As you mentioned in your letter, I suffer from dyslexia but was able to turn this to my advantage. I delegated the areas I struggled with to people who also believed in the project. This freed up my time to focus on what I was good at—the strategy of the magazine, making contacts and developing marketing. We had very little money so had to take risks to get our magazine on the map. I approached to be in Student people like Mick Jagger and David Hockney, whom somebody with more experience may have been too intimidated to contact. For some reason, they said yes! I secured advertising by calling up big brands from the school phone box, telling them their rivals were already advertising with us and playing them off against each other.
It was all great fun, and we learned so much about business by taking chances, getting things wrong and getting up to give it another go. Back then, people who were interested in starting their own businesses were not encouraged in school. Nowadays, while I still think much more could be done to encourage entrepreneurship in education, there are lots of tools and mentors to help you get started in business. If your GCSE studies spark your interest too, then that’s brilliant. If you don’t get top grades, remember there’s a lot more to life than some letters on a piece of paper. Have you thought about your own first business idea yet? When you do, be sure to let me know.
Which reminds me: I must write back to Olivia and find out how her business plans are going.
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Back in autumn 2013, the day had come to launch Virgin StartUp. There was only one place that seemed fitting to do so: the entrepreneurial hotspot of Silicon Roundabout.
When I lived in London, most of the innovations coming out of the city were attached to people with west London postcodes. Now, east London has become the cultural center of the city, with artists, musicians and, most notably, start-up businesses flocking to Shoreditch, Hackney and beyond. There is great value in working within a community of people with shared mind-sets and goals, all striving to achieve new things. It certainly helped being surrounded by our competition when most of the record labels worked within a few streets of each other. I see the same benefits in the way that Virgin Galactic and its fellow space companies are pushing each other to new heights.
The best-known example of this groupthink competitive advantage is in Silicon Valley, where most of the world’s brightest tech talents have gathered for the past decade. With companies from Google to Apple and Facebook to Twitter all operating within the same geographical boundaries, the atmosphere of innovation on the West Coast is tangible. I have long believed the UK is floundering behind the US and elsewhere when it comes to technology, and the lack of a principal hub to nurture the undoubted British talent is one of the main reasons why.
So it’s great to see Silicon Roundabout filling this role. Some people think it’s a silly label, but it’s memorable and plenty of people thought Virgin was a ridiculous name, too! The entrepreneurial spirit is thriving in the UK, especially when it comes to technological breakthroughs. By 2014, 16,000 new businesses had registered at Silicon Roundabout and the tech sector accounted for more than a quarter of all new jobs nationwide. While the UK is still definitely missing its own Google or Facebook-esque global powerhouse, it’s catching up.
We pulled into Shoreditch, and went inside Boxpark to discover a flurry of activity; entrepreneurs were swapping stories and contact details, caterers were handing out croissants and I went hunting for a cup of tea. A couple of young lads grabbed me, said they were in business together and asked: “Have you got any inspirational words for us?” It’s not easy to be “inspirational” on demand, but thankfully I had a Dr. Muhammad Yunus quote stuck in my head: “All human beings are born as entrepreneurs. But unfortunately, many of us never had the opportunity to unwrap that part of our life, so it remains hidden.” Now, as you do have the opportunity, don’t waste it.
I think entrepreneurship is our natural state—a big adult word that probably boils down to something much more obvious like playfulness. When we are young, before we have our childlike wonder beaten out of us by adult life, we are at our most inventive and ambitious in our actions. I’ve always tried to keep that youthful spirit. Running a business with your mates is the best thing in the world, but it can quickly turn sour. The important thing is to remember you were friends before you were business partners, and can remain friends afterward. I had differences with my Virgin Records co-founder Nik Powell, even though we had been best friends since we were three years old. I can’t even recall the details of what we quarreled about, but I can remember climbing trees together when we were kids in Shamley Green. Now we’re good friends again. Life’s too short, and if everyone could befriend their enemies the world would be a better place.
It may be controversial to say it but there is no job more important than being an entrepreneur. When you analyze everything about the world and all the improvements that get made, almost without exception it is an entrepreneur that has made them. It might be an entrepreneurial doctor, or architect, or artist—anything. The world is improving day by day, week by week and year by year at an extraordinary rate, thanks to entrepreneurs in every single profession. The number of people being pulled out of poverty globally is amazing, fewer people are starving and more people are working. Fortunately, that means even if there are rotten governments in place; yes, they can do harm but considerably less in a world made up of hundreds of thousands of entrepreneurs.
