How I Built This with Guy Raz - Live From The HIBT Summit: David Neeleman of JetBlue Airways

Episode Date: February 13, 2020

Our seventh episode from the 2019 How I Built This Summit features David Neeleman, the founder of JetBlue Airways. In this live conversation with Guy, David talks about the benefits of having ADD, and why he thinks it's important to talk to the passengers on his airlines. We'll be releasing a few more episodes from the Summit, so keep checking your podcast feed.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

This podcast is brought to you by Squarespace. I talk to entrepreneurs all the time who are looking for a way to upgrade their digital footprint. Well, whether you're just starting out or you're scaling your business, Squarespace is the easiest way to build a great website that stands out. It's an all-in-one website platform that gives you everything you need to claim your domain, showcase your products, and get paid. Anyone can use Squarespace's cutting-edge design tools to build an online presence that truly reflects what makes your business special.

There are templates, intuitive drag-and-drop editing, and even an AI-enhanced website builder. Then, Squarespace's built-in analytics tools help you make smarter business decisions. Review website traffic, learn where to focus engagement, and track revenue all in one place. Looking to grow your business, Squarespace even offers fast, easy business financing

through Squarespace capital. Go to Squarespace.com slash built for a free trial. And when you're ready to launch, use offer code built to save 10% off your first purchase of a website or domain. Loans issued by Celtic Bank and serviced by Stripe, all loans subject to credit approval. This show is in partnership with Airbnb. This past summer, I took my family to Vienna, and it was incredible. We spent our days wandering the old streets, stopping for coffee and pastries, visiting museums, and just soaking up the history of one of the most beautiful cities in the world. And one of the things that made the trip so special was the home we booked on Airbnb. It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city,

made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. 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 Neelman, the founder of Jack Blue. And if you heard the original episode with David, you might remember some of the crazy highs and lows of his story. 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, JetBlue, and it took in $100 million 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 it 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 mission experience, I had not succeeded really anything in my life. You know, I've 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, because I couldn't really learn in school. If you asked 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 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.

You know, I was functionally illiter. it. You couldn't sit down and absorb a book. I could. Because your brain just wouldn't not. 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, when I took the ACT test, I think I got 16 on it. And my advisor said, look, you got eight on the English section. If you had just put C on any question, you would have got 12. You know, so I felt like, you know, people that, oh, kids are a pretty sharp kid, but I just didn't have any confidence. Yeah. So being able to go and have this experience at 19 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 kind of learn from a new land. And it just had a profound influence on me. And it changed my life in ways that, you know, two years of that, that I couldn't have gotten in college. And I came home confident, and I felt like I could do anything. Yeah, I mean, one of the things that we've talked about, And 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. Either diagnosed or undiagnosed. I mean, having attention deficit disorder is a struggle in school. But, you know, you've got to 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 called Driven to Distraction. It was like 21 criteria. And it was all negative things, you know, like you can't. You're disorganized, you can't get started, and I was every single one of those. And I got to the last one, and it said, you have this unusual ability to hyper-focus. And when you hyper-focus on something, you're the best in the world at it. You can absolutely become a world expert in no time at all, because you obsess with it, and it becomes part of you. And I said, wow, that's me.

And so you have 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 them. You know, my teams are always just like, David, it's just not that simple.

I was like, yes, it is. It's not that complicated. So you look at this 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 100 miles an hour about something that you're going to 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 something that just, you know, comes from with then. Well, I want to kind of drill down on this idea because, I mean, you could make the argument, like with optimism or greater perseverance, that it's intuitive, right? right, that to be an entrepreneur's intuitive.

I'm not so sure that I believe that. I mean, based on all the people who have been on the show, I think there are some people who just are not, you know, you wouldn't peg them to be entrepreneurs. Eileen Fisher, for example, who created an incredibly successful clothing line. Yvonne Cheneard of Patagonia doesn't naturally, you wouldn't necessarily think that he would be an entrepreneur. 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, I can't help but think that it's something that you can also develop and and cultivate. Yeah, I think you can. I mean, it's harder. I mean, I have a son who started a company in college. He's making like $800 a day profit from starting a little company on campus.

I remember talking to his teacher in the third grade and she said, Seth just sits in the back of the room and he comes up with stuff out of the blue that we've never even thought of before. You know, and we'd like, how did he ask that question, you know? And, you know, not scholastically straight A's from when he was a little kid, but you just have this 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 where I was listening to your podcast.

For every person that makes it on your podcast, I wonder how many tens of thousands or millions that 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, but just by saying it and wanting to be it doesn't mean it. A lot of businesses describe themselves as customer focus, which is what you should be, right?

You kind of bake that into the whole idea around JetBlue, and in fact, 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. Was it more gimmicky, or was that actually really, actionable and important for you to do to make that a successful brand. It's all the above. I mean, I think, you know, I have a rule at Azul. And Azul is, I think, the third biggest airline in Brazil.

