Life begins at sixty

Sir Richard Branson may have crossed 60, but the Virgin Group founder is busier than ever
Life begins at sixty
Richard Branson Virgin Atlantic
By Anil Bhoyrul
Sun 02 Jan 2011 11:49 AM

How do you start a conversation with Sir Richard Branson? It’s not easy: he has 300 companies around the world, employs 50,000 people in 30 different countries, and last year banked close to $18bn in global revenues. Most experts reckon he is personally worth around $4bn. There are planes, trains, and now with F1 even automobiles. You name it, he is in it. Oh, and let’s not forget Elders, the organisation he founded to help tackle global problems.

Luckily, he starts the conversation. “Are you married now?” Yes. “Do you have kids?” Yes. “That’s good. You have gone straight then, straight and boring. There’s a lot to be said for that.”

Not that straight and boring is anything Branson himself would ever subscribe to. Ten years ago, the last time we had a lengthy interview, he had just parachuted out of a helicopter over Las Vegas, dressed as Elvis Presley, to celebrate the first ever Virgin Atlantic flight to the city. He was 50 years old then. Now he is over 60. Bizarrely, he looks younger, fresher and keener than ever. And by any measure, the last decade has been pretty good for Branson.

Last year saw the 25th anniversary of flights on Virgin Atlantic, with over five million passengers a year heading to 30 different destinations. The airline accounts for a hefty $4bn of his Virgin Group revenues. His mobile phones, trains and media companies are all worth several billion dollars each having started from scratch less than ten years ago.

From megastores to drinks, there appear to be few are as that Branson has left to conquer. But he, of course, doesn’t quite see it that way. “I just love life today as much as I did when I was twenty. I feel the same as I did when I was twenty. There is still a lot to achieve,” he says.

“I see myself just painting a picture, I love creating things. If the companies do well we can make some money and create more jobs. It’s part business, it’s part fun. An equal splash of both…..but I hope only half the picture is painted. I love life, every minute of it and keeping on challenging and testing myself.”

His latest test has been a pretty big and challenging one — trying to gatecrash the world of F1 racing and do it the Virgin way. During the 2009 season, Branson part sponsored the Brawn Racing team, which went on to win that year’s championship with Jenson Button at the helm. He admits he was “ridiculously successful for what was a very small investment.”

By December 2009 Branson had caught the F1 bug and announced the launch of Virgin Racing, in a partnership with Manor Motorsport and WR Technology. Again, Branson is coy on the figures but admits his contribution was the Virgin name more than hard cash. The team ended the season in last place with zero points, alongside other newcomers Lotus and HRT who also failed to pick up any points.

But, Branson insists, there is a lot to be cheerful about from his debut season. “I think it’s a tremendous start. We have spent less money than all the other teams. We have shown that you can do almost as good a job as the other teams with $20m less than they spent and we have got a great team of people. We have set a solid foundation,” he says, adding: “It hasn’t been much tougher than expected. We never thought we were going to come in and win F1 in the first year, some of the more established teams took time. No new team has come in and done much better than Virgin.”

That said, F1 is notorious for being a closed shop that generally doesn’t welcome newcomers. Branson admits: “Yeah, I think there were no advantages given to the new teams. There were some advantages promised but the big teams stopped that happening, that’s fair enough that’s the rule of the game. I think that the big teams were new teams once and they had to go through this initiation ceremony. It’s been tremendous fun.”

While he may be pleased, F1 supremo Bernie Ecclestone hasn’t — at least on the face of things — been over impressed with the low spending new boys clogging up the back of the grid. In July, the UK newspaper The Daily Telegraph claimed Ecclestone had blasted Virgin and co, saying: “I would be surprised if one or two of them make the end of the season. I think there are a couple of teams who really shouldn’t be there. They are a bit out of their depth at the moment….All we ever want is ten teams. In general this year has been a bit of a nuisance because it has cost money to keep these teams in. The bottom line is they haven’t really and truly given us value for being there.”

