Sir Richard Branson, the British billionaire entrepreneur, answered readers’ questions in a live online Q&A on FT.com.
Sir Richard offered advice to budding entrepreneurs and fielded questions about his unorthodox approach to building the Virgin business empire, which includes branded ventures in music, mobiles, airlines, financial services, retail, internet, drinks, rail, hotels and the leisure industry, with about 200 companies worldwide.
Sir Richard also answered questions about the future of mobile TV, which he is betting on to be the next big thing. Virgin will soon be launching one of the first full-blown digital television broadcast services for mobile phones, and Sir Richard is also driving the merger of Virgin Mobile and NTL, the cable group.
With mobile TV, what is going to differentiate one brand from another? Will it be content or technology, or will it all come down to pricing still? Secondly, what do you think can realistically be sold through mobile TV? Are we just looking at sport, music videos and the odd bit of sensational news, or is there more?
Sir Richard: Mobile TV over the last three years has largely been a failed 3G gimmick which has involved very short video clips on ugly and chunky handsets. But much more quickly than anyone anticipated, real breakthroughs are happening which will allow us to watch genuine television programmes on our mobiles.
Mobile communication devices, such as Blackberrys, which transmit data, including emails and real-time financial information, will remain at the forefront of what business users need from their devices in the future. But the general consumer will want exactly the things you have outlined, Leigh, in your question.
Sport will be number one for the person on the move who really wants to watch that football match rather than just hear it on their radio.
I still think most people will want to listen to music through an Ipod whilst on the move, rather than watching pictures on their mobile to accompany the music, but some will want the pictures.
Mobile TV news will come into its own when a truly sensational event happens, be in tragic, such as September 11th, or joyful, such as the worlds first private space tourism flight on Virgin Galactic in two years time!
I think brands will matter and it is one of the reasons that Virgin Mobile UK is in close talks with NTL/Telewest to create a new Virgin branded quadruple play company. And as far as technologies are concerned, it will be ease of use for the customer rather than the technical solution which will be most important. For example, I tried to watch a video clip on a 3G phone last year and it was menu after menu before I got to my downloaded clip. Virgin Mobile are planning a service which will simply have a button to press to get to the TV content. Freeserve have proved that simplicity in the digital television market counts for just as much as content, and Virgin TV of the future, whether it be on mobile or your TV/computer screen/plasma gismo will keep simplicity in just as important a box as technology.
Looking ahead to the Virgin Mobile/NTL merger and the so-called ‘quadruple play’ company that can offer fixed-line and mobile telephony, pay television and broadband: To what extent will it become important to also own the video content that you anticipate consumers will be demanding over these delivery channels?
Sir Richard: I remember the front page of Music Week in the mid 1980’s predicting the death of record retailing and that all our music content would be downloaded by satellites, that would also provide our music programming and telephone. And all that was predicted to happen by the 1990’s. At that time, the word ‘convergence’ was first being used and there were lots of confusion about who would be the winners and losers and everybody bet that the content owners would be at the top of the tree.
Well that prediction was wrong. But finally, in 2006 the technologies for delivering entertainment, information and communication services are finally starting to come together, thanks to broadband internet, wi-fi and mobile technology which can at last be genuinely converged. I do not personally think it is that important to own the audio visual content, but it will become important to have the right to distribute it to individuals when they demand it.
When you think about the Virgin brand and its prospective push into the “quadruple play”, how do you anticipate the impact of the brand on NTL/Telewest business and which of the four services do you think will benefit most from the Virgin brand’s leverage?
Iain Osborne, Amsterdam
Sir Richard: Virgin Mobile UK is still in talks with NTL/Telewest but assuming the deal goes ahead, there will be a long and complex project to achieve a quadruple play of services seamlessly delivered. My personal view is that achieving the benefits of the Virgin brand for consumers will take at least three years. I don’t think any one of the four services will particularly benefit more than another from the Virgin brand but what we will prioritize over the three years of integration is ‘customer service’. The most exciting new service will be able to bring together broadband content, internet telephony and a mobile product.
I was curious about what a typical working day is like for you? What time do you wake, sleep and relax?
