E-mail a friendEarvin "Magic" Johnson
airdate November 17, 2008
After singularly changing the way basketball is played, Johnson's magic is now focused on the business world. As chair-CEO of Magic Johnson Enterprises, he has partnered with major brands like Starbucks, 24 Hour Fitness and AMC to lead a major economic push in ethnically diverse communities. Through his foundation—one of the most recognizable charities in the world—he's a strong supporter of the United Negro College Fund and HIV education. Johnson is also VP and part owner of the Los Angeles Lakers.
Businessman and former Laker describes the difference between the high of closing a great business deal and being successful on the basketball court. (3:22)
Full interview. (24:01)
Earvin "Magic" Johnson
Tavis: Got a great week this week, and when I say great, you can't kick off any better than this - bam, there he is - the magic man, Earvin "Magic" Johnson, basketball great, of course - five championships with the L.A. Lakers. After retiring from the game, he's become one of the most successful entrepreneurs and businessmen in the country.
He's finally got a book out about his success, called "32 Ways to be a Champion in Business." Earv, nice to see you.
Earvin "Magic" Johnson: Good to see you, Tavis, thanks for having me.
Tavis: Glad to have you on, man. And you'd better be glad I don't wear - I was teasing, man. You can't really see this, Jonathan, but these shoes he has on are so cold. (Laughter)
Johnson: Well, anything you want from me, you can have.
Tavis: Man. But I can't wear them, though.
Johnson: I know, I'm a 15, baby.
Tavis: Yeah, your feet are too big, I can't wear them. But I got the book, though.
Johnson: Oh, yes.
Tavis: Can I have this?
Johnson: Yes, you can have that.
Tavis: I appreciate that. (Laughter) When I first saw the book, the first thing that got my attention was - and I know why you did this, but on the cover - put the cover back up, Jonathan, for me - "Earvin "Magic" Johnson, Entrepreneur and Community Leader" is what that that subtitle says. Nothing anywhere on the book - if you didn't know that Magic Johnson were a basketball great, this book wouldn't tell you, or the cover wouldn't. You deliberately left that off.
Johnson: Oh, yeah. I moved on past basketball. I enjoy being a businessman and doing the things that I'm doing in urban America, putting people to work and trying to bring pride to our community as well as make the dollar travel more than three hands. And the way you do that is putting people to work, and also drive up the property value all at the same time.
Tavis: How did this - and the book tells the story, you can take me all the way back to your childhood with your dad - how did this happen for you? And I say for you because there are so many athletes who could do what Magic is doing, and this is going to sound strange to say to some people who don't have a lot of money, with all the money that you made when you played, even you didn't make the money that these cats are making nowadays.
Johnson: You got that right. (Laughter)
Tavis: You a long way from broke, man, but the money they're making now is more than what you made. But you found a way to take that money and turn it into -
Johnson: Yes. Well, I started off at $400,000; I tapped out at three. Now guys make an average of five. Just coming in as a rookie you make almost $5 million. But what I wanted to do, I've always wanted to be a businessman as well as a basketball player, and so my dream started when I was 15 and 16 being both an NBA player as well as a businessman.
And what I did was I took the money that I made and I started investing it, and I got into business very early. But what I found out, Tavis, you have to have mentors. You have to have people who have been doing it and go seek their advice, and I was able to get with different people. Earl Graves helped me, Bruce Llewellyn helped me, Michael Ovitz helped me, Dr. Buss, who owns the Lakers, helped me.
So these became my mentors, and guys who were able to shape and mold me in terms of my business thinking. And then I said, "Where am I going to invest my money?" I said, "I've got to go back where I grew up, in urban America," because at that time, there was no quality retailers in our community. And that's how I got really started with the Magic Johnson Theaters.
Well, at first I did a radio station, a long time ago in Denver, Colorado - outside of Denver - and then just took it from there. I went and I decided I'm going to bring everything that's missing in our community and bring it to our community.
