Here’s my book summary of the book Business Stripped Bare, by the famous billionaire, Richard Branson. He’s written many books over the years. And this book is your go-to guide for concise, trustworthy business advice.
Complexity is the enemy. Any fool can make something complex. Making something simple is hard.
Keep your cool. At some point, you will ruin a relationship with someone in business. It is part of the process. In a year’s time, take the person out to dinner and makeup.
Don’t do unethical or illegal things. It will bite you in the butt. When Richard was young, he illegally smuggled records into Britain to sell. He got caught. He went to jail, had to pay three times the tax he should have paid, and his parents had to mortgage their house to bail him out. It turns out the big record companies were doing the same thing, and they had to pay a massive amount when they got caught.
Business is more than about the bottom line. Contrary to popular belief, don’t follow the phrase “It’s just business.” Business is not just about money. Business is about ideas.
Success is not about how much money you make. It’s about the type of relationships you make and positive impact.
Business is not as glamorous as you think. Richard was often in debt and looking to borrow money when the media had him on “Richest people” lists.
Richard believes more about getting the right people in his company than what job they will do. Look for people who are positive, love to make people smile, smile naturally, and give off a positive vibe. Richard is always on the lookout for these people.
Forget about the resume. When hiring employees, look for savvy (street smarts) more than what is on their resume (technical qualifications). Richard hired a man to run part of his whole organization without looking at his resume, interviewing him, or anything else. He just observed how great of a worker this person was as a consultant. Richard even let this man come up with and decide his job title and what that job entails.
Richard cares more about whether a business has employees who are disciplined more than anything else. And by discipline, he doesn’t mean punishing people if they don’t do something they’re told. By discipline, he’s talking about having the discipline to continue to work hard and do what you were assigned to.
Parties are a great way to galvanize the team and raise morale. They must happen routinely. Richard used to invite his whole team to parties at his house.
Business requires leadership and great decision making. Business is not about formalities or meetings. At its core, it is about relationships and people.
The culture of a pre-existing business is hard to change. Sometimes, it’s better and easier to build from scratch. Richard learned this by buying a business and trying to change its culture to fit Virgin Express. It ended up being too difficult.
Giving employees a raise and moving around offices will not change the culture. Richard decided to start a new airline (Virgin Blue) from scratch rather than buy an existing airline, which would’ve been cheaper, for this reason.
Press is great free marketing. Never pass it up. Richard drops everything he’s doing if he gets a request from CNN because he gets to tell the world about his brand for free.
It is better to be cheeky and poke a few light jokes at your business than pompous. Customers are more annoyed by the latter and smarter than you think.
Take extra risk for more massive upside. Richard always decides to take a little bit more risk if there is tremendous upside with that extra risk. For his airline business, he would have lost a hefty amount in the millions with a new business venture. But if he succeeded, he would have made hundreds of millions. If he failed, it would not have out him out of business.
Trust your gut instinct. Richard was offered $250 million for a company that he had started only a couple years ago for $10 million. But he’s got was telling him that something was fishy. He didn’t understand why his partner company was throwing money away to make the transaction. He decided not to sell, and it was the right move. The competitor who tried to buy him out eventually folded. His company, Virgin Blue, ended up taking over the market.
Do what you love because life is too short. When one of his top executives was considering leaving the company, Richard was frank with him. He said that if he did not enjoy it, then life is too short to do something you don’t like.
Try out different systems and throw it out if it doesn’t work. Richard admired a lot of Japanese business systems. But it just did not work with the style of organization that he ran. One of the systems required you to think of the whole company as a family but based on how it was run, it was too far of a stretch to call everyone family even though everyone was friendly.
Don’t promise anything you can’t deliver and deliver everything you promise to control your brand. If you don’t define your brand, your competitors will define it for you. How many brands do you know that represent slow delivery and poor quality?
A brand is what a customer expects of your product or service when they use it.
Virgin’s products are not similar in any way but there is an expectation based on their reputation on how they will deliver, their service, quality, and culture.
If you rip off the consumer, you will destroy the integrity of the brand.
Write things down. Richard always writes down everything. He says the boring, mundane, everyday things are the most important and he doesn’t see anyone do it but him. He writes down anything he notices in his companies that can be improved when testing out their services and gets a lot of ideas from this.
