Lunch with the FT: Richard Branson
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Chicken or beef?”
The call of the Virgin Atlantic trolley-pusher escapes my lips as Sir Richard Branson consults his menu. Without looking up, the philanthropic entrepreneur-adventurer tells me he gave up beef nine months ago, having read what cattle farming was doing to the rainforest. “I find it hasn’t bothered me at all,” he says.
Locanda Verde’s carnivorous menu has no such qualms but I surrender thoughts of steak tartare and search for something that might reconcile my appetite and his conscience. The sun-lit restaurant, run by chef Andrew Carmellini in Robert De Niro’s Greenwich Hotel, is one of those exposed-brick Tribeca places that somehow remains buzzy five years after it opened. As Branson walks to the table he is accosted by Heidi Klum, the model and TV fashion show judge.
Branson has not eaten here before – he delegated the choice of restaurant – and for a man with a reputation as a sybarite, the pleasures of food seem low on his agenda. “I’m very lucky I have a wonderful wife who’s a fantastic cook,” he says blandly, “but I’ll eat whatever I’m given.”
When the waiter arrives, Branson picks casarecce, a tubular pasta with cauliflower, raisins and ricotta, and a garlic chicken main course with sides of spinach and roast potatoes. Remembering the rainforests, I choose a marinated beet salad for a starter, then my eye jumps to the halibut. In 2011 Branson added saving the seas to his to-do list when he joined the Ocean Elders, a group of dignitaries including Queen Noor and Ted Turner. Is halibut sustainable, I ask him?
“I think halibut’s OK,” he reassures me. Instead of wine he asks for just a splash of orange juice in his water. I order sparkling water without thinking through the environmental impact of bottled bubbles.
Our lunch falls in the middle of a typical Branson week. It began in Montreal with a meeting of his charitable foundation, Virgin Unite, then moved to Toronto for the launch of a Virgin Mobile training programme for homeless Canadians. He is in New York to hold a press conference for the Global Commission on Drug Policy, a group including nine former world leaders that favours decriminalising drug use.
Next he will be off to Washington for breakfast with Republican senator Rand Paul, before heading for a spin in a “centrifuge gondola” near Philadelphia to prepare his body for the stresses of a long-awaited suborbital space flight with Virgin Galactic, which he dubs “the world’s first commercial spaceline”. Somewhere between these public appearances, he will also find time to run the eclectic collection of airlines, train operators, gyms, mobile phone businesses, radio stations, music festivals and banks that have built a fortune Forbes estimates at $5bn.
In person, Branson is an almost shy showman. He has barely made eye contact from under his sweep of silver-gold hair. Wearing a dark blazer with two shirt buttons undone and cuffs open at the wrist, he plays with a pen while he talks about his next adventure.
He has performed his fair share of stomach-turning exploits in hot-air balloons, high-speed boats and the like. But, at 64, he knows that going into space will put different strains on his frame. “There’s eight seconds where you go from nought to 3,500mph,” he says. At 4.5 G-force, “you’re going to feel it on your body”.
His dream of experiencing “the overview effect” that astronauts talk of when they see the planet from afar has been delayed by about seven years, but his best guess now is that in March next year he and his son Sam, 29, will lift off from the “spaceport” in New Mexico.
Branson is in a space race with Tesla Motor’s Elon Musk and Google’s Larry Page, his friends and fellow billionaires. (Branson officiated at Page’s wedding on Necker, his Virgin Islands home, where Musk is now a neighbour.) He has been dreaming of rockets since watching the first Moon landing in 1969, but he insists the competition is more than a rich man’s folly.
“The space company will be our flagship company,” he says. “Because we’re the only private company in the world sending people to space, the next few months are obviously something that has a halo effect on every Virgin company.”
His companies span everything from balloon rides and water purifiers to cord blood banking. As our waiter brings a small carafe of orange juice and two slices of focaccia, I ask what Branson – with his seemingly limitless enthusiasms – turns down.
He admits he is not good at saying no. “I sometimes see it as the university education I never had. We’re learning about the train business, the mobile phone business, the space business,” he says, “and more in our not-for-profit world.”
