Bizdom U 2009: Andrew Hwang

Magic Johnson was not only a basketball superstar and an HIV survivor, but he is also a business guru when it comes to urban America. He said, “Many people told me that I was crazy when I told them that I want to do business in urban cities.” Magic found in his research that there are 75% less options when it comes to retail in urban America, which is growing seven times faster than the general population. In addition, he discovered that there is approximately $1.5 trillion in spending power in urban areas.

One of Magic’s first business ventures was opening a Cineplex movie theater in Los Angeles. In his early stages, many investors turned down his idea of opening a movie theater in the “hood” due to the possibility of gang violence, vandalism, drug use, etc.. However, Magic has now been operating the theater for fifteen years without a single case of violence and with record breaking revenue reports. In fact, the theater has been overly successful because of Magic’s ability to understand the people his company serves. For example, during the opening week, his consultant told him that they have enough hotdogs in stock to sustain the theater for the first month of operation. Magic disagreed because he knows that people in urban America don’t go to the theater to just watch movies, but they also have dinner there too. Within the first weekend, the theater sold out of their months worth of hotdogs (note: movie theaters make most of their profit on concession rather than ticket sales).

Magic Johnson’s business motto is this: “Always make your business about the customer.” In his 110 Starbucks, he doesn’t sell scones; instead, he sells chocolate cake, sweet potato pie, and pound cake-things that people in urban America love. Not only that, his cafes don’t play fancy jazz music, rather their customers come in and drink coffee to some R&B.

Magic is always thinking of new businesses that have potential in Urban cities. He is also owns TGI Fridays restaurants, 24-Hour Fitness centers, Burger King restaurants, and major real estate developments. Magic is one of the few athletes that have truly leveraged their basketball stardom and money into a business empire.