“The Virgin name is synonymous with experimentation and trying things”
— Richard Branson, The Telegraph, 2010
Earth, water and space. He has conquered them all. Sir Richard Branson, Chairman of Virgin Group, has introduced space jets for those who can afford the ticket price of $200,000, and of late, he is offering a $25,000 underwater ride that will propel tourists deep into the depths of the Caribbean Sea. Known as the Rebel Billionaire for his adventurous streak, from traveling the world in a hot air balloon to making the fastest Atlantic crossing, Branson has blazed a track record as a unique and colorful entrepreneur.
It wasn’t always so easy. Branson, the son of a barrister and a dancer, grew up fighting dyslexia and was academically weak. His struggles perhaps served to sharpen an already tenacious personality. Although lacking a formal business education, Branson displayed a penchant for business and a way with people early on in life. His budding business efforts involved growing fir trees and breeding pet parakeets, experiments that failed. Determined, Branson struck the right chord when he became the successful publisher of ‘Student’ magazine. And he was just sixteen.
In 1970, ‘Student’ began offering the chance to order music records cheaply through mail order delivery. Orders began flooding in, and Branson’s music career was born. A novice in the business world, he dubbed his new venture “Virgin”. Within seven short years, the engaging and persuasive Branson signed on renowned artists like the Rolling Stones and Phil Collins among others, establishing Virgin Music as one of the top six record companies in the world.
As Virgin Music climbed the success charts, Branson began looking to expand his business. A chance meeting with Randolph Fields, the founder of British Atlantic Airways, gave Branson the idea for his next push. Fields needed funding and Branson was ready to be the source. Eventually, Branson bought out Fields’ stake, re-launching the airline as Virgin Atlantic in 1984. Profits were registered in its maiden year.
The success of both his ventures, spurred Branson to branch out. During the 1990s, Branson extended the Virgin name to financial services (Virgin Direct), internet services (Virgin Net and Virgin Games), clothing (Virgin Rags), movies (Virgin Cinemas), and even beverages (Virgin Cola and Virgin Vodka).
Although luck favored Branson, it was not long before the rapid pace of expansion began to take its toll on Virgin Group’s finances. With the exception of Virgin Atlantic and Virgin Music, the other enterprises were showing signs of weariness. Virgin-branded soft drinks and vodka were failing and it was necessary to hive off the cinema theatres in the U.K. to UGC, a prominent European cinema operator. A cash-strapped Branson decided to focus on his airline, which consistently performed well. To keep Virgin Atlantic afloat, he reluctantly sold Virgin Music to Thorn-EMI for around $1 billion. With the sudden injection of cash, Branson upgraded his airplanes with luxurious accessories like seatback video screens and in-flight massages, which enlarged his customer base. Later, in a bid to raise more cash, Branson sold a 49% stake in Virgin Atlantic to Singapore Airlines for $960 million. By 2001, the Sunday Times Rich List estimated that Branson’s personal wealth had been trimmed down by more than half to $1.8 billion.
But Branson’s characteristic resolve kicked in. The ever-optimistic Branson fought back by debuting Virgin Active, a fitness club chain and Virgin Digital, an online music portal. “I’m not somebody who believes in money sitting on deposit in bank accounts. When I make money I reinvest it straight away in new ventures,” he boasted to the Sunday Telegraph.
This determination has appeared to have paid off. Since then, Branson has come a long way both personally and professionally. Branson received one of the U.K.’s most prestigious nods when he was knighted by Queen Elizabeth in 2000. Business-wise, it was the beginning of a good decade as well. Virgin Group continued its expansionary mode, adding on Virgin Comics and Virgin Health Bank, a stem cell storage venture. In 2008, Virgin Group, which consisted of more than 200 companies across 30 countries, recorded revenues of more than $17 billion. The group’s major businesses, including airlines and media, faced slower consumer demand during the global economic recession, but recovered by the end of 2009.
Yet, for Branson, who has always operated with a little notebook even in an extremely fast-paced digital age, life is not always about money. Branson admitted in an interview with the Financial Times that his priority is, “learning and trying to improve the world – not being rich.” In 2006, he announced he would invest $3 billion, including all profits from Virgin’s airlines, to further clean fuel and renewable energy research. The next year, Branson spearheaded the effort to form The Elders, an unofficial group including prominent leaders like Nelson Mandela and Desmond Tutu, which seeks to tackle some of the world’s most pressing problems such as poverty and climate change.
With such a checkered personality that fuses business, adventure and humanitarian concerns, Branson has attracted scores of admirers. Chief among them is Tony Fernandes, the Chairman of Air Asia, a high-flying budget airline based in South East Asia.
But Branson also has his critics. They point out that he lacks focus and has swept his arms too wide, diluting the Virgin brand. Yet it cannot be denied that the panache and playful attitude that Branson brings to an often staid business environment has indeed caught the world’s attention. When asked by the Financial Times how he wants to be remembered, he replied, “That I have made a difference.” Branson has arguably done so. And in style.
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© Thomas White International, Ltd. 2019