Like a Virgin: Secrets They Won't Teach You at Business School

SCREW YOU, GOLIATH!

For every entrepreneurial David who has the courage to take on a Goliath with the equivalent of a slingshot and a couple of stones, there are a hundred others who’ll say, ‘You must be kidding! There’s no way I can ever compete with that monster!’

For much of my business career, I’ve played the role of David – and loved every minute of it. You see, I’ve always believed that small is beautiful. Young, energetic businesses have surprising advantages when taking on large, cumbersome competitors. All they have to do is figure out what the giant’s weaknesses are and how best to leverage them.

For instance, in 1984, when an upstart Virgin Atlantic Airways first picked a fight with mighty British Airways, the odds were certainly stacked against us. In fact, my bankers were so unenthusiastic about my prospects that they threatened to pull the rug from under us!

But our inexpensive arsenal was loaded with some pretty surprising and highly unconventional weapons. Perhaps the most effective of these was our agility, which was integral to our corporate culture, in large part because of our small size. British Airways was weighed down by bulky, hierarchical decision-making processes that made any course corrections very difficult, whereas we were able to change direction or stop on a dime.

Sir Freddie Laker once told me, ‘Richard, never forget that only a fool never changes his mind.’ Not wanting to be foolish, I took his good advice. At Virgin, when our customers or crew told us they didn’t like something, we’d drop it and quickly move on to the next idea.

Our smallness – we had only a few planes – allowed us to give our customers an experience the bigger players simply couldn’t afford to match across their large fleets. For instance, our Upper Class passengers (billed as business class; but first class in everything but name) are provided with free door-to-door limousine services to and from the airport. Our competitors would have to offer this service on every global route, not just the few routes competing with Virgin – a much more expensive proposition for them.

And consider this: if we provide limos for our business class customers, what should our competitors do for their first class customers – send them a Rolls-Royce? It didn’t take them long to decide not to try to match our limo service, and almost thirty years later it remains a unique selling point for Virgin.

This may seem like a peculiar boast for a chief executive, but I don’t believe a Virgin company has ever become the biggest player in any sector we have entered (although Active is getting close).

In the late eighties, Virgin Records was certainly the industry’s biggest independent label, but we were far from being the biggest label overall. I kept splitting the company into smaller companies, ensuring that we kept our sense of competition and urgency.

It seemed to work. We were influential enough to attract big names like the Rolling Stones, who knew that with Virgin they’d never be just another superband on a roster full of them. At the same time, we were still small enough to be totally tuned in at street level and highly adept at discovering exciting new artists.

Now that I think of it, the one area where we probably are the biggest player is in commercial space travel. Virgin Galactic doesn’t quite fit the pattern, though. Our choice to go ‘To infinity and beyond!’ as Buzz Lightyear of Toy Story would say, is more about being sufficiently courageous, visionary or perhaps plain crazy enough to establish a brand-new business sector. In fact, that attitude just about sums up our brand name.

While I believe that small is beautiful, I’m not implying that there aren’t any very good companies that are very big. If you look closely, however, some of the best of them, like Apple, got where they are by focusing on great products, being nimble and competing with much bigger competitors. What Steve Jobs achieved with Apple’s amazing success has brought tremendous growth – these days, those battles to survive seem a distant memory. Apple, like Virgin, must now fight to retain all the cultural elements that will keep it as nimble as its competitors and not morph into one of the ponderous giants it managed to overcome.

Now, where did I leave my slingshot?