Interview with Leo Petersen at Secure Token Network LINK:
https://sectkn.com/2019/03/17/interview-tapjets-private-jet-blockchain/Booking your own plane instantly through an app on your smartphone, what a dream! TapJets allows exactly this, it is the world’s first direct blockchain based marketplace for private aviation. Removing intermediaries, ensuring trust in pilots, this exciting, already a multimillion business will run an STO soon. Our Chief Editor talks to Eugene Kesselman, TapJets CEO:
Q) These days companies opt to do an STO for a various reasons, to some STOs are ICOs reinvented, some do it to crowdfund, to some it is de facto a mini IPO. Which goal does TapJets pursue with its STO?At TapJets we are obsessed with ensuring that each of our clients is also a fan of the brand and services that we offer. Our business is allowing our clients to book private jets instantly. Almost all of them are HNW individuals or companies essentially they are virtually in all cases are “Accredited Investors”. Allowing our clients not only being able to use our service, but to reward them with dividends as shareholders are our primary driver of making our company stock available as Secure Token Offering.
Q) A security token is a digital share. How many new shareholders do you aim to attract?
The second most important decision was to determine the minimum investment amount. That number coupled with the total number of shares being offered as a percentage of the company determines how many shareholders we were looking to attract. We found a balance of making a valuable offering of 6,000,000 with a minimum of 5,000 shares per investor. This would open up the offering to a maximum of 1200 shareholders, all of whom we hope to convert to fan’s as well as happy clients.
Q) What is your target in fundraising through the STO?
We are looking to raise 6,000,000 USD with a minimum threshold of 1,500,000 to stay on track of our sales and marketing efforts.
Q) What kind of marketing efforts do you intend to undertake?
From the perspective of the STO, our marketing efforts are geared towards a particular HNW audience that is within the region of our flight operations and have a profile of folks who fly private.
Q) No secret, that investors tend to choose an existing business. TapJets was launched in 2015, with the aim to ubernise private jets. Please describe your business model. Did the business take off? Can you provide some key figures please.We all been a witness to an ICO bubble. And if you consider some of the posts on our bitcointalk.com thread, the lines between STO and ICO are still blurred to some extent. So YES, the viability of the business model and current sales and growing success of TapJets made us ore confident in our decision to fundraise using STO.
Our business model is simple. We receive 10% fee from each transaction that happens on our platform. We also offer SaaS for air-carriers that improves their efficiency and profit margins.
As you have mentioned, the company started in late 2015, and our first product hit Google and Apple stores in May of 2016. Since then we have booked on our platform over 11M dollars and added flight booking capability in Europe and Asia. Our 2017 to 2018 numbers include 81% year over year growth, 17,500 active platform subscribers, and hundreds of flights conducted using our software.
Q) What are your plans for further expansion, which countries seem interesting?
Our expansions are driven by the number of flights in particular market. Currently the next three areas that have substantial private jet travel are the European Union, the Russian Federation and Eurasia regions, and Asia (China, HK, and Singapore). This would be our natural progression in the next two years.
We currently licensed our software to a Joint Venture company called TapJets Asia LTD. Located in Beijing, PRC, the company is in process of capturing the market of 184,000 of flights per year. TapJets Holdings (STO issuer) has a 49% stake in TapJets Asia LTD.
Q) When you enter a new country market, what is typically your plan?
We begin with research of demand and supply. Then we build relationship with aircraft operating companies and ground handling representatives. Once we secure these relationships we build a sales team that acquires new clients and introduces them to our platform.
Q) Back to tokenization, which platform did you choose for the STO? Why?
Given TapJets private jet booking expansion to Europe and our STO client outreach goals, we had to conduct and STO under both Regulation D 506c (US Accredited Investors Only) as well as Regulation S. At the time we have ventured to interview multiple platforms none offered the dual regulatory approach capability.
Second decision factor was our familiarity with blockchain technologies and smart contracts. We use these technologies in several key elements of our platform offering. So when it comes to Solidity (language for programming “smart contracts”), we had no learning curve both in development and security aspects of programming.
As a result, we have developed a comprehensive investor portal, that meets all of the legal requirements in the US and the World. This approach also allows us to save a substantial amount of commissions we would have paid for similar services offered by third-party platforms. The only item we outsourced is related to Investor Accreditation Verification which is much more efficiently performed by an outside firm that is specialized in handling this task.
Q) How do you see the effect of tokenization onto your industry, the private aviation? In 2019, then in 2-3, then 5-10 years from now?
Private Jet industry and aviation, in general, is not known for being an early adopter of technology. The most significant changes historically only took place when there was a huge need for such a move. At present, the industry is years behind in jet booking advances, and one critical component of that is the ability to access information about thousands of constantly moving planes, their crew, and maintenance status. The second component is being able to settle the flight costs and fees (high dollar tickets) with trust and agility. Blockchain and Tokenization are the answers to these huge pain points that prevent the air-carriers from increasing the efficiency of their fleets.
Here are a few predictions based on our current information and our client’s feedback:
2019 OutlookIn 2019 we will see early adoption of stable coins and crypto payments for private jet travel. While at TapJets we have been accepting crypto since 2016 we are still the only company that receives ETH, LTC, and XRP. The list of the currencies and companies that allow them will increase.
2-3 year outlook
In 2019/20 we will be fully operational with our payment system, and we believe that will drive other companies to enter a $37B payment servicing opportunity. The more companies enter the payments market the more likely air-carriers, and clients will embrace and adopt this instant transaction revolution of the private jet charter.
5-10 year outlook
[/b
]This one is tough to predict, and the only information we have to draw any conclusion from is the fact that despite the downfall of BTC and ETH which both have stabilized in the last 2-3 months and there is a healthy buzz in fintech world when it comes to blockchain and them considering the use of tokens. This on the long term visionary scale is two critical factors that so far look positive for tokens to continue and make an impact in their respective use cases.
Q) What new possibilities does tokenization bring to booking of private jets? Will it become cheaper? Do you believe fractional ownership in private jets to be implemented through tokenization?
Both at TapJets and when speaking publicly about tokenization and blockchain I discourage people from finding uses for tokens and blockchain that can be performed by other already existing technologies more efficiently and more cost-effectively. This said our financial system today is unable to pay for a transatlantic flight (about 120,000 USD) on Friday night. Credit cards are the only possibility, and they are costly in fees and from a liability perspective. So having a token that allows you to make this kind of bookings is essential to increase efficiency and sales in aviation. The next big thing is safety, today you trust that the pilot in the cockpit has the hours of experience and that plane is maintained on schedule, but your option to verify this transparently does not exist. So people settle for just making sure that pilots have a license and that plane has insurance. Blockchain changes that concept, making our skies and your personal flights safer.
Unfortunately, there is very little use for tokens in a fractional world, that is still a paper-driven process that is barely making its way to an old fashioned relationship database world.
