predict thatyou will either
go to prison
or become a
millionaire.”
Branson was looking at the world around him, and he had a great talent for reading people, even if he could not read the written page without difficulty. He was seeing the changing attitudes around him in the youth movements of the late 60s.
Working with a friend, Branson put together Student when he was only 16 years old. He decided to put together a successful venture from the start by thinking big. This paper was aimed at the students of multiple schools, tying together a local population. He wanted to make it much bigger than a typical student paper by selling advertising to major corporations, and printing articles by famous people. The paper was produced out of his friend’s parents basement, and the first issue was distributed for free, a total of 50,000 copies. The paper was paid for by advertising.
Branson dropped out of school, due to his difficulty there, in order to put his efforts into his newspaper. The final word on Branson, as a student, was provided by his headmaster at the time, who said, “I predict that you will either go to prison or become a millionaire.” The headmaster’s prescience was uncanny—Richard Branson has since done both.
The newspaper was a success, because Branson aimed high. He did not let the fact that he was a young dropout stop him from approaching the biggest names he could. Branson says that, “I remember when I was asking Vanessa Redgrave or James Baldwin for an interview and the fact that they took the time to respond meant an enormous amount to me. It inspired me. So it’s extremely important to respond to people and to give them encouragement if you’re a leader.”
From the single venture of Branson’s paper, further establishments grew and spread, like ripples on a pond. In 1970, when Branson was 20 years old, Branson saw another opportunity.
The Retail Price Maintenance Agreement was abolished by the British government. This agreement kept records from being sold at discount prices, but this would be possible after the regulation was ended. However, record stores did not voluntarily discount their prices, and Branson took action.
He began a mail-order discount record company advertised through his own paper. His readership, as Branson well knew, was hungry for music and willing to pay. The record company took off and Branson expanded by adding to his staff and taking a space above a shoe store to distribute his records.
His new employees wanted to think of a company name that would reflect the new business and be more dynamic than “Student”. Names like “Slipped Disc” were considered and discarded before one associate suggested Virgin, because they were all untried and untested in business. And the first Virgin company was born.
The young Richard attempted a daredevil move in order to sell the discount vinyl and to avoid taxes. Record makers would sell “cut-out” discs that had been returned unsold from retailers, so-called due to the fact that these records would by marked by cutting off a corner, or cutting a notch or hole into the spine of the jacket. Branson travelled to the continent to purchase crates of these cut-outs. He would then return to London with the records in the back of his van to be sold at his bargain prices to retailers. This way Branson avoided paying a purchase tax and saved about £5,000.
After several trips, Branson attracted the attention of the Customs and Excise office. He was arrested and he spent a night in jail. The fines were steep, as Richard needed £15,000 immediately in order to be released and would need to eventually pay a total of £45,000 to keep the incident off of his criminal record.
Branson’s intrepid mother came to his rescue at this point, mortgaging her home to get Richard out of jail. Richard redoubled his efforts with Virgin to make the money to pay the fines. In a strange way, prison fuelled the growth of the future Virgin Megastores. Branson was arrested in 1971.
He opened his first record shop in Oxford Street in 1972, two years after beginning the mail-order business. The shops made money through retail concerns, and also exported records. Branson says in his autobiography that “avoiding prison was the most persuasive incentive I’ve ever had. Since there was limited growth left in the mail-order business, we concentrated on expanding the record shops. The next two years were a crash course in how to manage cash. From being a completely relaxed company running on petty cash from the biscuit tin and a series of unpaid IOU notes, we became obsessively focused. We used every penny of the cash generated from the shops towards opening up another shop, which in turn was another pound towards paying off my Customs and Excise debt. Eventually I was able to pay everything and relieve Mum of the bail she had put up.”
Branson went on to open many other companies that form the Virgin Group. He purchased the nightclub Heaven in 1979. This was a gay nightclub near Charing Cross in London. In 1980, Virgin Records went international.
Branson continued to expand his influence in the entertainment industry with Virgin Vision, which later became Virgin Communications, which is a distribution company that sends films to television and radio broadcasting.
“Branson
owns over
300 separate
companies
under the
Virgin aegis.”
On the personal front, Branson has been married twice. He married Kristen Tomassi in 1972, at the age of 22. They were divorced four years later.
He has been married to his second wife, Joan, since 1977. In 1979, Branson suffered the biggest tragedy of his life. The couple’s first daughter, Clare Sarah, was born three months prematurely, and died a few days later.
Another year and a half later, their daughter Holly was born. She is now a doctor. The couple also have a son, Sam.
Today, Branson owns over 300 separate companies under the Virgin aegis. The net worth of his empire can only be estimated but, at last count, by some calculations, was worth PS2.6 billion.
That figure is far below some calculations, partly due to the recent economic downturn. It is also due in part to the fact that such figures are always in flux and estimates vary. In any case, the fortune is huge.
Wealth Accumulation
Branson actually credits his dyslexia for some of his business success, as much as it also caused his educational failures. Since he could not read and study business reports any more than he could school papers, he cultivated an intuitive sense of people and of business. His creative approach has put an indelible stamp on his corporate style.
Whatever his intuition told him, the record company, although struggling, was ultimately successful.
When musician Mike Oldfield met Branson, he was unsigned, and apparently unsignable. Branson, however, with his characteristic disregard for risk, simply decided to form a record label in order to publish this release.
With the money from his mail-order business, Branson built a studio in Oxfordshire. It was here that he oversaw the recording of his first vinyl album. Mike Oldfield recorded Tubular Bells and Branson began distribution of this album in 1973.
Thus was born Virgin Records. Oldfield’s Tubular Bells rose to the top of the charts and the top of the best-selling records. This, of course, was just the beginning of Virgin Records.
Virgin
