Richard Branson: Like a Virgin

And, finally, I am often asked: are you a man of habits?

Well, yes, there are a few, but I am certainly not going to put them in writing. I guess, however, being a serial entrepreneur could be described as a pretty big habit!

For every entrepreneurial David who has the courage to take on a Goliath with the equivalent of a slingshot and a couple of stones, there are a hundred others who’ll say, ‘You must be kidding! There’s no way I can ever compete with that monster!’

For much of my business career, I’ve played the role of David – and loved every minute of it. You see, I’ve always believed that small is beautiful. Young, energetic businesses have surprising advantages when taking on large, cumbersome competitors. All they have to do is figure out what the giant’s weaknesses are and how best to leverage them.

For instance, in 1984, when an upstart Virgin Atlantic Airways first picked a fight with mighty British Airways, the odds were certainly stacked against us. In fact, my bankers were so unenthusiastic about my prospects that they threatened to pull the rug from under us!

But our inexpensive arsenal was loaded with some pretty surprising and highly unconventional weapons. Perhaps the most effective of these was our agility, which was integral to our corporate culture, in large part because of our small size. British Airways was weighed down by bulky, hierarchical decision-making processes that made any course corrections very difficult, whereas we were able to change direction or stop on a dime.

Sir Freddie Laker once told me, ‘Richard, never forget that only a fool never changes his mind.’ Not wanting to be foolish, I took his good advice. At Virgin, when our customers or crew told us they didn’t like something, we’d drop it and quickly move on to the next idea.

Our smallness – we had only a few planes – allowed us to give our customers an experience the bigger players simply couldn’t afford to match across their large fleets. For instance, our Upper Class passengers (billed as business class; but first class in everything but name) are provided with free door-to-door limousine services to and from the airport. Our competitors would have to offer this service on every global route, not just the few routes competing with Virgin – a much more expensive proposition for them.

And consider this: if we provide limos for our business class customers, what should our competitors do for their first class customers – send them a Rolls-Royce? It didn’t take them long to decide not to try to match our limo service, and almost thirty years later it remains a unique selling point for Virgin.

This may seem like a peculiar boast for a chief executive, but I don’t believe a Virgin company has ever become the biggest player in any sector we have entered (although Active is getting close).

In the late eighties, Virgin Records was certainly the industry’s biggest independent label, but we were far from being the biggest label overall. I kept splitting the company into smaller companies, ensuring that we kept our sense of competition and urgency.

It seemed to work. We were influential enough to attract big names like the Rolling Stones, who knew that with Virgin they’d never be just another superband on a roster full of them. At the same time, we were still small enough to be totally tuned in at street level and highly adept at discovering exciting new artists.

Now that I think of it, the one area where we probably are the biggest player is in commercial space travel. Virgin Galactic doesn’t quite fit the pattern, though. Our choice to go ‘To infinity and beyond!’ as Buzz Lightyear of Toy Story would say, is more about being sufficiently courageous, visionary or perhaps plain crazy enough to establish a brand-new business sector. In fact, that attitude just about sums up our brand name.

While I believe that small is beautiful, I’m not implying that there aren’t any very good companies that are very big. If you look closely, however, some of the best of them, like Apple, got where they are by focusing on great products, being nimble and competing with much bigger competitors. What Steve Jobs achieved with Apple’s amazing success has brought tremendous growth – these days, those battles to survive seem a distant memory. Apple, like Virgin, must now fight to retain all the cultural elements that will keep it as nimble as its competitors and not morph into one of the ponderous giants it managed to overcome.

Now, where did I leave my slingshot?

The four Ps – people, product, price and promotion – are often cited as the keys to a successful business. Yet this list omits a vital ingredient that has characterised Virgin companies throughout our forty years: Fun, with a capital F!

When we started Virgin Atlantic in 1984, we had some great people and lots of good ideas about how to do things differently. Sadly, we did not have a lot of money to take it to the streets. Compared to the giant establishment players of the time – TWA, Pan Am and British Airways – we had a tiny fleet, if one plane qualifies as a fleet, and a minuscule advertising budget. The author Anthony Sampson, pointed out that with only one plane ‘we’d either have the best or worst safety record in the world.’

We could not do much about the single plane – leased from a very trusting man at Boeing. We had to make the most of our meagre marketing money. At the urging of Sir Freddie Laker, who made an art form of grabbing the limelight for his airline, I quickly became a willing victim in all kinds of wild and crazy adventures to promote the fledgling Virgin Atlantic. You couldn’t buy a quarter-page ad on the front of the New York Times , but when my sinking speedboat or crashing hotair balloon just happened to feature the distinctive Virgin logo, there we were!

We also started to run some funny, pretty direct and usually highly topical advertisements to grab the public’s attention – I believe it’s called ‘jugular marketing’. Such in your face ads were largely unknown in the stodgy world of airlines, so our approach quickly gained us notoriety, press coverage and, above all, visibility. The humour stood out against our moribund competitors, and soon Virgin Atlantic itself – not just the ads – became synonymous with a cheeky and upstart personality and, more importantly, a fresh, different approach to commercial aviation.

Marketing teams in London and New York frequently reacted instantly to the day’s headline news and, within twenty-four hours, placed tactical-response advertisements in key markets. The day after John Sununu, then White House chief of staff, was castigated for using public money for a limousine to take him on personal trips, Virgin ran a one-off ad saying if only he had booked Virgin Atlantic, he would have got the limo for free!

When General Manuel Noriega, the former leader of Panama, was extradited by the US Justice Department to Miami for trial, we ran a big picture of him, with the caption ‘Only one person has flown to Miami cheaper than on Virgin Atlantic!’

Sometimes the ads were close to the bone, especially when tweaking the tail of our favourite adversaries, notably British Airways. Always irreverent and cheeky, the ads gave Virgin Atlantic a real personality in its early years, which was a key to its success and growth.

Our staff also liked the humour, and the sense of fun. They felt proud to be associated with a company that made people smile and that was seen as a good place to work. We made sure the same spirit ran through everything we did; it was not confined to the cute advertisements. It was crucial that we created an enjoyable atmosphere for crew and passengers alike, at 30,000 feet.