Part IThe Story
The Salesman in the Cockpit
In November 1932, a red and maroon biplane with its upper wing set oddly behind its lower one flew over a sod field on the edge of Wichita, Kansas, at 200 miles an hour, a speed no other cabin biplane of its size could approach. It came from a company that had existed for seven months, had no customers and was building its first airplane in space rented from a rival's shuttered factory. The man at the controls on the day it hit 200 was the company's president, Walter Herschel Beech. He was forty-one, and three years earlier he had been a paper millionaire. By then most of that fortune was stock in a conglomerate that had fallen to seventy-five cents a share.
Beech was not an engineer. He had left school around the sixth grade, taught himself to fly in Minneapolis and earned his Army wings as an enlisted sergeant after the First World War had already ended. What he had was a mechanic's feel for machines, a salesman's feel for buyers and a willingness to walk away from a comfortable job when the people above him refused to build the airplane he wanted. He did it twice. The first time produced Travel Air, which by 1928 built more airplanes than any other manufacturer in the United States. The second produced Beechcraft, whose Bonanza, first flown in 1945, is still being built today.
He also married his former secretary, Olive Ann Mellor, who kept the books, managed the bankers and, when illness took him out of the company for most of a year in 1940, ran it. The partnership is the other half of his story. Walter Beech sold airplanes and flew them. Olive Ann Beech made sure the company survived him.
By the Numbers
Walter Beech's Flight Log
1919Year he earned his wings as an Army enlisted aviator, at age 28
~$3.2MEstimated price Curtiss-Wright paid for Travel Air in 1929
1Airplanes Beech Aircraft had sold after its first 18 months
785Staggerwings built between 1932 and 1948
7,400+Military aircraft Beech Aircraft built during World War II
235 → 14,000Beech Aircraft employees in 1939 and at the wartime peak
Pulaski to Minneapolis
Walter Beech was born on January 30, 1891, on a farm near Pulaski, Tennessee, the younger of two sons of Cornelius and Tommie Ann Beech. His formal schooling was thin. The aviation historian Edward H. Phillips, who spent decades on the Beech records, concluded that he probably did not go beyond the fifth or sixth grade, and that he made up for it later by reading heavily, including dictionaries, to build his vocabulary. What he had early was mechanical aptitude. He repaired broken farm equipment, and family lore, preserved in the Beech papers at Wichita State University, has him building a glider as a boy out of materials that included his mother's new bedsheets. It did not fly.
Farming did not interest him. In 1911, at twenty, he left Tennessee for Minneapolis and a job with the White Motor Company as a journeyman automobile mechanic. He also trained as a chauffeur, and the garage assigned him to drive and maintain the Pierce-Arrow, Cadillac and Packard limousines of the Union Investment Company's senior management. The garage manager's reference letter, which Phillips found, called him "sober and industrious" and a first-class mechanic. It was an education in two things that would matter later: engines, and what wealthy men expected from an expensive machine.
Minneapolis is also where he started flying. With a friend he acquired a damaged Curtiss-type biplane, rebuilt it and taught himself to fly it. The Wichita State archive dates his first solo to July 11, 1914, and Phillips found local press reports that year of Beech making flights over the city. A story that White Motor sent him to France around 1915 to look after a fleet of Army trucks circulates in some accounts. Phillips was never able to confirm it.
Sergeant Beech
In August 1917, four months after the United States entered the war, Beech quit White Motor and enlisted in the Army Signal Corps, which then ran military aviation. Many later biographies, including some official ones, describe him as a wartime flight instructor. Phillips, working from Beech's service papers and a letter from the aircraft designer E.M. Laird, concluded that this was a myth. Beech was made a sergeant in November 1917, assigned to the 328th Aero Squadron at Kelly Field in San Antonio, and early in 1918 sent to the Signal Corps aviation school at Rich Field in Waco, Texas. There he ran engine overhaul and repair, keeping the Curtiss OX-5, Hispano-Suiza and Liberty engines of the school's Jennies and de Havillands running.
His commanding officer, Major John G. Whitesides, rated him an airplane motor expert. When the war ended in November 1918, White Motor told him his old job was waiting. He stayed in the Army instead, was promoted to sergeant first class in December, and in 1919 was selected for pilot training as an enlisted man. He took his first hour of dual instruction in a JN-4D on June 18, 1919, soloed on July 9 and was designated an Army enlisted aviator on October 27 after 52.5 hours of instruction. That autumn he was one of thirteen pilots who ferried 134 airplanes from Rich Field to Love Field in Dallas.
