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Richard Branson: The spirit to Succeed
Fundamentals of an Entrepreneur
04-75-290-01

Submitted to: Dr. Jonathan Lee
Submitted By: Ryan Thrasher
Submission date: March 3, 2012

The mind and spirit of an entrepreneur are that unlike any others. In today’s economy, it takes more than the basic traits and skills to succeed in founding and running a successful company. One has to seek opportunity where no one else does and be willing to take adverse risks in order to get ahead. The risk involved in creating your own business venture in today’s economy is astronomical compared to times prior. Charles Dawrin’s theory of ‘survival of the fittest’ reigns supreme in the business world. The ability of a company to create, innovate, differentiate, and grow often determines their chance of surviving. Based on a stats derived from Industry Canada (2009) “Business failure statistics show that about 96 percent of small businesses (1–99 employees) that enter the marketplace survive for one full year, 85 percent survive for three years and 70 percent survive for five years (Key Small Business Statistics - January 2009, Industry Canada). This is why it is imperative for a young and aspiring entrepreneur; to not only encompass a vast array of specialized traits but also be willing to take on the adverse risk involved in following through. The focus of this paper will support those desired traits and characteristics that helped define the great Richard Branson as an entrepreneur, and propelled him to found the media giant Virgin Inc. While his success in numerous business ventures have landed him on Forbes list (2010) for riches men in the world with assets totaling of over 4.0 billion dollars (Forbes.com, 2010), it is passion and leadership that make him so unique and so worth discussing Richard Branson was born in England in 1950, to a loving family who encouraged the free spirit and unbridled enthusiasm that drives him today. “Born as the son of a stewardess and Lawyer, Branson remembers the time spent with him parents and two sisters growing up as a happy time” (Finkle, 2011). Branson was never a strong student growing up, but what he lacked in academia he managed to make up for in ingenuity, and always had a knack for pushing the boundaries. One of the earliest memories of Branson growing up was his mother’s ability to push her children to strive for independence. As Finkle notes “Branson’s mother was raised in a family that encouraged women to strive to live more than just a domestic existence. She had drive and determination and wanted to instill this in her children” (Finkle, 2011). It is important to understand that many of the lessons and values we learn at a young age help mould and model whom we become and how we deal with life’s challenges later on. As mentioned in a study of Annals at the University of Oradea, Although many people believe that entrepreneurs are born like this and they cannot be trained, experience has proven that they can be taught, and a positive environment encourages entrepreneurial thinking, and improves the innovation concept that leads to a higher level of economic and social support”, (Denescue, Popescu & Strokes, 2008)

