How I Built This with Guy Raz - How I Built Resilience: Live with David Neeleman and Tristan Walker

Episode Date: April 16, 2020

Each week, Guy will be hosting brief online conversations with founders and members of the How I Built This community about how they're navigating these uncertain times. This past week, Guy spoke with two former guests: David Neeleman of JetBlue Airways, and Tristan Walker of Walker & Company. David described how Azul Airlines, his Brazil-based company, has been directly impacted by the COVID-19 crisis, and Tristan explained how he's innovating from home. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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Airbnb.ca.ca. slash host. Hey, everyone. So as some of you know, we've just started a new series of conversations on Facebook Live, where each week I'll be talking to founders and entrepreneurs about how they're dealing with the new normal that we're all experiencing right now. And in case you miss these conversations live, we're going to be posting an excerpt right here every Thursday in your podcast feed. And today we've got two guests. Later, you'll hear from Tristan Walker, the founder of Walker and Company. But first, let's start with David Nealeman, the founder of JetBlue Airways. The airline industry has taken a huge hit over these past few weeks, and it's likely air carriers won't be flying at capacity for the foreseeable future. Now, David is no longer involved with

JetBlue, but he has founded two other airlines since then. One is called Azul, and it's one of the biggest air carriers in South America. So of course, COVID-19 has had a direct impact on his business. But David is confident people will fly again, and that his airline will survive this crisis. You know, our business is off 95%. We had 900 flights a day before the crisis. We're down to under 50 flights a day. Wow. Our revenue, we were doing something close to 10 million a day. And now we're doing, you know, 5% of that. So, you know, it's, It's a big challenge. But one of the great things, you know, when you build great companies, you have great people.

You know, we have about 13,000 people that work for Azul. And so we went out to the group and said, hey, you know, everybody, we're going to need your help here. Who would like to take a few months off without pay? And remarkably enough, we had almost 10,000 of our people say, we love this company. We want to save this company. so we're going to bow out for a few months. Wow. Which is astounding.

And it just says everything about our people. And, you know, I think that gives me great hope that, you know, we're going to be back and we're going to be back strong because, you know, these people are truly amazing. And it makes me all more the resolve to really save those jobs every single one of them and make sure that they're all back to work, you know, soon as possible. David, what's your sense of sort of the domestic airline situation? I mean, we're talking about potentially months, many months of very, very little air travel. Do you think that domestic carriers are going to survive this?

You know, our major expenses that we have are obviously our crew members, you know, our salaried folks. That's number one. Number two is fuel. We're not flying, so we don't have that expense. And number three is obviously the cost of our aircraft. We have great business partners, people who have provided us. planes. They know the position we're in. So we're not burning fuel. You know, a lot of our salaries have been reduced. And those that supply our planes for us have said, hey, don't pay us for six months.

We're good. You know, we'll catch us up later. And they know it's going to survive. In addition to that, moving to the U.S., to your question of the U.S., you know, the aid package that was given to the airlines was, was $50 billion. Right. That's a lot. And it was done for a reason. So there were some streams attached to the aid that was given. Number one, it said that you have to pay your people through the end of September and you can't lay anybody off. So that's where a good portion of that money is going to go is going to pay salaries for these people. The second thing is they said you need to maintain service to a minimal level to the cities that you had service to. And so we have a lot of flights flying around with really few or no people on in some cases. You know, these airlines were

very strong financially before the crisis. You know, I was talking to one airline executive in the U.S., and they said, you know, we're probably going to be 25% smaller if we come back in a few months. But if this goes for a year, we could be 50% smaller or more. So you can imagine, I mean, just one major airline employs 100,000 people. And so it's critical that we get this right and we figure out not only how to deal with this issue, but we figure out how to stay with it as opposed to always having this threat of shut down. open up, shutdown. That's an excerpt for my conversation with David Nealiman, founder of JetBlue Airways and Azul Airlines. If you want to see our whole conversation, you can check it out at facebook.com slash how I built this.

