Losing My Virginity: How I Survived, Had Fun, and Made a Fortune Doing Business My Way

by Richard Branson

  At one point I took Boy George in to meet all the staff in the Woodstock Street office. He was dressed in his usual bizarre collection of robes, with his hair plaited and braided and tied with ribbons and his gloves festooned with huge diamond rings. For a minute he stood watching the complete chaos as everyone answered the phones, made out tickets, told passengers about our timetable, invited celebrities and journalists for the inaugural flight, and worked on dummy copies of the in-flight magazine. Then he said:

  ‘I’m pleased that I’ve got my feet squarely on the ground.’

  14 Laker’s children

  1984

  ON 19 JUNE 1984, three days before we were due to launch, I went down to Gatwick for our final CAA approval, a test flight. Maiden Voyager stood by a departure gate and I marvelled again at her size. I also wondered at the size of the Virgin logo on her tail fin. It was huge – the largest version that I had seen. I remembered back to the early 1970s when Simon and I asked Trevor Key to come up with some ideas for a new logo. Having drawn a blank, Trevor briefed graphic designer Ray Kyte, of design consultants Kyte & Company, who created the concept and supplied the visual styling for a signature-style logo which can be interpreted as my personal endorsement, the ‘V’ forming an expressive tick. Some marketing experts once analysed the logo and wrote about the upbeat way it rises from left to right. This, of course, might have been going through Ray’s head when he developed the original idea. Seeing it up on the tail fin made me begin to realise what we had started. This thing was going to happen: we had a jumbo.

  The entire cabin crew came on board for the ride, as did over a hundred Virgin staff, and I sat at the back with the CAA official. The plane had arrived only the previous day, flown over from Seattle, and until we had received our formal CAA licence to fly, the engines were uninsured. We took off and the crew all burst out clapping and cheering. I could hardly stop myself from shedding a tear: I felt so proud of everyone.

  Then there was a loud bang from outside. The plane lurched to the left and a massive flash of flame then a long trail of black smoke poured out from one of the engines.

  In that horrible stunned silence, the CAA official put his arm round my shoulders.

  ‘Don’t worry, Richard,’ he said. ‘These things happen.’

  We had flown into a flock of birds, and one of the engines had sucked in some of them and exploded. We needed a new engine overnight in order to do the CAA test flight again. Our inaugural flight to New York was due to take off the day after tomorrow with 250 journalists and cameramen on board.

  Roy Gardner was with me and he radioed through to the team at British Caledonian who carried out our maintenance. When Maiden Voyager had arrived the previous day, Roy had rejected two of the engines on financial grounds and asked for two others to be fitted. Now he recalled one of the engines, which had been taken to Heathrow and was about to be flown back to Seattle.

  When we landed I was standing beside the plane trying to think of how to overcome this problem, when a press photographer came up to me smiling broadly.

  ‘I’m sorry,’ I apologised. ‘I’m not up to it now.’

  ‘I’m sorry too,’ he said. ‘I saw the flames and smoke pouring out of your engine. I actually got a great shot of it.’

  He looked at my dumbstruck face and then said, ‘Don’t worry though. I’m from the Financial Times; we’re not that kind of paper.’ He opened up his camera, pulled out the film and gave it to me. I couldn’t find words to thank him. If that photograph had appeared in the press, it would have been the end of Virgin Atlantic before we’d even begun.

  Unfortunately, because Virgin Atlantic did not have a CAA licence, we were uninsured for the engine. We had to pay £600,000 for a new one. After several desperate calls, I realised that there was no alternative. With a sinking feeling, I called up Coutts to let them know that a payment of £600,000 would have to go through.

  ‘You’re very close to your limit,’ Chris Rashbrook, the manager of our account, said.

  Our overdraft limit with Coutts for the entire Virgin Group was set at £3 million.

  ‘It’s a terrible freak accident,’ I said. ‘One of the engines blew up and we can’t get our insurance until we get our licence. Without a new engine, we won’t be able to get our licence. It’s a catch-22 situation.’