He only rejects an idea if it “is not going to transform people’s lives or is not going to be fun to do, or it’s something we feel uncomfortable about doing,” he explains, nibbling on the focaccia. So there will be no Virgin spliffs, for example, although one of his missions is to urge governments to end what he sees as a failed 50-year war on drugs. “As a businessman, if one of my companies had failed for 50 years I’d have closed it down 49 years ago,” he says with a flourish.
Our starters arrive – a steaming plate of pasta is placed in front of Branson, and for me there’s a deep bowl of beets, peeled into bright candy-striped cross-sections of purple and yellow, that tastes unashamedly earthy. He spears a piece of cauliflower and declares it delicious.
It’s 30 years since he leapt from running an independent record label to competing with British Airways, but Virgin’s latest plans are, once again, taking him into businesses he knows little about but reckons he can improve.
He is building two “very large” cruise ships, “to see whether we can attract people like myself who’ve never been on a cruise ship”. He seems unconcerned by the idea of getting into a business he has no feel for, saying: “The key to running a company is to be a good listener.”
He sees in cruise lines an industry that has been poorly run, just as he did in the 1980s with the airlines. I say that I remember the fun of my first Virgin Atlantic flights, with their cheap tickets, bantering stewardesses and free ice-creams. I met my wife on one. But, in the post 9/11 era of plastic knives and high fees, has Virgin Atlantic, I ask, lost what made it distinctive?
“I’m always nervous,” he replies pensively. He maintains that the experience has not deteriorated since the days when Virgin only had one plane, but he concedes that “other airlines have done their best to catch up”. Virgin Atlantic has also been waiting five years for delivery of a fresh fleet, he says, but it has just flown its first 787 Dreamliner. “That will transform the perception.”
The airline – unsurprisingly, given its industry’s financial record since the days of the Wright brothers – has never been the most profitable part of Branson’s group. Last year it halved losses to £51m and this year executives have said it should turn a profit. Firm numbers about the web of tax-efficient holding companies have always been elusive, but Branson claims Virgin Group “is in the strongest position it’s ever been in” – “cash-rich” with no net borrowings.
The group also has a business model that allows it to spray its cash around more carefully than it does its brand. Delta Air Lines now owns 49 per cent of Virgin Atlantic, Branson has cashed in his small stake in the telecommunications business Virgin Media and many of his businesses are controlled by other investors, with Virgin collecting licensing fees for the use of its name.
It’s a model that allows him to embark on seemingly outlandish diversifications while limiting the risk. So while two cruise ships will cost $2bn, “We’ll bring in outside partners,” he notes. Virgin talks of having “global branded revenues” of £15bn in 2012, but it is never quite clear how much of the total flows back to Virgin itself.
Virgin’s finances are likely to be bolstered in the coming months by listings of two of its companies. Virgin Money, the UK-based financial services company, plans to raise £150m in a London flotation, while Virgin America, the low-fare US-based airline in which it has a 22 per cent stake, has filed paperwork for a New York IPO. There is talk of a $1bn valuation but he has been schooled not to comment.
Though Branson may be a ubiquitous presence in his marketing of Virgin-branded companies, he spends far less time on the business than he does on his philanthropic and personal pursuits. As he pushes his half-finished starter away, reaching again for a pen to keep his hands occupied, he says the trick is that he delegates much more than just restaurant choices.
“I learned the art of doing that in my early twenties. That enabled me to have a life,” he notes. Branson’s life – his Caribbean island home, kite-surfing and periodic attempts at breaking world records (he currently holds four, including the one for oldest person to kite-surf across the English Channel) – is an important part of his carefree brand.
In September, he told staff they could take as much annual leave as they want – with the caveat that they should first “feel 100 per cent comfortable that they and their team are up to date on every project”. Branson says he has taken extended holidays for years, spending two or three hours a day on business, but delegating enough “to have time bringing up the children”.
