Richard Branson, one of the most exuberant and successful entrepreneurs of the last 50 years, stopped by our offices last week. As the conversation below suggests, one of his greatest strengths may be his ability to grasp all that’s thrilling and inspiring to people, be they his customers, his employees or anyone he happens to meet. The following has been edited for clarity and length.
Henry Blodget: Most management gurus preach the virtue of focus. They will say you have to focus on one thing, learn how to do it great, crush everybody else. How does Virgin succeed doing dozens of things in dozens of industries?
Richard Branson: It’s interesting. When we started diversifying from student magazines to records, from records to airlines, there were big headlines saying, “Will Branson’s balloon burst? He’s stretching the brand too far.” Fortunately, we ignored them. We built up what I would call a “Way of Life” brand, a brand that has overcome my frustrations in lots of different areas. I hated flying on other people’s airlines, so I thought we could create an airline that we enjoyed flying on. I was frustrated by the way the banking system works, so let’s create the friendly bank that I’d like to go to, and so on. And if we hadn’t done that, 50 years later, we would not be in business today. Because our original business was the record business. The record business has imploded, record shops have disappeared. So by diversifying, we’ve I think had the last laugh.
HB: But each of these businesses is very hard, very competitive. Even if you have a macro idea for a great airline, how do you actually execute it while then also building a space tourism company, a cola company and the many other companies that you’re doing?
RB: Let’s take Virgin Atlantic as an example. I was trying to fly from Puerto Rico to the Virgin Islands, and I got bumped off an American Airlines flight. I was desperate to get there. I had a beautiful lady waiting. So I went out, I hired a plane, I was 28 years old. Came back with a blackboard, wrote on it: Virgin Airlines, 29 dollars, one way. And I filled it with all the people who’d been bumped. When I got there, somebody said, “Sharpen up the service a bit and you might be in the airline business.”
I thought there was no point in going into the airline business unless we could be by far and away the best airline. We got one secondhand 747. We were competing with British Airways and about 18 other American carriers. And by creating something really special, we survived. In fact, every single one of the American carriers we were competing against disappeared, went bankrupt. And the reason for our survival was we just had magical stuff, we had magical service, and people enjoyed the experience with Virgin Atlantic.
HB: And how do you keep the focus over the years, while you turn your attention to other things?
RB: I learned very early on the art of delegation. The best bit of advice I think I can give to any manager of a company is find somebody better than yourself to do the day-to-day running. And then free yourself up to think about the bigger picture. By freeing myself up, I’ve been able to dream big and move Virgin forward into lots of different areas. And it’s made for a fascinating life.
HB: Fascinating! So what would your advice be for us? We started Business Insider seven years ago. We were very nearby, three of us writing in the loading dock of another company. It’s been very successful, 200 people now, but all these huge companies want to kill us. What’s your best advice for us — and for me?
RB: (Laughs.) I’m not sure you need any advice. The feedback I get is that you’re doing spectacularly well. When I arrived here, I saw five people and I thought, “God, how are they managing to achieve that with five people?” Then I came around the corner and there’s 200 other people. You’re offering a great service. People are tuning in. So continue to find great people, continue to do what you’re doing. And do it better than your rivals. I know that’s easier said than done, but you seem to be getting it bang on.
HB: You said that culture eats strategy for breakfast. In other words, it’s much more important to have a great company culture than the perfect strategy. Why is that, first of all, and then second, how do you build a great culture?
RB:Don’t take yourself too seriously. Realise that the people who are working with you, this is their life. You know, 80% of their time is spent at work. Make sure that they’re proud of what they’re doing, that they’re enjoying what they’re doing. I know it’s difficult to take 200 people out for a drink in the evening, but you know …
HB: We’re bringing the drinks in!
RB: Well, then occasionally maybe take them down to the pub, if you have a local pub. Make sure there’s time for partying, time for celebration. You’ve got a lot to celebrate about; share that celebration with your team. I’m sure you do, but you know, offer lots and lots of praise, bring out the best in people. Look for the best in people. People don’t need to be told when they have done something wrong — they know it.
