Business Lessons From Mega-Entrepreneur Richard Branson
Like many entrepreneurs, Richard Branson loves creating things. He sees problems in the world and provides solutions. But unlike others, he has established many different businesses. In fact, in his 40+ years as an entrepreneur, he has developed over 100 brands.
Branson has given a lot of advice along the way. He has spoken on topics of starting a business, running a business, managing people, and hiring people. Let’s get into what he advises entrepreneurs.
On Starting a Business
Challenge The Status Quo
Challenge the accepted wisdom and encourage your staff to do the same. Look at things from the point of view of the customer. Here are two examples where Virgin took a totally unique perspective on things:
Virgin Money is a bank in Britain where the branches look more like living rooms than banks. There are tables for Wi-Fi, newspapers, and comfortable seating. This eliminates lines and teller windows.
Virgin America Terminal 2 is a terminal with a yoga room, a wide variety of food choices, etc.
It’s important to create something different, something that will stand out.
Create Value In The World
Branson says that he starts a business only if it will improve people’s lives. He was unhappy with the customer service he was getting from British Airways, so he started a new airline, Virgin Atlantic, which is focused around the customer.
Building something you’re passionate about is important as well. If Branson hadn’t been passionate about building an airline, he wouldn’t have put so much time into getting the staff, buying the aircraft, and working hard to turn it into a viable business.
When Pitching, Keep Things Simple
Keep your pitches simple, clear, and memorable. Avoid wishy-washy language like “we hope that…” or “with some luck, we’ll…” Be concrete and confident.
“It is vitally important to present a clear, concise plan that investors can easily understand and repeat to their own people. In the first meeting, avoid overly complicated, numbers-laden presentations.”
Branson also advises entrepreneurs to give a clear explanation of why their business will be sustainable and pull through technological changes and shifts.
“Nothing stays the same for long, so explain how you plan to tackle the inevitable technological changes and market shifts that are heading your way.”
Be A Self-Motivator
According to Branson, entrepreneurs need to be good self-motivators. Branson advises that entrepreneurs use it to their advantage:
“It’s important to understand what your main motivation is so that you can focus your efforts on reaching those goals. Then structure your job – perhaps by delegating some work – so that you can spend as much time as possible turning this energy to your company’s advantage.”
He says that making money shouldn’t be a main motivator:
“Above all, you should work on building a business you’re proud of. This has always been a motivator for me, from my Student magazine days, through to our latest startups today. I have never gone into any business purely to make money. If money is your only motive, then I believe you shouldn’t launch the business at all.
“Once you know what your own motivations and aspirations are, talk to your employees and colleagues about theirs, if you haven’t already. Then structure their jobs in a way that allows them to tap into this energy, too. With you and your employees approaching your work with renewed energy and commitment, you’ll find that there’s little that you can’t accomplish together.”
Dream Big
Branson’s first book, Losing my Virginity, was almost titled Talking Ahead of Yourself. Branson goes on to say:
“Because I sometimes think in life you’ve got to dream big by setting yourself seemingly impossible challenges. You then have to catch up with them. You can make what people believe is impossible possible if you set big enough targets. Flying from New York to Australia in, say, two hours. Can we do it in our lifetimes? I’m determined to try. If you don’t dream, nothing happens. And we like to dream big.”
Your First Year Is All About Surviving
In your first year of running a business, your only goal should be surviving.
“In a company’s first year, your goal should be simply to survive, and this will likely take everything you’ve got. No matter how tired or afraid you are, you have to figure out how to keep going.”
Investors Bring More Than Just Money
When examining investors, Branson suggests that you ask yourself, “Will this person or group give us the space and time we need to build a great business?” A “dictatorial financial partner” can ruin the spirit and enthusiasm of entrepreneurs, so ensure that your investor is someone who will let you run your company without getting in the way or questioning every decision you make. Remember that it’s not all about the money and that the person you are bringing on is also important. They carry more than just a checkbook.
The most important partnership you have is the one with your staff. Branson says that if you get that right, your chances of success are much higher.
