For a long time when I traveled to the U.S. the most common question I got asked on the street was: “Hey, are you that guy from ‘Friends’?” Indeed, I did sell a Union Jack hat to Joey and chat with Chandler in an episode of that classic American sitcom, but it’s been quite a while since anybody asked me about it.
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For a long time when I traveled to the U.S. the most common question I got asked on the street was: “Hey, are you that guy from ‘Friends’?” Indeed, I did sell a Union Jack hat to Joey and chat with Chandler in an episode of that classic American sitcom, but it’s been quite a while since anybody asked me about it.
Now, I am far more likely to be quizzed about Virgin America, our startup U.S. airline. When we launched the business, nobody gave us a chance. We were one of the first U.S. domestic airlines to form after Sept. 11, and most experts expected us to be the first to close down.
Whenever I flew in America, I encountered the same problems I used to find elsewhere when I flew internationally. The service was poor, the prices were high, the entertainment was almost nonexistent and the food was barely edible. It seemed to be an accepted truth that cross-country American flights were something to be endured rather than enjoyed.
At Virgin, we saw a chance to disrupt a sector in which we already had expertise, and in a key market where the Virgin brand was loved, but had room to expand. Why not make flying in the U.S. fun again, instead of treating customers like cattle?
In early 2004, we tasked a tiny team in New York with turning Virgin America into a functioning airline. Fred Reid, a former president of Delta, came on board as CEO. The team’s first major decision was where to base our fledgling airline. We considered several cities, including Washington, D.C., and Boston, but in the end chose San Francisco.
There were numerous arguments against doing so: The local airport was overcrowded and needed investment; the weather was foggy and unreliable; the labor market was tough. But I was amazed when I realized that San Francisco, with Silicon Valley on its doorstep and tourists visiting all year round, didn’t have a hometown airline.
Befitting its new home, Virgin America had a startup mentality from the beginning. After some long, hard months, we introduced our first plane in October 2006. As a nod to another group formed in San Francisco, we called it Jefferson Airplane after the legendary rock band.
There is a lot more to launching an airline than simply putting a plane on the runway, however. That is particularly true in the U.S., where legislation is especially stringent. For a country that prides itself on being the freest marketplace in the world, it certainly has some of the strictest regulations.
Our competitors, who possibly had their bottom lines in mind more than their patriotism, began questioning our “American-ness.” They tried to paint me as an eccentric British entrepreneur who had no place meddling in U.S. business.
I was happy to subscribe to the first half of that description, but the second complaint was plainly ridiculous. By law, non-Americans may not own more than 25% of the voting shares of a U.S. airline, a rule that we were careful to stick to. While we licensed the Virgin brand and considered Virgin America very much part of the family, the Virgin Group did not control the airline. But by objecting relentlessly, our competitors managed to delay our launch and cost us tens of millions of dollars at the same time.
They also forced us to lose our brilliant CEO, with regulators from the Department of Transportation demanding Reid’s removal by February 2008 as a condition of granting our certificate to fly.
Because I’d interviewed Fred for the job on Necker Island, where I have a home, he was deemed too close to me: Some rivals even claimed that I had hired him as a puppet CEO while I would run the business. Despite these accusations, Fred remained incredibly upbeat.
“Well, my sell-by date is coming up, we better get moving,” he said at his last meeting.
I gave him a hug and thanked him for his superb work, but everyone was frustrated. By mid-2006 we had a fully employed staff, customers in waiting and planes sitting on the tarmac unable to fly.
In the end, it was the wonderful American people who got us off the ground. In January 2007, we took to the streets of San Francisco, explained what our airline was all about and let the public decide for themselves whether they wanted the option of flying with us. By May, more than 75,000 letters had been sent to Congress on our behalf. It turned out we were “American” enough after all, and we finally got approval to fly from the Department of Transportation. (Reid officially stepped down in December 2007.)
Delighted, we began selling tickets in July, gearing up for our inaugural flights the following month. Passengers were signing up in droves and our planes and teammates were raring to go. We arranged a big press push to celebrate our launch, with inaugural flights from New York and Los Angeles landing in San Francisco simultaneously. There was just one problem: While we had permission to fly in theory, the actual Department of Transportation certificate had yet to materialize.
On Aug. 7, the day before the planned inaugurals, there was still no sign of the paperwork. I was being interviewed in the Virgin Atlantic lounge at Kennedy Airport in New York, determined not to let slip that we were still worried we’d never get off the ground.
It was touch and go, but, finally, we got a call from our counsel. The message was short but sweet: “The eagle has landed.” I jumped out of my seat, cheered and ordered Champagne all around, even though it was 10 in the morning. Our inaugural flights from New York and Los Angeles took off and Virgin America was a go.
Like it or not, navigating government regulations is a big part of every entrepreneur’s job, and that’s never truer than when you’re expanding internationally. In these cases, it’s absolutely crucial for you and your team to be up-to-date on all the local rules and regulations affecting your industry. Ignore or misread any one, and you could find yourself permanently stranded on the tarmac.
(This essay is adapted from Richard Branson’s latest book, “Finding My Virginity: The New Autobiography.”)
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© 2017 Richard Branson (Distributed by The New York Times Syndicate)
