Earvin “Magic” Johnson — you know him as a legendary basketball player, but most people are not aware of his business genius.

Magic Johnson started an initiative to build 125 Starbucks stores that earned him millions of dollars.

However, this didn’t happen without overcoming a few obstacles.

He shared the story on stage at 10X Growth Conference 2020, and the journey will amaze you.

Knocking on Starbucks CEO Howard Schultz’s door

Magic Johnson flew to Seattle because he felt Howard Schultz was missing a huge opportunity. The African-American athlete had noticed that there were little to no Starbucks store locations in the urban United States. 

“I went and knocked on his door and said, ‘You know, Mr. Schultz, minorities like coffee too.”

— Magic Johnson on Johnson the initial meeting with the coffee CEO

Schultz seemed hesitant about the proposal. Then he went on to explain to Magic that the Starbucks business model has no franchisees.

Of course, that didn’t deter the all-star. His response was that he would put up half the money himself, and Schultz would build the famous coffeehouses in urban America. 

The idea was presented to the Starbucks Board of Directors and was ultimately approved. But that’s when the real magic to make this deal a success began. 

The magic of knowing your customer and overdelivering

After the locations were built and opened, Magic Johnson noticed that he needed to make some adjustments to the standard Starbucks formula. 

“We’ll pay $3 for a coffee, but we don’t know what a scone is.”

— Magic on the difference between the urban customer and the suburban one

Immediately, he made changes in his offerings that resonated with his customers. He removed the scones and replaced them with pastries like sweet potato pie, peach cobbler, and pecan pie.

Another smart change Magic implemented was switching the typical jazz and classic rock music in suburban locations to artists such as The Weeknd and Drake. 

All of these smart moves paid off. Magic Johnson’s Starbucks locations have an average customer spend of $4.59 cents while the traditional locations have an average of $4.51. When you think of how many Starbucks there are in the world, that eight cents a customer adds up. 

In conclusion, Magic improved an already successful formula by knowing his customer and overdelivering.

It’s not only a big player move. It is proof that true success comes from ethics and serving other people to the best of your ability.

For more massive inspiration from industry greats, secure your virtual seat @ 10X Growth Conference 2022 right now. 

Featured image source: Magic Johnson Official Facebook Page


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