thing for entrepreneurs. If you have a real, deep drive, no matter how much you’re knocked down, you can always get your head up,” he says of his career.
He’s had that spirit, he says, since his teens. In high school, he attempted to start an import-export business for automobile tire rims. When he was a student at the University of Florida, he got exposed to computer science and joined a startup for live chatting. “They were doing this stuff back in 2005, 2006. I knew I wanted to go in technology,” Petrossov says.
Before JetSmarter, he cofounded an educational startup that sold cloud-based software for schools and universities in Eastern Europe and Russia, “countries that couldn’t afford legacy systems.” Aviation, he adds, “was my side hobby.”
He saw how generally wasteful private jets are and sought to fix that
After his first exposure to private jet travel when a fellow business owner took him aboard one, Petrossov noticed surprising inefficiencies.
“You have this multibillion-dollar industry that was completely analogue,” he says. It required literally calling to book and signing papers. “There was no digital form in accessing it. It was highly inefficient. The planes weren’t being utilized enough. You’d have only two to three people on an average airplane. The cost was high.”
Private jets often sit around empty, further driving up prices. He decided to organize planes in a “digital fashion with high utilization and a lower cost of entry.”
And so JetSmarter came to be, though not easily. Petrossov formed relationships in aviation by going to trade shows. “We bootstrapped a small tech team in 2012, built an app, met with industry people, raised a little bit of money, and launched” to the public in 2013.
The business is capital-intensive, so JetSmarter, based in Fort Lauaderdale, Fla, had to secure major funding -- including a $105 million round of financing raised last year.
JetSmarter offers lots of ways to fly
After paying to join, JetSmarter members can pay to fly on pre-scheduled flights between popular destinations or book their own aircraft and let members claim seats. Members also have access to free last-minute flights on empty legs. And, if they want, they can book a fully private flight, which comes with a higher cost.
JetSmarter has not been without its hiccups. Last year website The Verge wrote a long article detailing anonymous complaints the company faced after changing up the services it offered. In February of 2017, the company’s president Edward Barsky resigned after he was arrested on charges of grand theft, although Petrossov said the incident was not related to his work for JetSmarter. The company had no comment on The Verge reporting or Barsky's exit for this story.
Petrossov says the company has at times been misunderstood – but he’s worked hard to make its value clear. “The hardest thing on the demand side,” he says, “is to change consumer behavior. We have to do that for the traditional private flyer who’s not used to sharing an airplane. But when you present all the pros, you save a significant amount of money.” As he points out, members are still able to choose an airport and time, and other users can opt in for the excursion. But the app still requires convincing. “We have to boil that down to them.”
He wants JetSmarter to offer seats on private jets for $500
Petrossov declined to say when JetSmarter would turn a profit. He put its revenue in the “hundreds of millions,” which he hops to double in the next two years.
And down the road, “we want to own premium business travel in the United States,” he says. That means going after business-class and first-class travelers and trying to lure them to JetSmarter. He sees his app as not a premium product, but rather as “providing value” to consumers.
“In 10 years, I think there’s a big opportunity as you move into shorter-distance flights where we can actually deliver a much broader, mass-market solution, where you can actually serve customers at $500 a seat,” he says. When it comes to private jets, “you think Jay-Z flying for $60,000. That’s a shift. We’re still educating. We’re still in the early days.”
He thinks millennials should take big risks while they’re young
While many 20-somethings stick it out paying their dues in corporate jobs, Petrossov has enthusiastically moved from one uncertain endeavor to another. His advice to millennials like him who want to create companies is to be bold sooner rather than later.
“Just go do it,” he says. “When you’re young, those are the years you can take the most risks. Pretend you’re 80 years old and looking back on your life—how would you feel if you didn’t try anything? Take as much risk as you can when you’re young. Because you can’t when you’re older.”
His other tip, which he’s put to use himself, is simple. “Don’t give up,” he says. “There are lots of hard times, but I found that, no matter how difficult something is, you should keep falling, and if you keep getting back up and move forward, it’s virtually impossible to fail unless you’re physically incapacitated.”
That doesn’t just apply to him, he adds, but among “the great entrepreneurs, it comes back to perseverance. If you truly believe in what you’re doing, you’ll get there one way or another.”