Transcription
Oh my God, guys! Richard Branson has just stepped me through the five steps to build any business. So, Richard Branson is the billionaire founder of Virgin Group, one of the most recognizable and diverse brands in the world. From telecommunications to transport, Richard has done it all and taken plenty of risks along the way, building more than 40 companies in over 35 countries globally.
So, the five steps that we discussed are: identifying a problem, getting revenue in advance, working with the right people who believe in you, the importance of building a brand, and learning to take risk. Guys, you're not going to want to miss this one.
So, people are always asking me, "How to start a business? If you were starting a business again today, what, what steps would you take? What things would you do?"
I would, uh, wait until I saw something that frustrated me, um, and, uh, and then jump in and, and, um, yeah, try to correct it and, and, and do it better than it's being done, or, or, um, uh, or do it from scratch. And, um, and that's basically what a business is. It's just creating something that makes, makes a positive difference to other people's lives. Yeah, and that's how, anyway, that's how I've said about it at Virgin. I, I've never really been, I never really thought of being myself as being a businessman. I just look at, um, uh, you know, I hated flying on other people's airlines, so I started an airline. I wanted to get a piece of music out, and record companies wouldn't put it out, so I started a record company. So I'm just trying to, um, to, uh, yeah, do something for that sort of reason. It's often, I think, the best way of creating a business.
I was personally 15 years old when I first found out about you and, and listened to your journey of starting these incredible businesses. When I was younger, I always wondered, "What are the first few steps?" Do you think, okay, you've identified a problem, which I think is brilliant. I, I, by the way, think that's the way they should reframe school. It shouldn't be, "What will you do when you grow up?" but "What problem do you want to solve in the world?" That should be reframed, I think. But people listening, you know, they maybe don't have the resources, uh, to start. What, what do you think are the ways that you can get a business going if you're say, short on resource?
Well, uh, when I started my first business, I didn't have any money. So, um, so I had to sell advertising in advance, um, uh, for the magazine that I put out. So then when I started, um, a mail-order record company, I would, um, uh, get the, get the money in, and then I'd go and buy the records, and then I'd send, you know, send them out to people. So, you know, so that it's not easy, but sometimes you can, can actually start a business, uh, getting the cash up front, and then, and then, uh, and then pay the bills with that cash.
There are five steps, I think, to start a business. So the first, I, I really believe what you just said is so true: like, identify a problem that causes you pain, and then try to solve that problem. The second one is, and I think this is really interesting, get revenue ahead of time. So I, I used to charge 50% deposit before I even done, I did the work for the client. I had a service business, that's how I started. I did a gardening company, and I charged 50% in advance, and that paid for me to do the work, and then the other 50% was my profit. So that kind of cash flow management side.
Do you think the third step, do you see in your path, um, then just, you find people that believe in your idea and, and come and come, you know, who, who are as excited about what you're doing? And if you've got a good, you know, small team, it could maybe just two or three of you, you know, then, um, anything's possible. I mean, it's, you know, so I think, um, surrounding yourself with the right people is key. Do you remember your first employee? First person you convinced?
A guy called Johnny Holland. Gems, who was a, um, I was 15, he was 15 at school. And, uh, he wasn't as dyslexic as me. And if you're going to start a magazine, you need somebody who can actually write. Yeah. Well, that's the interesting thing. You're dyslexic, you start, start a magazine. People don't always connect the dots. You need great people to come in and help you do these visionary things, right?
I think dyslexic people are brilliant in some ways, but they, they've obviously got some issues. And, and those issues was why I left school early and started, you know, went you started creating things rather than learning conventional schooling, um, which was doing nothing for me, to be honest. My third step was get a co-founder. I, I didn't feel confident enough to hire someone at the beginning, so I got someone to come in and have equity with me. And every business I've ever started had a co-founder. I've enjoyed it more, it's been more successful. So, you know, personally, I've really enjoyed that. But I think the first employee also brings you some discipline, right? Because then you can't just not do it now if you brought someone in, right?
Yeah, I think, I mean, I think having partners is great, um, and making a real effort to get on with your partner. Partners, and like a marriage, there's going to be lots of give and take. But, but, um, uh, and you may have to give, give a bit more than you take in order, in order to make the partnership work. Yeah. I actually use a slogan, um, "We should move away from give and take to give without take." If you help someone be successful without any expectation of anything in return, it comes back to you like karma, right?
Of course. Do you think there's a fourth step? Jumps in your mind that's, I mean, I build a brand, for example, not a business. Is something I really believe in, and I think I've got that from you. Yeah. I mean, obviously, market, you know, marketing, um, your brand is important. I mean, I had to, you know, how did I get a one plane airline, um, to be as well known as British Airways? I had to stick my neck out and, you know, jump on boats and balloons and things to to get it on the map. Nowadays, you've got the internet, so there are other ways, other ways of marketing things. But, um, in those days, we had to try to get on the front page of the newspapers and not be a little cornerstone in the back. And, and I take risk would probably be my fifth. Like, learn to love risk. It's something again, I think I've learned from you. But risk-taking, how do you build up that risk muscle? How do you get comfortable with risk?
I think it's taking risk, but protecting the downside. So every move you make, you must make sure that if it goes wrong, um, it's not going to bring the whole pack of cards crashing down. And, and just occasionally, you, you might stick your neck out and take a risk that will bring the whole pack of cards down, because it's, you know, the upside is really worthwhile. But, but by and large, protecting the downside is critical. So, you know, with, in my own life, I've had to protect the downside when I do my adventuring, which is my life is on the line. And then protecting the downside in business to make sure that, you know, nearly 60 years later, we're still, we're still, um, uh, Virgin Atlantic is still going strong, and the other companies are still going strong.
What do you think the biggest risk is you've ever taken in your career?
Oh, I think, um, yeah, trying to fly around the world in a hot air balloon was maybe the biggest risk.
I remember that, like that was yesterday. No, I really remember that. Like, how long ago was that?
Uh, that was, uh, in the, in the, uh, in the '90s, in the '90s. Yeah.
So I was leaving school at the time. Maybe that's why it's stuck in my mind so much. That's such a crazy moment. Yeah.
If you went back to your, uh, 20-year-old self and gave some advice, anything you'd say?
Don't change a thing. And I've had, I've had an absolute blast. And, um, uh, and an element of, there has to be an element of good luck in, in, in building businesses. And, uh, and a lot of really, real hard work. And, um, uh, and you, and you really have got to throw yourself in day, day, and night, you know, um, to, to, um, uh, you, to be successful. Um, but you can, yeah, you can have fine time to party as well.
I think you, you personify this concept, I think, of just enjoying your work. And then you don't mind throwing yourself into. I think work is slightly a negative for some. I've, I've never, I've never ever seen what I do as work. I've just enjoyed creating things. And, um, and I create things with the groups of other people. And if I've created something I'm proud of, um, that I get a real, you know, real kick from it.
I just want to say, for the record, you've been an inspiration to me since I was 15 years old.
Be am to than very much.