 What’s in it for me?

Learn how to make it big in business from self-made billionaire

Richard Branson.
 Branson’s family pushed him to test his own limits, once even almost causing him to
drown.
 Branson struggled academically, and put most of his energy into his pop culture
magazine.
 Branson saw an opportunity in selling music records via mail, and so Virgin Mail
Order was born.
 Virgin’s record stores became very popular because customers felt relaxed and
welcome there.
 Virgin expanded its position in the music industry by founding a studio and record
label.
 Virgin was sued for promoting the Sex Pistols album, but a savvy defense and a
stroke of luck saved it.
 After some clever negotiating, Branson bought a beautiful £3 million tropical island
for just £180,000.
 The arrival of CDs and signing unknown but promising artists made Virgin Records
hugely successful.
 Going into the airline business almost bankrupted Virgin, but eventually Branson got
Virgin Airways off the ground.
 Despite severe adversities, Branson managed to sail across the Atlantic in record time
on his second attempt.
 During the Kuwait war, Branson flew humanitarian supplies into Jordan, and later
rescued British hostages from Baghdad.
 When he crossed the Pacific in a hot air balloon, Branson faced a lack of fuel, the loss
of his radio and a fire.
 British Airways resorted to dirty tricks to compete with Virgin Airways, but in the
end had to settle and apologize.
 Final summary

What’s in it for me? Learn how to make it big

in business from self-made billionaire Richard
Branson.
How can one person be the driving force behind an airline business, record store chain,
record label, nightclub and railway company, and still find the energy and time to smash a
world record in a hot-air balloon?

Richard Branson is certainly unique: an adventurous and fearless risk-taker, but with razor-
sharp business acumen. This combination, wrought with imagination and determination, was
his recipe for success, which came not without many failures and challenges along the way.
In Losing My Virginity, Branson describes the many life events that shaped his character – his
naivety, his sense of adventure and steely resolve – and led him to revolutionize the music
and airline industries.

If you tend to think of business as a tedious and dull endeavor, these blinks will change your
mind. By immersing yourself in the stories of Branson’s exciting and unpredictable life, you
will come to understand why choosing to not play by the rules can provide you with a
massive advantage in business – and in life.

Also in these blinks, you’ll learn

 how Branson flew into Baghdad to recapture British hostages from Saddam Hussein,
just as the Gulf War broke out;
 how to buy an island for a fraction of the initial asking price; and
 how to balloon across the Pacific, after losing half your fuel on the first day.

Branson’s family pushed him to test his own

limits, once even almost causing him to
drown.
Born in 1950 to a family with an independent spirit, Branson was, from a very young age,
pushed by his family to test the limits of possibility.

As a result, young Branson developed a taste for adventure, eagerly rising to the challenges
that his mother, or life in general, presented to him.

When he was only eleven years old, his mother sent him to visit relatives who lived more
than fifty miles away – on a bike and without directions. This was meant to teach him
stamina and orientation. And, when finally he returned to his family home the following day,
instead of a hero’s welcome he was greeted simply with the instruction to go to the vicar’s
house to chop some logs.

But this wasn’t the first time his family had set him an arduous challenge. On a fortnight’s
family holiday in Devon, when Branson was just four years old, his aunt bet him ten shillings
that he couldn’t learn to swim by the end of their holiday.

Rising to the challenge, he spent hours upon hours in the sea. Unfortunately, by the time the
final day arrived, he still couldn’t manage to keep on top of the waves.
But, to him, this was far from the end of the matter. When he spotted a river during the
twelve-hour car journey home, he seized the opportunity and asked his father to stop the car.

Springing from the car, he tore his clothes off, raced toward the riverbank and, as soon as he
reached the water’s edge, jumped in.

He immediately began to sink.

Gradually, however, by kicking slowly and regularly, he managed to push himself to the
surface. As he made his way to the middle of the current, he saw that his family was clapping
and cheering, and that his aunt was waving a ten shilling note.

When Branson emerged from the water, his father gave him a big hug, himself dripping wet.
Seeing his son dive headfirst in the stream had greatly unnerved him, so much so that he had
jumped in after him.

