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<title>Does it help to be desperate? | Derek Sivers</title>
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<h1><a href="/" title="Derek Sivers">Derek Sivers</a></h1>
<div class="blogparent"><a href="/blog">Articles</a>:</div>
<h1>Does it help to be desperate?</h1>
I’d always felt it was best to never be desperate.
Confidence comes from knowing you have many options.
But reading <a href="/book/RichardBranson">the autobiography of Richard Branson</a>, the founder of <a href="https://en.wikipedia.org/wiki/Virgin_Group">Virgin</a>, it was clear <strong>his entire career was driven by a self-created desperation</strong>.
He would always sweet-talk the bank into giving him a large loan to take on an ambitious new venture.
Then he’d stay deep in debt past the final hour, always to the brink of getting repossesed, and use that do-or-die desperation to take an even more ambitious gamble, somehow coming out ahead.
Just enough to pay off the loan, then do it again with something even more ambitious.
Here are some examples:
When he was only 21, running “Virgin Records and Tapes”, his little record shop in Notting Hill, he thought what rock stars needed was a big, comfortable house in the country where a band could come and stay for weeks at a time and record whenever they felt like it.
So he drove around the countryside, looking at ads, found 15-bedroom manor that had been on the market a long time, and was able to make a great deal for £30k.
He had no money himself, but borrowed a little from his family, then showed the bank his business receipts and got a loan.
He turned it into a <a href="https://en.wikipedia.org/wiki/The_Manor_Studio">successful recording studio</a>.
Virgin had <a href="https://en.wikipedia.org/wiki/Tubular_Bells">a hit record</a>, and though its success was enough to pay off past debts, he didn’t have much profit left for himself.
When he was 28, he took a vacation and fell in love with this <a href="https://en.wikipedia.org/wiki/Necker_Island_(British_Virgin_Islands)">island</a> that was for sale for £5 million.
Through negotiation and luck, he was able to buy it for £180k, but the government required that he turn it into a resort within 5 years, (at a cost of about $10 million), or the ownership would revert back to the government.
He said, “I was determined to make the money to be able to afford it,” and for the next few years, he was always pushing down to the wire to come up with the money to do so.
During that time, Virgin Records hadn’t had a hit record in years, and was broke.
His business partner said they had no option but to cut costs and drop artists. Richard says, “I have always believed that the only way to cope with a cash crisis is not to contract but to try to expand out of it.”
So he decided to go deeper into debt, borrowed $1 million, signed Phil Collins, Human League, and bought two night clubs.
All were successful and made Virgin profitable again.
Only two years later, he started an <a href="http://www.virgin-atlantic.com/">airline</a>, against everyone’s warnings, which was so deeply in debt for so many years that it almost destroyed his other companies.
He ended up having to sell Virgin Records to keep the airline from going under.
But again: this sense of danger, desperation, and deep debt fueled his next ten years of ambitious expansion.
So here I am reading this, impressed but confused.
I avoid debt.
I save most of my income, and never spend more than I earn.
Because of this, I’m comfortable.
Is this the wrong approach?
Could it actually help to be desperate?
Could that drive us to new heights, out of necessity?
On the other hand, haven’t we all seen smart people do dumb things when desperate, like signing bad deals or stealing?
So what’s the difference?
I don’t know the answer.
Do you have any ideas?
I’ll gather some ideas from the comments and share the collective answer to this <a href="/desperate2">tomorrow</a>.
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© 2009 <a href="https://sive.rs/">Derek Sivers</a>.
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