Finding My Virginity: The New Autobiography

by Richard Branson

  When it first became public knowledge in the early 1990s that Virgin was interested in setting up a train company, the powers that be were, to put it politely, less than enthusiastic. Or to put it less politely, as the British Rail CEO John Welsby did, after leaving a meeting with me and unaware the intercom was on outside my then home, “I’ll be in my grave before that fucker gets his logo on my trains!”

  The idea of running my own train company had first come to mind in September 1991. I was in Tokyo, looking for locations to open a new Virgin Megastore. After doing my various recces, I jumped on the Shinkansen, the bullet train, bound for Japan’s historic former capital of Kyoto. The journey was a revelation. It wasn’t just the speed, as we whizzed through the Japanese countryside at 199 mph, it was also the excellent service, the vending machines, the entertainment—much of it reminiscent of the plane journeys Virgin Atlantic had pioneered. It made me wonder why the trains in the UK were so bad by comparison.

  Back in London a few days later, I was interviewed by the Sunday Telegraph’s transport correspondent, Toby Helm. He asked Will Whitehorn and me if Virgin was interested in operating our own train service.

  “Well, are we?” I said to Will, remembering the contrast with my Japanese experience. “It certainly needs improving.”

  After the interview, we spent a couple of days looking into it a bit more, learning about the government’s proposals to privatize British Rail.

  “Tell Toby we are interested,” I told Will. “Let’s fly a kite. It can’t do any harm.”

  Forty-eight hours later, the Sunday Telegraph was emblazoned with the headline “VIRGIN TO GO INTO TRAINS.” The momentum now matched that of a bullet train: I was already searching for a CEO and a management team by the time the phone starting ringing off the hook on Monday morning, with scores of potential partners. It turned out there was an awful lot of interest in Virgin Trains and we hadn’t even registered the name yet!

  I began meeting officials, including John Welsby. He visited my house at the time and within seconds of walking in made it very clear that he opposed any sort of privatization of the railways. By the time he left, I knew his disapproval applied to me in particular. And this was confirmed when he strolled out of the meeting and turned to his colleague, not realizing the intercom was going to broadcast his colorful comments to the entire office.

  Regardless of John’s strong opinions, the Virgin Rail Group put bids together for both the CrossCountry and InterCity West Coast franchises. We promised new diesel Voyager trains, to be built by Bombardier, on the CrossCountry line’s criss-crossing route around the UK. When we won the bid in November 1997, I was both ecstatic and excited about the possibilities. The following year, I predicted in Losing My Virginity that Virgin trains would come to be seen as one of the best things we ever did.

  —

  In the first years after my forecast, however, many people thought precisely the opposite. It didn’t take long to appreciate the size of the challenge we had taken on and for me to wonder why I had decided to try and run my own train company. Put simply, the railways were in a bad, bad way, both organizationally and on the tracks. The infrastructure was half the size it had been in 1946 when the Labor government nationalized the railways, and there had been very little investment since.

  We took over running the CrossCountry route in January 1998, the same month we beat off competition from Stagecoach and Sea Containers to win Britain’s premier track, the West Coast franchise, too. One of the first decisions we had to take concerned rolling stock. After discovering that 300-mph Maglev trains wouldn’t suit the size and shape of Britain’s railways and would produce high emissions and electricity costs, I flew to Italy in May 1998 to see if tilting trains could work. I traveled on a Pendolino ETR 460 from Turin to Rome and was amazed at how smoothly we zipped through the countryside.

  Bringing Pendolinos to the UK was controversial, however. British Rail had tried and failed to introduce tilting trains on the West Coast back in 1981, with their Advanced Passenger Trains quickly being nicknamed Accident Prone Trains. The press dubbed them “queasy rider” as reporters on board were sick, while technical problems cost taxpayers millions of pounds. If the railways had still been nationalized, a government official would have lost his job for even suggesting bringing back tilting trains. But as an entrepreneurial company, it was a decision that Virgin was able to make.

