Business Stripped Bare

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At a meeting in Downing Street a while ago, I was asked by some emerging Russian business leaders if I could help with some informal education about the practical aspects of capitalism. I scribbled on a bit of paper: ‘Russian Dragons’ Den: Must Launch’. As I walked along Downing Street after the meeting, a Times newspaper photographer about sixty to seventy feet away snapped the bit of paper and then blew it up. This ended up headlined ‘BRANSON TO CONSIDER LAUNCHING DRAGONS’ DEN IN RUSSIA’. I still think it’s a good idea — but I’m sure the BBC, who commission the show, are on to it.

Everywhere I go, I’m deluged with business ideas. A few years ago I would sit with a pile of business ideas in front of me and work my way through them. For example, there was a charming offer from a Spanish gentleman, written in perfect English. He told me that he would like to work with me to create Virgin White — a washing powder. He reckoned this would be a wonderful product and, of course, he might have been right.

Some of the proposals we get are brilliantly thought-out, down to the last detail, and offer us a good share of the market. Others are simply handwritten scribbles, often marked ‘Private and Confidential’, saying basically, ‘Dear Mr Branson. I have had this idea for a great product which you might like to launch — it is Virgin Tomato Soup in a tin can. I think it would be a very popular product. I look forward to hearing from you.’ What can you say about that? That Mr Heinz and Mr Campbell already have perfectly good products? I never like to be rude. I’ve looked back and discovered that we’ve had about a hundred proposals to set up — yes — Virgin White. So you might think your idea is original, but there are other people out there who might have been there before you.

I never want to blunt anyone’s passion or enthusiasm but over the last thirty-five years we have run the rule over almost every single idea you can think of. We are bombarded with ideas: some half baked — like Virgin Beans — some plain crusty — like Virgin Breadsticks — and, among them, some real ringing successes — such as Virgin Mobile.

I’ve come to think of our search for ideas as ‘Showgirls to Stem Cells’. Indeed, we have always looked at sex and health as being pretty fundamental parts of the Virgin brand.

The ageing of the ‘baby boomer’ generation in a number of wealthier nations means that people can no longer expect their own national welfare systems to prop them up in terms of pensions and healthcare. In the UK, the National Health Service can only come under increasing strain. In the future, there’s going to be a need for supplementary and supportive health services, which might deliver the extras and the non-life-threatening services that would give people a better quality of life. This isn’t a political view, or even a business pitch. It’s stark reality. The NHS can no longer be expected to do everything. There are too many of us, and it is simply unreasonable to expect a single organisation — however visionary — to adopt every single new procedure, however expensive, however rarefied, and roll it out to everyone. It’s just not doable.

This, anyway, is the big picture. Virgin’s supportive role is quite modest but, we hope, targeted in a way that will support and sustain current public services. We want to offer non-urgent complementary services that combine physiotherapy, dentistry, optometry, diagnostic testing and scans. Given the surge in the number of fit and active people in their forties, fifties and sixties with a lot of disposable income who want to travel and see the world, it seems crazy not to offer them the opportunity to invest in their own well-being. It is an evolutionary step for us, too — to consider the healthcare of the first Virgin generation!

In addition, and with the awareness that there are many regulatory issues and ethical ones to look into, we are exploring the highly contentious field of stem cell research. Stem cells could open up breakthroughs in treatment in years to come. As I jotted in my notebook: ‘Stem cells are the essence of life. They have potential to develop into any other cells. Given the right conditions they can create not just a heart — a heart for you.’

We’ve researched the harvesting of stem cells from the blood stem cells of human umbilical cords. We’ve set up a Virgin cell bank storing stem cells for forthcoming generations, and we’ve invested in a genetic testing service which might be able to predict certain conditions and diseases. I’ve spoken to several scientists at the cutting edge of this field, including the head of a company called ViaCell, a clinical-stage biotechnology company whose raft of experimental cellular medicines might one day beat cancer, neurological diseases, diabetes and muscular dystrophy. My view is that difficult ethical questions are there to be answered — again and again, if necessary, as the years go by and morals and fashions change — and that anything that can save lives in the future is certainly worth studying.

