Turning Failure Into Success Like Richard Branson
“Business opportunities are like buses, there’s always another one coming,” – Richard Branson (tweet now)
Sir Richard Branson, the legendary “adventure entrepreneur”, is known for having achieved success in a variety of different businesses and having built one of the most popular brands in the world. What people may not notice is that he has had to overcome failure during his career several times.
Here are some of the most important failures of his career and the way he reacted to them, embracing the new opportunities that brought with them and turning them into massive success.
Failing to Monetize
At 16 and dissatisfied with the education he was receiving, Branson left high school to create Student Magazine, a publication that would provide a breath of fresh air to British students.
Although he managed to include interviews with important personalities such as Jean-Paul Sartre, he was unable to make it profitable and it seemed that he was headed for disaster.
At that time, the idea of starting a correspondence record order business came to him and he was soon making more money from it than from his magazine. It was called Virgin Records.
Failing Forward: He was able to act rapidly on the new business opportunity he discovered by recruiting the Student magazine staff and putting it to work in an empty shop converted into offices.
He also learned valuable business skills by building Student, such as networking with celebrities and closing advertising deals with large companies, which he would later use for growing his brand new company.
Underestimating The Competition
In an attempt to disrupt the sugar drink industry, Branson launched Virgin Cola in 1994. He used all the weapons that had worked so well in the past for promoting his new product. A sleek bottle design inspired in Pamela Anderson’s curves, entering Times Square with a tank and shooting the cannon to a Coke’s sign are memorable moments.
Despite serving Virgin Cola on Virgin’s flights, cinemas and trains, and distributing in a bunch of countries worldwide, the product didn’t get enough traction to compete against Pepsi and Coke and lost visibility as time went by, until it finally ceased production in 2012.
Richard Branson recognizes that he unsuccessfully tried to apply once again his strategy for catching huge companies off-guard by running faster and leaner than them.
Using customer dissatisfaction for getting a loyal customer base early, as he did with Virgin Atlantic, didn’t work neither.
In this case, customers didn’t have a definite dissatisfaction with how the established brands were serving them, and Virgin Cola didn’t bring in the table revolutionary features neither. Thus, the brand ended up depending solely on marketing to find that differentiation edge they were needing.
Failing Forward: Branson says that he learnt a very important lesson and that he will never underestimate again the capacity to respond of huge companies.
Being Outperformed (By Apple)
Trying to launch a response to Apple’s iPod and iTunes, Virgin created Virgin Pulse and Virgin Digital in 2004.
This time, they were slower than the competition.
Still unreleased, the Virgin’s device became completely outdated after the successful launch of the new iPod.
Failing Forward: Recognizing rapidly his defeat, Branson closed the company just one year after and moved on.
Sticking To The Past For Too Long
Virgin wouldn’t close the last of its record Megastores until 2009, after having losses for years because of the market disruption caused by digital downloads.
Branson recognized that having the stores in Times Square and Oxford Street was a symbol for the Virgin brand, and a link to the golden moments of the past he didn’t wanted to break.
Failing forward: It’s probable that Richard was measuring the branding impact the Megastores were producing, and comparing it with the money he was losing on them. click here Once the situation became unsustainable, he just sold them and move on to target more profitable opportunities.
Branding works this way, it’s never easy to tell which portion of the money you are investing is just being burned.
Having to sell his beloved company
In 1992, Richard Branson sold Virgin Records to Emi Music for 560 million pounds.
He was forced to do so to avoid Virgin Atlantic Airways bankruptcy. The new capital allowed him to save the airline and to expand it further during the next years.
Selling the company that so much effort took him to grow was a painful moment in Branson’s career.
“When we sold it, I remember running down Ladbroke Grove, tears streaming down my face with the check for a billion dollars.”, said in an interview with Reuters.
Failing Forward: Afterwards, he has recognized that it was a good decision to sell, because it propelled him to build magnificent things.
We wouldn’t be building spaceships today if it hadn’t been for that (sale) so it was the right decision.