When a private flight startup hit turbulence, here's how it recovered
Stratos CEO Joel Thomas reveals his strategy for scaling up his company after turbulence.
Sometimes leaders need to create their own systems to fit their unique needs and a third-party vendor just won't do, no matter how convincing the sales pitch. It's crucial for that system to be easy to use, because, after all, employees base their jobs around using the system every day.
Stratos Jet Charters had been flying high with its own system for years, but when the company scaled up, things became too complicated for its small team to handle. Joel Thomas, the company’s founder and CEO, explains how his company returned to flying high after turbulence during its ascent .
Tell me what your company does.
Stratos Jet Charters is an air charter broker that provides private jet charter travel experiences worldwide on a flight-by-flight basis. Because we don’t own or operate the aircraft, we are able to recommend the most appropriate aircraft at the best available price for every flight. This allows our private flight advisors to help customers make an informed buying decision. Once the right aircraft has been selected, our trip support team ensures the proper coordination and organization of every flight.
At what point did you scale up, and what did that growth look like?
On-demand air charter is a relatively young industry. Until recently, there weren’t third-party systems for quoting and managing flights. In 2008, Stratos created an internal platform called Stratos FMS (Flight Management Systems). This platform allowed me to duplicate my individual efforts to transact business. By 2013, Stratos had 12 sales agents and was transacting over $15 million in annual revenue.
What went wrong when you scaled up?
Our proprietary platform was great when I was an individual running my own business, but as we grew, the platform didn’t give me a clear way to gauge the health of the company. Each individual agent delivered a different customer experience, there was no insight into our efficiency and no ability to know which contacts in our system were being engaged. We only worked on low-hanging fruit and inbound leads from Google. Our sales agents were bogged down with so many non-revenue generating tasks that they were unable to successfully manage their workloads. We couldn’t grow because the nature of our software tool prevented new hires from accessing the client database.
To keep up with the workload, we looked for ways to expand our agents’ productivity peak. In the late summer of 2012, I came up with the idea of what I called Stage 3 Organizational Structure. In this structure, we would departmentalize our sales process. The idea was to take the non-revenue generating tasks of flight coordination and accounting off the plates of our sales people. This actually led to an expanded productivity peak for each sales person. The problem was that our FMS platform wasn’t designed to share trip information across different logins. To manage this, we created a system of green hanging folders to organize flights and share information. We implemented Salesforce to solve our client assignment issue and to be the central location for all departments to access flight related information. This step required our sales staff to work within two systems and that is when disaster struck.
“It is OK to take a step back.”
How bad did things get?
Our business kept growing, thanks to the steady stream of inbound and repeat business, but our processes were broken. Trips were falling through the cracks, sales agents were tasked with transposing information between two systems. This led to them getting burned out. Our flight coordinators had to be in the office around the clock. Because of transcription errors, I was constantly putting out fires. Things got so bad as we implemented layers of solutions, sales agents began losing confidence in the direction we were going. Simultaneously, Google introduced algorithm changes that completely stopped driving inbound business. In January of 2014, we lost nine of 12 sales people in a mass exodus. By March of 2014, I had cut all possible expenses and was forced to pause my efforts to support our new organizational structure with new technology.
How did you fix the issue?
I believed in the concept behind Stage 3 Organizational Structure. We just needed a technological solution that supported this vision. As we limped along, we began to build our processes within the Salesforce platform. We first moved accounting, then we developed the flight itinerary piece. After that, we built our quoting tool. By completely moving away from Stratos FMS, we were able to standardize the customer journey from beginning to end.
Where did you get the idea for the fix?
It was actually in the summer of 2012 that I got the idea of how to correct the issue. We needed to departmentalize our tasks, create an entirely new Flight Management System and arm our sales team with the tools to properly manage and engage our client base. We also needed to articulate our vision so managers would feel motivated to grow their departments and improve their roles.
What do things look like now that you’ve corrected the problem?
It took us until late 2017 to finalize the buildout of our new processes in Salesforce. This allowed me to once again focus on hiring and training new salespeople. We have taken this technology a step further and created the first ever SaaS platform for business aviation. Today, we have six extremely knowledgeable private flight advisors who are now able to manage a much greater number of clients. We are planning to double our sales staff this year. Our projected revenues for 2020 exceed the $15 million we once posted. More importantly, our company is now able to deliver an unmatched customer experience.
What did you learn from this experience that other business leaders need to know?
It is OK to take a step back. Progress isn’t always measured by revenue. If you focus on improving the customer experience, living your vision and supporting your team, you’ll build a successful and healthy business, and the profits will follow.
Scaled Up is a weekly interview series by Inverse with entrepreneurs. They share how almost everything went wrong while growing their business — and how they fixed it.