Foreign Sir Richard Branson is one of the most high profile billionaires in the world known for his adventurous Spirit innovative ideas and successful business ventures. He's built an Empire with multiple successful companies under the umbrella of the Virgin group, including the highly successful Airline Virgin Atlantic as well as dozens of other companies sporting the Virgin brand, focusing on a broad range of industries from hotels to telecommunications. In fact, Branson's achievements were so great that in 1999, the Queen of England formally awarded him Knighthood in honor of his services to entrepreneurship. Despite his impressive track record as an entrepreneur, Branson's three most recent Ventures Virgin Galactic Virgin Orbit and Virgin Hyperloop have been complete disasters and threatened to bankrupt his entire.

Empire Virgin Galactic is a space tourism company that aims to offer 90-minute space flights for 450 000. The company initially had a lot of hype after it went public by merging with one of Jamath Palahapatia's facts. However, today, the company has never flown a single-paying customer into space and it is burning cash at a rate of almost 2 million dollars per day. Virgin Galactic isn't Branson's only space related company.

He also founded Virgin Orbit, which plans to launch small satellites into space by attaching a rocket to a Boeing 747 airplane. Virgin Orbit also went public via a SPAC and the results have been even more disastrous than Virgin Galactic In March of this year, the company was forced to temporarily lay off almost its entire staff as it ran out of cash to make payroll. As of the time of recording this video version, Orbit is in talks to secure 200 million dollars of emergency funding to avoid bankruptcy, but even if this deal goes through, it will likely be just delaying the inevitable. In 2017, the Virgin Group made a Strategic investment in the Hyperloop One, a California-based startup which hopes to transport passengers at high speeds and vacuum sealed tubes.

After the investment, the company was renamed Virgin Hyperloop and Branson became the Chairman, putting it firmly within the Virgin Empire. Despite spending hundreds of thousands of dollars on CGI renderings and other marketing materials, Virgin Hyperloop failed to live up to the hype and thus far has amounted to little more than a cash incinerator. In 2022, they were forced to lay off half of their staff and abandon their previous plans to build a mass transit system. This is coming at a time when the established companies of the Virgin Group are under severe pressure with the airline.

Virgin Atlantic losing almost half a billion pounds in 2021 and is expected to report another loss in 2022. Over the past three years, Branson has poured in hundreds of millions of pounds of its own money to keep the air line of flow. He funded these cash injections in part by selling his shares in Virgin Galactic but now that his space company's share prices are crashing, this may no longer be a viable option. For the past three decades, Branson appeared to have the Midas touch: amassing a multi-billion dollar Fortune by building disruptive companies.

but now his business Empire looks to be teetering on thin ice in this video. We'll look at how Richard Branson built the multi-billion dollar Virgin Group and how it all could come crumbling down. foreign up in London Richard Branson Started his career at the young age of 15 when he started a magazine called The Student, where he wrote about pop culture and criticized the Vietnam War The magazine grew in popularity among young readers and soon grew to circulation of over one hundred thousand. He monetized the magazine by placing ads for mail-order music records, which sold at significant discounts to prices at Brick and Mortar record stores.

After having some initial success with the mail order record business, he started his own physical record store and eventually turned it into his own record label called Virgin Records Virgin Records Was Extremely successful as they signed on the Sex Pistols and other punk rock bands who went on to sell millions of albums in 1984. Branson invested his record label profits to lease a Boeing 747 and created Virgin Atlantic an airline that primarily flew Transatlantic flights between the US and UK Branson Differentiated Virgin Atlantic by focusing heavily on the consumer experience. In his view, an airplane ride is more than just the method to get you from point A to point B It should also be an experience that you enjoy in and of itself. Virgin Atlantic was one of the first airlines to provide retractable seats that could turn into beds in its first class cabin.

They were also the first airline to offer on-screen entertainment to all passengers. Their focused on the customer experience paid off big time with the airline taking significant market share. Throughout the 1980s and 90s, one of the airlines they are taking market share from was British Airways the dominant airline in the UK at the time. British Airways Executives were Furious about this new airline that came out of nowhere and was taking their business.

British Airways Hired a team of hackers to hack into Virgin Atlantic's computer system and get the names and phone numbers of Virgin Atlantic customers. Whenever a Virgin Atlantic flight was delayed, British Airways would call them and erroneously claim that the flight had been canceled. They would then offer to book them on a British Airways flight. This strategy was highly effective.

