The Predatory Virgin
Dave Trotton 28 January, 2013 at 10:01
About 40 years ago, the young Richard Branson and his fiancée were waiting at Puerto Rico airport.
They needed to get to the Virgin Islands.
In fact there were a lot of people that day who needed to get to the same place.
Then the flight was cancelled and a massive groan went up.
Everyone rushed to the airlines representative: pleading, yelling, threatening.
As if any of that could make any difference.
They were yelling about how badly they needed to get to The Virgin Islands, they were yelling about compensation, they wanted to know when the airline would be arranging replacement flights, where they were supposed to stay while they waited.
While they were doing this, Branson started to make some calls.
He phoned around to see how much it would cost to hire a plane to fly to The Virgin Islands.
Eventually, he found one available at short notice, but it was a fifty-seat plane.
They were willing to do the trip for $1,800.
So the young Branson did some quick math and decided to book the plane.
Then he got a big board and wrote on it in chalk: “SEATS AVAILABLE: PUERTO RICO TO VIRGIN ISLANDS – $39”
And he stood in front of all the disgruntled passengers.
Suddenly everyone wanted to get on the plane.
The young Branson sold all the tickets immediately.
This was the seed of Virgin Atlantic.
The first time Branson saw how easy it was to make money by running an airline.
The interesting thing for me was his reaction to the situation when the flight was cancelled.
His attitude wasn’t “Oh on, the flight’s been cancelled, that’s terrible.”
Because he didn’t see the flight as the end in itself.
The flight was just a means to the end.
The end was Virgin Islands.
If this particular means isn’t working out, let’s investigate others.
This is just a speed-bump.
So first he investigates the possibilities.
He finds out whether there are any other flights and what they cost.
Now most people wouldn’t do this because they’d see hiring a plane as too expensive.
But Branson thinks “Let’s handle one problem at a time. First let’s find out if there is a plane.”
And he finds there is a plane, but not a small affordable two-seater.
Only a large expensive fifty-seat plane.
So now the problem has changed.
Now the problem is, how can we afford to hire a fifty-seat plane?
Well there is a market for exactly that, waiting at the airport.
Many people who badly want to get to the Virgin Islands.
For them, a chance to buy a ticket would be a distress purchase.
Therefore an easy sell.
Branson let one problem solve the other problem.
Because he had a longer term goal in view.
So the cancelled flight was a road bump not a brick wall.
He got upstream of the problem.
He changed it from a problem he couldn’t solve into one he could.
He changed it from “There are no flights to the Virgin Islands” to “How to sell plane tickets to the Virgin Islands”.
Which is exactly how Richard Branson built an empire of 400 companies worth $2.4 billion.
Predatory thinking at its finest.