Startups

Beacon, the all-you-can-fly travel startup, closes shop

Comment

Image Credits: under a license. (Image has been modified)

Another tech startup seeking to transform aviation has closed its doors. Beacon sought to bring an all-you-can-fly option to business and leisure travelers starting on the East coast.

The company’s approach was to charge membership fees, handle customers at the gate with a white-glove service and partner with regional aviation businesses to get passengers to their destinations.

The company was co-founded by Wade Eyerly, Cory Cozzens and Reed Farnsworth, who previously started the California-based all-you-can-fly airline Surf Air. Ryan Morley was their other co-founder.

Customers paid Beacon a $1,000 deposit and $2,000 per month for unlimited travel between Boston’s Logan Airport and the Westchester County Airport outside of New York City.

Pre-sales were key in the company’s plan, and revenue from these would enable Beacon to get started. The startup had to cover payroll while also renting planes from partners, planes that use a lot of fuel and required skilled pilots.

Eyerly said, “We built the business on the premise that once we launched we would never have to lose money on operations. We thought pre-selling would let us do that.”

He believes the business model behind Beacon would still work, but here’s where the former CEO says he made critical mistakes.

“Beacon launched in September and I believed we had sold enough to cover our expenses but learned that we had not because three-fourths of our sales were to people who didn’t want to start flying until a future date. Most of them wanted to wait until the summer to start flying.”

The company had raised a tranched Series A of $6.5 million led by Romulus Capital and joined by MiVentures and others. It also raised $1 million in venture debt funding.

About $4 million of its Series A money was earmarked to support Beacon’s growth, once it became operational and profitable, not to get Beacon flying in the first place.

Founders were subsidizing operations from day one, but could no longer do so by the turn of 2015, Eyerly says.

Beacon employed 20 in March when it closed shop. Its website is still up.

Most, if not all, employees have since found other work, according to Eyerly. Beacon co-founders have gone to lengths to help them find that work, he said.

The startup realized half a million in revenue. It could not return capital to investors — all of its funds and assets were assumed by senior creditors.

The company planned, but was not able, to launch a service between its hubs in Boston and Westchester, and summer vacation destinations in Nantucket and the Hamptons. Customers who made a deposit and intended to fly that circuit will get, or already have gotten, their money back. Others flew and got what they paid for.

The highly regulated industry of aviation proves a consistent challenge for upstarts.

Regulation and high overhead costs are reasons why we don’t see new airlines launching very often, or terrestrial trends like on-demand rides, subscription commerce and the collaborative economy transforming the industry as quickly as they have ground-based travel.

Beacon joins the ranks of Airpooler, BlackJet and others who have folded or pivoted under such pressures.

Eyerly himself has joined Wheels Up as the Managing Director of New Ventures. Wheels Up is a private aviation startup that sells memberships and on-demand flights. It charges customers $17,500 to become members, and $3,950 an hour to fly anywhere within the U.S. on short notice.

Correction: This post has been updated to reflect that BlackJet is still in business. The company launched in a bid to become like “Uber for private jets,” but now offers private jet seat booking to members who pay an annual fee for access to their network.

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

2 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo