Thoughts on startups by investors that
fund them & entrepreneurs that run them

Market Opportunity From Customer Hostility, Exhibit 802.11: Airline WiFi

Entrepreneurship is often born of founders’ sheer frustration with the status quo.  One class of clear business opportunity, which wouldn’t exist in an ideal world, is created by the service that seemingly makes it as difficult as possible for potential paying customers to make it take their money.  This sort of chronic customer dissatifaction flies in the face of both common sense and economic theory, yet it persists in countless contexts.

When it comes to inefficient outcomes and dissatisfied customers, it’s hard to beat the U.S. domestic airline industry.  (In fact, it’s literally impossible; accordingly to a 2011 customer satisfaction survey, the airline business tied for last place out of 47 industries.)  Don’t get me wrong, I’m grateful to get online at 35,000 feet as I write this.  Yet in classic tone-deaf fashion, airlines have gone about implementing in-flight WiFi connectivity in such a customer-hostile fashion that it’s almost as if they’re competing vigorously to make things as difficult as possible for their most valuable customers:  Frequent business travelers who are motivated to pay for WiFi to stay productive even on relatively short flights.

As it turns out, the decision to charge for onboard WiFi at all cascades in ways that pile the infuriating on top of the frustrating on top of the absurd.  It seems inconceivable that this kind of “disservice” was deployed without any tests involving actual passengers, in much the same way that — judging by their design — many American car models at the nadir of the domestic auto industry in the late 1970s and ’80s made it to showrooms without apparently ever having been driven by actual car buyers.  (Thankfully, fierce international competition has changed that.)

Since I happen to be trapped on a Southwest Airlines flight as I write this, I will pick on SWA for the sake of convenience, but it’s worth noting the experience has been similarly dismal on other carriers if they offer WiFi at all.  (Among the ironies on my recent trip to the Middle East and Europe, most quick hops between domestic destinations had WiFi but the long transatlantic flights didn’t.)  I have nothing against Southwest:  It covers the routes I fly most often between Northern and Southern California and throughout the West; it serves smaller area airports (Oakland, San Jose, Burbank) that are more convenient and suffer fewer delays than massive, congested SFO and LAX; and flexible fares allow for unlimited last-minute changes without paying extortionate penalties.  For what it is (a budget carrier), Southwest regularly achieves some of the best customer satisfaction ratings in the business (which unfortunately isn’t saying much).

As a frequent flier, I’m a Southwest “A List” member.  As with any elite frequent traveler status, it’s earned through loyalty:  In this case, flying SWA at least 25 times in one year.  Among other things, A-List carries the significant benefit of being able to skip ahead of long airport security lines in the “Fly By Lane.”  I also often pay extra for Business Select tickets.  Today I happen to be doing that.  One would think the combination of being an A-Lister flying on a Business Select fare ought to be the textbook definition of “valuable customer.”  Indeed, Southwest rewards Business Select passengers with drink coupons good for one free alcoholic beverage per flight segment.  That’s two free drinks on this particular one-way trip from New York to California, a $10 value (although not worth suing over).

Nevertheless, Southwest charges $5 for in-flight Internet access, which starts to feel like nickel-and-diming.  It might make sense for weekend partiers heading from LA to Vegas on El Cheapo Web-Only Special fares, but doesn’t WiFi come free along with the peanuts since I paid substantially more for a Business Select fare?  Nope.  I can get free Jack in my Coke or Bailey’s in my coffee, but no free WiFi.

Lest readers think I’m a cheapskate, as you’ll see shortly, it’s not about the money but rather about the customer experience.  Thankfully, the login splash screen shows that WiFi access is complimentary for A-List Preferred members.  Hallelujah!  Good thing I have my nine-digit frequent flier number memorized.  Just enter it and — FAIL.  Denied access!  What gives?  Reading the fine print, WiFi is complimentary for A-List Preferred members.  Wait, what?  So I’m “A List” but not really A-List? I’ve never heard of “A List Preferred” before now.  I guess that means the “A List” is now the “B List?”  That’s news to me, and not in a good way.

Having wasted several good minutes of above-10,000-feet portable-electronic-device  working time, I’m resigned to paying $5 on the spot for access.  It’s worth it for a relatively long flight, particularly because I have both my laptop and iPad with me, so I can do work on the former and also load up on new music and reading material on the latter.  Plus, with a backup device, if the battery dies on one I can just switch to the other and keep working.  Oops, another FAIL.  Turns out the charge is $5 per device.  All of a sudden the price has doubled, or more likely, I’ll just do without one or the other.  Luckily, I can do without the iPad this time because the laptop is well charged.