The postwar Signal Corps offered little chance of promotion, and Beech took his discharge in June 1920. Whitesides sent him off with a letter that Phillips quotes at length.
— Maj. John G. Whitesides, letter of reference for Sgt. Walter Beech, 1920He will make a success of any enterprise he may see fit to undertake.
For about a year Beech drifted through the itinerant aviation of the early 1920s, working briefly for an air taxi service and barnstorming across the Midwest. The market was flooded with war-surplus Jennies, and pilots were cheap.
Jake Moellendick's Test Pilot
In July 1921, Beech was hired in Wichita by Jacob Moellendick, an oilman who had put money into the Wichita Laird Airplane Company, builder of a three-seat biplane called the Swallow. According to Phillips, Moellendick hired him without the knowledge of Matty Laird, the company's designer. Laird later described the new man as a pilot of limited experience. He came to value him anyway. By 1922 Beech was manager of sales and ran operations at the flying field, and, by Phillips's account, he developed into an excellent salesman and demonstration pilot.
The job taught Beech how to sell an airplane to a skeptical buyer. The standard method was to fly it in public, and Beech entered and won a string of regional air races and meets in the Swallow. It also taught him what happens when an owner overrules his builders. Moellendick was, in Phillips's account, impetuous and domineering and fond of announcing plans the company could not pay for. Laird quit in October 1923 and went back to Chicago. The company became the Swallow Airplane Company, and Beech and a young draftsman named Lloyd Stearman designed an improved model, the New Swallow, which sold well.
Their next idea was to replace the Swallow's wooden fuselage with a frame of welded steel tubing, as Fokker had done in Germany during the war. Moellendick refused. As far as he was concerned the Swallow would stay wooden. By December 1924 Beech and Stearman had decided to leave. One or both of them went out to see Clyde Cessna, a pioneer flier who had built Wichita's first airplane and was farming near Rago, Kansas, and asked him to join them. Moellendick's company limped on for a few more years, until he stopped production to build an entry for the 1927 Dole air race to Hawaii. The airplane and its two crewmen disappeared over the Pacific, and the company went into receivership.
Three Partners and a Planing Mill
On January 26, 1925, the Wichita Eagle carried a small notice that a local businessman, Walter P. Innes Jr., had formed a company called Travel Air. Innes was president. By Phillips's reckoning, Cessna put in about $5,000 and his woodworking equipment, Beech about $5,000, and Stearman $700 and his drawings for a new three-seat biplane. Other accounts give slightly different sums. The company started in a cramped rented space about thirty feet square in downtown Wichita. When the aviation magazine Aviation reported the founding, it called Stearman a well-known aeronautical engineer, Cessna a pioneer flier and Beech merely a pilot in the Wichita area.
The Travel Air Model A flew in March 1925. It had the welded steel tube fuselage Moellendick had rejected, and, because there was no cheaper engine, a war-surplus Curtiss OX-5. Selling a new $3,500 biplane against surplus Jennies at half the price was hard. Beech sold the first one to a businessman in St. Louis. Travel Air sold nineteen airplanes in 1925, with sales of $54,936 and a net profit after taxes of $11,056, and forty-six in 1926.
In 1924 or 1925, depending on the source, the company also hired a secretary and bookkeeper named Olive Ann Mellor. She had been born on September 25, 1903, in Waverly, Kansas, had kept her own bank account at seven and at eleven was writing the checks to pay her family's bills. She had skipped high school for secretarial college in Wichita and worked as a bookkeeper at an electrical contracting firm. At Travel Air she handled correspondence, kept the books and did the banking, and she was soon office manager and Walter Beech's personal secretary.
Beech's job was to make the product famous. In 1926 he entered the second Ford Reliability Tour, a multi-state circuit of airfields meant to show that airplanes could keep a schedule. He won it in a specially equipped Travel Air biplane, with Brice Goldsborough of the Pioneer Instrument Company as navigator. The National Aviation Hall of Fame credits the pair with showing, during that tour, that instrument-guided flight through bad visibility was practical.
President of the Air Capital
In late 1926 Stearman left for California to start his own company. In January 1927 Cessna, who wanted to build cantilever-wing monoplanes the board would not approve, sold his shares and left too. Phillips found no evidence of bad blood between them. Beech was elected president in February 1927. One of his first acts was to wire the Department of Commerce in Washington and ask for an inspector. The Air Commerce Act of 1926 was about to bring federal licensing to pilots and aircraft, and Beech wanted Travel Air certified early rather than late.
