Dave Kloeber Has a Plane to Catch

The second store he’s visiting today is at another strip mall in a suburb across town. This mall, he owns. The store is open for business when we arrive. He does the same silent walk-through drill, but this time he lingers up front to watch customers go through the check-out process. A woman with two plastic bags full of purchases asks if she can safely leave one by the register while she carries the other out to her car. Kloeber grabs the second bag and totes it for her, then comes back and puts her shopping cart away, as well as two others left by the cash registers. He says nothing, but employees can’t fail to notice, and some look sheepish for not having beaten him to the punch. Kloeber had boasted earlier that his thrift stores are not just larger than most but offer vastly superior service. Carrying bags to cars was an example he mentioned.

“Never ask an employee to do anything you won’t do and haven’t done,” he says, naming the principle he just illustrated. “JetChoice is the only business I have where people can do things I can’t. I can’t fix the planes.”

So Many Hats

Doesn’t Kloeber get some kind of cognitive whiplash when he goes from dealing with JetChoice’s multimillionaire clients to interacting with the customers and employees at his thrift stores? Not at all, he says. “I just treat everybody the same. I’m no nicer to JetChoice customers than I am to these people. I’m nice to everybody, unless they give me reason not to be.”

All right, but how can he juggle the business aspects of so many different kinds of companies? “That’s one I can’t explain,” he says, though some of it has to do with picking the right partners and hiring the right key employees. “If you surround yourself with smart enough people, you actually look smart.”

Then how does he even decide what businesses to go into in the first place? He points out that several of his companies—a clothing-recycling business, thrift-truck operations in Minnesota and Maryland, a fledgling Internet site to sell used books—evolved naturally from the thrifts. “And I’d rather lease from myself than from somebody else, so I started buying shopping centers to put the thrift stores into.” As that led to more real estate and other ventures, he says, “I needed JetChoice to get to all of it.”

Kloeber explains that he got into some businesses, including JetChoice, on the simple theory that if he needs or wants something, other people will, too. He likes all-beef hot dogs; hence, Philly Dawgz. He feels that most golf courses don’t treat their members well and are poorly managed; hence, StoneRidge and GreyStone. He finds retail jewelry prices outrageous, and so do some of his friends; hence LionsGate.

He says he also creates business models for his companies on the theory that his experience and preferences might represent something bigger. For instance, the basic selling proposition for any company like JetChoice is that private-jet travel saves valuable time for busy executives and others who can afford it. As Brian Overvig, one of 28 full-time JetChoice pilots and the company’s general manager, puts it, “In the time you’d spend at [New York] LaGuardia, waiting to get off the ground, I can have you in Dallas from White Plains.”

But there are many ways to achieve that time saving. You could buy your own jet or a partial stake in one—but that, says JetChoice Vice President of Sales and Marketing Bradley Boyle, gives you a very expensive asset whose value can fluctuate wildly. It also saddles you with hiring pilots and running a miniature airline. You could use charter services instead, but how much faith will you have in the unfamiliar pilots and the mechanics who maintain the planes?

Kloeber envisioned a membership service that sold flight hours rather than shares in capital equipment. (An example from one of JetChoice’s several membership programs: For a monthly service fee of $5,975 and an hourly rate of $1,595, a member can reserve 50 hours of flight time.) His company would fly only one type of aircraft (Falcons) to keep maintenance and pilot training simple, and would assign pilots to particular planes so that members would get to know them. Kloeber speculated that members’ number-one concern would be safety.

Sure enough, safety was a primary issue for JetChoice members, including Michael Dougherty, chairman and CEO of Dougherty Financial Group, LLC, of Minneapolis, whose company owned its own plane before joining JetChoice in 2004. “We wanted to get out of the airplane business—hiring and managing pilots and mechanics,” Dougherty says. “But I’m almost a nut about safety, training, and maintenance.” He says that JetChoice was the first private-aviation company to satisfy him in those areas. “We finally found a suitable outsourcer to help with a business need. That’s how we view it.”

Not Too Big

In the course of the day in Denver, Kloeber takes several calls on his cell phone to talk about his various businesses. Harvey Mackay later tells me that “the constant, immediate feedback [Kloeber] gets from his people due to his accessibility is incredible. I’ve had [JetChoice] employees tell me that if anything goes wrong in that corporation, they can call him and reach him directly. That’s highly unusual for a CEO . . . . He has a fanatical attention to detail, and his focus on customer service is second to none.” Mackay insists that Kloeber’s personal attention extends even to the cleanliness of the restrooms at Stone-Ridge golf course.

Kloeber says that his hands-on style explains why he prefers to own a lot of smaller businesses instead of trying to build one or two companies into giants. “I like to be involved with employees,” he says. “If you get too big, you lose that.” But he says he also likes the autonomy that the managers and partners in his businesses enjoy: “This way, there are a lot of people who can be the boss.”

JetChoice might expand next year to include hangar operations in Scottsdale, Arizona, and southern Florida, common destinations for its current members. “But if it grows beyond that,” Kloeber says, “it won’t have me at the helm.”

One of his business partners, Charles Cudd, president of Charles Cudd Company, calls Kloeber a phenomenon: “He gets more work done than five people. If I was in jail in Angola and had one call to make, I’d call Dave Kloeber and say, ‘Figure out a way to get me out of here.’

“We generally set up LLCs [limited liability corporations] for projects, so I’ve had a lot of investor partners over the years,” Cudd continues. Kloeber, who became a partner in 1997, “is by far the best guy I’ve been involved with. He’s brilliant. And fearless.” Cudd cites a recent condominium-development project on Maui. “We had to take a risk to do it, because everything wasn’t buttoned down—we hadn’t closed on the land or even drawn up the offer. But I called Dave, and he said, ‘I’m in.’ Boom, over the phone: ‘As long as you guys like it, I’m in, let’s go.’ And he lined up the dough to do the deal. That’s the difference between Dave Kloeber and anybody else.”

One difference, anyway. There is also that matter of getting just 4.5 hours of sleep.