Otto successfully raced cars and motorcycles in various competitive events. He was also very active in the earliest days of aviation. On 10 April 1910 he obtained his pilot's licence on an "Aviatik" biplane (also he took over an agency for this aircraft). He founded the "Aeroplanbau Otto-Alberti" workshop (renamed "Gustav Otto Flugmaschinenfabrik" in 1911) at the Puchheim airfield. In 1910, Gustav designed and built a biplane which created a sensation throughout Germany. Otto, along with a few others, flew machines made of wood, wire, canvas and powered by Daimler aeroengines. Through their passion for flying machines, they helped transform aviation from a do-it-yourself hobby to an industry vital to the military, especially after the breakout of World War I.