The next two years were the best of the era. Before Cessna left, Beech had flown a cabin monoplane Cessna built on his own time and liked it. Travel Air developed it into the Type 5000, and in January 1927 National Air Transport ordered eight for $128,676. Early in 1927 Charles Lindbergh asked Travel Air to build him an airplane for a solo flight to Paris. Beech declined, but after Lindbergh's success in May orders flooded in. Beech also decided to build two Type 5000s for the Dole race from Oakland to Honolulu that August. Most of the other entrants crashed or were lost at sea. One of the Travel Airs, the Woolaroc, flown by Arthur Goebel with a Navy navigator, won the $25,000 first prize. That summer the company moved into a new factory on East Central Avenue, and by the end of 1927 it had delivered two hundred airplanes since its founding.
Beech's next product came out of market research. In 1928 he and his sales manager, O.G. Harned, surveyed hundreds of prospective buyers. The results showed a clear preference for an enclosed, heated cabin, an airplane that could serve as a flying office. The Type 6000 that followed had six seats, crank-down windows like a car and room for a desk and typewriter. Beech billed it as the Limousine of the Air and flew it on demonstration tours. When prospects complained that the prototype was too small to work in, he had production models made bigger. By 1929 orders for cabin monoplanes were overtaking open-cockpit biplanes.
Some of Travel Air's most famous work happened in spite of him. Beech preferred biplanes. Two engineers, Herbert Rawdon and Walter Burnham, designed a low-wing racing monoplane in their spare time, and the factory windows were painted over to keep it secret. The press called it the Mystery Ship. At the 1929 National Air Races in Cleveland, Doug Davis flew it to victory in the Thompson Cup, the first time a civilian racer had beaten the Army and Navy's best pursuit planes.
By then Wall Street had noticed Travel Air. At the start of 1929, Hayden, Stone and Company, which had ties to Wright Aeronautical, bought half the company. In March 1929 Travel Air set a monthly sales record of $300,000, and by June the factory was trying to turn out twenty-five airplanes a week. In August 1929 it merged into the new Curtiss-Wright Corporation, for a price Phillips reports that Wall Street estimated at $3.2 million. Beech's share was worth at least $1 million, most of it in Curtiss-Wright stock. When Wichita reporters asked him about his new wealth, he did not apologize.
— Walter Beech, to Wichita reporters, 1929, as quoted by Edward H. PhillipsI'm just a country boy. Go get a picture of me when I first came to Wichita. I've made good and I'm not afraid to say so.
Flying a Desk
The merger made Beech president of the Curtiss-Wright Airplane Company, the division responsible for commercial airplanes, and a vice president of the parent. It also moved him to a desk in New York, far from the factories in Wichita and St. Louis. On February 24, 1930, he married Olive Ann Mellor in Wichita, and she moved east with him. For two years she stayed out of business.
The stock market crash had already started to wreck the industry. American manufacturers built 1,937 commercial airplanes in 1930, 1,582 in 1931 and about 550 in 1932. Curtiss-Wright consolidated production in St. Louis, and Beech had the job of ordering the layoffs of the remaining workers at the East Central plant, many of them men he had hired. Curtiss-Wright pushed cheap light airplanes such as the CW-1 Junior. Beech thought the opening was elsewhere: a fast, comfortable cabin airplane with long range for the business executive, filling the gap between airliners and small sport planes.
In 1931 a young Curtiss-Wright engineer named Theodore Wells, one of the first graduates of Princeton's aeronautical engineering program, showed Beech sketches of a cabin biplane whose upper wing was set behind the lower one. The negative stagger gave the pilot an unusually clear view, and Wells expected speed near 200 miles an hour, a 1,000-mile range and a landing speed of 60. Beech took the design to Curtiss-Wright's management. They turned it down, reasoning that there would be little demand for an expensive five-seat biplane in a depression and that the company's future was in airliners.
By January 1932 Beech's Curtiss-Wright stock had fallen to seventy-five cents a share, and the company had lost $450,000 the year before. He had, however, kept a substantial amount of cash from the Travel Air sale. Early in March 1932 he resigned. He and Olive Ann went back to Wichita, where he told reporters he intended to conduct ambitious experiments that would revolutionize commercial aviation.