This environment was typical of what surrounded Branson during his upbringing. The positive influences his parents had instilled allowed Branson to push the boundaries needed to develop a sense of confidence needed flourish in the business world. Some of the key fundamentals required to be a successful entrepreneur are evident with Branson because of his upbringing. His commitment and determination are products of succeeding in academics despite his struggles. While mentioning his difficulty Branson credits intuition as a driving force noting “perhaps my early problem with dyslexia made me more intuitive: When someone sent me a written proposal, rather than dwelling on detailed facts and figures, I found that my imagination grasps and expands on what I read” (Branson, 1998). These special features of Branson were evident when he began taking on the business world. Even at such a young age, Branson had a knack for selling, as Finkle mentions, “Branson was an entrepreneur from a young age. He embarked on numerous business ventures, such as selling Christmas trees and breeding budgerigars, a small breed of parakeet. Although not financially successful, he discovered a love for doing business. This love would never die”(Finkle, 2011). It was clear that Branson possessed the ability to visualize the bigger picture. He was able to see numerous steps ahead, and wasn’t afraid to follow that path. As it becomes more relevant, Branson’s directly taught or given the tools to become a successful entrepreneur. In fact, no single entrepreneur is ever born or given direct lessons that help them become a better successor in this endeavor. However, Branson had the elements in place that allowed him to govern and develop his own inherited traits that allowed him to flourish. As the Annals notes of this topic, “Nobody is born to be an entrepreneur. Success does not rely on the entrepreneur’s origin, but his needs and tenacity influence it, the economic and cultural environment” (Denescue, Popescu & Strokes, 2008). Meaning that although Branson’s path to an entrepreneur weren’t exactly paved for him, his upbringing and support allowed him to develop and seek some of the traits that make him so special today. As the modern day entrepreneur sees the world and learns how to adapt his way of thinking, he begins more efficiently recognize opportunity. This understanding leads way to another very important point about successful entrepreneurs and Richard Branson in particular. It is the ability to creatively and meticulously seek new innovation and incongruities. As described in the Annals on the ability to think creatively, “the nature of this process is the one that calls for an original way of thinking and initiative spirit” (Denescue, Popescu & Strokes, 2008).
These creative approaches and innovative thinking are evident in almost all of Richard’s business enterprises. Some of the various accounts of Branson applying his creativity are though his, willingness to accept change, his limited fear of negative consequences, his ability to connect and create teams within his organization in which he feeds off of and brainstorms with and most notably his vast array of personality types”(Kuratko, 2011). Richard always served an interest in media products; it was believed he appreciated the communication to the masses, and liked being the focal point of the flowing information. Branson’s first successful and major business venture came in the form of a Student magazine. He targeted the 16-25 year olds, which he deemed an undervalued market, and reached his high point when circulation reached over one hundred thousand in circulation, (Finkle, 2011). While Branson began to come into his own, and experience different forms of success, one thing remained true, and it was his ability to push the boundaries and creatively develop himself and his way of thinking. He was constantly learning, and developing relationships that would allow him to learn and grow along the way. It’s become clear that a vast array of behaviors and tendencies are needed to develop an young entrepreneur. As the Annals mentions: From the behavioral point of view, ‘the winner is sometimes characterized by a very strong dynamism and by an unchallenging energy that helps him to act, generating as main behavior features, the and the desire to succeed, and especially the behavioral dynamism (personal engagement, self determination, tenacity), (Denescue, Popescu & Strokes, 2008).

Although these type A characteristics may appear to limit Branson’s from the emotional standpoint, his ability to empathize and develop strong bonds are also another key factor in his success. As Branson began to further pursuit his dream and embrace his free spirit and desire to create, his open mind allowed him to develop his next endeavor, which would prove to be the focal point in his career. After venturing into various music specific projects, including a mail order catalog, and even a record store, Branson and founded Virgin Records in 1972, a recording studio and record label (Finkle, 2011). From there the mogul took off, creating an empire of the modern day music and communications enterprise. Branson discusses his early success as a series of risk limitations and the ability to negotiate music rights. His environment and past experiences help him create linkages from one venture to the next. As he began building networks he circumvented circumstantial leverage and created value off pre existing goods. Branson notes of success with Virgin Inc early in his career: When we discovered that it was possible to negotiate music publishing rights as well as record rights with the same band, we set up a music publishing company. Once we got past the very early stages of record production, we realized that we were spending an awful lot of money on recording costs, so we got into the recording studio business. When music videos became a necessary part of marketing records, we did not just make them and waste them, but began to distribute them ourselves. This got us into the video distribution business, and it was a natural move to begin acquiring other products for video distribution. (Branson, 1986).

