When Magic Johnson wanted to move from basketball to business, he picked up the phone and started cold-calling 20 people he wanted to meet.
The famous NBA Lakers player did have an advantage: the names on his list were all Lakers courtside season ticket holders.
Those are people who would pick up the phone if the NBA legend extended a lunch invitation.
For Johnson, though, it was the first step in transforming himself from an NBA player suddenly retired in 1994 to a businessman.
Seeing the opportunities others ignore
If there's one theme to Johnson's business career, it's to see the opportunity that others have ignored, particularly in urban communities. This is the lesson that Johnson wanted to convey to the crowd of venture capitalists and tech entrepreneurs at the Upfront Summit as the tech industry grapples with its lack of diversity.
His first lesson came from Michael Ovitz, one of the biggest talent agents in Hollywood, and one of his 20 cold calls.
Ovitz had one major piece of advice: only surround yourself with the best.
"That's when I fired everybody. I got the best money manager, best accountant, best lawyer," Johnson told the crowd at the Upfront Summit in Los Angeles.
He started his business career with a couple of Pepsi bottling plants, then built from there into shopping centers and movie theaters in urban areas. His focus was on underserved urban markets, and it was often a tough sell — the folks in charge of investments for the CalPERS pension fund rejected him five times before finally agreeing the sixth.
See Magic Johnson through his career:
Magic Johnson's career
The vital lesson Magic Johnson taught Starbucks CEO Howard Schultz
Earvin 'Magic' Johnson, left, of Michigan State, and Larry Bird of Indiana State on March 25, 1979 in Salt Lake City, will be the big guns in Monday's final game in the NCAA Championships at Salt Lake City, Utah. In their semi-final games Saturday, Bird scored 35 points for ISU with Johnson scoring 29 for the Spartans. (AP Photo/Lennox McLendon)
Earvin "Magic" Johnson, the NCAA tournament's Most Valuable Player, greets fans at Capital City Airport in evening, Tuesday, March 28, 1979 in Lansing. Johnson and his teammates attended a rally in their honor at MSU's Jenison Field house afterward. (AP Photo/Craig Porter)
Los Angeles Lakers first round draft choice Earvin "Magic" Johnson is flanked by his parents, Mr. and Mrs. Earvin Johnson, Monday, June 25, 1979 in New York at the Plaza Hotel where the draft was being conducted. The Lakers signed the all-American back-court man to a multiyear contract. (AP Photo/Marty Lederhandler)
Earvin "Magic" Johnson, second from left, beams June 26, 1979 as he holds a Los Angeles Lakers uniform at New York's Plaza Hotel where he was selected by the Lakers in the first round of the NBA draft. "Magic" is joined by NBA Commissioner Larry O'Brien, seond from right, and his parents, Mr. and Mrs. Earvin Johnson, left and right. (AP Photo/Marty Lederhandler)
Los Angeles Lakers' Earvin "Magic" Johnson is shown in 1979. (AP Photo)
Los Angeles Lakers Earvin "Magic" Johnson (32) rips a rebound from the hands of Boston Celtics Larry Bird (33) during the first half, Dec. 28, 1979 in Los Angeles. It was the first time both former NCAA stars met in combat since last year's NCAA Tournament. (AP Photo)
PHILADELPHIA, PA - May 16: Earvin Magic Johnson #32 of the Los Angeles Lakers celebrates with team owner Jerry Buss after they defeated the Philadelphia 76ers in the 1980 NBA finals 4 games to 2 on May 16, 1980 at the Spectrum in Philadelphia, Pennsylvania. Johnson played for the Lakers from 1979 - 91, 96. (Photo by Focus on Sport/Getty Images)
