I believe in Magic

“Domestic consumption is driven by entrepreneurship” Jack Ma

When I heard this today during my daily motivational video session it struck a chord. It linked everything I’d been working on in a simple explanation. For the past 10 years I’ve been working on a solution to poverty in Black America. Through all the research and conversations, it boils down to one thing, control of our money. Only 7% of Small and Medium Enterprises are Black owned, our purchase power leaves the community at a 98% rate and the black dollar only circulates within the community for 6 hours. Put that on one hand, on the other hand, globalization and the search to grow emerging markets into hubs that join the consumerism train. When you put the two together, you get a missed opportunity.

As a race, we are well aware of our longterm economic issues. We talk about ‘Buying Black’ but what I don’t really hear is ‘Build Black’. Since my retirement from Pro Football in 2013, I’ve become a philanthropreneur, which is the belief in doing good through business. In that pursuit, I hold several executive and board positions and wear many different hats. Since 2013, I’ve watched company after company launch, fizzle out, become irrelevant to become a low return investment for the investor. Many of these, extremely well funded ideas. In understanding Intrinsic Value through Warren Buffett, I sit in meeting after meeting seeing value opportunities be missed, investment opportunities that have significant moats, some acquired through potential influence investors. New fields, with few players. Real opportunities. To continuously hear no or not right now is perplexing, yet every major entrepreneur has stories of how they were laughed at, called crazy and told no leaving self-funding as the only option.

For example, I was once told that the best products aren’t the ones that are ultimately successful, it’s the products with the best teams. As a consumer, I was pissed. You think that you can serve me a product and think I’m gonna support it just because you it well and make it seem cool. No, to the consumer, good stuff is good stuff and not so good stuff is not so good stuff. Nobody wants to buy not so good stuff. Yet, they were well funded, $3 million kind of well funding. A major billionaire was part of their fundraising effort. The company was founded by the daughter of the founder of a major cold pressed juice company. That company has since gone under, well before we were able to raise any money.

I use this case to show what happens in the world of entrepreneurship. It’s very much a world of who knows who, not necessarily meritocratic. The best ideas don’t always see the light of day, it’s the best contacts that determine what gets out into the consumer space. If I may speak frankly, there are few Blacks on the investor side. This presents a major issue to capital access, in conjunction with that, our highest earners in the community are our athletes and entertainers in general. I was one of them, I sat in the top 1% they say for quite a while, it’s a nice life. But do you want to know what the financial advisers say to request from family and friends? “That’s the quickest way to lose your money”. A damning and pervasive thought in financial circles, here we have our highest earners being shielded away from investing into their communities and instead into the stock market, where they get far less returns, where some index fund is running the show and the financial adviser is making money off the gravy train. Every dollar out it is a threat to his well-being, so their favorite word is, NO. They point out the lack of business expertise as the crowning risk that cannot be mitigated. Many of us believe this, I didn’t want to, I really didn’t have to. I had an advantage, I grew up in Inglewood.

Growing up in Inglewood was advantageous because I had a front row seat to the off the court journey of Magic Johnson. The king of athlete transitions and master of leveraging access to powerful people to increase his opportunities to grow. He was my first example. I’m certainly not Magic Johnson and do not have access to the worlds top executives, I assume you don’t either. He leveraged the social capital that he had to create economic equity. This resulted in multiple businesses with the preceding Magic label: Magics Starbucks, Magics Movie theatre, Magics Friday’s, Magics 24-Hour Fitness. Magic leverage his family and friends round to gain tremendous access.

My family and friends are like most Americans, void of the chance to think about investing. As I settle into retirement, knowing what the investor side looks like, I see the huge opportunity being missed. In every Black community, there is a vacant commercial space. I’ve witnessed vacant commercial space languish in Inglewood or be turned into a Starbucks, Fast Food chain or living complex. We often talk as a community about poverty, poor education, police brutality, but never about the vacant spaces. They are never a book store, rarely a black owned business, rarely a value add business nor a business with a vested interest in the local community they serve. Primarily extracting value, not creating value.

These vacant spaces can be training centers for the youth, they can serve as economic incubators teaching entrepreneurship. They can invest into local sports programs. Local STEM initiatives, local schools. They can do so much, but they remain vacant. Or occupied by multinational companies.