Branson struggled academically, and put most

of his energy into his pop culture magazine.
Failing to achieve academic recognition in university – due partly to his independent attitude,
and partly to his dyslexia – Branson began looking for alternative occupations.

He and fellow student Jonny Gems founded the magazine, Student. Initially intended as an
outlet for criticisms of their school, it quickly turned into a celebration of pop student culture
and contemporary issues.

But getting the magazine off the ground was not without its problems. One of the biggest
difficulties Branson and Jonny faced was finding the money to publish Student – which
meant finding advertisers for a magazine which didn’t exist yet.

Even though most of the companies Branson approached were reluctant, he ultimately did
find an effective way to hook them in:

In an attempt to get National Westminster Bank to buy ad space, he told them that Lloyds
Bank had just taken out an advertisement. Wouldn’t they like to advertise alongside Lloyds?

The strategy was successful, and soon they received their first check for £250.

Working on Student quickly gained priority over schoolwork, so Branson and Jonny left
Stowe and moved into a London basement. There they edited and distributed their magazine,
cramming increasing numbers of fellow students into one tiny room to help them with the
workload.

Despite Branson’s dyslexia – the root of his academic struggle, and the reason his grades
were usually at bottom of the class – he put more time and effort into editing and writing
articles for the magazine than into any of his coursework.

Ambitious as ever, he and Jonny wanted to report on international events, like the wars in
Biafra and Vietnam. So they asked the DailyMirror whether they would be interested in the
story of a young reporter going to Vietnam.

Indeed they were: the Mirror bought the story and Student was able to send one of their staff,
making a similar arrangement for Biafra.

However, despite its political interests, the key element of Student was its involvement in the
music scene – be it exclusive interviews with Keith Richards, John Lennon and Yoko Ono, or
reports on club events and concerts.

Branson saw an opportunity in selling music

records via mail, and so Virgin Mail Order
was born.
Due to his insight in the music scene, Branson realized people were very excited about
records, and noticed their distribution via record shops went unrivalled. Simply because there
was no alternative, people who’d never spend 40 shillings on a meal would gladly pay that
same amount for a new Beatles record at a large record store.

But Branson had an alternative in mind. He saw that a mail-order system would be popular
with people his own age, who’d prefer to order records by mail at a lower price, than at retail
price at a big store like WH Smiths.

He discussed his idea with the Student staff, and they decided the new venture would need a
new name. It should have a broad appeal, beyond the student population, and should be eye
catching.

After considering several names, one of the staff suggested “Virgin,” as they were all
complete virgins at business.

And so Virgin Mail Order was born.

In the last issue of Student, Branson placed an ad for record mail-order, bringing in more
inquiries and cash than they had ever seen before.

But the sweetest part of their venture was that the company received the money for orders
inadvance, which provided the capital to buy records. Because of this, they were able to build
up a large balance rather than have to wait for the money to come in.

Branson brought on his childhood friend and Student co-contributor Nik as accountant, and
together they determined where they’d buy the records from and how they’d send them to
customers. They decided that, by making a deal with a local record shop that could obtain
records directly from the record companies, the Virgin team would be able to sell records at a
discount.

Throughout the 1970s, Virgin Mail Order flourished. Then a potential disaster struck: in
January 1971, the Post Office went on strike, which meant that Virgin customers were unable
to send checks and couldn’t receive records.

Virgin’s record stores became very popular

because customers felt relaxed and welcome
there.
In 1971, the record departments of large retail stores were dominated by a bland interior and
almost zero excitement for what was going on in rock music.

When the postal strike occurred, Virgin was impelled to set up their own record store. They
wanted it to be an extension of what they’d established with Student: a place where customers
were not merely encouraged to buy a record and leave, but a welcoming place where they
could exchange views on their interests.

Noticing that a shoe store in Oxford Street had a staircase leading to an empty first floor, they
struck a deal with the owner to set up their shop there.

