Branson: Behind the Mask (3 page)

With the deal agreed, on 4 October Branson was standing in front of dozens of cameras in the Mojave desert to watch the launch of Virgin Galactic’s SpaceShipOne. He had arrived amid media reports that the intention was for the spacecraft to carry the first tourists into space in 2007. Branson’s declaration to the
cameras generated euphoria among enthusiasts. Until then, the only journey for tourists to the International Space Station 250 miles above the Earth cost over $20 million aboard a Russian Soyuz rocket. ‘We’ll be the first in space,’ Branson told the crowd.

Standing next to him was Burt Rutan, a remarkable aerospace designer recognised internationally for his achievements. As an adventurer he had much in common with Branson. Dressed in a leather jacket, the sixty-year-old saw himself as a modern version of the Wright brothers. Politically, he and Branson were not soulmates. Rutan was a fierce conservative who derided global warming, opposed liberal causes and loathed political correctness. He did, however, share with Branson a contempt for bureaucratic paper-pushers, who in the context of this operation were the US government’s regulators. Success, he hoped, would silence the naysayers. ‘We proved it can be done by a small company operating with limited resources and a few dozen dedicated employees,’ he pronounced proudly to over fifty journalists. Branson applauded that sentiment and stared like a thrilled schoolboy as WhiteKnight roared down the desert runway and took off, with SpaceShipOne glistening underneath.

As before, SpaceShipOne was dropped from the aircraft at 50,000 feet and, after firing its rocket, soared seconds later past the winning post 69.7 miles above Earth. After two minutes in space, the craft tilted and glided back towards the Mojave. Rutan and Virgin Galactic had won the prize. Media attention was Branson’s oxygen, but on this occasion his publicists did not need to contrive any excitement. A genuine frenzy swept through the crowds. They loved Branson’s promise of space tourism for everyone within three years. Although Virgin’s ‘space travel’ was a trip that lasted less than five minutes outside the Earth’s atmosphere – ‘a high-altitude bungee jump’, the critics carped – the joyful crowd embraced the company’s spectacular achievement. Their cheers were interrupted by a call from the president.
Squeezing into an office with Rutan and Paul Allen, Branson listened to George W. Bush’s congratulations over a telephone loudspeaker.

The success of that day in 2004 more than satisfied Branson’s requirements. For some years, he had been trying to shift the focus of Virgin’s expansion from Britain to America. So far, a commercial breakthrough there had eluded him. Triumph depended on boosting his own and Virgin’s image. To be effective, he needed to occupy his favourite place – the spotlight. Staging stunts for free publicity had been Branson’s prime weapon over the previous thirty years, and had produced profitable results in Britain. By contrast, his flamboyant feats in America had barely registered with the media and the public. In the past, he had entered New York’s Times Square on top of a tank to promote Virgin Cola, and had dangled from a crane apparently in the nude with a cell phone strategically placed to boost the marketing theme that Virgin Mobile’s charges were transparent with ‘nothing to hide’. On that occasion, the small crowd had failed to notice that Branson was wearing a skin-coloured bodysuit. His gimmicks had produced a scattering of photographs in obscure newspapers. Smudged images were no substitute for a sustained advertising campaign, but the finances of the billionaire had deteriorated after the 9/11 attacks. Unable to afford a multimillion-dollar advertising budget, Virgin Atlantic struggled. Virgin Galactic, Branson hoped, would change everything.

Virgin’s publicists instinctively presented Virgin Galactic as the underdog and a poke in the eye for NASA. Their script was quickly abandoned. NASA, Branson realised, would be the source of future contracts. This was no time to be making new enemies, especially as his $1 million investment had produced an unexpected bonus. Within days of the launch, SpaceShipOne received an official blessing. The prestigious Smithsonian Museum in Washington had agreed to exhibit the rocket in its
permanent collection of milestones in aviation history. Daily, thousands of visitors would gaze at the craft’s gleaming shell with the iconic logo – ‘Virgin Galactic’ – emblazoned on the tail fin. The catalogue entry was priceless: ‘Private enterprise crossed the threshold into human spaceflight, previously the domain of government programs.’ For just $1 million, Virgin was set to become firmly established in America. Virgin Galactic would be developed by The Spaceship Company, jointly owned by Virgin and Rutan’s Scaled Composites. Under contract to The Spaceship Company, Scaled would develop the motor and obtain the safety licence from the Federal Aviation Administration (FAA) allowing them to carry tourists into space. Reassuringly, Northrop Grumman, the aerospace giant, would soon after buy a 40 per cent stake in Scaled.