Have you ever wondered why American investors invest in foreign countries or emerging economies and not Black America? Have you wondered what the hype was around BRIC’s?

For starters, BRIC is a playground of economic opportunity with Brazil, Russia, India and China being the participants. They share one thing in common, they have a lot of people, that can create, produce and bring value to the world. But the biggest value the new to middle class citizens will bring, is a desire to buy the goods these company invest in for us to consume. Extending the reach of the global economic machine. But why overlook Black America?

Although Black America lies within traditional America, the two experiences are very different. It’s far more difficult to become what you dream you can be in Black America, far less hope and far less opportunity. We lack access to quality education, quality health services, quality food choices among many other things. These are all issues that are prevalent in parts of India, China, Brazil and Russia, as well as many other developing and emerging countries around the world. In many cases, these countries don’t have a strong middle class to support capitalism. Black America, despite it’s conditions have a purchase power of over $1.3 trillion dollars, which is more than many nations. Yet we have 20% poverty rates in many communities, the incarceration rates of prime aged working men, who exit the system as unemployable felons among many other issues. But we spend 98% of our money with non community stakeholders. If there is no change made, over the next 32 years we will hand over $50 trillion dollars that could be circulating within the Black community.

Imagine if those vacant spaces became Black owned Small and Medium Enterprises. The rate of ownership would increase from 7%, more jobs will be created, more ladders will be available to climb, opportunities to learn entrepreneurship. Business growth will happen. One location becomes 2 and 2 becomes 4 and 4 becomes 8. What started in Inglewood would be able to reach Compton, Detroit, Chicago and D.C. among other urban communities deeply afflicted by poverty. These businesses become economic hubs. This is the potential of 1 business. Imagine 10, 20, 30 businesses. In the report ‘The Equity Solution’ it states, in Los Angeles alone gave equal opportunity in employment and access to minorities, over $550 billion can be added to the GDP. These businesses can create millionaires from early equity participation. Those millionaires now see it as their mission to help others, the ones they help develop and in return help others.

This cycle of growth is one that happens in other communities but seemingly not in the Black community. We don’t make the investment into our own. It’s easier to have Apple in your portfolio, low risk but mild return than to open a business in a so called ‘unstable’ business environment. It’s easier to open a foundation with 510c3 status and have your investment into the community protected by write offs. Other communities use their wealth to create more wealth, which creates more opportunities.

This is what happens in business. I’ve seen groups of successful men, of different races, create business groups, where each member contributes x amount every year, they take that money and invest it into a group approved project. This is happening everyday in America. This is something we as Blacks need to do as well.

The front row seat I had to Magic Johnson showed that there is no real risk in targeting the Black consumer. With well designed and well run businesses. This success built the bridge in which I walk.

Magic was the elephant who lead Carnegies parade that would prove the viability of steel. Magic proved the viability of investing into the black community. What resulted from the passing Elephant, was the vertical growth of the American Skyline. Since Magic, we haven’t seen such a dedicated positioning to the Black Consumer. The confidence he delivered to me, was the same confidence that put the world on steel. It worked. And worked well.

To continue the work and build upon the foundation set by Magic is an opportunity that I won’t miss. I trust the bridge and know that it is safe. For now, I wait for the right partner who see’s the growth potential of Black America and believes in a unique market ecosystem that creates a self-sustaining platform for continual development, using the businesses as active endowments to fund progress. Although the timetable is uncertain, I continue to push forward and build, knowing that the time will come. I have brilliant examples to follow, but to say it simply. I dare to proceed, because, I believe in Magic.

One thought on “I believe in Magic

  1. Well spoken my dear friend, and brother! Brick by brick, brick by brick! That’s how things actually get built! The vision will most definitely come to pass by a consistent work rate, heartfelt community collaboration, entrepreneurial and individual capital investment, wise counsel, and a willingness to come together, work together, and stay together, as an African-American community, for the long haul, and for the greater good right in our own local urban communities, my dear friend! I applaud, and respect you, for your heart, courage, faith, personal investment, vision and willingness, good brotha! The longest journey starts with the first step! I’m in! Let me know when and where you’d like to meet to further activate the plan, and I’ll show up, Lawrence. Grace and Peace. One Love, Gerald E. Jackson, Ph.D – Inglewood High School – Class of ’79 gej@rivereaglemedia.com

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