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