In late 2004, Daniel Baker (right) was a newly minted private pilot flying Cessna 172s around the country. “I wanted my friends and family to be able to track my flights just as they could if I were flying on a commercial airline,” explains Baker. “I may have been piloting the aircraft myself, but I still needed a ride once I landed. There were a few commercial products that provided this service for around $1,000 a month, but that wasn’t a realistic solution for friends and family. I got in touch with the FAA and after learning a bit about working with the government, managed to obtain a feed of the live flight data.”
Baker then started working during his free time to build an infrastructure for processing the data and a web interface. He recruited friends Karl Lehenbauer and David McNett to help out too. After six months they released FlightAware.com to the public. The site “took off like wildfire” within the pilot community, according to Baker.
“Before long, the phone started ringing,” he says. “A guy called asking for a data report. I was so excited that someone was interested in us that I produced an Excel file for him for free. The next day, someone called asking for a similar project and I charged him $200, which he gladly paid. Later that day, another call, and I charged $500, which was no problem. It didn’t take long to realize that we had stumbled into a real business. It also didn’t take long for the call volume to encourage me to hire someone to answer the phone.”
The rapid growth led to hardware and bandwidth expenses. At first, Baker used his credit card to cover the costs. He says, “Initially, I bought a server for $6K and just put it on my AmEx. I figured it would all work out; I did the math and at our October 2005 run rate of $20/day, I’d be able to pay myself back in just under a year. I was OK with that. Quickly, it became clear that we were going to grow a little faster than that and we all chipped in for more hardware, some graphic design, and bandwidth. All in all, we only fronted about $25K before we broke even in March of 2006. And we have been profitable ever since then.”
The inside scoop on flights
Now, the site is a full fledged hit. Unlike airline-centric sites that simply pass on the flight status straight from the airlines, FlightAware.com shows the real-time, inside scoop from air traffic control data and other operational data sources. This includes radar positions, flight plan re-routes, and weather on interactive maps, delay projections, trends, and more. According to Baker, the site serves over two million people per month, split about 50/50 between airline and private flights. It displays over 150M ads every month.
Additional revenue comes from commercial data services. Baker explains, “Everything from a single aircraft owner who needs a flight history report to complete their taxes, to aircraft engine manufacturers who want to evaluate real-world flight conditions. There are many valuable answers to be found within FlightAware’s historical databases, and there are many organizations that have interesting questions.” FlightAware also profits from enterprise products for the aviation industry.
FlightAware did over a million dollars in the first 18 months after it launched, according to Baker. “It’s pretty remarkable considering we had no business strategy or real products back then,” he says. “Now, sales are in the millions, we continue to grow revenue 40-75% a year, we’ve got over 20 employees and offices in two cities (Houston, New York) and three data centers (Houston, New York, London). We think it’s a rate we can sustain for several years before we need to expand the strategy.”
“It’s pretty remarkable considering we had no business strategy.”
Not your typical dot com
A young internet company means everyone rolls in at noon, plays ping pong, and wears shorts, right? Not at FlightAware. “We start answering the phones at 7am on weekdays — we’re open 7 days a week, by the way. Almost everyone is in by 9am, and we dress up,” says Baker. “Unlike a lot of ‘dot coms,’ we’re involved in decision-making for aircraft operations, crew scheduling, and travel plans. Our customers don’t have any sense of humor about outages, delayed data, or missing deadlines on custom projects. Accordingly, we try to act more like an enterprise services business — we’re maniacs about monitoring, redundancy, and we definitely don’t use a clever error page with a cartoon.
“However, that doesn’t mean that we’re slow moving, have a stifling bureaucracy, or that we don’t have any fun. Every employee is empowered to improve or change anything — from changing a process to pushing to get a feature onto the web site. Developers’ changes to the code are live to the world in less than 24 hours.
“It’s rewarding to see your work in production and used by millions of people so rapidly. Developers have hobby projects that usually make it into production or lead to something like our web-based system for ordering lunch and the status of the coffee machine being displayed for employees at the top of every web page if the coffee’s fresh.
