In The Big Chair - Bonny Simi of JetBlue Technology Ventures

Bonny Simi, President

Founded in 2016, JetBlue Technology Ventures invests in and works with early stage travel technology startups with the goal of improving the travel experience across the whole travel ecosystem - not just for airlines.

Bonny Simi joined JetBlue in 2003 and served in various roles including vice president of talent before becoming president of JetBlue Technology Ventures at its launch. Simi is also an active JetBlue captain and a three-time Olympian in the sport of luge. 

There’s been a general trend in the industry to create incubator and funding mechanisms for startups in recent years. What was JetBlue’s motivation for doing so?

We are a corporate venture capital firm, so we actually invest in the startups instead of just doing an incubator model. Once we invest, we‘ll spend years with these startups, helping them and monitoring them.

The reason we did it is, innovation is happening so fast, particularly with digital disruptions that are occurring and massive amounts of data. And the fact that we have mobile and mobile is pervasive, obviously, in travel because you’re always mobile. A lot of the tech stack in the travel industry is not mobile, it’s legacy. So there’s a wholesale transformation that is occurring in that space. Then when you add in other elements like blockchain, electro-propulsion - so many disruptions are coming around the corner.

We knew as a company, a Fortune 500 company, it is imperative for us to have a way to look around the corner and see what’s coming so we can adapt our business model as a large company to those shifts and also be a first mover in some of the great technologies that are coming forward.

The idea was, instead of just doing hackathons or doing a three-month incubator, we would put a full-time team in Silicon Valley to meet with the thousands of startups every year. And it’s been extraordinarily successful for us.

What have your learned over the course of the last two and half years about the travel startup ecosystem?

One is that the actual travel technology is evolving. As I mentioned, we have a lot of legacy tech stacks in the industry. But what’s also interesting is it also bleeds over across many verticals – for example fintech or insurance tech.

Other things we’ve seen are the concept of air taxis - not flying cars - that’s happening. Electro-propulsion is happening. These are some of the trends we are seeing. We also are seeing that consumers … want instant pricing, they want relevant information, personalized information. There is so much information available to consumers these days, they want it curated for them.

And lastly, and several of the travel providers are acknowledging this, is that people want a seamless experience across various channels - whether they start on a phone and then they move to desktop and then they move to tablet - and they want to have single providers for things.

So a seamless transition from ground to airport to air to destination - creating that holistic, seamless experience that has alluded the industry to date. We see that emerging as well.

Approximately how many startups do you consider each year and how many do you invest in?

Because we are the only travel provider corporate venture firm … and we are full time in this business, pretty much all of these travel startups - certainly in the United States and increasingly worldwide - are coming to us. The first two years we were in operation we saw about 1,000 startups. This year we are on pace to perhaps triple that. We will invest in about eight to 10.

When you think about going from 3,000 to eight to 10, we like to say it’s not just the investments that we do and working with those startups that provides value to JetBlue, but also the screening of the other 2,990 startups that we see because there are learnings that come from that. Just because we don’t invest does not mean that they aren’t an amazing startup. So that market research, if you will, has been invaluable.

We are starting to have other companies come to us. We are beginning to partner with international travel providers - airlines, hotels - who want to come to Silicon Valley. They can become part of our international ecosystem and actually have an office in our space and be part of that funnel of 3,000 down to eight. So it’s pretty exciting. Our first partner is Air New Zealand, and we are in the process of finding a few more.

What do you provide your portfolio companies in addition to funding?

That is the key element and the difference between a venture capital firm and a corporate venture capital firm. Venture capitalists provide them advice and money and connections, but what a corporate venture capital firm does is very much provide that industry knowledge. We are also a potential customer for the startup when they mature to a stage that we’re ready. We don’t guarantee that for the portfolio companies, but we clearly have an eye toward JetBlue being a customer of their technology.

We provide media support for those that need it when they are launching – if you have a team of six people, they are not necessarily going to have a communication person so … we’ll work with them to craft their launch plans. We help them get them additional investors.

For some, the ones that are airline- and aviation-focused, we provide regulatory support such as how do you navigate the FAA? We provide support on building out safety procedures. We share our safety manuals. We provide connections so when a startup comes to us, because of this international partnership ecosystem we are building out, we are a potential customer but we are also able introduce them to an Air New Zealand, an Emirates, a Lufthansa.

For a startup to try to go to a global aviation company and try to figure out which door to knock on, they don’t even know where to start. We know all the players at all the major airlines, so we can open doors for them. That’s probably the biggest benefit of all.

Where do you see the most potential for disruption in travel? What needs to be addressed?

Clearly when you think about the pain points for air travelers - how do you make the airport experience as seamless as possible? Obviously, security is immensely important in this industry. How can we make it even more seamless so there aren’t as long of lines?

We are looking at various startups that will enhance the security, improve the flow through airports. If you think about the various pain points that travelers have, they have paint points around the airport experience, paint points around lost baggage, paint points around flight delays. So how can we provide a better baggage experience, how can we provide a better airport experience, how can we provide better information and predictive information around flight delays?

Then we are also looking at this whole disruption, thinking about how do we take the new technologies - blockchain, mobile payments, cross-border payments - how do we find ways to improve that? Fintech is a huge area of disruption. Customer service is another area. We are the launch customer for a company called Gladly, which is omnichannel communication. This is a theme we’re getting at - regardless of what means you want to communicate, pay or travel - it should be as seamless as possible.

Gladly is an omnichannel communication channel, so whether you call JetBlue, you text JetBlue, you web chat JetBlue or you email JetBlue, it all goes into one communication screen for the customer service agent that is helping you. He or she can see three weeks ago you sent us email about this topic, or you called us, and it all comes together so you don’t have to start over with the conversation you have with each agent.

