Resources

Buckle Your Seatbelts: Startup Lessons from Virgin America

Imagine launching a company during the longest economic downturn since WWII. Your startup is competing with legacy companies in a trillion dollar monopoly. As you invest in designing expensive new hardware and building operations, the competition is lobbying to stop you from launching. It was under these circumstances that Virgin America launched its inaugural flight on August 8, 2007.

This is the story of a startup airline, maybe the last domestic airline to launch in the foreseeable future. Virgin America defied analyst expectations, re-imagined domestic air travel by introducing a fundamentally better experience, and reset customer expectations and behavior. It also influenced the entire industry: once Virgin America made more revenue per passenger with its updated product and customer experience, the legacy carriers were forced to upgrade their tired product to win back customers. Competition is good for consumers.

Every past founding team carries insights useful for the next generation of founders. Tough decisions they faced are not unlike what you routinely confront: can you build brand awareness without a product customers can try, what goes into building a brand new product, does internal culture matter, how to work with regulators, how to take risks for customers.

Starting a company is a deeply collaborative, vulnerable and human experience. You can’t do it alone: it takes many allies, from employees, investors, partnerships, suppliers, media, customers, and a public that gets what your brand stands for. The friendships forged during the entrepreneurs’ journey last a lifetime and so does the impact of your work. I sat down with friends from the founding team shortly after Richard Branson’s 70th birthday for what became an emotional conversation about startup lessons from Virgin America. 

Videos & Key Takeaways:

  • How to Build a Brand
  • How to Build a Product
  • How to Take Risks
  • How to Build Culture

Guests:

  • Abby Lunardini served as Virgin America’s VP of Brand Marketing & Communications and is now Chan Zuckerberg Initiative’s Chief Communications Officer and VP of Brand. 
  • Adam Wells designed Virgin Atlantic’s upper class suites before leaving London to join Virgin America as employee #4 and its first Head of Design. Adam went on to lead design at Virgin Galactic and is currently helping to develop an electric flying taxi service.  

How to Build a Brand


Build your product to express and reinforce your brand values.

The team turned to the Virgin brand for product inspiration. Virgin is naturally social so the team designed the airline’s seat back entertainment to offer seat to seat chatting and the ability to order food to other passengers. It was the first airline with fleetwide Wifi so it made the at the time bold move to use Twitter to deliver meaningful customer service.

Establish a direct path to your customers.

Using the publicly viewable Twitter channel to solve guest problems was challenging but worthwhile. It wasn’t easy but their efforts engendered loyalty and sparked engagement.

How do you build a brand if you can’t show anyone your product?! 

During the excruciating years dealing with anticompetitive lobbying and waiting for regulatory approval to launch, the team had to generate brand awareness. Abby established relationships with the first generation of tech bloggers -- Gizmodo’s Brian Lam, Boing Boing’s Xeni Jardin, Ars Technica’s Glenn Fleishman and TechCrunch’s Peter Ha, DiggNation taped its show in first class! -- to get to know our engineers including the inventor of the RED inflight entertainment Charles Ogilvy, test our tech and share feedback.

Deepen relationships with people who get you.

Virgin America partnered with not the biggest but the best and most likeminded partners. To debut service to Toronto in 2010, we partnered Drake who was a promising artist with a debut of his own, his first studio album Thank Me Later.  The airline was too small for mainstream press (“they had no belief that the airline would ever make money”) so they deepened their engagement with tech bloggers (“let’s just go to the people using the product!”) to experience its tech features and warm guest service.

“OK...how can we do this?!” Team up with operations to create exceptional moments.

Why would you invite a spaceship to land on a new airport’s runway? Because it’s important to serve up exceptional moments and nothing is impossible with great operations. To celebrate SFO’s new Terminal 2, Virgin America invited our sister Virgin Galactic to fly alongside our aircraft and celebrate the future of aviation. A brand is only as effective as its execution so the close relationship between brand and operations ensured a smooth and memorable flight for dignitaries, media, KIPP students and staff.

Taking risks for your customer will make you a beloved innovation leader.

Adam reminded us that the industry -- from the airlines to manufacturers -- caught up to and benefited from Virgin America’s trail blazing. 

How to Build a Product

Start with your customer: how is the rest of the industry failing them? 

Obsess about the underserved customer. Through all the touch points of the customer journey, where is the industry failing? Through years of product development centered around the customer, Adam transformed the flying experience from an onerous activity that people resented to something that was fun, wonderful and that you look forward to, key attributes of the Virgin challenger brand. 

