Home | Education & Distance Learning Articles | Article

Secrets of the empire builders - The 25 Best Business Schools - Cover Story

Success - September 1, 1996

Heads turn as Richard Branson, founder of the nearly $3 billion Virgin Group Ltd., lopes into Knight Auditorium at Babson College. Other than an eager student guide tagging at his heels, he's alone. He smiles and winks as he bounds onto the stage, accustomed to being the center of attention. He has been an entrepreneur since he was a 16-year-old dropout.

It's been a hectic week. Take Monday, for example. First, he was lowered into Times Square from one of those big lighted globes usually reserved for New Year's Eve, as cameras relayed his image to the giant Sony Jumbotron. Then he cut the ribbon for his company's new, 75,000-square-foot megastore on Broadway, the largest record store in the world. Later, he was standing at one of the store's 1,000 listening stations, fiddling with the headphones, listening to Liza Minnelli's new album. Sure enough -- and doesn't this always happen just when you're trying to find a quiet moment alone? -- Liza herself tapped him on the back to ask how he liked the music. "Uh . . . great!" he answered.

Now, two days later, the master promoter finds himself being taken quite seriously by one of the best schools anywhere for creating entrepreneurs. It's the 19th Annual Founder's Day at Babson College of Wellesley, Mass., a brick-and-clapboard confection; the very image of a New England campus.

Three of the world's most accomplished businessmen have been brought here for induction into the school's Academy of Distinguished Entrepreneurs: Branson; Ely Callaway, founder of Callaway Golf Company, a $553 million club maker that has reshaped its industry; and Andronico Luksic, founder of The Luksic Group of Santiago, Chile, a $2.8 billion conglomerate that dominates its country's major industries, including banks, breweries, mines, railroads, and hotels.

Branson, Callaway, and Luksic-together, they represent more economic activity than many nations-line the dais in Babson's Knight Auditorium. Branson fidgets and gins like a kid. The grizzled Callaway noodles with his glasses; he's fighting a bout of bronchitis. Luksic, dignified, reserved, moves with stately grace. He's the only one with a real entourage.

It's a lofty, whitewashed hall, not unlike a church. The benches are packed with solid citizens -- alumni and students, many of them entrepreneurs. It looks like an old-fashioned town meeting.

Branson is first to speak, bursting from his seat as he is introduced. "I have to admit, I feel a little out of place." he says. "As a teenager, I suppose I could have been described as a little impatient to begin my entrepreneurial career. In other words, I couldn't wait to get out of school, so I quit."

Huge laugh.

4:15 P.M.

Later, in the seminar room, a student asks Branson about his first business, a magazine for students: "Where did you get the money to fund it?"

"I didn't have any money," Branson says. "I was 15 years old. My parents didn't have any money, either. I had a friend who said you have to fund the magazine by selling advertising space before you actually publish the first edition. It took me a year and a half to do that. We didn't make a lot of money with that."

Then he stops, realizing he has something more positive to teach these young entrepreneurs. "Nothing is better than starting your own business," he says. "It's a tremendous education, and if you do fail the first time, try again.

"You can succeed as long as you've got the will and something you really believe in, that you have a passion for."

Branson is deeply aware that he is a role model. He recalls the time he spoke of his distaste for school on British radio and was barraged with complaints from angry mums.

Since he started Student magazine in 1968, Branson has followed a pattern: entering markets with huge entrenched players and fighting for a big piece of the action. From Student magazine, young Branson launched a mail-order company that distributed records at bargain prices. He called his company Virgin to reflect his own inexperience in business.

In 1973, Virgin Records was launched. It went on to sign such top-selling artists as the Sex Pistols and Peter Gabriel. Branson sold the record business in 1992 for nearly $1 billion. Today, the Virgin Group consists of media, entertainment, and travel companies, the most famous being Virgin Atlantic Airways. It and its joint ventures employ more than 12,500 people in 22 countries.

4:45 P.M.

The Babson crowd wants his secrets. "How do you do it, Richard?" an alumni asks. "How can I do it, too?"

"Your people are your product," he answers. For Virgin Airways, Branson refuses to hire flight attendants from other major airlines, "the ones who act like they are something special in the air." He looks for genuine, happy, and interesting people, often from the entertainment industry, whom he can train.

"We didn't want to get in the transportation industry," says Branson. "We're still in the entertainment industry -- at 25,000 feet."

Some of Branson's most successful spin-off concepts are born when employees approach him with an idea. Two flight attendants shared their frustration with having to shop at six different stores to plan their weddings. They partnered with the boss to launch Virgin Bride -- a megastore for the betrothed.

