Eclipse Aviation: Redefining the Value Proposition for Jet Travel
December 11, 2005
Vern Raburn, President and CEO of Eclipse Aviation (mantra: "fly in the face of convention"), gave a rousing presentation at Friday's NWEN Breakfast, describing how his company is redefining the value proposition for jet travel by making private jet travel -- via a new generation of very light jets (VLJs) employed as air taxis -- as affordable as full-fare coach travel on large commercial air passenger carriers. I learned a lot about aviation, and, as at all NWEN events, a lot about entrepreneurship.
Eclipse is pioneering a new line of VLJs that incorporate three elements of disruptive technology:
- modern turbine power: a new breed of aircraft engines that can be manufactured in 8 (rather than 65) hours, and are more quiet (ICAO Stage 4) and efficient than most existing engines
- digital electronics: more sophisticated than the Boeing 777
- new manufacturing processes: friction stir welding, machined parts, just-in-time (JIT) manufacturing
These elements combine to result in an efficient, low-maintenance aircraft that can be assembled within 10 days from the time an order is placed ... and 20 days before the payments are due for the components.
Vern relayed a number of differences between the aviation and high tech industries. One aviation veteran, upon learning of Eclipse's plan, revealed the immense difference in scale between the two industries, remarking "you're only going to be a $5B company ... how are you going to survive?" In technology, the non-existence of a product or service is seen as an opportunity; in aviation, the presumption is "it can't be done." Up until a year ago, most in the aviation industry believed the market for VLJs would never exist; now it is widely seen to be the hottest market segment.
Among the entrepreneurial insights and experiences Vern conveveyed:
- Real value change produces new demand (in technology, this reduces prices; in aviation, this has historically increased prices)
- Market forecasts for disruptive products are always wrong
- Price new products based on cost, not "what the market will bear"
- Eclipse has attracted the world's largest amount of angel investment -- $475M, with no institutional investors
- Everyone wants to combine their occupation with their avocation ... if you don't have passion for what you're doing, it's just a job. Vern is clearly someone who has successfully merged his occupation and avocation, and his passion was contagious and inspiring.
Speaking of occupation, avocation and jobs, after Vern's presentation, Connie Bourassa-Shaw, the Executive DIrector of NWEN, announced that she would be resigning her position at the end of the year, and taking over as director for the Center for Innovation and Entrepreneurship at the University of Washington Business School. We will miss her at the helm of NWEN, but wish her all the best in her new position!