Richard Branson is a one-man brand who loves to blend adventure with business. From attempting world-circumnavigating balloon flights to fighting with British Airways in public and making cameo appearances on “Baywatch”, “Friends” and “The Simpsons,” there’s not much the Virgin entrepreneur hasn’t done in the name of headlines. He showed his Caribbean home Necker Island to the world on an episode of MTV’s “Cribs” and loves to invite celebrities over: guests have included Mariah Carey, David Hasselhoff and Kate Winslet.
His drive to start new companies has usually been to challenge the status quo. “I suppose I've stuck my neck out a lot of times. And I love to sort of tilt at very big companies and see if we can shake them up and keep them honest and come in with products that are a lot better than their offering,” he told CNBC’s “The Brave Ones.”
“And you have to be a little bit brave and maybe even foolish to do that. And fortunately we sort of got away with it more often than we haven't.”
His headmaster’s predictions that he’d either end up a millionaire or in prison came true (he’s done both, spending a night in jail for tax evasion as a teenager, and his estimated net worth is $5.1 billion) and he’s not afraid to show off: barely three weeks after President Donald Trump had taken office in the White House, former president Barack Obama was vacationing with Branson, and pictures of the two of them goofing around on a boat went all over the world.
Branson’s family-owned Virgin Group is a venture capital ivestment firm with interest in more than 60 businesses, with trains, planes and spaceships bearing the Virgin brand name. The group makes money through a complex mixture of stakes in companies such as Virgin Rail Group and gym chain Virgin Active in the U.K. and royalties earned through licensing its name to others such as telecom company Virgin Media, which is now wholly-owned by Liberty Global, and Virgin Mobile in the U.S., operated by Sprint. Sales from Virgin-branded businesses around the world are $23 billion annually, according to a company spokesperson.
Branson himself does not have day-to-day involvement in the running of each venture, instead focusing on Virgin Unite, the philanthropic arm of the group and collaborating with world leaders on issues such as climate change. He is a member of The Elders, a group founded by Nelson Mandela to promote peace and human rights.
Branson was born in 1950 in Blackheath, a suburb of southeast London, to parents Eve, an air hostess, and Edward, a barrister. He credits his mother for his daring spirit: Driving to his grandmother’s house one day, Eve pushed the young Branson out of the car and told him to make the rest of the way there himself, aged just four.
“My mom is a very adventurous person. And she very much felt that she wanted us to stand on our own two feet and not to be ‘mollycoddled’ as she would call it,” he told “The Brave Ones.”
Eve may also have realized that her son had spatial awareness issues, longtime former colleague Will Whitehorn said. “He inherited that idea of rising to a challenge from his mother, who obviously realized when he was young that he probably had some kind of spatial issues, and she tested him.” Indeed, Branson is dyslexic, something he has said gave him a “massive advantage” in life.
“It has helped me to think creatively and laterally, and to simplify things … I’m blessed to have had parents that encouraged me to follow my passion and talents … they recognized that I was at my best when I could do things my way,” he wrote on his blog in August.
Virgin itself was named when Branson was a teenager. It was 1970 and he’d started a mail-order record company with his friend Nik Powell. “I was sitting in a basement with a bunch of girls. We were all about 15, 16 years old. And we were trying to think of a name for a record mail order company,” he told “The Brave Ones.”
“And Slip Disc Records was one that was quite popular amongst us all. Because the old black vinyls, when you put a needle on them, they would slip sometimes.
“If we had gone with Slip Disc Records, Slip Disc Airlines wouldn't have worked so well. And then one of the girls said: ‘We're all virgins. Why don't you call it Virgin?’” Branson told “The Brave Ones.” The name worked for every industry the company went into, because it was new to each.
Branson had dropped out of high school around the age of 15, having rowed with his headmaster over the publication of a magazine he’d set up, called Student. Together with Powell, he knew they needed some big names to make it work, and managed to get an interview with the writer James Baldwin, turning up unannounced at his London hotel room. Others included journalist James Cameron, who wrote directly from North Vietnam during the war, and Vanessa Redgrave, with whom Branson protested against it.
But his attention was soon to switch to launching Virgin Records, his and Powell’s first proper company. “I knew nothing about the record industry. But I'd heard a tape of a 15-year-old who was a year younger than I was. And I loved it. And I thought somebody must put this out. He didn't have any vocals on it. I took it to eight record companies and all of them said they liked it. But they wouldn't put it out without singing on it,” he told “The Brave Ones.”
