Episode 525: Time and Execution Creates Success with Glenn Gonzales

Welcome to this edition of the Million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell.

Hello, Glenn Gonzalez.

Larry, good to be here.

Yes, glad to have you here. And Glenn, we're going to have some fun this afternoon talking about winning and it's something we don't usually get exposed to, the private jetting, you know, world the aircraft and flying and all of that. Something that you, where you spend your world. And so Glenn, is, is it CEO or of Jet IT? Are you a founder or CEO? What's your role?

I am co founder and CEO.

Co founder and CEO is 2018 correct on that?

It sure is. We launched actually tomorrow will be our departure from Honda Aircraft Co. The four year anniversary and received our first airplane in December of 17. So kind of unofficially, tomorrow is our four year anniversary.

Hey, congratulations. And when you started, by the way, is that Honda? There's a Honda factory there in Greensboro, North Carolina. Is that where you came from?

It is. That was my previous role. It was a little bit of an effort to try to find an intrapreneurship opportunity that didn't present itself. So I left the company and here we are. Both my co founder and I left on the same day four years ago tomorrow.

Well, Glenn, I lived there for about 20, I don't know, 20 zillion years in Greensboro, built a financial services business and then after the business was built, the family raised, I moved down to Palm Beach, Florida and also in the winter to Aspen, Colorado. But I'm up in Greensboro all the time. I drove by that, drive by that Honda place quite frequently. And so I know where you're coming from. And I'm very, I was always very curious to see what came out of that factory. But I never got a chance to get a tour so I can get some of the inside scoop. Now jedit, I've heard about JEDIT for a long time now. When you started, Glenn, how many, what did you start with? You know, you and your co founder but you know, Plains employees funding this, that the other. What did you start with?

Yeah, Larry, we started just my co founder and I. Our first hire was someone for client experience. We recognize we're dealing with an audience that needs, they need to be well taken care of. And then our second hire was a young intern who was business development and very much kind of supporting our sales efforts. So we needed to sell and we needed to hire new people or at least take care of those people that we sell to. It was just the two of us. We did have an investor behind us. That investor has moved on. He received a great and handsome return for his time and investment. And we bought an airplane 30 days after leaving Honda Aircraft Co. Or at least we signed up for it and received it in December of 2018. So it was just the four of us. I was the pilot, the CEO, the salesman, the chief bottle washer, if you will. And we were off to the races.

And it was a small plane, so you didn't have flight attendants, I guess.

But no cabin attendance. I also, I guess did some of that as well, reaching over my shoulder to support whatever needs they had.

Yeah, can I get you a Perrier, sir? And but as you. How did. Did it catch on? Was it a slow start? Was it a quick start? I mean that had to be scary times for you.

Yeah, you know, Larry, my co founder and I, we took our life's earnings and invested it into the business. 401ks just vanquished everything. So needless to say, it was definitely concerning. But at the same time, man, we knew this industry inside now and we believed in the business model that we created and recognized that it was the only thing that was holding us back, was just traction in the marketplace. We started with kind of the mantra that we're going to establish the brand, communicate the service, and then we've got to execute. And so we were doing all of these things at the same time, getting ourselves in front of people. And it really wasn't a very much of a. It wasn't a slow burn. We started very quickly. We got the first airplane in hand in December of 18, got it completely sold shortly thereafter. Very appreciative of our initial investor for helping us get that airplane. But after our first two airplanes, everything's been pre sold. And that speaks to the recognition of what the market was in need of and our ability to provide it as a business model.

What was your business model?

Yeah, so we are what we call a hybrid fractional. Fractional in the sense that a number of share owners are buying a piece of the airplane. They're getting all of the benefits of aircraft ownership without having to buy the entire airplane. There are tax benefits, distinct tax benefits, being able to write off 100% of your investment in your share. They are the lower operating costs, eighteen hundred dollars an hour for the whole airplane with no reposition cost. That includes fuel, that includes crew. So the owners get a great benefit. And when they're not using the airplane jedic gets the benefit of providing an exceptional service to the broader charter marketplace and being able to find something in that charter marketplace comes back to us as a business. So it's a great trade off between.

The three, as opposed to. For people who are not familiar with the chartering and the way these private, like, let's just say what is it netjets or what Warren Buffett has and some of these other models are marquee or sentient or whatever. How. How is this opposed to that?