Four days after the Mojave triumph, Branson embellished his success. Seven thousand people, he said during a newspaper interview, had already registered to make a paid flight in 2007. ‘A tremendous take-up,’ said Branson, mentioning that Virgin Galactic would carry at least 50,000 people over ten years. Those who paid the full fare immediately, he added, would be at the front of the queue of the 500 passengers who would fly in the first year. ‘We are extremely pleased because it just means that the gamble we took seems to have paid off.’ His commitment to spend $110 million, he continued, would earn $100 million from passengers in the first year.

Rutan was unfazed by his partner’s certainty. The designer uttered optimistic assurances about the problem-free process of scaling up the spaceship and its engine. There were no doubts about converting his crude two-man rocket into a sleek craft capable of carrying two pilots and six passengers up into space in a non-orbital flight, meaning that after a few minutes they would be heading straight back to Earth. Branson might have asked questions, but he was driven by marketing rather than
engineering. His comprehension of the problems was best assessed by the appointment of Will Whitehorn, Virgin’s media specialist, as the rocket supremo. Whitehorn’s lack of engineering qualifications was concealed by his thrill at having found a Virgin winner – an aspiration held by all Branson’s outriders.

Branson’s own enthusiasm was shared by Stu Witt, the chief executive of Mojave airport. Surrounded on one wall of his office by the memorabilia of twenty years’ service as a US Navy fighter pilot and at the opposite end by elk skins collected from afternoon hunting trips in north California’s mountains, the former Top Gun welcomed Branson for bringing glamour and money to the shabby desert outpost. ‘He’s a neat guy,’ Witt told everyone in the Voyager diner. Branson had reignited the executive’s ambition to transform Mojave into the Silicon Valley of the space business.

Witt’s military charm flattered the billionaire. Joining Rutan’s exploratory venture, he told Branson, could be compared to the pioneering voyages of Christopher Columbus and Ferdinand Magellan. ‘State-sponsored exploration is over,’ Witt told Branson. ‘It’s back to low-cost private enterprise.’ Witt’s enticing imagery predicted that millionaires would commute by helicopter from Beverly Hills to Mojave and, one hour after leaving their mansions, would be blasting off into space for a day trip to the Middle East or Australia. ‘You’re a pioneer,’ Witt had told his visitor. ‘Planes are the safest travel ever. Now make space the same.’

Witt may not have warned Branson sufficiently that Rutan’s plan to scale SpaceShipOne up to SpaceShipTwo was risky. ‘It’s like going in one step from a Kitty Hawk to a DC3,’ Witt would later say. At the time, no one told Branson that Rutan knew how to expand his spaceship but seemed to know little about the technology involved in developing a bigger reusable rocket motor. By his own admission, Branson struggled to understand a corporate balance sheet, so engineering technology was a challenge. Usually, he relied on others to worry about the detail.
Delegation was his management style, but in reality his lack of expertise allowed no alternative. Outsiders had the impression that his unique ability was to perceive advantages invisible to others. In the past, that instinct had rewarded him with great wealth, but on this occasion he appears to have failed to understand the fundamental principle of designing a rocket: the motor must be perfected before building the spaceship. By nature, Branson prided himself on breaking conventions and doing the opposite. ‘The rich think they’ll be successful with everything they touch,’ Witt would tell friends. ‘Their planning is essential, but their plans are worthless. Pushing at the frontiers is their forte, but they’re working in a hostile atmosphere.’

Branson was uneducated about science. In search of a PR coup, he wanted to believe Rutan’s assurances that expanding SpaceShipOne would be achievable. Since Scaled was an accomplished aircraft company, he assumed that building a bigger rocket motor would be no different than swapping the engine in a Boeing 747. Branson did not appreciate the consequence of his innocence as he embarked on his final attempt to become a major player in America.