What Branson makes it relevant in this statement is an evident feature to all successful entrepreneurs; the ability to look forward and have a vision. As Virgin began to take shape, Branson used his ingenuity and creativity to synergize the company, reducing cost, and generating cross benefit revenue. Over the next 10 years, Virgin became one of the biggest players in the music industry signing exclusive rights to some of the U.K. biggest bands including, Mike Oldefield, The Sex Pistols, Phil Collins, and many more rock legends that helps define the labels persona as a hip, cool, controversial player in the industry, (Finkle, 2011). As Branson notes further of these linkages and the connections made in breaking boundaries and building a vision, they didn’t come by chance. One thing definitely persistent in all ventures new and old alike is the presence of hard work. Nothing ever came easy, and as Branson mentions, “these linkages do not happen without hard work. In almost every case, I have devoted a good deal of my time to new business and completely immersed myself in it before making any significant investment” (Branson, p. 14). All of these steps and links are examples of incremental innovation, referring to the systemic evolution of a product or service into newer or larger markets, (Kuratko, 2010). Richard Branson didn’t have to invent the wheel, but his ingenuity led him to connect existing products together in order to make a new structure in the music industry. At this point, Richard Branson was already a success. The label had expanded on an international level and was signing even more of the biggest names from around the world. However, Richard Branson was not satisfied with just that. Like any individual with that entrepreneur spirit, it’s the desire, the passion, and the drive to keep building and keep moving forward that separate the average from the exceptional. As the Annals puts it, “the entrepreneurs are motivated by the desire of independence and power, assuming the decision role in organizing the economic resources in order to generate new products and services”, (Denescue, Popescu & Strokes, 2008)
In this regard, its no wonder that Branson decided to push the boundaries even further when Virgin implemented a completely unrelated diversification strategy in the airline industry, with the inclusion of Virgin Atlantic Airways, and Virgin Cargo. When Branson decided to embark on this endeavor, some say it was his greatest test of character. The airline industry is very hostile, proving any new company needs to be stocked with capital, ready to take on stiff competition, and extremely volatile in relation to the market. But as mentioned earlier, one thing Branson has that other company’s neglect is the thrill for the unconventional. His ability to be bold and unoriginal is what often defines his success, as Branson so callously mentions in an article with Business today, “But in business itself, I am pretty bold, I still hold to the philosophy, nothing ventured nothing gained. I am not too afraid of failure. I love to challenge the people around me; I love to challenge myself, (Business Today, 2008). The airline proved to be Branson’s most time intensive undertaking, and gives way to one of his most important and fundamental character traits of a successful business leader, that is the ability to lead a team. No one man is an island, and for Branson to be so successful he has constantly needed to build team that support his drive and share in his vision. Branson has always been able to lead and allow his team to share in his success. One of the keys to get people to buy into his vision and follow his dreams is his ability to inspire, as Todd Finkle incurs “Bransons real talent was his ability to inspire loyalty from people. He was known as a global entrepreneur who loved adventure”(Finkle, 2011). Although Branson’s leadership style was quite unorthodox, his people admired him, and success in any industry is always the best motivator. Although the short term of Virgin Airlines deemed to be successful, for the ongoing proliferation, Branson needed more capital. After going public with the Virgin Group, Branson felt distant, and unable to accept not having complete control. After no other alternatives sufficed, Branson had decided to part with his origins of riches, Virgin Records. As Finkle describes it, “Virgin Records was the crown jewel of the Virgin Family and it was what made Virgin a household name. At that time Virgin was the worlds biggest independently owned company”. (Finkle, 2011). Although this decision may first appear to be Richard Branson’s set back, and a weak point in his legacy, it is actually one of the smartest moves he has made. What often defines good entrepreneurs from great ones is the ability to cash out when you can no longer progress. As Branson puts it, “Too many entrepreneurs have gone down because they were not prepared to cash in their chips at the right time” (De Vries, 1999).