He has just finished building a new home on Necker for his children, Sam and Holly. Both are now expecting children of their own (twins in Holly’s case), and are becoming increasingly central figures in Branson’s charity work, his adventures and his company.
“They’ve wanted to prove themselves,” he says, noting Holly’s medical school training and Sam’s film production company, but both now talk openly about one day following their father into the business.
“I think companies benefit from a face – especially family-run ones – and Sam and Holly are a younger face than myself,” he says. It is 46 years since a 17-year-old Branson started his first business, a youth magazine called Student.
“It’s been a long time but obviously I’m hoping in 20 years’ time . . . ” he trails off, implying that succession is far from imminent. He wants Virgin to be, like Apple, “a global, well-respected brand that will hopefully outlive its founder”.
The unanswered question is whether his children can hold together a group as diverse as Virgin, where the founder has made his own image so central to everything it does, and seems to hold its disparate assets together by force of personality. As if on cue, he asks to be excused – “I’ve got to that age!” – and while he is away one of his staff walks up to advise me that we have 10 minutes left. His next meeting is waiting.
We have been talking for an hour but there has been no sign of our main courses. I anxiously call over a waiter, asking for our food and the bill. He blanches and dashes to the kitchen.
Branson is probably Britain’s most popular businessman but when he returns I ask him about the hostile headlines he gets for living instead in the tax haven of the British Virgin Islands. Last year he sold his home in Oxfordshire to live there full-time. He defends the decision as an entirely personal one. “If anybody comes to Necker they’ll realise it’s a pretty nice place to live,” he says. “If governments feel the rules should be changed, that’s up to governments to change the rules.”
Time is ticking but our main courses arrive at last – a gleaming stack of yellow halibut for me and a heap of crisp-skinned chicken in front of my guest. He groans: “I hate these American helpings.”
As I take a forkful of creamy mash topped with shavings of fennel, I realise the consummate pitchman has somehow failed to mention his new book, the ostensible reason for our interview. I ask why he wrote The Virgin Way, Branson’s seventh book.
“If you’ve had a good life, I do think it’s important you capture what you’ve learned for future generations,” he says. The dyslexic Branson then admits that he has never been much of a reader of management manuals. “I still think the best way is getting out there and doing it rather than reading books,” he says, which may not help his sales.
Virgin Books is yet another of the more than 50 companies listed on Virgin’s website and I wonder whether the book needs a chapter on trimming dead wood. “I’m not very good at cutting things back that don’t go well,” he admits, his answer belying his earlier comments about how he might have ended the war on drugs in its infancy.
He cites Virgin Megastores as one business he clung on to for too long. But several splashy Virgin launches – from Virgin Brides to Virgin Cola – have been quietly put to sleep after not working out, and last month he grounded Little Red, a short-haul UK airline.
Branson describes failure as part of being “a true entrepreneur”, saying it doesn’t damage the brand, “as long as you pay the bills”. But after nearly five decades, he has no desire to have to start all over again. So even seemingly bold bets are financed in a way that ensures he is never betting the company. Virgin is investing about $500m in Virgin Galactic, for example, but 30 per cent of the total cost is coming from Abu Dhabi.
I have polished off my fish but Branson’s American-sized chicken has proved too much for him. “I don’t want this wasted,” he tells the waiter, asking if the remains could be bagged up.
Though we have overrun by about half an hour, he seems in no hurry to leave, and when we are offered tea or coffee he chooses English breakfast tea (which the waiter gives us on the house, as I have already paid the bill). “When I drink too much coffee, I don’t like myself,” he explains.
But pretty soon his colleagues are hovering, having decided he can keep his next meeting waiting no longer. He offers them the food, but both will be moving on with Branson before they can find a chance to eat it. So he gets up from the table, his tea unfinished, leaving me with a wave, a smile and a billionaire’s lunchtime leftovers.
Andrew Edgecliffe-Johnson is the FT’s US news editor
Illustration by James Ferguson
Letter in response to this column:
Your priorities do not make sense, Sir Richard / from Ms Anne-Carole Chamier, Ardross, by Alness, Ross-shire, UK