Tavis: So here's a question - if the White man and the White men who you were consulting, if they had decided that this was not a good investment, and obviously a lot of White folk had decided that they weren't going to invest in the inner city at that time -
Johnson: And corporations as well.
Tavis: And corporations, exactly - same thing, White men.
Johnson: Yeah. (Laughter)
Tavis: I mean, I love them all - I work for one of them - but it's cool.
Johnson: Exactly, exactly.
Tavis: The point is if so many people had decided that it wasn't the place to invest, why did you think, then, that you could do good and do well at the same time?
Johnson: Well, let's look at the numbers. This is very easy. Right now, the minority community is growing seven times that of the general population. Our spending power in the next couple of years will be over $2 trillion. That's a lot of disposable income just sitting there.
When I did my research, we were the number one group of people at that time who went to the movies, because we're priced out of the Laker games, the Dodger games, and so on. And so our form of entertainment usually is going to hear somebody perform - a singer or something - or going to the movies.
And so we were going, but we were driving 45 minutes outside our community. So now what I said, man, if they make up over 35 percent of all the moviegoers, why don't I put it right into our community? And so it was just a great thing, and sure enough we hit a home run right here in South Central L.A., the first Magic Johnson Theater.
And then from there, because the theaters were successful, I went up to Seattle and approached Howard Schultz about bringing his great brand of Starbucks to our community. We were already driving 30 minutes to go get a great cup of coffee from Starbucks, so it makes business sense for Howard to bring Starbucks to the urban community because he already had that customer base.
And sure enough, here we are at 119, and my per caps are better than his per caps. They do 462 a person, I do 468 a person. So we're making money, we're doing great, and when most people said, "No way that Starbucks is going to be successful in urban America," and no, we fooled them all. And only thing is, Tavis, we just don't eat scones. We don't know what scones are. (Laughter)
Tavis: I know I don't. I'll drink some coffee every now and then, but scone - I'm (unintelligible) scone. Persons outside of our community may have never heard this, but certainly African Americans have heard this a thousand times over the years - that the White man's ice is colder - the White man's ice is colder. There are a lot of Black folk down through the years who've made the argument that even when Black people step up, as Magic Johnson did and does, and try to do something for them, that we prefer driving 30 minutes because we think that his ice is colder.
We think that whatever the White man has is better than what the brother's offering. So here you come with this vision, what made you think that they would come to the Magic Johnson Theater rather than going to the other side of town?
Johnson: Well, you made a good point. Why? Because I know the customer base and I address their needs. First of all, I put in spicier hot dogs and sausages; I put hot sauce at our concession stand -
Tavis: Ah, that's the answer, hot sauce. (Laughs)
Johnson: I brought the flavors, drinks, so your grape and red, yeah. (Laughter) Red's a flavor, I love it, yeah, yeah.
Johnson: Exactly. I put peppers down there, if they want to enjoy a pepper. So I brought the things that we like and our customer base enjoyed it. And the same thing with Starbucks - I took out the elevator music; I put in R&B. We had the desserts; we put in pound cake, sock-it-to-me cake, things that resonate with my customer base.
I'm going to bring first-class service; I'm going to bring a first-rate building. Because a lot of times, what happens, the building was bad and the service was bad, so they didn't want to come in. So I said, "Uh-uh, I'm going to give you the first-class everything, and I'm going to change that mindset that was going on for many, many years," and we were able to do that.
Tavis: Talk to me specifically about this issue of service. I've argued many times over the years that because people of color - it's not just Black folk; people of color - have to work so much harder for the dollar that they get as compared to the majority community that if you're going to give anybody wonderful service, it ought to be the person who had to work harder.
If I decide I'm going to give my dollar to Magic Johnson, you really ought to give me some good service because you know, since you know your customer, how hard I had to work as a Black man to get that dollar. And yet there are so many people of color who think that the service in our institutions just isn't up to par. What do you say to your employees about how important service is?
