I do try to be tactful, but sometimes you just have to speak your mind to make a point, as was the case when I went to speak to the US Senate towards the end of 2005, as part of a project to develop a coalition on HIV/AIDS. On the way there in the taxi, Jean briefed me: ‘There are some issues with the Bush government regarding condoms. They have committed a huge amount to HIV/AIDS, but they’re unwilling to use it to buy condoms.’
I nodded. ‘Yes, I see.’
‘So you might need to be a bit careful about how you speak about this at the Senate today,’ Jean continued.
As soon as she said that, I smiled.
It was slightly surreal to be in the amazing Senate House, with all its history, and to be discussing sex. Someone used the word ‘grazing’ to describe how HIV could be spread by having sex with multiple partners – like a bee going from flower to flower. One of the Republican senators reared to his feet and declared that people should abstain from sex.
I stood up and said, ‘That’s lovely, but it’s not realistic. People are going to graze – but they should wear a condom when they graze. No glove, no love.’ I could feel Jean bring her hand up to her face to hide a wide grin.
I was hopping into a van outside the CIDA campus one afternoon, having just met the wonderful Dalai Lama for the first time, when, out of the blue, Taddy grabbed me on the pavement and said, ‘Hey, Richard, I’ve got a great idea. Why don’t you start the Branson School for Entrepreneurship?’
Taddy is an inspirational man and, when he speaks, you find yourself nodding in agreement. Inspired by his almost throwaway words in the street, I decided I would set up my first ‘school’. CIDA City Campus already provides specialised accredited business administration degrees to disadvantaged students, and I resolved that Virgin Unite would work with Taddy to launch a separate school at CIDA to help young people start their own businesses. One of the first things we wanted to do was to raise a seed fund, to be used as a kind of revolving loan for the students’ enterprises. As soon as they started to make money, they would repay the loan and, in that way, the fund would continue to work for those who followed behind.
My model for this was Muhammad Yunus, who for some thirty years had successfully been operating a micro-credit system for some of the poorest people in the world, through the Grameen Bank – known as the Poor Bank. He was first approached by a group of craftsmen in 1976 when he was a professor of economics in Bangladesh to lend them $27 to start a business. He did so, fully confident that they would pay him back – as he said, ‘The poorest of the poor have a great sense of responsibility.’ He even lends to 55,000 beggars under a Struggling Members Programme. Professor Yunus’s long-term vision is to eliminate poverty. So far, he has lent $1.5 billion to three-and-a-half million people, principally women, and has had very few defaulters.
Virgin Atlantic sponsors the Sunday Times Fast Track initiative, which brings top entrepreneurs together for dinner each year at my house in Oxford, to act as mentors to fledgling businesses. I auctioned off two spaces on our Wake Up Trips to Africa. Two British entrepreneurs, Tom Bloxam and Leo Caplan, bid £120,000 each to go with us. This launched the seed fund for our students’ businesses, to help start them off in the world. Most people cut ribbons or break bottles of champagne when launching something new. Instead, along with Tom and Leo, in October, I found myself taking my shoes and socks off and leaving my footprints in concrete at the entrance to the newly opened Branson School of Entrepreneurship. I felt quite emotional as I glanced at our footprints – which were supposed to inspire the students to ‘walk in the footprints of global entrepreneurs’. The first footprints of people were found in the clay of African shale beds. But, to me, the more important thing was that this very building at 27 Harrison Street was where Nelson Mandela had worked as a young man before his long years of imprisonment. His autobiography, written after he was freed, was titled Long Walk to Freedom; the students would also have a long walk on their road to economic freedom against so many odds.