Take risks that your brand can uniquely own.

The industry rightfully prioritized safety and schedule, leaving little room for hospitality. So Adam reinforced the brand values by designing a welcoming check-in and new furniture. The onboard experience too was built from scratch including 12 modes of mood lighting, massage chairs in First Class, the robust RED entertainment system and even a soundtrack for the lavatories.

Was the mood lighting about creating a flying nightclub?

Until Virgin America’s flattering pink and purple mood lighting, the US flying public was bathed in yellow and green (“nauseous”). Its unique and complex mood lighting system created a soothing atmosphere to offset the many checkpoints and hassles of travel. While Adam did not intend for a nightclub feel, he wanted guests to see a hint of mood lighting from the jet bridge and build anticipation and curiosity -- and to elevate an activity that had become a mundane routine.

Win with experience. 

Did the team have to build a differentiated product? No but these details contributed to an overall experience that passengers began to pay more for, changing the industry for good. And did the brand and product design yield a revenue premium? Yes. Over time people paid more for a better inflight experience, the airline won the transcontinental market and spurred the legacy carriers to invest in upgrading their products. 

What do Drake and politicians have in common?

You know you’ve made a great product when everyone from Drake to elected officials had the same reaction: “it was undeniable!”

How to Take Risks


Opportunities result from disruption and market change.

In crisis, it is important to take risks and make decisions quickly. Like others in the industry, Virgin America had to prepare for quick pivots and respond to market competition, shifts in demand, ripple effects of global events, and weather delays and ‘acts of God.’ That responsiveness required communicative leadership and coordination across the entire organization. 

Focus on what you are uniquely suited to do that helps your consumer. 

In an environment where everything else is “terrible, boring and broken,” Virgin chose to be the customer champion, coordinating design/tech/service and conceiving an integrated system that the small team had to build and test on their own and that was ahead of its time. The results were ‘whiter than iPod white’ (a special coating was invented to achieve that level of brightness) seatbacks that would not discolor over time, flattering mood lighting, a fully integrated inflight entertainment system, even customized buttons on the remote for bespoke functionality (ie a slice of pie button to shortcut into the food ordering page). Whether or not customers would pay more for a better experience was answered when VX became profitable, forcing the competition to catch up.

Leadership must be excited to win the right to exist. Every day.

Especially in risk-adverse industries or times, present and active leadership is essential to break through risk intolerance. The airline had leadership at all levels that conveyed that the entire organization must be different to survive. Without that energized and unified mobilization, the airline could not have survived global financial crises and competitive hurdles. 

Comply with industry requirements your way: the story behind the safety video.

When closed captioning was required by the industry, Virgin America’s safety video had to get updated. Abby tells the story of CEO David Cush’s first reaction, how they involved regulators, and why they chose to communicate important safety procedures with a music video, resulting in a win-win for flyers, viewers and the brand.

How to Build Culture


Committing to a bold shared mission creates a can-do culture.

The airline encouraged staff to own and solve big problems -- starting with building a hospitality-focused flying product and then fostering an award winning guest service focus that was reinforced by its annual all company “Refresh” brand training. The team’s hunger and humility resulted in collaboration and execution over ego.

Get even the smallest details right.

Those details create your brand’s overall customer experience and give your staff and customers more to love about you. Teammates saw that Richard cared about and would actively try to help resolve individual flyer’s issues or larger challenges, reinforcing the importance of going above and beyond.

Humor and humanity first.

The airline channeled Richard’s humor (“what would Richard do?”) for its 30 media-friendly market launch campaigns. Richard saw the big picture and prioritized people over everything else. While his schedules were packed with press conferences and receptions, he started each event by first talking with the teammates. Inclusion, pride, fun and the constant David v Goliath battles fostered lasting bonds.

Celebrate the wins.

Every new route was a big win for a small airline to live another day to battle the competition and monopolistic hurdles. Each market launch included a public celebration, a way to widen the circle and bring the brand to more people. Richard is low maintenance and had very few recurring requests; the one I recall is whatever US city he visited, he always wanted to invite the crew of any Virgin airline who happened to be in town to join whatever event he was doing. It taught us to use every opportunity to nurture connections among staff and community. And to have fun. 

Related Content in 

Operations

Related in 

Resources

Featured Founders

Eric

Carl

Co-CEO
of
Rae

Sam

Wang

CEO
of
ProGuides

Darshan

Shah

CEO
of
Next|Health

Josh

Wand

CEO
of
Pinata