Yeah, I guess I'll start with explaining it in something that everyone is probably familiar with. We've heard of people who might buy a second home in a vacation spot. Most of us though, are using a hotel or a resort in the area when we're going on vacation. Jette, like a netjets or a flexjet is a fractional. We're more of that second home. You have a distinct need for it, you want to use it frequently, versus the hotel user that is just going to visit it every so often, maybe once or twice in a year. That's our charter customer. So we have both customers, we have both sides of the business that we support. And it works very well for us. We're the first to offer it in the fashion that we do.

What was the. Like how much when you say you took all your life, you know, your. All your savings and everything, how much did the two of you put in and what did your investor put in? If you don't mind me?

Yeah, combined. We were on the complete opposite side of the business. Typically there's a saying, if you want to make a million dollars in aviation, you start with a billion. Well, we started with sounds like the horse.

Sounds like the horse business.

Exactly right. Exactly right. We started with just over a million dollars and our investor, of course, he put in the majority of that. And you know, we, we had a great, we've had a great run for the last three years. We are almost to 200 employees in our organization with 25 airplanes that we support in North America and one more in Europe that's run by my co founder with our sister company, Jet Club.

Yeah, I had the closest I've seen to this type model is a friend of mine out in la, bought himself a limo and he made a deal with the driver that as long as you're available when I want to go, you can use it the rest of the time. And it worked out great for both of them. And on a smaller scale, is that kind of the idea?

Exactly right, Larry. As Long as the limo is working, or in our case as long as the airplanes are working, it should work out quite well for us. And it works out well for the guy who in this case your friend who bought the limo or in our case the fractional share owners who are buying the airplanes. We should have the ability to get out to and from, get them where they want to go, when they want to go and the airplane's in our hands the rest of the time.

Well, let's talk about how you set it up yourself. You know, you said you ramped up quickly. That came I'm sure because of the advance planning. You know, you win a war in the early stages, have advancements because you set yourself up for success. And obviously you had set yourself up for success very quickly and how did you go about that comes into prospecting, you know, to have people to go to market and reach. And so how did you, I guess you had clients that you flown for, you had friends in the industry and then friends of friends like that. How did you set yourself up to go out of the gate strong?

Yeah, I mean it started with friends, clients, prospective clients and friends of those clients leaning on those relationships. So, so, so critically important. But it was also a function of, we were, we designed the business to be prepared for time to build that time necessary to make those relationships, understanding the lengthy sales cycle and then on top of that making sure that we executed on what we outlined was necessary to get it done. It took the better part of two years to build the business model and then my co founder helped me refine it and here we are now, almost four years later. We've got over 180 customers. It's a very small demographic that communicates with one another. So if you can make them happy, they'll tell their friends. If you can provide the service that you outlined that we knew from our business planning and our modeling was productive and successful and helpful to the customers and they would buy in and the end of that is rapid growth.

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And so what happens with your typical client? Do they wind up getting a bigger piece of, you know, get into more planes or get a bigger piece or. Once they're in, that's pretty much it, you know. Cause when you get into a lot of these hedge funds, they'll have a project and then they'll let you know, here's what it takes to get into the project. And you know, we, we expect to be in three to five years and expect for this to happen, but there's no guarantees. And then, you know, you can get in for sometimes 20,000, 100, you know, they have units, you know, 100,000, 200,000, you know, 500,000. And you buy units. So you get in on it and then you might decide, you know, you want to get in more next time. They rolled around. So do you see that kind of thing happening in your business?

Oh, absolutely. I mean, it's all about return on investment. What oftentimes happens with our share owners is they buy a smaller share. Especially as a new company just getting started, it's still an expense. It's well over, it's over $600,000. And so they're making a big investment in our business, in themselves. But when they see the return on that investment and more time with their families, more time and more success for their business, being able to reach a supplier or a customer faster than someone else, they immediately start to see the return on that effort. But more so when they get the invoice and they realize, man, I only, I flew five times this month and I spent less than $10,000, but I made $250,000 in a month's time. That kind of return on investment says, gosh, I need more of this. And so they buy and increase their share size with us if they're not happy. Obviously they won't. If you're not seeing a return on that investment with the hedge fund, needless to say, you won't buy up and increase your investment.

So they have the initial investment and then they pay the per hour cost when they actually used the plane, is that it?

That's exactly right. And the initial Investment is a one time expense over a 10 year period. There are some exit points prior to. But when you can have that predictability as well as an hourly rate of less than $2,000 an hour, it really is a tremendous investment.

Now do you do distributions throughout the year or how does that work?

