Entrepreneurship and Innovation Lessons from Boise, Idaho

Boise, Idaho: Where Dreams Took Flight

In recent weeks, air travelers and aviation industry insiders have undoubtedly been following the unfolding saga of the burning battery packs that have led to the global grounding of all 787 Dreamliners, considered to be Boeing’s aircraft of the future. It is a disaster that might end up costing Boeing billions of dollars in compensation for its customer airlines.
I have previously written about how pursuing breakthrough innovations like the “Dreamliner” can easily lead to runaway projects that become extremely costly — both financially and strategically — for companies. I wrote that blog post hoping that Boeing had seen the last of its troubles with the Dreamliner, and was personally looking forward to fly on a 787, myself, some time soon.
I guess I will not mind waiting for a little bit more.
However, what I want to write about today, while still related to airlines and airplanes, is a story about the entrepreneurial daring and technical breakthroughs of the very first commercial airlines in the beginning of the last century. Not incidentally, it also involved two of the biggest players in the on-going 787 saga: Boeing and United Airlines, two companies whose histories were woven together from the start in the early days of aviation history.

A Very Special Place in Aviation History

Boise is able to boast it is the birthplace of two of the largest airlines in the United States, which have since merged to become the largest airline in the world — United Airlines. That may be somewhat surprising to consider as you walk through Boise’s modern, spacious, calm, and ordered single terminal airport. It feels as far away from the chaos and overcrowding of modern hubs like Chicago or Dallas as Boise is from those hubs by flight.
I only learned about Boise’s central role in the history of the airline industry recently, having just visited Boise to meet with our portfolio company Balihoo, an innovative leader in local marketing automation and a respected role model in the local startup community.
In 1925, aviation pioneer Walter Varney started Varney Air Lines and won the first private contract for airmail service in the United States, just as the Postal Service was taking away the US Army Air Corps’ mandate to carry all airmail in the country. On April 6, 1926, Varney Air Line’s chief pilot, Leon “Lee” Cuddleback, flew the first Contract Air Mail flight between Boise, Varney’s headquarters, and Pasco, Washington. This could be considered the beginning of modern commercial airline service,as we know it with regular flights between fixed destination on a fixed schedule.
Varney Air Lines later on became part of a much expanded Varney Air Group, which was then sold into William Boeing’s United Aircraft and Transport in 1930, an integrated aircraft manufacturing and airline holding corporation that was ultimately broken into United Airlines and Boeing in the 1930s.
In 1934, Walter Varney took his chances at building an airline again, this time founding Varney Speed Lines, focusing on airmail and passenger service in the American Southwest region. This company also took its first flights out of Boise, Idaho. Later on it was bought by Robert Six and eventually changed its name to Continental Airlines.
Thus, it was sort of a reunion of descendants when United and Continental merged again in 2011 to become the largest airline in the United States. Boise, having continuously been served by United Airlines service since 1933, could rightfully claim to be one of the birthplaces of modern commercial passenger air transportation.

Entrepreneurship and Innovation Lessons from Early Aviation Pioneers

The entrepreneurial spirit of the pioneering Varney Air Lines company was remarkable — they were trying to do something unprecedented and extremely risky. In 1926 aviation remained very much the reserve of the daredevils, the rich, and the military. The Army Air Corps handled airmail, flying was very dangerous, and there was yet to be a commercially viable airline.
The decision of the government to open up airmail services to private contractors was the impetus for commercial growth, much like some of the recent government-sponsored technological initiatives, but it still required enterprising owners and pilots to take up on these contracts and prove that there was a viable business in flying airplanes.
In a fascinating parallel to the starting up of the iconic technology and software companies we often hear about, Varney Air Lines started out with a few small, lightly-powered aircraft, just a few pilots (who had to convince their families that they were not crazy to accept the job), and what larger competitors considered to be the most undesirable niche.

Focus on an Underserved Niche Market

The designated route through Boise, CAM Route 5, was considered the least commercially viable route — flying over “cow towns” in the northwest frontier of the country.
Starting from a niche allowed Varney Air Lines to hone their craft and climb up the learning curve without having to deal with a major competitor. It also provided the company the opportunity to really figure out its business model, identify its customers segments, and determine the right type of business to support them.

Adapt and Pivot as Quickly as Possible

Like with all startups, the early days were not without drama and setbacks: the very first delivery Westbound was two days late, because the aircraft was forced to land 70 miles from its destination. The pilot had to borrow a horse from a nearby farm house and rode with the 300 pounds or so of letters to the destination post office.
Yet, Varney also demonstrated tremendous agility and responsiveness to the market, undergoing several major adjustments in what later startups would call “pivots” – they quickly upgraded their planes, started flying passengers, and expanded their routes, ultimately merging and growing into United Airlines.

Always Be Looking for the Next Opportunity

Later, when Varney started what would become Continental Airlines, he also targeted the American Southwest region as a starting point, another underserved market. Continental went on to pioneer lower fare strategies, adopting new aircraft technologies among many other innovations, growing to become the fourth largest airline in America before merging with United Airlines.
The stories of the airlines that started out in Boise and ended up dominating a large chunk of air transportation in the US is a great reminder of the lasting reward that daring entrepreneurship and mold-breaking innovation promises, even as we pause to consider the woes that Boeing is going through with its Dreamliner.
For even more history, illustrated by rare photography, please visits the few links below:
The history of the first private Contract Air Mail routes: http://www.aerodacious.com/ccCAM005.HTM
The history of United Airlines: http://www.uahf.org/united_history_01.asp, http://avstop.com/history/historyofairlines/united_airlines.htm
What innovation lessons can we learn from aviation’s more recent triumphs and struggles? Please share your thoughts in the comments below.