Richard Branson on how to take on Goliath
By Gabey Goh May 27, 2013
- Branson and his tips: Delegate and don’t get bogged down; get someone better than you to handle day-to-day ops
- Don’t compete on just price; if your company is based on quality, harder for a big company to put you out of business
THERE he was, right in front of me, sitting on the main stage of CA World in Las Vegas, accompanied by a moderator and surrounded by 5,000 curious attendees.
Richard Branson, entrepreneur and owner of Virgin Records and Virgin Atlantic Airways, was present at the enterprise IT conference to share his insights on innovation.
Part of the session was devoted to the story behind Virgin Airways and as aptly put by the moderator: “Who just goes out and starts an airline?”
Branson recounted the tale, which saw him years ago at the age of 29 in Puerto Rico, waiting for a flight out to the Virgin Islands. The flight didn’t have enough passengers and was arbitrarily cancelled, leaving travellers in a lurch.
Branson, then already head of thriving record label Virgin Records, decided to charter a plane to get him and other passengers to their destination.
“I got a little sign, wrote ‘Virgin Islands for US$29’, started flashing it around and just like that I filled up my first plane,” he recalled.
The experience got him thinking about the state of airline companies and how their passengers always came second. When he got back to England, he made a call to Boeing to ask if they had any planes for sale.
“They asked me what the name of my company was, what we did, and I said well we have the Rolling Stones and a few other great bands. There was a big pause at the other end of the line but they were brave enough to send a sales representative over and we managed to secure a deal for our first plane,” he said.
With that, Virgin Atlantic Airways was born.
Branson was asked for his take on the classic David vs Goliath scenario his new airline was in at the time and he shared that it is not impossible to slay the giant.
“The thing is, if you do something just based on price then it’s hard to survive. If you create a company based on quality and brand, then it’s harder for a bigger company to put you out of business,” he said.
He also shared a piece of advice he got from British airline entrepreneur Freddie Laker: “You’ve got one plane, they’ve got 300 planes. You got to get out there and get yourself on the front page of the paper.”
Branson said that the lesson he took to heart was that it’s important to tell people what you’re doing, even if it means using yourself to do it. “There’s no point creating a great product if no one knows about it.”
His recommendation for anyone looking to start a business in a space already dominated by others was this: “Just make sure you’re a hell of a lot better than that big goliath in whatever space you’re in.”
“You’ve got to be better than the others, learn the art of delegation and don’t get bogged down. Find someone better than you to handle the day-to-day operations.
“I was lucky enough to learn that lesson early in my career and it freed me up to think big and take the company forward and fire-fight when things went wrong,” he added.
Branson has since shifted his focus to bigger aspirations, namely space travel, inspired by an invitation from former president of the Soviet Union Mikhail Gorbachev, to be the first non-astronaut to travel into space in a Russian spacecraft.
The invitation came with a US$60-million price tag. “We have a charitable foundation [Virgin Unite] and are doing a lot of work in Africa, and I felt that it [paying to put himself into space] was a waste of money and it would be much better to spend money on building our own spaceship programme,” Branson said.
Things are moving along with Virgin Galactic, the company’s commercial space travel division co-owned with Aabar Investments PJC of Abu Dhabi. On April 29, the company’s SpaceShipTwo made its first powered flight, breaking the sound barrier in a test over the Mojave Desert in California.
When asked about trying to achieve the impossible, Branson said: “If you keep asking questions and you’ve got these wonderful engineers and technicians who want to prove themselves and you test them and encourage them; suddenly everything becomes possible.”
But commercial space travel remains a ways away and Branson was inevitably asked if he felt it was necessary for entrepreneurs to be big risk-takers in order to find success.
“I think the great entrepreneurs have all taken big calculated risks. Ideally you must try to protect the downside. Whatever risk you take, if it goes wrong it’s not going to bring the whole pack of cards crashing down,” he said.
The same considerations that adventurers take, when they consider missions Branson himself did such as crossing the Atlantic ocean in a hot air balloon, also applies to business.
“You have to think, what’s the worst that can happen and how do you survive to tell the tale? Take big bold risks, but if things go wrong, is there a way of dealing with it?” he said.
And in the event that everything does fall apart completely, as Branson noted was usually the case with people who start a business, then his advice was: “Learn from it, pick yourself up and move on.”
There is no message to this week’s column but if there is one thought I can leave you with, it is this quote the moderator used as his last question to Branson: “They say you know you’re getting old when your memories outnumber your dreams. So what’s your ratio?”
Much to the amusement of the crowd, Branson quipped in reply: “You know, I can’t remember!”
But the question is certainly worth pondering and best saved for a rainy evening.
This column originally appeared in the Metro Biz section of The Star and is reprinted here with its kind permission.