  ‘Well, I’m just warning you,’ Rashbrook told me. ‘You spent a fortune on filming Electric Dreams and we’re still waiting for the MGM cheque.’

  The MGM cheque was the £6 million which MGM had agreed to pay for the American distribution rights to Electric Dreams.

  ‘Please can you wait until I get this inaugural flight out of the way?’ I asked. ‘Let’s sort it out when I get home. I’m back on Friday. We’ll only be £300,000 over our limit. When the MGM cheque comes through we’ll have no overdraft and around £3 million on deposit.’

  He said that he’d think about it.

  The day before the inaugural flight, Maiden Voyager was fitted with another engine and ready to fly again. The CAA official came on board and we took off. This time there was no explosion and we were given our licence. I dashed back up to London to sort out another Randolph Fields crisis. We had offered Randolph £1 million, but he thought that wasn’t enough. He had gone to a judge in America and applied for an injunction to stop Maiden Voyager from taking off. All through the night we had a damage-limitation meeting with David Tait, Roy Gardner and my lawyers, to try to work out an arrangement whereby we could prevent Randolph from ruining the airline. The judge eventually threw the request out, but not before we had battled all night to keep on top of what he was up to. By dawn we felt that we would win, and at 6a.m. I ran a bath and lay in it. I felt exhausted. I tried to wash my face, but my eyes felt sore and itchy as if a blast of sand had blown into them. David Tait came in and sat on the lavatory and we ran through the final list of things we had to do. David then left to catch Concorde so that he would arrive in New York before us in order to organise the welcoming reception for the flight.

  On board for the inaugural flight, I was surrounded by family and friends, the people who had been most important to me, and to Virgin, over the last ten years. I sat next to Joan, with Holly on her lap. Behind us was pretty much everyone from the entire Virgin Group. The aircraft was full of journalists and photographers, along with a collection of conjurors, entertainers and Uri Geller. As Maiden Voyager taxied down the runway, the screen at the front of the cabin flickered into life and showed the backs of the pilots and the flight engineer as they sat in the flight deck and manned the controls. Over their shoulders we could see the view through the windscreen. An announcement came over the loudspeakers:

  ‘Since this is our first flight, we thought you might like to share our view from the flight deck, and see what really happens when we take off.’

  We could see the view of the runway stretching out in front. Then we started speeding along: the tarmac rushing beneath the windscreen gathered pace until the white lines were just a blur. But the pilots seemed rather relaxed: rather than staring intently ahead and flying the plane, they started looking sideways at each other and smiling. One of them had very long hair beneath his cap; the other was a West Indian. We were now hurtling down the runway, and these two pilots were doing nothing about it. They were simply paying no attention. Everyone watching the screen held their breath: this was all some mad suicide flight by that lunatic Branson. There was a deathly hush. Then, just as the plane’s nose rose up and the runway began to disappear from view, the West Indian reached behind his ear, pulled out a joint, and offered it to his copilot. Before anyone was entirely sure that this was a joke, the plane took off and the two pilots took off their caps and turned round to face the camera: they were Ian Botham and Viv Richards. The bearded flight engineer was me. The whole plane rocked with laughter. We had filmed it the previous day on a flight simulator.

  We had loaded seventy cases of champagne on board. This number proved to be just about right for what turned
into an eight-hour party. People danced in the aisles as we played Madonna’s new hit ‘Like A Virgin’ and Culture Club and Phil Collins. For a quiet interval we showed the movie Airplane, and the cabin crew started a Virgin tradition by giving out choc ices in the middle of the film.

  At New York’s Newark Airport I realised that, in the excitement of going, I had forgotten my passport. I was almost refused entrance to the reception party in the terminal. By some mistake, the cabin crew had thrown away all the cutlery, so they had to scrabble around up to their elbows in all the rubbish bins retrieving the cutlery to wash it up and then get it back on board the plane. I embarrassed everyone except the Mayor of Newark when I was talking to him as I thought, for some bizarre reason, that he had organised the catering. I took the return flight back to Gatwick and fell into my first long sleep for many weeks. I dreamt about exploding engines, cabin crew offering meals on plates straight from the rubbish bins, and pilots smoking marijuana. When I woke up, I felt sure that nothing else could go wrong. A bad mistake.

