Archive for the ‘Rod Rakic’ Category

Why I Don’t Talk About “General Aviation” Anymore

Thursday, January 23rd, 2014

Back in the 1950′s, Cessna Aircraft produced this gem… “Wings for Doubting Thomas

This little documentary clearly spelled out the value proposition for Private Aviation 2 generations ago.

I rarely talk about “General Aviation.”

Like most people who read this blog, I’m much more interested in, “Private Aviation.”

You might think quickly that it’s the same, thing, but it’s not. General aviation is broadly defined as as all aviation except for military and airlines. That’s great, but I’m not a, “General Aviation enthusiast.” Frankly I don’t care much about, “General Aviation.” I don’t fly biz jets, cargo, fly much for hire, (Though I have the certificate for, it’s just not a big part of my life these days.) spray crops, perform in air shows, whatever…

While I may aspire to sit in the back of a something with turbines, drinking Cristal… It does not inspire me. I’d rather be up front flying the jet.

Private aviation is the part of civil aviation that does not include flying for hire.”

“In most countries, private flights are always general aviation flights, but the opposite is not true: many general aviation flights (such as banner towing, charter, crop dusting, and others) are commercial in that the pilot is hired and paid. Many private pilots fly for their own enjoyment, or to share the joys and convenience of general aviation with friends and family.”

– Wikipedia

You see “General Aviation,” is doing just fine. Ask anyone running a jet charter business these days. Business is up, folks who choose to afford it are buying jet cards and getting to where they want to go in style, and plenty of people are making a good living helping them get there. I’m fine with all that. “General Aviation,” is not dying. It’s growing.

But “Private Aviation” is the community that inspires me. It’s Private Aviation that’s what we’re really talking about when we fry bacon at Camp Scholler, or eat pancakes at the fly in. The ability to climb into a plane and fly myself and my friends or family someplace is like a magic power.

It’s Private Aviation that we built OpenAirplane to serve.

So you see, I don’t talk much about General Aviation. When I speak to the press about OpenAirplane. I explain that it is a marketplace for Private Aviation. I get asked all the time if OpenAirplane will let them hail a jet like they can hail a cab, or if we can help them charter a flight. My answer is always, “Not yet.” It’s just not the business we’re in right now. There are plenty of smart people working to offer charter for businesses and pleasure. That part of General Aviation is well served. I explain that we are focused on Private Aviation, because that’s where the opportunity lies today to unlock more value than anywhere else right now. General Aviation is a competitive, well served market with a healthy ecosystem. But Private Aviation hasn’t seen much innovation since Cessna commissioned that film. This is strange to me, because GPS, iPads, and composites sure have made it a lot easier. Private Aviation can create entirely new use cases for the over 5,000 airports, thousands of aircraft, and hundreds of thousands of certificates in the wallets of  pilots across the country.

Private Aviation has been in decline since the airlines we’re deregulated in 1978. The value proposition of Private Aviation has been evolving ever since. The industry and the community need to both step up to communicate the value proposition for Private Aviation to a new generation of “doubting Thomases,” updating what you see in the old documentary film above to speak to the value proposition we can offer today.

For most of us, the conversation isn’t about General Aviation, it’s about Private Aviation. Let’s call it what it is. I have no time sit back and complain. I believe we can make it better than ever.

What General Aviation Can Look Forward to in 2014

Thursday, January 2nd, 2014

Kicking off the shiny new year by sharing some things that I’m looking forward to in 2014. What excites me about these developments is their potential to have far-reaching impact on the aviation community and the industry that supports it.

 

ICON A5

A5ICON gets a lot of flack from the traditionalists in the aviation community. But with with first pre-production aircraft on track to be completed in mid-2014, and the first deliveries of production aircraft planned later this year, this is a product  is looking less like vaporware everyday. Partnering up with Cirrus Aircraft (Folks who know a lot of about building composite aircraft) for production seems like such a smart move. Why re-invent production techniques when you’re reinventing the experience of flying for the fun of it?

A modern, clean sheet aircraft design which reimagines what flying for fun can be has a ton of potential. The ICON A5 is product which feels like a mashup of a jet ski and a seaplane to offer something completely new. Team ICON has focused their efforts not on the dwindling traditional aviation community, but on a much broader market for recreational motorsports. Everything ICON does is feel more at home at luxury motorsport dealership, not the stodgy milquetoast spaces we associate with today’s aviation brands.

Ditching the airspeed indicator, for a far more intuitive Angle Of Attack system is a great example of how this is a product designed for folks who aren’t pilots. (Yet.)

