Richard Branson is an entrepreneur and a philanthropist. He was born in 1950 in England. He dropped out of school at the age of 16. He established a student’s magazine. He later established the Virgin Records. In 1992, the company was faced by multiple challenges resulting in its divestiture. It is then that he entered the airline industry. His first plane 747 started competing with British Airways once it was launched in 1984 (Joekes, & Evans 2010, p33). He has gone a mile ahead by investing in space speed travel. H remains a key philanthropist who has pledged $10 billion in the next ten years to curb the menace of global warming. The main goal of this study is to identify and analyses the entrepreneurial journey that Branson has gone through over the years. Successful entrepreneurs tend to have specific attributes that unsuccessful entrepreneurs often lack.
Timmons model is based on the entrepreneur. The entrepreneur is the one who searches for the opportunity. The entrepreneur risks his or her resources with the aim of gaining better returns from the venture. This implies that such entrepreneurs are risk takers. There is no guarantee that the venture would successes and hence there are high chances that the entrepreneur may end up losing the resources that he or he has invested.
Source: Landsberg (2015, p77).
The Timmon model of entrepreneurship mainly considers the opportunities, resources, and teams that are critical in making entrepreneurial pursuit a success. Entrepreneurs look for opportunities to venture in. Once they get the opportunity, they shape it to a very high potential venture. This is attained by identifying a reliable team that would assist in the pursuit of the venture and direct adequate resources towards the exploitation of the venture. As noted, the process of entrepreneurship starts with the availability of an opportunity rather than money or strategies
Once the entrepreneur establishes a team, the team is tasked with removing ambiguity and uncertainty in the application of creativity during the pursuit of the presented opportunity. It equally provides leadership in the pursuit of the opportunity. Failure to identify the right approach to resource optimization adversely affects the ability of the entrepreneur to attain the desired goals and objectives.
The team factor is an important element in The Timmons model. an effective entrepreneur should be in a position to bring talent together. A good team has the potential of resulting in great success while a weal team has the potential of resulting in failure (Lussier, & Achua 2015, p88). According to Timmons’s model, A good team has the potential of increasing chances of success while the poorly established team has the potential of wasting creativity of the entrepreneur. On the other hand, a good team has the chance of unlocking of the great potential of an entrepreneur. Successful teams engage in collaboration and information sharing. This ensures that the employees have adequate skills to address the challenges and opportunities that are facing the organization.
Critical Burn Rate
A major factor that influences the success of a factor is its burn rate. It refers to the level of spending that the entrepreneur engages in pursuit of the venture. It involves the decision on how much to spend in a product and how to use the available resources to attract high-quality employees. In order to succeed, the entrepreneur needs to have a balanced rate of spending. This involves matching the cash outflows and inflows to ensure that the organization has adequate resource to invest in the venture. It is worth noting that at the infant stage, the organization requires capital to invest in equipment and production processes (Janssen, & Van 2011, p70). As the venture expands, the organization requires even a high level of funds to establish outlets as well as to transport goods to distant location as the organization engages in the market expansion (Metro 2017), p2). This is unlike the maturity stage when the organization may not need much capital to invest as the organization starts generating a stable level of cash flows.
Startups need to effectively manage cash flows. It is worth noting that many of such startups rely on investors’ money as they are yet to establish a performance track record and credit rating to access loans. The entrepreneurs must thus ensure that they do not run out of cash. In the assessment of the entrepreneurial approach of Richard Branson, the Moore – Bygrave Model of Entrepreneurial Process is also employed. Under this model, entrepreneurial success is highly influenced by the personal elements of an entrepreneur. For instance, their commitment to achievement increases their chances of success (Sarasvathy 2001, p245). Equally, their risk-taking capability influences their ability to pursue opportunities that though risky, has the potential of generating a very high level of success (Financial Review 2017, p3). Equally, the entrepreneurs are expected to have a strong internal locus of control ensuring that they can initiate control of their actions.
Risk taking is an essential requirement for successful entrepreneurs in the current highly dynamic operating environment. Personal values also drive entrepreneurial success, for instance, entrepreneurs who take care of the interest of their significant stakeholders receive support from them (Scott, & Davis, 2015, p45). On the other hand, those who do not support such stakeholders may not receive such support, and the pursuit of opportunities may thus not be successful.
According to Moore’s model, Bygrave (2004), sociological factors also influences the success of an entrepreneur. For instance, entrepreneurs who can establish strong teams are in a position to boost their success. Such team members use their creativity and innovativeness in pursuit of the opportunities presented by the entrepreneur. Equally, the role models that the leader follows influence his success in the industry.
Their organizational skills influence the success of entrepreneurs. For instance, how well the leader manages the team controls his or her success in business. Their ability to generate strategy also determines whether they will be successful or not. The success of a company is dependent on the strategy adopted (Coomber, & Barriball 2007, p88). Through the application of strategic approaches in the operations of the organizations, such entrepreneurs are in a position to align their internal resources and capabilities with the threats and opportunities from their external environment.
Culture also influences entrepreneur success. For instance, by adopting an organizational culture that is based on sound values, the entrepreneur is in a position to enhance the collaboration of employees (Thompson 2004, p70). This is unlike in the organizations where the culture is discriminative, reducing the willingness of talented employees to join the organization.