Los Angeles Lakers Earvin "Magic" Johnson, center, with arms raised, and teammates Norm Nixon, far left, Brad Holland and Kareem Abdul-Jabbar, wearing hat, respond to the crowd at a victory rally in Los Angeles, May 17, 1980. The Lakers beat the Philadelphia 76ers to win the NBA world championships, 4 games to 2, with Johnson selected as the series MVP. (AP Photo/Randy Rasmussen)
Earvin Magic Johnson, center, of the Los Angeles Lakers sits on the Western Conference bench during introductions before the NBA All-Star game at the Meadowlands Arena, Sunday, Jan. 31, 1982, East Rutherford, New Jersey. He was writing to be introduced as a substitute after the fans failed to vote him into the starting five this season. (AP Photo/Paul Burnett)
SAN ANTONIO, TX - CIRCA 1983: Earvin Magic Johnson #32 of the Los Angeles Lakers goes in for a lay-up against the San Antonio Spurs during an NBA basketball game circa 1983 at HemisFair Arena in San Antonio, Texas. Johnson played for the Lakers from 1979 - 91, 96. (Photo by Focus on Sport/Getty Images)
Los Angeles Lakers' Earvin Johnson lies on the floor in pain after he was injured during second quarter NBA action against the Philadelphia 76ers in Philadelphia, Wednesday, Jan. 5, 1983. (AP Photo/Rusty Kennedy)
Boston Celtics Robert Parish (00) eyes the ball as Los Angeles Lakers Earvin Magic Johnson (32) seeks a firm grasp during first period of Sunday, June 10, 1984 NBA championship game in Los Angeles. (AP Photo)
INGLEWOOD, CA - 1986: Earvin 'Magic' Johnson #32 of the Los Angeles Lakers holds up the NBA Most Valuable Player Award in 1986 in Inglewood, California. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory copyright notice: Copyright NBAE 2003 (Photo by Andrew D. Bernstein/NBAE via Getty Images)
Los Angeles Lakers' Earvin Johnson, 32, left, clowns around with Detroit's Isiah Thomas (11) during Rolando Blackman's free thrown attempt which tied the NBA all Star Game forcing overtime in Seattle, Feb. 9, 1987. The West won Sunday's game 154-149. (AP Photo/Barry Sweet)
BOSTON - 1987: Magic Johnson #32 of the Los Angeles Lakers dribbles against Danny Ainge #44 of the Boston Celtics during the 1987 NBA Finals circa 1987 at the Boston Garden in Boston, Massachussetts. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 1987 NBAE (Photo by Andrew D. Bernstein/NBAE via Getty Images)
Earvin "Magic" Johnson, of the Los Angeles Lakers, leads a crowd of supporters in front of the Forum, Tuesday, June 17, 1987 in Inglewood, Calif. The NBA champion Lakers were treated to a parade in downtown Los Angeles earlier in the day. (AP Photo/Nick Ut)
Los Angeles Lakers Earvin "Magic" Johnson reacts after he was presented with championship ring before NBA game with the Denver Nuggets at the Forum in Inglewood, Calif., Wednesday night, Nov. 10, 1988. The Lakers were honored for their 1987-88 championship season. (AP Photo/Nick Ut)
1988: Magic Johnson #32 of the Los Angeles Lakers dribbles down the court during an NBA game circa 1988. (Photo by B Bennett/Getty Images)
Guard Earvin (Magic) Johnson of the Los Angeles Lakers looks on during a game against the San Antonio Spurs at the Great Western Forum in Inglewood, California.
CHICAGO, IL - 1988: Kareem Abdul Jabbar #33 and Magic Johnson #32 of the Western Conference All Stars sit on the bench during the 1988 NBA All-Star Game on February 7, 1988 at the Chicago Stadium, Chicago, Illinois. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 1988 NBAE (Photo by Andrew D. Bernstein/NBAE via Getty Images)
THE TONIGHT SHOW STARRING JOHNNY CARSON -- Air Date 06/23/1988 -- Pictured: (l-r) NBA Basketball player Earvin 'Magic' Johnson during an interview with host Johnny Carson on June 23, 1988 (Photo by Chris Haston/NBC/NBCU Photo Bank via Getty Images)
Guard Earvin (Magic) Johnson of the Los Angeles Lakers takes a shot during a game.