This “hobby project,” dubbed LunchAware, offers voting on restaurants, order cut-off times, random orders or your standard order from a particular restaurant, reminders if you haven’t placed an order, direct debit from your pay check, etc.
“On the sales side, everyone can pretty much come up with their own strategy, market, or even product, if people will actually buy it and we can reliably deliver it. Our sales team doesn’t just sell FlightAware’s products and services; they also invent and design them.
“Matt Davis from our sales team realized we could combine a bunch of different features and data and sell it to FBOs, terminals for private jets. He named it FBO Toolbox and he sells it for $100/month (competitive products are around $1K/month). He convinced one of our developers to put a few hours into it every now and then and now we’ve sold hundreds of licenses in the 14 months since the product launch. It does fuel price trending and figures out how much fuel an inbound aircraft needs and all sorts of amazing stuff. There was no official company initiative to make that happen and the CTO and I have had no involvement. He recently asked if he could get our creative design firm to make a brochure (PDF) for it and I agreed; I was amazed to see how many features it has! Pretty cool.”
As for growing pains, Baker says the toughest part has been turning employees from doers into managers. “FlightAware, like a lot of companies, started out with people who are ‘rock stars’ at their particular niche,” he says. “The rock star developer, the rock star database architect, the rock star biz guy, etc. That’s how we created a killer product so fast, got millions of users, tons of press, thousands of customers.
Do something that you want to do, business and money aside. Do something that you would do for free because you think it’s such a cool idea.
It’s very common for people to give me lots of credit for my “incredible market insight” and “exploiting a niche” — but it was none of that. I wanted to do flight tracking and I was really excited about it. The reason we’re successful is because there was fanatical passion driving the development. All that passion resulted in something that people really enjoy using and now it’s not just the employees who love FlightAware — the customers do too. If the only reason you’re making something is to turn a profit or flip it, that will show in your product.
Of course, it sure didn’t hurt that it was a good idea, ultimately, and that people really wanted it. That said, I think that lots of businesses fail due to a lack of passion and drive as often as they fail because the business was a bad idea from the start.
“Then, the company grew into a real business with a corporate structure, and the original ‘rock star’ guys suddenly had to become managers of employees and worry about various project deadlines. It makes sense and it’s a natural way to grow, but then we realized that we had our ‘rock star’ people in key positions where their primary job is not their core competency.
“That continues to be a real learning experience for everyone; It requires a lot of growth, self-reflection, and personal motivation to excel at something that isn’t your strength. The key is that you have to want to be a great manager — even if you’d rather be doing something else — because you’re committed to moving the company forward.
“I use myself as an example a lot. Every day I’m doing something I’ve never done before. I’ve never been the CEO of a 6 year old company. I’ve been the CEO of FlightAware as a 1, 2, 3, 4, 5 year old company — so I’ve done that — but every day I’m running a company that’s larger than any other company I’ve run before.”
One thing Baker fights against is being a slave to customer requests. He says, “Customers — or prospective customers — will often say, ‘If you just build X, I would buy it and you could sell it to everyone.’ And it’s really tempting to go and make that product. However, I’ve been burned by that both at FlightAware and at previous companies. The problem is that people don’t actually know what they want until it exists. It’s not that customers are stupid or something, because I’m the same way; I’ll regularly demand that a feature should work one way and then when I see it, I realize it doesn’t actually make sense or wasn’t as good an idea as I originally thought.”
FlightAware comes to an iPhone.
Baker’s goal is to be the largest and most reliable source of aviation data and services powering everything from airport displays to airline dispatch tools to iPhones. As for an exit strategy, he says, “That’s not something I really think about. I’m not saying it makes sense for me to run and grow FlightAware for the next 50 years, but I don’t think anyone can be successful by constantly thinking about a sale, acquisition, IPO, whatever. The potential buyer is not using the product everyday and we didn’t create the products or the company for them.”
“I don’t think anyone can be successful by constantly thinking about a sale or IPO.”
This is part of our “Bootstrapped, Profitable, & Proud” series which profiles companies that have over one million dollars in revenues, didn’t take VC, and are profitable.