So Branson’s company released it. The musician was Mike Oldfield and the album “Tubular Bells,” which became one of the U.K.’s best-selling albums of the 1970s, after it was featured on the soundtrack of the 1973 movie “The Exorcist.” It got to number three on the U.S. Billboard 200.
But it was also the hip vibe the Virgin brand had that attracted young people, recalls Peter Williams, a non-executive director at multiple companies including fashion website Boohoo.com and Domino’s Pizza franchisee DP Eurasia. Williams went to Virgin’s first makeshift record store in west London, after seeing ads for its albums in music magazine Melody Maker.
“You went up some rickety stairs and there were a bunch of hippies, with thousands of brand new albums sprayed out about the room. The first interaction was, here was somebody who in an innovative way for that era, 40-odd years-ago, was challenging a very staid way of selling records. The new generation were buying records in unbelievable quantities,” he told CNBC by phone.
“(Branson) had challenged the status quo and he struck a chord with me as a consumer, albeit it was all around price, being a fellow hippie at the time, there was (also) something hippieish cool about it all.”
That “cool” was about to be applied to Virgin’s next venture, which was nothing to do with the record industry: an airline.
As Branson tells it, the story of how he started airline Virgin Atlantic is one born of frustration. He had been due to fly to the British Virgin Islands to see a girlfriend (now his wife, Joan Templeman), but his flight was cancelled. Instead of moaning about it, in typical Branson style he found his own out-there solution. “I went to the back of the airport. I hired a plane. And I gave them my credit card, hoped it wouldn't bounce, borrowed a blackboard (and) wrote as a joke: ‘Virgin Airlines: one-way $39 to the Virgin Islands.’ (I) went out to all the people that got bumped and I filled up my first plane,” he said.
He then managed to persuade Boeing to sell him a second-hand 747, making a deal that if the venture didn’t work out within a year, the company could give it back. Virgin Records was doing well, signing artists such as Janet Jackson, the Rolling Stones and The Sex Pistols and his colleagues weren’t pleased about this new plan to reach for the skies.
“The people who ran the record company were distraught, basically at the fact that I would even consider (starting an airline),” he said. “We had a very successful record company. And why was I going to put this very successful record company at risk and go into the airline business?” Branson said.
Virgin Atlantic was originally British Atlantic Airways, a joint venture between American lawyer Randolph Fields and pilot Alan Hellary, who went into business with Virgin. Branson’s vision was to create an airline that would not be “stuffy” or “boring” like competitors, in his view, especially incumbent British Airways. He wanted smiling staff and fun at 33,000 feet.
Like a Virgin
The Virgin Group is an investor in a variety of businesses, with interest in more than 60 companies that it either has a stake in or collects royalties from. Branson started his first business, Virgin Records, in 1970 (with the Sex Pistols “Never Mind the Bollocks” album landing a Virgin store manager in court for obscenity in 1977 — Branson hired the Queen’s attorney and he was found not guilty). Now the group has stakes in airlines (it owns 20 percent of Virgin Atlantic), a train company, holiday firm and licenses its name to Virgin Media in the U.K. and Virgin Mobile in the U.S. The group also provides various services to the U.K.’s National Health Service, such as dermatology and sexual health clinics. In 2004 it launched space company Virgin Galactic, and it invested in Elon Musk’s Hyperloop One in October 2017.
“People thought we were absolutely off our heads. (But) from one plane we went to two and three and four and five. And I don't think anybody would have put money on it being around 35 years later. And I think because Virgin Atlantic flies all over the world, that helped get the Virgin brand on the map on a global basis and enabled us to be brave in other areas as well,” he told “The Brave Ones.”
Eventually Virgin sold the record company to EMI (now part of Universal Music Group), in 1992, to help fund the airline, for a reported $1 billion, a move that Branson said was sad but necessary. “But it meant that Virgin Records was safe and Virgin Atlantic was safe.”
But competitors were circling: British Airways ran a so-called “dirty tricks” campaign, the result of fierce rivalry between it and Virgin Atlantic. British Airways was accused of attempting to gain confidential information from Branson’s company, and of spreading negative rumors about Virgin in the press. Virgin won damages of nearly $1 million, and court costs of around $3 million.
As the business grew, Branson knew he needed a business head and someone who could think about brand Virgin. When Whitehorn joined to manage marketing and PR in 1987 (after an interview at Branson’s home while his baby son Sam waddled around in the background), part of the business was listed.
