Live From The HIBT Summit: David Neeleman of JetBlue Airways

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.

• 0:03Speaker 00

  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 Neeleman, the founder of JetBlue. 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.

• 0:46Speaker 00

  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.

• 1:27Speaker 00

  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.

• 1:38Speaker 01

  It was interesting, because before I went and did this, you know, my mission experience, I had not succeeded really in 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. And people talk about Kiel Moynihan Bird, and I didn't read that book. I didn't read any of these books. So because I couldn't, you know, I didn't, I was functionally illiterate.

• 2:14Speaker 00

  You couldn't sit down and absorb a book?

• 2:16Speaker 01

  I couldn't. Because my brain was, I could tell you everything I was thinking about when I read that page except for what was on that page.

• 2:23Speaker 00

  Yeah.

• 2:24Speaker 01

  And so I hadn't had any success. I, 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'd have just put C on any question, you would have got 12. You know, so I felt like, you know, people that, oh, kid's a pretty sharp kid, but he, but I just didn't have any confidence.

• 2:42Speaker 00

  Yeah.

• 2:43Speaker 01

  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, 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, I came home confident and I felt like I could do anything.

• 3:09Speaker 00

  Yeah, I mean, one, one of the things that we've talked about and you've, you've 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.

• 3:21Speaker 01

  Yeah.

• 3:21Speaker 00

  Either diagnosed or undiagnosed.

• 3:23Speaker 01

  I mean, having attention deficit 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 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, you, and that 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, that's me.

• 4:05Speaker 01

  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 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 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 100 miles an hour about something that you're gonna do different

• 4:46Speaker 01

  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 within.

• 5:01Speaker 00

  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? 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, you know, you wouldn't peg them to be entrepreneurs. Eileen Fisher, for example, who created an incredibly successful clothing line. Yvon Chouinard of Patagonia, doesn't naturally, you wouldn't naturally 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, but I can't help but think that it's something that you can also develop

• 5:46Speaker 00

  and cultivate.

• 5:47Speaker 01

  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 be 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 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...

• 6:30Speaker 01

  I wonder how many tens of thousands or millions have 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, so.

• 6:44Speaker 00

  A lot of businesses describe themselves as customer focused, which is what you should be, right? You kind of baked that into the, the whole idea around JetBlue. 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. Was it more gimmicky or was that actually really actionable and important for you to do to make that a successful brand?

• 7:12Speaker 01

  It's, it's all the above. I mean, I, I think, you know, I have a rule at Azul.

• 7:18Speaker 00

  And Azul is, is the big, I think, the third biggest airline in Brazil.

• 7:21Speaker 01

  Yeah, it's the largest in term of value. And we have a thousand flights a day. We serve 117 cities.

• 7:26Speaker 00

  It's mainly domestic.

• 7:28Speaker 01

  Domestic, but we also fly to Europe and we fly to the United States.

• 7:31Speaker 00

  Right.

• 7:31Speaker 01

  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, 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.

• 8:15Speaker 01

  And then when 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 in Salt Lake City at, 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, you know, 300 of our people. 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. 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 300 people knew that I talked to people on an airplane.

• 8:54Speaker 00

  Yeah.

• 8:55Speaker 01

  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 and it keeps us in touch with our customers.

• 9:06Speaker 00

  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.

• 9:39Speaker 01

  Yeah, it did.

• 9:40Speaker 00

  Did you almost set yourself up for that because you said, "Look, we are all about the customer. We're all about you."

• 9:46Speaker 01

  No, I think in that case, there were all the customers. I mean, I-

• 9:50Speaker 00

  We should just briefly explain. The planes were grounded, there's a blizzard, people were stuck on the tarmac for hours.

• 9:56Speaker 01

  Yeah, it was ice pellets and so the, 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 COO, who was in charge of the company that time, and make him the CEO.

• 10:37Speaker 00

  Yeah, I mean, you were, you were, just to make a point, I mean, you were pushed out of the company that you created.

• 10:43Speaker 01

  Yeah, yeah.

• 10:44Speaker 00

  And you're not involved with it anymore today.

• 10:46Speaker 01

  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.

• 10:54Speaker 00

  And you still fly JetBlue all the time?

• 10:56Speaker 01

  For free. I love it. So does my family, so we all, we all, we all love JetBlue, so, but you know, the company, we had some, 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,

• 11:38Speaker 01

  with my high school diploma, I don't even have a college degree, and, 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 12 years, was a smart decision by the board, or a bad decision by the board, I would, I would love to have that case and, and debate that.

• 12:08Speaker 00

  Yeah.

• 12:09Speaker 01

  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, I've got 15,000 people that work for me in, 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 every bank guy, is this the best job of your life, 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?

• 12:51Speaker 00

  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 Neeleman, you're the founder, and they're gonna say, "Yes, it's the best job I've ever had." You know, right? They're not gonna say, "No, it sucks."

• 13:34Speaker 00

  I mean, this is an important part of a business and culture, right? Even if you're on a, 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?

• 13:48Speaker 01

  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 workday," 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 JetBlue all the time, we get hundreds of thousands of resumes. We really gotta find out if you like people. And it's okay if you don't like people. It's okay, it 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, and then you have to train them really well,

• 14:29Speaker 01

  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 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?

• 14:58Speaker 00

  Yeah.

• 14:59Speaker 01

  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?" And she goes, "No, I go to the bank to cash my check." And I said, "You should have auto deposit, but..."

• 15:21Speaker 01

  And the bank teller says, 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. 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 and do. And if you can do that, you're going to have a company that will be more successful, will make more money, and you'll be a success.

• 15:58Speaker 00

  That's David Neeleman, 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 the 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 J.C. Howard, who produced this episode, and Ramtin Arablouei, who wrote the music. I'm Guy Raz, and you're listening to How I Built This.

• 16:36Speaker 00

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