Q: How do you decide on new ventures and where to focus Virgin Group’s attention?
Isaac Polanco, Panama
A: We did not have a traditional master plan with sectors and new territories marked for expansion neatly mapped out. In fact, we still do not have that sort of plan or organization, since we believe that our entrepreneurial spirit and flexibility are vital to Virgin’s success. This approach has had a profound impact on the way we develop our new businesses.
At a casual glance, one would think that we have been rather opportunistic in our choices over the years about the businesses and sectors into which we expanded. Initially, we moved into areas where I had a personal interest (such as music and media); then, as we began to understand more about Virgin’s strengths in terms of customer service, where we felt industries were ready for shaking up (airlines, health clubs, mobile phones); and more recently where my passion for exploration has taken us (space and deep ocean tourism). Our choices were not random or merely reactive, but guided by our decision to take an entrepreneurial approach to expansion.
Instead of pushing our teams to do ever more intensive analysis to pick our next venture – which can slow the whole business down – I set a priority on our remaining open to new ideas. It is one of the reasons that I always urge people to pursue their own interests outside work and to take regular vacations. Exercising your creativity in other settings isn’t just relaxing; you’ll stay informed about developments in other fields and connect with a wider circle of people than you might encounter at work. Keeping your thinking fresh and original makes good business sense!
I had always loved music, for instance. In 1972, when Mike Oldfield pitched us his album “Tubular Bells” after many record companies had turned him down, I recognized its value, as did my friends, and we decided to start up a company to help him find an audience. The album did so well that it helped establish Virgin Records and funded the launch of the company, which became the biggest independent record label in the world by the 1990s.
This brings me to my next point: You always have to be ready to capitalize on opportunities when they come along, and not be afraid to pounce.
In the late ‘90s, established companies offering mobile phone services in Britain were finding it tough to attract the lucrative corporate market and the growing youth one. We took advantage of the opening by launching Virgin Mobile, which, using T-Mobile’s physical plant and network, provided great service at a cheaper price and didn’t require customers to sign a contract. We saw this as an opportunity to create a service orientated toward youth – as you could see from our cheeky marketing campaign.
You must be fearless when venturing into new areas, once you have established what the risks are. Our launch of our space-tourism business Virgin Galactic and our recent explorations of the ocean depths are great examples of this. We did not set ourselves these challenges on a whim, but after years of working and exchanging ideas with experts in those fields.
Finally, you need to seek out new opportunities, as well as react to those you encounter. At present, population growth and development are linked to increased consumption of natural resources and rising energy needs. Entrepreneurs who take time to inform themselves about the issues will spot opportunities to build new, sustainable businesses for present and future markets. We have set up the Virgin Green Fund to lead our effort and invest in the renewable sector.
This is likely to be one of the biggest areas of investment in the next 40 years; I hope that in the future Virgin is as well known for its activities in these areas as it is for music and aviation today.
There is no prescription for how best to build and expand your business or invest capital. Your choices should depend on your interests and goals, how a new company would fit with yours, on your tolerance for risk and also on luck – although you can make your luck!