What are the development goals of Virgin Group? This question is too big to give an answer. Some people say that the prospect of Virgin I have determined violates all business rules, is ever-changing, and is too broad; others say that Virgin has become one of the leading brands of this century; others have made detailed analysis of Virgin and wrote about it Academic papers. As for me, I just picked up the phone and continued to operate.
I am Richard Branson. Whether it is a series of seemingly crazy decisions of mine or a series of Virgin companies I have established, it is a series of closely related challenges. Their origin can be traced back to my childhood.
“Student” was born
My family is located in Shamriglin, Surrey. Since childhood, my parents have set various challenges for me and my two sisters. In order for me to learn to live independently, my mother put me out of the car a few miles away from home when I was only 4 years old, and asked me to find my way home.
I think my parents must have instilled a kind of rebellious spirit in me. I always think that breaking the rules is a reasonable thing. When I was 15 years old, my classmate Jonny Jims and I began to discuss the issue of changing school rules and tried to reorganize the school’s dining system.
The principal suggested that I publish my views in the school journal, but Jonny and I want to create another school journal with a fresh perspective. I made a list of potential advertisers and wrote to a bookstore to ask if they plan to enter the publication. In this way, at least in the plan, the writers, advertisers, publishers, and costs are all ready-my first business plan is done.
We finally decided to use “Student” as the title of the journal, because there was a heated discussion about “Student Power”. My mother lent me £4 to cover the cost of calling and sending letters. Jonny’s father designed a letter paper with a head-up printed on it, with the words “Student”—A British Youth Magazine” on top, and it was marked by a rising sun. Then, we began to write to all contributors and potential advertisers.
I made a lot of calls to these advertisers, wrote hundreds of letters, and waited fearfully for a response. Soon after, I received the first copy of the copy and a cheque for 250 pounds for advertising fees. At the same time, the famous British cartoonist Gerald Scarf agreed to draw us a cartoon and accepted an interview. “Student” finally changed from a faint hope in my mind to a real magazine.
When I left my hometown in 1967, I was almost 17 years old. The parting message left by the principal was: “Congratulations, Branson. I predict that you will either go to jail or become a millionaire in the future.”
In January 1968, in the basement of Johnny’s parents’ residence, the first issue of “Student” was published.
Surprisingly, Mick Jagger (lead singer of the Rolling Stones) and John Lennon (member of the Beatles) also agreed to accept our interview. You know, in the minds of the students at the time, they were both demigods. Like idols.
But our life is still difficult. I will spend several days on the phone, peddling advertising space, lobbying everywhere, looking for someone to write articles for “Student” for free, or accept interviews. Jonny is a good partner for me, he knows all kinds of interviewees and reasons for interviews. On the other hand, I can do everything I can to convince them to accept the interview.
After several issues were published, the number of people who participated in the publication of “Xuezi” gradually increased. Through word of mouth, old friends came from school, and then friends of friends, or people who had read this magazine. All kinds of people come to help us issue magazines. Our basic idea is that after they sell the magazine, they will pay us half of the income. In other words, for every magazine sold, both parties can earn 1 shilling and 3 pence.
I tried my best to keep the magazine alive, but I didn’t realize that this urgent need also squeezed my ambition to be a reporter aside. Jonny is in charge of editing, and I am in charge of running, selling advertising space, and bargaining with printers. It can be said that I became an entrepreneur because of a momentary negligence. However, if someone mentioned the word entrepreneur to me at that time, I would probably have to ask Jonny what it meant.
Although we have tried our best, “Student” still cannot make money. I began to think of various ways to make it develop in other directions and increase its popularity, such as establishing the “Students” Association, “Students” Travel Company, and “Students” Accommodation Intermediary Company. I did not regard “Xuezi” as a noun or as a goal in itself, but as an adjective. A word that allows people to recognize a certain key value from it is the beginning of a whole series of services.
Soon, reporters from some national newspapers started interviewing me and spoke highly of “Student”.
“It seems that photographers, reporters, and writers from newspapers around the world are eager to help “Students”.” The Sunday Telegraph wrote, “They have developed a large volunteer distribution organization in all middle schools and universities to ensure five More than 100,000 students can read this magazine.”
