LAS VEGAS — Earvin “Magic” Johnson Jr., a basketball superstar—now retired—has morphed into a successful businessman, thanks to hard work and determination.
“Basketball was a tremendous platform for me to start my brand, to understand winning, and be a competitor,” says Earvin “Magic” Johnson Jr., CEO of Magic Johnson Enterprises. PHOTO BY MELBA BERNAD
Speaking at Oracle NetSuite’s SuiteWorld 2018 in Las Vegas, Johnson attributes much of his success to a willingness to work hard.
“Basketball was a tremendous platform for me to start my brand, to understand winning, and be a competitor,” he told thousands of spellbound delegates.
After retiring from the National Basketball Association in 1991, Johnson says he needed to start his own business but lacked the knowledge. The key, he said, was getting mentors.
“I cold-called 20 CEOs and asked them to lunch, and I was able to pick their brains. I knew from basketball that preparation was key; I’m focused and I’m driven and I’m one of the most disciplined people you will ever meet. So when I was picking their brains to start a business, I discovered self-evaluation is key.”
Johnson says that he started off by leveraging on the spending power of African Americans who spend a trillion dollars a year. His first venture, after putting up Magic Johnson Enterprises, was investing in movie theaters. “Our first movie theater ended up topping revenue for its opening weekend and was one of the highest grossing in the business.”
Be open to change your business
Next CEO Johnson entered into a 10-year deal to deliver Starbucks stores across the U.S., particularly urban centers where African Americans lived.
“They said, no way will minorities pay $3 for a cup of coffee! I thought they were wrong, but we had to do things a little differently. We don’t know what scones are, so I had to take scones out of my Starbucks and replace them with pumpkin pies and peach cobblers. And I got rid of the Andrea Boccelli from the playlist and in my Starbucks you hear Earth, Wind and Fire. Why? Because you have to know your customer, and you have to over-deliver to your customers. My customers didn’t want classical music and scones!”
In just six years, Johnson built 125 Starbucks stores. “We were making so much money and we had already fulfilled and exceeded our contract, so they came to me and said, you’ve already exceeded the deal, you could sell – so what do you think I did? I sold!” says Johnson, who used to own the Lakers at the same time. He sold that, too, and bought the Dodgers for over $2 billion dollars.
“They said we were crazy. But what they didn’t know was that a TV deal was coming up, which was $9 billion and the 300 acres of land the Dodgers own is worth $3 billion, so the land alone was worth more.”
But the Dodgers were struggling at that time. “We had to find out what was wrong. We changed the fan experience. We put money into the stadium and now we’re number one in attendance.”
Cracking the millennial market
When it came to raising the attendance at Dodgers games, it wasn’t only about understanding customers.
“The one thing you’ve got to realize is that the customer now is a different customer to before,” says Johnson. “They want it now, they want it fast and if they don’t get what they want they’re going to somebody else. Well, we found out that the millennials that come to the games don’t actually come for the game.
“They want the experience of meeting their friends and hanging out. The game is secondary. So we built a pavilion so they can just stand and socialize. And guess what? They buy an incredible amount of drinks while they’re at it. We’ve got that revenue coming in like crazy from these young people.
“Know your customer and over-deliver to get the retention you’re looking for. The secret sauce for me is to see what is wanted – what is missing – and deliver it.”
Johnson also acquired a Disney Land contract. “You haven’t made it big if you don’t have a Disney contract.”
Maintaining resilience despite challenges
Despite the successes of his business ventures, Johnson said he also ran into some stumbling blocks, but he maintained his resilience.
“When I first started out in business they held me being a basketball player against me. I was funding everything with my own money,” Johnson explains. “I thought, how am I going to get the growth and sustainability? And I spoke to one of my mentors and she said, you’re doing it wrong – you need to use other people’s money.
“Well, 10 banks turned me down – I had a track record of success with the movie theaters, the Starbucks, but they turned me down. They turned me down five years in a row, then the sixth year, they said yes.”
Hire smart people
Employees are also key to a business, says Johnson.
“I keep a lot of young people around me, because my old way of thinking sometimes gets in the way of success. I had to be open to listen to the young people who work for me. Hire people that are smarter than you.”
Learning from your mistakes is also crucial. “Everything I do I want to win. I want to win for me, for my partners, and for my community. But if I mess up, there’s two things: learn and change,” Johnson says.
The basketball legend then concludes with another important tip: “When someone doesn’t believe in you or your business you have to keep going. If I felt sorry for myself, I wouldn’t be here.”
