The Virgin Knight
Sir Richard Branson's new world order: save the planet, save its people and keep an eye on things from above. Way, way above.
From the Print Edition:
Richard Branson, Sept/Oct 2007
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That Branson spends an inordinate amount of time at sea—literally, not figuratively—is undeniable. On his second attempt to set the transatlantic speed record (he sank his boat the first time out, in 1985), Branson and his crew set a world record the following year, in the Virgin Atlantic Challenger II. And on six separate occasions, Branson's been plucked out of the sea by a rescue helicopter following unexpected, uh, aquatic landings while attempting to set records for crossing oceans or circling the globe via hot air balloon.
If there are some among his countrymen or business peers who would suggest that Branson's hot air isn't relegated solely to balloon flights across vast expanses of land and sea, the entrepreneurial rogue couldn't seem to care less. White teeth flashing in a tanned face, eyes crinkled by either too much staring into the sun or at profitability spreadsheets for business ventures as diverse as commercial aviation and condoms, mobile phones and "banks" that store umbilical cords, Branson is the kind of man who is known for pulling off elaborate stunts involving army tanks, belly dancers, parachutes or God knows what else, in the firm belief that no publicity is bad publicity.
He is a knight—again, literally, not figuratively—since being knighted by the Prince of Wales in 1999, and if he's most often seen by the public in loose, flowing open-necked shirts, hands on hips and arms akimbo, with long hair blowing in the wind, well, what more could you expect from a globe-trotting fortune builder and adventurer. He's a rascal. A buccaneer. A swashbuckling gambler.
Branson is also quite definitely an alpha male in spite of the time that he dressed up in complete bridal drag, gown and all, to promote the launch of Virgin Bride, his chain of U.K.-based bridal stores. Not since actor Johnny Depp embodied Captain Jack Sparrow (channeling Keith Richards) in Pirates of the Caribbean have we seen a man wearing more makeup alongside a five o'clock shadow.
The charming Branson can spin a tale when it suits him; his is a natural Pied Piper-meets-Tom Sawyer-like ability to get people to happily stop whatever they're doing to paint his fence. Chase his hot air balloons across three continents. Buy a ticket to space.
He's a dyslexic entrepreneur who can unerringly read people and proposals, a high school dropout who learned his lessons—magna cum laude—by building businesses and brands one at a time over 40 years, and an incorrigible jokester who truly believes the punch line to the very best joke he's ever heard is…life.
A modern-day pirate? You bet. Bloody hell, the guy's even got his own private Caribbean island.
A Virgin by any Other Name
Everyone, it seems, has a Richard Branson story. His father, Ted, likes to tell stories of how, as a toddler, Richard was already the leader of a gang of 2- , 3- and 4-year-olds who routinely got into whatever mischief their diaper-wearing captain dreamed up.
There are stories of how his mother, Eve, once pulled her car off to the side of the road while driving to her parents' country farm and, more than two miles from the final destination, told 6-year-old Ricky to get out, find the rest of his way, and she'd meet him there. She kept an eye on him, of course, and little Ricky managed to make his way to the next-door neighbor's house without incident.
There are stories of how the headmaster at Stowe School gave his blessing to a 16-year-old Richard Branson and his parents, for Richard to drop out of school—something he'd never done before with any other student—and predicting that Branson would either become a millionaire or go to prison.
Whether business peers or business foes, budding entrepreneurs who aspire to Branson's legendary success or employees who happily take pay cuts to come work on the Good Ship Virgin, everyone seems to have a favorite story about Richard Branson. Some are about failures, some are about successes or, in the case of one of Branson's personal favorites, it involves what at first appears to be failure but winds up being wildly successful.
Contrary to what Branson groupies might like to think—and they exist in vast droves, as any recent popularity poll in the United Kingdom will tell you—the British Virgin Islands are not named after the Virgin Group and the British billionaire who founded it.
Still, fairly early on in the success of Virgin Records, Branson found himself in the BVI with a beautiful woman—Joan Templeman, who would ultimately become his wife and partner of more than 30 years and with whom he'd have two children—with inexpensive romance on his mind. Intent on wooing Joan, but cash-poor due to continually reinvesting all of the fledgling company's profits into new businesses, Branson had accepted a gratis trip down to the Caribbean under the pretense of being interested in buying an island.