PORTLAND, OR - CIRCA 1990: Magic Johnson #32 of the Los Angeles Lakers looks on against the Portland Trailblazers circa 1990 at the Veterans Memorial Coliseum in Portland, Oregon. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 1990 NBAE (Photo by Brian Drake/NBAE via Getty Images)
SEATTLE, WA - 1988: Magic Johnson #32 of the Los Angeles Lakers rebounds against the Seattle Supersonics at the Seattle Coliseum in Seattle, Washington circa 1988. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 1988NBAE (Photo by Brian Drake/NBAE via Getty Images)
ORLANDO, FL - FEBRUARY 9: Magic Johnson #32 smiles and talks to reporters after the 1992 NBA All-Star Game at Orlando Arena on February 9, 1992 in Orlando, Florida. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 1992 NBAE (Photo by Jon Soohoo/NBAE via Getty Images)
Earvin 'MAGIC' Johnson December 10, 1993.
(Photo by Marcus Brandt/Bongarts/Getty Images)
INGLEWODD, CA - MARCH 27: Los Angeles Lakers head coach Magic Johnson looks on against the Milwaukee Bucks on March 27, 1994 at the Great Western Forum in Inglewood, California. (Photo by Jon Soohoo/NBAE via Getty Images)
LOS ANGELES, CA - JULY 10: Former Los Angeles Lakers player Earvin 'Magic' Johnson stands in front of the 12-screen movie theatre that he built and financed during the theatre's grand opening 10 July. 'Magic Theatres,' which is located in the Crenshaw area of Los Angeles, is 60,000 square feet and seats some 3,700 people. AFP PHOTO (Photo credit should read DAN GROSHONG/AFP/Getty Images)
LOS ANGELES - 1996: Magic Johnson #32 of the Los Angeles Lakers poses for a portrait in Los Angeles, California. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this Photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 1996 NBAE (Photo by Andrew D. Bernstein/NBAE via Getty Images)
LOS ANGELES - 1996: Magic Johnson #32 of the Los Angeles Lakers goes for a layup against the Miami Heat during the NBA game at the Forum in Los Angeles, California. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this Photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 1996 NBAE (Photo by Andrew D. Bernstein/NBAE via Getty Images)
Earvin "Magic" Johnson enjoys having "Happy Birthday" sung to him for his 38th birthday while on stage at the Jamizon concert Thursday night, Aug. 14, 1997 at the United Center in Chicago. Johnson was wearing a Bulls jersey with Michael Jordan's number on it during his appearance. (AP Photo/Timothy Boyle)
PHOENIX - 1997: Magic Johnson #32 of the Los Angeles Lakers and Charles Barkley of the Phoenix Suns meet at center court during the NBA game in Phoenix, Arizona NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this Photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 1997 NBAE (Photo by NBA Photo Library/NBAE via Getty Images)
Earvin "Magic" Johnson jokes with guest Whitney Houston, at the opening of his new talk show in Los Angeles, "The Magic Hour" which premiered Monday June 8, 1998 on the FOX television network. (AP Photo/MIchael Caulfield, pool)
348127 06: Former NBA star Earvin 'Magic' Johnson laughs at a press conference March 23, 1999 in New York City. Announcing plans to open a Magic Johson Theater in Brooklyn, NY, Johnson continues on his quest to improve the quality of inner-city life through his chain of state-of-the-art movie theaters. (Photo by Porter Gifford/Liaison)
Members of the Naismith Basketball Hall of Fame, Class of 2002, pose with their Hall of Fame jerseys, from left, Earvin "Magic" Johnson, coaches Lute Olson and Kay Yow, Biserka Petrovic (the mother of the late Drazen Petrovic), coach Larry Brown and Tex Harrison (representing the Harlem Globetrotters) Wednesday, June 5, 2002, in Los Angeles. The inductees will be enshrined Sept. 27 in Springfield, Mass. (AP Photo/Ric Francis)
Magic Johnson & Samuel L. Jackson during 'S.W.A.T.' Premiere at Mann Village Theatre in Westwood, California, United States. (Photo by SGranitz/WireImage)
