“I don’t go into ventures to make a fortune. I do it because I’m not satisfied with the way others are doing business.”-Richard Branson
Richard Branson, a high-school dropout, is today one of the richest business bigwig s in the world. The founder and chairman of a leading business group, Virgin Group, his entrepreneurial achievements are unparalleled. Today, Virgin Group, which started off as a humble store selling music records called, Virgin Records, holds more than 400 companies. The company gradually expanded to Virgin Megastores, Virgin Atlantic Airways and many more. With a net worth of US$ 4 billion, he is said to be the 4th richest man in the United Kingdom and one of the most influential people around the world.
Richard Branson was born in Blackheath, London on the 18th of July, 1950. His father was a barrister. Branson attended Scaitcliffe School and later Stowe school. Suffering from dyslexia, Branson did not excel at studies; he was more interested in extracurricular activities, such as football and cricket. At the age of 15, he had started to try his first business ventures, which included trying to grow trees and another raising budgerigars. On one occasion, he was caught leaving the bedroom of the headmaster’s daughter, and Branson was expelled from school. This left him devastated and he wrote a suicide note, suggesting he couldn’t cope. When the note was discovered, he was forgiven; but failing at his studies, Branson left school at 16 becoming an early high school drop out.
Branson began his diverse entrepreneurial career in 1967 when he quit school at the age of 16 to start a magazine. Branson hoped his magazine, simply titled Student, would become a voice for young activists. When the first issue debuted in 1968, the headmaster of Stowe, where Branson had been a student, wrote Branson a rather prophetic note that said: “Congratulations, Branson. I predict you will either go to prison or become a millionaire.” Branson would eventually do both.
Then he hit upon the idea of selling records through the mail at discounted prices. Branson ran ads in Student and his mail-order record business soon became more lucrative than the magazine. To take full advantage of this newfound market, Branson rented an empty shop above a shoe store, put up a few shelves, recruited the staff of Student as employees, and opened a discount record store. They dubbed the store Virgin because everyone involved was a complete virgin at business.
With the opening of the Virgin record store, Branson seemed to be on his way. But he hit a major roadblock when strapped for cash, he concocted a scheme to avoid paying the British sales tax. The scam was quickly uncovered, and Branson was arrested and jailed. He negotiated an out-of-court settlement, agreeing to pay back the taxes over the next three years. Left a little wiser by the experience, Branson set out to turn his loosely run business into a company focused on and ruled by balance sheets.
Branson’s next entrepreneurial adventure began in 1973 when he formed Virgin Records and released Mike Oldfield’s “Tubular Bells.” The haunting instrumental became a worldwide hit and put Virgin Records on the map. But the company really took off in 1977, and Virgin Records flourished, to become the world’s largest independent record label with a stable of stars that included artists such as The Rolling Stones, Peter Gabriel, UB40, Steve Winwood and Paula Abdul.
Interestingly, by 1983 Branson’s empire encompassed more than 50 companies involved in everything from filmmaking to air conditioner cleaning and generating combined sales of more than $17 million. But according to Branson, money is not the driving force behind his varied business endeavours. Instead, his principal motive for expanding into new ventures is that he enjoys the challenge of trying to do something better than other people. And in 1984, Branson embarked on what would prove to be the biggest challenge of his life-Virgin Atlantic airlines.
Branson’s colleagues thought he was crazy. Starting a transatlantic airline would mean going up against the behemoth British Airways, which had already thoroughly trounced Freddy Laker when he attempted to enter this highly lucrative market. But Branson was undaunted. He felt the major airlines, especially British Airways, were no longer responsive to their customers’ needs, and he became convinced that if he started an airline that made travelling an affordable and enjoyable experience, he could beat them at their own game.
The initial response to Virgin Atlantic was tremendous. The airline became famous for its superior service and lavish amenities, which included in-flight massages, hydrotherapy baths, free ice cream during movies and seat-back video screens in every class. But the early 1990s would prove to be a turbulent era for the upstart airline. Economies were floundering worldwide. The price of airline fuel had more than doubled. And fewer people were travelling abroad due to fear of terrorist attacks. To make matters worse, in 1991, British Airways launched a secret campaign to drive Branson out of business.
By 1992, Virgin Atlantic’s financial situation was so shaky that Branson’s bankers forced him to sell Virgin Records to Thorn-EMI to raise enough cash to keep the airline flying. The sale generated nearly $1 billion, enough for Branson to pay off the bank and own Virgin Atlantic outright. But Branson was crushed at being forced to sell the music company he loved and vowed never to put himself at the mercy of bank lenders again.
However, to this end, he developed a new business approach, which he calls “branded venture capital.” This remarkable strategy has enabled Branson to launch a patchwork of businesses with minimal investment. The key to this strategy lies in licensing the highly regarded Virgin name. Basically, Branson manages the business and supplies the Virgin name, usually in exchange for a controlling interest, while his wealthy partners put up most of the cash. As a result of this strategy, Branson now owns or holds interests in more than 400 different companies.
In all, Richard Branson is a success story that has shown that hard work and vision will always be rewarding, in as much consistency is involved.