Like a Virgin

Q: How do you decide on new ventures and where to focus Virgin Group’s attention?

—Isaac Polanco, Panama

A: We didn’t start out with a traditional master plan with sectors and new territories marked for expansion neatly mapped out. In fact, we still don’t have that sort of plan or organisation, since we believe that our ongoing entrepreneurial, free-spirited flexibility is at the core of Virgin’s success. This approach has had a profound impact on the way we develop our new businesses.

At a casual glance, it might appear 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, it became industries that we felt were ready for a shake-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-aka ‘paralysis by analysis’, which inevitably slows the whole business down-I set a priority on our remaining open to new ideas. It is one of the reasons why I always urge people to pursue their own interests outside work and to take regular holidays. 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. Broadening your horizons keeps your thinking fresh and original and makes good business sense!

I had always loved music, for instance. In 1970, when Mike Oldfield pitched us his album Tubular Bells after many record companies had turned him down, I recognised 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. Although we have sold our recording and retail businesses, Virgin still retains a connection to music through live music festivals.

This brings me to my next point: you always have to be ready to capitalise on opportunities when they come along, and not be afraid to pounce. In the late nineties, established companies offering mobile phone services in Britain were finding it tough to attract the lucrative corporate market and the rapidly 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 lock into a complicated and expensive contract. We saw this as a classic opportunity to create a service orientated company aimed towards young people-as you could see from our cheeky marketing campaigns.

From this we learned the advantages of the Virgin-branded virtual network model, where we partner with an existing operator. Soon we rolled out similar businesses in the United States, Australia, Canada and France; we have since expanded into India and Latin America.

You must be fearless when venturing into new areas-assuming, of course, you have a clear understanding of what the risks are. The 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 only after years of working and exchanging ideas with experts in those fields. We are building on our technical experience in air travel and also our history of taking on difficult feats, such as our record-breaking balloon trips across the Pacific and Atlantic, which required the acquisition of technical know-how in many different areas. You must heed the lessons of the past, but also be prepared to learn as you go: and, by comparison to many, I think it is fair to claim that at Virgin we are fast learners!

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 forty years; I hope that in the future Virgin becomes 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 and on your tolerance for risk. Essentially you should learn to go with your instinct. It takes courage but over the years it has certainly served me well. Bon chance!