Branson deliberately promotes the Virgin name, ensuring that it will endure even if its famous founder should ever step down. He's applied the powerful Virgin brand to everything from the airline to his own brand of cola. "Quite a lot of companies didn't build their brands," says Branson. "As the chairman, I'm trying to promote the Virgin name and spread the word."

2:35 P.M.

Point by point, a student speaker recounts the in credible career of Ely Callaway. How he joined the Army in 1940 and left as a major in command of 72 people. His early years in the textile industry, then becoming the president of Burlington Industries, one of the largest textile firms in the world, at the age of 48. The turning point in 1973, when he was passed over for the chairmanship of the company: He quit, leaving the East Coast and corporate America to assume a tremendous risk. At 53, he bought a chunk of desert land in California to found a vineyard. He sold it in 1981 for $14 million.

"His biggest success was yet to come," the student continues. After selling out, Callaway had plenty of time for golf, his favorite pastime. One day he discovered a club he loved. When he found out the manufacturer was struggling, he bought the company. His insistence on creating distinctive, superior products resulted in the Big Bertha, a stainless steel club whose performance revolutionized the golf industry. It transformed Callaway Golf into a colossus with 1995 sales of $553 million.

4:05 P.M.

In a curved seminar room built like an amphitheater, Callaway explains principles he developed to drive (as they say in the golf world) his success. It's standing room only.

"We don't bring out a new product until our professional staff and experts have tested what it can do, and that includes me," says Callaway. "The product must be demonstrably superior to our competition and pleasingly different in some significant way."

The market has had a mixed view of your company. Does that have any bearing on how you manage?

"We try to ignore almost everything on Wall Street, unless our price goes up.

"Wall Street is nutty. You get mass emotional reactions from masses of people, most of whom are very ill informed about the company they're investing in."

You say you use internal experts. Do they poll the marketplace, or do you use your own judgment?

"We do no market research to find out whether a product is superior or not, or how to market it. Zero. And we don't plan to, as long as I'm here.

"If you know the inside of your company, and how to improve your product in significant ways, and you are thorough and complete about your testing, then you've developed your own internal measures."

Did you work all your life toward the goal of starting your own company?

"I had never done anything but work for the Army when I went into the textile business. Very few people can know ahead of time what they would really love to do.

"That's why no graduate student, no matter how bright he is, should jump right in and be an entrepreneur. He has to go out into the world, to learn to ride on somebody else's bicycle."

Callaway has one of the most successful golf clubs, but you don't have any golf balls. Are you going to enter that market?

"We should be into golf balls. If we do it -- and I don't have the faintest idea how -- our philosophy would demand we make a golf ball that's superior in some significant way to the competition. But pleasing me is a problem.

"The golf ball business is not very ethical in one sense. Every golf ball ad claims to make the longest ball, and the public believes it. But all manufacturers are regulated as to the liveliness of their balls. You can't make a ball that goes farther than anyone else's."

1 2 Next »

If you would like to discuss any of the issues raised in this article with hundreds of other Education & Distance Learning enthusiasts from around the world, please feel free to visit the discussion forums & post a message.

Discuss this article in the discussion forums now.

Popular Education & Distance Learning Discussions From The Past

Website on physics (1 posts)
by Tchernov - Last post on: 07-20-03 12:20
http://physics.nad.ru This website offers animated physics experiments and visualizations with theoretical explanations. There are also physics forum, free samples and educational programs for download. ... (Read More)

Looking for Marketing Agents (1 posts)
by James McIntyre - Last post on: 07-31-03 20:33
Hi, I'm looking for individuals who can refer a proven system to Dr's that will save them $. Those individuals will receive a good % of the sale for those that sign on. Please contact me directly. Best regards, James McIntyre ... (Read More)

for the kids (1 posts)
by sure@chello.at - Last post on: 07-21-04 09:33
-- http://members.chello.at/fairy-tales/fairies.html ... (Read More)

Re: INFIDEL DOGS. RELEASE THE BODIES. (1 posts)
by Love Not War - Last post on: 07-30-03 11:13
Paul, can't you see that with people taking your attitude and those who advocate further violence, you are only continuing a self destructive, self fullfilling prophesy of certain doom? "PaulC" wrote in message news:... > What an absolute knobhead you are, are you really a raghead or just som... (Read More)

You must register before posting in the Education & Distance Learning discussion forums. It's free & only takes a few seconds. Please also remember that no advertising is allowed...
Enter The Forums Here