Welcome to Scaled and Failed! My name’s Amil Naik and I’m an aspiring VC and founder at The University of Texas at Austin. I write about startups that scaled and startups that failed to draw insights about the patterns of startup failure and how to avoid them. Everything is clearer in hindsight, so it’s worth looking back.
If you haven’t subscribed already, do it here:
TLDR
Today’s Topic 🚁: Helicopter Rideshares
Scaled 📈: Blade; Built among the first successful helicopter air taxi platforms for consumers through a very deep understanding of its early customers and expanded into business travel, going public via SPAC this year.
Failed 👎: Voom; Incubated by Acubed and launched in Brazil, expanded its helicopter rideshare to Mexico City and LA before shutting down in the early days of the pandemic, citing
Lessons Learned 💡: Early adopter customers not only need the right product, but the right experience crafted around it as well as the proper marketing to reach them. Success with the initial audience can provide the blueprints and feedback for attacking a new market.
Today’s Topic: Helicopter Rideshares 🚁
Taxis, Ubers, Lyfts; they all get us from Point A to Point B without much planning and are way cheaper than renting a car. Unfortunately, they are all beholden to the forces of traffic and incidents outside of our control like road closures and accidents. Wouldn’t it be great to soar above the cars, feeling sorry for the poor saps stuck in rush hour while you sip on a beverage and save loads of time? If you’ve got the money to pay for it, you can in fact get a helicopter transport and some wine; and I don’t mean by owning your own helicopter. Just like you can get car rideshares, several cities boast companies providing aerial rideshares. Many of these helicopter rideshare services are the testing ground for concepts that can reach their potential with the development of viable eVTOLs (electric vertical takeoff and landing aircraft) for the real air taxi revolution.
Blade started out offering helicopter rides between Manhattan and the Hamptons back in 2014, cutting long transit times significantly along with the convenience of booking a single seat via an app rather than forcing a splurge on a full helicopter charter. The company has reached new heights since its inception, going public via SPAC earlier this year and offering origins and destinations in a number of traffic-congested areas in the US. Voom offered a similar service to what Blade has evolved to today, offering helicopter flights to and from airports with its initial launch in Latin America. The companies operated very similarly, but Voom has disappeared while Blade continues to trailblaze in urban air mobility. Let’s dive in to see what set these two apart.
Scale: Blade 🗡️
Blade was among the first aerial rideshare companies when it launched back in 2014 to make helicopter travel more accessible and ease the headaches of traffic around and out of New York City. There are many different levels of wealth; the most wealthy probably don’t care about how expensive it is to charter a private helicopter or keep their own on-call and only fill a single seat when traveling; time is the only currency they need to ration. For others, a $500 seat on a helicopter for business travel is on the table while a $6,000 planned flight is not. Blade grants on-demand heli access to the skies to the latter kind of people while making it a very memorable experience (this link summarizes the experience quite well). Their app allowed users to book flights from a mobile phone, wait for their ride in a retro 60s-70s themed aviation lounge, grab a glass of rosé at the bar and for the flight (to calm one’s nerves), and catch a heli ride that saved a lot of time in comparison to a road trip for a few hundred bucks (around $395-$695 in 2015). If users were looking for a different destination, they could also use Blade to plan a charter and help fill the seats.
The company doesn’t own its own helicopters; it partners with several different operators to keep its routes going. This model has worked well to keep down their overhead and have more flights running each day. The trend of helicopter transport caught on quickly as a status symbol on Instagram for those that could afford it and wanted to show off the experience, and plenty of celebrities hopped on Blade helicopters. The service was flashy and far more affordable than chartering a helicopter, but the Hamptons are primarily a vacation destination for wealthy New Yorkers; Blade aspired to extends its reach further. By 2015, the company was rolling out additional trip options like Nantucket, the Jersey Shore, areas within Los Angeles, Cape Cod, and New York area airports. They also added a $6M Series A to the bank and were offering rides in seaplanes and higher-end helicopters in addition to the original experience. By the end of the year, Miami via a private jet was also on the table for Blade customers.