Five Tips For Success
In a LinkedIn post, Branson gives entrepreneurs five tips for starting a successful business:
- Listen more than you talk
- Keep it simple
- Take pride in your work
- Have fun, success will follow
- Rip it up and start again (don’t let failure be the end all, be all)
Five Guidelines Branson Follows When Launching Businesses
Branson and his friends in business followed these five guidelines when they launched their first magazine, Student, and, later, Virgin Music:
- If you don’t enjoy it, don’t do it. You must love what you do.
- Be innovative: Create something different that will stand out.
- Your employees are your best asset. Happy employees make for happy customers.
- Lead by listening: Get feedback from your staff and customers on a regular basis.
- Be visible: Market the company and its offers by putting yourself or a senior person in front of the cameras.
Four Tips for Avoiding Startup Mistakes
When speaking on avoiding common startup mistakes, Branson gives these tips:
- Stay on target – You need to be clear and concise in explaining your idea. Branson says that the shorter the pitch is, the clearer it will be. Don’t plan too many years in advance, and stay on target.
- Be realistic about costs – Don’t underestimate the cost that it will take to launch your company. Branson says that JetBlue needed $160 million to launch. Conventional wisdom said that cost was too high and they wouldn’t be able to raise that much capital. But they did and had one of the most successful launches in airline history and turned a profit after only six months.
- Hire people you need, not people you like – It’s been said that people would rather work with people they like than people who are competent. Branson says entrepreneurs may want to stay away from working with friends because, if they don’t work out, it will be difficult letting them go.
- Know when to say goodbye – Entrepreneurs need to know when to step away from the CEO role. This doesn’t mean turning your back on the business, but realizing you’ll have a new role in the company which will allow you to focus more. It also doesn’t mean that you cannot return to running the company, as Larry Page did at Google.
On Running a Business
It’s All About The Details
“I often compare creating a business to creating a painting. You’ve got a blank canvas, you’re filling in that canvas and you’re trying to get every single little detail right.”
Branson says entrepreneurs should have a notebook with them at all times and write down what they notice about their business. When Branson flies on Virgin, he takes notes on everything from the food to the carpets. He advises others to do the same, and focus on getting everything right, all the time.
Skip The PowerPoint And Have A Conversation
Branson doesn’t care for PowerPoint. He said, “I believe in conversation and eye contact.” This isn’t surprising considering how well Branson connects with people. Avoiding PowerPoint is similar to the practice at Amazon, where, in place of PowerPoint, they write six page reports.
Ultimately, PowerPoint presentations are aimed to provoke conversation and only touch on the highlights, not to be a crutch for the speaker who only reads the slides.
Get Away From The Job
It’s important to spend time away from work to be with family and friends. Branson says, “Spending time away from work is important to helping you maintain perspective on the challenges you face, and thus to the future of your company.”
Not only that, but time off can also improve performance. So take some time off, you’ll be better because of it.
Keep A Notepad With You
“Anyone who aspires to lead a company must develop a habit of taking notes. I carry a notebook everywhere I go.”
As mentioned, Branson is an avid note taker and list maker. He recommends doing this to keep you focused and productive. It can be done for day-to-day or monthly goals. Making these lists can keep you productive and focused on what you need to get done.
Once you write in your notepad, then you need to act. Simply writing in a notepad doesn’t create change.
Don’t Take Yourself Too Seriously
“Humor, I think is a very important part of building a business, not taking yourself too seriously and being willing to have a sense of humor.”
Along with not taking yourself too seriously, Branson says you should smile and not take failure too seriously, either.
Promote From Within
Whenever possible, promote from within. This doesn’t mean just bumping people to higher positions, but also letting people have more freedom in their current job.
A Question Entrepreneurs Should Ask Themselves
Continually ask yourself,
“Is this how I would want to be treated if I were the customer?”
Don’t Forget What A Company Is
Branson says that the most important thing to remember when running a company is remembering what a company is.
“A company is simply a group of people. And as a leader of people, you have to be a great listener, you have to be a great motivator, you have to be very good at praising and looking for the best in people. People are no different from flowers. If you water flowers, they flourish. If you praise people, they flourish. That’s a critical attribute of a leader.”