So was this a spectacular kick in the teeth? Not quite, says Branson. “I spoke with Bernie about it and he 100 percent denies saying it. He says he did say something about the Spanish team but he categorically denies saying it. It didn’t seem like his words and he knew that Virgin was bringing a strong brand to the sport and he knew on what basis. I think we have done what we promised and he is incredibly happy with what we’ve done.”

Branson adds: “There could have been some rules that could have been different but in the end we were happy we knew what rules we were playing under. It was Bernie that wanted to see new teams in the sport.”

If anything, Branson’s F1 future looks bright for the next few years. Virgin Racing has sold a “significant” shareholding to Russian motor giant Marrussia Motors, which should be enough to keep the F1 dream alive for a good five years — certainly until at least the first Russian F1 race in 2014. And while he admits that his first season in the sport has been “tremendous fun”, Branson is doing this for a simple reason: to sell more Virgin products. “A billion people watch it and there are fanatical F1 people. We have reached people in certain countries like Brazil and Russia where we don’t have a lot of products. It’s formidable what Bernie has achieved. Yes, I think it is cost effective.”

So how do the numbers look going forward? His airline, after a profits dip last year, is forecast to bounce back strongly next year - pretty impressive when you consider that British Airways lost close to $1bn last year. His dream of commercial space flights, through Virgin Galactic, is close to becoming reality, helped by Abu Dhabi’s Aabar Investments,  which took a 32 percent stake in the company for $280m. To date, Virgin Galactic has taken $45m in deposits from 335 budding astronauts. With a starting price of $200,000 for a trip to space, this could yet become one of his top revenue earners in the group.

Branson is also eyeing a Middle East expansion of Virgin Mobile, with more Virgin Atlantic flights to the region also possible a few years down the line. “The fact that Virgin is so strong now, I don’t have to sweat about surviving all the time; we have climbed over the wall. We have a fantastic group of companies all over the world and people want to partner with us. It makes life more fun than when you are struggling,” he says.

Branson is busy planning several new ventures, and as far as he is concerned, the worst of the recession is now over. “I think if it wasn’t for the Far East the recession would be continuing, but because the Far East is doing so well, I don’t think we will see a double dip recession. I think we are through the worst.”

Really? He agrees the US and Europe still have “some pain” to come, but is generally in favour of the austerity drive in Europe and even President Obama’s bank bailouts. “I like Obama immensely and I suspect that he had to bail the banks out but I actually think cost cutting is needed. If we were a company in that sort of debt we would definitely be cutting costs, you just can’t go on year after year getting more and more into debt. I think the medicine that’s being dosed out is a Mrs. Thatcher type of medicine. But yes, I agree with it, I think it had to be done. It’s a risk in the short term but long term the country [UK] will be better for it.”

He adds: “I’ve been through a few recessions and you generally come out stronger from it. We are much better prepared than we used to be because we are getting old hats it.”

While Branson still has his finger on the pulse of everything connected to his brand, he is spending an increasing amount of time on philanthropic work. And there is no shortage of projects:

His Virgin Green Fund is investing in renewable energy and resource efficiency, while the Virgin Earth Challenge is a $25m prize to encourage a viable technology which will result in the net removal of anthropogenic, atmospheric greenhouse gases. Virgin Unite is a non-profit foundation, which continues to focus on entrepreneurial approaches to social and environmental issues. He also, along with Peter Gabriel, founded “The Elders”, a group of leaders to contribute their wisdom, independent leadership and integrity to tackle some of the world’s toughest problems. This group has no less than the likes of Nelson Mandela, Graça Machel, Kofi Anan, President Carter and Desmond Tutu at the helm.

He explains: “I just came back from meeting with Anan and Carter and Tutu, an incredible group of people, talking about Zimbabwe and Iran and how we can help as a group. Yes, I am busier than ever, having more fun than ever, but a lot of my life now is creating, instead of for profit businesses, not for profit businesses and projects…but running them as if you run a business, using our entrepreneurial skills. But they are designed to get on top of some of the big problems in the world.”

If his success on these ventures is even a fraction of that with the Virgin Group, Branson will have left a significant mark on the planet. Only a fool would bet against him succeeding.

 

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