Sir Richard: I travel a lot and have been in Australia for the last two days launching our Virgin Money business. That means sleeping on planes (I obviously favour the new Virgin Upper class beds!) and learning how to “cat nap”, which I can do anywhere. I once even crossed the Hong Kong-Chinese border in a bus and managed a much-needed 4 hours whilst my colleagues had a meeting sitting around me. If I need to I can stay awake and am very lucky to not really get anything but occasional jet lag. For relaxation it is chess, bridge, poker or a good history book (I am reading a fascinating biography of Mao right now). Outdoor sports of sailing, kite surfing, and skiing are my favourites. And I get back to Necker Island in the British Virgin Islands as often as I can to practice these.
What do you look for in an entrepreneur?
Kelly Hann, Sindy Calay, Manoj Kulwal, Michael C Dowling and JG
Sir Richard: Restless questioning, the ability to ask the question ‘why not?’ rather than just ‘why?’ - and the ultimate determination to say: ‘Screw it, Let’s do it!’
However ultimately, the entrepreneur will only succeed if he or she has good people around them and they listen to their advice. My colleagues know me as Dr.Yes because I always find it hard to say ‘No’ to new ideas and proposals. I rely on them to guide me but ultimately. I’m also prepared to trust my intuition, as long as I feel it is well informed.
And which other (currently active) entrepreneurs do you admire, and why?
Kelly Hann, Sindy Calay, Manoj Kulwal, Michael C Dowling and JG
Sir Richard: I admire lots of entrepreneurs at the moment. My first mentor, Sir Freddie Laker sadly died a couple of weeks ago. But I admire a wide range of entrepreneurs in today’s markets. Charles Dunstone, Barbara Cassani, Stelios, Tom Hunter and Brian Souter are all entrepreneurs I know and respect. There are others I don’t know very well but they all share the ability to ask the question and then take a decision. It is often better to take a decision that is wrong and change it - than take none at all and witness the subsequent meltdown.
Would you ever consider a process similar to “The Apprentice” to recruit senior positions?
Diana Calligaro, HBO
Sir Richard: I did a series in America called “The Rebel Billionaire”, which is quite like “The Apprentice” in the UK but with extreme adventure sports thrown in. I recruited a winner called Shaun. He’s a fantastic guy but he wants to be an entrepreneur in his own right, rather than work for anyone else.
In reality, as opposed to reality TV, the best way to recruit senior positions is to do it internally or spot people working on projects that you realise are a cultural fit.
I can think of many senior Virgin Executives who have come to us from companies, law firms or investment banks that we have been working with over a long period of time. I am also a great believer in recruiting people with some experience and then nurturing their careers and moving them around the Virgin group.
Entrepreneurs often site one or two key events that materially helped them on their way earlier in their careers. Is this also true in your case, and, if so, what were they?
Jon in London and David Li-Sai, Newcastle Upon Tyne, UK
Sir Richard: I have had a few seminal moments, such as learning at the age of nineteen why breaking the law is a bad idea. I also learned that having some cash reserves up your sleeve is a good idea. This was brought home to me when the engine on the test flight of our 747 was struck by a goose, the day before Virgin Atlantic launched in 1984. Coutts Bank wouldn’t extend my overdraft to buy another one and in the end we only just scraped enough cash together to pay for it. The net result was that I ended one bank relationship and started a new one with Lloyds TSB, that has lasted since.
Do you think that the current advertising campaign for Virgin credit cards, which centres on the message that ‘life is better when you say yes’, encourages an irresponsible attitude to personal finance amongst young people and is not in line with the core Virgin brand/ values?
Jonathan Cowie, Aberdeen
Sir Richard: Please refer back to my earlier answer (above) about being known by my colleagues as ‘Dr.Yes’. I’d have a cheek questioning their campaign.
Advertising campaigns, by their very nature, are there to grab people’s imagination, to bring your product to the front of their minds rather than your competitor’s product - as a result many of the best ones are irreverent, fun and over the top.
Virgin Credit Card’s new campaign is exactly that - a cheeky, fun ad campaign. But to be honest the underlying sentiment which is to ‘live life to the full’, ‘to enjoy every moment’ - is one that I truly believe in and are sentiments that I have tried to live by.
Are there any new areas you want to extend the Virgin brand into, and if so, what? By the same token, are there products or services the brand could not stretch to encompass?
Sir Richard: I am looking at several exciting projects at the moment. One is Virgin Galactic, with which we hope to prove the safety and commercial viability of space flight in a project which will also see the development of the world’s first low-cost and environmentally-friendly space launch systems.
Another exciting area for Virgin for the future is alternative energy, and I have a team actively working on a bio ethanol project as we speak.
Another research area to which I’m committed is healthcare.
