Transcript

Live From The HIBT Summit: David Neeleman of JetBlue Airways

Hey everyone, so today we've got another one of my conversations from the How I Built This Summit that took place in San Francisco back in October. And this one is with David Neilman, the founder of Jeck Blue. And if you heard the original episode with David, you might remember some of the crazy highs lows. At the age of 29, he was already the president of a regional airline, and when that airline was acquired by Southwest, David became a top executive there. It was a dream job until he got fired just a few months later. So eventually David launched another airline, Jet Blue. and it took in a hundred million dollars in its first year.

But after one particularly bad ice storm and a public relations disaster. David was ousted by the board. He had to walk away from his own company. So what did he do next? He started yet another airline, Azul, in Brazil. In this interview, David was really open about all these ups and downs and the frustration that he felt along the way. So at the summit, I asked him how he developed the resilience to Deal with it all.

on the podcast you talked about how As a young man, you did a mission. As a Mormon. You went to Brazil, and you had to spend a lot of time knocking on doors. And

Having those doors slammed in your face. And I'm curious to sort of talk more about the connection between that experience and your ability as an early stage entrepreneur to handle the kind of rejection you would face. It was interesting because before I went And did this, you know, my my mission experience.

I had not succeeded really at anything in my life. Hm. Talked a lot about my attention deficit disorder. Which I really didn't know I had. I just thought I was really stupid. You know, I'cause I couldn't really learn in school. I can't I if you ask me today what books did you read in high school, I can't tell you one single book I read in high school.

I went to public school in Utah. But I I don't know. I mean people talk about Kill Mockingbird and I didn't read that book. I didn't read any of these books. So Because I couldn't. Functionally illiterate.

You couldn't sit down and absorb a book. I can tell you everything I was thinking about when I read that page except for What was on that page. Yeah. And so

I hadn't had any success. I I when I took the A C T test, I think I got sixteen on it and My advisor said, look, you got eight on the English section. If you'd just put C on any question, you would have got twelve. You know, so I felt like You know, people thought, oh the kid's a pretty sharp kid, but he but I just didn't have any confidence. So being able to go and have this experience at nineteen years of age. Be plucked from your life.

And put into a completely different environment. And to be able to learn a foreign language and to be able to kinda Learn from a new land. And it it just had a profound influence on me. And it changed my life in ways that you know, two years of that that c I couldn't have gotten in college.

And I I came home confident and I felt like I could do anything. Yeah, I mean one one of the things that we've talked about and and you've you sort of noted in the past is that there seems to be a high number of Entrepreneurs who've been on the show. who have attention deficit disorder or some form of it.

Yeah. Either diagnosed or undiagnosed. I mean having attention defense disorder is a struggle in school. But you know, you gotta have some positives from it. And when I first found out I had it and I self-diagnosed myself, because my mom sent me this book. Call driven to distraction.

There's like twenty one criteria. And it was all negative things, you know, like You can't you're disorganized, you can't get started, you and I was every w single one of those. I got to the last one and it said. You have this unusual ability to hyper focus.

And when you hyperfocus on something You're the best in the world at it. You can absolutely become a world expert in no time at all because it you obsess with it and it becomes part of you. And I said well that That's me.

And so you have that all that kind of negative stuff. Which you can solve by just hiring good people that can fix all that. And then you have this ability just to hone in on things. And just to take really complicated things. And just simplify'em. Mm.

You know, my teams are always just like David, it's just not that simple. I said yes it is. It's not that complicated. So you you look at a complex solution, you simplify it. And you put yourself in the shoes of the consumer and you can just create something. You know, a lot of you here are entrepreneurs.

But If you're not in the shower every morning And your mind isn't racing a hundred miles an hour about something that you're gonna do different than everybody else. And you're excited to just get out and get dried off and get dressed and start your day because you have this idea that's just gripping you. Then

You know, maybe you're not an entrepreneur. You know, and it's it's something that just Well I'm I I want to kinda drill down on this idea because Um mean you could make the argument, like with optimism or greater perseverance, that

It's intuitive. Right, that to be an entrepreneur is intuitive. I'm not so sure that I believe that. I mean, based on all the people who've been on the show, I think There are some people who just are not Yeah, you wouldn't peg them to be entrepreneurs. Eileen Fisher, for example, who created an incredibly successful

Closing line. Evon Chanard of Patagonia doesn't naturally you wouldn't naturally necessarily think that Um I wonder whether You know, it's something like for you, you get up in the morning, you're in the shower, you can't stop thinking about this idea, you can't stop thinking about the next idea. But

I I can't help but think that it's it's something that you can also Develop and And cultivate. Yeah, I I think you can. I mean, it's harder.