After a few days of enjoying the hospitality of the real estate marketing firm that had flown them in, Branson found himself on a completely unimproved island—one large lump of volcanic rock and neckerberry bushes inhabited only by geckos—where he climbed to the top of the hill and realized that, aside from flinging his arms wide and yelling into the wind, "I'm captain of the world," he could genuinely, in real life, be captain of his own domain.
The problem was that he had no money, at least not ready cash. Student, the magazine that he'd launched after dropping out of school, had been successful for a few years before Branson realized that the real money was in taking out mail-order ads (in his own publication, natch) for record albums. The neophyte retailer—cheekily dubbing the company Virgin Records after his vast breadth of knowledge of both retailing and the music scene—then began a small chain of record stores in 1970 and, not content with his place in the music industry food chain, leveraged everything he owned in 1972 to buy an old manor house outside of Oxford, which he turned into a recording studio. Over the next couple of years, Virgin Records managed to find a few small bands and artists to sign—Branson always smiles as he tells this part of the story—with names like Mike Oldfield, the Sex Pistols, Culture Club, Simple Minds, Phil Collins, Genesis, the Eurythmics, UB40, ZZ Top, Belinda Carlisle, Janet Jackson, Peter Gabriel and, years later, the Rolling Stones.
So, successful on paper but broke, Branson found himself captivated by the allure of owning his own island and, standing there in the Caribbean sun, he took an impulsive shot. The asking price for Necker Island was £3 million; Branson offered £150,000—a sum that he would have had trouble coming up with as it was—and after sheepishly upping the offer to £200,000 to the broker's continued disgust, he was summarily flown off the island, back to his luggage, and encouraged to return to wherever he came from.
A few months later, having contacted the British lord who actually owned Necker, Branson learned that the owner was in financial straits and needed to sell; a little haggling later, including a commitment to putting infrastructure on the island within a specific period of time, and Branson had struck a deal with the owner, closing the deal for £180,000.
Still doubt that pirates don't recognize treasure when they see it? Necker Island has, in the ensuing years—and with a hefty investment by Branson—become not only a personal getaway for the Branson family but one of the most exclusive playground destinations for the rich and famous. With a weekly rental rate of $275,000, which includes the lovely collection of Cuban, Dominican and Honduran cigars available at the bar, the success of the property—now the lynchpin of what was to become Virgin Limited, a collection of luxury resorts—has spawned additional sites, including Ulusaba, a private game reserve in South Africa, and a kasbah in Morocco known as Kasbah Tamadot.
As is often the case with a Branson story, there's a second punch line to this joke. It seems that when the real estate broker summarily dismissed Branson from Necker Island following his lowball offer, Branson was also left to find his own flight home. Thoroughly disgusted with trying to get a commercial flight, and observing many others feeling the same way at the island airport in Tortola, Branson had an idea. An idea, you might say, with wings.
Flying the Unfriendly Skies
When routinely asked by budding entrepreneurs or business students about the fastest, surest way to become a millionaire, Branson likes to quip back, "become a billionaire and then start an airline."
Actually, Branson's only partly joking; after all, his first foray into commercial aviation happened on a whim. Hiring a private jet to get him back to Puerto Rico after his Caribbean jaunt, he took the time to count the number of other pissed-off travelers at the gate. After some quick math, Branson borrowed a blackboard, turned to the other passengers and wrote "Virgin Airways. $39 Single Flights to Puerto Rico" on it, and filled the seats. In the back of Branson's mind, a light had gone on. He could build a better airline.
"Look, the airline business 21 years ago was dreadful, and in some countries," he laughs, "it's still dreadful. You had a piece of chicken dumped in your lap if you were lucky, the seats were uncomfortable, the stewardesses and stewards never smiled…they obviously weren't happy in their jobs and they weren't happy with the tools that they were given. I spent a lot of time on planes because I had a record company, so I rang Boeing and I said, 'My name's Richard Branson and I'd like to buy a secondhand 747.'"
Ultimately, Branson was to negotiate an even better deal with Boeing—a lease with a guaranteed return policy—but first, the person at the other end of the aviation giant's phone line had to figure out who the hell this upstart Brit was, calling out of the blue.
"They said, 'Who are you again? What did you say your company is called?' and I said, 'Virgin. Virgin Records. You know, the people who brought you the Sex Pistols.' To their credit," Branson continues, laughing, "they said, 'Look, we'll give you a go as long as, unlike your name, your airline's going to go the whole way.'"