In early 2017, Blade forged a partnership with Delta to provide a unique experience for the Blade’s customers flying Delta at JFK Airport; at an extra cost, customers would be taken via Blade helicopter to JFK and escorted with their luggage directly to their flight by Delta Elite Services following an expedited security screening. In the other direction, Delta customers arriving at JFK would be greeted by Delta Elite Services and have their luggage taken directly to a Blade-operated car that would take them to a Blade helicopter on its way to Manhattan. The next year, Blade raised a $38M Series B and had established over 22 core routes in 7 states. Airbus Helicopters participated in this round and partnered with Blade to provide technology solutions to Airbus Ride, a similar helicopter service in DFW. As we’ll see in regards to Voom, Airbus had its dollars in many baskets for tackling the urban air mobility space with helicopters back then.
In 2019, Blade diversified its business model a bit with several membership options offering discounted airport flights to encourage frequent flying among its clients. The company was pushing more and more for business and airport-centric travel for expansion, a far cry from its roots in vacation flights. Given that most airline profits come from business travel, it made sense for Blade to pursue that audience. 2019 also saw Blade begin to pilot routes in the San Francisco Bay Area between SFO, OAK, Silicon Valley, Monterey, and Napa along with a partnership with American Airlines at LAX and JFK with a similar offering to the partnership with Delta. Further expanding its business, Blade also took on organ transportation with the first flights of Blade MediMobility, a means of taking advantage of its existing logistics and infrastructure in another space it could make a difference in. In pursuit of international markets, the company also took its first steps in India to combat traffic congestion in Mumbai and Pune.
As you can imagine, the pandemic’s onset in 2020 significantly reduced demand for helicopter travel to vacation destinations and airports alike. Blade pivoted towards a more traditional automobile rideshare service, retrofitting their SUVs used for airport transportation to handle passengers at the height of the lockdowns (plexiglass separators, A/C modification to use only outside air, new cleaning procedures, etc.). The majority of their passengers during this period were healthcare workers traveling to hospitals, so Blade partnered with those health systems to provide rides at no cost as well as to move equipment between locations. The service let Blade keep its doors open and people employed until restrictions lightened and it could reemerge. As it began to operate helicopters again, the startup decided to start requiring Covid tests prior to flights, the first aviation company to do so. With its foothold reestablished, at the end of 2020 Blade announced plans to go public via SPAC the next year. Additional capital would go towards pushing Blade into new cities across the globe and help prepare for the slow transition towards eVTOLs. With the pandemic having fragmented the urban air mobility space, Blade wanted to acquire others and consolidate its gains in the market to help meet these goals.
Early in 2021, Blade showed the first signs of its plan to move away from helicopters, sealing a deal with Beta Technologies to purchase 20 EVAs (electric vertical aircraft), slated to join the fleet in 2024. In May, the SPAC merger was completed and Blade was on the public markets! Since then, a few interesting things have happened with the company. First, the CEO admitted that their media spokesperson for the last 3 years was a fake persona they’d crafted at the office. He decided to come clean now that Blade was a public corporation (and probably needed a real spokesperson). Second, Blade began requiring Covid vaccinations for all of its passengers earlier this month. The company’s leadership seems to be humorous, committed to safety, and primed to invest in the future of eVTOLs for urban transport; the future of air taxis is looking bright. CEO Rob Wiesenthal has some words of wisdom for driving innovation in business:
If you're not willing to make mistakes, you're not going anywhere. We're not going to innovate if we can't make mistakes. They have to be measured, and calculable, and none of them can be something that could bring your company down.
Fail: Voom 🐦
While Airbus had backed Blade, it had plenty of other bets and operations branching across all sectors of urban air mobility. A3 (Acubed), the Airbus Silicon Valley innovation center, helped incubate Voom back in 2016 before it launched commercially the next year. It had a similar model to Blade in that it operated a platform and ran logistics rather than owning the helicopters itself (even allowing for plane charters too), opening its service in São Paulo, Brazil as its first market. To avoid dealing with noise regulations in US cities, the company elected to expand to other countries in Latin America next until quieter eVTOLs were viable. Thousands of passengers and almost a year later, Voom was now operating in Mexico City and became a subsidiary of Airbus Helicopters. Things seemed to be heating up in the space by 2019 as Voom launched in the San Francisco Bay Area (connecting SFO, OAK, Silicon Valley, and Napa) as well in competition with Blade and Uber Copters. In pursuit of the business travel market, Voom also launched Voom for Business in the US for enterprises wanting to simplify billing and offer helicopter service to employees. While things appeared to be going great, Voom was in a precarious position that the pandemic toppled.
