Richard Branson's lesson from his ‘most notable failure’ is one every underdog should hear

They say failure is the stepping stone to success. It teaches important lessons and prepares one for the battles of life. One of the biggest entrepreneurs of the world and the founder of the Virgin Group Richard Branson has also faced his share of failures. Recently, Branson spoke about one of his most notable failures, 'Virgin Cola' and the lessons it taught him on TED’s “Work Life with Adam Grant” podcast.

Thinking like an underdog

Branson owns so many businesses across industries like travel, music, telecoms, and financial services, that it is difficult for him to keep track of. His net worth is $2.6 billion, as per Forbes .

While many of his businesses succeeded, some like Virgin Cola failed as well. Talking to the host of the podcast, Branson reflected that while his company failed, it taught him “You don’t always want to be the smartass that is [always] successful."

Virgin Cola, launched in 1994, found some success in the UK. The company then expanded to the U.S. to challenge big brands like Coca-Cola and Pepsi.

Branson stood at the forefront of the launch and drove a tank through a wall of Coke and Pepsi cans at Times Square in 1998. While the launch grabbed attention, the product began disappearing from the shelves, Branson told NPR in 2017.

The product was facing stiff competition and Branson suspected that Coca-Cola was giving retailers exclusive offers to not keep Virgin Cola in their stores. Years later, Virgin Cola shuttered. However, Branson realized that it was the No.1 drink in Bangladesh. “People quite like the underdog,” he said in the podcast.

In a previous blog post from Branson, the billionaire entrepreneur expressed that his company has always thought like an underdog to avoid complacency. “We never considered Virgin to be ‘big business.’ We’ve always seen ourselves as the underdog,” he wrote in the blog as per a 2017 CNBC report.

Breaking the rules

Branson had previously reflected on Virgin Cola's failure in an interview with Forbes as well. He admitted that the company did not think things through and was confident of beating the competition.

However, they weren't prepared for the ferocity of Coca-Cola's response, Branson added. He claimed that Coke implemented a steep increase in its marketing budget to drive Virgin Cola out.

Furthermore, Branson said that Virgin Cola broke one of the fundamental rules of the group as well.  “Virgin only enters an industry when we think we can offer consumers something strikingly different that will disrupt the market, but there wasn’t really an opportunity to do that," Branson said in the interview.

He added that consumers already had a product that they liked at a price that they were happy to pay. Thus, Virgin Cola was not different enough.

Branson had expressed the same to CNBC claiming that both Virgin Cola and Coke were great brands at the time with the latter tasting marginally better. Thus, it taught Branson and Virgin another important lesson of not entering a business where their product isn't "palpably better" than the competion, Branson told the publication.