Archive | September, 2007

New Insights In the Quest for an All-Business-Class Domestic Airline

16 Sep

Virgin America InteriorIn the time time since writing an earlier post, “Domestic US All-Business-Class Airline?,” I have stumbled across some additional, interesting insights about the prospects for an all-business US airline. To quickly reiterate, in that post I proposed that a company like EOS or Silverjet, which offers business-class-only flights over the Atlantic, could be successful flying domestically within the US.

First off, I failed to point out in my previous post that some airlines have taken a similar, if not identical approach in the past. Midwest Airlines is effectively an all business class domestic carrier, and airlines like JetBlue and Frontier have tried to position themselves as premier economy airlines, with leather seats and seat-back entertainment systems.

Second, it is important to note that the recent boom in transatlantic business class airlines is likely to not only continue, but to increase in light of the upcoming March 2008 opening of the transatlantic market to new competition when the Open Skies Pact goes into effect. This will likely distract much attention from the domestic US market for the next year or two, as the existing business-class players focus their investments on expanding service between new, previously unserved markets.

Third, Richard Branson appears to have really set his sights on the US domestic airline market. Virgin is expected to enter the all-business-class fray with a new transatlantic option, competing with EOS, Silverjet, and the others. This, only months after Virgin American began service from San Francisco offering a new premium domestic option. Its flights are split like most traditional airlines with both economy and “first class” sections, but many new service innovations such as on-demand meals, custom MP3 music playlists, and a seatback entertainment system that even allows electronic chatting with fellow passengers.

Virgin American appears set to fill a niche for low-cost premium service, but doesn’t eliminate the attractiveness of a truly upscale business-class-only option, since that configuration offers advantages in terms of lightening-fast boarding, lower risk of screaming babies, and smaller planes that can fly to less congested regional airports.

Finally, I should point out that I am not the first to have thought about this. Steven Livett and Stephen Dubner over at Freakonomics wrote about this very opportunity just a few months ago. Similarly, Scott McCartney at the Wall Street Journal, author of the Middle Seat column, generated some interesting discussion on his forum a couple months ago about domestic opportunities when he wrote about L’Avion and Silverjet.

Have others already tried?

While I still believe United PS is the best example of the type of routes and target audience such an airline would target, MidWest Airlines (formerly Midwest Express) is an interesting case study. It offers a single, “premium” class of service that is close to traditional “business class” on most domestic carriers. They even bake fresh cookies onboard!

The airline is rated “tops” again and again by customers, and demonstrates that a niche player can indeed be successful in the airline industry. It recently fended off a hostile takeover bid by AirTran, whose efforts were blocked partially through grassroots objections by its customers.

But Midwest Airlines is still relatively small and doesn’t compete in all US markets. Interestingly, it doesn’t compete for most of the long-haul domestic routes like LA to New York and Seattle to Miami where I believe a business class airline has the greatest prospects. If a proposed purchase of the airline by private equity giant TPG Capital and Northwest Airlines goes through, however, this sort of move and expansion between more US airports might very well be in the cards.

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Earn My Tweets

15 Sep

Pyramids_Mitch I am falling in love with “status messages” and “tweets.” These handy little messages tell me what my friends are up to, in a simple, usable way. It’s the best way for me to stay up to date on the day-to-day life of my friends and family (yes, even my mom is on Twitter). Plus, they help me keep track of where on earth all my friends are at any given time. This weekend, for instance, while in Cairo, I discovered a fellow Georgetown alum and colleague was also visiting for the weekend because of his Facebook Status message.

The shame of the current system of status messages is that they are incompatible. I have at least three places where I could / want to update my status – Facebook, Google Talk, and Twitter (most of you probably have 6 or more), but have to update each manually. Why don’t these services talk to one another? I should be able to set an automated import of my twitter messages to Facebook the same way this post will be imported as a Facebook “note” when it is published. My Google Talk status message should change every time I change my Twitter message, but if I update Google, Twitter should change.