“The number of top contributors is staggering, and the scope of coverage is unlimited.” The Observer wrote. The “Daily Telegraph” said: “The popular publication “Student” has attracted many well-known writers, and it seems that it will become one of the largest circulation magazines in this country.”
The next day, I suddenly thought that record distribution is a very interesting business opportunity, so I began to consider entering the record distribution business. I published the first mail-order advertisement in a magazine selling cheap records. A flood of consultation calls flooded in, and it also brought us a lot of cash.
We decided to find another name for the mail order business. The name needs to be eye-catching, charming and distinctive. Finally, everyone agreed on the company’s name-Virgin.
Connect upstream and downstream
It turns out that my intuition about record release is correct. The students were willing to spend money on records, and when they found that they could buy cheaper records at Virgin, they flocked to them. The letters we receive every day have changed from the initial bundle to a large bundle. Customer pre-remittance is one of the biggest benefits of mail order business, which provides us with funds to purchase records. We started to have a lot of cash in our bank account.
In January 1971, a completely uncontrollable incident nearly ruined us, and that was the postal workers’ strike. Our mail-order business was going to end. Customers couldn’t send us checks, and we couldn’t send records. So I decided to open a store to sell records. We must find the location of the store within a week before the funds are exhausted.
On June 21, 1984, the day before the first flight, the company obtained the flight permit from the Civil Aviation Administration. The next day, company employees and my relatives and friends participated in the maiden flight. We packed 70 boxes of champagne on the plane and the flight turned into an 8-hour party. Accompanied by music, people danced in the cabin aisle to celebrate the success of the maiden flight.
In 1986, everyone yearned for the City of London. I will never forget the sight of people lining up to buy Virgin stock in the Financial City. We received more than 70,000 Virgin stock purchase letters, and these people in line did not leave until the last day, November 13, 1986.
Prior to listing, Virgin had become one of the largest private companies in the UK, with approximately 4,000 employees. As of July 1986, Virgin’s annual sales reached 189 million pounds, an increase of about 60% over the previous year. Our pre-tax profit has also increased from 15 million pounds to 19 million pounds. Although we are a large company, we still lack flexibility if we want to expand. We either spend all the cash we earn or ask the bank to increase the overdraft limit. At this time, listing becomes an inevitable choice.
But after the listing, the City of London asked us to appoint some non-executive directors, but this move slowly weakened my control over Virgin. As Virgin became a public company, I began to lose confidence in myself. I am disturbed by my consistent practice of making decisions quickly. I don’t know whether every decision should be formally approved by the board of directors. When we became a public company in 1987, Virgin was the least creative. We spend at least 50% of our time in the Financial City, explaining to fund managers, financial advisors and public relations companies what we are going to do instead of doing our own thing wholeheartedly.
In 1987, Virgin’s stock price reached around 140 pence and never went up. We used the funds raised from the stock market to start investing in two businesses. One is to establish a real Virgin Records branch in the United States, and the other is to slowly approach Thorne-EMI, hoping to bid to merge this company.
In August 1987, British Scottish Airlines was merged by British Airways, and the new company formed from this took up more than 50% of the market share in transatlantic flights. As the transaction was underway, I realized that although the stronger British Airways poses a threat to us, this merger also brings us potential opportunities.
Virgin’s first large aircraft has appreciated by US$10 million, and we used the money to rent a second aircraft. After the merger of Scottish Airlines, Virgin Atlantic, as the second British airline, can apply to fly on routes that allow two airlines to participate in the United States, Britain, Japan and Britain.
We first applied for the main airport in New York-Kennedy International Airport, and then Los Angeles and Tokyo. Then, we set our sights on three other destinations previously operated by Scottish Airlines: San Francisco, Boston and Hong Kong. In 1987, we only owned two aircraft. In order to fly to Los Angeles and Tokyo, we leased two more planes and doubled the number of flight attendants.
Today, Virgin Atlantic is based in London’s Gatwick Airport and Heathrow Airport and has routes to major cities in the world.