An Airline is certainly not a Startup business but a large scale business definitely gives entrepreneurs a deep understanding of business acumen, especially when there is a big failure. Since the bankruptcy of Go Air, there has been extensive discussion about the state of the Indian aviation industry. While the potential for growth and scale seems promising, with only 5 percent of the Indian population currently using flights for travel, past failures of Indian airlines such as Kingfisher Airlines, Deccan Airways, Sahara, and Jet Airways serve as management lessons for entrepreneurs.
What are the lessons for Startup entrepreneurs from the failures of Indian airlines?
Given the high failure rates in both the airline and Startup industries, there is much that entrepreneurs can learn from the aviation industry.
Lack of sufficient capital is one of the major reasons why Startups fail. Entrepreneurs must ensure that they have enough capital to cover their losses in the early years. They must also have a clear understanding of the capital required for their business and be prepared to multiply the capital requirement estimate and breakeven time by 3x.
Understanding the scalability of the business is crucial, particularly for large-scale businesses like airlines. Entrepreneurs must have negotiating acumen and must be able to deploy assets profitably. They must also understand the difference between the scale of business by nature and the scalability of business as a requirement.
Clarity of Mission
A clear mission statement helps entrepreneurs to have a clear sight on the path ahead. A business plan and blueprint must clearly identify the sources of competitive advantage, whether it is on the cost side, through differentiation, or both. A relentless focus on executing the mission is essential.
Timing is Key
The aviation industry is notorious for its tight margins and fierce competition. For Startups, timing is key. Entering a market too early or too late can have disastrous consequences. A Startup must be able to identify the right time to enter the market and be prepared to pivot if necessary. For example, the rise of low-cost carriers in India saw the likes of Indigo and SpiceJet successfully capture market share, while legacy carriers like Air India struggled to adapt.
Customer is King
In today's age, customers have more power than ever before. Startups must prioritize customer satisfaction and create an exceptional customer experience. In the case of Indian airlines, customers have increasingly become more discerning and value-driven. Offering affordable fares and a hassle-free experience has helped airlines like Indigo and SpiceJet attract a loyal customer base.
Technology has revolutionized the way airlines operate. Startups must leverage technology to streamline operations and enhance the customer experience. For example, online booking platforms, mobile check-in, and in-flight entertainment systems have become standard offerings for airlines. Embracing technology can help Startups differentiate themselves from competitors and stay ahead of the curve.
The Importance of Cost Control
For Startups, cost control is crucial. This means keeping a tight leash on expenses and being disciplined about spending. Airlines must constantly monitor and optimize costs, from fuel consumption to aircraft maintenance. Startups must have a robust cost control strategy in place, with regular audits to ensure they are operating efficiently.
Hire the Right Talent
The success of any Startup hinges on its team. Hiring the right talent is essential for startups to succeed. Airlines must hire experienced pilots, mechanics, and ground staff to ensure smooth operations. Startups must prioritize hiring the right people for key roles and invest in training and development to help them grow and succeed.
In today's rapidly changing business environment, agility is key. Startups must be able to pivot quickly in response to market changes and evolving customer needs. For airlines, this means being able to adapt to changing regulations, shifts in demand, and new competitors entering the market. Startups must have a culture of agility, with a willingness to experiment and take calculated risks.
Build Strong Partnerships
Partnerships can be a valuable tool for Startups, especially in the aviation industry. Airlines must build strong relationships with suppliers, vendors, and other stakeholders to ensure smooth operations. Startups must prioritize building strategic partnerships to help them grow and scale.
The Power of Branding
Branding is critical for Startups looking to differentiate themselves from competitors. Airlines like Indigo have successfully built a strong brand through a relentless focus on their mission and values. Startups must prioritize branding and marketing efforts to create a strong brand identity and connect with customers on a deeper level.
Learn from Failure
Finally, Startups must be willing to learn from failure. The aviation industry is no stranger to failure, with many airlines going bankrupt or being forced to merge. Startups must be prepared to face setbacks and learn from their mistakes to improve and grow. Failure can be a valuable learning experience and an opportunity for Startups to pivot and come back stronger.
Moral Of The Go First Bankruptcy Story
The failures of Go First offer several lessons for Startup entrepreneurs. These include the need for sufficient capital, scalability, clarity of mission, timing, prioritizing customer satisfaction, embracing technology, cost control, hiring the right talent, staying agile, building strong partnerships, the power of branding, and learning from failure. Entrepreneurs must understand these lessons and apply them to their businesses to increase their chances of success in today's rapidly changing business environment.