Richard Branson has been mugging and grinning, diving and rappelling, ballooning and mooning his way to extreme mogulhood for nearly 40 years. Now he wants to fly you to space.
In that time, his Virgin Group has expanded from a funky record business into a sprawling keiretsu encompassing air travel, cell phones, train travel, soft drinks, African safaris, digital downloads, and Caribbean hideaways. Branson’s own Virgin Island – no kidding – is available starting at $25,000 a day. All of which adds up to a personal fortune pegged by Forbes at $2.2 billion.
Despite such a dazzling career, the business world has always been ambivalent toward Britain’s best-known entrepreneur. He launches trendy companies the way Trump builds casinos. But a farsighted innovator like Steve Jobs or Jeff Bezos or even Southwest Airlines’ Herb Kelleher he is not. Branson traffics in opportunism. He spots a stodgy, old-line industry, rolls out the Virgin logo, sprinkles some camera-catching glitter, and poof – another moneymaker. While that formula has kept him in champagne and headlines, no Virgin business has ever changed the world.
Until now. Mojave Airport isn’t just where aging jets wait to die; it’s where the dusty dream of commercial space travel is finally coming alive. Last summer, a tiny winged wonder called SpaceShipOne spiked 62 miles into the desert sky on its way to nailing the $10 million X Prize for the first sustainable civilian suborbital flight. The world’s stuffed-shirt airline chiefs took one look and went back to worrying about fuel prices. Branson took one look at the gleaming white carbon-fiber spaceship and said, Beam me up.
The upshot is Virgin Galactic, the world’s first off-the-planet private airline. Under a deal still being negotiated with SpaceShipOne’s owners – Microsoft cofounder Paul Allen and legendary Mojave airplane designer Burt Rutan – Virgin will pay up to $21.5 million for an exclusive license to SpaceShipOne’s core design and technologies. Another $50 million will go to Rutan’s company Scaled Composites to build five tricked-out passenger spaceships. An equal amount will be invested in operations, including a posh Virgin Earth Base somewhere in the California desert. Total outlay: $121.5 million. Business plan: 50 passengers a month, paying $200,000 each. Core product: a two-hour flight to an apex beyond Earth’s atmosphere, wrapped in a three-day astronaut experience. Lift off: T-minus three years.
Of course, Virgin Galactic is a tiny bit riskier than the typical Branson venture. For starters, the first passenger-carrying Virgin spaceship – already dubbed VSS Enterprise – is still just a glow on Rutan’s computer screen. No one knows how big the market for seats into space might be. And what happens to the business model when a ship full of amateur astronauts fails to make it back to Mojave in one piece?
But look at the upside. The total price tag is half the cost of a single Airbus A340-600 – and Virgin Atlantic ordered 26 of those last summer. In return, Branson gets bragging rights to one of the cooler breakthroughs of the early 21st century, with rocket-powered marketing opportunities that could fuel excitement – and sales – in his entire 200-company holding group.
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