Virgin – the power of the brandOne Tuesday afternoon in December 2000, Sir Richard Branson, billionaire and founder of Virgin Records, sat in his bedroom in his house in west London. He was too nervous to walk downstairs to his office, where John Jackson, a leading figure in Branson’s People’s Lottery bid, was waiting by the fax machine.
   At 4:01 p.m. the news came that Branson had failed to win the licence to run Britain’s national lottery.
   Downstairs, family, journalists and People’s Lottery staff were filling up their champagne glasses, ready to toast Branson and his lottery success. But then someone whispered that the People’s Lottery had lost the licence to the incumbent, Camelot. A case of champagne crashed to the floor and members of staff began to cry. What was to be a celebratory party suddenly turned into a wake.
   Lesser men would have given up, but Branson’s message, left on the mobile phone of Camelot’s chief executive, illustrates his indefatigable optimism. “Don’t feel too sorry for me,” he said in his message to Dianne Thompson. “I’ve just stepped outside, and the view is wonderful.” Within days he was announcing a non-profit-making game to rival the National Lottery.
   Not surprising, really. After all, this is the man who has fallen several times from the sky in a balloon, and who nearly drowned in 1985 when his speedboat sank in an attempt to win the Blue Riband. The following year he and his crew were back to take the prize for the fastest Atlantic crossing.
   Branson’s childhood was a happy one. His father, Ted, a lawyer, provided quiet encouragement, while his vivacious mother, Eve, instilled a love of adventure in Branson and his two siblings. “She wouldn’t let us watch television,” Branson recalls. “She would say, ‘Be a doer!’”
   School was a nightmare for Branson. His dyslexia embarrassed him, and mathematics only became real to him when at 12 he applied it to his first business effort. He planted thousands of tree seedlings, convinced he would make a killing selling Christmas trees. (He didn’t. Rabbits ate them.) He left school at l7 with poor exam results and his headmaster’s words ringing in his ears, “Richard, you will either go to prison or become a millionaire.”
   The headmaster had undoubtedly noted Branson’s success in 1968 at publishing a magazine called Student, which he continued to produce after leaving school. Frustrated with the rigidity of school rules and regulations, and witnessing the energy of student activism in the late ’60s, Branson decided to launch his own student newspaper. His persistent badgering of celebrities to appear in the magazine paid off and Student outclassed its rivals. His ambition to be a journalist was pushed aside to keep the magazine afloat. “Later it became apparent to me that the business could be a creative enterprise in itself. If you publish a magazine, you’re trying to create something that is original…. Above all, you want to create something that you are proud of. That has always been my philosophy of business,” he wrote in his autobiography, Losing my Virginity.
   In 1971, Branson sold records cheaply by running ads in Student for mail-order delivery. The tiny magazine office was soon flooded with orders, and the first Virgin record store quickly followed. The rest is history.

At 50, Branson has amassed a billion-dollar fortune by doing things that are frowned on by business strategists. He has resisted corporate sprawl, preferring to keep his businesses operationally small. He has stamped the Virgin logo on mobile phones, condoms, weddings, computer games, restaurants, hotels and more. He targets well-established industries with entrenched competitors – airlines, records, retailing – and then attacks head on. In the process Britain’s quixotic tycoon attracts huge amounts of publicity from an assortment of daredevil stunts – and by just being himself. Little wonder it’s a standing joke among Virgin executives that they’re paid to curb some of their boss’s wilder ideas. “Richard comes up with ideas, and we say, ‘Down, Richard,’” joked Virgin Atlantic CEO Steve Ridgeway in a Business Week interview.
    “He takes tremendous risk without fear of failure,” says Manhattan entertainment lawyer, Elliot Hoffman, who helped Branson set up Virgin Records in the United States. “For the most part, his risks have paid off handsomely. He has an ‘I can do it’ attitude. For Richard, life is not a dress rehearsal. It’s the real thing.”
    As one financial commentator recently remarked, “Virgin usually wins because Branson can do the mundane spectacularly well and because he has an almost unerring ability to connect with consumers, particularly younger ones. Those business instincts are matched by an ability to motivate people who work for him.” And who wouldn’t want to? Branson makes sure everybody at Virgin is having as much fun as he is. “A product or service must add a sense of fun or cheekiness,” he says.” We have found that people react much better to this than to the predictably straight propositions of many competitors, even in some things as dry as financial services.”
   Despite the bravado, Branson is as traditional as an English high tea when it comes to the most critical and central asset of his empire – the brand. He believes in the power of brands in the same way that such multinationals as Coca-Cola and McDonald’s do. “I believe there is no limit to what a brand can do, provided it is used properly,” he once remarked. Which is probably why dozens of companies have put up millions of dollars to get into bed with Virgin. Branson’s outfit usually retains from 20 percent to 75 percent interest, and operating control.
   Despite their celebrity status, Branson and his wife, Joan, have a modest lifestyle. Joan prefers to do the cooking herself and distances herself from the Virgin business. Their two children have attended local schools. Weekends are spent in their modest home in Oxfordshire and weekdays in west London. “Ultimately though, while I have enjoyed much success for a variety of reasons in my business career, my family is the most significant thing in my life,” he writes in his autobiography.
   A modest family life combined with his stance as the consumer’s champion has endeared Branson to the British. But behind that trust-me smile, his critics who are usually his competitors say there is a dark side: A thread of secrecy runs through his knot of business interests. It is hard to get up-to-date financial information on his businesses, as they are not held in a consolidated group, but rather in a clutch of offshore trusts in various tax havens where there is no obligation to publish accounts. There are no registered shareholders, either.
   While Branson puts the structure down to a reduced tax bill, his critics hint at greed. “I never went into business solely to make money,” he asserts. Despite his Midas touch, he maintains that it’s the consumers and his Virgins who come first. “It all comes down to people,” he said in an interview in Forbes magazine. “Nothing [else] even comes close.”

Christine Aziz  
a journalist based in London