Here's a breakdown of the philosophy Richard Branson used to start over 400 companies in the Virgin Group

Richard Branson founded his first business, Student magazine, after dropping out of high school at age 15.

He soon cofounded the Virgin record store, which then grew into a record label. After 10 years of great success, Branson left his business partners dumbfounded when he announced he wanted to branch into the airline industry.

Nearly 50 years later, Branson is the billionaire chair of the Virgin Group and has overseen approximately 500 companies, with his brand currently on somewhere between 200 and 300 of them.

It's his remarkable passion, vision, and leadership qualities that make him an "exponential entrepreneur," write serial tech entrepreneur and XPRIZE CEO Peter Diamandis and Flow Genome Project founder Steven Kotler in their new book, "Bold: How to Go Big, Create Wealth and Impact the World."

Branson sits on the XPRIZE board, and Diamandis spoke with him for the book.

Drawing from Diamandis and Kotler's insight and an interview Business Insider CEO Henry Blodget held with Branson last fall, we've broken down the key elements to Branson's philosophy that has been behind the hundreds of businesses he's either created or helped develop.

Be a "fun junkie."

"Branson says to himself, 'if I have fun doing this, I assume other people have fun doing this,' so fun has become his filter for 'should I go into it?' and it's a great filter," Kotler says.

When he first told Virgin Music CEOs that he wanted to use a third of the company's profits to start an airline because it would be "fun," they weren't amused. But Branson wasn't being cheeky or trite. He's been able to have such a successful, rich, and long career because he's been enjoying himself.

"Fun is one of the most important - and underrated - ingredients in any successful venture. If you're not having fun, then it's probably time to call it quits and try something else," he writes in his book "The Virgin Way: Everything I Know About Leadership."

Protect the downside.

"Superficially, I think it looks like entrepreneurs have a high tolerance for risk," Branson tells Diamandis in "Bold." "But, having said that, one of the most important phrases in my life is 'protect the downside.'"

Limiting possible losses before moving forward with a new business venture is a lesson his father taught him when he was 15, he writes in a LinkedIn post.

His dad would let him drop out of school to start a magazine, but only if he sold 4,000 pounds of advertising to cover printing and paper costs.

It's a strategy he repeated in 1984 when he went into the airline business with Virgin Atlantic. He was only able to convince his business partners at Virgin Records to agree to the deal after he got Boeing to agree to take back Virgin's one 747 jet after a year if the business wasn't operating as planned.

Diamandis and Kotler write that this strategy has allowed Branson to remain agile as an entrepreneur. Over the past five decades, Branson has, of course, experienced many failures, like Virgin Cola and Virgin Clothing.

But he "is quick to rapidly iterate his ideas, and quicker to shut down a failure," Diamandis and Kotler write. "In total, while Branson is known to have started some five hundred companies, he has also shut down the two hundred of them that didn't work."

Be customer-centric.

"Unless you're customer-centric, you might be able to create something wonderful, but you're not going to survive," Branson tells Diamandis. "It's about getting every little detail right."

Branson writes in "The Virgin Way" that even though it's impossible to be hands-on with all of his companies, he will occasionally play customer, experiencing a Virgin service as a consumer would. It's why he says he once called one of his company's customer service lines and disguised his voice, demanding to be put on the phone with Richard Branson - his test worked, and he was connected to his assistant, who saw through his disguise.

He tells the story for a laugh, but also to communicate the fact that regardless of whether you're running a startup or a massive conglomerate, you can't lose touch with your customer.

Branson also says he used to regularly cold call Virgin Atlantic business-class customers to ask about their experience, and he writes down observations about his own experiences as a Virgin customer, such as when he noted that he and fellow Virgin America passengers didn't want a hot towel offered to them on a scorching Las Vegas day. He took that bit to management and had the policy changed to having cold towels offered on hot days.

Delegate.

Branson may still kite-surf in his 60s, but he's not superhuman. He's constantly searching for new ways to expand the Virgin brand into "industries that are stuck or broken," as Diamandis and Kotler say, assured that the people he's surrounded himself with can make his ideas reality.

"The best bit of advice I think I can give to any manager of a company is find somebody better than yourself to do the day-to-day running," Branson tells Business Insider. "And then free yourself up to think about the bigger picture. By freeing myself up, I've been able to dream big and move Virgin forward into lots of different areas. And it's made for a fascinating life."