Johnson: Oh, I teach them all the time the most important part of business is service. If you don't give that customer a great store experience, restaurant experience, whatever it is, then they're going to go and tell a hundred people how bad it was.
If you go and give them a great experience, they're going to tell two hundred people that "Man, you got to go to Magic Johnson Theaters, you got to go to Magic Starbucks" or whatever it is. And so they're going to go to church and tell people, and they'll spread the word.
Now, I understand how hard people work, especially minorities, especially Black folks, because I work hard, my dad showed me hard work. So I preach to my people you got to be unselfish, because it takes an unselfish person to give a person their best when they come into your store or restaurant.
And so if we can do that, then we're going to be able to have retention. People will keep coming back, coming back, and sure enough, I wanted to make my restaurants and my Starbucks the place to be, and that's what we have created. People now know from out of town, they know if they come to L.A., they go to New York, I want to go Magic's theaters, I want to go to his restaurant, I want to go to his Starbucks, because that's where everybody is.
And so we created that by having good customer service, by having the things in there that they want, and by having a nice, clean area for them to lounge and hang out at.
Tavis: I ain't mad at you, but you put your - you're like Donald Trump, your name is on everything. Everything Magic does, your name is on it. What made you think that that name would have marquee value, that it would have cache outside of the town where we sit now, where you won five championships? What made you think it was going to work in New York and Houston?
Johnson: I had to build a brand, and I had to build the trust of the people. Now, a lot of the retailers didn't have that, but I felt Magic did. So that's why I put my name on it, to let minorities know it's mine, and when you come in I'm going to give you everything that you want, but you've got to give me everything that I want, too, which is take care of the place. That's the only thing I want.
Come in, have a good time. You know Magic Johnson stands for quality, great customer services, I'm going to take care of you, and I want you to take care of the building and the place. That's it - it's quite simple. Just building a brand. That brand has loyalty around the country, so now I'm in 22 states, 91 cities, and so people know about the brand, and so we were able to elevate that brand around the country.
Did I know that it would work like this, Tavis? No, I could never tell you - I'd be lying to you if I thought that I would be able to say in Brooklyn and in Harlem I would be successful as I am in L.A. But I thought if I brought them quality service and I brought them the best of the best to them, to the people of Harlem, they have - that they would respond, and they have responded.
Tavis: Compare for me, if you can - here's a silly question - compare for me if you can the high that you get from pulling off a business deal versus the high you get off of winning a championship.
Johnson: Well, different highs. (Laughter)
Tavis: Yeah, you explain this one, yeah. Explain this, yeah.
Johnson: It's nothing like killing somebody on that basketball court - let's make no mistake about that.
Tavis: Got you, got you, got you.
Johnson: It's nothing like coming -
Tavis: And I assume you can't do a no-look in a boardroom.
Johnson: Oh, no, no, no. (Laughter) And the good thing, Tavis, is that I got a chance to control what happened on that basketball court. I can do everything right - I could say the right things, the deal was almost done, everything has gone perfect, and then the last minute, he could say, "I changed my mind." "What, what?" (Laughter) Now I'm ready to, like, go crazy, right?
Tavis: Worthy (sp) wouldn't do that to you.
Johnson: No, not Worthy. Here, and he going to take care of it.
Tavis: Exactly.
Johnson: So in business, I had to learn patience, I had to almost go back to school, in a sense. Because see, when I had that ball, I knew I was going to make something happen. I knew what Kareem was going to do; I knew what James, Byron, Coop, Kurt - on and on - AC. But in business, it's harder because first of all, they didn't respect me.
They thought I was a dumb jock, so I had to earn their respect by showing them that I can work hard, I am smart - I'm smarter than just a basketball player. And so it took me a while, really - it took me, probably, I think my first 10 years just proving myself. And then it took me a while to get financed, because a lot of people said, "Oh, we want the autograph; we love you, but how you going to make me money? Where's my return on the investment?" And they didn't think I could do it.