Capitalism – which in its purest form is entrepreneurism even among the poorest of the poor – does work; but those who make money from it should put back into society, not just sit on it as if they are hatching eggs. Every single person at the Branson School soon had an idea to fill in a gap here, to fill in a gap there. Any opportunity, they soon realised, is worth pursuing. Students will sell lollies, set up dealerships, be tour guides, open street cafés and restaurants – anything that will give them a leg up out of the townships and slums. I often pop in when I’m in South Africa and I was both taken aback and moved once to find some of the kids had taken it upon themselves to fill in the holes in the road and then stand by the side of the road and see if anyone would be good enough to pay them for filling in holes. It was a good example of capitalism at work.
When Sam reached the age of eighteen and left school, he thought he might take a gap year off and do some travelling. I thought it was a great idea and asked if I could tag along for a while. I’d been working pretty diligently since I was fifteen years old, not wanting to let people down, and missed out on a gap year of my own. Fortunately, we’re the kind of family who choose to go on holiday together, rather than separately, and Sam and I are very close, so it wasn’t a matter of ‘getting to know him’ but of having some fun together. I had to be in Australia for some meetings, and afterwards we headed off down the coast to Byron Bay, the most easterly point of the Australian mainland. We stayed in a flat above Rae’s, an exotic little hotel, more Mediterranean Moroccan than Alice Springs, right on Watego’s Beach and went for a walk along the Cape Byron Lighthouse track, which meanders through some fabulous rainforest. As the forest opened out on to the headland, we saw a manta ray idly cruising along and a small school of sharks.
In the small town of Byron itself large groups of hippies roamed the wooden Western-style sidewalks. There were more head shops and bongo drum shops than in San Francisco and the haze of marijuana hung heavy in the air, like a time warp back into the Summer of Love.
The first morning, we were up early and ran down to the beach with a couple of surfboards to ‘catch a few waves’. Sam and his friends were old hands, but I had never surfed before. I could kite surf and thought that surfing would not be hard. You just waited for a wave, climbed up on a board and it would carry you along to shore. The first day, I couldn’t get up. The second day, I couldn’t get up. My mind idly remembered the sharks out there beyond the headland.
‘It’s easy – look, you do this, Richard,’ Sam’s suntanned friends chortled as they cruised by on a long, curling wave.
I was determined to crack it, but was still struggling on the third day when someone on the board next to me said, ‘Hey, Richard, two guys are hiding in the bushes over there with telephoto lenses.’
Instantly, ego got the better of me and, on the next wave, I got up, balanced like an old pro and sailed smoothly in. It was like riding a bicycle. You struggle and struggle, then suddenly you’re off and never look back.
It was a perfect day, one of the very few times in my life when nothing seemed that important. I didn’t make phone calls, didn’t think about a thing. I was out on the waves, with not a care in the world. Such days are rare and all the more precious for that. I remember when Holly was about five, the two of us went off for a week down to the fishing village of Bantham, in Devon, without Joan. It was a special week for both of us.
Several years after successfully surfing that day, Sam and I drove sixty miles up into the mountains together, goofing around, saying silly things, cracking bad jokes and laughing, more like two best friends than father and son. We were so exuberantly happy, we didn’t want the day to end.
31 Changes
2006
MANY THINGS CAME together in the summer of 2006 to make me focus on the two linked issues of global warming and rising fuel prices. I had first seen warning lights when the figures showed me that Virgin’s fuel bill was rising by half a billion dollars a year.
As early
as my teens, perhaps because of the influence of one of my relatives, Peter Scott, who founded the World Wildlife Fund, I was interested in the environment. I was drawn to the Gaia Theory, a hypothesis formulated by James Lovelock almost forty years ago, which states that the Earth is a living entity, like a single cell, and, like a single cell, everything it needs for its existence is contained within it. Professor Lovelock believes that the planet can heal itself if damaged, but, even with Gaia, there is a point of no return, beyond which the damage could be irreversible. We at Virgin knew what dangers came from wasting resources and carelessly burning fossil fuels but, for many reasons, even among the greenest of the greens, there was no real sense of urgency. I’m afraid that it wasn’t until it began to affect me personally that I sat up and took more notice.
