Billionaire Richard Branson never wanted to make billions of dollars.
But it still happened somehow.
Let’s call it a side effect of his life decisions.
Just exactly what happened?
Let’s dive right in!
Early Life Richard Branson was born in 1950 to an upper
middle class family where he enjoyed a normal and happy childhood.
He was already lucky in the genetics lottery in this regard, but this doesn’t mean he
was anywhere near being born rich.
But he did have a leg up on his competition because his parents were quite progressive.
They considered their kids equals and they often gave the kids challenges in an effort
to make them self-reliant.
That was most likely the seed that started it all.
Entrepreneurship was set deep in the Branson kids.
Branson's parents were supportive of Richard’s ventures from an early age.
One big reason might have been because Branson's mom was an entrepreneur herself.
Know Who You Are Growing up, Branson had a lot of trouble with
school, something that’s isn’t that unusual with entrepreneurs.
Many of Branson’s teachers supposedly considered him to be a bit slow and lazy, something that
we all now know isn’t true.
What was going on was something else.
He was actually dyslexic!
Branson himself admits that by age 8 he still couldn’t read and he was hopeless in math
and science.
According to Branson, he was considered the dumbest person at school!
The headmaster of his school famously said to him, “You’ll either go to prison or
become a millionaire”.
Instead of feeling sorry for himself and seeing himself as a big failure, Branson recognized
his weaknesses.
But he also recognized his strengths, which was his ability to make things happen.
Because he wasn’t good with school, he realized that he needed to channel his energy somewhere
else.
And that something else was monetizing his interests.
Bold moves Branson got into his first business venture
at the age of 16 with a magazine called Student.
He was looking around for magazines that he liked to read, and he found all of the magazines
at that time to be boring.
There weren’t any magazines out writing about anything he was interested in, so he
decided to come up with a magazine of his own!
Student magazine covered all the topics that major magazines didn’t talk about.
The magazine was started and run in his co-founder’s parents’ basement when he was just 16 years
old with no money.
That experience taught him the skills to start running bigger things.
Just a short time later, Branson started his record business from the same basement where
he ran the magazine.
Whenever Branson saw a need for something in the market that he was interested in, he
asked himself why couldn’t he do it?
Virgin Records Branson started advertising records for sale
in Student magazine.
And that’s when he found another brand new opportunity.
That new business was an overnight success.
Well, for selling records at least, and it was the unofficial start of Virgin Records.
How Branson beat the big guys at that time was to sell records for considerably less
than the traditional record stores.
But the way he did it was completely illegal.
We’ll get into this a bit later.
And that’s why the name "Virgin" was completely appropriate for the company.
It was suggested by one of Branson's early employees because they were all new at business.
Virgin Atlantic Let’s fast forward a bit in Branson’s
life and look at a bigger example of his boldness.
Branson's successful entry into the airline industry happened only because of a trip to
Puerto Rico.
On the way back home, his flight was cancelled.
So what’d he do?
He decided to charter his own plane the rest of the way!
BUT he also offered a ride to the rest of the stranded passengers for $39 dollars a
person in order to cover the cost.
Long story short, he started doing research into the business.
He received a proposal to establish a transatlantic service to compete with British Airways and
he couldn’t resist the opportunity.
One little mishap gave Branson the vision to start Virgin Atlantic Airways in 1984!
Are you guys recognizing a pattern?
Whenever Branson found an interesting situation, he found a way to monetize it and make a profit!
Against the advice of his advisers, he called Boeing in Seattle and negotiated to lease
a 747 for a year, just to see if the whole idea could work.
Virgin Atlantic was soon a reality, although it almost never got off the ground!
On their very first flight, a flock of birds flew into one of the engines, ruining it at
a cost of around 750,000 thousand dollars!
And no, the plane wasn’t insured!
Having to get the engine fixed brought Virgin over its credit line, and they came close
to going bankrupt.
Only an emergency influx of cash from Virgin’s overseas operations got everything through.
Do it right However, Branson’s path to being a billionaire
wasn’t without failures.
Let’s go into one example.
Remember when we mentioned how Virgin sold a lot of records, but it was done illegally?
Although Virgin’s chain of record shops was growing, it actually wasn’t profitable!
In the spring of 1971, Virgin was losing money as a discount music retailer.
Its record shop on London’s Oxford Street was popular and its mail-order business was
growing.
But because of rock-bottom prices, the company was burning cash and digging itself deeply
into debt.
Branson accidentally found a solution to his company’s problems.
And that’s how he almost fulfilled the other part of his headmaster’s prophecy of him
in jail!
The scheme was simple.
Virgin could avoid paying purchase taxes by pretending to export albums internationally
that it actually sold in England.
In Britain at the time, music retailers paid a 33 percent tax on records they planned to
sell domestically.
But the tax didn’t apply to records that were sold internationally.