“It was publicly traded on the stock market as a single group, with the exception of Virgin Atlantic … Looking at it from a corporate finance perspective I thought the whole thing looked nuts,” he said. The stock market had crashed and Whitehorn felt Branson had gone public too early. But an IPO (initial public offering) was the usual way to raise capital back then.
“But he was one of the first people to say: ‘Let’s do this with private equity. Let's split the businesses up into their different constituents, and let's fund them all,’” said Whitehorn. So they decided to develop Virgin as a branded private equity organization instead. “And then the Virgin empire began to emerge,” with a strategy of releasing equity from one business to invest in the next.
Today, the group is more like a family office that manages the Bransons’ money and in July, it sold a 31 percent stake in Virgin Atlantic to Air France-KLM for £220 million ($294.1 million), retaining a 20 percent interest.
In 1997, Virgin branched out into its second transport business: trains. Britain’s rail network had been publicly owned, and Branson wanted to be part of its privatization.
“I had the head of British Rail over to my house and talked to him about it … And he said to the person next to him: ‘I'm not going to let that f--ker Branson get hold of our trains.’ And he didn't realize that the intercom was broadcasting this all over the house,” Branson told “The Brave Ones.” But Virgin bid for the rail franchises and now operates several train routes in the U.K. In 1998 Virgin Rail Group sold a 49 percent stake to transport company Stagecoach.
In 2007, one of Virgin’s trains derailed in Cumbria, in northwest England, killing one woman and seriously injuring five more. Branson immediately wanted to go to the site of the accident (which turned out not to be the fault of Virgin, but a track failure), in spite of some of his senior management urging him not to.
“He was there, he went to visit the families. He didn't shy away,” Whitehorn said. “The number of times you read about a boss that isn't there when the proverbial hits the fan and something has gone badly wrong, and rightly gets criticized, is something you'd never get with Richard Branson.”
Powell became childhood friends with Branson “because Richard was a lot of fun,” he told “The Brave Ones.” “He was, right from the beginning, someone who did things, who went to … where angels fear to tread. And he was fun to be around. He was adventurous from a very young age … He was absolutely the classic daredevil.”
Growing up near the village of Cranleigh in southeast England, the two would play chicken with cars or race their bikes towards the river at top speed, jumping off just before they reached the water. Branson’s pranks continued into adulthood, often in the name of promoting Virgin.
“I think some of these adventure things have helped give Virgin that sort of exciting image, which really sets it apart,” Branson said.
He knew that the company needed a public profile. “We painted the front of Virgin (record) shop multi-1960s colors. We were always doing things that we felt people would take notice of that we could get in the press for. And we didn't have a PR agency, we did all this ourselves,” Powell recalled.
Branson has variously put on a wedding dress to promote Virgin Brides in 1996, driven a tank through New York City’s Times Square through a “wall” of Coca-Cola cans in the name of Virgin Cola in 1998, and jumped off a hotel in Las Vegas to celebrate Virgin America’s inaugural flight in 2007.
But his most famous stunts have been those that have been most dangerous. In 1985 he attempted the fastest Atlantic crossing in a boat, the Virgin Atlantic Challenger, but capsized and had to be rescued. The team managed to break the record in 1986, before Branson tried but failed to cross the same ocean in a hot-air balloon a year later.
Since then he has dressed in a silver wing suit and attempted to fly, run the London Marathon dressed as a butterfly and kite-boarded across the English Channel. More recent challenges have been related to charity and causes, such as a 2012 Mont Blanc climb with children Holly and Sam to launch their non-profit Big Change.
Some of Branson’s challenges have put pressure on the family. “I know it created a lot of tension between him and especially (his wife) Joan, who he's been with for decades … that he would go on risking things while having young children and now having grandchildren. And I think it’s a really difficult balance for Richard and Joan to get right,” Powell said.
Along with courting danger as a child, Powell and Branson came up with ways of making extra pocket money, planning (aged 10) to grow fir trees to sell at Christmas and attempting to breed budgerigars for sale. But both were eaten by animals, giving them their first exposure to business risks.
“So we just learned, bit by bit, that you can take risks but also you need to protect yourself a little bit from the things that can happen. You can't protect yourself against everything,” Powell said.
Was there a time when Powell thought Virgin wouldn’t make it? “Every day. Every day there were things happening that were putting at risk what was already being done. And you just got used to that,” he said.