Having gotten this far — or sunk this low — it’s time to fill in more than a dozen fields on the registration form, including credit card information to pay my $5.  Here’s where it really gets good:  Of course I remember my own email and snail mail addresses, but my credit card is stowed along with my briefcase in the overhead compartment.  Surely for Internet access they take PayPal or Google Wallet, which would solve this problem in about 30 seconds?  Nope.  Darn it!

Seated in the middle, I’m determined not to make the guy in the aisle seat move for such a stupid reason.  The laptop affords access to all of the right records if I can locate them and remember the password(s).  OK, here’s a PDF of a recent credit card bill — except most of the digits are redacted.  Foiled again!  On a mission now, I invoke the mysterious powers of a search tool and finally uncover electronic bill payment records that contain the actual full account number and expiration date of one of my cards.  Eureka!  Back to the WiFi registration page to select the type of card from a drop-down menu (which could be deduced from the account number alone, but never mind), fill in the 16-digit account number and four-digit expiration date, and now all I need is — wait for it — the three-digit CVV2 code from the back of the physical credit card.  This for a $5 purchase by someone who already (1) bought a plane ticket with full passenger identity information required by federal law; (2) made it past TSA and gate agent screening, (3) had to give a (redundant) street address and email address moments ago as part of the WiFi registration, (4) is currently trapped on an airplane, and (5) is trying (for crying out loud) to pay for a local, temporary service that can only be used on that plane on that day?  I’m guessing the losses from payment card fraud if Southwest were to omit the CVV2 code requirement would probably plummet from approximately 0% to 0%.

I didn’t make it this far to be stymied by a stupid CVV2 code.  Excuse me, Mr. Stranger-to-my-Left, can I dislodge you for a moment to get my credit card from overhead?  Thanks.  Sorry to disturb you.  OK, now I can finally complete registration to use one device of my choice for the remaining flight time before the flight crew starts haranguing everyone at the 10,000 foot mark of our descent.

Phew!  Never have I worked so hard to get a business to take such a small amount of money for something so trivial to them (assuming near-zero variable cost) yet valuable to me.  Given that I’m already registered and cookied on their site — as an “A List” member, no less — I should be able to save all this in a profile so I never have to do it again, right?  Nope.  No sign of any such option.  I get to look forward to all of this the next time I fly Southwest (if I ever do).

At least the financial pain is relatively modest compared to these headaches — and yet, as I hit the aptly named “Submit” button, it occurs to me that I’ve typed all of the following on a crisp, readable screen while two strangers sat about six inches from me the entire time: Full name, company name, mailing address, email address, frequent flier number, credit card type, credit card number, expiration date and CVV2 code.  Although the credit card digits are masked on the screen, they’re prominently displayed on the physical card itself that I pulled out to pay.  Even better, thanks to that dandy CVV2 code, I even had to turn over the card to read the numbers on the back!  The folks running should really change their focus; other than requiring a Social Security number, it’s hard to imagine much more of a giveaway to an aspiring identity thief in the aisle seat.  The highly publicized Apple-Amazon security breach reported by Wired‘s Mat Honan shows how much enterprising hackers can do with just a small subset of this information and good old “social engineering.”

All of the above isn’t mere venting.  I’m no UI/UX designer or product manager, but I do work with entrepreneurs daily.  Entrepreneurs building new products and services are passionate about them, wanting more than anything to beat the pants off the competition and dazzle potential customers with their creations such that they willingly part with their hard-earned money.  Well executed, the development and testing process yields the kind of product that Steve Jobs made famous at Apple — and that startups such as Square seek to replicate — that just works:  Simply, elegantly, effortlessly, or at least relatively painlessly.

The agonizing customer experience described above could be transformed from infuriating to satisfying with just a few basic steps:

  • Just make WiFi free for everyone on the plane.  If the airline is only charging $5, it’s so cheap already it can’t yield significant profit.
  • If you absolutely have to charge, at least make it free for all customers of every elite status (including mere A Listers) or traveling on every kind of premium ticket (full-fare or business) using a basic, bare-bones verification mechanism.  You are not granting access privileges to somebody’s numbered Swiss bank account or nuclear missile launch codes; it’s a purchase worth $5, only usable for a couple hours!
  • Link the WiFi registration to the airline’s own online reservation/check-in/frequent-flier program.  I just knew from the moment I first opened my laptop on a plane with WiFi (another carrier) that this would not be the case.  Of course it wouldn’t; that would make entirely too much sense.  These things are clumsily bolted on like homemade aftermarket car accessories.
  • If that’s just too complex a challenge for the state of the art in 2012, how about at least accepting PayPal?  I recently visited a Home Depot store that accepts PayPal for good old fashioned hardware purchases.  It provides all other information needed for checkout — those dozen-plus fields — by filling in only two, followed by a couple mouse clicks that don’t involve sharing a large volume of personal information in front of strangers at close quarters.
  • Remaining areas of improvement (of which there are many) are left as exercises for the reader.