Five Tips For Success
On American Express Open Forum, Branson gives five tips for entrepreneurial success:
- Find good people.
- Realize that the employees are the business.
- Always look for the best in your people. Lavish praise. Never criticize.
- Don’t take yourself too seriously.
- Screw it, just do it.
On Managing
Find The CEO
This one may be difficult for some entrepreneurs.
Branson recommends that, early on, you need to find somebody better than you to run the business on a day-to-day basis. Remove yourself from the day-to-day “nitty-gritty.” Branson even suggested possibly getting out of the building. He says if you do this, you’ll be able to deal with the bigger picture and become a better entrepreneur. Learn how to delegate.
Remember that, just because you leave the CEO role, doesn’t mean you cannot return. Larry Page ran Google with Sergey Brin until 2001, when they hired Eric Schmidt to be the CEO until 2011. Then, in April 2011, Page became CEO of Google. Being the CEO through all the different stages of a company can be difficult, so don’t think stepping down means you’re incompetent. As Branson says, it’ll help you focus and gain a fresh outlook.
Learn To Delegate
An entrepreneur must learn the art of delegation. Branson says of his CEOs:
“I have a fantastic team of people who run the Virgin companies, who have a lot of freedom to run the companies as if they were their own companies, I give them the freedom to make mistakes…”
In an interview with Marc Benioff, Branson says:
“I learned to delegate early on and I think that for people in this room who are building businesses I think quite early on it’s worthwhile in trying to find somebody better than themselves to do the day-to-day running of their business so they think about the big picture. They can be entrepreneurial, they can do the next venture, they can be ready to firefight when something’s going wrong, they can spend their time helping promote and put their companies on a map on a global basis. If you delegate, you’ve got to be very careful not to second guess people. You’ve got to accept…let them make mistakes without jumping down on top of them all the time. Some things they’ll do better than you, some things they won’t do quite as well as you. Giving people the freedom to make those mistakes is important.”
Everything Trickles Down From Your Staff
Put your staff first, customers second, and shareholders third. He says:
“If the person who works at your company is 100% proud of the job they’re doing, if you give them the tools to do a good job, [if] they’re proud of the brand, if they’re well looked after, [and] they’re treated well, then they’re going to be smiling, they’re going to happy, and therefore the customer will have a nice experience.
“If the person whose working for your company is not given the right tools, is not looked after, is not appreciated, they’re not going to do things with a smile, and therefore the customer will be treated in a way in which they don’t want to come back for more. So my philosophy has always been, if you can put your staff first, your customers second, and your shareholders third, effectively in the end the shareholders do well, the customers do better, and your staff are happy.”
Get Lots Of People Involved In Brainstorming
Everyone in the organization should get involved in brainstorming discussions. Branson says that the quietest person in the room may have the best ideas, so it’s important to include them in discussions and brainstorming sessions. Bringing in people from other departments also may spark new and fresh ideas.
“Ultimately, you need to find a balancebetween brainstorming your way out of a great idea and acting as lone ranger. Use brainstorm sessions to obtain your team’s perspective, listen to and follow up their best ideas, but in the end you need to make a choice and then take responsibility for that decision.”
Keep Things Fun
Branson advises companies to do activities outside of the office. Companies need to bring a sense of play to the office. This will pay off in the long term as employees are more likely to remain loyal to the company. Since they enjoy their job, they’re also likely to perform better. If people feel trapped and stuck in their job, performance will suffer. And if that happens, company performance suffers and the company won’t live up to its potential.
What Great Leaders Do
“The best way of becoming a successful business leader is dealing with people fairly and well and I like to think that’s how we run Virgin.”
Branson also adds that a key attribute of a good leader is listening. Listen more than you talk, you’ll learn more.
On Hiring
What To Look For
Hire people who are:
- Smarter than you
- In agreement with your vision, goals, and values
- Friendly and eager to have fun
- Motivated to be successful
- Able to see their work as a mission
Great Employees Like To Learn
Hire people who want to learn. Branson says, “The day you stop learning is the day you stop living.” When you hire people who want to learn, you are getting a competitive edge over your competition. You’ll look forward to trying fresh approaches and ideas on how to do things differently.
