Richard Branson on the Importance of Taking Meaningful Risks
This story appears in the November 2017 issue of Entrepreneur. Subscribe »
Richard Branson is known as an adventurer, a billionaire and a prolific entrepreneur with an ever-expanding brand, Virgin. But as he explores in his new autobiography, Finding My Virginity, entrepreneurship is about much more than money.
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This issue of Entrepreneur is all about risks, and you’re known for taking many. But I imagine that what seems daring to others is actually, to you, very calculated.
We take a lot of calculated risk, but we make sure that no one risk is going to topple everything. Protecting the downside is critical. One of the first big deals I did was buying a secondhand 747 from Boeing. I was going from a record company to the airline business, so the key thing in that deal was that if it didn’t work out, I could hand the 747 back to Boeing after the first year. It wasn’t going to bankrupt our record company or the other things we’d started. So every decade, I have experience based on things that have gone wrong and gone right, and the little computer in my brain is computerizing everything that’s gone before. But as I get older, I’ve got to be careful not to get more conservative in my decision-making, which some other people do.
How do you stop yourself from a conservative shift?
I don’t actually think I have a problem with it. But a lot of people do. As they get older, they take less risk. I mean, it’s bizarre. People will jump into balloons or boats and take enormous risks when they’re in their 20s and 30s with a long life ahead of them. When they get to their 60s or 70s, when their life isn’t so long ahead of them, they won’t take these risks, and yet they’ve got less to lose. I’ve found that I get great pleasure in throwing myself into life and learning. I see life as one long learning process. And I love a challenge. I suppose I have to bring my fellow directors along with me.
You say in the book, “We like to work fast, to try ideas, see if they stick, and if they don’t, quickly move on to the next,” which is a very freeing mentality. Is that how you guide the people around you?
If you look at most companies in the world, they abide by that rule they’re taught at business school: Stick with your onions and don’t stray. Most big brands in the world are like that. Coca-Cola, we know what it does. Microsoft, we know what it does. And so on. Very few become all-encompassing, way-of-life brands. And it’s a pity, because I think the people who work for those companies would have a lot of fun if some of their resources went to starting new companies or challenging people in new areas. But we’re very happy they’re not. We’ll carry on doing it ourselves.
And yet, though you love launching companies, you’re not comfortable parting with them. Many times in your book, you’re genuinely anguished at the prospect of selling a company for a lot of money. You write that it’s “one part of my life I don’t enjoy.” That’s such a stark contrast to how many entrepreneurs think, where it’s all about the exit.
A company is simply a group of people, so what you’re selling is a group of people. If you’re a really close-knit company where people love working for you, and then you sell it to a company that doesn’t have the same culture, I feel that you’re letting people down. And obviously the classic example of that is Virgin America, where it was sold to Alaska [Airlines], and by selling it, a lot of people lost their jobs, which is very sad. Yes, there were great financial returns. But having a little bit more money in the bank is not the same as running a great airline and having a great group of people, and having people come up every moment of every day saying you’ve created the best airline in the world. I get my satisfaction from that, not from the amount of dollars in my bank account.
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If you walk into a roomful of tech hopefuls in Silicon Valley and tell them that, many would stare blankly back at you. How would you convince an entrepreneur that the exit is not the only goal?
I could point to 20 people who sold their companies and are having the most miserable lives. They’ve got lots of money in the bank, but they’ve sold their baby and they’re finding far too much time with their wife or their husband, and they’ve lost a very important purpose in their life. That would be one way I’d point it out. But look, if they sell their baby, if they have a good reason to sell it, and they don’t just buy a big yacht and get more and more caviar, and then they use that money to create 10 more babies, and they are the kind of entrepreneur that likes creating new things, then yeah. There’s two sides to a story.
Milton Friedman had the right idea of saying profit is important, but he should have added, “Your people are important. Your culture’s important. The moral way that you run your company is important. How you deal with the environment is important. Your responsibility to society is important.” What we have to do is get every company to think like that. And if every company thinks like that, then I do think we can get on top of most of the problems in the world.
Your answer comes down to purpose. It makes me feel like the big question to pose to entrepreneurs is: What’s your purpose?
Yeah. You do need to ask. People get so wrapped up in the day-to-day of what they’re doing. It’s important to sit back and think about, Why am I on this Earth? What can I do to make a real difference?
In your book, you tell a story from 2007 when one of your trains derailed and a woman died. You rushed to the scene and met with the families, and you wrote that “the key thing after a major disaster is to get there quickly, deal with it head on and be both sympathetic and honest.” At the time, that struck me as smart leadership. But now I wonder if it was really
When I was brought up, if I ever said anything ill about someone, my parents would put me in front of a mirror and make me stand there for 10 minutes and say how badly it reflected on me. So I always look for the best in other people. We should be out there to praise other people, to care for other people. It doesn’t matter which person it is. If somebody comes up to ask for a selfie, take the effort. It doesn’t take long. And that follows through to, if somebody is killed in a train, it’s important to go there, to hug the relatives and to treat them as your own family. That’s just the human, decent way of dealing with people. If you deal with people properly, when you look in the mirror, hopefully it will reflect back on you in a positive way, and life’s that much more enjoyable as a result.
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We talked about you not wanting to think conservatively as you got older. But I wonder if your perspective has shifted as you got older, and this focus on purpose is a part of it.
I think more so, I was a lad of the ’60s. We had a magazine, and I set it up originally to campaign against the Vietnam War. So most ventures that we set up, we have not set up thinking, How can we make the most money? There is a purpose behind them. And when I started, I never thought of myself as going into business. I just wanted to be an editor. I wanted to do what you’re doing.
I can assure you that you chose the route that makes more money.
I’m sure you can have the same food on your plate as me. And the same mattress on your bed. Having more money just gives you more responsibility. When you have a hurricane on your island, you’ve got a big headache.