The products that the entrepreneur provides to the consumers determine whether the venture will be successful or not. Successful entrepreneurs develop products that solve some of the problems facing society. As a result, society rewards them by paying for such products after purchase.
According to Moore’s model, Bygrave (2004), the environment in which the entrepreneur operates influences their success in the market. For instance, if there are many opportunities in the background, there are high chances the venture initiated by the entrepreneur will be successful (Beck 2014, p15). The economic performance of the context in which such organizations operates as well as the government policies influence the success of entrepreneurial businesses. Industry factors also affect performance. If the industry has a high level of competition, the chances of success of such organizations decrease (Basarab 2011, p98). Substitute products in the market may also reduce the chances of success of such ventures. Effectuation theory emphasize on strategic alliances to boost firm performance
Moore’s model, Bygrave (2004) has been the core model employed in the study although the other models have also been explored. In his pursuit of business venture, Richard Branson has emerged as a risk taker. For instance, he sold Virgin Records and ventured in Virgin Atlantic. This was in spite of the fact that he did not have enough experience that Virgin Atlantic operations required. Such an assumption of risk nevertheless exposed the organization to multiple opportunities in the airline industry
As a leader Richard Branson has emerged as a good team leader. In Virgin, the leader ensures that the employees are motivated. He often creates outside organization outings where the employees can mix in a less formal environment and interact (Timmons & Spinelli 2009, p46). This move has increased the level of motivation of such employees and increased their productivity in the organization (Clardy 2011, p45). Through teamwork, Virgin has emerged as one of the most popular airlines across the globe due to the delivery of the services by a highly motivated team.
In his entrepreneurship mission, Branson has recorded significant success through the identification of innovative ways of service delivery. As an innovator, he has been in a position to develop new solutions in the airline industry. Innovation in service delivery ensures that the organization delivers an outstanding experience to the customers and hence Virgin has been receiving repeat customers.
The leadership style of Branson has been his key source of success. He ensures that he spends time with the employees (Kotler 2013, p98). Equally, instead of remaining in the office, he visits the various areas of the organization to ensure that everything is running well. As a transformational leader, Branson has ensured that the employees in the organization equally act in line with the vision of the organization (Rahim, Abidin, Mohtar, & Ramli 2015, p199). This has led to a shared vision between the employees and the organization
Entrepreneurs are people who should be in a position to identify opportunities. Branson’s first success was recorded between 1981 and1987. His entry in the airline industry was occasioned by a mistake that occurred resulting in the canceling of his flight during a flight that he had made in Puerto Rico. As a result, he opted to charter a private jet which he not only used but which was also used by the other colleagues who were also stranded (Renko, Tarabishy, Carsrud, & Brannback 2015, p60). The challenge inspired him to develop an airline industry and profitably solve the problems that were facing people in the industry. With the increasing fascination of people by the discoveries of the space, Branson has also established a project that will focus on space tourism. It is expected that such space tours will cost people $200,000 for each trip. Branson has thus been very creative and able to identify emerging opportunities in the airline industry. The tourism industry has also been some of the fast-growing industries across the world as a result of an increased level of globalization. There are thus chances that the organization will record success.
Culture is a critical element that has driven the success of Branson. Branson believes in people and their capabilities when they are treated in the right way. As a result, he has adopted a culture that recognizes the unique needs of the employees. Equally, he has promoted equality of individuals. In modern organizations, employees are avoiding firms where they are discriminated. Forms that do not discriminate on people such as Virgin are thus recording improved performance in the industry.
In spite of the above indications, it is evident that the theory of Critical burn rate also provides some explanations on the entrepreneurial success of Branson. Startups rely on limited capital from the owners. In this case, Branson was forced to sell Virgin Records to ensure that the Virgin Atlantic had sufficient cash flows (Yilmaz, & Gormus 2012, p4490). By divesting one of the ventures and directing the proceeds to the most viable venture, Branson enhanced the success of his venture in the airline industry.
Timmons model of entrepreneurship equally provides a good explanation of the entrepreneurship approach that has been adopted by Richard Branson/. The model emphasizes the identification of opportunity. During the early years of Branson, he realized the fast growth in the importance of communication. As a result, he invested in a magazine business and received a high level of earnings inform of advertisements. Equally the model emphasizes effective management of resources. Branson used the money he got from advertisement well in the airline venture resulting in its growth. The model equally emphasizes on the importance of teams (Ruvio 2010, 150). Various post interviews from Virgin indicates that most of the employees consider the organization to be an employer of choice. Through the motivation of employees, their productivity and satisfaction with their work have been enhanced. Equally, in the airline industry effectuation explain the strategic alliance that Virgin Airways has made enhancing its success.
Analyses of the entrepreneurship journey and successes of Richard Branson have been presented in the study. It indicates that one of the key sources of success to Branson has been timely identification of opportunity. He has been able to identify opportunities in communication and airline industry throughout his career as an entrepreneur. The study equally indicates that the willingness to take risk has also contributed to his success. Risk-taking exposes entrepreneurs to opportunities that pose high risks while at the same time generating high returns. In order for people to engage in entrepreneurship effectively, the study indicates that they should be creative and innovative. Equally, people should identify opportunities and invest the resources they have in such opportunities. Forming an effective team and good organization culture equally enhances the success of entrepreneurs and organizations.
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