Maiden voyager

By Vincent Heeringa, May 24, 2007 @ 11 pm

Idealog May/June 2007, page 26. Illustration by Paddy Boehm

When he’s not promoting space tourism or throwing his cabin crew into the Avon River, Richard Branson is funding research into biofuels and sustainable business. Last year he announced that all the profits from his airline business would go to research on climate change and sustainability. On his whistle-stop tour of Enzed, Branson talked to Idealog about Al Gore, the Arctic and what you can learn from the Sex Pistols

Are you serious about being green or is it just the Branson branding machine at work?

Every single year of the last 50 years the world has warmed up. If we let this continue, it will lead to the destruction of the world. Millions of people will potentially be displaced as the sea levels rise and there is a considerable possibility of the Arctic actually disappearing and becoming water in the next decade. Yet there aren’t any business leaders taking a stand on it and there aren’t that many global political figures either. Al Gore came to see me and suggested that I should, and so the idea was born to pledge all the profits from our dirty fuel companies, such as our airlines, into tackling this issue.

If we’re going to be successful we’ll have to take on the oil and coal companies so we’ve got to come up with the fuels that people are willing to buy—and create a mega-business out of it as well. Just making it one big charity ain’t going to do the trick.

Have you seen anything that really impressed you recently in that whole space of sustainable fuels?

There are some patents that people have managed to get on deriving butanol from biomass, which we’re excited about. There are some solar power companies in Australia that we’re excited about. We’ve got a team of people looking at a whole mass of different projects at the moment. I don’t think there’s a magical killer app.

You’ve got your fingers in so many pies. What’s your process for choosing one idea over another?

A lot of it is gut feeling, rather than in-depth market research. Twenty-one years ago when we started Virgin Atlantic I’d flown on lots of other people’s airlines. The experience was dire—the staff working for those airlines obviously weren’t proud. They didn’t smile, the food was dreadful, the entertainment was non-existent and my gut feeling was we could do it a lot better.

A lot of people would feel like that, then not do the next thing.

The next thing was that I rang up Boeing and said my name is Richard Branson, my company is called Virgin, I’m the person that brought you the Sex Pistols, let us have a second-hand 747 for 12 months and if my business doesn’t work out I’ll give it back to you. And I think the response was “Virgin? Well it doesn’t sound like your airline’s going to go the whole way.”

What do you mean? What’s wrong with these people!

Yeah! We somehow managed to persuade them to give us a plane and if it didn’t work out we could hand the plane back after 12 months. I didn’t get the accountants in to do lots of figures to tell me why it would or wouldn’t make sense. I mean, one set of accountants will do figures showing you that you’ll make a profit and another set will do     the opposite.

You did do some figures though … or maybe you didn’t?

I don’t think I did. Maybe on the back of an envelope I wrote the cost of the plane equals X and the cost of fuel equals Y. In the end, I said if we can create an airline that people want to fly on there’s a possibility we can make a go of it. And by creating a really good airline it turned out that we have 300 planes flying around the world.

Are there some general lessons here?

The most important thing is that I’ve never been interested in making money. What I’m interested in doing is creating the best of whatever is in the area that we go into. If you look at it historically, the best hotels, the best clubs, the best restaurants, the best travel agents, the best magazines, never disappear. So the important thing, I think, is to make sure that you create the best in your field. I’ve had accountants with Virgin Atlantic telling me that we should get rid of the 400 or 500 masseuses on board our planes. Think of all the money we would save. Or the stand-up bars we have on our planes, we should get rid of them, or the fact that we have four more staff than our rivals, and so on. The important thing is to resist the accountants. In the short term you might make a little bit more money, but in the long term you won’t.

I remember reading about George Soros, the great financial guru and risk taker, that what you don’t see is the amount of research and thinking that he does before taking a big risk. How much research  do you do?

George Soros buys companies, we start companies. There’s a big difference. Almost every Virgin company was started from scratch. We’ll start off with one space ship, one plane, one train. We’ll put our toe in the water and then we decide whether to keep going.

But would you go all the way?

Well, our philosophy is ‘Screw it, let’s do it’ so yes, we would.

You obviously have a huge amount of energy and jump out of bed in the morning and think let’s go! How do you impart that to the rest of your team?

Finding the right people is the best start. I think the senior people should be given a stake in a company. And then you need to create a company that everybody is really proud of. Like our Pacific Blue carrying crew, they’re flying in the newest planes. They know the price that the people on that plane are paying is a fair price. So they can look people in the eye and feel good about it.

And learning the art of delegation is very important. Accept as chairman that there are people who are better than you and you’ve got to try to find people who are better than you.

You know the great quote from David Ogilvy: employ people who are shorter than yourself and you end up with a company full of pygmies.

Actually that is very, very good.

Everyone in our company is really, really tall. It’s a nightmare hiring people now. The other question that people want to ask you is what’s it all about if it’s not about the money? Fame?

It has been in the past. Now it’s about inspiring myself and the people around me. Life is one long learning process and it’s fascinating. I don’t want to waste the position that I find myself in. For instance, with Nelson Mandela and his wife we’re setting up an organisation called The Elders, the 12 most respected people in the world meeting every couple of months. They will act in the same way that elders in an African village act—and hopefully the villagers will look up to them.

What’s the interest in New Zealand? With Virgin Galactic, for instance, you could raise the money you need in California. So why go to the ends of the earth to do business?

Well, I think in a strange way that being British we find that New Zealanders and Australians and South Africans have a strong affinity with Britain.

We let you beat us in the rugby for example …

I doubt it, buddy. Anyway, I think Virgin is held in affection down here and we reciprocate. I always enjoy coming to New Zealand. I’m always given a fantastic welcome and it’s fun as well as work.