If you look for the best, they will overcome their negative side and they don’t want to let you down. But if people are jumping down people’s throats all the time, in the end, they will just shrivel up like a flower shrivels up that’s not watered.
HB: How important is luck in building a great business?
RB: I think luck certainly plays a part in it, because there are lots of people out there who’ve worked enormously hard who haven’t been successful. But you know the old saying, by working hard, by making the right moves, you can create your own luck, I think. But certainly luck plays a part. I’ve been lucky to have survived balloon trips, boating trips, you know, a lot of rather foolish things in my life, so I was definitely born under a lucky star.
HB: Your friend Elon Musk had an interesting thing to say recently. “I like Richard but,” I think his exact quote was, “technology is not your whack.” He makes technology; you use technology to create better experiences. What do you think about that?
RB: Well, I hope we’re about to prove him wrong in that. I mean, I would not be able to change a sparking plug and I would not be able to fly a spaceship or build a rocket or whatever. But what I am good at doing is finding brilliant people and surrounding myself with brilliant people. And you know, before Christmas, we’ll start to go into space. Earylish next year, I’ll be going to space with my kid Sam. I would love to have my daughter, Holly, with me, but she’s pregnant. And then we’re going to start a whole new era of sending people to space.
We’re building our own spaceships shaped as aeroplanes. That means that one day we’ll be able to transport people across the earth in spaceships. We’re going to be able to put thousands of small satellites into space. So at the moment Elon and I are in different areas, but there will come a time, I’m sure, where we’ll overlap. He’s done something extraordinary — I think our team has done something extraordinary, as well.
HB:And are you scared to do that? Especially with your son?
RB: Oh, look, I’m not going to take Sam to space until we’re 100% sure that we’ve got it right. And that’s why the program has taken three years longer than we’d hoped. But we believe we’re there now. The rocket is performing beautifully. We have lots more test flights before we go. We’ll actually put the spaceship into space before the end of this year, where there’ll be a number of flights into space before I take him. But, I’m not going to put him up there or our customers up there until we really feel we’ve got it absolutely right.
HB: You mentioned the possibility of flying folks to different parts of the earth through space. Is that the ultimate goal here — it’s not tourism, it’s to build a trans-world transportation system?
RB: It’s both. There are millions of people out there who would love to become astronauts, who’d love to go to space — they’d love to look back at this wonderful world from space. That will be the engine that will enable us then to develop spaceships to transport people around the world at tremendous speeds in an environmentally friendly way.
HB: Everyone looks at your life, my goodness, it’s just one heroic success after another amazing accomplishment. Tell us about a time that you failed, and how did that make you feel?
RB: (Laughs.) I think our most notable failure was thinking that we could knock Coca-Cola into the number two position. For about a year, we thought we were going to pull it off. We launched Virgin Cola. We were outselling Coke and Pepsi in the UK. We thought we’ll bring it to America, we arrive with a Sherman tank. We went to Times Square. This was before 9/11. We’d rigged up the Coca-Cola sign in Times Square with what looked like explosives, lots of smoke and everything. And we fired the Sherman tank at it. Anyway, it was a good laugh. We rolled the tank over tons of coke cans; Coca-Cola was splashing everywhere. We were on a high. Anyway, Coke had bigger tanks. And our cola was not exceptionally better, and therefore we didn’t have that edge to deal with their counterattack. And suddenly Virgin Cola was disappearing from all the shelves, as retailers became very rich from Coke coming in, lavishing them with deals and resources.
So, the moral of the story is, if you do something, make sure it’s a hell of a lot better than your competitor, and when BA tried that trick with us, Virgin Atlantic survived. And it cost BA a lot of money. So, you know, quality in the end wins out, or should win out.
HB: So how did you feel when you realised Virgin Cola was dead, or was going to be?
RB: By then I had moved on to other projects. I think in life the key thing is just to fight really hard to make sure something survives. If it looks like you’ve done everything you can to avoid failure, just move forward, move on and learn from it. And that’s what we did then.
HB: Do you have any moments of self-recrimination or doubts or suddenly, “I thought that I was invincible and now I’ve been laid low,” or any moments where you have to pick yourself up, or is it just sort of “next thing”?