However, there was no way they could pay the rent. With typical charm and sharp business
sense, Branson talked the shop owner into letting them use it for free, emphasizing the
number of potential customers who would have to pass through his shop as well.

The first Virgin store proved to be a huge success – so much so that Branson and Co. decided
to shift their focus to opening more stores. Meanwhile, they would keep the mail order intact,
ready to resume business as soon as the postal strike was over.
By Christmas 1972, Virgin had expanded to fourteen record stores, all over England.

Their lifestyle concept was such a success that the balance between maintaining the
atmosphere they desired and keeping it profitable tipped towards the former. In other words,
their stores were crowded but no one was actually buying anything: their atmosphere was so
relaxed that Virgin stores had become a place to hang out.

To rectify this situation, they installed brighter lights and moved the counters and cash
register nearer to the window so as to inform people that they were entering a shop, not a
club. The strategy worked: after a couple of months, sales recovered.

Virgin expanded its position in the music

industry by founding a studio and record label.
Soon, Branson figured out that there were even greater profits to be made in running a
recording studio and record label.

He also noticed that most studios did business in a very formal way. They operated with
strictly appointed time slots, overbooked rooms and few musical instruments. Such formality
was too strict for the wild and spirited pop and rock culture that had begun in the 1960s.

So, in 1971, at just 21, he started looking to buy a country house he could convert into a
recording studio, imagining this to be the most conducive and attractive environment for
bands to come and record.

After searching for weeks, he eventually found a beautiful seventeenth-century manor,

replete with iron gates, and set in the fairy-tale countryside.

However, there was the matter of the asking price. This property was going for £30,000 –
nearly half a million pounds in today’s terms – far more than he had. Sure, his other ventures
were going well, but Virgin was not making that kind of profit.

After investigating the sales figures of Virgin Mail Order and Virgin Music Store, though, the
British bank Coutts made the astounding offer of a £20,000 mortgage. His aunt re-mortgaged
her house to lend him £7,500, and he was able to transfer the full amount to the estate agent
to secure the sale.

In addition to the studio, he founded the music label Virgin Records. Having a label
integrated with the Virgin group allowed them to sign their own artists, offer them a place to
record (and charge them for it), publish and release their records (and make profit on them)
and promote and sell their records through their own chain of music shops (and make the
retail profit margin as well).

The first artist they signed was Mike Oldfield. Oldfield recorded TubularBells at the Virgin
Manor throughout 1972 and 1973, a record that eventually sold over thirteen million copies,
making Branson’s company successful beyond his wildest dreams.

Virgin was sued for promoting the Sex Pistols

album, but a savvy defense and a stroke of
luck saved it.
In 1976, Virgin was headed towards trouble: aside from Mike Oldfield, all of the label’s acts
had lost it money.

But the mid-1970s was the high point of punk in the UK, and Virgin was desperate to sign
one of the new bands.

Eventually, in May 1977, Malcolm McLaren, manager of the Sex Pistols, signed the band to
Virgin, hoping to be quickly dropped from their contract due to indecent behavior, as they
had done with EMI and A&M before.

Virgin closed the deal just in time to release the song “God Save The Queen” for Queen
Elizabeth’s 25th anniversary as queen, when the Sex Pistols staged a concert in front of
House of Commons, resulting in massive publicity and the arrest of McLaren.

However, since Virgin didn’t have any shareholders to protest their actions, McLaren’s hopes
of being dropped by the label were dashed.

In 1977, the Sex Pistol’s album “Never Mind The Bollocks, Here’s The Sex Pistols” was
released and widely advertised in Virgin store windows throughout the UK.

A Nottingham store manager was arrested due to the public use of the word “bollocks.”
Furthermore, the police were also threatening to injunct the album.

Branson needed to take action. He brought in linguist James Kinsley for the court case, who
went on record explaining that “bollocks” did not refer to “testicles”; rather, it was a
nickname for priests.
Kinsley went on to argue that, surely, not even the church would be offended by a title that
meant “Never mind the priests, here’s the Sex Pistols.”