Virgin Atlantic went airborne—literally—in 1984 and while "going the whole way" was certainly Branson's intention, starting out with a single, used 747 did nothing more than amuse the rival airlines serving London and New York at the time, including PSA and British Airways. Laker Air, the discount airline started by one of Branson's business idols, Sir Freddie Laker, had gone bust not long before and People's Express was soon to follow.
Virgin Atlantic began to gain notice from its rivals, though, when its sold-out flights and snappy, tongue-in-cheek marketing efforts began to eat into their sales. Normally boring, cookie-cutter transatlantic flights were suddenly fun again with the addition of sleeper chairs, fine cuisine and flight attendants hired for their smiles and sass appeal. By the time Virgin Atlantic began gaining creditability, additional planes and additional arrival gates—not to mention the media stories about in-flight neck massages and passengers having pajama parties at the stand-up bar in first class—one rival in particular, British Airways, had had enough.
In what was ultimately to become a case study for MBA students the world over on the subject of corporate dirty tricks, British Airways declared war on Virgin Atlantic. The battle played out in the international media, and, later, the courts: a David versus Goliath story that spawned numerous film documentaries and nonfiction books. Tales of how British Airways hacked into Virgin Atlantic's computer database, stole passenger data and either cancelled its flights or rerouted them to British Airways flights were told from one side, as rumors of Branson missteps and of how Virgin Atlantic, the underdog, was financially insolvent were told from the other.
Richard Branson as underdog? If so, not for long. Remember, it's always the smaller dogs that circle around to bite you in the arse.
As he began to lose customers on flights that had once been sold out, Branson doubled his efforts, dipping into the profits generated by other Virgin Group companies to cover the airline's losses. He also began digging in his heels.
Determined to save his airline and wanting British Airways to pay, Branson, the pirate, began returning cannon fire. He sued BA for libel and slander, accused the company of corporate misdeeds including espionage—which internal documents at BA proved—and, to fund both the airline and his court battle, sold his beloved Virgin Records to EMI in 1992. The difficult decision—and billion-dollar cash influx—was, in hindsight, the wise business choice. Virgin Atlantic was successful in the court battle, winning damages that were nearly equal to what had come in from selling the record company, and also wresting a public apology from the U.K.'s largest airline.
Just Lie Back and Think of England
"Screw it, let's do it" is a favorite saying of Branson's when it comes to business decisions, so much so that the man dubbed "Dr. Yes" by Virgin staff used it as the title of one his books on life lessons for the business world. Still, Branson acknowledges that launching an airline and fighting to ensure its survival against much bigger competitors was a major gamble in his professional life, although, frankly, not unlike some of the risks he's taken in his personal life. And some of these risks, he admits, grinning, were taken concurrently.
"Look, I love a challenge. And you know, there's an adventurous streak in us all and, I think, and in British people in particular. You look at the history of Britain…we got Scott [a distant relative of Branson's] to the Antarctic. We had Drake. We've got people who really like to sort of see what they're capable of and push, push the limits. And so if somebody comes along to me and says, 'I guess we could maybe wrest the Blue Riband [sailing trophy] off the Americans, who have held it for a number of years for crossing the Atlantic,' well, you know, we'll give it a go!"
The same rule applied, Branson says, when Swedish pilot and balloon designer Pers Lindstrom first approached him about funding the design of a balloon that would cross the ocean in jet streams that could reach up to 300 mph. Sure, said Branson, if he could fly along on the trip. Well, first, Branson admits, he asked Lindstrom what he thought was a deciding-factor question about the risks involved.
"I asked him if he was a father, if he had any children. He said yes, and he was obviously willing to do it. That was enough for me.'"
Branson pauses for a minute before continuing. "Now, the consequence of all that was that I've been pulled out of the sea six times by helicopters, and I remember before the first crossing of the Atlantic by boat, somebody said, 'What if the boat sinks? You've just started an airline. It's not going to look very good if you go [down at sea],'" Branson says with a sigh. "About three weeks later I was picked up by a banana boat out at sea heading back to Jamaica. My boat had sunk and I looked out to see the Virgin sign on the spit of the boat still sticking out of the water. The airline [Virgin Atlantic] put a full-page ad in [the paper] the next day," Branson laughs, "saying, 'Next time, Richard, there really is another way to cross the Atlantic.'"
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