Taking Off

The dot-com boom is long over. Big deal. These entrepreneurs are still using the Web to break new ground

by Eve Tamincioglu

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Nathan McKelvey was working as a marketer for an aircraft management company when he noticed how inefficient the private jet industry was. Planes sat on ramps waiting for passengers, or flew empty on one leg of a trip. Passengers looking to book a flight had to thumb through the phone book to find companies and collect bids. "The idea hit me that the best way to make the most efficient use of the plane was to centralize the process," says the 36-year-old. In 1997, McKelvey began work on a degree in computer programming at night and tried to develop aircraft-booking software in his spare time. His aim was to combine online reservations popularized by sites such as Travelocity with the bidding process used by long-haul truckers. "If you're a small trucking management company and you have a load to take from New York to Oklahoma, when you get to Oklahoma you're not going to turn around and drive back empty," explains McKelvey.

Although he didn't finish the degree, by 1999 McKelvey had learned enough to develop the technology to launch Quincy (Mass.)-based Jets International. His system takes flight schedules for specific aircraft directly from plane operators and feeds the information into his database. After travelers log on to his site at jets.com and enter their desired itineraries, the system sends alerts to plane operators, who then submit bids on the flights. Frequent flyers can put up to $100,000 in an interest-bearing escrow account to pay for their travel and can set a maximum price they are willing to pay for a particular trip. The site also tracks and displays safety and quality-of-service information. McKelvey's 24-employee company gets a cut of each winning bid.

In 2005, it booked about 3,000 flights and brought in revenues of $17 million. In the past year, Barbara Wolfe has used the site to book seven trips, mostly to the Caribbean. "I used to call several firms and get phone calls or faxes back. It was just too time-consuming," says Wolfe. "I just love the Internet." No doubt McKelvey feels the same.

YOU GOTTA HAVE ART

By stressing the "middle market" of collectors, Lark Mason's iGavel.com prospers in a niche the heavyweights largely ignore

While plenty of people might buy a $20 butter dish after viewing only an online photo, few would spend $30,000 on an oil painting they hadn't seen up close. That's what prompted Lark Mason Jr. to co-found iGavel.com. The site sells expensive -- but not too expensive -- art through eBay-style auctions. What separates the site from those like eBay is that would-be buyers can view the artwork before they buy at one of iGavel's 13 exhibition centers or 300 dealers, appraisers, and galleries that are part of Mason's network. Last year the company sold $6.5 million in art and had revenues of about $400,000.

Mason, 51, spent two decades at Sotheby's and watched as the auction house's online foray foundered. One problem, he thought, lay in the site's high prices. "There seemed to be a ceiling to what a customer would pay online," Mason says. That's why iGavel.com targets the "middle market," which Mason defines as art that sells for $300 to $100,000. At the high end are pieces, such as a minor painting by a major Impressionist, that would otherwise be lost among much higher-value items in a sale at Sotheby's or Christie's, says Mason. The average price for merchandise is $900, and the highest price paid so far for a single item -- $264,000 -- was for a painting by Beijing-born artist Zao Wu-Ki.

Mason and business partner Benjamin Turk Tolub, 36, a former Webmaster for Sothebys.com, spent about $50,000 in savings to launch iGavel. The six-employee New York company presents artworks in themed auctions such as "Fine Asian Ceramics and Works of Art" and "The Skowhegan Collection." Mason has experts assess the authenticity and condition of the pieces. Sales typically run for two to three weeks, with the pieces exhibited at one of the exhibition centers or partners' showrooms in the final week. IGavel earns a 5% to 20% commission on each item.

Today iGavel has about 125,000 visitors to its site during high-traffic days.