No single product I know of has as much potential to suck otherwise unsuspecting “civilians”  into the aviation lifestyle.

 

Cessna 182 Turbo Skylane JT-A

JTAI love this airplane. The new JTA-A even looks better. As the old saying goes, the C-182 Skylane isn’t great at anything, but it’s good at everything. This is product where the world called, and Cessna listened. A proven legacy airframe, is getting a new heart. This bird sips Jet-A.

Bolting a SMA SR305-230 diesel engine and a new cowling onto this workhorse airframe should be a winner. Burning Jet-A gets you 30-to-40-percent lower fuel burn per hour, faster cruise, better climb, and no mixture control to futz with.

Cessna knows the market for newly built light aircraft is overseas, and anything burning avgas is going to have limited utility due to the constraints on 100LL infrastructure around the world. This is the year the market makes the the move to Jet-A.

 

Redhawk 172

RedhawkOn the other end of the spectrum, the folks at Redbird (Folks who have done a great job bringing some great training technology in reach of far more flight schools than ever before.) are taking a different approach. Back in the 1970′s when the manufactures were churning out airframes at a rate that made the efficient to build, they were relatively affordable to buy. The folks at Redbird are essential recycling legacy airframes to make training aircraft affordable again.

With the cost of a newly built 172 often climbing out of the reach of many flight schools, Redbird will start remanufacturing old 172s, stripping them down to the bare metal, and offering 172 Redhawks to the training industry.

They’ll start by hanging Continental‘s Centurion turbo-diesel engine, which sips Jet-A at just 4.5 gallons per hour, (Again, more Jet-A) install Aspen Avionics’ Evolution glass panel in a new interior, and new paint. Everything about the Redhawk will be tuned for the demands of a busy flight school.

Redhawk will be a package solution for flight schools. Including insurance, leasing “power by the hour,” with an innovative lease program through partner Brown Aviation. This could mean that more schools could get better access to more modern equipment. Flight schools will be free to concentrate on finding customers, not financing. The beta program starts in Spring.

 

Mooney is Back

MooneyJust when it seems like the idea of building airplanes designed for personal transportation seems to be going the way of the betamax, Mooney is starting the production lines back up this year.

These are some really nice traveling machines. Simple trainers they are not. They don’t have all the features you find in more modern designs, but if the prices can be kept reasonable, they could be competitive again.

This is a product with a lot of fans. It’s nice to see another option in the marketplace of aircraft well suited to private aviation.

 

Space Tourism

Virgin GalacticStarting in 2014. Folks who bought a ticket will starting climbing aboard rocket ships that will take them into space.

Now I  won’t be able to afford a ride, (for a long while) but then again I probably wouldn’t have been able to afford to buy a ticket on the earliest airlines 100 years ago either. Virgin Galactic will commence sub-orbital hops above the Kármán line, with a view of the curvature of the earth, and some zero G thrown in for good measure.

Sir Branson has compared SpaceShipTwo to the Ford Trimotor of of our time. I’m good with that. Mostly because I can’t wait to see what they come up with next.

 

Demo Teams Back In Action

T- BirdsAir shows are the largest outdoor professional sports in North America. These performances and static displays are the backbone of the air show experience. Last year’s sequestration debacle caused the outright cancellation of many air shows around the country.

Now the economic impact aside, the impact to recruiting can be debated other places…

…but the impact on inspiration is clear. The inspiration air shows deliver have a huge impact on aviation, aerospace more broadly, and across the board STEM education is huge.

Nothing delivers the tonnage of inspiration like an air show.

…and if you don’t like air shows, we just can’t be friends.

 

So that’s what I’m looking forward to. How about you? What did I miss? What do you look forward to the most?

Happy New Year everyone. Let’s make it awesome.

 

 

“Moneyball” for General Aviation

Thursday, December 5th, 2013

Flight time is the secret sauce to success.

It’s like getting runs on base.

I wrote that headline because, “Sabermetrics for Flight Schools, Flying Clubs, and Anyone Who Wants to Make A Buck In Aviation,” just doesn’t roll off the tongue.

I find the movie “Moneyball” inspiring. It’s a movie as much about business as it is about baseball. Anyone managing an aviation business can find inspiration here too. Its how the business model of OpenAirplane came to be.

“It’s about getting things down to one number. Using the stats the way we read them, we’ll find value in players that no one else can see. People are overlooked for a variety of biased reasons and perceived flaws. Age, appearance, personality. Bill James and mathematics cut straight through that. Billy, of the 20,000 notable players for us to consider, I believe that there is a championship team of twenty-five people that we can afford, because everyone else in baseball undervalues them.”

