Live From DMA06: Richard Branson and The 37-Year-Old Virgin

Whether trains, planes or cola, Richard Branson is bent on putting his brand on any industry he deems as needing a well-run enterprise. And after 37 years of diverse endeavors his brand, Virgin (or, formally, the Virgin Group of Companies) has been stretched without breaking.

Not too shabby, considering the brand almost wasn’t. The name–chosen during a late-night bull session among friends for its edginess–was denied registration by England’s patent office as being “too rude.”

“I had to write long letters explaining that ‘virgin’ was the opposite of rude,” Branson said during an opening keynote address at the Direct Marketing Association’s annual conference.

But it was edgy. Since 1970, when it was founded as a record distributor, it has attracted a number of artists to its roster, including The Sex Pistols, Culture Club and Genesis. Not bad for a small startup with its roots in direct marketing–Branson’s first sales channel was a direct response flyer that listed the records he sold.

Branson has subsequently expanded the Virgin umbrella over a variety of businesses, including financial service products (including personal loans, credit cards, insurance); telecommunications (mobile phone service, accessories, ringtones); entertainment (racing packages, Internet gaming, books); and many, many more.

And of course, Virgin Atlantic, the airline he started after chartering a plane to take himself, his wife, and a passel of stranded tourists whose flight to Puerto Rico had been canceled. (He based the ticket on the charter price of the plane divided by the number of passengers he knew he could sell seats so–without, of course, including the two seats occupied by himself and his wife.)

That flight started another Branson/Virgin tradition–that of naysayers telling him he couldn’t make an endeavor work, and him proving his critics wrong. On board, he confided in a fellow traveler that he was considering starting an airline. His seatmate informed him that he couldn’t possibly make any money running an airline. Branson, who was turning a profit on that flight, didn’t bother to correct him.

Nor did he correct–at least, in words–John King, Lord of Wartnaby, the chairman of British Airways. When Virgin rolled out its airline and announced its plan to offer more congenial service than its competitor, Lord King, in a nod to British rock group Jethro Tull, derided Branson as “too old to rock and roll, and too young to fly.” (If track record is any judge, Lord King was wrong on both counts.)

The derision-and-comeuppance has proved to be a pattern with Virgin. With each new venture, one pundit in the financial world wonders if the delicate Virgin brand has finally been stretched too far. Sometimes the Virgin management echoed these concerns, especially as the company’s goals became more complex: In 1997, when it decided to upgrade the UK’s Manchester-to-London rail system, not only did Branson pledge a faster, more comfortable ride, he promised a more environmentally sound one as well.

There were bumps in the implementation, of course, but Virgin overcame them by hewing to its brand principles of keeping communication open between customers and company, offering as pleasant an experience as possible, and making any company under the Virgin aegis pleasant to work for.

The trains have captured 40% of the airplane market between the two cities, and have done so while generating only 5% of the carbon dioxide emissions.

Branson wrapped his presentation by stressing the value of corporate responsibility, both in terms of noblesse oblige (the wealthy have a social obligation to take care to take care of the less fortunate) and corporate morale (creating an entity people are proud to work for results in more productive workers.)

“Those who do command wealth have responsibility to use it constructively, to redistribute it for the collective good,” he said. “Don’t leave money in a bank account; employ more people. Wealth should be used to challenge the establishment.”

During a question and answer period, Branson commented on the future of direct marketing (“television is beginning to decline as an advertising medium: Direct marketing tools are becoming more effective”); offered insight into how he chose which businesses to go into (“there is no point going into a well-run sector”) explained why he usually targeted new launches to younger generations (“It’s much easier to start off with youth market and grow older in time than start with older consumers: The old don’t mind buying what the young are buying, but the yojng don’t buy what the old buy”) and, at the request of a double handful of audience members, cheerfully posed for a series of photo opportunities