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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.
Betsy Model
From the Print Edition:
Richard Branson, Sept/Oct 2007

(continued from page 1)

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.'"

Virgin Atlantic is now the second largest British long-haul airline and, not content with the skies over Britain, Virgin took over the country's two most run-down rail franchises in 1997, CrossCountry and the West Coast Main Line, and invested £2 billion in a fleet replacement program.

Since then, Branson has invested in other airline ventures around the globe, including Asia and Africa. In June, he launched Virgin Charter, an online bidding service for charter jet travel, and received FAA approval for Virgin America, a new U.S.-based airline that will offer discounted tickets to gateway cities throughout North America. That's big news for frequent business travelers, but it's the launching of an entirely different flight option that seems to garner Branson and the Virgin Group the most attention these days.

Some People Call Him the Space Cowboy…
In 1991, Branson registered the business name Virgin Galactic Airways in part, he says, because he simply liked the name and in part because he had a spacey little fantasy.

"I watched the moon landing [and] I was inspired by it," recalls Branson. "I assumed having seen the moon landing that I would be able to go into space in my lifetime—I was a teenager at the time—but, you know, decade by decade went by and NASA wasn't opening their doors to you and me. And so I thought, you know," Branson chuckles, "that NASA needed some competition."

Branson's dream was to be the first private company to offer consumers the opportunity for space travel and, in typical Branson style, he sat down to figure out how to make that dream a reality.

"I set off around the world to meet every zany mad scientist I could find who was into rocket and space technology—there were incredible contraptions, and one day I should write a book about them—but then finally came across Burt Rutan. He's a genius…the best engineering genius and space genius and aviation genius in the world. Burt was just in the developing stage of building Spaceship One [so] we offered to build [it] with him and watch the dream of flying SpaceShipOne. And now, using that technology, we're now building SpaceShipTwo, which is quite a bit bigger, and a year from now it will be on its first test flight. And 18 months from now my children [and my wife and I] and my parents, God willing, will go up in the first flight and it will be the start of an exciting new era in space travel."

Branson's eyes gleam every time he talks of space travel, and his demeanor is far closer to that of a small boy with a new model airplane—or rocket ship—than that of most business tycoons discussing a new venture. Of course, to Branson it's as much adventure as venture.

"The initial flight will go about 70 miles into space," Branson continues, "so basically, you'll take off [and] you'll go up to 60,000 feet. You'll be attached under the mother ship, drop away [and then] you'll have the biggest rush of your life from naught to 3.5 thousand mph in 10 seconds. In space you'll unbuckle and through enormous big windows you'll be able to float around and look back at the Earth."

Whether they go up in the actual flights or not, New Mexico voters are pretty enthused about Branson's plans; they've just voted in favor of a $150 million bond that will pay for part of the space port construction already under way in the state's southern region. That the space port's location is less than 40 miles from Roswell, the little town that just celebrated the 60th anniversary of an (alleged) alien spacecraft landing, and which drew tens of thousands of visitors from all over the globe for the anniversary festivities, isn't lost on Branson, and he chuckles at all the nicknames that immediately come to mind for his latest venture, names like Space Cadet, Space Cowboy, Space Monkey and Rocket Man.

On the other hand, in spite of the extraordinary investment required to launch the company—and the spaceships—Branson may, once again, be laughing all the way to the bank. With an estimated trip price of $200,000, more than 100 would-be passengers have already signed up and another 40,000 people have placed deposits on future trips. And Branson's already planning additional sources of revenue and business: launches of satellites, the build-out of small hotels in space ("with spas…zero gravity spas") and even the possibility of 30-minute commuter flights from New York to Australia.

When it's thrown back at him that he might just be creating the mother of all jet lag moments, Branson only smirks. "But it won't be jet lag," he counters, "it will be space lag! If we can just pop the spaceship up out of the Earth's atmosphere and straight back down again [then] the only problem will be the airports. You know, getting up to the gates!"

If much of Branson's enthusiasm for this next venture is visible—wide grins, hands slapping the table and his very nearly bouncing up and down in his chair as he describes some of the wilder possibilities—there's one aspect of Virgin Galactic that he's dead serious about: he's committed to making the flights as environmentally benign as possible.

"Did you know that the NASA spaceship uses up almost two weeks of New York's electricity supply when it goes up?" asks Branson. "Both our space flights and our satellite flights [will be] almost completely environmentally benign."

Branson only laughs when asked if a very, very large rubber band is involved, and instead begins talking seriously about his other two big passions at the moment: the environment and his commitment to finding alternatives to fossil fuel for transportation (including space transportation) and how environmental corporate responsibility is only part of what every company—and individual—should be doing for the good of the planet and its inhabitants. Especially those in developing countries.

Earlier this year, Branson shocked the world, including many of his business peers, with a public commitment to donate all the profits from his airline and rail interests for the next 10 years (an estimated $3 billion) toward finding alternative fuels and energy sources to curb global warming.

Much of the decision, Branson acknowledges, came about from an unexpected visit—an actual knocking at the door of his U.K. home—from Al Gore, who raised some uncomfortable questions. And, says Branson, some inconvenient truths.

"Al Gore came to England, he came to my house, said he wanted to see me and asked, Did I have a few hours for a long conversation? For the person that should have been president of America," Branson laughs, "I could find, you know, 10 hours.

"So he sits down, and this was before An Inconvenient Truth had come out, and he gives me a couple hours' lecture…told me about global warming. I knew, obviously, about global warming [in general terms], but he laid it out in a stark reality. At the end of the conversation he simply said that because I was well known, reportedly one of the best-known business leaders on a global basis, I could use myself to get out there, make a grand gesture and maybe get other people to follow."