Expanding Virgin’s operations into America had been Richard Branson’s plan ever since he had rescued his business from the financial difficulties that began in 1999, and which were compounded in the aftermath of the 2001 terrorist attacks on America. Starved of cash, he had survived by selling a house in London, a hotel in Majorca, shares in an Oxfordshire restaurant and nearly half of Virgin Atlantic. To break out of the straitjacket, he needed to expand. Australia was one target, but success on the other side of the Atlantic was his dream.

Naturally, he chose not to highlight those problems when he met a group of journalists for breakfast in Los Angeles in October 2002. To relaunch himself and Virgin, he wanted positive profiles describing his genius. Size mattered in America, and in anticipation of the meeting, his publicists had briefed each journalist that the ‘Virgin Group comprises 350 companies with an annual revenue of $8.1 billion’. What appeared to be a repeated exaggeration was never challenged. No journalist who was minded to doubt the publicists’ hyperbole would be allowed near their employer. ‘Richard Branson’, the publicists continued, ‘is head of the privately held Virgin Group, which oversees a vast empire which includes Virgin Mobile, Virgin Atlantic, Virgin Blue, Virgin Express, Virgin Megastores, V2, Virgin and Radio Free Virgin.’ Not mentioned was the fact that seven out of those eight companies were at the time losing money, and three were on the verge of closure. And beyond those eight, Virgin did not have complete ownership of any profitable major trading company.

Branson’s supreme confidence was built on his conviction that his ambitions would always become reality. During the breakfast, he regaled his guests with his plans to expand Virgin’s empire across America – on land, in the air and on the internet. In particular, he described his plan to launch Virgin America, a cut-price airline based in California. The journalists appeared to be impressed, but the publicity after the meeting barely justified the effort. In his attempt to attract attention among serious American players, he had made no further progress than his disclosure six months earlier to another group of journalists that he intended to raise £2 billion ($2.9 billion) by selling or floating Virgin Blue, Virgin Mobile, Virgin Entertainment, Virgin Atlantic, Thetrainline.com, Virgin Active, Virgin Rail and Virgin Money over the next eight years. The only objective conclusion was that Branson needed cash.

Two years later, in 2004, his finances had been restored by Virgin Mobile’s success, but progress in America had stalled. Buying into Virgin Galactic was one solution, although it did not satisfy his appetite for instant fame.

Ever since he prematurely left Stowe, a private boarding school, in 1967 aged seventeen to produce a magazine called
Student
from a London basement, Branson had sought recognition. Even as a wayward teenager, his gift was to attract talented people to join his easy ‘family’ lifestyle and develop ideas. ‘He plucks what he wants out of you,’ disclosed Eve Branson, his influential mother, about her protégé’s star quality. Unlike his friends raging against the Vietnam war, Branson was a putative trader in search of ideas that would earn him money. One friend suggested selling records, and another mentioned a recording studio. Although he knew nothing about music, Branson snapped up his pal John Varnom’s suggestion to call the new business Virgin Records. The first record which, fearing failure, he reluctantly supported was Mike Oldfield’s
Tubular
Bells.
The album’s phenomenal success made Branson a millionaire at twenty-three. Skilfully, he had retained all the rights, leaving Oldfield with a comparative pittance. Flush with money deposited in the Channel Islands, he banked on outrage to expand his business aggressively. Notoriously, he promoted himself by gambling on the Sex Pistols, an anarchic punk band, and Boy George, before expanding into property and clubs. Along the way, many erstwhile friends became outraged at his reluctance to meet their expectations of a proper reward and his readiness to use the courts to enforce his wishes. ‘You don’t have to be a complete shit to be a success,’ he said. His growing number of enemies were not convinced. They noticed that by the late 1970s, the rebellious youth had been transformed into a rebel tycoon with a mercenary attitude towards keeping the ‘family’ fortune for himself and a hardening disposition towards his partners.

That trait burst into public after he accepted a proposition in 1984 from Randolph Fields, an American lawyer, to launch Virgin Atlantic, an airline catering to the hip and the hot. To succeed, Branson campaigned against BA, characterising the airline as an old-fashioned monopoly and caricaturing Lord King, the airline’s chairman, as a blimpish toff. King had lost the bitter battle, and Branson, already famous for daredevil stunts in speedboats, was hailed as a public hero. In 1992, he became one of Britain’s richest businessmen by selling Virgin Music to EMI for a record £560 million – a sale that was directed through the Channel Islands to avoid £84 million in taxes. To his associates’ fury, he shared the windfall with only two friends, creating yet more enemies among those who felt betrayed after working for nineteen years to build up the company. To placate them, Branson pleaded that he personally had received no money, but in his subsequent autobiography he wrote: ‘For the first time in my life I had enough money to fulfil my wildest dreams.’

