“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.”
Branson dropped out of school in 1967 at the age of 16 and started a magazine called Student. He hoped it would be a forum for politically-minded youth. He soon was publishing essays and interviews from such figures as Jean-Paul Sartre, James Baldwin, Alice Walker, and Robert Graves. Despite such a roster of great minds and literary figures, the magazine never made money and seemed bound to fail.
Starting the Business
Branson began marketing his next idea in the pages of Student; selling albums at a reduced rate through the mail. It rapidly became a more profitable business than the magazine itself. The staff of Student suddenly found themselves the employees of the Virgin discount record store. “Virgin” because no one had been in business before. Virgin had been going strongly but it was discovered Branson was dodging his tax payments. He was arrested and jailed.
Building an Empire
An out-of-court settlement was reached and, determined to keep the balance sheets carefully, Virgin Records was founded in 1973. Mike Oldfield’s progressive “Tubular Bells” was the first record released through Virgin and became an international success. But, it was the signing of the Sex Pistols to his label in 1977 that truly established Virgin Records. Though the Pistols broke up soon after, Virgin became the largest indie label in the world. Bands like the Rolling Stone, Peter Gabriel and UB40 were signed to Virgin.
Over the next six years, Branson started over fifty different companies encompassing everything from filmmaking to air conditioner cleaning. Though he was making more than $17 million dollars from his various companies collectively, Branson insists that money is not the motivation behind his involvement in so many ventures. Rather, he enjoys attempting to do something more effectively than those who have tried before him.
In 1984, Branson started Virgin Atlantic Airlines – a company that would prove to be a great challenge as well as the cause of financial distress. Branson ignored discouraging comments that told him he could never compete with British Airways, and to look to the example of those who had failed before. The reason being that he had observed how airline companies did not look after their customers adequately enough – so he would be the one to bring affordable and enjoyable flights to the public. Virgin Air was immediately recognized for its service and luxury. In-flight massages, hydrotherapy baths and seat-back video screens were all part of the experience on-board a Virgin aircraft.
With fuel prices having doubled in the early ’90s, terrorist attacks making people afraid to fly, and BA launching a campaign to put Branson out of the airline business, Virgin Atlantic struggled to stay afloat. Branson was forced to sell Virgin Records in order to raise enough money to keep Virgin Atlantic and pay off his creditors. The sale of the company that gave him his start was a crushing blow.
From this point on, Branson developed a new approach to business called “branded venture capital”. Through this method, Branson licenses the well-known Virgin name and logo in exchange for a controlling interest in the venture. Consequently, Branson has his company’s name fixed to more than 200 different companies, among which are Virgin Bridal, Virgin Publishing, a blimp company and a modeling agency.
Branson is known for his unusual business practices (no central headquarters, no board meetings, and he can’t operate a computer), his showy publicity stunts (like driving a tank into Times Square and buzzing over Big Ben in an Airbus jet), and his adventurous exploits (he was the first person to cross the Atlantic in a hot air balloon and has attempted three times to fly it around the world). It might be thought that such an approach to business could have ruined him, but Virgin is a towering $5 billion dollar giant. And Branson keeps dreaming for the future. In discussing the prospect of starting a shuttle service into space, Branson has said, “Why not? It’s virgin territory.”