I first got interested in looking for alternative fuels in the 1990s when I became more aware that oil was a finite resource. Britain’s own North Sea oil was running out and most of the rest of the world’s supplies were in the hands of OPEC in a very unstable Middle East, which could make oil both vulnerable and expensive. The war between Iraq and Iran in the 1980s raised the price of oil from an average of $16 a barrel to a spike of almost $70. When Saddam went after the Kuwaiti oilfields in 1990, it confirmed oil’s vulnerability to war. As someone who is heavily involved in the transport business, I needed to be aware of the cost and availability of oil and I looked into the alternatives. Virgin used over 700 million gallons of jet fuel between the four airlines, and large amounts of diesel in Virgin Trains. In 1997, when we were investing in a new fleet of trains, I asked the manufacturer, Alstom, to ensure they were fuel efficient. As a result, our Pendolino trains are the only ones in Europe that put 20 per cent of electricity back into the grid every time the train brakes. And our Voyager diesel/electric trains are being converted to a biofuel blend of rape and soya.
Then, after Hurricane Katrina in 2005, when the US drilling platforms in the Gulf of Mexico and the huge refineries along the Gulf coast were damaged or destroyed, the price of refined fuels in the US went through the roof. With a major capacity shortage, I started to look into the potential of investing in our own oil refineries and, in fact, issued a press release to announce that we were building one hopefully to bring the price down.
Ted Turner is an interesting blend of capitalist, environmentalist and philanthropist, who is as well known for founding the CNN news channel as he is for owning the Atlanta Braves and for being an Olympic yachtsman and winning the America’s Cup. I had last met him at the Time Global Health summit a few months earlier, alongside Bill Gates, Madeleine Albright, Paul Wolfowitz, Bono and others – and after I announced my intention to build an oil refinery, Ted rang me and said, ‘Richard, have you thought of the alternatives?’
‘What do you suggest?’ I asked.
‘Why not build a refinery for clean rather than dirty fuel? Come and meet my people. They will convince you that there is another way.’
Ted invited me to Washington to lunch with some members of the United Nations Foundation, a think-tank he had started up with a hefty donation of $1 billion to look into environmental issues and push biofuels in the US. Around the lunch table with Ted were Senator Tim Wirth, the UNF’s president; John Podesta, Bill Clinton’s former chief-of-staff; Boyden Grey, George Bush’s legal counsel (shortly to be appointed US ambassador to the EU); and Reid Detchon, head of the Energy Future Coalition.
The subject almost immediately turned to biofuels. I already knew a fair bit about fuels in general, but wasn’t yet as knowledgeable about biofuels as this group was. While they talked, I made my usual cryptic notes in the notebook I always carry, and, by the end of the meal, I decided that they were right. Instead of investing in conventional forms of refining, the more sensible thing for Virgin to do would be to invest considerable sums in alternative fuels. I am lucky – once I make up my mind, I can generally do something about it: I joined the steering board of Ted’s Energy Future Coalition; and went back to my team at Virgin and asked them to look into plant-based ethanol. The result was that I became hooked on the potential of biofuels as an environmental necessity and as one way forward to loosen the world’s dependency on oilfields. Both environmentally and economically, it made perfect sense that individual countries should grow their own fuel and use it at point of origin, without transporting it halfway around the world – thus saving even more on financial costs and CO emissions.
I formed Virgin Fuels in early 2006 and began an investment programme in research and development of biofuel. Our first investment was to back a California firm, Cilion, which makes bioethanol from corn. We started to build biofuel refineries in both the American West and Tennessee, at both the point of origin and of use, and then moved into Brazil. The next stage will be to expand into the US East Coast and elsewhere in Europe.
I wasn’t being entirely altruistic. Alternative fuels should be a good business move – investing in them puts pressure on fossil fuel prices and acts as a hedge for our airline and train companies. If the price of oil remains high, we can make very decent returns on both our research and development and our investment in the cost of building refineries. It also makes perfect sense over the next five or six years to replace some or all of our conventional fuel with our own fuels.