Branson discovered that he could stop at customs in Dover, England and get his export paperwork
stamped.
And then all he had to do was bring the cargo back home to sell, that way the company just
didn’t have to pay any tax.
He figured that after just a few of these profitable trips, Virgin would be debt-free.
However, after three trips of taking records across the English Channel to imaginary buyers,
his activities were discovered by UK Customs.
To escape jail he had to pay back THREE times the amount he was supposed to have paid in
taxes!
That experience taught him a valuable lesson.
At the age of 21, he resolved to never do anything illegal again.
Branson learned at that moment, if he was gonna do something, he was gonna do it right
the first time.
No copycats But let’s take a step back and take a more
detailed look at how Branson grew Virgin Records.
The way they did business sold a lot of records, but they were still having trouble generating
good margins.
So they decided to sign their own acts and sell their own records, instead of doing it
for other record companies.
Branson recognized that ownership was important to making a profit.
He and his partners decided to buy a country estate north of Oxford and they installed
a residential recording studio.
The first act Virgin signed was an unusual choice for any record company, let alone a
startup.
A young musician named Mike Oldfield had spent months perfecting a recording that had no
vocals.
It was basically a lot of bells and other unusual instruments.
It was a bizarre first choice for a company that was intended as a rock music label.
But it was a calculated gamble that paid off!
Oldfield’s album Tubular Bells was one of the biggest selling records of the 1970s,
and it helped to bankroll Virgin’s early years in the business.
Virgin later signed controversial bands, such as the Sex Pistols, a band that many other
record companies were reluctant to sign.
Branson saw opportunities where other people could only see liabilities.
Branson was willing to go against the convention and do the complete opposite of what the trend
was.
Virgin Records would go on to sign other artists such as the Rolling Stones, Peter Gabriel,
Paula Abdul, and Culture Club.
By the early 80s, Virgin had become an unconventional big label to contend with.
It was all because of Branson’s willingness to step outside the box with artists that
many contemporary labels were afraid to sign.
Big Ambitions Let’s go forward in Branson’s life again.
You may know that Necker Island is a 74-acre island in the British Virgin Islands that’s
owned by Branson.
When he first bought the island, it was completely uninhabited.
He purchased Necker island when he was just 28, just six years after starting Virgin Group.
The story behind the sale completely shows Branson’s bold attitude in life.
He first became aware of the British Virgin Islands in 1978 when he saw the island for
sale.
He had actually never heard of the ‘Virgin Islands’, had no idea where they were located,
or knew that the islands are actually called the British Virgin Islands.
At that time he and his partners were still in the early days of Virgin Records.
Branson by no means had the money to buy an island.
But, he was trying to impress a girl he liked, so he called up the realtor and said he was
interested!
Luckily for Branson, the realtor didn’t know he couldn’t afford it, so he offered
him an all expenses paid trip to see the Islands.
Branson agreed to go on one condition.
Only if he could bring a guest!
So he and his date were given a luxury villa and they were flown around the British Virgin
Islands by helicopter.
The final island he saw was Necker Island.
He was stunned by the view and the wildlife on the island, and he decided there was no
way he COULDN’T purchase the island.
However, remember, Branson had no money to buy the island.
But he figured that he had nothing to lose.
He made an offer with the max amount he figured he could come up with from his bank.
So he made a lowball offer of $100,000 for an island that was advertised for $6 million
dollars!
The owner said no, and was so insulted, Branson actually had to figure out a way off the island
himself!
But, the owner got over it.
After a year, nobody else had made an offer on Necker Island.
By that time, the owner of the Island was desperate to sell because he needed cash.
And Virgin Records was in a much better position financially than it had been a year before.
So Branson quickly agreed to a purchase price of only $180,000.
The only condition was that Branson would need to build a resort on the Island within
four years.
It’s because of these negotiations skills and his willingness to make bold moves that’s
put Richard Branson where he is in the business world.
Passions Branson will be the first person to admit
that he didn’t go into his first business to make money.
He did it because it was something fun to do and he was passionate about it.
Even nowadays, Branson’s main reasons for entering a business is that it would be fun
and exciting.
For example, Branson got into Virgin Galactic because it was fun and exciting to get into.
Obviously there’s also money to be made.
Branson also has a number of achievements that have nothing to do with business.
For example, there were his various efforts to break world records for hot air balloons.
Branson is also well known for his different way of thinking.
According to Branson, most people in business dress the same, and that contributes to them
acting and thinking the same as most of their coworkers.
And that’s why he has a distinct dislike for ties!
He often carries a pair of scissors with him at all times, ready to cut off a tie off anyone
at his company.
He even owns a pillow on Necker Island that’s completely made up of a few of the ties he’s
cut!
To Branson, wearing a tie restricts new ideas and innovative thoughts.
Embracing change and having the ability to adapt is the only way to move forward for
anyone.
Here’s what’s next!