Earvin "Magic" Johnson unveils a 12-foot statue of himself Saturday, Nov. 1, 2003, outside the Breslin Center in East Lansing, Mich. The sculpture, "Always A Champion," symbolizes his championships at the high school, collegiate, NBA, and Olympic levels. (AP Photo/Al Goldis)
Former NBA star Magic Johnson poses for the press at the NBA Store, Wednesday, March 23, 2005, in New York. Johnson appeared at the store to launch his DVD" The Fundamentals of Basketball". (AP Photo/ Louis Lanzano)
Former NBA basketball star Magic Johnson drives in a nail to help construct a house in New York's Rockefeller Center, Wednesday Sept.. 28, 2005. Johnson volunteered in support of the Hurricane Katrina Project, a joint effort with with NBC, Warner Bros. Music and Habitat For Humanity to provide homes for people displaced by the recent hurricanes. (AP Photo/Richard Drew)
Former basketball star Earvin "Magic" Johnson speaks at a news conference on World AIDS day Friday, Dec. 1, 2006, in Los Angeles. Fifteen years after disclosing he was HIV-positive, Johnson unveiled a campaign Friday to end the disease within the black community. (AP Photo/Nick Ut)
Former NBA player turned business mogul Magic Johnson speaks to a group of cruise industry members and travel agents at the cruise3sixty conference, Friday, March 30, 2007, in Fort Lauderdale, Fla. The former All-Star point guard, through The Magic Johnson Travel Group, has created a network of home-based travel agents who serve minority customers. (AP Photo/Marianne Armshaw)
Basketball player Earvin "Magic" Johnson laughs as he signs autographs, while campaigning with former President Bill Clinton on behalf of Clinton's wife, Democratic presidential hopeful Sen. Hillary Rodham Clinton, D-N.Y, at Davenport Central High School in Davenport, Iowa, Tuesday, Dec. 18, 2007. (AP Photo/David Lienemann)
Basketball legend turned entrepreneur Magic Johnson tours the Sports Museum of America in New York, Friday, Nov. 21, 2008. Johnson was there to promote his new book, "32 Ways to be a Champion in Business". (AP Photo/Seth Wenig)
Michigan State head coach Tom Izzo is congratulated by former Michigan State player Earvin "Magic" Johnson after MSU's 70-69 win over Tennessee in the NCAA Midwest Regional college basketball championship game Saturday, March 28, 2009, in St. Louis. (AP Photo/Jeff Roberson)
A bronze statue of Earvin "Magic" Johnson stands outside Staples Center, where the Boston Celtics and the Los Angeles Lakers were scheduled to play the deciding game of the NBA basketball finals later Thursday, June 17, 2010, in Los Angeles. (AP Photo/Reed Saxon)
THE TONIGHT SHOW WITH JAY LENO -- Episode 4539 -- Pictured: Former NBA Basketball player Earvin 'Magic' Johnson onstage September 30, 2013 -- (Photo by: Paul Drinkwater/NBC/NBCU Photo Bank via Getty Images)
COMMERCIAL IMAGE - In this photo taken by AP Images for AIDS Healthcare Foundation, basketball legend and AIDS advocate Earvin âMagicâ Johnson is seen during a press conference to present the 2nd annual "World AIDS Day Magic Award" and kick off the free HIV testing caravan at the AHF Magic Johnson Clinic in Los Angeles Thursday, Dec. 1, 2011. (Joe Kohen/AP Images for AIDS Healthcare Foundation)
Los Angeles Dodgers owner Magic Johnson (right) shakes the hand of new Dodger pitcher Zack Greinke (middle) at a press conference announcing Greinke's signing at Dodger Stadium in Los Angeles on December 11, 2012. At left is Dodger General Manager Ned Colletti. The right-handed, former Cy Young Award winner agreed to a six-year contract. Greinke, 29, will enter his 10th Major League season in 2013 after pitching for the Royals (2004-10), Brewers (2011-12) and Angels (2012) during the course of his careeer. (Photo by Gary Friedman/Los Angeles Times via Getty Images)
Magic Johnson speaks during a news conference at Dodger Stadium in Los Angeles, Wednesday, May 2, 2012. The $2 billion sale of the team to Guggenheim Baseball Management, a group that includes Johnson, was finalized Tuesday. (AP Photo/Damian Dovarganes)