– Peter Brand in “Moneyball”

The book, and the movie are the story of how the Oakland A’s, a team out spent and out gunned by it’s competitors, finished 1st in the American League West with a record of 103 wins and 59 losses, despite losing three free agents to larger market teams. They built a championship team like, “an island of misfit toys,” using sabermetrics.

Sabermetrics is the term for the empirical analysis of baseball, especially baseball statistics that measure in-game activity. So let’s look at how this discipline, which demystified the voodoo of the business of baseball, can be applied to the business of aviation.

Jason Blair, former Executive Director at NAFI, has spent a lot of time researching what makes flight operations tick. He offers up what he’s learned in his seminar for industry folks called, “Skills for Flight Training and Aircraft Rental Operators to Increase Profitability.” Using one of the handy spreadsheets Jason has been gracious enough to publish can be enlightening, (sometimes scary) and very useful.

Modeling profitability of rental aircraft yields our industry’s version of sabermetrics. It’s flight time. More specifically, its flight hours flown on an airframe, or utilization that makes or breaks the business. Like the focus on getting on base make a baseball team a winner, optimizing the business on number of flight hours flown by each airframe is the secret sauce to success in flying business.

To grossly oversimplify this…

Fly more hours = make more money.
The cost of getting the airplane doesn’t matter near as much.

Utilization is the single biggest influencer on price and profitability for airplanes. It’s this single metric that has the biggest impact on the business. The effect of utilization is significantly more influential than the effect of the acquisition cost of the airplane.

For example, let’s model utilization vs. cost…

If we decrease the hours flown by 25%, the rate for profitable rental increases by 17.3%. If we increase the hours flown by 25% the rate for a profitable rental falls by 9.4%.

but…

If we decrease the acquisition cost of the airplane by 25% the rate for a profitable rate drops by 3.7%. If we increase the acquisition cost by 25%, the required rental rate also only bounces up by the same percentage.

This example shows the asymmetrical influence flying more hours per year has on profitability and affordability of the airplane.

Flight hours flown per year really is the single most influential metric on the profitability of the business that you can manage. This is why we built OpenAirplane from the ground up to do one thing at scale, which is to drive up the number of flight hours and drive better utilization of the fleet.

Operators who optimizes their business to create more flying hours will win.

 

Skip the MBA. Learn to fly instead.

Wednesday, September 11th, 2013

 

Venn Diagram - Aviate - Navigate - Communicate

The best business advice I’ve ever been given came from my flight instructor.

Aviate. Navigate. Communicate. …in that order.”

Success in the cockpit relies on managing bandwidth. It turns out, so does success in any business. As my friend Steve [@StephenForce] likes to say, flight training is all about bandwidth packing. Making a business work is no different.

I try to balance consuming ideas and immersion. Much of what I’ve consumed in the last couple of years has been business advice and counsel. Eighteen months ago I had no idea what a “cap table,” was or what the heck, “preferred stock,” meant. I immersed myself in the lingo as I went about the business of starting a business. I’ve come a long way through immersion.

As I consumed most everything I could get my hands on to help me through each stage of the project, it struck me how many aviation analogies you find in business books. (Second only to military analogies by my count.) Startups have, “runway,” which is calculated from a, “burn rate.” We, “launch,” products and we hope the business, “takes off.” You get the idea.

Many businesses fail because of distraction. Don’t believe the hype. Human beings are terrible at multitasking. Entrepreneurs are notoriously distracted people. (Just ask my team, they’ll tell you after the laughter subsides.) Prioritization of attention is a critical life skill for both flying and business. Fixation is the enemy of any good instrument scan, and it can completely blow up you calendar too. Managing a business like we manage a cockpit may not be for everyone, but here’s my idea. Cockpit discipline can be a guide for how to structure time and help you manage your bandwidth better.

AVIATE – (Operations, customer service, production, finance, etc.) The tasks that make a business a business are the foundation. When I see businesses disappointing people, it seems most often due to distraction from the basics. My primary flight instructor taught me long ago, “Never drop the airplane to fly the mic.” Aviating must come first. If you’re a retailer, you should first and foremost be good at selling stuff. If you’re a flight school, you should prioritize your focus on tasks that get people flying. If you make stuff, make it better. See what I mean? In my case, since launching OpenAirplane I’ve tried my level best to always make the operational tasks my priority. Personally, this kind of discipline has never been my strong suit. I’ve adapted.