It is clear that not all of Branson’s decisions turned to gold, and for as much money as he has made, he has lost more then his fair share of fortunes. In fact, Virgin Airlines “lost $227 million in its first 12 months of operations, far more then expected”(Biz Journal, 2009). However, adversity is one of the keys to forward thinking. The ability to understand what you’re doing and learn from your mistakes helps both the individual and the business adept to change, and although taking risk is one intrinsic necessity to the importance of entrepreneurs, it’s the ability to limit risk that makes for success in the long run. One of Branson’s most inadvertent tactics is his ability to maximize profit while minimizing risks, and he openly discusses this fact in his writings. Branson discusses, “Although I’m familiar with it at a gut level, risk taking is something I find extremely difficult to describe in the abstract”. (Branson, 1986). It is in this passage that Branson eludes some of the most fundamental facts of a successful entrepreneur. That is the ability to calculate risk and make informed decisions. While analyzing and assessing whether to take on a new venture or pass, it is his level of tolerance for the ambiguous that have earned him the most merit. He has always believed in himself, and with this level of confidence and optimism comes great success. Branson mentions one of his most valued assertions in his drive for success. He believes in himself and his decision, and allows his instinct to guide him and his confidence to support him in his decisions. Branson asserts in his memoir, reflections of a risk taker: There is one overriding point that is essential to success. Having evaluated an investment and applied all the rules I have listed any others that you find particularly helpful in your markets, and having decided to make an investment, don’t pussyfoot around. Go For It! In reality, one of the biggest risks that a lot of British industry takes is the lack of commitment to new projects and new ventures. They do not put enough energy, personal commitment or leadership into them, (Branson, 1986)
This paper will conclude on one of the most notorious rules in business and in life that Branson holds true, that is the ability to love what you do. Branson is motivated and persistent because of his passion and desire for pushing the envelope and creating something out of nothing. He has a strong network of support, and shows gratitude and to the people around him. His pursuits new business with his heart, but calculates with his mind. The lessons he learned in his childhood, and through his adolescence he keeps with him still, and is constantly learning new things that he applies to all aspects of life. Branson asserts that, “life is short; one has to make the most of it. Thus, do things that you like. If your work and hobby are the same, you will work long hours because you are motivated”, (Branson, 1986). Not one person is born with the all the great tools and talents to start and run a successful company, however Branson uses the tools he has, and passion to learn and develop wisely to be a successful entrepreneur.

References

Branson, Richard (June 1986) Reflections of a Risk Taker. Source McKinsey Quarterly. Cited March 2012. Source http://web.ebscohost.com/bsi/pdfviewer/pdfviewer?vid=6&hid=21&sid=2a 3f7953-55b5-48d7-aa44-2f047d5df203%40sessionmgr13

Business Today (2008). I am not afraid of Failure; Richard Branson. Source Busines today. Cited March 2012. Reference http://web.ebscohost.com/bsi/pdfviewer/pdfviewer?vid=2&hid=10&sid=23 dbabad-696a-4b07-b388-43c77677f698%40sessionmgr10

Denescue, Tatiana., Popescu, Dan., Strokes, David., (2008) Entrepreneur Development Within the European Context. Source: Annals of the University of Oradea, Economic Science Series. Cited March 2012 Reference http://web.ebscohost.com/bsi/pdfviewer/pdfviewer?vid=5&hid=111&sid=1 1e2e113-f5a3-43b1-979b-7c1e21ef3e3d%40sessionmgr15

Devries, Kets (1999). The New Global Leaders. San Francisco; Jossey Bass. P 29. Cited March 2012. Source http://web.ebscohost.com/bsi/pdfviewer/pdfviewer?vid=3&hid=25&sid=ea ee3aac-85ab-4d0d-89ec-f5f3f7e7a322%40sessionmgr13

Finkle, Todd, (June 2011), Richard Branson and Virgin, Inc. Source: Journal of the International Academy for Case Studies. Refenence cited March 2012 http://web.ebscohost.com/bsi/pdfviewer/pdfviewer?vid=3&hid=25&sid=ea ee3aac-85ab-4d0d-89ec-f5f3f7e7a322%40sessionmgr13

Forbes.com (2010) The worlds Richest Billionaires. Source Forbes. Cited march 2012. Reference http://www.forbes.com/lists/2010/10/billionaires- 2010_Richard-Branson_2Y7I.html

Kuratko, Donald F. (2010) Entrepreneurship: Theory, Process, Practice. 8e.