Then the prosecutor asked him why he was so certain that the church wouldn’t be offended
by such a title. Kinsley simply folded down the collar of his polo neck shirt, revealing a
clerical collar.

Branson had truly lucked out: as his witness, he’d managed to find a linguist who was also a
reverend. The case was dismissed.

After some clever negotiating, Branson bought

a beautiful £3 million tropical island for just
£180,000.
In 1978, Branson was in New York, as he wanted to be close to Joan, his future wife, who
was in the process of splitting up with her husband in New York. After the divorce was
finalized, Branson was asked whether he had named his company after the Virgin Islands.
Although that wasn’t the case, it certainly seemed like the perfect getaway for the pair.

He had heard that if one expressed genuine interest in purchasing an island, a local estate
agent would put you up in a villa and provide a helicopter to fly around the islands.

So, he contacted an estate agent and mentioned that he was searching for a place for Virgin
Music’s artists to relax and record.

Joan and Branson flew to the Islands, where they were put up by the agent and were shown
one of the most remote and beautiful islands – Necker Island.

Although initially he had no intention of buying it, he asked for the price. It was a staggering
£3 million. With nothing to lose, he made an offer of £150,000, which got the couple thrown
out of the villa.

Back in London, he learned that the owner of Necker Island, a British lord, needed to make a
quick sale in order to finance another building, which would cost him £200,000. So Branson
upped his offer to £175,000 and the agreement was – incredibly – settled at £180,000. From
trying to bag himself a free holiday, Branson ended up buying an island for a fraction of its
asking price.

But the purchase wasn’t the trip’s only result; it was on the Virgin Islands that Branson set up
his next venture: Virgin Airways. When his flight back to Puerto Rico was cancelled, he
simply chartered a plane for $2000 and, on a blackboard, wrote: “Virgin Airways: $39 Single
Flight To Puerto Rico.”

The arrival of CDs and signing unknown but

promising artists made Virgin Records hugely
successful.
Although having signed the Sex Pistols and several young New Wave bands got Virgin into
new musical territory, it proved far from profitable. In 1980, Virgin Music was running at a
£900,000 loss.

Still, Branson gave the go ahead to keep signing new artists, such as Simple Minds, The
Human League and Phil Collins, much to the dismay of the financial director who saw that
Virgin was spending money it didn’t have on artists that weren’t known yet.

The financial director left, selling his 40 percent share to Branson, making Branson owner of
100 percent of a company that seemed very close to going bust.

What no one had expected, however, was the popularity of the Compact Disc. Due to its
success, people started to buy albums on CD, even those they already owned on vinyl. Virgin
was able to resell their back catalogue on compact discs, and Mike Oldfield’s first record, in
particular, sold extremely well on CD, restoring Virgin’s cash balance.

Additionally, Branson’s trust in his musical scout and advisor, Simon Draper, finally paid off,
with almost all the bands he had brought in selling extremely well.

For instance, The Human League’s third album, Dare, shot to number one on the British
charts, selling one million copies in Britain and three million worldwide. Furthermore, the
roster of young artists that Virgin had broke into the industry – artists that were absolute
newcomers at signing – seemed endless: Phil Collins, Boy George and the Culture Club,
Simple Minds, XTC or Heaven 17 all proved tremendously successful.

Virgin had become the undisputed independent label, with more money rolling in than they’d
ever expected: a £2 million profit in 1982 on sales of £50 million and a staggering £11
million profit in 1983.
Going into the airline business almost
bankrupted Virgin, but eventually Branson got
Virgin Airways off the ground.
Having toyed with the name Virgin Airways in the late 70s, Branson was already keen on the
idea of opening an airline. So in 1984, when a US lawyer named Randolph Fields called to
inquire whether Branson would be interested in operating a transatlantic airline, he was ready
for the challenge.

His senior management opposed the idea, however Branson remained adamant, arguing that
if they could lease just one airplane for one year, they would limit the amount of money they
could lose, and could retreat from the project if it became unsuccessful.

After two months of tough negotiations, Boeing finally agreed to lease Branson a Jumbo for
one year.

