Anatomy of a Startup

Last month I wrote a profile of a promising new startup company, Toronto-based Novajet, for PROFIT Magazine.

It’s the first story in a new regular feature called Startup Scan, in which PROFIT commissions a profile of a young company just starting out, and then submits the story to a jury of experienced entrepreneurs for their comments. Does the company have a credible plan? Are they going about it the right way? Are there additional, related markets the company should be pursuing?

It makes for a fun piece, and good insights into what makes for business success.

You can read the story - and the related critiques – by clicking here.

For those too busy to click through, here are a few excerpts:

-- Why CEO Chuck Buchanan walked away from his previous company after a partnership dispute, and decided to found another jet-charter company:

Having found his business-building instincts blunted in a company that had grown to 100 employees, Buchanan agreed to leave. "It was disturbing at first," he admits. "But the more I looked at it, the more I saw this as an entrepreneurial opportunity — a chance to grow something." By selling his half of Flightexec, Buchanan admits, he really didn't have to work again. "But you can't just sit around and grow petunias," he says. "You're not supposed to be a lump in life."

The Launch:
On November 2, NovaJet launched its first flight — a business jaunt for five people to Chicago's Palwaukee Municipal Airport, aboard a plane subcontracted from another charter company. Sitting on the tarmac just outside NovaJet's office abutting Hangar 9 at Pearson International Airport, the airline's sole jet, a seven-seat, 480-nautical-miles-an-hour Dassault Falcon 10 (call letters: C-JET) was still waiting for its permit to fly paid passengers. In the meantime, NovaJet had already launched its marketing campaign, featuring ads in the Globe and Mail and pay-per-click ads through Google AdSense targeting business clients who have never used chartered planes and consider executive jets a perk for the wealthy and self-indulgent.

Not true, Buchanan insists. His target market is mid-sized businesses that may have four or five people who need to fly 900 km to 1,600 km, often there and back in a single day. It might be a sales team making a presentation in the U.S. Midwest, a management team reporting to head office on the East Coast or an engineering team headed for a mine in northern Quebec. Once you add up airfares, take into account the time required to negotiate airports and change planes, and add hotel and meal costs, executive charter rates start to look good.