Web Masters Episode #73: Nugget McNett


FlightAware - Wikipedia

Nugget McNett:

One of the things we found was if you work at a Cinnabon in an airport behind security, and you’re responsible for staffing that Cinnabon. And there is an ice storm in New Jersey, that ice storm in New Jersey is going to have a huge impact on what your staffing needs are six hours from now. And there’s nobody around to tell you about that, unless you have access to that kind of flight tracking data. So there’s a whole bunch of grounded planes in Boston and Newark that are supposed to be in Phoenix right now. Then that ground hold is unlocked. In four hours, you’re going to see this influx of passengers, and you’re going to want to up staff for your [inaudible 00:00:38], food restaurant or whatever in the Phoenix airport. So if you’re passenger on an aircraft and you land in Phoenix after that long ground hold for deicing or whatever. And the fact that the Cinnabon is open with excess staff is in part because they had access to all that inbound aircraft information and the delay information.

Aaron Dinin:

That’s right, if you didn’t have to wait in a huge line at Cinnabon the last time you were in an airport, it could very well have been thanks to some of the work from this episode’s guest. He is David McNett, but he prefers to be called Nugget. And he’s one of the co-founders of FlightAware, the website that provides tracking information for commercial aviation. Of course, if you’re part of the general flying public, I’m guessing you have no idea just how much FlightAware affects your overall travel experience. But after this episode of Web Masters, you might never be able to pass an airport Cinnabon again without tipping your hat to the entire FlightAware team. Are you ready to hear the story? Let’s get dialed in.

[INTRO]

Aaron Dinin:

Hey there, and welcome to another episode of Web Masters, the podcast that lets us all learn more about entrepreneurship by hearing from some of the internet’s most impactful and successful innovators. I’m your host, Aaron Dinin, I’m a serial entrepreneur and I teach entrepreneurship at Duke University. I’ve also always been fascinated by airlines, and I’m a bit of an AvGeek, in case you’re not familiar, that’s the term for people interested in the commercial aviation industry. It’s a small but passionate community of people. And one of the most valuable web resources they have is a site called FlightAware. It provides real time and historical tracking data on aircraft of which there are literally thousands in the skies above us at any given time.

            But if you’re not an AvGeek and could care less that Delta flight 1788 on August 4th, 2021 left Los Angeles, 53 minutes after its scheduled departure time. Well, you should be glad that FlightAware has that information and makes it available to the public. Because making data like that publicly available has actually had a significant impact on the aviation industry, as a whole. And a successful and efficient aviation industry helps all of us. We’re going to learn more about why right after I tell you about this podcasts sponsor.

            Web Masters is being brought to you with the help and support of our sponsor, Latona’s. Latona’s is a boutique mergers and acquisitions broker that helps people buy and sell cash flow positive internet businesses and digital assets. That means things like eCommerce sites, SaaS apps, Shopify stores, Amazon FBAs, blog networks, domain portfolios, and any other type of online work from anywhere, internet based business. If you currently own one of those and you’re thinking about selling it, you should be reaching out to the team at Latona’s. They’ve been helping business owners, just like you for a long time now, they’re experts in the process of selling internet businesses. And they can definitely help you get yours sold for a great price. And if you’re thinking about buying an internet business, Latona’s can help you, too. Just head on over to the Latona’s website, where you’ll find listings for all the internet businesses they’re currently helping to sell. That website is latonas.com.

            FlightAware.com is a website you might have stumbled onto because you were checking the status of a flight you were about to take. Or you were checking the status of a flight someone you know is currently on and you need to figure out when to pick them up at the airport. The other way you may have come across FlightAware is in the news. Anytime there’s some sort of airplane related event or accident or disaster, news sources often pull their flight data from FlightAware and make reference to the site. Or maybe this is your first time hearing about FlightAware, that’s fine, too.

            The general gist is you can go to flightaware.com and search any flight number or origin/destination pairing and get all sorts of data. Everything from the type of airplane flying, to how fast the plane was traveling at any given time during its flight. That may or may not interest you, but it definitely interested this episode’s guest, Nugget McNett and his FlightAware co-founders. Now before getting into FlightAware, let me give you a bit of background on Nugget, like a lot of our Web Masters guest, he was introduced to computers at an early age.

Nugget McNett:

So I had an Atari 800 home computer in 1979, I think in 82, I got my first modem, which a 300 Baud Modem plugged into the joystick board of the Atari. And got really heavy into the bullet board scene in the early to mid eighties. The very first networked bulletin boards, this is kind of pre-internet. Even if you were in college, you probably didn’t have much access to the internet. This is pre-web, pre FTP, almost, Archie and Gopher were kind of things toward the late part of this. And I got big into phyto net for a while with the PCs and the Atari forum net networks of bulletin boards just dial up.

            I was the net echo coordinator for my region in phyto net and I was the pipeline between the Netherlands and the United States every night. I was the one that ran the modem that called the Netherlands and sent all the phyto net echo traffic to the Netherlands from the United States. And from a very early age, I was involved and it turned into Usenet, when that kind of became a thing. I was involved with a company called I Quest, I was living in Indiana at the time, Indianapolis, which was one of the very first TCP IP Unix, Usenet based ISPs in Indiana. So early on, I was exploring and getting a part of that process of getting people onto the internet and forming communities around interests and technologies and things like that.

