“Back when I was a teenager, I thought that with the right bunch of people anything was possible,” he says. “And that turned out to be the case.“It was the people I surrounded myself with who made the difference: If you treat your employees right, they will treat your customers right, and sustained profits will follow.”
Even now, after Virgin has created more than 400 companies, Richard says that little has changed. “Those launches are in themselves an important factor: Our approach to creating a new business sets us apart and has helped us to sustain our momentum.”
But how can others replicate that success?
“One of the tried-and-true methods of building a business is by offering such useful products and terrific service that you disrupt the local market, winning customers away from your competitors,” he says. “We at Virgin have done this with a particular focus on disruptive change.”
As Richard often says, Virgin won’t go into a new business unless they believe they can offer something that is distinct from what already exists. “From our first ventures, like our music stores and record label, to some of our flagship businesses today, including our airlines and space tourism companies, we have approached business development proactively and opportunistically, looking for openings where we can surprise and delight customers by offering something truly different.”
Over the years, Virgin has refined this approach - and, of course, has seen failures along the way. But Virgin has been successful: eight businesses that it has created in eight completely different sectors have an enterprise value of more than $1billion, which Richard says is down to momentum.
“Success in one area tended to lead to success in other fields, and so it has been sustained,” he says. “We built up an extensive network of relationships, and now entrepreneurs and companies often approach us with ideas for partnerships that will help them to start a new business, or to attract new customers.”
It hasn’t been an easy ride for Virgin - Richard notes that in the early days critics said that the Virgin Group’s diverse portfolios “would distract from our primary mission”. But he says that diversity provides competitive advantages to help the company stay current and sustain momentum.
“There is a lot of crossover between sectors in everything from technology and design to trends in customer preferences,” he explains. “The lessons we learn from one business can often be applied to another.”
Companies across the Virgin Group often work together to achieve common goals, meeting at forums based either around a sector, like mobile technology, or a department, like communications.
But what’s Richard’s real secret to success? He says this to anyone who is building a company now planning for when they might have more resources and a stronger brand: “Consider the importance of what seems to be the final magic ingredient: since we started Virgin over 40 years ago with such strong personal relationships, we have always also had close ties with our customers.”