And when I went to CalPERS, they turned me down the first time, and then they had me come back and they took a chance. They said, "Okay, I'm going to give you $50 million." And this is a key for everybody out there listening to this, especially those who want to be in business.
I took that $50 million and I over-delivered on it. I bought a shopping center, the Ladera Center, for $22 million, we sold it for $48 million, so we over-delivered on it. Young people out there got to understand it's not good enough today, in this marketplace, in this economy, to just deliver. You've got to over-deliver. If you over-deliver, minority suppliers, young people who are in college, on and on and on, we got to over-deliver because at the end of the day everybody's looking at us like okay, let's see what's going to happen.
Everybody was looking at Magic Johnson, saying, "Let's see what's going to happen." Well, every partner I have, I over-delivered to them. Every contract that was given to me, I over-delivered to that contract and to that corporation. And that's what we have to do now, and that's why I've been able to build my company, on over-delivering to my partners.
Tavis: Yours is an inspiring story, and yet I suspect there's somebody who's a bit cynical watching right now who is saying that while you talk about over-delivering, you can't over-deliver it if you don't get a chance to deliver. And because you're Magic Johnson - that's why you got a shot that I'm not going to get. I got a great idea, but I'm not - I didn't win five championships, so I'm not going to get a chance to deliver.
Johnson: Yeah, well, that's - I wish that was right. I wish that was true. First of all, Magic Johnson just didn't - just wasn't born Magic Johnson. He had to - when I was growing up I had to go to school, I had to play ball, and I had to be out on my dad's trash truck every day, working.
Tavis: That's in the book, you talk about that.
Johnson: Yes. And so that's where I learned and got my work ethic, from my dad.
Tavis: Let me jump in - speaking of worth ethic, there's a great story in the book that I love about you working with your dad on the trash truck one day - talking about discipline and over-delivering and high quality of service. Tell the story about your dad picking the trash out the ice. Remember the day that the ice - that's a great story, tell it.
Johnson: Yeah, so we go to either people's home to pick up their trash, or corporations. So we're at this corporation, and so you know kids - you do the job 90 percent, so I thought -
Tavis: Right. I can see - (laughter) 90 is high.
Johnson: Yeah.
Tavis: Okay. (Crosstalk) You're in a generous mood today. (Laughter)
Johnson: Exactly, and the snow is piled up this high, higher than me, it's cold.
Tavis: This is back in Michigan, of course.
Johnson: This is back in Michigan. So I got all the trash that I could get, (laughter) so I'm ready to run back to this truck where it's warm. So I go back to the truck, and my dad opens the door, Tavis, and pulls me out, like, with his hand, and drags me all the way to the ice, and he - and I got there, and there's trash that's in the ice now.
Tavis: Frozen.
Johnson: Frozen. He gets a shovel and he said, "I'm going to teach you something right now, because it's important when you do a job that you do it right." He started breaking the ice, breaking it all the way around, gets the trash that's in the ice - now we're picking up ice and putting it on our truck with the trash in it.
He goes and then gives me the shovel and get the rest of it, and I never forgot that story, man. And all the way to the next location he was saying, "Young man, anything that you do in life, you got to do it the best. See, if we had left that trash, we did a half job. I don't do half jobs, and I'm trying to instill that in you now." And man, it just blew me away.
Tavis: It blew me away when I saw it, it's a powerful story. You also talk - again, the subtitle is "32 Ways to be a Champion in Business." You talk about not spending time trying to perfect your weaknesses. We have strengths and we have weaknesses, because we're not human and divine; we're just human.
So we each have strengths, we have weaknesses, and you argue in the book not to waste your time perfecting your weaknesses. And you talked very - I was surprised - you talk very courageously about the TV show, and how you learned some lessons from the TV show that didn't become a hit, so to speak. (Laughter) I'm trying to be nice.