Aaron Dinin:

That exploration of communities of interest around technologies led Nugget to get involved with a unique piece of internet history called distributed.net. Actually, it’s probably worth an entire Web Masters episode in and of itself. But for now, I’ll let Nugget explain what it is.

Nugget McNett:

Around 97, about a year before SETI@home started. I was one of the founders and key contributors to a project called distributed.net, which is a 501(c)(3) not for profit organization. That takes volunteer participants on the internet using their own personal computing equipment to pitch in together for a gigantic large scale problems that would otherwise take massive computing infrastructure to solve. So we did a lot in drug discovery, little bioinformatics, adjacent, development work. And then also played a big role in shaping this country’s cryptography and security laws around high grade encryption in the late nineties, with the relaxation of the ITAR restrictions on high grade encryption to consumers within the United States.

Aaron Dinin:

And that work with distributed.net launched Nugget into his entrepreneurial career, a career that’s spanned all sorts of different types of companies.

Nugget McNett:

I’ve had an opportunity to work in startups and small companies at pretty much every philosophy of company and instantiation. And then also kind of different stages of companies. With United Devices, which was a commercial offshoot of distributed net. We were trying to do commercialized distributed computing. That was the traditional … we walked up and down Sandhill Road and pitched for VCs and got funding and lead investor with SoftBank. And we did the whole VC thing for that.

            And with FlightAware, we were completely bootstrapped. I wrote a $2,000 check to help pay for that first server. And that was the only capital injection we did into FlightAware and created that company. And then, never grew beyond our ability for the revenue to drive the growth of the company.

            I’ve been with smaller companies that are owned and operated by the founders and principles in a lot of cases. It’s just been a really remarkable front row seat to a lot of different ways of structuring companies and structuring corporate growth. It’s just been a fascinating aspect of my career and is given me some strong opinions on the good and bad ways to approach structuring a company or forming a company.

Aaron Dinin:

Out of curiosity, do you have a preference for bootstrapped versus VC backed companies?

Nugget McNett:

I think bootstrap versus VC is just a choice of tools in a toolbox and it really depends on the mission. So there are companies that have a risk of the fast followers that you need to have a deep bank of financial liquidity to fund speculative development. Or really surge growth in particular areas to combat against competitive influences.

            But then again, I think that the companies I’ve been with that were founded by founders who had an exit as their primary goal, I think it leads you to some really challenging decisions that can be unhealthy for the company, unhealthy for the product, really. And can be counter to your users and your customers priorities. There’s risks with both and there’s upsides to both. I think if I had to give you the really quick description of what my preferences are, I like early stage software development, and I like the bootstrap environment. I like being in control of choosing product direction. And it’s hard to do when you’ve got investors who have exit in mind.

Aaron Dinin:

That seems like a carefully crafted, let’s call it, politic answer.

Nugget McNett:

I’m happy to be less politic. You’ve caught me at a point in my career where I have very few encumbrances in that regard. If I was going to start a company that was going to make a living off enterprise sales, I would want to do that with VC funding. And if I was going to make a product that was more consumer focused, crowdsourcing consumers as a source of data and input, I would want to bootstrap that. I think that the delicate relationship you have with users who are both contributing to the company for no financial gain or you’re giving them a free product in return for what they’re providing to you in the form of usage or data ingestion. You don’t want to be encumbered by those influences that come from a VC. It just makes you make bad decisions, I think. Or at least bad decisions for the users.

Aaron Dinin:

Okay. So now you’ve got a little background on Nugget and understand a bit more about his tech and startup experiences. But let’s be honest, I’m sure the thing you’re really wondering is, well, why does he go by the name Nugget? There’s actually a very interesting explanation for it.

Nugget McNett:

I go by Nugget, professionally, David Nugget McNett or just Nugget. A lot of times I get asked where that nickname came from. When I was about third grade, however old you are in third grade. And I was a very late bloomer, couldn’t have weighed more than 70 pounds, maybe three feet tall, tiny little guy. With the last name McNett and a very unfortunate event as McDonald’s invented the chicken McNugget. While I was this tiny little danger to myself in a stiff wind, tiny little kid named McNett. It took my classmates about a day to make that connection between McNugget and McNett. And I have been Nugget ever since.

            You just kind of have to roll with those things. And what I’ve learned, it’s kind of a weird byproduct to that. Going by Nugget professionally, I have since 2000 easily. One of the things I like to do is whenever I have a customer contact with another company, I’m calling my bank, I’m calling whoever. I always try to convince the customer support rep to call me Nugget instead of David or Mr. McNett. It’s a fun challenge I have. And I have learned that is a tremendously useful predictive marker for the quality of that company, as far as their relationship to their customers.

            If I’m calling a level one support rep, and I’m trying to talk this person to go off script and call me Nugget, if they can do that, that is a company that has confidence and trust in their employees. That is an employee that is not bound by a rigid decision tree of conversations that they’re allowed to have with customers. And I know early on, if I’m talking with my financial advisor or my bank or my electric company, if I can get a customer service representative to call me Nugget, I know I’m in good shape. Because I would rather have a customer service rep who’s engaged and on my side, but doesn’t necessarily know the answer I need. I’d rather have that than one who knows the answer I need, but doesn’t really care, isn’t engaged.