I mean I have a son who started a a company in college, he's making like eight hundred dollars a day profit from starting a little company on campus. I remember talking to his teacher in the third grade and and she said Seth just sits in the back of the room and he comes up with stuff out of the blue that we we've never even thought of before, you know? And we think, how did he ask that question, you know? And

Yeah, not scholastically. Straight A's from When we was a little kid. You just have this ability innate ability to think things differently. Now can you train yourself to do that? Yes, you can, but it takes a lot of work. And

You know I had this thought the other day when I was listening to your podcast. For every person that makes it on your podcast, I wonder how many Tens of thousands or millions and never made it. You know, it's hard and it takes a lot of perseverance. You can do it, and that's exciting. And each one of you in this room can make it happen. Just by saying it and wanting to be it doesn't mean it's so a lot of businesses describe themselves as customer focused, which is what you should be, right? You

idea around jet blue. And and in fact in in really For a long time you would fly on the planes, you would walk up and down the aisles, you would Ask people to give me some feedback. Um

Was it more gimmicky, or was that actually really actionable and important. for you to do to make that a successful brand. It's it's All the above.

No, I have a rule at Azul And Azul is is the big I think the third biggest airline in Brazil Yeah, what is the largest in terms of value, and we have a thousand flights today. We serve 117 cities. It is an mainly domestic flight. Domestic, but we also fly to Europe and we fly to the United States. Every single one of our directors or VPs When they plan a flight, they have to talk to every single customer on the flight. Hm.

What does that do? Number one. It

And they're listening to what people are saying about our business. It puts them closer to the customer and realizes that we're not as good as we think we are sometimes. Yeah, we have all kinds of dashboards and metrics that shows on time percentage and N P S scores and all that kind of stuff. But just talking to a customer saying

I'm a freaking flyer. I can't redeem my points. You know, or whatever. There's just all kinds of things that you have, or complaining about high fares or whatever It just keeps our management team in touch with our with our customers.

And then when y a CEO is on a plane and he talks to a customer, it has a huge impact on them. I mean one time I was um In Salt Lake City uh it At JetBlue we have all of our reservationists at JetBlue are in their home. They don't work at the office. So you can call someone and they're in their furry bath slippers, you know, or in a robe or whatever.

So I was in a group like this with about And I said, How many of you have spoken to someone who have spoken to me on airplane and almost every single hand went up? Hm. So that was a mark for them. Hey, I talked to your CEO on the airplane. It wasn't just that I talked to those people, it's just that these three hundred people knew that I talked to people on an airplane.

And and that was important to them. That I was the kind of CEO that would talk. It's just a cultural thing. It's symbolic. But it's also very important and it keeps us in touch with our customers. I mean there's a flip side to that, right? So if you think of a of an airline like Spirit, their value proposition is it's cheap.

And they're very open about it. I mean I've I've had good experiences on it, but that's not what they're selling. They are selling a cheap, cheap ticket. Jet blue, South West. They're selling an experience. They want you to feel good when you're on their planes and feel good about the price you paid. But when there's a crisis like there was in two thousand seven, there was a big blizzard. um jet blue airlines were grounded.

You got Um Disproportionate amount of the Yeah, I did. Did you almost set yourself up for that because

You said look, we are all about the customer, we're all about you. No, I think um in that case There were there were all the customers. I mean I We should just briefly explain. The planes were grounded, there was a blizzard, people were stuck on the tarmac, ice pellets, and so the it was some the FAA had come up with this rule just lasted that one year, two thousand seven, that was it. They said if you have ice pellets you can't take off. People were on airplanes, it wasn't really my responsibility, it was our COO to take care of it, but I took responsibility.

It started with uh Today show in the morning and I ended with Letterman at night and I did twenty eight interviews in between and we created a customer bill of rights. We took a media hit, but within two weeks Because of the customer bill rights, things had returned. The only people that weren't convinced was the Jet Blue Board that kind of

I don't know what they were thinking, they kind of lost their way. And they had decided to take the COO who was in charge. Yeah, I mean you were you were uh just to make a point. I mean you were pushed out of the company that you created. Yeah. Yeah.

And you're not involved with it anymore today. Well I'm a shareholder. Um the current CEO, thank goodness the board now has him there. He's a good guy. He calls me all the time for advice and we talk. And you still fly Jeep Blue all the time. For free. I love it. So does my family. Uh we all we all we all love Joe Blues, so Um But you know, The company.

