Gogo: Internet for Private Jets - [Business Breakdowns, EP. 62]

5 snips

Jun 22, 2022

In this discussion, Oak Thorne, who has spearheaded Gogo's transformation for 20 years, delves into the premium in-flight internet landscape tailored for private jets. He shares insights from his leadership journey across various sectors, emphasizing Gogo's shift from analog roots to digital innovation. Topics include the technical evolution of air-to-ground technology, competitive dynamics with satellite providers, and the intricate business model sustaining high-margin service revenue. Oak also reflects on building a resilient team culture amidst industry challenges.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

ANECDOTE

GoGo's Journey

GoGo initially focused on business aviation, transitioned to commercial aviation around 2008, and returned to business aviation in 2020.
They started with analog cellular technology, shifted to satellite, and then back to air-to-ground (ATG) with licensed spectrum.

ANECDOTE

Oak Thorne's Background

Oak Thorne, GoGo's CEO, has led two other public companies, Commerce Clearinghouse and eCollege.
He successfully transitioned Commerce Clearinghouse into the digital age and sold it for three times its initial value.

INSIGHT

Business Aviation Focus

Business aviation primarily serves private travel at the higher end, not recreational flyers.
GoGo's business aviation operations have been exclusively focused on North America.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

I am @Compound248 and this is the next installment in our Business Breakdowns mini-series focused on Digital Infrastructure. In this episode, we will talk about a company that delivers that airbourne experience, Gogo. Known for its eponymous inflight WiFi service, Gogo is frequently misunderstood, having undergone a transformation to focus purely on the business, or private, aviation industry. It sells equipment that gets installed on a private aviation airplane, and then, in infrastructure like fashion, monetizes that equipment with high margin service revenue for decades. We’re fortunate to be joined by Oak Thorne, who has led Gogo for 20 years into the success it is today.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Show Notes

[00:04:02] - [First question] - Gogo’s history and how his history intersects with it

[00:08:03] - His background and what lead him to joining Gogo

[00:10:01] - A primary focus on US airlines and high-end air travel specifically

[00:12:33] - What the competitive landscape looks like today and how many planes they have

[00:14:15] - Whether the formerly unaddressable planes will make their way into their fleet

[00:16:04] - Their product offerings today and the differences between them

[00:19:26] - Overview of their business economics and their digital infrastructure

[00:21:31] - Unit economics and labor and install costs

[00:24:17] - CapEx, service revenue, and a projected 20% system growth

[00:25:55] - Cost structure margin on their recurring service revenue

[00:27:25] - Momentum of business growth year-over-year

[00:28:29] - How the ATG network actually works and how the 5G connection improves it

[00:30:44] - What portion of their business comes from aftermarket installations

[00:32:18] - Competitive nature of this sector and if someone could come after Gogo

[00:40:42] - Describing the differences between GeoSatellite and Elon’s Starlink

[00:46:19] - Reasons why Starlink might become a competitor

[00:48:56] - How Gogo’s 5G and global broadband product are offensive and defensive

[00:51:24] - Portion of new US delivery aviation planes built with in-flight WiFi solutions

[00:55:01] - How long he anticipates this growth runway to continue

[00:56:27] - Potential risks to Gogo from a legal and regulatory perspective

[00:59:50] - Cyclicality of their clients and suspended business periods

[01:04:57] - Two key lessons for others attempting to build and lead a company