One Airplane in Eighteen Months
The Beech Aircraft Company opened on April 19, 1932, with Walter Beech as president, Ted Wells as vice president of engineering, the former Travel Air comptroller K.K. Shaul as treasurer and Olive Ann Beech as secretary. A Wichita investor, C.G. Yankey, also joined as a vice president. It was capitalized at $25,000. Curtiss-Wright would not let Beech use his old Travel Air plant, so he leased two buildings from the Cessna Aircraft Company, whose board had shut the factory in 1931 and locked out Clyde Cessna himself. Beech hired craftsmen from Travel Air, Cessna, Swallow and Stearman who knew woodworking, welding and sheet metal, and a test pilot, William "Pete" Hill.
The first airplane, the Model 17R, was a 420-horsepower cabin biplane with leather and mohair upholstery and a projected price of $15,000 to $18,000. As it neared completion, reporters asked how many had been sold. None had. Phillips dates the first flight to November 5, 1932. Other sources give November 4 or November 14. Hill flew it first, and a few days later Beech took it to 200 miles an hour. More than 1,500 people came to the Wichita airport to watch Hill dive it past the crowd.
Speed did not produce customers. The company then spent months fighting the Department of Commerce over certification. Wells was an intuitive designer rather than a numbers man, and inspectors kept finding errors in his stress analyses and demanding new calculations and tests. For a company with no revenue, every delay was expensive. By mid-1933 Beech Aircraft was close to insolvency. The rescue came from Tom Loffland of the Loffland Brothers oil drilling company in Tulsa, who bought the second Model 17R in June 1933 and used it to fly between drilling sites. Phillips's explanation of why anyone would buy an unproven airplane from a struggling startup in the depths of the Depression was simple: Walter Beech's reputation. As of September 1933, eighteen months after opening, Beech Aircraft had delivered exactly one airplane.
Beech and Wells drew the obvious conclusion. The 17R was a superb machine that almost nobody could afford. In 1934 they introduced the B17L, with retractable landing gear and a smaller engine, at about $8,000. It sold. Forty-eight were built by the end of 1936. In 1934 Beech also moved production into the old Travel Air buildings on East Central Avenue, which became Beechcraft's permanent home. In 1936 the company issued common stock and became the Beech Aircraft Corporation.
A Potato Race
In 1936 the Bendix Trophy, the transcontinental speed race from New York to Los Angeles, opened to women for the first time. Walter Beech was inclined to enter his C17R with Bill Ong, a company salesman and test pilot. Olive Ann argued that a woman winning in a Beechcraft would be worth far more. He agreed, and the company offered the airplane to Louise Thaden, whom Walter had helped start in aviation in 1927. She flew it with Blanche Noyes as co-pilot and navigator.
Their only fuel stop was Wichita, where Beech was waiting. When Thaden admitted she was cruising at 65 percent power, he exploded. In the version she later told, he asked whether she thought she was in a potato race and ordered her to open the engine up. She said she would, and did not. On September 4, 1936, they crossed the Los Angeles finish line in just under fifteen hours, about forty-five minutes ahead of Laura Ingalls, beating a field that included Amelia Earhart and the best male racing pilots in the country. They were the first women to win the Bendix. Beech, surprised, was generous in public.
— Walter Beech, on the 1936 Bendix Trophy win, as quoted by Edward H. PhillipsThose girls did a wonderful job and deserve every bit of praise they get.
When Thaden told him afterward that she had flown the whole race at cruise power, Phillips writes, Beech laughed until tears ran down his face, then told her the engine already had more than 1,200 hours on it. Thaden won the Harmon Trophy for the flight and went to work demonstrating Staggerwings. Other pilots added to the airplane's reputation. Jacqueline Cochran set a women's speed record of just under 204 miles an hour in a D17W and finished third in the 1937 Bendix.
With the Staggerwing finally selling, Wells designed a twin-engine, all-metal transport, the Model 18, which first flew in January 1937. It became the company's most important airplane. By 1938 Beech Aircraft's sales passed $1 million for the first time. The Staggerwing had problems too. Between 1938 and 1940 a series of fatal accidents, several involving pilots without instrument training flying into bad weather and some attributed to flutter of the ailerons and wings, damaged its reputation. Beech warned owners not to fly the airplane in instrument conditions, and the Civil Aeronautics Authority eventually required lead balance weights on the control surfaces and stiffer outboard wing panels.
The Year He Was Gone
In 1940 Beech Aircraft stopped commercial production to build military aircraft. Its order backlog rose from $22 million that year to $82 million in 1941. In June 1940 Walter Beech fell ill with encephalitis and was hospitalized for nearly a year, for part of that time in a coma. Olive Ann was in the same hospital, giving birth to their second daughter, Mary Lynn. Their first, Suzanne, had been born in 1937.