So another industry that's been heavily impacted by the COVID-19 crisis is the beauty industry, salons and barbershops in particular, places that require human connection and touch. Tristan Walker is the founder of Walker and company. You might have heard his episode on how I built this. and they make shaving, beauty, and body products, mainly for people of color. And a lot of those products are used in salons all over the country, salons that are now closed. Anyway, in 2018, Tristan's company was acquired by Procter & Gamble, and today he's still the CEO of Walker & Company. I spoke with Tristan from his home in Atlanta, Georgia, where he's been leading his employees through this unexpected new reality.

So first and foremost, when this started to happen, we didn't make sure that our people were taking care of, right? So, you know, we started work from home about four, close to five weeks ago. And we saw this coming and wanted to jump ahead of it. But I had to very quickly realize that we all had very different situations, right? Much like me, I had two kids at home. I had to kind of moonlight, quote, unquote, as a pre-K teacher now, right? So one of the first things that I encourage everybody to do, and this is kind of about modeling the way, you know, I had to block out the sections in my calendar where I just could not participate

in work, right? My kids needed to complete their school work, and I needed to afford them the time to do that. And I encourage all of my teammates to do the same. And frankly, as a result of it, you know, the business has been doing just fine. In fact, when we think about, you know, online orders, folks are still buying from us. In fact, we're probably three, four X, our daily sales online up since the start of this, right? But the thing that's most important, regardless of any of that stuff, is that our people are safe and well. Yeah, for sure. Tristan, for a lot of people watching, you know, they're running businesses, small businesses, and you know what it was like to have a small business because you started, your business started out of a small business. Yeah, right. What are ways that you can think of to kind of keep the morale going, like with your team, for example? Yeah, I mean, it's hard, but doable, right? Folks have their own unique schedules. Thank goodness for things like, you know, Slack and text message, among other things, right? You know, we have folks sharing kind of what they're watching during the quarantine.

what hobbies they're learning, what drink recipes they're learning, right? And, you know, we also have other channels of engagement. We see what folks are doing with their children on Instagram, right? And we can engage with them there. So for us, it hasn't really required a daily fixed time of engagement, right? Because we're still working throughout the day and speaking with each other. But I think, again, our respect for each other's schedules, our respect in transparency for what's going on,

but also sharing some of the things that they're learning in good moments. I think is refreshing. How are you able to reassure people who are nervous about, I don't know, their job prospects or their economic situation? Like, are you guys able to retain everybody and avoid layoffs for now? Oh, yeah, we have. You know, we're fortunate in our partnership with Prokner and Gamble. You're very, very fortunate, but I also recognize that not everyone has that luxury. Even though it feels unprecedented, it's not unprecedented. We've been through all types or recessions. You know, it's a lesson for all of us to learn how we can prepare for situations like this, whether it be kind of cash preservation, you know, ensuring that you have a kind of tight,

loyal, excited, hopeful, mission-oriented team. And the rest is, you know, you just got to do the work, right, and follow a strategy that matters. But, you know, the thing that I can say, at least, is be hopeful and know that, you know, this is temporary. It might last a little bit longer than expected, but it is temporary, and there is light at the end, I believe. Here's a question from Michael Peterson. What advice would you give to somebody starting out in this current climate? Yeah. You know, I think we talked a little bit about this during how I built this episode live.

It's know your why, right? This is really an important time to not start a business just to start a business. And, you know, one theme during our conversation guy was really feeling like you're uniquely positioned to do the thing that you're doing. And, you know, it's not necessarily the financial potential benefit of doing that. It's the happiness and the joy that you find in times of great success and potential failure, right? You persist. And it's really critical that you actually know your why is why you're doing it, right? And it sounds so simple. It sounds almost aloof, but I can't tell you how many times folks don't really understand the answer to that question.

question. And when you kind of answer it for yourself, ask yourself it again. Answer it again and ask it again. Right. And everything will fall in the place if you feel that you're uniquely positioned to do the thing that you're doing, right? This stuff will pass and you will have acquired a bunch of learnings to be more successful on the other side. Tristan, this is a question from Chris Beers. How do you think this pandemic is going to change your business? Yeah, I think it's, I try and take a kind of more global worldview, right? I'm a part of Procter & Gamble, right, in $70-80 billion revenue company

that serves five billion people around the planet, right? But let me go back to, you know, this idea of humanness. The way we interact with each other, right? After this, are we going to keep shaking each other's hands? You think about the comfort of working from home, you know, this idea of four-day work week, five-day work week, now you can't work from home, you can't be more productive. some people actually might like it, you know?