British Airways had already bankrupted another rifle called Dan Air using similar tactics, but in this case the phone calling wasn't enough. They needed to be absolutely sure they could crush Virgin Atlantic So they planted false stories in newspapers claiming that Virgin Atlantic was on the brink of bankruptcy. even going so far as to say that they couldn't pay their fuel suppliers. Nobody would want to buy a ticket from an airline that could go bankrupt before the flight departs.

Branson Eventually found out about this and filed a lawsuit against British Airways eventually winning A 1 million dollar settlement, the whole Affair ended up backfiring on British Airways as their reputation was severely diminished, which set up Virgin Atlantic to take away even more market share from them. Branson reinvested the profits from Virgin Atlantic to fund a whole host of businesses that would collectively be known as the Virgin group. This included the gym chain Virgin Active, the cell phone carrier Virgin Mobile the casino operator Virgin Games, and a wine company called Virgin Wines just to name a few. He also started Virgin Balloon Flights, which offers rides on hot air balloons.

While some of the ventures failed, some of them were big successes. For example, in 2013 Virgin Media the holding company for the cell phone carrier Virgin Mobile and other assets was sold for 15 billion pounds which was equivalent to 23 billion dollars at the time. Branson became a billionaire and purchased the 30 hectare private island in the Caribbean By the 2010s, Branson had become one of the richest and highest profile businessmen in the world. Foreign group's companies were Innovative in how they approached customer service and marketing they were not Innovative and so far as developing new technologies.

But this all changed in 2004 when Branson founded Virgin Galactic a space tourism company that promised to take paying customers into space. Branson initially claimed that he would start flying people up to space by 2007 just three years after founding the company. But of course, making spaceships isn't easy. it's literally rocket science.

Over the years, the company has had numerous problems and delays, including a fatal crash in 2014 when a test pilot tragically lost his life in 2018. More than 10 years after the initial Target, they made their first successful space flight. This successful flight set them up well to go public via one of Chamath Palahapatio specs in 2019 at a 3.7 billion dollar valuation. In their SPAC presentation, they said they expected their first commercial launch in either the first or second quarter of 2020..

as of the time of recording this video, three years later, Virgin Galactic still is not flown single. Paying customer into space. Virgin Galactic's aircraft can in fact fly Branson himself went on a test flight in 2021. However, there's a big difference between having the technical capability to fly into space once versus being able to get regulatory approval to start flying large numbers of commercial passengers in 2021.

Richard Branson became the target of a class action shareholder lawsuit accusing Virgin Galactic of deliberately sending faulty Rockets into space and misleading investors about this. According to the lawsuit, cracks appeared on their spaceship's wings after every flight and some were not fixed. so much so that Virgin Galactic employs that the wings look like spider webs or cracked eggshells. This is especially concerning given that somebody's already died on a Virgin Galactic spacecraft in 2023.

Virgin Galactic is now 15 years late in its goal to launch a commercial space tourism service and the company is burning cash at a rate of almost 2 million dollars per day. They are now engaged in Desperate Race Against Time to get regulatory approval before they go bankrupt. Also, even if they do get approval, all it takes is one mass casualty event to destroy the public perception of space tourism. foreign.

Galactic isn't the only high-tech company that Branson has invested in. In 2017, he invested in the California-based transportation startup Hyperloop One, became the Chairman and renamed it to Virgin Hyperloop. A hyperloop is a vacuum sealed tube which allows a transportation pod to travel at very high speeds due to the lack of friction. The idea is scientifically sound, and a hyperloop pod can achieve far faster speeds than an automobile or even a maglev train version.

Hyperloop and Vision Building hyperloop stations around the world, which could give commuters a low-cost alternative to air travel with a tiny fraction of the carbon footprint. However, there's a difference between scientific possibility and economic viability. The earth's surface is not flat. There are Hills valleys and all types of other natural and man-made obstacles.

If you build a hyperloop system around the obstacles, the transportation pod would have to slow down significantly every time it takes a turn, which would defeat its whole purpose. The alternative is to make a raised platform that could go above any obstacles on the ground. The problem is this would cost billions of dollars and air travel would be cheaper. Basically, the entire idea was doomed to fail from the beginning, even though the technology itself is sound.