Aaron Dinin:

Now that you know why David prefers to be called Nugget, here’s what I want you to focus on as we listen to the rest of the FlightAware story. What Nugget shared isn’t just a story about his name, you see, as an entrepreneur, Nugget is passionate about the importance of engaging with and learning from customers. His interest in testing companies and their customer service reps by seeing if they’re willing to call him Nugget is actually a reflection of how he and his companies try to constantly engage with and learn from their customers, in order to discover opportunities. Which was a big factor in FlightAware’s success.

            What we’re going to hear in the FlightAware story, which we’re going to jump to now. Is that the company’s business evolved by listening closely to its users. That was important because FlightAware actually didn’t start as a company, it started as a simple website sharing flight data to help Nugget and his co-founders, Daniel Baker and Karl Lehenbauer, who were pilots in training and wanted a way to track their private flights.

Nugget McNett:

We started FlightAware in order to track our own flights. We didn’t have any kind of corporate interest in mind, there was no kind of exit on the plan. We really just wanted to build cool technology to track airplanes in a way that it didn’t exist at the time. And if you were flying on Southwest or United from Austin to Houston, Karl and Daniel lived in Houston, I lived in Austin. We were all getting our pilots licenses at the same time. And if you flew Southwest from Austin to Houston, Southwest kind of had flight tracking on the webpage, it was really early days. But it was little picture of a jet and like the wingspan was half the width of the state of Arizona. And you could get an ETA, but that was about all you could get off of the Southwest website.

            But I climb in my little Cessna 172, I’m queued up right behind that Southwest 737 at the runway in Austin. You can’t track me, there was no way to track just based on a tail number or a private call sign. And we were really just looking away for me to be able to fly to Houston or Daniel will be able to fly into Austin and have our mom pick us up at the airport. That was all we were looking for. Server under Daniel’s desk and how do we get access to this flight tracking data? We knew it had to exist somewhere. And then, how do we get into a database? Then, how do we get that database to present on the web?

Aaron Dinin:

How did you do it? How’d you wind up getting that data?

Nugget McNett:

So it was free. The FAA released the data at the time, this was all changed. It was called ASDI, which is Aircraft Situational Data to Industry, I think, ASDI. Don’t quote me on that, I’m pretty sure that’s what it stands for. It was completely free from the FAA, all you had to do was run a dry copper circuit to their data center in Boston. Which was like two grand a month or something. Server a running under a desk, we’re all working full time jobs. It was a non-starter for us, it might as well have been not available for free. But you could, you could petition and you’d buy a CSU/DSU and run your dry copper pair and all that.

            But under the Freedom of Information Act, we were able to get a list of all of the current subscribers of that data. So all the big names, Boeing gets it and Raytheon got it. And all the major airlines were pulling it in for their own internal use. And we just started calling, I say, we, Daniel. We started at A, and we started calling and say, “Hey, we’re three reprobates in Texas, and we’d love to have access to this data. What can you do for us?” There were probably 600 companies on that list, we got down into the S’s and we finally got a company that said, “Hey, no problem. We’ve got all on this FTP server, we’ll give you an account and do whatever you want with it.”

            Yeah, so our initial access to that data was a great company called SH&E, Consulting Company out of Boston. They were just doing consulting to aviation. They let us have access to that data. And we ran on that for about a year before we could justify. We fired up our second data center at that time, this would’ve been, I don’t know, late 2006, early 2007. Our secondary data center we got in Boston, so we could run that dry copper pair to the FA facility and start pulling in our own ASDI feed. The situation for FlightAware now is completely different. There’s over a hundred different data sources, including FlightAware maintains its own terrestrial network of ADS-B receivers, which are like raspberry pies with antennas and software defined radios that any kind of random person on the internet can just run and put up in their attic. And start immediately contributing very hyper precise, accurate flight tracking data to FlightAware in exchange for a premium account on the website.

Aaron Dinin:

So from piggybacking on someone else’s data to having your own data collection network spread around the world, that’s obviously a lot of growth. Can you take us through some of that? How did FlightAware go from a single server under a desk to an international network of computers?

Nugget McNett:

Not to get too political, it was pre-ACA. So healthcare was a huge concern for us. We all had healthcare through our day jobs and the thought of giving that up and it wasn’t really a private market to buy health insurance on. So that was a real barrier for us, initially. That probably delayed our start of FlightAware by two, three years, for sure. But, at some point the late nights and weekend coding sessions really start to grade on you. We were working crazy hours.

            Daniel and Karl at the time were working on a company called Super Connect that was doing cable modem monitoring, enterprise sales to Comcast and Spectrums of the world. And that company was seeing some success. But the writing was on the wall, that FlightAware was definitely the more viable business than Super Connect, which they were spending their full time on. And Karl, who was principal of Super Connect, Daniel was co-founder, really made the bold and wise decision, which they just cut the cord on Super Connect, scuttled that company. And diverted their attention full-time to FlightAware. And then about a year after that, I followed, relocated to Houston so I could be local. We set up an office, hired our first employees and that would’ve been 2008 or so. The revenue was there, we weren’t making great money, but we were making reasonable money for working for ourselves.

Aaron Dinin:

You mentioned earlier that you and your co-founders built FlightAware for yourselves. When and why did you decide to let other people use it and make it public? Also, how did people initially discover it?

