Branson

"The island was on sale for £3,000,000 a few years ago. Branson’s starting offer: £150,000—95 percent off the list price. His offer was laughed at, but a few weeks later he bought the island for just £180,000. Needless to say, Sir Richard has had a very spectacular Dhandho return on his vacation home investment over the years. Now you and 13 other friends can spend time on Necker Island for just $30,000 per night.7"

"Venture capitalists ought to look at the Virgin model because the Virgin model is the VC model of the future. Branson is an ultra low-risk, ultra high-return VC. People keep feeding him ideas, and he acts on a select few. He gets large equity stakes, sometimes 50/50 equity stakes in these businesses without putting any money in them. In some cases, like Virgin Atlantic, it is a 100 percent stake with very little invested. There are two words that encapsulate Branson’s journey: Virgin Dhandho. Like his “twin” brothers Manilal and Papa Patel, Branson is all about: Heads, I win; tails I don’t lose much!"

"Branson only ventures into a business after he’s convinced it has a wide and deep moat. Part of the moat comes from extending his brand, part of it from creating a truly innovative offering, and the rest from brilliant execution."

"They’ve all concentrated their capital and their bets. Most of the time they either do nothing or place miniscule bets (Branson). Every once in a while, they encounter overwhelming odds in their favor. At such times, they act decisively and place a large bet."

"Branson noted that in the airline business with a single plane, he would pay for the fuel 30 days after the airplane landed and for staff wages 15 to 20 days after the airplane landed, but he would get paid for all the tickets about 20 days before the plane took off. Working capital needs in this scenario were pretty low and, with a very favorable short-term lease from Boeing, there was no need to buy an airplane."

"In 1998, the Economist counted 200-odd firms owned by Branson, plus joint ventures accounting for a similar volume of sales. The complex structure included family trusts based in the Channel Islands, as well as holding companies in the British Virgin Islands and sub-holding compa¬ nies in the United Kingdom. Branson acknowledged that the setup was “indirectly” designed to reduce taxes, while the company’s finance direc¬ tor said that the original purpose of locating companies in the British Vir¬ gin Islands was to keep information away from British Airways during a commercial dispute.23"

"Branson rejects the notion of making his sprawling business em¬ pire more efficient by consolidating its operations. In service businesses, he argues, the key is to have happy and well-motivated employees. Ac¬ cordingly, he perceives greater value in keeping his companies smallscale, with no more than 50 or 60 people in one building, than in saving money by putting everybody under one roof. Once a company becomes so large that people no longer know one another, says Branson, it is time to break it up."

"Branson sees employees as a source of ideas. In 1996, a Virgin At¬ lantic flight attendant told Branson that she had just gotten married and found it extremely difficult and time-consuming to make the arrange¬ ments. She proposed opening a store in which a bride could buy her wed¬ ding dress, have her hair done and receive a manicure, obtain help in planning the reception, and then use Virgin’s travel service to arrange the honeymoon. Branson made her dream come true by opening Virgin Bride in London and immediately began thinking about adding Virgin Babies and Virgin Dating to the product line.30"

"Branson also precisely replicated Kirk Kerkorian’s policy of “keeping the back door open” in acquiring aircraft. The deal for the air¬ line’s first Boeing 747 allowed him to sell the plane back to the manufac¬ turer at nearly the original price if Virgin failed."

"Similarly innovative thinking got Branson around the problem of an advertising budget much smaller than the major international carriers’ outlays. Breaking out of his past pattern of resolutely keeping his personal life private, he began staging stunts that attracted widespread media cov¬ erage. He began by announcing the creation of Virgin Atlantic dressed as a World War I aviator. Next, he attempted to break the record for crossing the Atlantic in a small powerboat. That 1985 attempt failed when his ves¬ sel sank 150 miles short of its destination, but he tried again the following year and succeeded in setting a new record. Additional millions of dollars worth of free publicity followed in 1987, when he and Swedish aeronaut Per Lindstrand made the first successful crossing of the Atlantic in a hot¬ air balloon."

"Branson motivates employees to excel by putting them into slightly higher positions than they expect. Like Kirk Kerkorian, Branson has no difficulty delegating day-to-day operations, much preferring to spend his time on new ventures. As long as a business is doing well, he does not bother to meet with management, while making himself available for crises. Virgin Atlantic Airways is the one business in which he maintains a tight grip on operations."

"Branson’s image as an “adventure capitalist” has become a living public relations vehicle for the Virgin Group. His celebrated antics include throwing fully clothed people into swimming pools, a practice he has defended on the grounds that the boss should set the tone at a party by having lots of fun. For similar reasons, he enjoys practical jokes such as festooning a hot-air balloon with blinking lights to make it look like a UFO, manning it with a costumed midget, and landing it at dawn in a field near London, to the astonishment of incoming commuters. At his wedding, Branson arrived at the altar hanging from the landing struts of a helicopter."

"Branson has shown equal willingness to take chances in the business sphere, as evidenced by the close calls and failures that inevitably arise from frequent risk taking."

"In the event, as the television pictures around the world showed, when Branson reached the shore, the tide had dropped a little too low and he needed a lift from some bystanders to get the back wheels on to the ramp. It was only a problem because we’d been held up by two things. First, he and I had taken off in the Aquada when I took a message on the radio to tell Richard that some guy called John, evidently a journalist, wasn’t on the flotilla. ‘Oh, we can’t go without him,’ Branson said. So we stopped and floated around in the harbour for 20 minutes waiting for this guy to arrive from London. Then because it was the twentieth anniversary of Virgin Atlantic and Branson had taken possession of his first Boeing 777, he wanted a photo of the plane swooping above the car. We reached the precise spot using GPS coordinates, but there was no sign of the plane. It had been delayed by air traffic control. That left us waiting another 20 minutes or so for it to fly by."

"Richard had been requested to get the boat carefully to Calais and instead he yahooed around, roaring up any wake he could find and leaping from the water. I could see our poor Aquada smashing down from waves with huge walls of spray stretching out before it. Neil, who had fully tested it in such conditions, was obviously confident, but I still can’t believe Branson didn’t break it. When I finally caught up with Richard in Calais and upbraided him — ‘What were you doing?’ — he casually replied, ‘Oh, I wasn’t worried; you get much more publicity the second time you try things!’"