NAVIGATE - (Product management, design, planning, strategy, etc.) In flying and in business, we should always be asking ourselves, “What’s next?” My friend Jason [@TFPofFLYING] likes to stress how important it is to always, “stay ahead of the airplane.” The same discipline can be applied to your work. In every business there are opportunities to look ahead within to improve experience, refine processes, expand or cut offering to make the business run better. Sometimes we get task saturated and get buried in the day to day operations, but unless there’s the discipline to regularly step back and turn the focus to planning, we’re plowing forward without a map.

I’m a student of the design of business. Our industry mostly evolved; very little around us was designed. Much of the industry doctrine in aviation isn’t a product of regulation or design; it’s a product of inertia. On the commercial side, look at the lowly boarding pass as an example. Good luck trying to make sense of those things. Recently someone actually took on a redesign of the boarding pass. The results will make you wonder what took so long.

COMMUNICATE – (Marketing, advertising, public relations, promotions, etc.) I’ve been in some sort of marketing role my entire career. I default to it. But others do not; I get that. Our industry has evolved to be exceedingly efficient at communicating to our own community. Beyond preaching to the converted, the industry for the most part is incompetent. Lack of communications is killing us. Go to Oshkosh, and you’ll be saturated by the message of how amazing aviation is. But imagine trying to penetrate the aviation community from the outside. You might as well be holding an iPhone in a camera store.

Communications is a muscle few aviation businesses take seriously. There is a huge market opportunity for those who invest in outreach. Props to the folks at Icon Aircraft [@ICONAircraft] for making it a priority to grow the pie, not just carve it up.

One of our Operators nailed it when he shrewdly observed, “Aviation expects excellence, but it seldom rewards it.” Turns out the mental pegboard for achieving the balance we need may already be right here.

I try my level best to attack each day with the discipline I learned in my primary flight training.

AVIATE
NAVIGATE
COMMUNICATE

It’s helped me hack my productivity, and maybe it can help you too. That, and starting every day with the Shepard’s Prayer couldn’t hurt.

There is a recipe for disruption

Thursday, August 22nd, 2013

“A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”

– Eric Riese, [@ericries] author of The Lean Startup

I continue to be very much inspired by how Tyson Weihs [@tysonweihs] and the team at Foreflight [@ForeFlight] completely disrupted the experience in the cockpit by helping so many of us do away with paper charts. You can see Marc Andreessen’s concept of how “…software is eating the world,” at work right there in our flight bags.

If there ever was an industry ripe for disruption, aviation should be at the top of the list.

Have a look at how SurfAir [@isurftheskies] has broken the mold for how commercial air travel works, swept the pieces off the floor and glued together a completely new concept of how people can use airplanes to get around. Note that they didn’t just come to market with a new business plan for how to run an airline or charter company. By making flying an all-you-can-fly membership service, the Eyerly brothers [@wadeeyerly & @DCMEII] came to market with a completely new business model. Netflix was successful because it attacked the friction points in renting DVDs. Maybe SurfAir will end up doing the same thing for short haul air travel.

Stop writing business plans. (Really, quit it.) Jason Fried [@jasonfried] founder at 37 Signals here in Chicago, famously offered, “Unless you are a fortune-teller, long-term business planning is a fantasy,” in his book REWORK. The ugly truth is that business planning is really just business guessing.

Aviation doesn’t need new business plans, we’re well beyond that. We need new business models.

Luckily for us, we’re able to skip the arduous exercise of writing the classic thirty page business plan. Creative writing is better left to artists rather than the MBAs anyways. Instead, let’s chart ideas using the Business Model Canvas.

Business Model Canvas

Business Model Canvas

 

The Business Model Canvas is one of the foundational tools in a doctrine for creating new products and services which has taken both corporate America and those who seek to escape it by storm – known as Lean Startup.

While many aviation enterprises definitely could be described as lean, that’s usually not by design, nor is it what we’re talking about. Lean Startup is a movement which first took hold in the tech startup community, but has spread across just about every industry. The methodology has become popular in both the creation of new companies and been applied within large corporations. We need more lean startups solving the wicked problems faced across the aviation ecosystem. Safety, utility, costs, access, and experience all need dramatic improvement.

The great thing about Lean Startup is that it’s a great inoculation against building stuff that people don’t want. Aviation as an industry has always been really good at building both products and services which nobody wants.

Grab a whiteboard, sketchpad or sticky notes and get to work. You don’t need an MBA or a budget to be inspired. We now have the methodologies to tackle the tough problems. It’s time for new business models. Together we can reverse the declines and create new ways to grow the aviation economy, ecosystem, and community.