Nugget McNett:

As I say, we were all getting our pilots licenses at the time. And Daniel and I were flying out of Austin when he was in Austin, and Karl and Daniel flew out of Houston. And we wanted to track our flights. We wanted to get access to the radar data that we knew existed. We were talking to the same towers, the same control centers, as any other airplane in the air. So we knew the data was there. We just had to get ahold of it. But then I think my background with distributed.net, I mean, the natural thing to do with this data then, of course, was put it into database and put statistics tables up on the web and just try to present that data as usefully as possible.

            Interesting sidelines, so when we launched FlightAware, we just shared it with friends. We probably had 30 or 40 users, were just our friends that we knew had an interest in aviation. And we hadn’t really intended for it to be a public site. And then somebody didn’t get that memo and they posted a link to us in the Microsoft pilot mailing list. It was an internal mailing list at Microsoft, they still did flight SIM development then. And it was basically just anybody at Microsoft that had gotten enough money from stock and options to buy an airplane or be interested in flights. And we went overnight from like 30 users to 3,000 users. All of a sudden it interested in accurate tracking around the Redmond area. So we were public at that point. Word had gotten out, and then we started dealing with scalability issues and we couldn’t just run it on the one little Athlon PC under Daniel’s desk.

            The killer for us was … and there’s no way you’ll remember this, but this was just formative for FlightAware. There was a circumstance where the Nike corporate jet … and I may get some of the details wrong with this, was flying out of Seattle into Boston. And they had a landing gear retraction failure, as they were coming into Boston. And the landing gear wouldn’t go down. And so they’d circle above the Boston airport for about three hours, they were like visually inspecting, they flew past the tower and used binoculars to try and see the landing gear. And then they were just burning through fuels, so that they did have to land gear down, they didn’t have a plane full of fuel. And half the Nike board of directors was on the plane and it made national media. It was the big news story that night.

            And if you went to Google and you Googled the tail number, it was N1KE Nike. Guess what website you got? Because nobody else was doing general aviation flight tracking. And so we started getting calls from NBC Nightly News, all these major primetime news organizations asking, “Can you get us maps? Can you get us graphics? Any kind of collateral? Can you speak to the data that we’re seeing on this website?” Daniel did an On Air speak segment on NBC Nightly News. It was huge. And then we had 30,000 users the next day. You can’t hope for kind of organic growth like that. We had all new problems the next day, it was just a really fun time to be around that flight tracking and presenting this data to the web.

Aaron Dinin:

Okay. So FlightAware starts blowing up and you’ve got all these people coming to the site that you’d really never meant as a business. How do you all turn it into a business?

Nugget McNett:

One of the things that I was kind of interested in at the same time was voiceover IP. This would’ve been like 2005, 2006. There’s a product called Asterisk, which is fantastic Linux based open source phone system. Which I was just playing around with because it was a fun thing to screw around with. So I had like a whole PBX system at my house and when I was home and my server detected that the Bluetooth on my phone was present, it routed to the desk phone when people called my number. When I was out of the house, it routed to the mobile phone. I had a single unified voicemail box, which was super high tech in like 2004, 2005.

            So one of the very first things I did when we set up the FlightAware webpage was put an 800 number on the bottom of it, which came to that little phone system. And I put phones at Daniel’s desk at his house and Karl’s desk at his house. I was in Austin, they were in Houston at the time. Which meant pretty much from day one of FlightAware, we got phone calls at any hour of the day from a guy in a fuel truck at an FBO who wanted to know where the jet was that he was expecting to refuel, to the billionaire on the back of the Gulfstream IV jet that was stuck fogged in at San Francisco, trying to get out of San Francisco to get back to Boston. And we took those calls. If you call the 800 number on the bottom of the FlightAware webpage, you got me or Daniel or Karl as one of the three principles founders of the organization, we had no employees at this point.

            And I had literally thousands of weird corner case, edge need aviation related questions from people who are interested in whether or not we could solve a weird problem for them. And our whole business model, the first three years of FlightAware was coming up with consistent pricing so that we could solve weird problems that people called and asked. And I feel like you don’t need to pay a consultant to produce a market analysis, white paper for you. You don’t need to buy a research white paper on the state of the aviation industry. If you are willing to just talk to crazy people at 3:00 in the morning who are the potential customer base.

Aaron Dinin:

So who was calling you and what kinds of things were they asking for?

Nugget McNett:

The very first product that was real revenue for us … That first March, we started getting calls from CPAs all over the United States working for clients who owned their own airplane with a mixture of recreational and commercial use. They were really keen on, for tax purposes … “I’m preparing the taxes for my client this April, and I really would love an articulation, how many hours were spent on deductible flights? How many hours were spent on personal nondeductible flights? Is FlightAware a source of record or a source of truth for this kind of thing?” So we started so selling what we call flight history reports, basically Excel spreadsheets of every flight that that aircraft has taken in the last 12, 24, 36 months, however far back the data … We had data back to 2005. First thing, you’d call us up and you’d say, “Hey, I’ve got this aircraft and I want to buy an Excel spreadsheet.”

            One of the problems we faced really early on in the company is they’d call in the morning, and Daniel was an early riser, so he would say, “Oh yeah, sure. We have that data. It looks like there’s about 300 flights in the database. We could sell you that for however much money we’re going to sell that for.”

