by Jim Glab – Executive Travel – 03/01/05
John Guidon's company, Row 44 of Malibu, Calif., wants to keep you connected in the air by making broadband services—Internet access, messaging, cell phone communications, etc.—available at reasonable cost to both airlines and passengers. It's taking on some big competitors, but relies on innovative technology, low costs and a key partnership with an existing satellite giant to give itself the edge. Row 44 is a small but well-connected company that aims to become a major player in the coming in-flight communications revolution.
Tell me how Row 44 got started.
I'm an electrical engineer by training, born and raised in London. I came over here in 1984 as part of the Reagan defense build-up. As an electrical engineer, I've designed a lot of avionics, like inertial navigation units for fighter aircraft that go on carriers, that sort of thing. I started a microelectronics company that I ultimately sold to National Semiconductor; then I cast around for other things to do. And Row 44 is the most exciting thing I've found to date.
Row 44 got its start when my partner, Gregg Fialcowitz, was working with DirecTV and the affiliated company Hughes Network Systems (HNS) to explore distribution systems for broadband and television within apartment blocks. He became very familiar with their broadband technology, and it occurred to him the same satellite technology could be used to send broadband data to mobile platforms like airliners. He's not an engineer, so he came to me and said, "What do you think of this idea?" I said it sounded feasible, so together we pitched the idea to Dick Armstrong at HNS. He really liked it, so we did a six-month feasibility study to prove the physics would work.
So, before the deal with Hughes, Row 44 didn't exist?
That's correct. Row 44's primary value proposition is certainly integrated with Hughes. We only have three full-time employees and a range of consultants. Most of our activities will be subcontracted to specialty avionics companies. Row 44 will grow as its marketing, administrative and engineering needs grow, but it will probably never exceed 25 people.
So, you got your concept in the door at Hughes through your partner?
Yes. He was very well-known to a lot of high-level people at DirecTV and Hughes Network Systems because he had been trying to get this distribution system off the ground. He became very friendly with several of them, including Dick Armstrong, and this really caught their imagination. It was something they had considered doing themselves, but it's not really within the purview of their business plan. So, this was an opportunity for them to go ahead.
So, you came along at the right time with an idea they were already receptive to?
You can't beat that, can you?
Why did you call the company Row 44?
Years ago, I had been sitting in Row 44 in a DC-10, which was very unpleasant—a large engine above your head, the restrooms behind you, in a chair with limited legroom that wouldn't recline. So I thought, "What could we do for the guy in Row 44 to make his trip more pleasant?" And the name just stuck.
Some larger companies offer similar services, like Boeing and Tenzing. Why will yours succeed when their products have caught on only with a few foreign airlines?
The first reason is that our costs are extremely low. We have no fixed costs for our space (i.e., satellite) and back-office segments. To compete with us, you'd have to rent transponder space, arrange for a network operations facility, build a back office and all the support costs, all the billing systems. That's already in place for Hughes, which has hundreds of thousands of customers in the U.S. and many more worldwide. So, we're piggybacking on this existing infrastructure.
Our competitors are either dependent on far higher cost for the space segment, such as Inmarsat; or they've built their own infrastructure and have to pay for that as they go—that's going to be very expensive for a long time. It's only cheap to buy satellite time when you have an enormous amount of traffic going through the transponders so they're nearly full, and this is not the case in the foreseeable future for our competitors.
Another factor for success with the airlines is that our equipment is very light, small and minimally invasive to the plane. While a competing system might weigh 500–600 pounds, ours weighs 150. And our equipment doesn't require any racks of avionics within the plane. All our electronics are contained within our radome (a small dome with antennas and related equipment) that fits on top of the plane.
As for our equipment, our model is to absorb most of the cost of getting the airline into this business. We understand that airlines right now don't have money. The other thing is the connectivity—they won't have to rewire their planes because our connectivity is all wireless.
What will your service cost the passenger?
For broadband, we expect to charge $10 for connectivity on flights up to two hours, to a maximum of $20 on a very long flight. For cell phone roaming, we expect retail charges to be substantially less than 50 cents a minute. And messaging, BlackBerry and other services will be extremely inexpensive.
Which airlines do you expect to break in with?
We certainly will be adopted here in the mainland U.S. first—that's our initial market without question, because 30 percent of the world's flying happens here. We're having very late-stage discussions with a couple of large U.S. airlines and early-stage discussions with some low-cost carriers. The service should be up in its initial fleet of planes by the end of 2006.
Do you think the FAA will approve cell phone usage on planes, even though many passengers oppose it?
Yes. I think you'll see a period of adjustment where some airlines determine they don't want to provide that connectivity, and others realize that the benefits outweigh the concerns of passengers who don't want it. We may see some segregation either within the cabin or between airlines as to cell phone use. But if you speak to carriers in Europe, they're 100 percent gung-ho on having this. The cell phone is the single most pervasive business tool for the foreseeable future. We can't live without them, and this is just going to happen.
You're a pilot. Is that how you travel on business?
I'm a fairly inexperienced pilot—I only have 400 hours. I fly myself all over the immediately neighboring states, but I'm not about to jump into my little plane and fly to New York. It would take a very long time! I got into flying a few years ago after I sold the microelectronics company. That afforded me some level of freedom with what I wanted to do. I love flying. You're always learning, and it's a demanding but rewarding pastime.
What bothers you the most about commercial air travel?
The wasted time between when you leave your house and when the plane takes off—that can be several hours. And then you have to accommodate your schedule to the available flights, and to the price of those flights. I know air travel will be changing over the next 10 years, and hopefully it will become a lot more convenient.
What kind of technology do you take along when you travel?
I take my cell phone and one of my laptops. I recently acquired something called the OQO, a miniature laptop about five inches by four inches by one inch thick. It's a fully functional XP laptop with a hard disc and a wonderful display. It has WiFi and Bluetooth built in, and it slips in a pocket. I just love the product. The only problem is it takes a long time to get one. I also take my Treo 650. The Treo 650 has good functionality for email and so on, but it also acts as a broadband modem for the OQO if there's no WiFi available.
What advice would you offer someone with an idea for a new product, service or company?
Two things: Develop a very clear description that can be conveyed in 30 seconds of what your value proposition would be; and start networking—through friends, local businessmen or local academia—to find somebody that can help you move this thing forward, whether in perfecting the idea or putting "angel" money together. If you're in a salaried job, it may be hard to leave it. If you have bills and responsibilities, you have to address that issue. But you can do a lot before you quit that job.
I would never recommend that anybody just cut loose and let the chips land where they may. But having said that, if you're working on something that's your idea and you love the idea and it's your vision, you'll become so productive and so excited about it that you can't fail to do far better than you ever would by working for somebody else. I say follow your dream and never lose sight of it.