  Convinced that Pendolinos were now the best choice, I signed two of the biggest deals in Virgin’s history. First, Brian Souter, the chairman of Stagecoach, got in touch and we agreed on a deal for his more experienced company to pay £158 million for a 49 percent stake in Virgin Trains. Next, we agreed a £1.85 billion deal for Alstom to build us a fleet of tilting, safe, lightweight, energy-efficient trains. Given the money involved, Alstom were surprised by the simplicity of our instructions. They were used to extremely lengthy, restrictive briefs that ruled out most creativity. Instead, all I told them was what speed the trains needed to go, how often they needed to run and how we wanted them to look. We left the details to them.

  “You’re the technical experts,” I wrote to them. “I want you to use your expertise.”

  Next, I headed over to Old Dalby, near Melton Mowbray, where we had electrified the track for testing. I was standing on the platform to watch the tilting train for myself when I decided to take a closer look. There was a man pressing a button on a laptop in each carriage to tilt the train, and I wanted to see what he was doing. Not thinking, I jumped over the barrier, straight onto the track with 25,000 volts charged overhead.

  “Richard! What the hell are you doing?” Tony Collins, who worked for Alstom and would go on to become Virgin Trains’ CEO, was screaming at me as I hopped onto the train. He was right to do so: it was only by luck that I didn’t step on the wrong track: if I had, I would have used up yet another of my (far more than) nine lives!

  Aside from the trains and the tracks, the other main challenge was changing the culture of staff, many of whom had worked under British Rail for decades. When we started the West Coast franchise, we found a British Rail procedure manual in the office. It detailed rules and regulations for everything, even including how close your carpet was officially allowed to be from the skirting board. There wasn’t exactly a get-up-and-go spirit around the place and I was initially worried they wouldn’t be able to adapt to such a radically different setup. But as it turned out, the staff became one of our greatest assets: they embraced every change we implemented.

  —

  Events, though, were to conspire against us as we started the new millennium. On 17 October 2000 the tragic Hatfield GNER rail crash took place, killing four people and injuring seventy. In the aftermath, speed restrictions were introduced across all rail operators over the entire country. A year later, things got worse. In the weeks following 9/11, Railtrack, which was a public company, went into administration and its shareholders lost all their money. This was to cost taxpayers £1.25 billion a year in additional infrastructure costs.

  The British government created Network Rail, a not-for-dividend private company, to manage the chaotic infrastructure. Very quickly, however, Network Rail was in disarray, too. They told us they could not deliver the promised upgrades on time, the cost of the upgrades was quadrupling and our Pendolino top speed was cut to 125 mph—all of which made our proposed journeys longer and less frequent. It was a massive blow.

  After long negotiations, both the West Coast and Virgin CrossCountry franchises were suspended in 2002 in favor of management contracts (agreements to run, maintain and manage the line, with minimal disruption to passengers, until new franchise terms were agreed). Eventually, we lost the CrossCountry franchise to Arriva, who bid more when it was retendered in 2007. It felt like a huge missed opportunity. We had never really had a chance to drive a good business on this higgledy-piggledy route. Just as we began turning it around, it was gone.

 
I was determined the same wouldn’t happen on the West Coast Main Line. By the time we signed the management contract we had already delivered the first Pendolino, on budget and on time. In November 2001 I stood in Alstom’s chilly Birmingham factory and proudly looked on as Joan, who usually avoids such occasions, named our new train Lady Joan. As we sat together that night watching the Six O’Clock News, Joan squeezed my hand as the newsreader said: “Virgin has delivered on its promises.” She knew how much this project meant to me personally, and, as ever, was right by my side.

  “By the way,” she added, “you know the name of the train is wrong?”

  “What? No it isn’t.”

  “Yes it is. The wife of a knight doesn’t use her forename in her title. I’m actually Lady Branson—not Lady Joan.”

  “You’re pulling my leg.”

  “I’m not. Look it up.”

  I did—she was right, of course.