            Then the CPO would go, “Great. Let me go get approval from my client,” and they would hang up and they would call back six hours later. I would be awake and I would take the call and I would have no idea what price we had quoted them or anything like that. Had this channel on IRC where like, “Oh, this tail number called in and this is the price I quoted,” just so we could get our story straight, because we’re just making these numbers up out of thin air, right? We have to a select in a database, from our perspective, but I mean, it’s aviation money. We started figuring out we could charge a little bit more depending on the value of the aircraft. If you’re calling about a Cessna 152, it’s one price. If you’re calling about a Challenger Global 3000 or something, it’s a completely different price just because if replacing a wheel on your aircraft costs $2,000, we figure you could afford a little bit for that spreadsheet. And so yeah, just coordinating.

            So Daniel wrote a script to price a flight history report, which it basically had to produce the report in order to come up with the price because the more flights there were, the more expensive it was. Then we realized, “Well, why even answer the phone? How do we accept credit cards on the website? This should just be a button on the website.” So there was no Stripe back then or anything like that. It was authorize.net. It’s a very common theme I’ve heard in a lot of your podcasts. But it was not tailored toward companies our size with our development resources.

            We wrote a tickle script to run a charge on authorize.net and figured out how to link that up on the website. So you could now, if you’re a CPA, you Google the tail number and you got the flight tracking page … at the bottom, there’s a little orange button, click here for Excel spreadsheet of the flight history report. That became real money, real quick. There was an untapped market of people looking for that information. If you could just buy it with a credit card online, we sold a lot of those, still sell a lot of those. That was the first product.

Aaron Dinin:

That’s great. I guess it makes sense that if you own a private jet, you also have a CPA who needs to keep track of how money is being spent on it. What else? What was another big product that you discovered by fielding random customer calls?

Nugget McNett:

The second product, which a little more controversial, was there’s a thing called the BAR list. There’s a blocked aircraft registry that the FAA maintains. Basically if you own an aircraft and you don’t want the operations of that aircraft to be publicly accessible, you can, for free, add your tail number or call sign to that list. And then anybody who’s presenting this kind of data to the general public is required to block the information of those tail numbers. Steve Jobs’ jet at the time was a high profile participant on that block list. It would just say, “We’re prohibited by the FAA from providing tracking information for that aircraft.” So as FlightAware became more popular and people became more aware of the fact that general aviation tracking was available, we got a lot of calls from people who were very upset, the fact that their aircraft was being made available to the general public on the website.

            And there are a lot of legitimate reasons why people would be concerned about that, your security or privacy, there’s corporate espionage issues. If you’re a guy, you own 50 Wendy’s across the Southeast and you’re flying around, your competitors want to know where your plane is going to see maybe where you’re looking to expand your operations. There are a lot of really justifiable and legitimate reasons why people would maybe not want to make that information public. We walk people through adding their tail numbers to the block list and then they would no longer show up.

            And what we found almost universally is if you own an aircraft and you added it to the block list, somewhere between three and 20 people in your life, in your immediate circle of family and friends, all would come out of the woodwork and go, “Hey, I was using that to track your flights, and it was great. I knew when you were coming home. My wife, my girlfriend, my parents were all making use of that.” So then we would get the follow-up call a month-and-a-half later from that person that we just helped add their tail number to the block list of like, “Well, how can I continue to provide access to me and my family and my business partner and my kids?”

            And so we started selling what we called selective unblocking. Have your family sign up for an account on FlightAware, we’ll add them to your account, and they will continue to be able to track your aircraft. Because we still got the data. We just weren’t able to present it to the web. So we started selling this selective unblocking access, wildly popular, just as a brand new product that didn’t exist the prior year for tracking aircraft.

Aaron Dinin:

Wow. That’s the definition of first world problems: “My wife wants to know when my private jet is landing.”

Nugget McNett:

You have this perception of … We all watch Succession, right? … this perception of the aircraft owner that’s just … For the most part, I joke about it, this is a guy that owns three auto body shops across Illinois, Indiana, Ohio, and is flying back and forth, working a lot, flying back and forth. He’s a guy that owns the franchise of fast food restaurants throughout the Southeast. One of the first big customers we had of selective unblocking ran a bunch of resorts all through Utah and Nevada and would fly high dollar customers from LA and San Francisco into their resorts over the weekend. A lot of people, really busy trying to get their jobs done, using aviation as a tool.

            By having access to this flight tracking data, it really equalized the smaller aviation business owners, business owners that having access to a small aircraft is a huge competitive advantage for them. It gave them access to a flight department that there’s no way they could have otherwise afforded access to, for both tracking and maintaining their aircraft.

            But we got all kinds of crazy calls. Another one we had was an airframe manufacturer that wanted hyper-accurate data on the engines that they were making and the airframes that they were making in ways that just the Hobbs … We say Hobbs. So just like an engine hours run on an aircraft is a Hobbs meter on a piston. They wanted to know, how many hours has this aircraft spent above 20,000 feet? How many hours has this aircraft spent between zero and 5,000 feet? Well, we had all that with the position data. We’re able to provide them for scheduled maintenance on engines: “Hey, this aircraft, it’s got these two Pratt & Whitney engines that you’ve sold. It’s crossed this threshold of hours in the air. And now you need to reach out to the owner of that aircraft, because it’s time for service.” Again, it’s our business model of just answering the phone and fielding bizarre questions from people who are aviation or aviation adjacent.

Aaron Dinin:

I guess that’s reasonable. I bet Lexus would love to know how many miles I put on my car so they could know when to offer me new tires.