As the launch day progressed, I grew even more convinced we were doing the right thing in providing assistance for new entrepreneurs. Too many young people are still held back by a lack of support, a lack of genuinely useful, practical training—and, of course, the lack of readily available start-up capital. But we are trying to change that, and meeting with some success. On 4 May 2016, we announced that Virgin StartUp had provided more than 1,000 loans to up-and-coming entrepreneurs in the UK in less than three years. What does 1,000 loans look like? £10 million in funding, tens of thousands of hours of mentoring, hundreds of brilliant ideas turned into reality and a new generation of thriving entrepreneurs. Plus research indicates every £1 loaned to a start-up business is worth £3 to the economy. A huge positive of the scheme is that 41 percent of our recipients are female, which is great news when you consider that only 19 percent of UK entrepreneurs are women. Virgin StartUp is also proving an excellent channel for previously unemployed people—nearly 20 percent were not working before they launched their businesses with our loans.
Getting a loan isn’t the endgame, though. It helps fund the building of prototypes, market research and proof of concept. This can then enable entrepreneurs to go to angel investors or secure further funds from the bank—it can be a stepping stone to scaling a business. For others, it could be all that is needed to turn a one-man operation into a thriving small business. It is vital to be flexible, treat each case on its merits and each applicant as an individual. As ever in business, it is all about people. Some need hand-holding before they are in a position to receive a cash injection—there would be little point in giving out loans then forgetting about the people you have invested in. That’s why we maintain such strong ties with the loan recipients, holding regular catch-ups, regional StartUp events for networking and inspiration and ensuring their mentor relationships progress well.
As I left the Virgin StartUp launch with all the energy and ideas flowing through me, it made me think back to nearly five decades earlier. The words of my old Stowe School headmaster, Mr. Drayson, popped into my head: “Branson, I predict you will either go to prison or become a millionaire.” In the end I did both: years later I met up with Mr. Drayson and he brought along a “humble pie” to eat. The world has changed a lot since I set out in business, but until now a lack of support for young people with bright ideas has been ever-present. Now, everyone wants to be an entrepreneur, and there are a lot more options available to make it happen. Economies will rise and fall upon the creativity and ingenuity of entrepreneu
rs, and big companies and governments are beginning to realize that start-ups are the job creators of the future. We’re trying to encourage other countries, from Canada to Australia to the US, to adopt start-up loans. I’ve said it before, but there really has never been a better time to start a business.
CHAPTER 32
Calculated Risks
At the start of 2014, I spent time taking stock of how the Virgin Group was developing. We redefined our focus on changing business for good, investing in five core consumer sectors: travel and leisure, telecoms and media, music and entertainment, financial services and health and wellness. With Josh Bayliss as CEO, it was the most defined strategy we had ever put down on paper and it was working. New Virgin Mobile companies and Virgin Radio stations were spreading the brand further afield, in South America, Asia and the Middle East; the brand had the global feel I had always wanted. But there was still room for improvement. Looking over the figures, I pulled out some that caught my eye: more than sixty active Virgin businesses serving over sixty million customers worldwide, making over $24 billion in annual revenue. I rarely sit back and think about the sheer scale of the business, but this brought it home. I sent a note to Josh and our senior management—the V Team, as we call them. “These figures are great. Now, 60 companies, 60 million customers—can we make it $60 billion revenue?”
One of our businesses in which the figures were moving in the right direction was Virgin Money. As a result, we began to think about floating the bank on the stock market. Behind the scenes, however, trouble was stirring. CEO Jayne-Anne Gadhia felt the board was not behind her. This wasn’t a good sign: every company needs strong, united leadership, especially when preparing to float. My instinct, though, was that the issues were probably being blown out of proportion. But within a few days things had escalated to the point that I thought Jayne-Anne might go. When a board meeting was scheduled for the Sunday evening, I rang Jayne-Anne.
“I don’t understand everything that’s going on,” I told her, “but I want to. Could you get on the next plane to Necker? We’ll talk it over.”
Jayne-Anne flew out the same day. As soon as she arrived and dropped off her bags, it was obvious she was very agitated and highly charged.
“Why don’t you come for a walk on the beach?” I suggested. “I often find the sand between one’s toes helps to calm things down.”
So that’s what we did. With the warmth of the sun on our backs and the coolness of the water on our feet, we strolled along the coastline, taking in the view, looking out at the reef, listening to the sounds of the birds overhead and the waves gently crashing. As we walked and talked, Jayne-Anne told me she didn’t feel supported. I listened to her for a couple of hours and accepted what she said.
“Some people think you’re being a pain in the arse,” I said, “but you’ve been at the center of Virgin Money since it was just an idea in an attic. You’re a great leader, you’ve done some extraordinary things, and the last thing we need is to lose you. You will have my full support.”
I appreciated her honesty and her heart, as well as her business acumen. She had a strong vision for Virgin Money and wanted to see it through. I wanted exactly the same thing. Following our conversations, Jayne-Anne wrote to me outlining her vision for floating the company and making positive changes for the future: “The business is growing fast, our projects are delivering and our hard-working team is loyal and motivated. I will stop talking about the past and look forward positively to finishing the job I started many years ago to the benefit of the staff and shareholders who put their trust in me. Thanks for everything.”