Johnson: I lasted about that long. (Laughter)
Tavis: What'd you learn from that experience, though?
Johnson: Well, I think that you've got to stay in your comfort zone in what you do, and I learned how great a job that you do, Tavis, Jay Leno, whoever hosting the show - it's a difficult job. And so I learned a valuable lesson. So I went back to doing what I do best, and that's I'm a businessman, I create businesses and jobs for people, and so that's what I went back to.
And then I started focusing on everything that I do well. There's been offers for me to be on a TV show. There's been offers for me to be in movies. I've turned them all down - I focus in on my business.
Tavis: But you were cold in the Michael Jackson video, though. (Laughter)
Johnson: My feet was big. I said, "Don't show my toes. They all curled up."
Tavis: No, I loved the Michael Jackson - "Behold." I love that video. Anyway, yeah.
Johnson: And that was a great call - when he called me I was shocked, because I'm such a big Michael Jackson fan.
Tavis: You talk in the book - actually, not just talk. The first thing on your list, these 32 ways to be a champion, the first thing on the list - and I thought about a quote that I read years ago that said, "Before honor comes humility." Before honor comes humility. And you start by talking about the fact that if you're going to be a success, the first thing you have to have in practice is humility. Explain for me.
Johnson: Well, I think that you have to understand that everything's not going to go right, and that everybody's not going to like you. Everybody's not going to like your business plan. And just like the TV show, most people hated it. But if you're thinking that everybody's going to like what you have to say or your business plan, or - I'm not crazy enough to think everybody was going to go through my Starbucks or was going to like my Fridays or whatever, but at the same time, you have to be grounded.
You have to be - I really think my strength relied in God blessing me and being strong enough to bounce back for things that didn't go right. See, a lot of times, if I was somebody else and the show didn't work, it would have been over for me. HIV came around. If I had said, "Man, I feel sorry for myself" - same situation. So I think you have to understand that - and I do this just by saying, "Hey, I know everybody's not going to like me, everybody's not going to like my business, but at the same time, I like me and I love me."
Tavis: Your smile - that one right there - yeah, that one right there. (Laughter) How important has that been to your overall success? And I don't mean just your smile, but I just mean peoples' disposition, to have the right disposition?
Johnson: Well, I think that that's very important, because I think the smile unarms people and gets me into the doors that I needed to get to and navigate through to those meetings, and then boom, I hit you with my plan. And so yeah, because it makes people feel comfortable, and at a time that I was trying to get into business and going to urban America and convince these people who had turned off on urban America - they wanted our dollar; they just didn't want to build in our community.
The smile definitely helped, and also the common sense of business helped. And having, again, a good strategy and a business plan helped. But my mom blessed me with a smile, my dad blessed me with the work ethic, and I combined the two and here I am today.
Tavis: As impressive as you are, the one thing that you've overlooked all these years that you could have made the most money off of - and I've been really disappointed in you that you didn't figure this out. (Laughter) If you could ever mass-produce your mama's sweet potato pie -
Johnson: I know, I know. (Laughter) I can't do it, can't do it.
Tavis: As much money as Magic has, I am not impressed. His best idea, he ain't found a way to work it out yet. If you ever taste his mama's sweet potato pie, that's where the money is. But I digress. The new book from Earvin "Magic" Johnson is called "32 Ways to be a Champion in Business." He, of course, entrepreneur and community leader.
I referred to it earlier as a subtitle; it is not. It is the title - I'm looking at the bottom of the book - "32 Ways to be a Champion in Business." Magic actually knows a whole lot more than 32 ways, and I'm always honored to have you on the program.
Johnson: Thank you. Fifteen minutes - the time goes so fast.
Tavis: And I gave you 30, and it still (unintelligible). (Laughter)
Johnson: Thank you.
Tavis: Because you all that. (Laughter) I love this guy.
Back to November 17, 2008