Nugget McNett:

Right, because how many miles have you driven? But what your Lexus dealer really liked to know how many miles you’ve driven on asphalt and how many miles you’ve driven on gravel and how many miles you’ve driven at high altitude, right? That was the kind of data that it was in the database, you just had to figure out how to extract it and then provide it in a meaningful way to people who had an interest in it. So we had a call once, I remember really vividly, which was a guy I met through a shared hobby at the racetrack, but yeah, so he ran a leasing operation for a bank and they did a lot of aircraft leases. And one of the things they were concerned about was skip tracing on people that failed to make their lease payments on the aircraft.

            And one of the things that was a leading into cater of an aircraft that was about to go into default was it would get added to the block list. And so they wrote into their lease agreements, “If you had a lease on an aircraft through their bank and you were on the block list, you had to provide them access via a selective unblocking account on FlightAware so that their skip tracing department basically could keep tabs on where that aircraft was to look for suspicious operations,” which they viewed as a precursor to a default on the lease.

Aaron Dinin:

This is what I meant about listening to users and why it’s interesting that Nugget is so passionate about it. Lots of entrepreneurs start companies with the intention of creating a business, but that’s not really the best approach. Entrepreneurship is about solving people’s problems. The problems that you just heard Nugget describe weren’t problems they predicted. They were problems that the FlightAware team discovered by providing flight data and then listening to users.

Nugget McNett:

I feel very strongly that what we built with FlightAware is a much better product because we didn’t have a runway in mind, no pun intended of, okay, we want an exit in three to five years and we’re looking for this kind of sale and we need to have recurring revenue of this much so that we can sell for this much. It never was about that, certainly not initially. It was more about, all of this data exists and how do we present it in a way that’s useful and meaningful to people in the general aviation community? And it was exciting. It was really fun to build.

Aaron Dinin:

And could you maybe talk a little about your specific role in the company and what your co-founders did?

Nugget McNett:

Like a lot of companies did, we had C-suite titles when we had two employees, right? Daniel was CEO and in charge of the administrative aspect, although we all did a lot of coding initially. We all had strong IT backgrounds. Karl as CTO, responsible for technical design of the flight tracking engine itself. And I was ostensibly CIO, so I did all of the back office automation integration of the phone system with the website data and customer account data. I was responsible for all of the database design and administration, schema design. Eventually, we went into federated [postgreSQL 00:10:36] and master-slaves, and I was responsible for all of that. So my background in databases and data led me to that.

            It was interesting, right, as the company started in the greater community of distributed.net, Daniel and I originally met and worked together on distributed.net. He and Karl did Superconnect together, and then also before Superconnect, NeoSoft, which was the first ISP in Texas. And there were a lot of distributed.net people in the blast zone of FlightAware as we started the initial development. And it was really a scramble for … I remember Karl and another one of our colleagues, Greg Hubel, both had competitive map products that they had put together, like taking the data and producing a graphical map. Greg didn’t actually end up being involved with the company, moved to New Zealand, a lot of reasons why. But yeah, we were competing internally to see who could produce the coolest thing.

            So a lot of times I’d go to bed on Friday night and I would wake up on Saturday morning and look at the IRC logs and Karl’s like, “Hey, I couldn’t sleep last night. And so I created this entire new product out of whole cloth and now there’s this thing on the website.” And it was like, “Oh crap, I better not make plans for next weekend because I’m going to have to come up with something equally cool to justify my role in the company.” So there was a lot of just technical development for the kudos and karma points internally for all of us in early stage FlightAware.

            So yeah, we carved out our roles aggressively and protectively based on what we thought was interesting and what was exciting. So I was the database guy initially, and the phone system guy. So if you called, when we had customer service reps with phones in the office in Houston and you called and we’d correlate that number with an account. And so it would pull up on, “This is the flight or user account. These are the tail numbers. This is how long they’ve been a member,” all this stuff. So we had all that kind of tight integration with the phone system by virtue of the fact that I enjoyed hacking on phone systems and databases.

Aaron Dinin:

Now, I bet the amount of data coming in was just huge. I mean, all that flight data.

Nugget McNett:

It continues to be, right? The data only increases and grows. Now FlightAware is tracking ground position. I went to Hawaii on my honeymoon recently, and to get to the island of Lanai is basically a charter flight. It’s Lanai Air. It’s a little Pilatus PC-12. And as soon as I knew what the tail number was going to be, we’re sitting in the waiting room waiting to get on the plane to fly to Lanai, I texted the tail number to Daniel. And he is like, “Is the plane sitting between two hangers right now?” He couldn’t understand. It wasn’t at the FBO or anything. It was actually right. Within 10 feet, he knew where that plane was sitting on the tarmac, waiting for us to get on board and taxi out to the runway.

            So with ground position, with aircraft at a large airport, we can infer a lot about the deicing lines. If you’re in Boston in the middle of wintertime, flying home to Boston or flying home from Boston over the holidays, and your plane is sitting in line for the deicing station, just by seeing where all of the planes are on the tarmac, we can figure out where the deicing is taking place, how many planes are waiting in line to be in the deicing, and start to make some really accurate predictions on departure time, based on what we know each of those planes is going to have to endure before they actually get to the numbers on the runway to take off. Every new data source adds a whole lot of new interesting things you can do with that data, and the challenges of then managing that data.