Accounts based on Dennis Farney's biography of the couple, The Barnstormer and the Lady, describe what happened next. Some executives began saying that Walter would not be coming back and that they were better suited to run the company. From her hospital bed, Olive Ann had a direct telephone line installed to the plant, called directors to meet her there and took charge. Fourteen men were dismissed. One of her first financial moves was to arrange millions of dollars in loans to pay for the retooling. The New York Times obituary of Olive Ann Beech in 1993 said she took full command during his illness and kept much of that control after he returned to work.
The war turned the small Wichita builder of business airplanes into a large defense contractor. Employment went from 235 in 1939 to more than 4,000 by 1942 and eventually 14,000. Beech Aircraft built more than 7,400 military airplanes, most of them variants of the Model 18: the C-45 transport, the AT-7 navigation trainer and the AT-11, which was used to teach bombardiers the Norden bombsight. According to the company's history, more than 90 percent of American bombardiers and navigators trained in military versions of the Model 18. The Army Air Forces also ordered 270 Staggerwings as the UC-43 Traveler and requisitioned more from private owners. The company received five Army-Navy "E" awards for production.
Bonanza
Beech knew that military orders would stop when the war did, and he spent part of the war preparing for it. He had Ted Wells start design studies for a four-seat, all-metal, low-wing monoplane that could carry a family or a traveling businessman at high speed for a fraction of the Staggerwing's price. Wells gave the project to the engineer Ralph Harmon and a small team. Harmon and Jerry Gordon argued for a V-shaped tail, which saved weight and drag, and wind-tunnel tests backed them. The Model 35 Bonanza first flew on December 22, 1945, with Vern Carstens at the controls, and was certified on March 25, 1947. The first ones sold for $7,975. The last Staggerwing, the G17S, cost about $29,000.
Beech also hedged. In late 1945 the company spent about $50,000 developing the Plainsman, a prototype car with an electric drive system derived from military truck work, in case the civil aircraft market failed to appear. It was abandoned in 1946 once new government orders came in. The aircraft market did appear. In 1947, according to the Wichita State history, Beech delivered nearly a thousand airplanes in eight months. The company kept building the civilian D18S, developed the T-34 Mentor trainer from the Bonanza's design in 1948, and flew the Twin Bonanza in 1949. The Staggerwing ended production in 1948 after 785 had been built.
The Bonanza was the airplane that outlived its founder. It stayed in continuous production in successive versions, and a descendant, the G36, is still built in Wichita under the Beechcraft name by Textron Aviation. It later earned a darker nickname, "the doctor killer," because wealthy owners with limited training kept crashing it, but it defined the fast single-engine private airplane for decades.
The Last Flight Plan
In 1949 Beech endowed a scholarship in aeronautical engineering at the University of Wichita. By 1950 the Korean War had brought another wave of military demand. On the night of November 29, 1950, he suffered a heart attack at a Wichita supper club and died shortly before midnight at St. Joseph's Hospital, according to the Associated Press. He was fifty-nine. Over his career he had logged more than 10,000 hours as a pilot and held Transport Pilot Certificate No. 534. Most of his employees called him Mr. Beech. At home, Phillips notes, Olive Ann called him Popper.
The board elected Olive Ann Beech president and chairman, making her the first woman to lead a major American aircraft company. She faced down another round of doubters, including, according to later accounts, Walter's own brother, whose resignation she forced. She financed the Korean War expansion, in which the payroll grew from about 2,500 to more than 13,000 in two years, and she ran the company for three decades, adding the Baron, the Queen Air and the King Air turboprop. In 1980 she sold Beech Aircraft to Raytheon and became its largest individual shareholder. She died in 1993.
Walter Beech was inducted into the National Aviation Hall of Fame in 1977, and Olive Ann was later inducted too, making them one of very few couples to receive that honor. The University of Wichita named a wind tunnel for him in 1951, and a Wichita elementary school carries his name. His real memorial is Wichita's claim to be the Air Capital of the World, which rests on the companies that came out of one rented space in 1925: Travel Air, and the three aircraft makers its founders went on to build under their own names.
Part IIThe Playbook
Walter Beech was a mechanic, pilot and salesman who became a manufacturer by necessity, and his methods came from the airfield more than the boardroom. He believed an airplane was sold in the air, that buyers would tell you what to build if you asked, and that a founder who could not get his design built by others should build it himself. He was also lucky in his partner, and he let her run the side of the business he was weakest at. The principles below come from what he did at Swallow, Travel Air and Beechcraft between 1921 and 1950.