We don't. Essentially we are subsidizing the utilization of the owners in exchange for access to the airplanes when they're not using it. So that's why that rate is $1,800 an hour as compared to other companies out there that will use. That'll be upwards of six and $7,000 an hour.

What surprised you? You know, your plan. You had your plan, it went well. What surprised you or shocked you or amazed you or what, what have you learned from. You know, the whole thing about being in a business is until you get in, you don't know what you're getting into. And there's, especially if you, until you own it, you know, it's just like, do you fly the plane? You don't know what you're getting into. For example, I, you know, at one point I was going to get a reason I was interested in those Hondas. I was, the Honda jet was at the time, way back then. I was thinking about getting a single engine jet flying to and from Aspen, you know, and get my hours and all of that. And I actually did 140 hours of training right across the Runway from hangar and, and then on my, I did a solo flight over that field and almost got on landing. I almost got t boned by 737 who neglected to call the tower and get clearance. And so I had to do a quick arc around and you know, the tower was calling, you know, abort, pull out, put a 2 7. So I landed and gave the keys to the instructor who was waiting on the ground and said, you'll never see me again.

That's deviation for you. There are those of us who've been spooked a little bit, and there are those who are soon to be spooked by an experience. But it also in some cases keeps us coming back, you know, the surprises that we've experienced. I guess I was very surprised at the market's interest in telling our story. You know, Harvard writing a case study on the JEDIT model, the cnbc, and just the quick awareness that people were excited to tell the JEDIT story. But, but also the other thing that surprised me is how quickly people started to copy what we were doing. I guess they figured, well, if, if those guys can do it, why not me? And aviation's a tough space and I wish them all the best because it really is a tough industry to be successful in and I'm grateful for the amazing talent that we've been able to recruit and grow into our business.

So let's talk up to where you are now. We're talking about from end of 2017, 2018. You got you and your co founder. You got some seed money, you got a plane now where are you today?

Yeah, well we've covered a lot of ground in a very short period of time. We have of course our aircraft operations. We've got 25 airplanes here in North America. One of those is in Canada. It is a subsidiary of our US operation. So we have just Jedit usa Jette Canada. We have Jet Club which is our European arm in Europe run by my co founder. And then we have of course almost 200 people on our staff and payroll. We are high wage paying so we're excited to share that. We have people in 31 different states, about 25% of our workforce are veterans. We have both maintenance operations, aircraft management and charter operations as well as brokerage services. So we do everything in the industry and we've covered a lot of ground in a very short period of time.

And where is your, where your headquarters now?

You know, we're right in downtown Greensboro.

You didn't go far, huh?

We did not go far. We wanted to stay close to Honda, the state of North Carolina and Greensboro has been very good to us. So we're excited to continue to grow our business here.

Okay. Where do you live in town since I know Greensboro.

Yeah, I'm. I'm in the Star Mount area.

Starmount. Okay. Well done. And I was over in New Irving park. So Page High School. You know, I don't get kids and all of that. But you. Yeah. What has it done for you personally? You know, you seem to be as a pilot needs to be very even keeled, checkless, you know. You know they say why do pilots have so many checklists? I said, you know, it's a little complicated thing, you know and you notice if you think of how many plane. One of the big things to come out of nine, 11 was when they put up on the screen how many planes, how many jets were actually in the air at that moment and how many they had to bring down out of the skies. It's just like planes raining down all over the country. But it's a complicated thing. Pilots in airline industry are role models for the disciplined life and the disciplined approach to things because you can't leave things to chance. You know, I think it's, you know.

I think think the tires are good.

I think we feel, you know that that doesn't really work. But that was that good or bad for you when you became A CEO because CEO is rough and tumble and dealing with surprises and this, that and the other. I mean, you gotta kind of shift gears, you know.

Yeah. Yeah. You know, I guess maybe my experience as a pilot might be a little different for most. I started flying in the Air Force and flew fighters. So you're always prepared for that next surprise. You're always preparing for the war that starts tomorrow. And in that sense it's yes, we still have checklists, we still have to flow through everything. But once you fence into the airspace, everything after that is dynamic and there's no set. There are standards and operating procedures that you're going to work within, but outside of that, you got to be prepared for anything and everything and you work within those procedures. Being a CEO has been just the same. Learning about myself that yes, I am even keeled, but I understanding and being prepared for anything and everything, planning for the things that are threats and issues that are known, the threats and issues that are unknown, and then the unknown unknowns, being prepared for those just the same, you know, I. I've learned to manage those as best as I can. It's hard, but I think my experience as a pilot and a fighter pilot has definitely helped with that.

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