RB: No, honestly. People do not mind people who try things and fail. If you’re a good entrepreneur, you’re not going to succeed in every single thing you try. You’ve got to try to succeed at more things than fail, but the public doesn’t mind people who go out and take on the big companies. And if they fail in one, then move on in another one, in the end, you don’t lose their support and the brand doesn’t get damaged. I supposed I’m quite good at — you know, we have so many things happening — moving on and being positive.
HB: You recently stopped eating beef because cattle raising is very tough on the planet. Yet, you run an airline, which is one of the roughest things, as I understand it, for the environment. How do you balance that, and what do you think individuals should do? Pretty much everything we do is bad. How should we each change; how should businesses change?
RB: Yes, I was criticised by an environmentalist last week for expanding my airline at the same time I’m trying to address climate issues. The truth is that even the most avid environmentalist flies in aeroplanes to get to conferences to talk about saving the world. What is important is that we can try to balance our books and more. We’re working with a company called LanzaTech that’s based in New Zealand, and they have come up with a way of turning the waste product that goes out the chimneys of steel plants and aluminium plants into jet aviation fuels.
So rubbish that would otherwise be up in the sky goes through a process and comes out as jet aviation fuel, and Virgin Atlantic will be the first customer of LanzaTech. We’re working with other companies that are trying to create algae-based and isobutanol-based fuels for planes. That, to me, is the way to deal with this problem. Not to just have every plane grounded, because I don’t think it’s realistic.
HB: You seem to be very excited these days about little satellites. What’s the promise there?
RB: An array of little satellites around the world can make sure that the two and a half billion people who don’t have mobile phone access or Wi-Fi access or internet access will be able to get it.
An array of little satellites around the world can make sure that the two and a half billion people who don’t have mobile phone access or Wi-Fi access or Internet access will be able to get it.
And Virgin Galactic is unique in dealing with that, because little satellites will start falling out of the sky in five years’ time. So you’ve got 15,000 little satellites around the world, you’re going to get a call on a Tuesday and say five of the satellites have fallen out. Normally you’d have to wait a year for a big rocket to go up and disperse those satellites back to that place. With Virgin Galactic, we can just take off with two hours’ notice. Drop off those little satellites, send them into orbit, they will go to their respective places and replace them. So, there’s tremendous potential, I think, for Virgin Galactic to transform that sector.
HB: In addition to creating so many companies and non-profits, you have this amazing life of adventure. I think a lot of people who are running companies or in business feel like the answer is to work 18 hours a day, your competitor is trying to kill you, you need every minute that you can put into that. How do you do all this amazing stuff and still have time to fly across the Pacific, do all these other things that you do?
RB: By delegation. By knowing that if my balloon goes down tomorrow, I have a fantastic team of people who will keep Virgin on the road. I think the adventure side of me has helped give Virgin an adventurous brand feeling and put Virgin on the map on a global basis, which has really helped us be able to take Virgin into new areas.
It’s been great fun as well, and some people would say very foolish, because there were certainly some risky minutes in those adventures. But I’m a great believer that saying yes is a lot more fun than saying no.
HB: In addition to being the global ambassador for your brand, what is the primary work that you do? You conceive the idea, hire the best people, and then you step back?
I’m 64. So I’ll kite surf, I’ll play tennis, I’ll swim. If you’re feeling really good and fit, I think you can get two or three extra hours a day of hard work in as well.
RB: Yes. I’ll dive in when there’s problems. I’ll help put Virgin on the map on a global basis. I’ll help conceive new areas for Virgin to move into. And work pretty hard on all those areas. And then there’s the other side, which is important — you know, I’m 64 — that is to have fun, keep fit. So I’ll kite surf, I’ll play tennis, and I’ll swim, I’ll find enjoyable ways of keeping fit. And that doesn’t just apply to 64-year-olds — that should apply to 18-year-olds, 20-year-olds.
It’s really important to find an hour or two to a day to make sure that you keep healthy, keep fit. It’s very easy just to forget that aspect. And if you’re feeling really good and fit, I think you can get two or three extra hours a day of hard work in as well.
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