Magic Johnson Reveals Billion-Dollar Secrets & Lessons from Failure

Rashad Bilal (0:00)

So you've invested in everything from movie theaters, Starbucks, the Dodgers.

What is your fore, obviously, you have a great vision. What is your foresight to know something is gonna be profitable 10 years, 20 years, a good investment to put your money in?

Earvin Johnson (0:16)

Well, I think first of all.

You gotta research the industry or the sector. So when you research the sector or the industry that you're investing in, you can see if it's been growing, right? So we'll go back probably five or 10 years to see if that sector that I'm going to invest in has been growing. If I see growth, I'm gonna see growth in the industry. That's been growing. If I see growth, then I said, okay, look like it's gonna be a good investment for me. But then we have an investment team of people try to break down the investment, making sure it is the right move for us to make both financially and align it with our brand, right? Because anything that you bring in, you gotta align it with your brand. So it's very important. So right now, we have contracts, so that's so magic. Charles Johnson is doing a wonderful job. Charles, where are you? Yes. Yeah, Charles, brother. Robbie is with them. Donna is here. Yeah. So when we think about, we have more house contract, Federal Reserve, we have contracts at the airport, we do Delta, their headquarters, on and on and on. We knew that industry was going to grow because people got to eat. Right? And so we understand that and it has been growing. We're over a billion dollars in revenue now with this small company that just shot up a car. Hold on, you said a billion dollars of revenue and two people clap. Can we clap it up? That's not an everyday thing. No.

Well, the reason it's important is that we started from the ground on up. And so we want the same thing to happen for all of you, right? Take your ideal, your strategy, start your company, and build it, right? And scale it. And we were talking about how to scale, but scaling is so hard because you got to have the financial resources. And then you got to have the right team in place. If anything, I can tell you, this is so important. It's going to hurt a lot of feelings in this audience. Please do not hire your family.

Uh-oh. Uh-oh. Unless they have the expertise. Whoa, whoa, whoa, whoa. Unless they have the expertise. What has made more black businesses fail in America? Uh-oh, because you hired your family member, and they didn't have the expertise, or they thought they could show up. Instead of 9 o'clock, they showed up at 12 o'clock.

I pay mind to stay away. Here you go. The check will be on the way. No, I'm just kidding. I'm just kidding. I'm just kidding. I'm just kidding. Make sure, though, if you're going to be in a family business, make sure you spell out Rose.

And once everybody know their role, make sure that they over deliver in that role. So so important.

We going back?

Rashad Bilal (3:40)

No, I'm going to stay right here. I learned my lesson. You wasn't going to get me again.

Earvin Johnson (3:44)

I was waiting. But you brought up a billion dollars in revenue. And so that that word stuck in my head. We have a common theme here at Investfest. Every year, we've been able to bring a billionaire to the stage. Mm, I love that theme. I love that theme. I love that theme.

Now, the billionaires that we brought looked like us.

There you go. There you go. 2025s, list comes out. Urban Magic Johnson, a billionaire.

Yeah, stand up to your feet for that, all right?

I wonder, the kid that's walking on the campus in East Lansing, Michigan, your wife, to the man who's standing here today, was that on the vision board, and what was that moment like? When it, I mean, for us and our moms, we already thought you were there, but now that it's been reported, what was this moment like for you? Well, when I first started, no, it wasn't on the vision board. It was just being successful. See, my whole business thesis was to be successful for other people of color could come behind me. Okay, now, remember this.

See, when I went to 10, nine, 10 banks, they all turned me down. They wanted the picture, they wanted the autograph, but they didn't want to loan me the money.

Then, I went up to CalPERS pension fund to get money because I was going to start my real estate fund, and they turned me down three straight years. Same thing. See, this hasn't been easy. A lot of you think that, oh, he Magic Johnson, so it was easy. No, that actually worked against me. But I love the challenge. See, I'm not going to run away. I knew my business thesis was strong. I knew my people. I knew what they wanted and what they like. So all I had to do was deliver it and then over deliver it to them once I started my business. And so as I became successful, first the Starbucks, the theaters, Magic Johnson Theaters, and then I said, hey, I got to really get into bigger business. So I needed somebody else's money. To do that, to grow and have sustainability. So once the finally, the bank said yes, I took that $100 million and turned it into what it is today. But stop, stop, stop, stop, stop. Anything that I've done is not just for me. It's so that you can come behind me, because now they say, oh, that black man was successful. We'll take a chance on another one. Because if I fail, then they're not going to take a chance on another one. So that's what it's about. So when you build your business, you don't even understand it's not just about you. You give another young person, young lady, young man, a chance and an opportunity to say, wow, if she made it or if he made it, I think I got a chance too. So what I always have my theme is, I turned the impossible into possible. That's what it's all about. Right? That's what it's all about. So I'm still on the basketball court. I just don't have the little hot pants on no more.