Nevertheless, there were flight permits to obtain, time slots to be fitted in, advertisements to
create and a ticketing system to install.

To get the permit, a test flight had to be made with an official on board. It was on that test
flight that the plane – which was uninsured, due to the lack of a license – flew into a flock of
birds. As a result, one of the engines exploded and the test flight was aborted.

Yet again, Branson was in trouble. The first commercial flight was to be in two days time, but
he still needed a license and an engine – which ended up costing him £600,000.

After installing the new engine, acquiring the license and going on Virgin’s maiden voyage,
Branson realized that the £600,000 had exceeded Virgin’s £3 million overdraft, which the
bank was unwilling to extend.

Virgin was teetering on the brink of insolvency.

To escape this fate, Branson collected as much money as possible from his overseas stores. It
was enough to keep Virgin Airways operating, and the airline soon became legitimate and
successful, under the leadership of Branson, who had just turned thirty-three.
Despite severe adversities, Branson managed
to sail across the Atlantic in record time on his
second attempt.
In 1984, Ted Toleman was seeking a sponsor to cover the cost of a catamaran he was
building to cross the Atlantic Ocean at a new record speed to recapture the Blue Riband
Trophy for Britain. Branson was keen to sponsor, realising that being involved in a world-
record Atlantic crossing would serve to attract attention to his transatlantic airline.

With round-the-world yachtsman Chay Blyth already on the team, Toleman and Branson
started in New York and set off for England to beat the current record, which had been set at
three days, 10 hours and 40 minutes.

But after three days at sea and with just 60 miles left to go, they were hit by a storm, which
split open the hull of the catamaran, causing the VirginChallenger to sink.

The crew retreated to a life raft, and was eventually rescued by a cruise ship. Surprisingly, it
was on this boat that Branson also first saw his newborn son – one of the passengers had a
copy of the EveningStandard which had covered the birth of the billionaire’s baby.

Determined to win the Blue Riband, Chay and Branson decided they should build a single-
hulled boat rather than a catamaran. This became the VirginAtlanticChallengerII, which left
New York in 1986 in a second attempt at the trophy.

However, yet another mishap occurred when the filters for the fuel pump became clogged,
choking the engine. Moreover, they would need to be replaced every couple of hours.
Because of this setback, there was no chance they would reach England in time to beat the
current world record.

Cunning as ever, Branson reached out to Downing Street and spoke to the right people: an
RAF plane was then allowed to pick up new filters and drop them on board. With new filters,
they were able to keep the engines running, finishing their journey in three days, 8 hours and
31 minutes – setting the new world record for the 3000-mile voyage.

During the Kuwait war, Branson flew

humanitarian supplies into Jordan, and later
rescued British hostages from Baghdad.
In 1990, Saddam Hussein invaded Kuwait. This left the world in a tailspin and doubled the
price of aviation fuel, from 75 cents to $1.50 a gallon.

As Branson was about to take his children to school, his phone rang. It was Queen Noor of
Jordan, whom Branson had met and befriended during one of his earlier adventures.

Over 150,000 refugees had fled from Iraq to Jordan, with neither blankets nor a water supply.
And though the Red Cross was setting up water distribution, the government of Jordan still
required around 100,000 blankets to prevent a catastrophe.

Branson and his staff tried to figure out the logistics of locating and then flying 100,000
blankets to Jordan.

By contacting the Red Cross, the Foreign Office and the Overseas Development Office, they
were able to gather 30,000 blankets, with still more to come from UNICEF. Additionally,
Sainsbury’s (British supermarket chain) offered to donate several tons of rice.

As for how to fly these supplies to Jordan, Branson and crew decided to remove all the seats
from a Boeing 747 and load the plane with over 40,000 blankets, medical supplies and tons of
rice. Also, on their way back to the UK, they picked up British nationals who were stranded
in Jordan.

But there were still a number of British nationals detained in Baghdad who had now been
taken hostage.

Branson called upon his friendship with the King of Jordan – this time to negotiate a deal
with Saddam Hussein: in exchange for medical supplies, Hussein should release all children,
women and sick men.

