The conventional wisdom at business school is stick with what you know. Of the top 20 brands in the world, 19 ply a well-defined trade. Coca-Cola specializes in soft drinks, Microsoft in computers, Nike in sports shoes and gear. The exception in this list is Virgin -- and the fact that we're worth several billion dollars really bothers people who believe that they know "the rules of business" (whatever they are). We're the only one of the top 20 that has diversified into a range of business activities, including airlines, trains, vacations, mobile phones, media, the Internet, financial services and health care.
We have created more billion-dollar companies in more sectors than any other company.
Between 2000 and 2003, Virgin created three new billion-dollar companies from scratch, in three different countries. Virgin Blue in Australia took 35 percent of the aviation market and reduced fares dramatically. Virgin Mobile became Britain's fastest growing network. Virgin Mobile in the United States was the country's fastest growing company ever, private or public.
As a result of this diversification, Virgin has been able to weather the storm of the recession. Our risks are spread over many companies, industries and countries; the failure of one will not bring down the whole group.
Why, then, are business teachers telling young entrepreneurs to stick to what they know, rather than advising them to imitate a company like Virgin?
Because they should. The Virgin brand came into existence gradually, reflecting what I was fundamentally interested in. And to my own surprise, it wasn't publishing magazines, as I'd originally thought; it wasn't even music. My driving force, I realize now, was finding new ways to help people have a good time -- ideally, in places where they were least expecting it. Like airports.
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Contrary to appearances, Virgin is focused: Our customers and investors relate to us more as an idea or philosophy than as a company. We offer the Virgin experience, and make sure it is consistent across all sectors. It's all about the brand.
If you are embarking on a new venture, how should you envision and develop your brand? Let's start with what a brand does.
Brands exist as a means of communicating what to expect from a product or service. The Virgin brand tells you that using this credit card is rather like using this airline, which, in turn, is rather like using this health club, staying in our hotels, and paying into this pension fund. It is a guarantee you'll be treated well, get a high-quality product that won't dent your bank balance, and get more fun out of your purchase than you expected.
Should you follow the Virgin formula and focus your new company on providing a certain customer experience? It really depends on the type of business you are in. We are in consumer-facing sectors where service is key. You need to assess what is core to yours.
When creating your first ads, designing a logo and reaching out to potential customers for the first time, you may be tempted to create a brand that's very corporate and remote. Too many companies want their brands to reflect some idealized, perfected image of themselves. As a consequence, their brands acquire no texture, no character and no public trust.
In contrast, Virgin wears its sense of humor on its sleeve. It's about our wanting to be honest about the ups and downs of our business and share what we think with the people who matter most -- our customers. The people who see our ads are the same people who read about our tussles, setbacks and mistakes. So why would we pretend the real world doesn't affect us?
Almost everybody in Britain knows of our run-ins with British Airways over the years. We had a lot of fun when we introduced onboard massages on Virgin Atlantic, running an advertisement in the newspapers saying "British Airways doesn't give a shiatsu!"
Whatever you and your team decide your new brand will stand for, deliver on that promise. That's the only way you'll ever control your brand. And beware: brands always mean something. If you don't define what the brand means, your competitors will. Apple's ads contrasting a fit, happy, creative Mac with a fat, glum, nerdy PC tell you all you need to know about how that works.
So, what's next? For any business building a consumer brand, speaking to journalists is part of the deal. Be prepared! Know what you stand for and be certain you're delivering it. Then you'll be able to answer every question openly and frankly, building your relationships with your customers and the media.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.