Take Care Of People
Take care of employees and let them grow in their job. Branson says:
“If your best people aren’t growing in their careers as your business gains traction and expands, they will quickly lose enthusiasm for their work. And before you know it, you’ll be dealing with unsatisfied customers as well as unsatisfied employees.”
Don’t Hire People Looking For Money
“For more than 40 years, I have felt that one of my most important jobs is to attract and motivate great people who genuinely feel their job is more important than just money.”
To do this, people need to know the mission of the company. They also need to be fully onboard with making the company a success. This is especially true with startups.
Create A Culture Of Opportunity
Let people run with their ideas. Let people know that they can move up within the company. Once they see this, they’ll work that much harder to master their current job so they will be considered for promotion or further development.
If employees constantly see people from the outside taking top jobs in the company, they’ll become discouraged and work will suffer. You’re also more likely to have high turnover. Why work at a place if you’ll always have the same amount of responsibility and never be promoted?
Quotes
On Dreaming Big:
“I sometimes think in life you’ve got to dream big by setting yourself seemingly impossible challenges. You then have to catch up with them. You can make what people believe is impossible possible if you set big enough targets. Flying from New York to Australia in, say, two hours. Can we do it in our lifetimes? I’m determined to try. If you don’t dream, nothing happens. And we like to dream big.”
On Delegation:
“The art of delegation is absolutely key.”
On What Makes An Exceptional Company:
“An exceptional company is the one that gets all the little details right.”
On Failure:
“The most important thing is not to be put off by failure.”
On Being The Best:
“Not only can a small company be the best, but it has to be the best to stand a good chance of thriving in today’s competitive world. Then, once it reaches the top spot, it has to strive to do better every day, to ensure customers buy its products or services. Large scale can bring a company many advantages: a hefty marketing budget, established brand awareness in target markets and dependable distribution networks. But, luckily for the smaller players, a business’s size does not guarantee better products or great service.“
On Learning:
“The best way of learning about anything is by doing it.”
On Facing The Downside:
“In business, protecting against the downside is critical.”
On Starting Businesses:
“I think most of the ventures I’ve started I’ve never thought, ‘I’m going to make lots of money going into this.’ I’ve started them quite often out of the frustration of finding that I couldn’t achieve something unless I started it.”
Advice For Startups:
“For people in this room who want to start something, they just got to think: ‘What’s not being done well by other people? How can I create something that’s really going to make a difference in people’s lives?’ Then hopefully at the end of year you’ll have more money coming in than going out.”
On People:
“If you do look for the best in people – your life is so much richer for it.”
On Playing The Game:
“Don’t just play the game – change it for good.”
David Vs. Goliath:
“If you’re a lot smaller than the bigger competitions, you’ve got to use every weapon you’ve got. And I suppose the fact that I am relatively well known means that I can get on the news or get on the front page of the local newspapers when we launch a new route.”
On Smiling:
“If you’re looking for the next big investment for your business but don’t have much money to spend, start by looking at yourself in the mirror. A smile won’t cost you anything, and the returns to your business will start right away.”
On Customer Service:
“Simplicity and good customer service will win every time.”
On Working:
“If you’re spending most of your life at work, it should not be a chore, it should be fun. If you’re the switchboard operator, you should feel as appreciated as one of the directors in the company. People very rarely leave companies because they don’t feel they’re being paid well enough. I mean, some do, but it’s much more that they come up an idea that they’re not being appreciated, they’re not being listened to, and they feel, ‘I’ll go off elsewhere and do something else.’”
The lesson to learn from Branson is to find an area where customers are being underserved and then build a business from the customer point of view. Also, make a difference in people’s lives and change them for the better. Build a business where you would shop. And then, when the time comes, step down from the CEO role and learn the art of delegation. Have fun, make mistakes, and don’t take yourself too seriously.
If you’d like to learn more about Richard Branson, you can check out a few of his booksand follow him on Twitter.
Have you read any of his books? Do you have anything to add? I’d like to hear it in the comments.
About the Author: Zach Bulygo is the Blog Manager for Kissmetrics, you can find him on Twitter here.