With his financial credibility enhanced, Branson searched frenetically for new ventures, becoming an accomplished deal-maker and a global celebrity. In America, his entrepreneurship was hailed in Congress and the White House. He boosted his fame by taking more risks in round-the-world balloon trips. His celebrity flourished until 1998, when the public became outraged by the shocking service on Virgin Trains. His famous publicity machine failed to suffocate the criticism. The halo had slipped, and some City players spoke fearfully about associating with Branson. As his businesses languished, his reputation began to slide. He needed money to survive, but his opportunities in Britain appeared to be exhausted. America was his best chance. The possibility of featuring in an American reality-TV show to promote himself would, he hoped, be the beginning of a rebirth.

For years, Branson had snapped up offers to make cameo appearances in TV series such as
Friends
and
Baywatch.
In 2004, he planned fleeting appearances in Hollywood films including
Superman
and
Casino
Royale.
The publicity excited curiosity but not the same wild excitement as Donald Trump, the then fifty-eight-year-old New York property developer, was generating on television.

Prior to 2004, Trump had played himself in eighteen different movies and sitcoms. He had featured on endless magazine front covers, authored five best-selling books – including, most recently,
Trump:
How
to
Get
Rich
–
and anointed several skyscrapers ‘Trump Towers’. In 2004, his fame was confirmed by
The
Apprentice,
America’s third most popular TV show, which revolved around the tycoon’s hunt for a nascent successor. Huge audiences awaited Trump’s trademark finale, as he mercilessly pointed his finger at that week’s loser and declared, ‘You’re fired!’ The drama transformed the programme into a cultural touchstone and confirmed Trump as an icon, with 500,000 people applying to star in his second series in 2005.

Every reality-TV hit breeds attempts to reproduce its success. During Branson’s career, his fortune had been earned and lost by copying incumbents. In seeking publicity, he did the same. The potential show was pitched by Branson to Mike Darnell, Fox TV’s zany head of alternative entertainment. Branson’s idea was a contest between aspiring tycoons vying for his job as president of the Virgin global empire. Fox, the producers of
American
Idol,
the season’s runaway success featuring Simon Cowell, believed that Trump, whose show was on a rival station, could be toppled by another vain Englishman.

Darnell and Branson had much in common. Although the four-foot-eight-inch TV producer was normally dressed as a cowboy, in torn jeans and snakeskin high-heeled boots, he was, as the
New
York
Times
told its readers, ‘always racing to one-up his rivals with over-the-top imitations and bizarre send-ups’. Darnell, a former child actor, boasted about how he hunted for ‘visceral emotions’ by producing reality shows about aliens, a beauty show in a women’s jail and a quiz featuring adopted children picking out their biological fathers from a line-up. Fortunately for him, the failures had been outweighed by the hits. Embarrassed about his initial rejection of Simon Cowell’s offer to broadcast
American
Idol,
which turned out to be such a sensation, Darnell became enamoured of Branson. Finding that ‘one extraordinary individual who has the right stuff to follow in his footsteps’, said Darnell, would grip America. The winner would receive a $1 million prize and the position of president of the Virgin empire.

Darnell handed the production to Jonathan Murray, based in Los Angeles. From the outset, Murray had no doubt that the purpose was to ‘familiarise Americans with the Virgin brand’. At his first meeting with Branson in London, Murray understood that he was to use shots of Virgin Atlantic planes whenever possible, in a programme showing ‘how Branson leads and what his
process is’. In Darnell’s description, Branson was taking ‘a select group of America’s best and brightest around the world to relive his experiences and dilemmas’. Darnell spoke of contestants being pitted against each other in a series of death-defying stunts filmed in exotic locations in ten countries on five continents. ‘Each week,’ he chortled, ‘one will be left behind.’ Originally called
Branson’s
Big
Adventure,
Darnell renamed it
The
Rebel
Billionaire,
with the subtitle
Branson’s
Quest
for
the
Best.