I wrote a letter to Wilbur Ross, Virgin Money’s other biggest shareholder, attaching Jayne-Anne’s note and explaining my view: “Have spent many constructive hours with Jayne-Anne. I really believe we have cleared the air. She’s been grateful for the frank discussion, is humbled and apologetic that there was a need for a trip to the sun, and I believe will move forward reinvigorated and determined to finish the job she started to the benefit of the shareholders.”
At a meeting the next day, the board decided to go ahead with the flotation in September. Viewing situations from afar is sometimes clearer than being on the front line. In the UK they couldn’t see the wood for the trees—with a bit of distance and perspective, which I had from Necker, I could see the wider picture. It is worth remembering that people who run businesses see them as their children. As shareholders you’ve got to be very careful to give them the freedom and support to look after their children. If Jayne-Anne had left it would have put the IPO back several years, caused the company huge disruption, demoralized staff and damaged the brand (and an excellent one at that!), not to mention removed one of the far too few female CEOs at top companies. And all for what?
Back in the UK, Jayne-Anne was a force of nature. The team worked relentlessly to an unforgiving schedule and, by September, Virgin Money was ready to float. But the markets were proving particularly volatile, and another unexpected issue was also presenting challenges: Scottish independence. A referendum had been called for 18 September, and, as the date neared, polls suggested the outcome was too close to call. With Virgin Money based in Edinburgh, we were among many companies which would have been negatively affected by Scotland leaving Great Britain. Jayne-Anne believed independence would put the IPO back more than a year, and was worried we would need to relocate south.
I hoped Scotland would stay, for personal as much as business reasons. My wife and her family are Scottish, I have Scottish heritage and it is one of our favorite places in the world. I believed its people would be best off remaining a part of the union. But I thought it was sensible to remain neutral publicly, as it was a vote for the Scottish people. A couple of days before the vote, I was in Ukraine trying to encourage more business leaders to call for an end to the conflict there. The atmosphere in Kiev was extremely tense—it was only a matter of months since revolutionary scenes on Maidan Nezalezhnosti, and the east was still under siege from Russia. I held a public discussion at the Yalta Summit about the need to bring Russia back into the international fold, and the role businesspersons can play in reconciliation. As I came out of the meeting I was surrounded by Ukrainian journalists, confusing me with questions. The issue of Scottish independence was furthest from my mind, when a journalist from Bloomberg brought up the vote. I replied without thinking: “If Scotland left Great Britain it would be an absolute disaster.” So much for staying neutral!
I used my blog to try and explain my views more thoughtfully: “As a businessman, considering Scotland’s economy, prosperity and security, I think it is imperative it stays in the union. It is clear that the people of Scotland want change. And whatever the outcome of the referendum, change is in the cards. If the vote stays as close as the polls suggest, there won’t be a mandate to separate, or to keep the union exactly as it is. Keeping the status quo is no longer an option and the Scottish Parliament needs greater powers.” Thankfully, the Scottish people opted to stay, with Westminster promising to devolve more power. It was one of the few times I’ve been happy about the answer “No.” With markets stabilizing, we decided the time was right to make an Initial Public Offering.
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Two of my favorite things are taking calculated risks and helping to grow businesses. I’ve built my career on these pillars with Virgin, but I have always made targeted investments outside the Group, too, such as the Twitter stake I mentioned earlier. More recently, these have developed into a full-blown venture capital strategy. Jonno Elliott and our investment team find innovative businesses at early stages and we take relatively small stakes to support their growth. The portfolio of more than thirty-five companies is always growing in areas ranging from health to education, technology to financial services. I am as inquisitive as ever, and believe if you have resources you should use them well.
Our investment policy is to support businesses we feel can make a positive difference. It’s f
oolish to do something just for financial gain—that usually ends in failure. Every household name today, from Pinterest to Slack (a couple of my other investments), had to start somewhere. The best, most purposeful start-ups are living, breathing examples to new generations that creativity, innovation and good honest hard work really can change the world for the better.
Whenever I speak to young people, or whenever I write on my blog, I’m determined to help turn more of those people looking for inspiration into the leaders who inspire the entrepreneurs of the future. My prominence online has other benefits, too, proving useful for discovering the most exciting start-ups for us to invest in. There is now a long line of ambitious entrepreneurs with bright ideas itching to share them with us. I am always more than happy to hear them out and do so on Necker, while traveling or online.
One question people ask me a lot is what I would do today if I lost all my money and had to start from scratch. My answer? To begin with, I’d have to make sure I went bust in the most spectacular, exciting failure in history. Then I’d autograph lots of £10 notes and sell them (hopefully for more!). Next, I’d go through all my notebooks, find the best ideas that had fallen through the cracks and start them up. While business may have changed from when I started out, the principles are the same and still fit what I am good at: finding markets that need shaking up, coming up with ways to make people’s lives better, then finding brilliant people to bring it to life. Once an entrepreneur, always an entrepreneur. I know I’d find a gap in the market somewhere.
Finding My Virginity: The New Autobiography Page 31