Just as quickly as Voom appeared on the scene as a potentially serious competitor to Blade in the helicopter rideshare space, it vanished. In March of 2020, the company suspended operations indefinitely, citing the pandemic as well as difficulties scaling globally. Airbus still walked away with tons of data to help inform the rest of their urban air mobility projects and helped bring many first-time fliers into the skies, so it wasn’t a total bust. Still, it seems Airbus will be waiting for commercially viable eVTOLs before taking a crack at air taxis again.
Lessons Learned 💡
Blade did a lot of things right down to the small details that helped the company succeed. Scrappy marketing and the attention to the entire experience of their rides were two big points in its early success. The Instagram-worthy rosé sippy cup was formulated to get attention on social media in Blade’s early days when it didn’t have a hefty marketing budget, and CEO Rob Wiesenthal was obsessive about crafting the right experience for the audience Blade was targeting:
Not only do I design the [employees'] outfits, I score the music for takeoff and landing, and also work on the menus. I design dopp kits. I go on flights to watch people interact with things on the flights. We provide gel eye masks, [think about] the weight of the blankets we want to go on our flyers, and decide when you should put a blanket on someone.
To make sure he stayed in touch with customer needs, he spent much of the early days poring over customer reviews and answering their emails 24/7 to improve Blade’s service:
But I read all these cases because at the end of the day, it's an expensive product and we need to know how we're communicating about those issues. [We can learn things like that] I can save a minute in loading time if we tell the pilots to make sure that the safety belts are unbuckled before the flyers go on, and not hidden in the seat ... two minutes when you're running multiple flights at the same time is a lifetime.
Even the rosé was only partially for aesthetic; it was good for calming nerves for many first-time flyers and was a part of the vintage lounge experience that made customers less concerned about any delays. Wiesenthal drew from his own experiences when he was younger to design the lounges; in the 60s and 70s, flying was an exciting occasion enjoyed by few people. The lounges capture that experience with the vintage airline décor, magazines, and bar. Bringing that feeling of adventure and glamour to Blade’s customers was at the core of the company’s mission:
That's the DNA of Blade — we're enabling flyers an experience that not everybody gets the opportunity to enjoy. We make it economically accessible to a much broader universe. 75% of our first-time flyers have never been on a helicopter or seaplane before. Before Blade, it cost $6,000 to charter a helicopter. Through our technology and user base, the entry point is now $595 per person.
Wiesenthal knew what his early adopters wanted to see and how to sell to them; combined with Blade’s early start in the space, a solid product, and a strong path forward into the business travel market, it’s no surprise the company has done well. Time will tell if they can adapt their business model and scale up to the promises of eVTOLs for urban air mobility, but they seem to be preparing for it just fine.
The pandemic no doubt played a significant role in Voom’s shutdown; Blade survived because the company was well capitalized and well established in the space. In terms of challenges for scaling globally, there would be many for such a tightly regulated and risky space as air taxis. Regulations, laws, permits, and more differ from country to country, and with smaller pools of customers available, the economics can be difficult to make sustainable. Coupled with the pandemic, investment in such a risky project may not have been high on Airbus’s priority list. Besides, they got plenty of data to feed into other projects on urban air mobility; they reaped plenty of benefits in that sense. Perhaps Airbus will take another stab at the service in the future, or perhaps they’ll just leverage their urban air mobility wisdom to support Blade as an investor. In either case, the way we travel across cities will be changing in the near future; I for one am excited to see it.
More Reads and Info 📚
On This Topic
Other Good Reads
Thanks for reading! Let me know about your experience if you’ve ever gotten the chance to ride in a helicopter. If you found this interesting, consider sharing it with friends and subscribing if you haven’t already!
Cheers,
Amil