Rick Anderson loves the feeling of flying. A certified pilot with 200 hours of flight time, he says there is something exciting about starting out in one place and being somewhere entirely different in just a few hours. But what he really looks forward to is the landing.
“I love the challenge,” says Anderson, CEO of Anderson Aerospace in Kent. “You point the [plane’s] nose at the ground and maneuver it all the way down to a small spot on the landing strip. When you hit ground, you feel a rush.”
Anderson is experiencing a similar feeling in his professional life right now. After three years of tinkering, Anderson and partner Matt Flannery are about to put their new aircraft satellite system on the market.
Weighing 21 pounds and using direct-wave technology, the system promises clearer, more consistent Internet connectivity and TV coverage to in-flight passengers than any currently on the market. And, at half the weight of other satellite systems, it can save a Boeing 737 airliner more than $180,000 a year in fuel costs.
Their timing couldn’t be better.
“Today, people expect to be connected 24/7,” says Lee Poseidon, a venture partner with JumpStart, a nonprofit that assists and invests in technology-based Northeast Ohio startups. “They no longer see it as a luxury. They expect to have the same Internet experience they have at home. ... That’s what makes Anderson Aerospace’s antenna system so appealing.”
In June, Anderson and Flannery debuted their satellite system at the prestigious Paris Air Show, the largest aircraft trade show in the world. The product’s impact was immediate. In the past five months, the duo have fielded phone calls from dozens of in-flight entertainment and connectivity players, such as Panasonic Avionics Corp. and Rockwell Collins, who are interested in their technology. In October, the duo received $250,000 in startup money from JumpStart to complete its first flight-ready prototype.
The investment came just in time. The men had been funding the venture themselves and the company was subsisting on the fumes of their 401(k) plans. They were considering closing up shop in December, if circumstances didn’t improve.
“But then suddenly, we started to sizzle,” Flannery says with a smile.
Self-professed engineering geeks, Anderson and Flannery met two decades ago while working at the Vicron Corp. in Newbury, Ohio. The men were working on the mechanics of a satellite system designed to capture images of gamma ray bursts.
Although such bursts are a common occurrence — happening once or twice a day, billions of light years from earth — no one had ever been able to capture a picture of the extremely powerful explosions, which last only a few seconds.
In 1997, the satellite Anderson and Flannery worked on captured that gamma ray burst on film for the first time. The American Astronomical Society awarded the inventors the Bruno Rossi prize for their contribution to astrophysics.
With that project completed, Anderson and Flannery began looking for a new career move. Anderson never expected inspiration would strike at a bar.
“I had a friend from my co-op days,” says Anderson. “We’d go out for beers occasionally and talk about starting a business together. We’d throw out random ideas to each other — most of which were terrible. But then one day, he told me about an idea he had for a satellite that would stream live TV on an airplane.”
The idea took hold. “I thought, Wow, there’s going to be a real market for that,” Anderson says. He signed on, convincing Flannery to come on board, as well. The company, AeroSat, incorporated in the late ’90s.
There was just one problem.
“I didn’t realize at that point that the satellite was a concept more than a product,” Anderson says. “We had to develop the product to support the concept.”
In 2003, after years of work, the product was a reality and became instantly attractive to private jet owners and a few commercial airlines.
“Private jets are the ultimate toy and status symbol,” Anderson says. “Owners wanted as many bells and whistles as they could get.”
Jet passengers loved the accessibility and novelty of watching live TV and streaming Internet mid-flight. Many of those passengers were Midwestern auto executives, flying to meetings in other states.
But when the auto industry collapsed in 2007 and execs were forced to explain their expenses to Congress, one of the first things to go were these excesses. When the auto industry stopped leasing private planes, AeroSat lost more than half its sales, and the Cleveland offices closed.
But Anderson still believed in the product. “I knew there was a way to take the old technology and make it better, cheaper, lighter and smaller,” says Anderson.
So in 2008, Flannery and Anderson decided to start a new satellite business, one that expanded its focus beyond the private jet industry to large commercial planes and would be known for the consistence and clarity of its broadband.
Working out of Anderson’s Aurora basement, the duo constructed a new satellite system that relied on the Ku band, which provided a more powerful and focused system with quicker, more reliable Internet connectivity.
Additionally, while competitors such as Aircel of Illinois used ground antennas to power the in-flight connection systems, Anderson and Flannery chose to utilize a geostationary satellite technology.
They thought ground antennas were too unreliable with limited coverage area and bandwidth. When towers were out of range, customers would lose reception and connection. Satellite technology doesn’t encounter such disruptions because it blankets entire regions of the globe.
Anderson and Flannery devised the device — meant to be affixed to a plane’s tail — with fewer parts and eliminated many of the long, heavy cables of older systems, making it more compact and more efficient. The lighter weight offered less drag and cut fuel costs.
This year, Southwest Airlines started providing Internet on more than 100 of its 500 planes, and Delta and American Airlines have spent the past few years making their aircraft Wi-Fi ready.
Despite these advances, Anderson Aerospace had problems attracting outside interest and investors. However, it was one of six companies the Ohio Aerospace Institute invited to the Paris Air Show in June. The Ohio Aerospace Institute aimed to re-establish Ohio’s roots as innovators in aerospace technology and wanted to showcase the state’s most innovative aerospace designers.
“[Anderson Aerospace] is an innovative company … that could really revolutionize the way Internet and communications are being performed,” says Patricia Grostiron, director of technology and innovation partnerships at Ohio Aerospace Institute.
Anderson and Flannery had thought fleetingly about attending the event on their own, but the $100,000 cost of a booth proved prohibitive. As part of the Ohio cluster, though, they would only have to pay $4,500 to court the industry’s biggest players.
The news was good and bad. “We couldn’t afford the tickets to get to Paris,” says Flannery. Anderson’s wife stepped in and pulled money out of her 401(k) to pay for their expenses. It was a worthwhile investment.
“We knew, as a startup, we needed visibility,” says Flannery. “At the show, we got international exposure and attention — the things we needed to make us attractive to investors.”
As a result, for the first time in three years, the duo have enough capital to start paying themselves a small salary. “Which is very good,” Flannery says, “because our 401(k)s were getting beat up pretty bad.”
In the next six months, they hope to raise $1.2 million in funds to move on to the production phase. That shouldn’t be a problem, according to JumpStart’s Lee Poseidon.
“Anderson Aerospace is way ahead of the curve in terms of in-flight entertainment technology,” he says. “They have some pretty strong intellectual property.”