In the early summer of 2006, Virgin Fuels had already made its first investments but I still wasn’t fully aware of the urgency of global warming. But nothing wakes one up more to the issues at hand than the former vice president of the United States coming all the way to your home in Holland Park, London, to give a personal lecture on global warming. When the film An Inconvenient Truth came out some months later, I realised that he’d test run it on me at my home that day.
We sat down at the low table in the sitting room and Joan brought in tea and sandwiches. Al perched on a corner of the table and pulled out his PC and switched it on. I sat in a big armchair, with Will Whitehorn leaning over behind me and Steve Howard of the Climate Group seated on the other side, and we all looked at the screen. It was quite an experience having a brilliant communicator like A1 Gore give me a personal PowerPoint presentation. Not only was it one of the best presentations I have ever seen in my life, but it was profoundly disturbing to become aware that we are potentially facing the end of the world as we know it. The impact on humanity and the natural world could be so great that we have no choice but to do something drastic, first to stop it and then turn it around.
During our intense discussion, Steve Howard said that we need to make people confident that this is a problem that can be solved. Some people think dealing with climate change could destroy the economy and is therefore an insoluble problem; but there is a lot we can do. We really have no choice in the matter: we have to do it.
Al agreed. Looking directly at me, he said, ‘Richard, you’re known the world over. You could help to lead the way with me in dealing with climate change. Without the politicians we need business leaders to take the lead.’
Al Gore’s lecture was a polemic, but it had enough good science around it to work really well. It was the first time I’d been presented with the full enormity of the effects of climate change. I saw at once that if we don’t do something fast to fix carbon emissions, in a very short space of time most of the Earth will be uninhabitable and the planet’s population will plummet. Most animals and plants will become extinct and life will be wretched. ‘I’m just about to launch a new air route to Dubai,’ I said. Usually I like doing that kind of thing – but now I could see the paradox of it. We want a connected world, we want to be able to fly, but we must also beat climate change.
‘How much time do we have?’ I asked.
Al replied, ‘Scientists say that we may have as little as ten years before we cross a tipping point, beyond which it will be too late. We have to make a massive and determined start. If we do, it is possible to start levelling out CO within the next five years. Part of it is evolution. Our brains are good at perceiving danger in the form of fan
gs and claws and spiders and fire but we find it hard to deal with dangers that can’t be seen until it’s too late – like the world heating up. Most of it is happening right now at the poles, where very few people see it and so couldn’t care less.’
Al was very persuasive and remained good-humoured, despite his argument with Will as to when Lovelock had first written Gaia Theory. Sometimes it’s interesting to be in a room with two people who both think they’re right!
After Al Gore left, Will and I had a long discussion about the way in which Virgin could take a lead in dealing with global warming. Obviously, with over 50,000 people working for us and their livelihoods at stake, I didn’t want to make any drastic changes that would mean we would run unprofitably; but I saw a way forwards in which we could act responsibly by making small changes – such as using long-lasting light bulbs and becoming paper free – as well as major changes, like switching to biofuels as and when possible. We coined the phrase ‘Gaia Capitalism’ to describe this. The concept of Gaia Capitalism is all about solutions: we wanted to take an apparent contradiction and show that it worked and made real sense. We were able to do this efficiently because Virgin is like a massive ecosystem. The parts are separately run and managed, and even have their own shareholders, but there’s always the linkages between them.
Three months later, Bill Clinton rang me to see if I would make a pledge to his Global Initiative. That night in the bath I had an idea. Al Gore had said he needed leadership from me. What if I pledged 100 per cent of all profits the Virgin Group made from our airline and train companies and invested them in developing alternative fuels? That could make a big difference and perhaps get other business leaders on board too.
Losing My Virginity: How I Survived, Had Fun, and Made a Fortune Doing Business My Way Page 44