You know, what does this mean for, you know, our appreciation of each other, right? I am craving for human interaction right now. I really, really am, right? But it makes you realize the things you took for granted before, and we're all going to have to actually expect everything to change. No, I know it's crazy to imagine how we are going to interact in formal and informal settings. This is a question from Andre. He's from Malta.

He's watching in Malta. Oh, cool. Like, how are you continuing with production and deliveries? Procter & Gamble is the mothership now, which in a lot of ways has built resiliency, right? If you were a startup on your own, you might be in big trouble right now. That's right. Having Procter & Gamble behind you actually gives you some stability and security. So how are you dealing with producing the product and getting it out to customers?

Yeah, so, I mean, this idea of stability, security, Procter & Gamble's been around for 180 years. They've seen this sort of thing, right? They started as a smaller company and became something that was not small. So the ability to learn around what resilience really means for a company that's been around for so long is an inspiring one to me. So I want to kind of make that, make that clear. As far as production, we are subject to the same issues that most others are. You know, we have one product right now that's on delay until June. It was one of our kind of top products, right? It's actually our T-blade that connects with our tremor. And we're finding ways to kind of get it to our consumers more quickly. But again, this goes back to being transparent with

your consumers about what's going on. And fortunately, we're in a position where everybody can understand. But there are lessons to be learned out of this, right? You got to manage your demand better. You got to diversify your production, right? You got to hoard more cash in the future. So, you know, I think of everything as an opportunity for learning as opposed to the potential issues that you're dealing with in the present. You know, I was talking to Jenny Britton Bauer of Jenny's Splendid Ice Cream a couple weeks ago on this show. And she said, we're so busy. We're always like rushing around. You know this better than anyone running a company.

That there's very rarely time to just stop and innovate and to just think deeply. Because to come up with new ideas and new products just requires time and like headspace. right? Like, are you finding that you actually have some space right now to do some of that thinking? We have no choice, right? Innovation doesn't really happen sitting in a kitchen and hoping for the best. The way I think about it, it requires some physical activity, right? I walk around, kind of the block around my house multiple times, without any phones, without any music. And things may or may not pop up, right? You know, it took Walker and Company 30 years to get the idea. idea to do it. From the time you were from the time you were a kid. From the time that I was born until it happened, right? But you know, that was a result of kind of living life and having

things kind of fall into my lap and understanding that there was an opportunity. It's no different today. You have to just afford yourself time to be able to look outward. Yeah. So much of what your like brand is about is human connection. Like people touching their faces and people kind of showing people how to use your products. And I mean, does some of that change? Does that human touch and human connection change? I hope not. I'm still going to be going to my barber, right, getting my haircut because I sure as hell need it. But, you know, I think those norms are thought of on both sides, right? You know, there's a principal and client relationship, right, that my barber has with me, as I have a principle in client relationship with our consumers. We need to be a principle in client relationship

with our consumers. We need to be thoughtful about how we package things, right? You know, she might need, my barber might need to be thoughtful about the sanitizing stuff, right? All that jazz, right? But we just need to think about the second dairy tertiary impacts of, you know, how we interact with our clients, which is good for everybody anyway. So, you know, I'm hopeful that it does change for the better, but it sure is how we'll

change. This is a question from Vincent Breathweight. Out of all the books that you've read, which one influenced the way you do business and which one influenced your personal life. Oh, interesting. It's probably only one business book that really helped me think about how to be a better just CEO day-to-day. And it's high output management, my Andy Grove. He's very good at distilling why you need quantitative and qualitative metrics in the assessment of your people or output, etc. I think personally, you know, one of the best books that I read was race against the machine.