  A taxi carried me back to London. As we pulled up at my house I saw a rather uncomfortable-looking man sitting on the steps. At first I thought he was a journalist, but then I realised that it was Christopher Rashbrook, my account manager at Coutts. I invited him in, and he sat down in the sitting room. I was exhausted and he was fidgety. I was rather slow to understand what he was saying. But then I suddenly heard him say that Coutts were unable to extend Virgin’s overdraft as requested and would therefore regrettably bounce any cheques that took our overdraft over £3 million. I rarely lose my temper – in fact I can count the times I have lost my temper on the fingers of one hand – but as I looked across at this man in his blue pinstripe suit with his neat little black leather briefcase I felt my blood boil. He was standing there in his highly polished black Oxford brogues and calmly telling me that he was going to put the whole of Virgin out of business. I thought of the numerous times since March when I and the Virgin Atlantic staff had worked through the night to solve a problem; I thought about how proud the new cabin crew were to be flying with a start-up airline; and I thought about the protracted negotiation we had fought with Boeing. If this bank manager bounced our cheques, then Virgin would be out of business within days: nobody would supply an airline with anything such as fuel or food or maintenance if word went about that the cheques were bouncing. And no passengers would fly with us.

  ‘Excuse me,’ I said as he was still making excuses. ‘You are not welcome in my house. Please get out.’ I took him by the arm, led him to the front door and pushed him outside. I shut the door in his bewildered face, walked back into the sitting room and collapsed on a sofa in tears of exhaustion, frustration and worry. Then I had a shower upstairs and called Ken:

  ‘We’ve got to get as much money in from overseas as possible today. And then we’ve got to find new bankers.’

  Our overseas record subsidiaries saved us that week. We managed to pull in enough money on Friday to keep us just below the £3 million overdraft limit. We gave Coutts no reason to bounce our cheques, and so we stopped them from pushing the various Virgin companies, together with the new airline, into instant insolvency. It was a surreal situation: Virgin Music was set to make £12 million profit that year, and was forecast to make £20 million the following one. We were already one of Britain’s largest private companies, but Coutts were prepared to push us into insolvency – and make 3,000 people lose their jobs – for the sake of going £300,000 over our limit, with a cheque for £6 million due to arrive any day from the States.

  The Coutts crisis made me realise that we needed a tough financier to replace Nik. We needed someone who could cope with the finances of both Virgin Atlantic and Virgin Music and act as a bridge between the two. By surviving on cash flow and debt, the entire Virgin Group was living too dangerously. The mid-1980s were boom years in the City, and every company seemed able to sell its shares to the public and raise millions of pounds to invest. Perhaps, I began to think, that was the way forward for Virgin.

  Apart from the four main operations, Virgin Music, Virgin Records shops, Virgin Vision and the new airline, Virgin Atlantic, there were now a host of new little companies operating under the Virgin umbrella. There was Top Nosh food, which delivered food around industrial estates; Virgin Rags, a line of clothes; Virgin Pubs and Vanson Property, a property-development company which looked after our growing collection of properties and as a sideline was making a lot of money by buying, developing and then selling property. This disparate selection of businesses needed someone to put them in order.

  Don Cruickshank was recommended to us by David Puttnam, the English film-maker. He was a chartered accountant who had worked at the management consultants McKinsey for five years before moving to be general manager of the Sunday Times and then on to Pearson, where he had been managing director of the Financial Times. Robert Devereux, who by now was married to my sister Vanessa, had come across him when dealing with Goldcrest Films, part of Pearson, but Simon knew nothing about him. Don started work in the cramped offices at Ladbroke Grove and was the first person at Virgin who had ever worn a suit and tie. Everyone marvelled at him. With Don as managing director, Virgin began to be organised into a company that could attract outside investors.

