The dividing line between large-scale business success or an early bankruptcy is sometimes just a thin layer of varnish. Richard Branson, eccentric entrepreneur and founder of the world-famous Virgin brand, makes this sincere confession in almost every interview that asks about the nature of his success. Sometimes you just have to be lucky that you manage to pay all bills just long enough in the initial phase of your new venture. However, Branson's successes are impossible to summarize as an accumulation of happiness. Behind the Virgin empire there is indeed an innovative way of thinking: the Richard Branson method.
From frustration to business model
We can hardly imagine it in the Spotify era, but there was a time when artists earned almost nothing from concerts and especially from selling singles and albums. The true music lover spent large parts of his monthly income on very expensive LPs that were displayed in many living rooms as trophies in bookcases.
Richard Branson started his first company in that market in the early 1970s: Virgin Records. The biggest frustration on the record market at that time was the price of an LP. By selling LPs not in stores, but via a mail order concept, Branson managed to lower the price and make albums more affordable. It wasn't long before the company became successful and - ironically - opened a first store.
This business model - not least the first model that Branson ever set up - symbolizes the lion's share of the companies he started in his impressive career. Branson looks sharply at a market or supplier, for example the record industry, and exposes where the greatest frustration point lies: in this case, the cost price. He then has the guts to come up with a business model in which that frustration is removed.
Courage and determination: Virgin Atlantic
One of the best known Branson companies is undoubtedly Virgin Atlantic Airways. When he was 28 years old and stranded at an American airport on his way to, yes, the Virgin Islands, he decided that things could be done differently (read: better). American Airlines canceled its flight and he would have to spend a night at the airport with dozens of other victims.
Branson did not intend that, turned to the charter department and divided the price of renting its own aircraft by the number of available seats. He returned to 'his' group of passengers and asked who wanted to fly to the Virgin Islands that night for $ 29. That same evening, Branson 'just' landed on the Virgin Islands.
It eventually led Branson to the creation of Virgin Atlantic, an airline with which Branson wanted to resolve its own frustrations, as he had experienced during flights with other airlines. With Virgin, he offered direct flights to cities that would otherwise be difficult to reach. Of course he paid attention to the price. He provided a pleasant atmosphere, including sympathetic staff, great music while boarding and good meals on board. He also introduced an understandable point system for frequent flyers, which he was able to bind to his brand.
However, with only a good product, Branson did not win in the airline industry. The fierce competition - mainly consisting of British Airways (BA) and American Airlines (AA) - had to be tackled. Over the years, Branson therefore cried out "Mine's bigger than yours", "4 engines 4 longhaul" and "No Way BA / AA" - referring to an intended merger between AA and BA - on the side of its planes. He constantly referred to competition with BA in particular, and did so in a way that aroused sympathy with the general public.
Profit within twelve months
The management style of Branson has few laws of Medes and Persians. He has no fixed headquarters, does not hold meetings and has no technical knowledge about the products or services that his companies offer. Branson undertakes based on a conviction that there is a need for innovation in every industry, and that the party that innovates the best will end up at the end of the day.
One of his few rules is that every business must be successful within twelve months, otherwise it will pull the plug. Virgin Atlantic, for example, wrote black numbers within a year - particularly for an airline. If you are not successful within a year, Branson argues, something is wrong with your product and you will not be the best.
What is innovation for you?
To return to the term innovation: at Branson, that is a broad concept that everyone can mean something else. Innovation is therefore applicable to every industry and does not necessarily mean that you have to come up with a completely new concept. Many market leaders tend to sit still and not innovate enough; that is where Branson sees opportunities to outwit the competition by correct well to innovate and try to take over a market.
A good example is Radio Free Virgin. In the late 1990s, the Internet gained popularity among the general public and the first broadband connections became available. People could be online day and night, but there were still few applications that required it. Branson saw the possibility that nobody saw at that early moment: he started a platform - Radio Free Virgin - where dozens of radio stations were offered as live streams. For the first time, radio listeners were able to bring stations from all over the world into their living rooms in an easily accessible way.
Don't follow the trend - Be the trend
In short, following the trend is not being the innovator. According to Branson you will have to start a trend yourself. See opportunities for improvement in the world around you and do not let yourself be stopped by a so-called lack of knowledge. Branson knew nothing about aviation when he rented a plane at the age of 28 and, after all, he still knows nothing about aviation. But he does know what innovations are needed to make a difference in every industry. That is why it is no coincidence that you are currently the best in a Virgin aircraft WiFi at the best price.
The next step for Branson: affordable space travel for you and me. With Virgin Galactic he wants to innovate space travel and make a flight outside the atmosphere possible for everyone. That may sound far away, but for Branson it is simply the next logical innovation in the space industry.
Constantly ask yourself which innovations would drastically improve your industry, and make sure that you are the one who trend move. Otherwise someone else does it.