Understand and do the basics. Richard is often known by the public as an entrepreneur who is always performing fun, dangerous stunts. You may get the impression that his life is all about fun. But when he talks about some of his businesses’ toughest moments, he reveals a great understanding of the more boring, fundamentals of business. that he dealt with.
For example, one of his trains killed people because of a faulty misplaced rail and he went into detail on how he handled the public reaction and how he recuperated from the loss. He also made sure to built trains to travel 10 miles per hour faster than the max speed limit because he saw the trend of speed limits rising over the years and wanted to be prepared when they raised speed limits again. The list goes on. He has dealt with debt, surprising and costly business events, and being threatened to be snuffed out or given the ultimatum of being bought out.
Don’t ignore the trends. Richard saw the margins on record sales dropping decade over decade, yet businesses were still trying to sell records for top dollar. He saw that CD’s were an upcoming new tech that was causing controversy on whether it will replace vinyl. He jumped on the CD and video game trends when he saw the rise in popularity.
Richard’s biggest business mistake was not selling Virgin Music fast enough when the time had come. Virgin Music was once the top independent music label. The company wasn’t profitable for a long time thanks to the advent of CD’s. CD’s hit their peak in 1999 and started declining rapidly thanks to digital downloads.
Richard thinks music is not going away. The way we consume music and the economics have changed. It now costs a couple hundred bucks to record and market a song with the quality that used to cost thousands of dollars decades ago thanks to software and computer improvements.
The music industry is not always about who is most talented. Richard saw people with talent dripping off them that did not succeed and others with a tiny bit of talent that did. Some succeeded but wasted their talent, while others had little talent, but leveraged every bit of it.
Virgin’s success is due to its ability to follow through on its brand message. And its brand message is to deliver on the customer experience. There were painful times, like closing down Virgin Music, but Virgin survived and thrived by delivering on its brand message through other products.
Use your current delivery system for new industries. One of the biggest things that amazes people about Virgin is its ability to quickly hit the ground running in a new industry. How? 90% of its delivery system is copied and slotted in. There is not much change. Getting a grip on a new industry is simply an issue of workload and attention to detail.
However complex the industry, you need to boil it down to a core selling proposition ordinary people can understand. If the industry is delivering a proposition is loopy and counter-intuitive, you’ve made a mistake and need to go back to the drawing board or the whole industry is ripping off its customer.
Always protect the downside. Never put your business in a place where it could lose everything. Richard has broken his own rule on occasion but he highly advises you to keep to this rule.
First mover advantage is not always the best advantage. If you are a later entrant, you can succeed, but you must do something radically different to stand out.
Look for bargains. Richard is always looking for a good bargain. He tends to find them when a business has more bandwidth than necessary. For example, he got into the mobile industry when he saw a lot of big companies buying more phone network lines than they could doll out. These companies had to lease their network lines.
Make it simple to understand for the customer. If the business director cannot understand it, how can the customers? Richard simplified Virgin Mobile’s pricing. Every other pricing model on the market was too complicated for the customer to understand. Experts should make things easier to understand, not harder. Otherwise, they’re doing it wrong.
Know your limits. Richard let others run his bank business because he knew it was outside of his skill set.
Make it more fun and enjoyable to the customer with innovation. Richard swapped the “peanuts and boring entertainment on an airplane” concept with in-flight chat, keyboards, diverse movies, different seat colors, mood lighting, and sandwiches-on-demand. The customers were willing to pay more for it. Other airlines assumed they had to provide the cheapest snack out there to cut costs.
A leader must be able to distinguish real danger that you should avoid from danger worth the risk. One of his TV show contestants almost fell to his death by blindly listening to Richard. Thankfully, Richard stopped him.
Sign every bill yourself every six months to identify unnecessary expenses.
Move people around to a different job before firing them. You would be surprised at how they turn around sometimes.
“Sue the bastards.” Sometimes, you have to stand up for your company by going to court. Richard was given this advice by a business friend when a giant competitor wanted to start trouble. Rather than letting them get away with stuff, he stood up for his company and they won the case.
Wealth is like a running stream of water. One moment you have more cash then you can deal with, and another moment, you need to put money into a business, and you don’t have enough cash.
Businesses always change. And change brings opportunities.
If you refuse to see the reality, you die.
You don’t have to change the world. Just try and come up with a couple cool ideas. And make a difference how you can.