            Another real challenge that the FlightAware had once we moved past [ASNE 00:00:13:52] data, the second data source we got was EUROCONTROL data, which was the same structure as ASNE’s, same system as the FAA development, but for Europe and the UK. We were only allowed to provide access to that flight tracking information to people who were operationally involved in Europe or the UK. So if you didn’t have a financial interest in that aircraft, we weren’t allowed to present any of that tracking data to you. But if you did, if you worked at a ground facility in Brussels, we could show you all the aircraft flying in and out of your airport. So now we had data that not only was large and complex, but we also had access control issues. We had to vet user accounts.

            And yeah, so now for any one flight, like an aircraft that takes off, flies in the air and lands on the ground, within FlightAware, there’s probably 10 different versions of that flight that are being tracked at any moment. So when that plane is in the air, there are 10 flavors of that based on the provenance of the data sources that feed that data. We actually have filed patents on that segmentation based on the data provenances for presenting it. So when you go to the website and you try to track a specific tail number, not only are we pulling data on that tail number, but we’re figuring out which of those 10 is the best possible that you are allowed to see based on the nature of your user account and the data that we have available to us. So really fun, challenging problems.

Aaron Dinin:

And as we wrap up the story here, could you maybe talk a bit about how big the company grew to, by the time you left?

Nugget McNett:

I left FlightAware basically December, 2016, officially off the books, March, 2017. New York office had been open for years. We had just opened a Singapore office for sales and partnerships. I want to say we were at 60-odd employees. I don’t want to talk about revenue, per se, but we were comfortably supporting 60 employees in three offices and all taking a fair bit of money out in the form of salary. So we were doing very well, cashflow positive, basically from 2005 on, and with a pretty appealing growth curve. And then Daniel and Karl continued that curve even more than I would’ve expected after I departed.

Aaron Dinin:

Would you be willing to talk about why you felt you needed to step away?

Nugget McNett:

I have several answers to this that are all perfectly truthful and all very different. On a day that I’m feeling very generous to myself, I would say that I learned about myself that I am more enthused about early stage software development. And we got to a point in the company’s development where, as CIO, my focus was on site reliability and database reliability and scalability. And our ad hoc IRC-based development model had turned into project management and JIRA tickets. And I was just not really enjoying technically, and seeking out another early stage project to get involved in. And left with the blessing of my co-founders and continuing to have a strong interest both financially and emotionally to the company.

            On days I’m feeling less generous to myself, I would say I, Peter principled my way up to my capacities as a manager and executive and FlightAware outgrew me. With two co-founders who were scrambling just to hold their own situations in place, we were not really equipped to cope with that sort of crisis of confidence or focus on the part of one of the founders. And it ended in an unsatisfying, but not damaging way. Really the truth is probably somewhere in between those two things, which I would say it’s funny how in hindsight, burnout can be so obvious, but when you’re in the thick of it, it manifests in really unpredictable and unusual ways.

            And I think I was just completely burned out after effectively 20 years of a career of being worried about where the servers were and whether the site was up and whether we were going to continue to be able to make payroll, and just washed out, right? That whole 2016 was a very difficult year for me on a lot of levels, personally and emotionally. And one of the casualties of that was in my participation in FlightAware. It all has a happy ending. I’m still on great terms with both of my co-founders, would happily start another company with them. But it was a difficult time in 2016. Only after several years of hindsight, I’ve been able to craft a cohesive vision or cohesive perspective on it.

Aaron Dinin:

Thanks for sharing that. Honestly, I hear similar stories from a lot of the founders we talk with here on Web Masters, and it points to some bigger issues about being an entrepreneur and the challenges of growing a company. As you well know, starting a company and running a company are two very different things. And I think a lot of eager and aspiring entrepreneurs aren’t necessarily prepared for that.

Nugget McNett:

Yeah. If I faced that challenge again, if I dive back into a career, I think I’m much better equipped to recognize the warning signs and adapt to that. But it was all we could do to keep things going, juggling and spinning plates and making payroll. And it just doesn’t leave a lot of mental energy to worry about how you’re feeling. It can be a challenge.

Aaron Dinin:

And just to wrap up the story of the company, at least to where it currently is, I know you’d already stepped away, but FlightAware sold, right? Can you tell us anything about that?

Nugget McNett:

FlightAware is owned by Raytheon Collins Aerospace. I can say this, it was extremely satisfying. I cannot overstate how is to me to see the transition in post-sale, going to an industry buyer that sees it as a powerful tool to add to their toolbox, to provide information to aviation. So, Collins has some really ambitious goals for where they want to take FlightAware, but it is an industry purchaser. We did not sell to private equity. We didn’t sell to a less aligned company that was just interested in the user base or access to the data. So it’s really satisfying to me to see, and who I’ve seen Collins chose to take over as CEO and take over as CTO are all early key FlightAware employees that have been around for ages, and speaks well to their vision for what they wanted to do with the IP and the data itself, and the user base.

Aaron Dinin:

For listeners who maybe don’t care so much about the commercial aviation industry, why should they care that FlightAware was purchased by an industry buyer? Really, why should they care at all about FlightAware? How does it, or even does it, impact their lives?