The principles
- 1.Sell the machine by flying it in public.
- 2.Ask the buyer before you draw the airplane.
- 3.Leave when the owner vetoes the better design.
- 4.Put your own name and savings on the product.
- 5.Launch the flagship, then build the version people can afford.
- 6.Hire craftsmen who have already built what you need.
- 7.Treat the regulator as part of the build.
- 8.Let someone else's win prove the product.
- 9.Pair the showman with a treasurer.
- 10.Design the peacetime product while the war orders pay.
- 11.Retire a beloved product when its price stops making sense.
Principle 1
Sell the machine by flying it in public.
In the early 1920s a new airplane had to compete with war-surplus Jennies that sold for half the price. Beech's answer at Swallow and then Travel Air was to put the product where crowds and newspapers would see it: regional air meets, pylon races and, in 1926, the Ford Reliability Tour, which he won. A win in a public contest was evidence that a buyer could not get from a brochure, and it cost less than a sales force.
He kept doing it at Beechcraft. When the Model 17R first flew, he invited the public to the airport, and more than 1,500 people watched his test pilot dive it past the crowd. The Staggerwing's reputation was built by the Texaco Trophy, the Bendix and Jacqueline Cochran's speed records.
Tactic: Find the public test your customers already trust, such as a benchmark, a competition or a live demonstration, and enter your product in it before you spend money on advertising.
Principle 2
Ask the buyer before you draw the airplane.
The Type 6000 was designed from a survey. In 1928 Beech and his sales manager questioned hundreds of prospects and learned that business buyers wanted an enclosed, heated cabin they could work in. The airplane that followed had crank-down windows, removable seats and room for a desk. When early customers said the prototype was still too cramped to do business in, Beech had the production version enlarged before it was certified.
The result was that Travel Air moved from open biplanes to cabin monoplanes as the market did, rather than after it. The same idea shaped the Staggerwing and the Bonanza: a clear picture of the customer, the executive who flew himself, and what he would pay for. This is the discipline behind jobs to be done. Beech defined the job before he defined the airframe.
Tactic: Before committing to a design, ask a large sample of real prospects what they would use it for, and change the product when their answers contradict your prototype.
Principle 3
Leave when the owner vetoes the better design.
Beech walked out of two employers over the same issue. At Swallow in 1924, Jake Moellendick refused to switch from wooden to welded steel tube fuselages, and Beech and Stearman left to start Travel Air, whose first airplane used the steel tube frame. At Curtiss-Wright in 1932, management rejected Ted Wells's cabin biplane, and Beech resigned to build it himself.
Both departures were risky. The second came in the worst year of the Depression. In each case, though, the idea that was rejected became the basis of a company. Beech did not quit over pay or status. He quit when the people above him had closed off the product he believed the market wanted.
Tactic: When your organization rejects a design you are sure of, test the idea on outside customers or investors, and if they confirm it, take it and build it elsewhere.
Principle 4
Put your own name and savings on the product.
Beech Aircraft was capitalized with $25,000, and much of the money came from what Beech had kept from the Travel Air sale. His name was on the airplane and his wife was an officer of the company. When the business was near insolvency in 1933, the first customer who saved it bought mainly on Beech's personal reputation among oilmen and businessmen he had sold to before.
Having your own money at stake changes how you decide things. Beech could not pass off a failure as a corporate write-off, and customers knew it. The idea of skin in the game explains why buyers trusted a new company with no track record: its founder stood to lose everything if the airplane was bad.
Tactic: If you ask customers to take a risk on a new product, show them how much of your own money and reputation is at risk alongside theirs.
Principle 5
Launch the flagship, then build the version people can afford.
The Model 17R reached its speed targets and sold one copy in eighteen months. At $15,000 to $18,000 it was too expensive for the market of 1933. Beech and Wells did not abandon the design. They used it as proof of what the company could do and then built the B17L, with a smaller engine and retractable gear, for about $8,000. It sold, and forty-eight were built by the end of 1936.
The expensive airplane did its job. It won races and headlines and set the brand's standard for speed and finish. The cheaper model turned that reputation into revenue. Beech repeated the approach with a wide range of Staggerwing engine options, from modest Jacobs radials to 450-horsepower Pratt & Whitneys, so that one airframe could be sold at several prices.
Tactic: Use your most ambitious product to set the standard, then quickly offer a cheaper version on the same platform before your cash runs out.
Principle 6
Hire craftsmen who have already built what you need.
