Mail: August 2002

Readers react to recent Inc magazine articles. Plus: An update on the MEP and why the Bush administration is significantly cutting its funding to this successful, cost-efficient program designed to help small manufacturers.

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Vern Raburn wants to rescue us all from airline hell. Backed by investors like Bill Gates, Raburn hopes to spawn a nationwide air-taxi system that will bypass the grind and gridlock that marks today's air travel. But as Hesh Kestin's June profile of Raburn, " The Plane Truth," shows, the entrepreneur is something of a modern-day Icarus: dogged, charismatic, and perhaps also reckless.

Sky-philes
Raburn's start-up has spent nearly $220 million to create a Checker cab for the airways: the Eclipse 500, a relatively low-cost six-seat plane, hailed as aviation's "next big thing." Kestin's article raised serious doubts about a much-publicized order for 1,000 planes that Raburn had received -- an order that appeared to have helped him win critical capital. One reader raises further questions about Raburn's plan.

This story was a great piece of reporting. Hesh Kestin asked the right questions and came to the right conclusions. There is, however, one assumption left unchallenged that deserves redress. The piece assumes that a lack of suitable airplanes is the main factor driving the concept of "air taxis." Having been in that field (providing charter air services to companies and individuals), I think not!

Potential users of air taxis have numerous options open to them, from partial ownership of planes to chartering any of the thousands of aircraft residing around the country. The ready availability of planes extends from inexpensive, small single-engine aircraft that travel at speeds of 100 to 200 mph, to upscale Turboprops that can carry more passengers at 200 to 300 mph, to Swift Jets carrying still larger loads at speeds of up to 600 mph. The idea that the Eclipse is filling an unmet need is a fallacy. The need has already been filled by existing service providers -- and those businesses require far less capital investment than Raburn's does.

Spencer Lane
Author of First World Flight: The Odyssey of Billy Mitchell
Daytona Beach, Fla.

Kestin replies: Fractional ownership? That's like buying the cow when all you need is the occasional quart of milk. Charter? Try chartering a plane from East Hampton, N.Y., to French Lick, Ind. Whoops: EH's runways are too short for charter jets, which shifts us to Westhampton -- in traffic that adds two hours' driving time round-trip. Then there's price. For a Citation V (a little faster than an Eclipse 500) one national charter outfit wants $10,650 round-trip -- $2,130 each for a party of five. That covers 4.25 hours in the air and 3 hours for plane and pilot waiting for me and four associates to get sloshed in French Lick. Using Raburn's far-cheaper plane, which supposedly can fly into and out of most anywhere, the business plan for one air-taxi start-up puts the price at $600 per flight hour and $50 per hour waiting time -- $2,700, or $540 per passenger. Charter is air limo. Air taxi is what we need.

This reader loves Kestin's plane-spoken style.

I don't think that Eclipse Aviation has legs, much less wings, but then again, the aviation industry has always attracted people who love enormous challenges. Hesh Kestin treats his subject matter with a nice combination of respect and skepticism, especially the latter. Kestin has more than a little bit of Studs Terkel in him. All in all, an extremely enjoyable read.

Lew Hoff
President
Bartizan Data Systems
Yonkers, N.Y.

Dangerous Liaisons
The risks involved in hiring a new CEO, examined in Jennifer Reingold's " The Most Dangerous Hire" (June), impelled this professional recruiter to make his own suggestion of what to fear.

As managing principal of a search firm since 1980, I find that the phrase "most dangerous hire" brings another thought to mind. At any level, including CEO, the most dangerous person is the one who can almost do the job. He or she is not bad enough to be an obvious mistake but represents a missed opportunity by being just a hair away from what the job calls for. Perhaps that is a thought for another article. I certainly appreciated how well you did this one.

Stanley Herz
Managing Principal
Stanley Herz and Co.
Somers, N.Y.

Camp Counsel
Senior writer Susan Greco's June cover story, " Finding the Perfect Pitch," followed a group of aspiring female entrepreneurs as they honed investor pitches in a grueling boot camp run by Springboard Enterprises.

As an investment banker who has worked with many young entrepreneurs raising early-stage capital for their emerging growth firms, I thought "Finding the Perfect Pitch" was right on the money.

When you are speaking to investors, you must engage them with a compelling message, but more than that, you must also convince them that you and your team can take your venture all the way, no matter what obstacles and setbacks you will face. It's a time to get real -- there can be no fluff in the numbers. And you will need to demonstrate that your management team can steer your company through down markets and tough competition.

Linda Chandler
Author of Winning Strategies for Capital
Formation
Amelia Island, Fla.

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