[tag]Richard Branson[/tag] founded Virgin, a loosely knit family of more than two hundred companies, as a mail-order record business in 1970. As CEO or majority shareholder, he developed successful ventures in music, air travel, financial services, retail marketing, telecommunications, and other fields.
Branson’s idiosyncratic approach to [tag]business[/tag] and his risk-taking personal life made him a British folk hero as well as one of his nation’s wealthiest men. Under Branson’s supervision the [tag]Virgin[/tag] group fostered creativity among its employees and allowed the [tag]Virgin brand[/tag] to evolve and diversify with the marketplace.
Branson overcame dyslexia as a child and began to show his entrepreneurial talents early. Born into a middle-class English family, he displayed both a natural intelligence and a competitive spirit on the playing field. His first business ventures included growing Christmas trees and breeding birds. As he reported in his autobiography, “Losing My Virginity,” chafing under authority Branson left boarding school at age 16. At the time his headmaster reportedly told him, “Branson, I predict that you will either go to prison or become a millionaire.”
In 1966 Branson launched Student, a youth-oriented magazine. As the editor Branson interviewed John Lennon, Mick Jagger, Vanessa Redgrave, and other celebrities. He also started the Student Advisory Center, a nonprofit referral service for troubled youth. In 1970 local authorities charged the center with obscenity for using the words “venereal disease” in its promotional material. Branson was successful in getting the charges dropped, setting a precedent for his future battles with authority.
After selling Student to a larger company in 1970, Branson started a mail-order record company, Virgin Mail. The following year he opened a retail store, which by 1972 had become a chain of 14 shops around the United Kingdom. Charged with evading purchase taxes on import record sales, Branson escaped prosecution by paying an out-of-court settlement. Saddled with $90,000 in fines and debts, a sobered Branson expanded his chain of stores and purchased a small castle in Wales, turning it into a recording studio.
His next project was to launch a record company of his own. With his cousin Simon Draper as the creative director and Nik Powell as the business manager, Branson inaugurated Virgin Records in 1973. Among the label’s first releases was Mike Oldfield’s album Tubular Bells, which topped the U.S. charts in 1974 and sold more than 13 million copies. Virgin had suddenly become one of the most successful independent record companies in the United Kingdom. Despite his image as a “hippie capitalist” dabbling in business, Branson proved an astute negotiator from the start, signing his artists to long contracts, acquiring worldwide rights to recordings, and owning copyrights for as long as possible.
After its impressive start Virgin Records entered a stagnant period in the mid-1970s. Branson failed to sign such established acts as the Rolling Stones and had to rely on Oldfield’s sales to keep the label profitable. Matters did not begin to improve until Virgin signed the Sex Pistols in 1977. Undaunted by the punk band’s controversial image Branson sold 100,000 copies of the single “God Save the Queen” in one week. Virgin did not pull out of the doldrums until it released Culture Club’s debut album in 1982.
The phenomenal popularity of the lead singer Boy George helped the band to sell 1.4 million albums in the United Kingdom the following year. Hit albums and singles from Phil Collins and the Human League also did well for Virgin. The label quadrupled its size in four years. Branson used his earnings to launch a Virgin American record label and to invest in new ventures, including Virgin Vision (a film and video distribution company), Virgin Games (a computer games publisher), Virgin Rags (a clothing line), Vanson Property (a property development company), and several London-area nightclubs.
In February 1984 Branson was approached by the American attorney Randolph Fields with an offer to invest in a new transatlantic airline. Despite the objections of his business partners, Branson was immediately intrigued by the possibility. Rather than adopt Fields’s initial idea of an all-businessclass airline, Branson envisioned a low-cost carrier that would compete with People Express. The decision to pursue the project caused ill feelings with Draper and other Virgin staff members and met with disfavor with Branson’s bankers. It was something of a personal triumph for Branson when, on June 22, 1984, Virgin-Atlantic Airways embarked on its maiden flight between London’s Gatwick Airport and Newark, New Jersey.
From a single leased aircraft Virgin-Atlantic slowly grew during the 1980s, adding routes to Los Angeles and Tokyo while seeking access to London’s Heathrow Airport. Branson emphasized his company’s commitment to service by talking with customers during flights. He was even known to dress as a flight attendant and serve refreshments. To help promote the airline Branson began to raise his media profile by performing promotional stunts and feats of daring. In 1985 he was rescued off the coast of Ireland when his powerboat Virgin Atlantic Challenger crashed during an attempt to break the transatlantic speed record.
A year later Branson succeeded in breaking the record with Virgin Atlantic Challenger II. In 1987 Branson set out with the aeronaut Per Lindstrand on a transatlantic hot-air balloon trip, crashing into the Irish Sea after making it across the ocean. The pair completed the first successful transpacific hot-air balloon ride in 1991, although they ended the trip stranded on a frozen Canadian lake before being rescued. Such death-defying adventures won Virgin invaluable publicity and emphasized Branson’s image as a fearless risk taker.
Not all of Branson’s corporate moves turned out as he had hoped. In 1985 Branson took Virgin public, attracting 100,000 applications for shares. While he gained greater financial stability, Branson disliked the restraints of working with a board of directors. “Previously, I had always felt confident about any decision we made, but now that Virgin was a publicly quoted company, I began to lose faith in myself,” he recalled. “I felt uneasy about making the rapid decisions I had always made and wondered whether every decision should be formally ratified and minuted at a board meeting.”
Branson fought with the board over paying out large dividends rather than reinvesting profits in new projects, as Virgin had previously done. The October 1987 stock market crash helped to convince Branson to buy back his company. He announced Virgin’s management buyout in July 1988 and began to seek investors, including the British retailer W. H. Smith and the Japanese media company Fujisankei, for joint ventures. These relationships were especially important in establishing a chain of Virgin Megastores, which were devoted to music as well as other Virgin consumer items, across Europe, North America, and Japan. In 1988, Branson launched Virgin Hotels and a new music division, Virgin Classics.
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