Nugget McNett:

It means there’s a whole fleet of limo drivers and Uber drivers out there. Anytime you’ve gone to a website for a hotel or ground transportation and you’ve put your flight number into that reservation so that whoever’s going to pick you up at the airport or ship your parcel is able to track that aircraft, none of that existed really before FlightAware, and the fact that we make that data available. FlightAware has customers now, like the guy I know here in Houston, and his company cleans the aircraft in between flights. So that five-minute period of time when they’ve unloaded the previous passengers and they’re about to load you on, his company is the one that sends the workers in to clean that aircraft and get all the Kleenex out of the ash trays and stuff.

            And FlightAware has been transformative for his staffing and his ability to turn those aircraft quickly and have hyper-accurate information of where those aircraft are. And he was never going to get that information out of Delta or United or American Airlines, or not without huge concessions that he would have to make to his customers. And the fact that the data’s just available on the web now means that every passenger on that airplane has a better experience and a cleaner aircraft. So that’s just a thousand times over, anybody who touches an aircraft operationally cares about where that aircraft is, where it’s been and where it’s going.

Aaron Dinin:

In other words, if you’ve flown on an airplane since 2010-ish, which I’m guessing is most of you listening, then your flying experience has probably been improved by FlightAware, or that’s true for most of you. Based on my conversation with Nugget, it sounds like there are some edge cases out there where FlightAware actually made people’s lives worse.

Nugget McNett:

On a couple occasions, we had that selective unblocking service where a flight was blocked generally, but your wife could still track the flight. And we got a few calls that were really super awkward and we never quite figured out how to deal with, which is, “My family all tracks my jet, but can you just not include any time I’m flying to Salt Lake City?” It’s like, “I want my wife to be able to track all of my flights except for my flights to Salt Lake City.” You don’t ask, you don’t probe. We were never able to come up with a satisfying solution to that for people, and basically just said it wasn’t possible. But yeah, people have interesting relationships with privacy. I don’t know, having access to flight tracking data is both empowering and also very illuminating sometimes. We got that call a lot.

Aaron Dinin:

Let that be a reminder that every product has limitations, as do people, I suppose, but that’s probably a topic best explored in a different podcast. As for this one, well, we’re at the end of the FlightAware story as it currently stands, but sounds like it’s a story that’s got lots still to be told. In the meantime, I want to thank Nugget McNett for sharing the parts he was able to. If you’d like to see what he’s thinking about these days, you can find him on Twitter where he’s @nugget. How awesome is that Twitter handle? This podcast is on Twitter too, though our handle isn’t nearly as awesome. It’s just @webmasterspod. Still, if you have any thoughts or feedback on the episode you’d like to share, you can do it there or ping me. I’m @AaronDinin. That’s A-A-R-O-N D-I-N-I-N. I also write lots of articles about startups and entrepreneurship that you can find over on my website. It’s aarondinin.com.

            Thank you to our audio engineer, Ryan Higgs, for his always wonderful help with these episodes, and to our sponsor, Latona’s, for their incredible support. If you’re interested in buying or selling an internet business, be sure and head over to the latonas.com website. Also, be sure you’re subscribed to Web Masters wherever you listen to podcasts. That’ll ensure you get the next episode as soon as it’s released. And you wouldn’t want to miss that, right? Of course not, because it’s coming soon and it’s going to be another great one. Until then, it’s time for me to sign off.

[OUTRO]

Aaron Dinin:

And sorry, you’ve used the phrase a few times, aviation money. I think I get what you mean, but could you maybe explain that?

Nugget McNett:

Oh, just much like boats, I imagine, although I’m not a boat person, but any kind of spending you do that is related to an aircraft is just three or four times more expensive than you would’ve expected it to be. Just because the nature of a product that takes off and goes up into the air with people in it, just changes the nature of everything from maintenance to service to support. So if you want to buy new seats for the back of your jet, they’re going to cost three or four times more than you could possibly … just imagine in your head what you think chairs cost in the back of a private jet. The price is three or four times higher than you’re imagining, even if you’re factoring in it’s got to be really high and crazy. So we were dealing with people. It’s like one of the problems we had … And I have very small vision for this kind of stuff sometimes. What do we charge for these flight history reports? And I was thinking, “Oh, like 29 bucks, right? It’s credit card and petty cash.”

            And Daniel’s like, “No, we should charge like $700 for this.” So the selective unblocking was almost a thousand dollars a year, we charged. $720 a year was the first price for that. And I was thinking like 10 bucks a month or something. And Daniel jokes, really the truth is we had a form you had to fill out because we had to really prove ownership of the aircraft. You had to fax us the registration certificate, if you were doing selective unblocking. We did not want to be socially engineered into providing access to somebody who shouldn’t have it. So there’s a lot of paperwork involved. And I want to say the first 100 selective unblocking products we sold, there was not a single person that didn’t pay the $250 rush application fee that we charged on top of the regular rate.

            So yeah, credit to the initial early success of FlightAware was just pricing that stuff appropriate to the industry we were in. And I don’t want to say we were gouging because I mean we were all working 80-hour weeks. We had left very high-paying jobs. And it didn’t feel exploitive in any way, but yeah, you really had to approach pricing for those things. That posed a challenge for us also. We wanted to continue to provide this data to non-commercial users and aviation enthusiasts in the aviation enthusiast community. And finding a way to do that, to create pricing segmentation in a way that didn’t feel really artificial and arbitrary, was a challenge sometimes. It was hard. Having the aviation community behind us was very important to our adoption and corporate reputation, I guess, is how I would put that.