In 2022, Hyperloop announced I'd be laying off roughly half of its staff and abandoning its plans for passenger transport. Now, they're developing a hyperloop system to transport cargo from ports to distribution warehouses at high speeds. Once you account for the enormous Capital costs of setting up such a system, it will be more expensive than transporting goods via semi-truck and only viable for cargos needing expedited delivery. Also, by 2020, Virgin Hyperloop have burned all the cash that Branson put into it, so they had to sell a majority stake to a Dubai based company called DP World.

This significantly diluted Branson's stake and he is now just a minority shareholder. While Hyperloop's new cargo strategy might work out, it's a far cry from the Revolutionary new passenger transit system that Branson envisioned foreign. Virgin Orbit is a space launch company that aims to send small satellites into low earth orbit. Instead of launching the rocket vertically from the ground, they use a modified 747 airplane to take the launcher into the air.

The 747 drops the launcher, which then Rockets up to low earth orbit. The air launch method has significant cost advantages as the rocket effectively gets a head start and thus requires far less energy than a traditional ground launch system. Similar to Virgin Galactic Virgin Orbit also went public by merging with a Spag, but there were a few reasons to be more optimistic about Virgin Orbit's prospects. By the time they went public, they had already done two successful launches, so their technology was proven.

Also, Virgin Orbit does not send people into space, thus the regulatory burden, insofar as safety is concerned, is far less. Their first two successful launches took place in California, which is where the launcher was developed, but the UK government wanted to develop their own space industry, so they gave Virgin Orbit 7.35 million pounds in subsidies to do their next launch in Cornwall England. Besides the lower cost compared to ground launch, another one of Virgin Orbit's main selling points was that it can be launched anywhere with a normal Runway by doing the next launch in Cornwall. Not only do they receive the government subsidies, but they also proved to the world that they can launch satellites from anywhere, not just California.

The launch from Cornwall was scheduled for January of 2023.. once the rocket launched, there was an ERA with the fuel filter causing the rocket to fail, destroying the rocket itself. plus the nine satellites it was carrying. One of the satellites was owned by a startup called Horizon Technologies Horizon Spent four million dollars building this satellite and the loss could bankrupt the company.

This was a complete disaster for Virgin Orbit. As a result of this failure, other customers will be hesitant to launch their Satellites with the company because the loss of a satellite can be found financially catastrophic. All the while, Virgin Orbit was burned in cash and didn't have any time to spare. In March of 2023, they paused operations and furloughed almost their entire staff.

As of the time of recording this video, Virgin Orbits reportedly intoxic cell majority Equity stake to an outside investor for 200 million dollars. If the steel goes through, the company may live to fight another day, but Branson's stake in the company will be greatly diluted and with the stock having lost more than 90 percent of its value since going public, this Venture clearly falls into the failure category. Richard Branson built a vast business Empire With Virgin group finding great success in Virgin Records Virgin Atlantic and Virgin Media his clever Innovations and customer experience and marketing campaigns brought him remarkable wealth and acclaim. However, as his wealth and ambition grew, it seems that Branson may have been captivated by Elon Musk extraordinary rise to fame, particularly with a groundbreaking accomplishments of SpaceX Eager to secure his place in the evolving world of private space exploration, Branson founded Virgin Galactic in Virgin Orbit.

the Allure of being remembered as a Pioneer in space tourism rather than just a successful Airline and Telecommunications entrepreneur was undoubtedly enticing. In addition, most the original idea of the hyperloop introduced in 2013 seemed to further ignite Branson's competitive Spirit prompting him to invest In Virgin Hyperloop. Yet it appears that Branson's quest to rival Musk's technological Feats and media attention may have led to his Downfall With no prior expertise in these fields, Branson's space Ventures and hyperloop investment have ultimately resulted in disaster. This serves as a cautionary tale about the potential Perils of chasing someone else's dreams rather than focusing on one's own strengths and areas of expertise.

Alright guys, that wraps it up for this video. What do you think about Richard Branson Do you think either of the space companies will ever turn a profit? Let us know in the comments section below. As always, thank you so much for watching and we'll see you in the next one! Wall Street Millennial Signing out.