Bartiromo talks IPOs, space travel with Branson
Corrections and clarifications: This article originally misidentified two of Virgin Group's businesses. They are Virgin Australia and Virgin Trains.
Virgin Group, led by billionaire Sir Richard Branson, is readying to raise new capital by taking some of its best branded businesses public, including the airline Virgin America. Branson is also weeks away from implementing his first commercial flight into space via Virgin Galactic. And before that, the serial entrepreneur will release a new book about leadership and his 50-year career, called The Virgin Way. The group's travel-related operations, led by 51%-owned Virgin Atlantic Airways, are among its largest cash generators. Virgin Atlantic's Australian low-fare cousin is called Virgin Australia. The group also runs Virgin Trains and has major operating areas including financial services and telecom. I caught up with Branson to get more on some of his top secrets to success and to get his take on the economy today. Our interview follows, edited for space and clarity.
Q: How would you characterize the economy today? And where is the growth in business?
A: Businesses across the board are enjoying a great time again. The Virgin business units are no exception to that. I've gotta be a bit careful what I say on that because we've got a (stock sale) coming up, but the aviation industry generally is going through a good time. The health industry's been great. And the banking industry has been doing well. So it feels like we're back in a boom era again. I've been through many booms and seen all the busts that follow, but, hopefully governments and industry will get it right this time and we'll have a more sustained growth period than we've had in the past. I'm an optimist.
Q: Are you surprised that we haven't seen much reaction from investors to what is happening in Russia, Iraq and Gaza?
A: One of the reasons is America isn't going to be so reliant on foreign energy for much longer. And partly because there's the discovery of gas. Also our clean energy, solar, is now beginning to compete with coal on price. If America wanted to power itself largely on clean energy and goes all out to do it, it can be done if you would get 100 giant solar power cells. It can be done. Because the reliance on foreign oil is beginning to go away, which means that when you have an international crisis like this, it doesn't affect things quite so much. Having said that, it is incredibly sad to see what looks like a Cold War mentality developing again between Russia and the rest of the world.
Q: Have you seen an impact on the European economy as a result of the happenings in Ukraine and Russia?
A: Not an enormous impact yet. If you're in specific products, like apples or vegetables or other things that you were importing into Russia and suddenly you can't import anything more into Russia, that must be pretty devastating for your business. But nothing too major that I can see.
Q: When you first started out, did you have to raise money? How did you fund your initial business?
A: The word "entrepreneur" had not been invented. The idea of venture capitalists that you could go to with an idea didn't exist, either. So I had to self-fund my first venture. I was 16. I was trying to launch a student magazine to campaign against the Vietnam War. I asked my dad if I could leave school and he said I could only leave when I'd sold enough advertising to cover the printing, paper and distribution costs of the magazine. So I worked out of the school and somehow managed to get about $4,000 worth of advertising sold to cover the costs of 50,000 copies of the magazine. Then I rang up my dad and said, "I'm quitting school." And he was good enough to stick with his word and let me. I still own 100% of Virgin. It may well have been fortunate that I had to self-fund it because otherwise I would have given away quite a big chunk of the company and not owned it all.
Q: You mentioned Virgin Galactic — what is your timing in terms of this program taking off?
A: I'll be bitterly disappointed if I'm not into space by the end of the year. The rockets have now tested successfully. We've got three more rocket tests and then we should be up, up and away by the end of the year. That should be the start of the program. The space port's ready. We are now in the last few weeks before finally embarking on the space program.
Q: Take us around the world. Are you seeing economic vitality?
A: The U.K. will see 4.0%, 4.5% growth this year. The U.S. something similar. Of course, there are countries in Europe that are doing nowhere near as well as that. That's still worrying. And there are countries in Europe where the unemployment is still very high. But in Africa, South America, the U.K., the U.S. and most of the countries in the Far East, things are going well.
Q: Is China still that growth engine of the world?
A: It is, but it's up to us to create our own growth. There are wonderful companies like Uber, and AirBnb and Google, Facebook, all growing strong. There's incredibly exciting things happening. Apple keeps going on, Virgin and so on. These are great companies, which are creating great growth in their own areas.
Q: What do you think those companies have in common? How have they been able to innovate and grow more than others?
A: They've been led by strong people, come up with brilliant ideas, been generally great designers, great innovators. They haven't always been led in the same way. I speak in my book about Steve Jobs' way of managing people and he was incredibly hands on and was not a great delegator. But somehow it worked for Apple. Whereas at Virgin I've taken a very different approach and have been much more trusting with people, thinking you're the people who run your company and giving them the chance to make mistakes as well as to make good things.
Q: You also mention luck and having fun.
A: I do think having fun is important. Most of our time is spent at work and if it's not fun, life is not fun. We once took over a big chunk of Britain's rail network and there were $15,000-a-year people who worked for the government. The first thing I did was have a week-long party at my house in the country. Invited their children, their families. We had tents. We had barbeques. We had rock music. We had dancing. We had partying. And they became the most loyal employees ever. They still talk about the parties. We had another big celebratory party again this year. So I do think having fun is very important. It's not to be underestimated. Too many companies take themselves too deadly seriously. If people who work for a company are proud and happy and enjoying the company they work for they'll smile. And if they smile, then customers will smile. And when customers smile, you have sales. It's self perpetuating.
Q: You have also differentiated yourself by making sure the world knows the company has purpose, stands for something, and has integrity. Young people today want to work somewhere because they have purpose.
A: Business people need to speak out on issues where there are injustices in the world. Uganda recently said they would execute people for being gay. They'd execute people for not reporting gay people or, at the very least, give them life imprisonment. I've made it very clear that Virgin would not do business with Uganda if they took that stance. Well, you know, there has been a backtrack in Uganda. I feel that governments and social workers deal with all the social issues in the world. We've set up The Elders (an independent group of global leaders who work together for peace and human rights)
to try to address conflicts in the world. The point of mentioning that is simply that as a business leader, you could go through maybe 10, 15 different governments in their lifetime. They've got much more stability. Their knowledge, encompasses decades. And it can be helpful to newer politicians not to mention entrepreneurial skills which social workers and politicians may not have.
Maria Bartiromo is the anchor and global markets editor at The Fox Business Network.Follow her on twitter @mariabartiromo and @sundayfutures.