Um we had some Some academics on our board that started thinking, oh this is the Entrepreneurs dilemma, it's time to kind of turn this over to professional management. Let's do this and kick David up to be the chairman. You know I don't

I think there's nothing like an entrepreneur. Yeah, there might be s isolated cases where the entrepreneurial dilemma. you know, is the case, but in most cases There's just nothing that can substitute for the passion and so Um

I'd love to do a business case. I teach courses at Stanford actually with my high school diploma. I don't even have a college degree. And um So And so I I teach a couple of different courses and I would love to say okay

how you do it in business school, you're like okay here's the case. This is what happened. Now you determine if the removal of this entrepreneur as the head, based on what happened in the last twelve years, Was a smart decision by the board or a bad decision by the board? I would love to have that case and and debate that. And personally, I mean I've gone on to You know, Create Azul is just a an amazing company. And I

I think I said this on the podcast, but Um I've got fifteen thousand people that work for me in at Azul and We we actually survey our people every year and ask them, Hey, do you like us? Do you like the job we're doing? How do you like your job? How do you like your salary, how you like your benefits, how do you like the way your supervisor treats you?

And the scores there are just unbelievable. I've never seen eighty seven percent of our people just love it. The mantra down there is We want this to be the best job of your life. So I walk around to everybody and go, Is this the best job of your life? Is this the best job of your life? And if they hesitate, I go, Why not? Why not? What can we do better? I want to ask a bit more about how you motivate

Employees. I remember Howard Schultz was talking about Starbucks and some of the things they do. to make sure that their employees are, you know, feel fulfilled and and they actually have some of the lowest employee turnover rates in the food business. I mean this is important, right? Because when you lose an employee, it's really expensive. You you want to retain employees. The airline business is really tough. Being a flight attendant is a tough job. You you're on the front lines of customer complaints or if you're at the ticketing counter or at the gate, I mean you're getting a lot of abuse.

What what do you do? I mean you you mentioned that you walk around you say is this the best job you've had, but of course you're David Nealeman, you're the founder and they're gonna say this is the best job I've ever had. You know, right? They're not gonna say no it sucks. Um I mean this is an important part of a business and culture, right? Even if you're on a s building a business on a small scale. How do you make sure that that is The

First, second or third most important thing you do. I mean, If you are in a service business You have to figure out how to make people excited about coming to work. At least feel make'em feel that they don't dread coming to work.

I w w really wanted as someone to kinda wake up in the morning and say, It's work day. And not say Ugh I hate my job. And I think it all starts with hiring people with the right attitude. I mean some people just don't like and I used to say this to Jeppler all the time.

We get hundreds of thousands of of resumes. We really gotta find out if you like people. And it's okay if you don't like people. It's okay, you just don't work for us. You know, and I think some people are just wired different than others. So you have to start out with the right people. You have to train'em really well and you have to

Create expectations. And You have to support him and you have to give him great tools to work with and And new airplanes and Great looking uniforms.

And then you have to stand behind them and You have to teach him look. If you go and you be nice to people and they love you and they appreciate you Your job's just a lot more fun. If you go and just be angry with people and treat them like Garbage.

Then they treat you like garbage and then you hate your job. So how difficult is that? Yeah. Just be nice to people. I mean I'm number one time. I was talking to uh one of our

our agents at the airport. in Buffalo, New York. And she says, I love my job so much. And she goes, and I'm a celebrity in my town because I work for Jet Blue. I said, W What do you mean? No, I go to the bank to cash my check. I said you should have auto deposit, but um.

And the bank teller said, oh you work for JetBlue. What's it like to work for that great company? I love JetBlue. And she goes, ah, I smile, and then I go to church and someone from the pew yells, hey Jet Blue, hey Jet Blue. And and so and then I went on my day off, I wear all my Jet Blue attire because people just love me because I work for Jet Blue. So that's what you want to create, you know, you want to create a brand where people are excited to work for you because you're helping other people. You're helping them find their you know get to their family members. And and that's what you have to try to do. And if you can do that You're gonna have a company that will be more successful, will make more money.

And you'll be a success. That's David Neeleman, founder of JetBlue. Azul Brazilian Airlines. And just recently, he announced plans to launch a brand new company.

Breeze Airways, a low cost airline based out of Salt Lake City. David joined me live on stage at the How I Built This Summit, which happened in October at the Herba Buenas Center for the Arts in San Francisco. We'll have more of my conversations from the summit over the next few weeks, so keep checking for updates. and thanks to JC Howard who produced this episode and Raptine Arab Lui who wrote the music. I'm Guy Raz, and you're listening.

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