Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. What follows is the latest edited round of insightful responses. Ask him a question and your query might be the inspiration for a future column.
Q: I am a first-time entrepreneur entering the business arena. When I am asked what previous experience I have in this field, how should I answer? -- Jeyanth Krishnan, India
A: Virgin's history shows that a lack of experience does not have to be a liability -- it can be an asset. It is something you should play up when you discuss your ideas with prospective investors, partners and employees, rather than directing the conversation toward your other strengths.
From the first days of my career as an entrepreneur, I have always used my own and my team's lack of experience to our advantage. In fact, at our first venture, Student magazine, we used our newcomer status to secure great interviews and generate publicity -- people were excited about our new project and wanted to get involved. Our inexperience fed our restless enthusiasm for trying new things, which became part of our core mission.
No matter which industry you are planning to enter, you will almost certainly find that the same holds true for you.
Since our Student days, we have started hundreds of new businesses, in most cases knowing next to nothing about the industries we were moving into. And our inexperience has always allowed us to focus on how we can do things differently, rather than on the reasons we cannot. This gives us freedoms that other businesses don't have, constrained as they are by past lessons and industry history.
The key to turning inexperience into an asset is to pitch what is new about your product or service. How does your approach differ from that of other businesses? How will you reach out to target markets? Why should people choose your products and services over your competitors'? Present prospective partners with a fresh take on a tired industry, and you will grab their attention.
Our group's history has taught us to target new industries and markets where we feel we can add something new, improve the customer's experience and carve out a successful position. Our move from publishing into music retailing is a case in point. When we sensed that Student magazine's circulation was reaching its peak, we looked for more ways to make money, and decided to start selling records by mail order. A postal strike stopped the business in its tracks, but we had caught the music bug. Instead we set up our first record store. So our inexperience did cause us a near-miss, and it's likely that if people are asking you about your lack of experience, your ability to spot problems is on their minds. But many startups fail each year; a founder's background has little correlation with success. A couple of failures on a beginning entrepreneur's record should not be considered an issue. Indeed, investors need to become better at accepting that as our dynamic, innovative economy constantly reinvents itself, businesses will inevitably become obsolete. A young entrepreneur who has dusted himself off and started again, learning from his mistakes, has proved that he has what it takes.
Constrained by a lack of capital after the strike, we found a former shoe shop on Oxford Street in London, and we talked the owner into letting us use the empty space. We were not trained retailers, but we liked music and wanted to create a cool hangout for young people. Instead of building displays designed to move merchandise quickly, with huge racks of records and no place to sit down, we brought in big, comfy cushions and built listening booths -- it was a place where you could chat about music with your friends and share your favorites with them.
Our Oxford Street store quickly became popular with Londoners, which meant we soon had the cash to open our second and third stores. We stuck to our original winning formula, making sure to open stores on busy streets, especially looking at spaces that needed smartening up, since we could get a few months rent-free. This usually gave us some time to establish a local following. Soon we had stores in almost every large town in Britain.
From music retailing we moved into the recording industry, but it was our move into the airline business that underlined for me the advantage of inexperience. When we leased our first 747 jumbo jet in 1984, I knew very little about the airline business, beyond the fact that I had flown a lot as a record executive and disliked it. The food was poor, the entertainment was bad, the seats were uncomfortable and the service was lackluster. Surely all this could be changed -- it was just common sense.
Virgin Atlantic's early years were all about breaking conventions. I hated being stuck in one place for eight hours at a time, so we created a bar where Upper Class passengers could meet and talk during the flight. We brought massage therapists on board to relieve the tedium and ensured that all passengers had better seat-back entertainment. Continuing this tradition, Virgin America, our newest airline, has similarly revolutionized the industry in the United States.
So when you are dealing with prospective partners, suppliers or employees, turn their questions about your inexperience to your advantage. Explain that it frees you and your team to follow your vision for the industry. And if you make adjustments along the way -- not just to correct for problems you've noticed, but for contributions from your employees as well -- you will forge a new path to success.