  In mid-2003 I sat in the latest of a seemingly never-ending series of meetings with ministers and officials from the UK government’s Department for Transport. We were discussing the finer details for renegotiating Virgin Trains’ franchise, and were going around in circles. On my way to one particular meeting I had spotted a game of Sam’s on the kitchen table and stuck it in my bag. As the meeting dragged interminably on, I decided to bring it out to loosen everyone up.

  “Let’s play a little game,” I said, to bewilderment around the table. “Just hold these in your hands; this won’t hurt a bit . . .” I explained the rules of the game and what was about to happen. “I’m going to ask some questions. If you answer correctly, the buck passes to the next person. If you get them wrong, you will get electrocuted. OK?”

  Patrick McCall, Virgin Trains’ executive co-chairman, looked on a bit nervously. I couldn’t decide if the ministers looked bemused or simply terrified—probably a bit of both! It might sound extreme, but I needed to find some way of injecting a spark into proceedings.

  Something needed to happen because by this point we were not making money and were losing goodwill in our brand. I felt we were victims of our own success with our other Virgin companies. Because people had seen instant improvement in service with businesses like Virgin Atlantic and Virgin Money, passengers expected an overnight transformation to take place as soon as the trains took on our name. The difference there, though, was that we started those businesses from scratch, and could build up the culture, practices and experiences in a bespoke way. With Virgin Trains, we inherited outdated facilities and old-fashioned working models. For all our efforts, by the end of 2003 Virgin Trains was still a long way from being on track.

  —

  It wasn’t until September 2004 that a full timetable of our 125-mph Pendolinos was finally ready to go into service. A week before the first customer train journey, we did a trial run of the Pendolino from London to Manchester. Prime Minister Tony Blair joined me at London’s Euston Station to mark the entry of tilting trains into service.

  I was delighted when the train arrived in one hour and fifty-three minutes, knocking fifteen minutes off the record time for a London–Manchester journey. We had reason to be confident the first commercial service would go off without a hitch, too. But then our flagship Royal Scot train broke down at Carlisle with a wheel problem, causing a two-hour delay. Only two of seventy-eight tilting services had any issues, but that was enough for some people to predict the end of Virgin Trains before it really got going. “Euston, we have a problem . . .” was the infamous Daily Mail line.

  But after this rather inglorious opening, the Pendolinos and the team came into their own. In the first week we hit 82 percent punctuality, 10 percent up on targets, and only four of 2,010 services were canceled. It was not perfect, but it was a good start. Slowly but surely we began to turn things around. “General mood of passengers is that it worked well and will steadily improve,” I wrote in my notebook.

  And that is precisely what happened. Tony Collins took over as CEO in 2004 after years of superb work from Chris Green, and by 2008 we were named the UK’s best train company by the Institute of Customer Service—an accolade that would have sounded utterly implausible a few years earlier. We had finally delivered on our promises.

  CHAPTER 6

  Answering Madiba’s Call

  I was in the bath when Nelson Mandela rang. The tub belonged to friends of mine, and was situated in their English country house where I was staying. I was having a proper soak, plenty of bubbles, and was relaxing to the point that I almost didn’t answer the phone. But, somehow, when Madiba rang, wherever you were, you always took the call.

  “Richard,” Madiba said, ignoring the sounds of splashing in the background and getting straight to the point, “you said that you wanted to help out in South Africa . . .”

  Madiba and I had recently spent time together in Cape Town putting on an incredible concert to raise awareness about AIDS. I had just got back from South Africa, so I presumed he wanted to follow up on that.

  “Yes, Madiba. You know I’m happy to help,” I responded, brushing the bubbles off the telephone cord.

  “Well, we have a problem. Our biggest health business, the Health & Racquet Club, is about to collapse.” He explained that 5,000 people were going to lose their jobs and that a company that was one of the symbols of South African growth and progress was going under. “Do you think you could save it?” he asked. “Do you think you could save the people?”