Twenty-five thousand applied to appear in Branson’s show, just 5 per cent of Trump’s wannabe list. The competitors would be flown around the world on Virgin planes, alongside a crew of 135 technicians, with the climax of each programme featuring video shots of the loser at the side of the runway as the plane took off with Branson inside. Unlike Trump’s competition, Branson’s contestants were not tasked with proving any business acumen. Instead, their skills were judged by having them walk a tightrope between two hot-air balloons apparently one mile in the air, dance naked in front of a crowd or go over an African waterfall in a barrel. On paper, the competition appeared visually exciting, but its success depended on the chemistry injected by Branson’s personality. During the death-defying antics, Branson was filmed sipping tea from a silver service. ‘To be honest,’ he would typically say, ‘I’m worried that Sarah may not make it.’ Branson’s expression was as flat as his words. Unlike Trump, he lacked the aggressive flamboyance to outrage the audience.

Darnell doubted that the winner would be appointed Virgin’s president for more than a brief moment. His prime interest was to crush
The
Apprentice.
Branson’s principal aim was to exploit the unlimited opportunities to promote himself. ‘If
Rebel
Billionaire
is a success,’ he told the
New
York
Times,
‘Virgin will be almost as well known in America as it is in England.’ His message to the
Los
Angeles
Times
was similar: ‘In one fell swoop we should get Virgin completely well-known in the States.’

‘The show’, praised one newspaper, ‘reflects the Virgin way of doing things.’

Branson’s intentions passed unnoticed among the American public. Few realised that his ambition went beyond self-promotion: his competitive urge was equally important. While playing the underdog to win sympathy, Branson often genuinely disliked those he challenged.

Donald Trump was described by many as an egotist decorated with a pompadour hairstyle. But despite the occasional financial crisis, his business triumphs were genuine. Branson’s image as a hippy thrill-seeker contravening conventions to help mankind disguised the same lust for profits that galvanised Trump. Although there was room for both men in the world, Branson was intolerant of co-existing with opponents. During an interview with the
New
York
Times,
he derided Trump: ‘His show is based in an office. I never spend any time in an office. And none of my businesses have ever gone bankrupt.’ That last assertion was open to question. His shops, clothing and cosmetics businesses had all withered amid debt. And his next assertion was plainly wrong: ‘We are building five spacecraft right now in the Mojave desert. They will take people into space starting in 2006. Already some 6,000 people’, he added, ‘have indicated they want to fly.’ Branson’s exaggerations were rewarded. The previews for
Rebel
Billionaire
enthusiastically favoured him. ‘Trump may already know that nothing succeeds like success but here comes Sir Richard to remind him that what goes up must come down,’ chirruped a Chicago newspaper. The honeymoon ended after the first show was broadcast. Instead of excitement, there was a yawn.

In the nature of show business, the blowback was vicious.
Rebel
Billionaire,
wrote a
Washington
Post
reviewer, joins the genre of reality shows ‘that are sillier, stupider and more ridiculous all the time’. He continued, ‘This show doesn’t just
feature hot-air balloons. It
is
a hot-air balloon. It could drift out to sea and never be missed.’ Another, parodying Branson’s description of ‘a search for excellence’, wrote, ‘Bored rich guy dangling money for the common rabble, then sitting back to watch the rats grovel, cringe, connive and betray for a bite of the cheese.’ The universally scathing reviews were matched by low audiences. Only 4.85 million Americans watched the first programme. ‘Fox executives’, reported the
Los
Angeles
Times,
‘who heavily promoted
Rebel
Billionaire
were stunned when the two-hour premiere bombed last week.’ Others reported that Branson’s show ‘flopped’, and while ‘contestants leap over a 350-foot gorge, Richard Branson continues to seem creepy’. Another wrote that the programme had ‘Nothing to do with business acumen … [it] just shows the impulse to lick the boots that kick you is not limited to dogs.’ Two weeks later, the reaction was worse. ‘The show is going over with viewers like a lead balloon,’ reported Reuters. ‘It started with dismal ratings three weeks ago and declined nearly 20 per cent in average audience.’ While Branson’s audience fell below four million, Trump was attracting sixteen million viewers.