Up until now, people couldn’t talk to brands and companies that way. You are basically a reservation number or a ticket number. Going forward you are a person, you are a customer, and regardless of how you want to communicate with us, you will be able to do so, and we will have a 360-degree view of the past communication.

We are very bullish on electric propulsion, because it will bring the cost of regional travel down dramatically so its viable again.

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The other area of significant disruption we see - this is on a very macro level - if you see think about how Airbnb disrupted the hotel space and think about how Uber and Lyft disrupted the ground transportation space, they very much caught the car industry, the taxi industry, the hotel industry by surprise.

One of our mandates is what’s going to happen in the airline industry in the next 50 years? Are airlines still going to exist? Our thesis is yes, airlines as we know them today will still be around for a very, very long time … but we believe airlines will be focusing more and more on long-haul travel and the regional travel – think of it from one to 1,000 or 700 miles is very ripe for disruption. Because regional airlines have been shrinking and airplanes are getting bigger.

There are about 5,000 public airports in the U.S. and only 160 of them have commercial service. What if you could create this transportation network in an efficient way through smaller airports using electric propulsion, using marketplaces for charter aircraft? We are very bullish on electric propulsion, because it will bring the cost of regional travel down dramatically so it's viable again.

B2B vs B2C – any preference?

As investors we prefer the B2B or the B2B2C. It’s tough for startups to make it straight as B2C. There are some B2C, like Recharge is one we invested in which is a B2C, and by JetBlue Technology Ventures adding our name … and helping them it gives them an extra boost in visibility.

I think B2B is easier for startups to get the traction, and we are able to drive even more help because we can introduce them to the other Bs out there. If it’s B2B we can introduce them to other airlines or even hotels. We are expanding our ecosystem to not just be airlines; we are a travel investor not just an airline investor.

Why do so many startups fail?

Knock on wood, so far we have 19 investments over the last three years and none of them have failed. So that’s been great. It’s also a reflection of the good economic times as well. I think a lot of startups that fail - maybe they have a good idea that is really useful, and they think it has broad market appeal but maybe it doesn’t. Or they are unable to get enough traction to get that next round of funding.

If you’ve got a good idea and it’s well thought out, and you have some good initial traction, it’s pretty easy to get a startup going in today’s day and age through seed investment or even a Series A. … But it’s one thing to go to market and get into a few markets, but to scale it enough for an investor to give you the next round of funding, that part is a challenge.

This is where we focus a lot: helping our startups get from the A round to the B round, helping them scale, helping them go from 10 people to 100 people. If you don’t have a good tier-one venture capital firm behind you or a good corporate venture capital firm, it is very hard to get through that to the scale stage.

What do you have planned for JetBlue Technology Ventures over the next three to five years?

We have five themes that we invest in. One is that customer-focused, seamless customer journey. So we see increasing in that space. We have technology-empowered magnificent service - another way of saying that is enterprise 2.0 - these are tools like Gladly to help our crew members deliver a better experience. We see a lot of opportunity in that space and the enterprise software space.

The third area we focus on is maintenance and operations. We are very focused on finding ways to improve the operations and specifically to do predictive maintenance. The fourth area is revenue management, distribution, loyalty. It’s still very early for blockchain, but we believe that will transform the distribution system in the travel industry, which is an area ripe for disruption.

And the last one is regional transportation - that’s that electric propulsion. Those are the five areas and we’ll do 8 to 10 investments a year.

The place we are really focusing now is on this international partnership, because JetBlue can probably digest three to four startups a year through its technology, but what about the other ones? We want to add these partners because JetBlue might not be ready for a particular technology or it may not be a priority for JetBlue, but maybe it is for another airline halfway around the world.

We are very focused on bringing on partnerships so we can help both the startup and the large airlines or hotel or even cruise lines. What we have here is something very unique, and we want to give more access to our portfolio companies to the whole travel community. So we will take on about six to eight partners over the next year.

You have an interesting and unusual background – you competed in luge in three Winter Olympics, were a sports reporter in San Francisco and commentator for CBS and NBC Sports and then a commercial airline pilot. How have those experiences shaped who you are today?

I think that for me, I’m a person that - first I like to keep moving, I like challenges. I like driving toward a big vision and a big goal. These particular things were on a list I wrote when I was 14 years old. I said I wanted to be in the Olympics, I wanted to be a TV commentator, I wanted to be a pilot. That was something that helped guide me through college and the early part of my professional life.

There is a common theme there, and that common theme is if you can imagine the future, it can come true. That’s why I’m so excited the role I’m in now is about helping these entrepreneurs imagine the future and help make it come true. One of the biggest things I always tell kids and even entrepreneurs – I always say, you have to have a dream for a dream to come true. So that‘s what I do. I help people shape what their dream is, what their vision is.

What advice do you have for entrepreneurs?

Clearly shaping what their vision is and being able to say it in two sentences is incredibly important. There are so many startups out there. You have to be very clear about what your vision is and how to get there. I can’t tell you how many times I see a pitch deck that is 30 slides and has 100 words on every slide. You have to be able to tell your entire story and business model in 10 slides. And each slide should take only 30 seconds to look at and digest.

All of the pitch competitions around here - the good pitch competitions - you get two minutes. And many times when we pass on a startup, we just look at the first three sentences of their email or the first three sentences of the description of their company that comes in on a spreadsheet with a list of companies pitching at a competition. Literally two to three sentences and we decide we’ll pass or continue on, so being very clear and succinct is important.