In April 1932 Beech had no factory, no product and no customers, but Wichita had plenty of idle, skilled aircraft workers. He hired former employees of Travel Air, Cessna, Swallow and Stearman who knew woodworking, welding and sheet metal. He also hired Wells, who had designed the airplane, and Shaul, who had been Travel Air's comptroller.
Because of those hires, a seven-month-old company could build a complex, hand-finished biplane that reached 200 miles an hour within days of its first flight. The Staggerwing was among the most labor-intensive single-engine airplanes ever made, and it could not have been built by people learning on the job.
Tactic: When starting fast, recruit people who have done the exact work before, even if they come from rivals or failed companies, and give them the hardest parts of the build.
Principle 7
Treat the regulator as part of the build.
Beech's record here is mixed, and the lesson comes from both sides. In 1927, as soon as he became president of Travel Air, he asked the Department of Commerce to send an inspector to certify his pilots and his factory. He understood that federal licensing was coming and that being certified early would help sell airplanes.
At Beechcraft he let it slip. Wells did not take stress analysis and paperwork seriously, inspectors kept finding errors, and the certification delays pushed the company toward insolvency before it had earned a dollar. Early B17 deliveries went out on temporary type certificates. The company had built an excellent airplane and nearly lost the business because the paperwork was not done.
Tactic: Put certification and compliance work on the critical path from the first week, and staff it with someone who is as rigorous about the documentation as the designers are about the product.
Principle 8
Let someone else's win prove the product.
Olive Ann Beech saw what her husband initially did not: a woman winning the 1936 Bendix in a stock Beechcraft would say more about the airplane than another victory by a factory test pilot. Louise Thaden and Blanche Noyes won at cruise power, in an engine with more than 1,200 hours on it, beating purpose-built racers. The result showed that the airplane was fast, reliable and easy enough to fly well.
Beech's reaction also matters. He had told Thaden to push harder, she ignored him, and she was right. He praised her in public and laughed about it afterward. An independent win carries weight because the manufacturer does not fully control it.
Tactic: Put your product in the hands of credible outside users in a demanding, public setting, and give them the freedom to use it their own way.
Principle 9
Pair the showman with a treasurer.
Walter Beech was a salesman, pilot and promoter. Olive Ann Beech kept the books, handled the banks and made the company's financial decisions. The division of labor started at Travel Air, where she rose from bookkeeper to office manager, and became formal at Beechcraft, where she was secretary-treasurer. When he was incapacitated in 1940, she was able to take over because she already knew the business in detail.
Many founders like Beech surround themselves with people like themselves. His partnership worked because it was not balanced that way. Her caution offset his appetite for risk, and her control of the money gave the company resilience when he was absent and after he died.
Tactic: If you are the company's promoter, give real financial authority to a partner who is more cautious than you, and make sure that partner knows the business well enough to run it without you.
Principle 10
Design the peacetime product while the war orders pay.
Beech Aircraft grew enormously on wartime contracts, and Beech knew those contracts would end abruptly. While the factory was building trainers and transports, he had Wells assign a team to a four-seat, all-metal private airplane. The Bonanza flew less than four months after Japan surrendered and was certified in March 1947, in time to meet the postwar demand for private flying.
He also kept a second option in reserve, the Plainsman car, and dropped it once aircraft orders returned. The planning meant the company did not have to invent a civilian business after its military one had already disappeared.
Tactic: While your biggest customer is still paying, fund a small team to build the product you will need when that customer leaves.
Principle 11
Retire a beloved product when its price stops making sense.
The Staggerwing was the airplane that made Beechcraft famous, and many pilots still consider it the most beautiful ever built. It was also enormously labor-intensive. By 1947 the G17S cost about $29,000, while the Bonanza, which carried four people at a similar speed, sold for $7,975. Beech built the last Staggerwings in 1948 and moved on.
Keeping the biplane would have satisfied loyal customers and the company's own sense of identity. The numbers pointed the other way. Knowing where a product sits in its product lifecycle means being willing to end a well-loved line when a successor serves the same customer better at a lower cost.
Tactic: Compare your flagship's cost and price with those of its likely replacement every year, and set a retirement date once the replacement does the same job for much less.
Free playbook
Get The Business Model Playbook
58 business models, one visual page each: how the money flows, the metrics that matter, and who runs it. Free when you join the Faster Than Normal email.
Free. No spam. Unsubscribe anytime.
Part IIIMaxims
- Reputation is working capital. In 1933 Beech had no track record as a company and nearly no cash, and his first sale came from a customer who trusted the man more than the balance sheet.