Virgin has launched several businesses that didn’t take off, including the cola and wedding dresses and a line of cosmetics. Sometimes the business strategy has been wrong, such as in 2000 when the group launched Virgin Cars, attempting to sell vehicles online, but it shut in 2005. “We neglected to realize that the biggest potential for disruption in the automotive industry had nothing to do with the process of selling cars, but rather with how cars were powered,” Branson said in a 2016 blog post.
The idea for Virgin Galactic came about one weekend in Morocco, according to Whitehorn. “I remember being in a bar in Marrakesh with Richard Branson and Buzz Aldrin, as you are on a Saturday afternoon, waiting for a balloon to fly around the world, and Richard asking Buzz about why had they never used balloons to get rockets into space.”
“And Buzz said: ‘Well, they did experiment with that, Richard. But actually, more success was (had) using big aircraft to get rockets into space. But that was all abandoned because of the desire to get to the moon and President Kennedy's push to NASA to move towards a moonshot before the Russians could do it,’” he told "The Brave Ones."
“Space tourism, like every form of history in developing transportation systems, it's always been the tourists that have developed it first: aviation, shipping … For us at Virgin at the time, if we could develop a space launch system capable of launching satellites and science into space, and fund it without government money using space tourism, this was really exciting stuff.”
Branson’s boldest move yet, Galactic was founded in 2004 and has sold $200,000 tickets to 100 people, rumored to include Angelina Jolie and Leonardo DiCaprio, and he hopes the first flight will launch in 2018.
“I would be very disappointed if I haven’t been into space within six months or so,” Branson told CNBC’s Squawk Box in October. A sister company, Virgin Orbit, is working on putting satellites into space, which he said would be operating from March or April 2018. “It’s been tough. But we believe we're on the verge of finally fulfilling our dream,” Branson told “The Brave Ones.”
It’s been one of his hardest journeys yet. In 2014, Virgin Galactic’s SpaceShipTwo crashed in the Mojave Desert, killing co-pilot Michael Alsbury and seriously injuring his colleague Peter Siebold.
“I was not sure whether we would continue,” Branson told “The Brave Ones.” “It was only when I got to the Mojave Desert and spent time with the 600 engineers, when I talked to many of the 700 astronauts who had signed up (for a flight), when I found out that it wasn't a technical problem. It had been a man-made problem and a human error … We decided to press on.”
Projects like Virgin Orbit, Elon Musk’s Space X and Blue Origin, set up by Jeff Bezos, will be part of the next big transition in the Western world, according to Whitehorn. “They are the presages of an industrial revolution in space that's coming very quickly, which will almost surpass everything you've seen in the internet over the past 25 years.”
In October, the group also announced its investment in Hyperloop One, a super-fast form of transportation that can travel at up to 670 miles per hour. “Importantly, Virgin Hyperloop One will be all-electric and the team is working on ensuring it is a responsible and sustainable form of transport too,” Branson wrote in an October blog post. The group has also invested in a Formula E racing team.
Branson is a passionate advocate for world leaders to tackle climate change, and spoke at the Climate Week opening ceremony in New York in September, flying there from the British Virgin Islands as Hurricane Maria was about to strike the Caribbean.
“I got so angry when I saw the damage (of Hurricane Irma). And I was just thinking of (President Donald) Trump's speech on the lawns of the White House, sort of hinting at withdrawing from the Paris Agreement that I just thought I had to be here to go and talk at the United Nations and try to get some sense going,” he told “The Brave Ones.”
Trump’s decision to withdraw from the Paris Agreement stunned him. “I was at the Paris talks. I just remember we celebrated that day. The way the world came together … And so, yeah, it makes me want to weep that America could backtrack from that. And we've got to make sure that we change the (U.S.) administration's mind,” he told “The Brave Ones.”
What’s next? For Whitehorn, Branson will keep going as long as he can, but his legacy will be the brand. “As he moves forward in his life over the next 30 years or so — assuming he lives as long as his parents and grandparents did — which means we're probably going to see Richard around till he's 100. I think he understands that he's leaving a legacy in Virgin, and the legacy is one he wants to not be wholly reliant on his personality.”
Credits:
Writer: Lucy Handley
Design and code: Bryn Bache
Editor: Matt Clinch
Executive Producer, The Brave Ones: Betsy Alexander
Producer, The Brave Ones: Mary Hannan
Images: CNBC, Getty and Virgin Galactic