Beyond that, we hope to take successful Virgin businesses, such as mobile, money, digital radio, health and fitness centres and transport and travel and grow them around the world.
Is the City’s ambivalent attitude to cross-sectoral brands such as Virgin a relief or a frustration?
Sir Richard: Although Virgin has a good relationship with the City I have never worried too much when the scribblers of the Square Mile tried to tell us how to manage the development of our brand. People trust the Virgin brand because of the philosophy of how we do business, in that we overcome challenges and have a goal of improving customer service.
Sometimes achieving the brand’s promises can take many years, especially when you encounter decrepit infrastructure and have to change it.
Virgin Trains is an example of the need for determination and a long-term view but now with a new fleet and an improved railway the people there are building a business we can all be proud of and knock the airlines to six on the Manchester - London route as well.
How easy do you think a start-up is these days in the UK compared with when you founded Virgin?
David Worthy, Foundations Capital, and Jonathan Guthrie
Sir Richard: It is much easier to start businesses now than it was in the1960’s and 70’s, even with all the red tape that supposedly comes from Brussels and the civil service. When I was a kid, it was impossible to persuade anyone to back you and venture capital didn’t exist at all. Banks were only interested in helping their well-heeled customers. Most major industry in the UK was owned by the government anyway, and a lot of people were scared of going it alone. Those attitudes, and that culture of “managed decline”, as civil servants used to describe the British economy, is long gone. Britain has become one of the top ten entrepreneurial countries in the world.
And how do you think the UK Government could further encourage young entrepreneurs to set up new businesses?
David Worthy, Foundations Capital, and Jonathan Guthrie
Sir Richard: The government in Britain does a better job of encouraging entrepreneurs than many countries but there is no room for complacency and a greater emphasis on ‘business skills for life’ at secondary school (GCSE and AS Level in the UK) is important. I also strongly believe that Spanish and Chinese are the key business languages of the future in addition to English. The government has to make a concerted effort on further encouraging language skills in the education system at all levels.
What are your plans for future philanthropy within the UK? Do you see this as a growing trend amongst British entrepreneurs, to ‘give back’ to communities and education? Will you be establishing an organisation along the lines of the Bill and Melinda Gates Foundation for this purpose?
Sir Richard: I am now spending nearly half my work time on international NGO and other charitable activities. We have established our own foundation called Virgin Unite to coordinate all Virgin’s worldwide charitable ventures (at the moment it is still a wee bit smaller than the Bill and Melinda Gates one). Most of our projects are in Africa at the moment and the fantastic Unite website will tell you all about them.
Jean Oelwang runs Unite with wonderful dedication and she has introduced us to lots of remarkable people and projects all over the world. The UK is so well served with charity activity generally that I am not concentrating my own involvement with Unite on it’s UK projects right now.
What key measures are in place in Virgin companies to avoid employee dissatisfaction? Or, even worse, employee resistance?
Sir Richard: We have dedicated People Teams in the majority our companies who operate an ‘open door’ policy with all employees.
We also facilitate training courses, such as ‘Work, Life, Balance’, which make it clear that we appreciate that they all have a life outside of work that is just as important as their life in work. It is important that all the staff who work for a company feel as though they are owners of that company. They should also have the ability to move up the ranks in a particular business, or if that’s simply not possible, that they have other exciting opportunities to move within the Virgin Group companies without being discouraged for wanting to experience something new.
I have always believed that work should be fun - if it isn’t you’re in the wrong company. Most years I still hold a massive staff party at my home in Kiddlington - I think last year we had approx. 35,000 members of our staff and their families over three weekends - slightly bigger than in the early 70’s when it was me and about 12 other like minded hippies!
This combined with staff drinks and socials, that the majority of our companies hold on a regular basis, encourages staff to let their hair down and party with all the different departments within the company - it helps to develop a common ground and a tangible ‘Virgin’ Culture.
I’ve been extremely lucky not to have experienced employee resistance in my businesses - again I believe this is because we actively encourage our staff to have a view and to voice that view - they know they’ve been listened to and asked to participate rather than being handed a dictate after the fact. It comes back to instilling a sense of ownership in all your staff regardless of what role they play in the business and treating them with respect rather than simply as a payroll number. Finally at the end of the day they can always write to me and it still happens!
Sir Richard Branson and the Financial Times would like to thank the many readers who submitted questions to the Q&A. We regret that due to time constraints it was only possible to answer a representative sample, but we would like to assure readers that all questions were considered and helped inform the discussion above. Thank you for your time.
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