Magic Johnson Taught This Amazing Business Technique to Starbucks CEO Howard Schultz and Its Results Will Astound You
Former NBA star Magic Johnson has surely come a long way from his life as a sportsman. Nowadays, he’s playing a different kind of sport, building and developing businesses.
It all started when the then Los Angeles Lakers player moved on from his basketball career, picked up the phone and began calling 20 businessmen he desperately wanted to meet. One of these people happened to be Howard Schultz, Starbucks CEO, and this is how their meeting played out.
POCs and Coffee
During a meeting, Johnson told Schultz about a market segment that the coffee giant hasn’t been paying much attention to initially. The then-business newbie proved his acumen by pointing Schultz to the African-American and Latino markets who, Johnson told the CEO, also like drinking coffee.
He then convinced the Starbucks head to go on a 50-50 deal with him in developing new urban Starbucks locations in under-served neighborhoods. But before setting their plan in motion, Johnson made a few suggestions first.
According to the 59-year-old businessman, he tweaked his Starbucks branches replacing menu items like scones with sweet potato pies and changing the music to appeal more to the tastes of other people as well. Sounds simple, right?
But it worked well. In fact, Johnson ended up having 105 Starbucks locations which lead to the company buying half of his business after their 12-year partnership. Along with Johnson’s sale of his 4.5% stake in the LA Lakers, he reportedly made $100 million from the two deals.
The Importance of Demographics
Getting more confident with his skills, Johnson then brought on his former insights into other business segments like technology and infrastructure.
And at the recent Upfront Summit, he warned Silicon Valley investors about keeping up with the now-changing demographics in the country unless they want to miss out on the same opportunities that he’s noted in the past years.
However, he also clarified that it isn’t all about just finding businesses with minority groups in mind. What’s more important is realizing how a shift in power also results in the changing demographics. As Johnson observed, minorities like him, who used to play for teams, can now own their own teams and make bigger money.
Another important lesson that Johnson learned early on in his business career came from Michael Ovitz, a top Hollywood talent agent who’s also one of the 20 people he called. The agent said one thing to him that he’s remembered until today: ‘surround yourself with the best’.
After that, Johnson began looking for the best accountant, lawyer and manager to help him achieve his goals. He started by going into the bottling plant business and then building his shopping and movie theater from there.
And it all paid off in the end. Johnson now has an estimated $500 million in his name making him one of the most successful African American businessmen today.
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