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Saturday, January 07, 2017

Richard Branon, the British Entrepreneur, Founder of Virgin Group of Companies, the Adventurist and the Philanthropist

Richard Branson

Early life

Richard Branson was born in 1950 in Blackheath, London as the eldest to Eve Branson, a former ballet dancer and air hostess and Edwrd James Branson, a barrister. His grandparents and great grandparents had lived in Madras, India, and Richard Branson is believed to have 3.9% Indian DNA.  He attended the school until his age sixteen.   He is reported to have suffered from dyslexia and had poor academic performance as a student. His headmaster seemed to have told him on the final day of his school that he would end up either in prison or become a millionaire.  


After leaving the school at his young age of 16, still struggling, he started his ‘Student’ – a youth-culture magazine, from a church – run by the students and for the students.  He sold $8,000 worth of advertising in its first edition, during 1966. The first run of 50,000 copies was distributed for free, after Branson covered the costs with advertising. He interviewed several prominent personalities of the late 1960s and advertised popular records in the magazine. It became an instant success.   By 1969, Branson was living in a London commune, surrounded by the British music and drug scene. It was during this time in 1971 that Branson had the idea to begin a mail-order record company called Virgin (a name suggested by one of his employees, as they were all new at business) to help fund his magazine efforts. He sold successfully music records under the name ‘Virgin’ to the less-popular stores. The company performed modestly, but made Branson enough that he was able to expand his business venture, adding a record shop in Oxford Street, London. With the success of the record shop, the high school drop-out was able to build a recording studio - Manor Studio - in 1972 in Oxfordshire, England. He then leased out the studio time to several budding artists (including a few controversial bands), of which Mike Oldfield’s album Tubular Bells became a best-seller. In the early 1980s, his novelty record ‘Baa, Baa, Black Sheep’ (singing as a sheep, baa-ing along to a drum instrument became a great hit in 1980s. Eventually, Virgin Music became one of the top six record companies in the world.


                                                                        (Branson’s Manor Studio)

From there, it was a non-stop high-speed trajectory into several more business enterprises for Richard Branson. To mention the major ones:

1.       In 1982, Virgin purchased the gay nightclub Heaven.
2.      While he waited to travel to Puerto Reco, his flight was canceled. In the spur of the moment, he decided to charter a flight for his journey and offered to fly a number of stranded passengers for a very small fee to cover a part of the cost. He then formed Virgin Atlantic Airways in 1984. Subsequently, he started several other airlines companies, Virgin Express, Virgin Nigeria, Virgin America, Virgin Blue (since renamed Virgin Australia) and the unsuccessful Virgin Cola, and Virgin Vodka. Later, Branson also bought a 20% stake in the Malaysian’s Air Asia.
3.      In 1993, he won the franchise to run the train services for the former Intercity West Coast and Cross-country sectors of the British Rail. Virgin Trains was considered to be one of the riskiest businesses Branson had ever undertaken.
4.      In 1999, he launched Virgin Mobile
5.      In September, 2004, he announced the signing of a deal under which a new space-tourism company, Virgin Galactic, will licence the technology behind the Spaceship One – an initiative funded by Microsoft co-founder Paul Allen and designed by the legendary American aeronautical engineer and visionary Burt Rutan – to take paying passengers into suborbital space. The tickets are expected to be priced around £200000 and the venture will use Scaled Composite White Knight Two space-crafts. After several delays, in April 2013, the project made an impressive leap forward with the test launch of the first SpaceShip. However, in October 2014, his SpaceShip Two VSS Enterprise broke up in flight and crashed in the Mojava desert.
6.      His latest venture is into Virgin Fuels in search of cleaner, environmental friendly fuel, especially in view of rising cost of space fuels. In September, 2006 he pledged the profits of Virgin Atlantic and Virgin Trains for research into environmental friendly fuel and his pledge is estimated to be in the order of US$ 3 billion.
7.      During July 2006, he sold his Virgin Mobile company to UK cable TV, broadband, and telephone company NTL/NTL Telewest for £1 billion. He then launched a new company, Virgin Media, with great fanfare, to integrate both the companies’ compatible businesses, and he owned only 15% in the new company.
8.      In 2006, in collaboration with some of the famous names like Deepak Chopra, Shekhar Kapur, Sharad Devarajan and Gautham Chopra, Branson formed Virgin Comics and Virgin Animation, an entertainment company focused on creating new stories and characters for a global audience.
9.      Branson launched the Virgin Health Bank on 1 February 2007, offering parents-to-be the opportunity to store their baby's umbilical cord blood stem cells in private and public stem-cell banks. On 10 January 2008, Branson's Virgin Healthcare announced that it would open a chain of health care clinics that would offer conventional medical care alongside homeopathic and complementary therapies, a development that was welcomed by the British Government.
10.   When Northern Rock, a British bank (formerly the Northern Rock Building Society) suffered a bank run during the credit crisis in 2007 (the first ever bank in the 150 years of British history to suffer bank run) and failed to find a commercial buyer, it was taken over as a public ownership bank in 2008. In Oct 2007, Branson’s Virgin Group’s attempt to add Northern Rock Bank to its fold was foiled due to the vigorous negative campaign (of tax evasion by Branson) by the Liberal Democrats in Britain. However, in 2012, Virgin bought Northern Rock and changed the name to Virgin Money.
11.    After February 2009, his Virgin organization sponsored the new Brawn GP car racing team which was eventually bought over by Mercedes Benz, Branson invested in an 80% buyout of Manor Grands Prix and renamed it Virgin Racing.
12.   In 2010, Branson became patron of the UK's Gorden Bennet 2010 gas balloon race, which had 16 hydrogen balloons flying across Europe.
13.   In April 2012 Virgin Care commenced a five-year contract for provision of a range of health services which had previously been under the aegis of NHS Surrey, the local primary care trust. By March 2015 Virgin Care was in charge of over 230 services nationwide.
14.   In July 2012, Branson announced plans to build an orbital space launch system, designated Launcher One. Four commercial customers have already contracted for launches and two companies are developing standardised satellite buses optimised to the design of LauncherOne, in expectation of business opportunities created by the new Smallsat launcher.  
15.   In August 2012, when the franchise for the West Coast Main Line, managed by Virgin Rail since 1997 came to an end, the contract was awarded to another group in a competitive tender process by the government. However, Branson complained unfair treatment in the tendering process, and, after considerable battle, the award to the other group was cancelled enabling Virgin Rail to continue to operate the West Coast Line.

16.   In September 2014, Branson announced his investment in a drone company 3D Robotics, seeing great potential in the drone business. 
                                                                                 ... to be continued

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