Yeah, what's the largest in term of value? And we have a thousand flights today. We serve 170 in cities. It's mainly domestic flights. Domestic, but we also fly to Europe and we fly in the United States. So every single one of our directors or VPs, when they fly on a flight, they have to talk to every single customer on the flight. What does that do? Number one, it takes these people from behind their desks, it puts them on an airplane, 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. Now, we have all kinds of dashboards and metrics that shows on-time percentage and NPS 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. 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 customers. And then when a CEO's on a plane and he talks to a customer has a huge impact on them. I mean, one time I was in Salt Lake City at JetBlue, we have all of our reservationsists at JetBlue are in their home. They don't work at their office.

So you can call someone and they're in their furry bath slippers or in a robe or whatever. So I was in a group like this with about 300 of our people, and I said, how many of you have spoken to someone who have spoken to me on an airplane and almost every single hand went up? 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 said that these 300 people knew that I talked to people on an airplane. And that was important to them that I was the kind of CEO that would talk to the customers. It's just a cultural thing, and it's symbolic, but it's also very important. keeps us in touch with our customers. I mean, there's a flip side to that, right?

So if you think of an airline like Spirit, their value proposition is it's cheap, and they're very open about it. I mean, I've had good experiences on it, but that's not what they're selling. They are selling a cheap, cheap ticket. JetBlue, Southwest, 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 2007, there was a big blizzard. JetBlue Airlines were grounded. you got a disproportionate amount of the grief for that. 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 in that case, there were all the customers. I mean, I... We should just briefly explain. The planes were grounded. There's a blizzard. People were stuck in the tarmac for hours. It was ice pellets.

And so it was some... The FAA had come up with this rule just lasted that one year. 2007, 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. I started with Today Show in the morning, and I ended with Letterman at night, and I did 20 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 of rights,

things had returned. The only people that weren't convinced was the JetBlue 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 CEO, who was in charge of the company that time and make him the CEO.

Yeah, I mean, you were, 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. 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 JetBlue all the time? For free. I love it. And so does my family. So we all love Joe. blue. So, but you know, the company, we had some academics on our board that started thinking, oh, this is the entrepreneur's 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. And, you know, I don't, I think there's nothing like an entrepreneur, you know, there might be isolated cases where the

entrepreneur dilemma, you know, is the case. But in most cases, there's just nothing that can substitute for the passion. And so 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 so 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 12 years, was a smart decision by the board or a bad decision by the board. I would love to have that case and debate that. And personally, I mean, I've gone on to, you know, create Azul. It's just an amazing company. And I, you know, I think

I said this on the podcast, but I've got 15,000 people that work for me at Azul. And 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 do 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 87% of our people just love it. And 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? Is this the other life? And if they hesitate, 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 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 want to retain employees. The airline business is really tough. Being a flight attendant is a tough job. 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 do you do? I mean, you mentioned that you walk around and you say, is this the best job you've had, but of course you're David Neelman, you're the founder, and they're going to say,

yes, it's the best job I've ever had, you know, right? They're not going to say, no, it sucks. I mean, this is an important part of a business and culture, right? Even if you're 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? It's just critical. I mean, if you are in a service business, you have to figure out how to make people excited about coming to work, or at least make them feel that they don't dread coming to work. I really wanted someone to kind of wake up in the morning and say, it's work day and not say,

I hate my job. And I think it all starts with hiring people with a right attitude. I mean, some people just don't like, and I used to say this SIDG up a lot of time, we get hundreds of thousands of resumes. We've really got to 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 working. why are different than others. So you have to start out with right people. And then you have to train them really well and you have to create expectations and you have to support them and you have to give them great tools to work with and new airplanes and great-looking uniforms. And then you have to stand behind them and you have to teach them, look, if you go and you'd 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.

It's like, how difficult is that? Just be nice to people. I mean, I remember one time I was talking to one of 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 JetBlue. I said, what do you mean? She goes, no, I go to the bank to cash my check, and I said, you should have auto deposit. but, 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, I smile. And then I go to church, and someone from the queue yells, hey JetBlue, hey JetBlue. And so, and then on my day off, I wear all my JetBlue attire because people just love me because I work for JetBlue. It's like, 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 that's what you have to try to do. And if you can do that, you're going to have a company that will be more successful, we'll make more money, and you'll be a success. That's David Nealeman, founder of JetBlue and 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 Yerba Buena 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 Jacey Howard, who produced this episode, and I'm Tene Arablewee, who wrote the music. I'm Guy Raz, and you're listening to How I Built This. This is NPR. This message is brought to you by the NPR Coffee Club. A subscription brings fresh-roasted coffee directly to your door, and you can also give a gift subscription to the NPR

superfan in your life. Learn more about our new NPR blends by visiting us at NPR coffeeclub.org.