Branson was sold, and the more he studied and the more he learned, he says, the more disappointed—and committed—he became to curbing global warming. Especially, he says, when it came to energizing the current White House administration to action.

"Europe is doing, I think, a lot better than America. I think the American people are getting it, but this administration has held things back for [seven] years. We desperately need leadership from America to tackle the problem and we need it quickly. Every year that goes by makes the problem worse. I think with good leadership, I think the business community is willing to participate."

Branson talked with other business leaders after his initial meeting with Gore and then he sat down to study. "When [Gore] left, I said I would think about what he'd had to say and see what I could do to help. And then the next three months I read a lot—a lot!—of books. I read Tim Flannery's The Weather Makers, I read all of James Lovelock's books: The Gaia Theory, and so on. And I got more and more worried about global warming."

Air travel, which contributes what experts estimate to be 2 to 3 percent of climate-changing carbon gases, is one of Branson's pet peeves…and pet projects. He's announced that, in a combined effort with Boeing and General Electric, Virgin Atlantic plans to fly at least one of its 747s using biofuel in 2008, a feat that most industry experts have said is at least 10 years off.

"I met with Ted Turner and he said he knew a group of fantastic people who are also concerned about global warming, and they gave me advice and information about alternative fuels and areas that we maybe should be looking at," explains Branson. "Then, about a week before the Clinton Initiative, I suddenly thought, 'Hang on a minute! I've got four airlines in different places in the world. I've got train companies. Why don't I make a really big gesture and just pledge 100 percent of the profits of these dirty industries over the next 10 years and invest, and try to come up with clean fuel?' You know, fuels that wouldn't damage the environment. Since then we've invested hundreds of millions of dollars in ethanol and butanol and isobutanol and solar and wind power and others [sources], trying to find the fuel of the future."

Together, Gore and Branson made yet another announcement regarding financial commitments to reduce global warming; this time it was in the form of the $25 million Virgin Earth Challenge, the largest science and technology prize ever offered. The contest, judged by some of the leading names in the science, space and environmental worlds, will be awarded to the individual or group that demonstrates a commercially viable design resulting in the net removal of atmospheric greenhouse gases, each year for 10 years, stabilizing the earth's climate.

If some are stunned—or skeptical—at Branson becoming such a knowledgeable and recognized voice on the complex issue of global warming in a relatively short period of time, compared to, say, some political leaders or entire administrations, Branson just shrugs.

"The way I start businesses is to immerse myself 100 percent for a few months. It's as if I've gone to college to learn everything there is to know about a particular industry, to listen and to learn."

Part of it, admits Branson, is his fascination with new things, but a lot of it has to do with the solid business sense he's brought to other aspects of his life. And, he says, part of it is also figuring out what you don't know and, through diligent research, figuring out who does.

"I've got [more than 200] businesses. If I have to pull away, I have to leave it up to chief executives to run it. So when they come to me and say, 'I really think that this is a breakthrough,' I can have a sensible conversation with them. If I just signed a check and said, 'Set up this business, just go ahead and set up' and, damn it, didn't realize the downside of corn-based ethanol in America or the fact that sugar-based ethanol in Brazil is six times more efficient than corn-based ethanol in America or that switch grass and willow trees could turn into cellulosic fuels…well, you get the picture!

"I think if you don't know the basics then you really shouldn't be going into an industry," he muses. "I'm sure good accountants can run businesses, but I think they're not going to be exceptional businesses. In our case, we're looking for the best scientists from all over the world…China, India, Australia, South Africa and America. Who's going to build the most efficient windmills? Who's going to come up with most advanced solar panels? Who's going to try to turn ethanol into cellulose ethanol [or] cellulose ethanol into butanol? Who's going to go from there to turn it into isobutanol? Who's going to come up [with] a fuel that's going to fly planes, and so on. I knew nothing about chemistry or physics or anything at school but I've learned, I've had a crash course in it and I think we've come across the best people in the world."

Branson, who was once quoted in his earliest years of business success as saying, "I believe in a benevolent dictatorship…as long as I'm the dictator!" has learned how to delegate and delegate well, and if an earlier comment about having managers prepared for "if I had to pull away" sounded casual, it's a subject that often comes up, directly or indirectly, with everyone from the business press and longtime investors to, one assumes, his family.

Inevitably over the last 20 years or so, Branson's PR pranks (such as water-skiing while being pulled by a blimp) and adventures involving high speeds, high altitudes or both (think boats, balloons and skydiving) have resulted in public and private contemplation about what would happen to a business conglomerate so thoroughly connected to its founder's personality should he…leave. Especially a founder who has, frequently, cheated death by the skin of his very white teeth. Branson hears the question so often it doesn't faze him in the slightest.

"Obviously, I do everything I can to try to avoid making mistakes, but I can sleep well at night if something goes wrong as long as I worked day and night to avoid it…I can then put it behind me and move onto the next thing. If I couldn't, I certainly wouldn't have this many companies! We've obviously made lots of mistakes…you try to learn from them and, fortunately, when it comes to ballooning and boating, they didn't cost me my life.

"It is impossible to run a business without taking risks," Branson says, "and Virgin would not be the company it is today if risks had not been taken. The very idea of entrepreneurship not only conjures up thoughts about starting up businesses and building them, but also the more frightening prospect of taking risks and failing. It's the last part that puts so many people off taking a leap into the unknown and working for themselves.

"Most importantly, management is about exactly what it says: 'managing.' To manage, you have to make decisions about people, events unfolding, and you usually have to spend money in order to make more. One of the sad realities of big business is that often people tend to forget the bit about making decisions, which is why so many large companies seem to suffer from inertia. One of the reasons that we run Virgin as a series of independent businesses is precisely to keep people focused on managing their individual companies and keep the decision process fluid. It's worked for us."


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