Virgin — like all the best entrepreneurial businesses — is really looking for something fresh. If you think we’re going to make millions together launching a washing powder, tomato soup or even three-legged women’s tights (yes, we’ve had that: you tuck the spare leg into your underwear and use it if you ladder one of the other legs) then perhaps you need a different entrepreneur.

The other thing you’ll need — in spades — is luck. The business-school gurus tend to underplay this commodity, presumably because the power of chance undermines every other business rule they teach you. But trust me on this: luck is essential. There aren’t many chief executives who admit to simply being in the right place at the right time. Yet the business world is littered with the broken careers of those who were in the right place at the wrong time and screwed up. Certainly Virgin Mobile — the fastest growing company in history to reach a billion-dollar turnover — was propelled by a huge slice of good fortune.

But then, chance favours the prepared mind. Gary Player, the South African golfing master, used to say that the more he practised, the luckier he became. Yes, the rub of the green (or should that be the red?) played a significant part in Virgin Mobile’s success. But never forget we doggedly stuck with our interest in mobile phones, and were constantly searching for the gap in the market. When a gaping canyon revealed itself, we were ready.

Right now, the world could do with some luck. Climate change will be a serious business challenge for our lifetimes and well beyond. Companies are already starting to make major changes, but things aren’t progressing nearly fast enough. We need advanced control technologies and clean energy alternatives to start delivering much sooner than we ever anticipated — and we haven’t even developed a fraction of what we need: ultra-efficient water heaters, improved refrigeration and freezers, advanced building materials, heating, ventilation, insulation, cooling, rainwater harvesting…

Some terrific products have already emerged. Smart windows that adapt and maintain comfortable temperatures. Super-efficient LED lighting. Energy-saving improvements in building design. Sensor technology to help us use scarce resources more wisely. Even a new breed of super-smart robots. (Bill Gates tells me this technology is as exciting as the nascent personal-computer industry was in the mid-1970s.) According to a Scientific American report in 2008, by 2055 a $1,000 personal computer will have as much processing power as all human brain power combined. By then we could probably do with the help.

Then there are next-generation hybrid cars (the latest being encouraged by Peter Diamandis, the founder of the X Prize and now the Automotive X Prize) that emit less pollution. There are colonies of wind farms, on- and offshore, sea barrages and solar panels. There are technologies emerging to capture carbon from power stations. Parabolic mirrors, deployed in Africa’s deserts, provide green electricity. There are huge investment programmes looking at biofuels such as cellulosic-based butanol that don’t eat away at our vital food supplies. And many of these excellent schemes have been evaluated by Virgin’s Investment Advisory Committee.

In business, as in life, you can’t afford to be afraid of doing the wrong thing. This book is littered with accounts of my and my colleagues’ successes and mistakes. Virgin Fuel’s first biofuel investment was in manufacturing plants that make ethanol from corn. Given what’s happening to world food investment at the moment, we can all agree that that was going to be a non-starter! But as we saw, from that not-so-good idea, good ideas have grown. Remember: success in business never comes from inaction. Have I been lucky in business? You bet. But most people, most of the time, have the same amount of luck. It’s what you do with it that counts.

Innovation is what you get when you capitalise on luck, when you get up from behind your desk and go and see where ideas and people lead you.

‘It’s idyllic here — would you mind passing me the sunblock?’ I asked my wife, as we both lay sprawled out on our sunloungers. Joan and I were having a romantic anniversary break in the Maldives, and the Indian Ocean was a shimmering mirror of turquoise. It was wonderfully warm, with a gentle sea breeze, and the only sound was the lapping of the waves on the pure white lagoon sand.

‘There you go. You’ll smell gorgeous with this one on,’ she laughed as she handed me the bottle.