Breakfast with Sir Richard Branson
Anywhere in the Caribbean is beautiful in December. But there’s something special about Jamaica as Christmas approaches. The air from the mountains sweeps down to the sea and brings a cooling wind known as the Christmas breeze. And since the island has just emerged from the rainy season, there is a lushness not seen at other times of year.
I always try to spend as much of the month here as I can. Apparently, Richard Branson feels the same way. En route to Necker, he stopped by for breakfast one recent morning, and I happily made the drive from Kingston to Montego Bay to meet him.
He’s clever, no doubt; one of those folks who was probably just born with a knack for business. The regular bloke image doesn’t seem contrived. If anything, in person, he is even more unassuming than the image he cultivates for his brand.
On a terrace overlooking the sea, we drank Blue Mountain coffee and talked of the global crisis. The conversation ranged over many issues, but one strand seemed to weave itself through each branch of the conversation: the challenges of entrepreneurship in difficult times.
I reckon he’s earned the right to opine on that topic. He started what would become his Virgin empire in the 1970s. A government then that had tried something like a “Cool Britannia” campaign would have been laughed out of the international hall. Britain was decaying, everyone knew it, and the real question was whether she would turn in on herself in doing it.
In short: not the time to launch a business based on cool. But the secret of his success – and it’s not really much of a secret – is that he can spot the opportunity in a decline. When it comes to recessions, Richard Branson departs from the script; he sees good times ahead. As businesses fold, assets become cheap. Dynamic new firms then have a chance to expand their operations.
It’s not a vision for everyone, of course. For the dynamic firms feast on the corpses of the less competitive ones, a re-generation the economist Joseph Schumpeter called ‘creative destruction‘. The result is an economy in which the strong survive, but the weak are left to – well, not everyone gets to have his own island in the Caribbean.
So it’s hardly surprising that Mr. Branson has little time for bailouts. He judged that if a financial sector is healthy, the rest of the economy can adjust to difficult times. Thus, he said, governments did the right thing in bailing out the banks: no matter how odious their behaviour had been during the boom days, it would be cutting off one’s nose to spite one’s face to let them collapse during this bust they helped create.
Nonetheless, when it came to, say, car-makers or airlines, he felt that consumers would suffer if the government kept running to the rescue.
Those who cannot hack the heat should leave the entrepreneurial kitchen. That was the gist of his message. The government should use its scarce resources to protect the weakest people in its society, but not the weakest businesses.
What is the best way to look after the weakest people? In part, at least, by allowing a competitive market to determine who prospers in business, and who doesn’t. For all the difficulties of the moment, Richard Branson remains convinced that when the most dynamic firms can thrive, the most people will end up with jobs.
His faith, and optimism, is unshaken. Capitalism is going through a rough spell, he said. But he insisted it has worked for a thousand years, and should be allowed to work for a thousand more.