  Soon Don brought in Trevor Abbott as finance director. Trevor had been with MAM, Management Agency & Music, an entertainment company which had managed the careers of Tom Jones and Engelbert Humperdinck, and had set up its own record label to launch Gilbert O’Sullivan. MAM had then diversified into music publishing, had a chain of hotels, operated a fleet of corporate jets, had nightclubs, and leased out fruit machines and jukeboxes. MAM had a great deal in common with Virgin, but as Trevor left he was already working on the merger between MAM and Chrysalis.

  Don and Trevor were soon holding meetings with banks and rearranging both our finances and the internal structure of the Group. As a whole, Virgin’s turnover in 1984 was going to exceed £100 million, and each time Don and Trevor saw me they expressed amazement at how things were run. They were aghast at the lack of computers in the Group, the lack of stock control, and the apparently rather casual way Simon, Ken, Robert and I decided on how to invest our money. They came to see us on Duende and set out how they proposed to reorganise Virgin with a view to inviting in some outside investors.

  The first thing they did was sort out our overdraft facilities. Coutts and their parent company, National Westminster Bank, had been willing to close us down for exceeding a £3 million overdraft. Taking the same balance sheet to a different consortium of banks, Don and Trevor arranged an overdraft facility of £30 million. They then looked at the structure of the Virgin Group and decided to close down a number of our smaller companies, such as Top Nosh food and the pubs. They divided the Virgin Group into Music, Retail and Vision, and then hived off Virgin Atlantic, together with Virgin Holidays, Heaven, The Roof Garden and Necker Island, into a separate private company. Simon and I were both 33 years old, as were Trevor and Ken. Don was a little older; Robert a little younger. We felt that we could take on anybody, and we now set our minds to take the Virgin Group public. We were going from the rock market to the stock market.

  15 ‘It was like being strapped to the blade of a vast Pneumatic drill.’

  1984–1986

  I AM OFTEN ASKED why I go in for record-breaking challenges with either powerboats or hot-air balloons. People point out that, with success, money, and a happy family, I should stop putting myself and them at risk and enjoy what I am so lucky to have. This is an obvious truth, and part of me wholeheartedly agrees with it. I love life; I love my family; and I am horrified by the idea of being killed and leaving Joan without a husband, and Holly and Sam without a father. But another part of me is driven to try new adventures, and I still find that I want to push myself to my limits.

  If I were to think about it more carefully, I would say that I love to experience as much as I can of life. The physical adventures I have been involved in have ad
ded a special dimension to my life that has reinforced the pleasure I take in my business. If I had refused to contemplate skydiving, hot-air ballooning or crossing the Atlantic in a boat, I think that my life would have been the duller for it. I never think that I am going to die by accident, but if I were to die then all I can say is that I was wrong, and the hardened realists who kept their feet on the ground were right. But at least I tried.

  Apart from the thrill of the actual event, I love the preparation for it. A tremendous sense of camaraderie builds up within the team when we are preparing for a challenge, and if we are going after a record there is not only the technological challenge but also a great feeling of patriotism as the public cheers us on. There used to be a great many British explorers, all in the best tradition of Scott of the Antarctic, and I feel proud to follow in their footsteps.

  The first challenge I was involved in was to try to recapture the Blue Riband for Britain. In the Victorian age of steamships, the Blue Riband was awarded to the fastest ship across the Atlantic. In 1893 the Blue Riband was held by the British Cunard Line. Then it went to three German ships, before Cunard won it back again in 1906 with RMS Lusitania, later sunk in 1915 by a German U-boat. After the First World War the Germans won it back, and then the Italian ship Rex won it in 1933 with an average crossing speed of 29 knots. In order to celebrate this achievement, and to celebrate the whole Blue Riband competition, an English shipowner and member of parliament called Harold Hales commissioned a monumental trophy. From then on, the Hales Trophy was awarded along with the Blue Riband.