Two players stand to benefit most from an increasingly “open” system of status messages (in my world, at least): Facebook and Twitter. Twitter is already wide open (For instance I can import my twitter messages via RSS into my personal blog at mitchellwfox.com) and is the natural host platform. If status messages are like ripples in my social network pond, spreading quickly to all networks, Twitter is well positioned to be the “stone.”

Facebook stands to benefit because status messages will be ever-more current, and more constantly changing. Because of the network effect of social networking, Facebook is the obvious place for me to go for “one stop shopping” of status messages. My profile will be more current, and my friends might even spend an extra second or two on Facebook before logging off to read what my status message is. Multiply that by hundreds of friends…

Anyway, I may be way behind the curve here. Is there already a way to do this? If so, tell me what it is!

The Gluten-Free Niche

5 Sep

GlutenTwo years ago, my friend told me she couldn’t eat bread or drink beer, but that corn-tortilla-wrapped tacos were just fine. I did my best not to look at her like she was crazy.

Then last year I met a coworker with a similar ailment, and then just this summer, a new flatmate. That trend is telling, and apparently in-sync with the growing trend in diagnosis of “Gluten Intolerance” throughout the United States. As with any ailment, increasing prevalence or diagnosis of previously inexplicable symptoms leads to new business opportunities for those willing to customize their service and products to cater to the afflicted.

In July, The New York Times wrote about Risotteria, a descriptively-named restaurant in Greenwich Village with a menu that caters to the needs of the gluten intolerant (“For the Gluten-Averse, a Menu That Works“). The success of that restaurant would seem to be a harbinger of opportunity for restaurants and food-product manufacturers looking for a new niche audience to target. Indeed, many producers have already started to move to the scene.

It has become a popular dietary villain. Gluten-free foods are popping up on grocery-store shelves and restaurant menus, including those of national chains like P. F. Chang’s and Outback Steakhouse.

The diagnosis of Celiac’s Disease (the scientific name), an autoimmune disorder wherein sufferers have an adverse reaction to Gluten, a protein found in wheat, rye, and barley (read: bread and other baked goods, beer, and a whole host of things that use wheat flour as a thickening agent) is on the rise in the United States. The New York Times wrote in May about this trend, comparing it to the similar rise in lactose-intolerance in previous times (“Jury Is Still Out on Gluten, the Latest Dietary Villain“)

The prevalence in North America was previously estimated at about 1 in 3,000, but several studies published in the last three years indicate that it is closer to 1 in 100 — and 1 in 22 for those with risk factors like having an immediate relative with celiac disease.

Two or three restaurants and a few packaged foods, however, would seem to barely touch the surface of the trend that could lie ahead. Wrong Diagnosis puts the disease’s prevalence rate at 1 in 250 Americans, and according to the University of Chicago’s Celiac Disease Center, prevalence among otherwise healthy adults may be as high as 1 in 133.

Businesses can cater to the gluten intolerant through a variety of means. For the majority of the restaurants in the world, the option will be as simple as ensuring one or two items are suitable for those with Celiac’s Disease, and labeling them appropriately in the same way vegetarian options often are. In places where populations where disproportionately many “alternative” or “healthy” diners reside, such as San Francisco and Chicago, or where a particularly aggressive diagnoser has a clinic, there is likely a large enough customer base to support a restaurant dedicated to gluten-free items. The place to start would be to contact local support groups and physician specialists to get a better feel for the size of the opportunity.

And best of all, especially for the friends of the gluten-intolerant, it turns out that the food can be quite tasty. I ate at Risotteria while in New York last year, and found my shimp, pepper, and spinach risotto to be excellent. The gluten-free beer made from sorghum, on the other hand, was another matter entirely.

Previous Lives: Uphill and Down in San Francisco

4 Sep

Today I was trying to remember the mailing address for Monitor’s office in San Francisco, and googled “Monitor Group San Francisco.” With a bit of amusement, I realized that a BusinessWeek article written about me (well, more like BY me) about a year and a half ago is the third hit that comes up.

I figure it’s worth linking to the article from here to say “yes, that’s me” and smile to think about how much has changed since then.

“Consulting is a fun job with a tough work schedule,” says this Georgetown grad, who bikes the famous hills to work each day