If you’re going to fail, fail well it simply means success is just around the corner.
The Collective Magazine looked to Britain’s brilliant business tycoon Sir Richard Branson for a few cunning and shrewd tricks and how to’s.
So you’ve failed. The big idea, with all its hopes and expectation, is toast. On the shrinking perimeter of your dreams, creditors encroach; your phone’s ringtone is switched to silent.
Congratulations. The doorway to opportunity beckons.
Think not? Think again.
For the true entrepreneur, only the ruination of a painstakingly conceived plan will reveal the key to starting anew.
Like the 19th-century anarchists who believed order only emerges from earth well scorched, a genuine opportunist knows there is no better time to demonstrate their creative agility than when the landscape of their vision is smoldering with post-apocalyptic promise. And there are few who rise phoenix-like from the ashes of an abject flop with the panache or consistency of Virgin Group founder Sir Richard Branson, who never lets a failure pass without turning it into a stunning commercial reversal. Or at least ensuring that is how it’s perceived.
By the time Branson turned 30, the sultan of self-promotion had lost millions investing in pubs, shops and film production. Shackled by debt, Sir Richard’s bankers revolted. Sell assets or declare bankruptcy they demanded. But the faux-hippy son of a Surrey stockbroker was not easily intimidated. He turned instead to the independent controllers of his offshore trusts, persuading them to provide the guarantees necessary to obtain a £1 million loan from the Bank of Nova Scotia (commonly known as Scotiabank).
Crisis averted. Confidence returned like the rising sun, along with a renewed enthusiasm among formerly sceptical lenders to finance his next loopy venture. Call it luck, call it genius, whatever it was, the cavalier restoration of imperilled credit was to become a Sir Richard Branson hallmark. For the bearded epitome of Cool Britannia, failure merely signalled that it was time to roll the dice again.
But what can aspiring entrepreneurs take from Sir Richard’s brush with debt delinquency?
Perhaps the first lesson is that the sooner one’s ambitions are financed with other people’s money the better. While borrowing carries risks, embarking underfunded seems, to Britain’s bearded business magnate, counterintuitive.
In a YouTube video – one of dozens featuring the Virgin boss expounding on the topics of business and success, management and marketing – he says this: “There is a very thin dividing line between success and failure and most people who set up a business without financial backing, fail.”
The message is clear. No matter how successful, you are always on the precipice, so best get used to living with vertigo. Sir Richard certainly has.
In 1994, he launched Virgin Cola, claiming it would sell 1 billion cans per year. He never came even close, even when he ordered the product to be sold in a bottle designed around the feminine dimensions of Pamela Anderson.
But when the time came to extract Virgin from its partnership with the firm manufacturing his cola, Sir Richard had the last laugh, disputing every clause of the signed contract, playing hardball and finalising the divorce on advantageous terms.
Similarly, his foray into financial services with Norwich Union lasted a year and ended in acrimony but his investment in Virgin Direct as it was branded was essentially rescued by Australian insurance giant AMP, which made an ultimately ill-judged decision to buy 50 per cent for £450 million.
This is not to imply that the tycoon has always had a parachute or lifejacket handy. When Sir Richard bought MGM’s UK cinema chain in partnership with Texas Pacific Group, the business mogul inspected the actual premises only after handing over the money!
In June 1996, Sir Richard gave the green light to the creation of Victory Corporation, a holding company intended to produce jeans and cosmetics. Virgin paid £1000 for 11 per cent. Sir Richard’s business partner stumped up £3 million for 89 per cent and was charged with raising an additional £45 million from other investors.
At the 11th hour the additional funding deal fell through, forcing Victory to seek a share market listing on London’s AIM (formerly the Alternative Investment Market). Sold to investors through an IPO at 58 pence each, the shares debuted at 52 pence. By August 1998, they were less than 10 pence.
Then there was Virgin Trains, which bought, and lost, on the cross-channel rail operator Eurostar and two franchises to operate rail routes in the UK.
The reality was that in the mid- to late-1990s, of all Sir Richard’s myriad businesses, only two were making money – his airline and Virgin Radio, both of which relied on monopoly franchises awarded by the government.
But Sir Richard’s confidence and chutzpah can do things with reality that Einstein might’ve envied. His incessant accusations about Virgin Atlantic’s rival British Airways (BA) using its monopoly power, market share and dirty tricks to prevent him bringing competition to the skies have been overwhelmingly successful. A gnat to British Airways’ eagle, the entrepreneurial mastermind has nonetheless dealt Virgin Atlantic into the kind of bargaining position a much larger airline would’ve envied.
The result of his hectoring and guile is the carving out, by politicians, of a duopoly at London’s Heathrow airport to admit Virgin Atlantic at the expense of BA. Like all good business leaders, Sir Richard never underestimates the capacity of legislators to be sold a good story. Nor does he underestimate the importance of the key people around him.
“The most important thing in running a company is to remember a company is a group of people,” he says in a Big Think video, adding: “People are like flowers.” He goes on to say if you water flowers they flourish and praise has the same effect on the people around you.
Of course, the true Bransonian response – be it success or failure – is to ‘say it with bikinis’ and have a damn good time. It seems that the toothy tycoon has coped with his myriad failures by never accepting they can or should derail his dreams.