So, on October 23rd, Branson and a volunteer Virgin crew set off for Baghdad, entering the
world’s most dangerous airspace on a commercial plane. They arrived safely and were
allowed to take most of the hostages with them. Yet they were forced to leave the men behind
at the airport, which was devastated only a few weeks later.

When he crossed the Pacific in a hot air

balloon, Branson faced a lack of fuel, the loss
of his radio and a fire.
Crossing the Pacific by hot-air balloon was an attractive challenge to Branson. He had
attempted it once before, with Per Lindstrand in 1989, but their balloon fell apart just before
lift off.

In January 1990, they met in Japan for a second attempt to cross the Pacific, by flying a hot-
air balloon into the 200 MPH jet stream. Their goal was to arrive in California within two
days and thereby secure the world record for fastest speed, and for being the first to cross the
Pacific in a balloon.

Seven hours into the journey, it was time to drop one of the empty fuel tanks in order to
jettison weight and fly faster. However, due to a mechanical failure, they dropped not just the
empty tank, but two full fuel tanks as well.

They now had just half the fuel required to cross 6000 miles.

If that weren’t bad enough, they lost contact with their control center, just after hearing of a
frightening storm below. They were left unable to communicate their route with the outside
world.

Fortunately, they managed to stay in the jet stream which carried them at 170 miles per hour.
Unfortunately, a propane leak caused the capsule to catch fire.

Reacting swiftly, Lindstrand and Branson took the balloon up to 40,000 feet, where the lack
of oxygen would extinguish the fire.

After the fire was out, their radio began to function again, restoring contact with the control
center. What they heard, however, was bad news: the jet stream had pivoted and would blow
them back to Japan unless they came down to 18,000 feet, where another stream was heading
north, towards the Arctic.

After almost 48 hours, they landed in Canada – 3000 miles away from their original
destination – having flown their balloon further and at a faster average speed than anyone
ever before.

British Airways resorted to dirty tricks to

compete with Virgin Airways, but in the end
had to settle and apologize.
In the 1990s, Branson was enjoying unrivalled success, but his success in the aviation
industry wasn’t greatly appreciated by British Airways – the traditional British carrier – who
started several campaigns to put him out of business. They had even put together a team
whose sole purpose was to undermine Branson and Co.

Not only did BA contact Virgin customers, offering them cheaper flights, claiming that
Virgin’s flights were overbooked or cancelled, but they also hacked into the Virgin database
to gain access to their booking information. Additionally, they contracted several private
detectives and public relations representatives to investigate Branson, his family and his
company, in order to discredit his image.

For example, after seeing a TV documentary on the feud between BA and Virgin, a Virgin
customer contacted Branson’s office, reporting that she’d received a number of calls by
people claiming to work for Virgin. They’d called to inform her that she’d been bounced off
her flight, and asked her whether she would like to take the Concorde on the following day
instead. BA denied any involvement.

Even with this information and several former BA-employees willing to testify, the officials
responsible for viable competition between airlines refused to see a dirty tricks campaign.
They decided that Branson’s claims were unfounded.

It was only when Branson and his team were given a hard drive containing all the logs and
conversations between top BA executives – revealing that, indeed, senior management had
made a decision to discredit Virgin – that Branson and his lawyers felt confident enough to
take BA to court.

With such damning evidence in Branson’s hand, BA abruptly changed their strategy, from
denial to settlement. Setting a record for the highest, uncontested libel payment, BA had to
pay £500,000 to Branson and £110,000 to Virgin Atlantic as compensation for personal and
corporate libel. Moreover, they had to make a public apology and admission of guilt.

Final summary
The key message in this book:

You can have fun while making af ortune, ifonly you’re bold enough torise toevery
challenge and audacious enough toconquer every obstacle inyourway.

Suggestedfurtherreading:TheManWhoFedtheWorldbyLeonHesser
TheManWhoFedtheWorld tells the story of Norman Borlaug, Nobel Peace Prize laureate, and
his work in fighting world hunger.