Skip to main content

“That was a $200,000 mistake” - Magic Johnson's failed investment that taught him the greatest business lesson

Magic Johnson had a big blunder very early on in his business career.

Magic Johnson is not just a legendary basketball player; he’s also a successful businessman. From earning $40 million as a player, Johnson is now worth an estimated $600 million. His business success wasn’t as simple as capitalizing on his NBA fortune and fame. In reality, Magic endured several failures early in his business career. One particular failure taught him the greatest business lesson he applies today.

Magic 32 Shop

After retiring from professional ball, Johnson wasted no time wearing his new hat as a businessman. He was an iconic athlete strapped with cash. And so, it made sense that one of his first business ventures was to sell sports apparel. He bought a ludicrous amount of hats, jackets, and other sports merchandise and sold them through his Magic 32 Shop. Little did he know that starting a business isn’t that simple.

That was a $200,000 mistake, but it taught me to make my business about the customer,” said Johnson, now one of the most recognizable business people in the world. “Never make your business about you. Just because you like red doesn’t mean you need to have red in your business, unless your customer wants red,” Johnson said at the Business Insight Series.

Scroll to Continue

Recommended Articles

Knowing what your customer wants. It seems like an awful cliche, especially for those studying for a business degree or those experienced in entrepreneurship. But Magic wasn’t even taking a business degree when he was in Michigan State. He was a communications major and dreamed of being a broadcaster. And so, it was a lesson he learned while already out in the rough terrains. Perhaps it’s the reason why it hit harder than it did. It’s also the reason why he’s become so successful.

Parting words

To emphasize his point, Johnson compared running a business to watching the Lakers live. You have to be quick or you’ll end up with nothing. He’s suggesting that all business decisions must take root in the customer. It is they who determine how the market behaves.

You have to know what the customers want,” Johnson said. “When the Lakers are on, you better be at my door by five o’clock, or you will not get in.

Just like any other profession, Johnson believes that if one wants to be successful, you have to put the work in. There are no shortcuts to glory.

You’ve got to stay on the hustle, stay on the grind. Just because you have a successful business, don’t rest, because you can lose it all tomorrow. I’m a control freak, and I don’t apologize for it, because if it’s my hands, we’re going to win it.

Vanessa Bryant revealed how Kobe Bryant was like everyone else

Vanessa Bryant revealed how Kobe Bryant was a normal person like everyone else: "He wipes his own ass too"

Kobe Bryant was a superstar on the court but never acted like one outside of it. This is what endeared him to the fans

Brooklyn Nets guard Kyrie Irving, forward Kevin Durant and guard James Harden

“This has to go down as one of the most epic failures in the history of this league” — Tim Legler shreds the Brooklyn Nets

Two other teams in the modern NBA came to mind as faliures given the talent they had on the roster.

Kevin Durant blasts Philly fans for their chants towards Ben Simmons

Should the Brooklyn Nets regret trading for Kevin Durant?

The Durant-Irving partnership in Brooklyn could arguably go down as the most disappointing one in NBA history.

Detroit Pistons legend Rick Mahorn and Indiana Pacers legend Reggie Miller

Reggie Miller on who he hated facing on the bad boy Pistons — “He ​​had a crazy look in his eye all the time”

There’s a reason why Miller's most feared Pistons player was dubbed as the “Baddest Bad Boy of them all.”

San Antonio Spurs forward Tim Duncan and guard Manu Ginobili

"I lost a lot of sleep because of him" — Chauncey Billups reveals who deserved to win the 2005 NBA Finals MVP

Tim Duncan won the 2005 NBA Finals MVP. But Chauncey Billups, as well as some fans, believed the trophy belonged to someone else.

Michael Jordan

Beer drones — the best feature on Michael Jordan's exclusive golf course

Do you want to be a member of the exclusive The Grove XXIII club? Michael Jordan has to invite you first.

miles-bridges-wife-min

Miles Bridges' wife exposes him for domestic violence

The NBA community needs to to better. ”I won’t be silent to protect others anymore because I value myself and my kids more than anyones ‘image’”