  “I’m sure we can do something.” I tried to sound more assured than I was feeling. “I’ll be back on the next plane to Africa.”

  As it happened, I knew more about the Health & Racquet Club chain than Madiba might have realized. As Virgin Active had expanded in the UK, we had been in the process of buying a couple of their clubs from Healthland International, the overseas branch of the overall company, LeisureNet. The discussions, however, had taken a sharply different turn when Healthland suggested that, rather than two clubs, we took over fifty leases from them in one go.

  It had been a tempting offer. The gyms were high-quality and it meant we could achieve scale overnight. I was over on Necker, running up quite a phone bill debating it back and forth with Peter Norris, an adviser for Virgin Group and Virgin Active. It got to 2 a.m. back in England, and Peter and I were both sorely tempted to do the deal. But I could tell from something in Matthew Bucknall’s voice that he wasn’t convinced.

  “It looks a good deal on paper,” he said, clearing his throat, “but it’s not as easy as it sounds. The model they have presented just doesn’t stack up.”

  “In that case we’re not going to do it,” I decided. “Let’s all get some sleep.”

  After we declined the Healthland deal, they soon went into receivership. As Matthew had rightly deduced, their business model had some fundamental flaws. They hadn’t forecast properly and ran out of cash, which was why they had knocked on our door. There was a domino effect, and very quickly LeisureNet was placed under a liquidation order. That put seventy-six Health & Racquet Club gyms across South Africa, with more than 900,000 members, on the verge of going under, too.

  As I put the phone down on Madiba, I had no idea what we could practically do, whether there was a viable business opportunity, or if the call would cost us millions of pounds. But I respected his desire to support his people and wholeheartedly wanted to help.

  —

  South Africa is a place I have always had a lot of affection for, and had got to know particularly well in the early years of the new millennium.

  One corner of the country I had long ago fallen in love with was Ulusaba, part of the Sabi Sand Reserve in Kruger National Park. Ulusaba means “place of little fear” in the local Shangaan tribe’s language and it was easy to see why. The first time Joan and I visited, we stayed in a tiny little makeshift treehouse, creaking and wobbling high above the plain with a stunning view of the waterhole below. This was a gathering poin
t for all manner of animals, from rhinos to gazelles, buffalos to hyenas. Throughout the park there were leopards, elephants, hippos, lions and giraffes marauding below. There were also painted wolves. Often known as wild dogs, these creatures hunt in packs with incredible guile and cunning, and have a fierce sense of family loyalty and solidarity. There are usually bigger, faster, stronger predators ready to steal their meal—or their young—but working together they can fight them off. Forget the Big Five (although magnificent lions, African elephants, Cape buffalos, leopards and rhinoceros can all be found roaming Ulusaba): these creatures quickly became my favorite animals in the bush.

  It was a magical place. Lying there looking up at the stars in the indigo sky, I felt I had discovered another little piece of paradise. I set about buying Ulusaba, with a view to turning it into a luxury reserve for people to visit and support the local community. With Karl and Llane Langdon at the helm, we have developed Ulusaba into a haven for wildlife as well as a beacon for the surrounding region. Today we employ 107 team members, of whom seventy-six are from the local villages. Their income is able to support an estimated 540 individuals in around sixty families. What’s more, those who become rangers and trackers are sponsored to study for Field Guides Association of Southern Africa accreditation, and, as ever, we promote our best staff from within. The park has become an integral part of the community, especially since we launched Pride ‘n’ Purpose, a scheme to support local people by building schools, backing regional education schemes and creating health clinics.

  In 2000 we visited Ulusaba to mark the official launch of Virgin Limited Edition, our collection of spectacular hideaways, which also includes Necker Island and the Roof Gardens in London. I have acquired each place in different ways over the years—I became the lease holder of the Roof Gardens after a bouncer refused me entry for wearing jeans and looking too scruffy. I bought the place the next day, and gently informed the bouncer to let me in regardless of my clothing. He turned out to be a delightful gentleman and ended up working for us for another three decades.