- Keep some wealth in cash. Most of his Travel Air fortune turned into Curtiss-Wright stock worth seventy-five cents a share, and the cash he had kept was what paid for Beechcraft.
- A corner office can end a builder's career. Beech left Curtiss-Wright because a vice presidency in New York had taken him away from the airplanes, and he preferred to risk failure.
- Finishing beats flat-out speed. Thaden won the Bendix at 65 percent power in a well-worn engine, against faster racers that broke down.
- Succession is settled before the emergency. Olive Ann could take over in 1940 because she had spent fifteen years learning the business at his side.
- Great engineering can be undone by bad arithmetic. The Staggerwing was an excellent airplane that nearly bankrupted its maker because the stress calculations kept failing inspection.
- Warn owners before the accident reports do. When Staggerwings began crashing in bad weather in 1938, Beech told owners not to fly them on instruments, two years before regulators imposed limits.
- Idle talent is a founder's opportunity. Former Travel Air hands, put out of work when Curtiss-Wright closed the Wichita plant, were among the craftsmen who built the first Beechcraft.
- Bad years make room for new entrants. Closed factories were easy to find in 1932, which let a brand-new company lease space from a shuttered rival and start building at once.
In Their Own Words
Walter always said that a company's financial strength determines its ability to maintain quality standards during difficult periods. We never compromised our standards to improve short-term profits.— Olive Ann Beech
Quality is never an accident. It is always the result of intelligent effort, skilled craftsmanship, and the determination to produce something superior.— Walter Beech
Our customers don't buy our least expensive airplane. They buy our best airplane, and they expect it to be worth every penny they pay for it.— Walter Beech
In aviation, there is no such thing as 'good enough.' There is only 'excellent' and 'unacceptable,' and the difference between them can be measured in lives.— Walter Beech
Every line of an airplane should serve a purpose. If it's beautiful and functional, you've achieved something worthwhile. If it's only beautiful, you've created a sculpture, not an aircraft.— Walter Beech
Innovation without purpose is merely novelty. True innovation solves real problems for real people in ways that create lasting value.— Walter Beech
The best aircraft design is one where every component works in harmony with every other component to achieve a common purpose: safe, efficient, and comfortable transportation.— Walter Beech
A successful business is built on the foundation of satisfied customers, dedicated employees, and unwavering principles. Remove any one of these elements, and the structure will collapse.— Walter Beech
Leadership is not about having all the answers. It's about asking the right questions and empowering others to find solutions.— Walter Beech
The most important decision a leader makes is choosing the people who will help carry out the vision. Everything else flows from that choice.— Walter Beech
Success in business requires the courage to make difficult decisions, the wisdom to learn from mistakes, and the persistence to continue when others give up.— Walter Beech
Olive Ann and I succeeded because we complemented each other's strengths and compensated for each other's weaknesses. Neither of us could have built this company alone.— Walter Beech
The best partnerships are built on mutual respect, shared values, and complementary skills. When these elements align, the result is greater than the sum of its parts.— Walter Beech
Trust is the foundation of all successful relationships, whether in marriage, business, or aviation. Without trust, nothing else matters.— Walter Beech
Aviation will transform American society in ways we can barely imagine. The airplane will make the world smaller and opportunities larger.— Walter Beech
Flying is not about conquering the sky; it's about working in harmony with the forces of nature to achieve something that seemed impossible just a generation ago.— Walter Beech
The future of aviation lies not in building faster or larger aircraft, but in building aircraft that are more reliable, more efficient, and more accessible to ordinary people.— Walter Beech
Every flight is a testament to human ingenuity and determination. We have learned to soar with the eagles, and in doing so, we have discovered new possibilities for human achievement.— Walter Beech
A company's true legacy is not measured in profits or production numbers, but in the lives it has touched and the standards it has maintained.— Walter Beech
The values that guide a company during good times will determine whether it survives during difficult times. Compromise those values, and you compromise everything.— Walter Beech
We are not just building airplanes; we are building a reputation that will outlast all of us. That reputation is our most valuable asset and our greatest responsibility.— Walter Beech
The airplane is not a luxury item for the wealthy few, but a practical tool that will revolutionize American business and commerce.— Walter Beech
The Beechcraft Staggerwing represents the most significant advance in private aircraft design since the end of the World War. Its combination of speed, comfort, and reliability establishes new standards for the industry.— Aviation Week, 1934
We don't build airplanes to meet a price point. We build them to meet a standard of excellence, and then we price them accordingly.— Walter Beech, 1950