On a customer (dis)satisfaction scale of 1–10, this experience scored a zero.  If it were a new service offered by a startup, I would never use it again, chalking it up to failure to do any customer development whatsoever before bringing it to market.  Unfortunately, customers don’t get much more “captive” than being confined in a cramped airplane seat for hours at 30,000 feet.

Postscript:  My laptop battery died with an hour to spare on this particularly long flight.  As Dave Barry would say, “I am not making this up.”  (I guess it wasn’t fully charged after all.)  That meant either paying another $5 and inputting a dozen-plus fields of registration information again for the iPad, or just giving up and perusing the SkyMall catalog.
This article is for general informational purposes only, not a substitute for professional legal advice. It does not result in the creation of an attorney-client relationship.

Written by Antone Johnson

user Antone Johnson Founding Principal,
Bottom Line Law Group

Antone is a business lawyer and executive advising technology and media companies, entrepreneurs and investors in corporate, commercial and intellectual property matters. Johnson is Founding Principal of Bottom Line Law Group, a business and IP law firm and was the former VP and head of worldwide legal affairs at eHarmony.

prev next

You might also be interested in

Co-founder Equity Split: A New Framework to Objectively Divide Startup Ownership and Get Back to Building a Business

We’ve just released our free Co-founder Equity Split tool. It’ll give you a fair and objective recommendation about how to divide your startup’s ownership, so you and your co-founders will have a sensible, real starting point for this notoriously hard, crucially important conversation.

Many startup founders find themselves lacking clarity and direction when it comes time to divide their

Read more >

From Accelerators to Venture Capital: What is best for your startup?

With startup growth up 61% since 2014 and more investment programs emerging, it can be overwhelming for founders to know just where to jump in. As the most startup-friendly accelerator on the planet, MassChallenge has helped 835 startup companies around the world, who have raised over $1.1 billion in funding and created over 6,500 jobs. We have seen startups at

Read more >

Valuation Part I: Peeling the Onion, or How Top Investors Value the Startups They Invest In

Update 2017: To help you understand how your startup will look to investors according to this methodology, we’ve created a fundraising feedback tool that will give you investor-level insight into your startup’s performance. In just about 15 minutes, it will tell you how much money your startup is likely to raise, where you can find that capital, and what to

Read more >

Starting a Startup as CTO / Head of Product

After less than a year, Glassbreakers is now a team of 10, we have thousands of active users on our free product, we’ve expanded into enterprises with paying customers and raised over a million in seed funding. After a few of my Glassbreaker matches inquired, I started to reflect on what it’s like to build a startup

Read more >

18 Ways to Make Your Financial Model Stand Out to Investors

The median investor looking at your proposal is in her 40s. Her eyes are going, not to mention her brain. I look at a lot of spreadsheets and analytic reports, and way too many are difficult to read and therefore hard to understand.

In an effort to make my life easier, I’ve summarized here the steps that will

Read more >


2 thoughts on “Market Opportunity From Customer Hostility, Exhibit 802.11: Airline WiFi”

  1. My head hurts just reading about your frustrating experience.

    I’ve had better luck with Gogo (n/a on Southwest) – it’s not perfect but they are definitely a step ahead.

    The airlines, in this case in-flight WiFi, are the classic cautionary tale.

  2. Darren says:

    I experienced some of the above this week on SW, and had slightly better luck (have my AMEX memorized, was only using one device, etc.), that was UNTIL I connected….

    The connection was slightly slower than dial-up circa 1997, and timed out trying to fetch e-mail and simple pages. I’m sure either someone was enjoying a movie or the plane was tethered to a really long phone line somehow.

    I am not sure if this makes sense for SW, but as an occasional traveler (every month or two) I would be willing to pay something, maybe $50/yr, to ensure B or better priority and decent wifi access (put it in the SW gates too, why not?) when I fly SW. More importantly, I’d be more inclined to travel on SW due to these amenities (the real upside for SW).

    Anyone listening?