Former Los Angeles Laker Earvin "Magic" Johnson, right, hugs former teammate Kareem Abdul-Jabbar before the unveiling of Abdul-Jabbar's statue in front of Staples Center, Friday, Nov. 16, 2012, in Los Angeles. (AP Photo/Mark J. Terrill)
Former NBA basketball player Earvin "Magic" Johnson Jr., speaks to players before Game 1 of the National League Divisional Series between the Atlanta Braves and the Los Angeles Dodgers, Thursday, Oct. 3, 2013, in Atlanta. (AP Photo/David Goldman)
Byron Scott, bottom left, is hugged by former teammate Magic Johnson, left, as Scott is introduced by Los Angeles Lakers General Manager Mitch Kupchak, right, as the successor to Mike D'Antoni as the Lakers' head coach during a news conference in Los Angeles Tuesday, July 29, 2014. Scott is coming home for his fourth NBA coaching job. He inherits a team that missed the playoffs for just the third time in 38 years. (AP Photo/Damian Dovarganes)
NEW YORK, NY - DECEMBER 09: (L-R) Tom Verducci, Madison Bumgarner, Magic Johnson and Boomer Esiason attend the Sportsman Of The Year 2014 Ceremony on December 9, 2014 in New York City. (Photo by Michael Loccisano/Getty Images for Sports Illustrated)
CHARLOTTE, NC - MARCH 20: Former Michigan State Spartans basketball player and NBA All Star, Magic Johnson (C), reacts against the Georgia Bulldogs during the second round of the 2015 NCAA Men's Basketball Tournament at Time Warner Cable Arena on March 20, 2015 in Charlotte, North Carolina. Michigan State won 70-63. (Photo by Lance King/Getty Images)
NBA legend, two-time Hall-of-Famer, entrepreneur and philanthropist, Earvin 'Magic' Johnson during the We Day Illinois 2015 at Allstate Arena on Thursday, April 30, 2015 in Chicago. (Photo by Barry Brecheisen/Invision/AP)
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But Johnson's business acumen really shone forth in a meeting with Starbucks CEO Howard Schultz.
"I said 'Look Howard, Latinos and black folks. We like coffee too,'" Johnson said.
He showed him how the theaters were performing, and it convinced Schultz to go 50-50 with Johnson to develop a chain of urban Starbucks locations in underserved locations. But he needed to make a few changes first.
"I had to take the scones out of my Starbucks and put in things like sweet potato pie and sockittome cake," Johnson said. They also changed the music, like playing more Michael Jackson instead of typical Starbucks fare like Hootie and the Blowfish.
Stephen Dunn/Getty Images
Johnson ended up building 105 locations, and his numbers were good enough that in 2010, after a 12-year partnership, Starbucks acquired the other half of the business from Magic Johnson Enterprises. At almost exactly the same time, he also sold his 4.5 percent stake in the Lakers. The deals reportedly netted him around $100 million.
"That really put the stamp on me as a legitimate businessman," Johnson said.
Changing demographics means changing business
Today, Johnson has turned his attention to tech and infrastructure. He's raised $1 billion on a fund solely focused on infrastructure improvements.
Yet, at the Upfront Summit, Johnson and his other panelists warned Silicon Valley that they must keep up with the changing demographics of the nation, or they too will miss out on the opportunities that Johnson had been seeing over the past 20 years.
"You have to look like America looks, and right now the tech space doesn't look like America," Johnson said.
It's not just about finding businesses that target minorities or under-served communities, but realizing that the demographic shift also means a shift in power. It's changed from when minorities used to only play on the fields, Johnson said. Now they can own the teams and write the big checks too.
"We can invest side by side by you, but we also bring the expertise to become successful too," Johnson said. "Look what Howard Schultz did. We changed the dessert. We changed the music."