Here is an excerpt from an article featured in the July issue of Southwest Airlines’ Spirit magazine. These are the first five business lessons and the last two. To read the complete article, a “must read,” please click here.
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Whether you’re founding a company or just want to look brilliant, take some cues from this airline.
1. Keep the idea simple enough to draw on a napkin.
In 1966, Rollin W. King sat with his lawyer, Herb Kelleher, in San Antonio’s St. Anthony Club and drew a triangle on a cocktail napkin. And lo, the napkin begat an airline. Rollin, owner of a money-losing commuter airline, wanted to start an intrastate carrier so the airline wouldn’t fall under the aegis of the Civil Aeronautics Board. Hence the triangle. He labeled the corners “Dallas,” “Houston,” and “San Antonio”—The Golden Triangle of Texas.
2. A legend is an asset.
That cocktail napkin became a whiskey-stained version of the Magna Carta. It summed up the infant Company’s personality: informal, pragmatic, and a little bit naughty. Imagine if the airline had been formed by a dozen lawyers
in a Manhattan boardroom. Not the same thing. More important, Rollin and Herb recognized the drama. Here was the stuff of legend. Now all they had to do was form the most successful airline in history.
3. Hire a good lawyer.
The good news was, they already had a top-notch lawyer in Herb. A graduate of Wesleyan University and New York University Law School, he kept a law office in San Antonio. Herb was no stranger to litigation, which was a very good thing: he was about to face the litigation storm of his life.
4. Raise more money than you think you need. Now double it.
The partners—now four men, including Rollin’s brother-in-law and a businessman-politician named John Peace—figured they needed a quarter-million dollars just to start the Company. Herb decided to raise twice that amount. That was prescient; the lawsuits would ground the airline for another four years.
5. Crazy is no liability.
Not always, anyway. If an idea immediately sounds good, chances are someone—many people—thought of it already. Rollin had no idea how to raise the capital for his new airline. “Rollin,” Herb said, “you’re crazy. Let’s do it!”
39. Never rest on your laurels or you will get a thorn in your, um, butt.
We stole that almost verbatim from Herb. (Being Herb, he used spicier language.) Southwest continues to take that wisdom seriously. The just completed $1.4 billion purchase of AirTran gives the combined airline a powerful presence in Atlanta’s Hartsfield-Jackson International Airport, the world’s busiest. The acquisition also expands Southwest’s operations at Ronald Reagan Washington National Airport, New York’s LaGuardia, as well as in Charlotte and Memphis. Plus Miami, Des Moines, and Wichita. Southwest will enter 38 new airports, and is working to open AirTran’s international routes to its network.
The merger will fly more than 100 million Customers each year to more than 100 airports.
So much for resting on laurels.
40. It’s OK to be unprofitable for a year.
Just be sure to be profitable for at least the next 39.