You know, you have this 1% 99% issue going on. And the idea is that folks at the top are leveraging technology in ways to make them hell a lot more productive, right, while folks in the 99% are not. So how can I actually help to close that gap to ensure that we're all participating in this new innovation economy? And the reason, you know, one would think that that's like, impactful as a business leader, but it really does change the way I think about everything, right? The types of businesses I want to create and to whom the respect of diversity around the

world, right, and its impact on consumerism among other things. It has fundamentally changed the way my kind of worldview is now. It's, it's, and it has impacted other things that I read, right? And I'm more choiceful and purposeful. in the things that I do, recognizing this very important issue, which I think is one of the most important in the world right now. Yeah, for sure. This is a question from Tara Gia Komosi. What about productivity tips?

I mean, obviously, we're all balancing different situations. You've got kids at home, and you've got to look after them and run a business and stay productive. I have to say that I have been a lot more productive lately. Every moment of the day is work and being with my family. it's kind of intertwined. But like for you, how are you able to kind of stay productive? Yeah, I remember when I was in high school, there was this exercise that was given to us. And, you know, the exercise was very simple.

It had a sheet. It had every hour of the day from midnight to midnight. And then you just block out what you're doing during those times, right? So eight hours of that time is sleep. Let's say four hours, five hours of that time was class. Then another, let's say, three hours of that time was studying, right? There's still left over something like. like six, seven hours of the day that can actually be used productively.

And you realize how much time is wasted doing things that you don't necessarily need to do. You know, throughout this time, you know, I have my sons at home. I have to, you know, do their continuous learning, that sort of thing. But also I had to realize for myself, I am not a trained pre-K teacher. I do what I can and we make best efforts my wife and I to do as well as we can. But during the times, those six, seven hours of free time that you don't really recognize, you know, it's taking care of yourself, right? Forget about productivity and work,

because that's already accounted for in those hours that we had to talk about. Take time for yourself. What is the hobby? I read a lot, and I make time for myself, right? You know, when I mentioned a little earlier how we, you know, you have to model the way and block out time so the other team members can actually see that, you know,

I think that applies across the board, whether that be at work, family, friends, et cetera. But if you just do that very simple exercise, you'll be surprised by how much time you have, to do the things that you didn't think that you had the time to. Really quickly before we wrap up, Tristan, in five years from now, when you look back on this time, what is the thing that you do today, the change you make that makes your business more resilient in five years from now? I don't think that there's a change in so much as my reflecting back on the fact that I was consistent.

And, you know, I talk a lot about values, as you know, and we've been through. a lot. You know, layoffs in the past, right? Down rounds, up rounds, all that stuff. Now we're going through this kind of COVID-19 crisis. And it's important that our people know that I am consistent in my judgment, right? Consistent in my courage, consistent in my loyalty to our people. And we're doing things that make everybody else realize that that consistency is there. Because there'll be another one of these in the future, whether it's COVID-19 or something else, right? And you've got to really make decisions clearly. And I'm most proud when I recognize that I did things that are in line with my values and I was consistent throughout. And that's really the most important message that I would

give to anybody, but I would be most proud in five years if I reflect back on it. And not only I felt that I was consistent, but the people who supported me through this know that I was being so in so much as their willingness to continue to be led into the future. I love it. Tristan, so great to see you. Thank you so much for doing this. Tristan Walker, thank you. Thank you. That's an excerpt for my conversation with Tristan Walker, founder of Walker and company, to see the full conversation. Just go to facebook.com slash how I built this. And we're going to be putting these online conversations in your feed every Thursday and hosting the actual conversations every week on Facebook Live. Next week, we're going to be having live conversations every single

day with chefs and restaurant owners who can talk about how the food industry is handling this crisis. We're going to be talking to a claimed chef Daniel Hume of 11 Madison Park, Christina Tozzi of Milk Bar, Samin Nostrat, author of Salt, Fat, Acid Heat, Alice Waters, Jose Andres, and Kyle Conaton of Single Thread. So join us live every single day next week at 12 noon Eastern at Facebook.com slash how I built this. We'll have a different conversation every single day. So bring your questions and you don't need a Facebook account to watch. If you want to find out more about our live conversations or other virtual NPR events, go to nprpresents.org. Thank you for listening. Stay safe.

And we'll see you next week. I'm Guy Raz. And you've been listening to how I built this. Life Kit is like your friend with really good advice. So can I really be truthful? It's just me and you, right? Well, sure. Let's say it is.

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