How Magic Johnson Built a Billion-Dollar Portfolio in 30 Years

Get people who are smarter than yourself, get the right people and always pay them and then let them do their thing. If I had did that deal in 1979, it'd be over a billion dollars. So that's the one that you talking about, one that got away.

0:00

Oh man, I'm sure that's the one.

0:17

Don't be afraid to partner. We gotta get rid of that myth that you gotta be the only one.

0:20

It's okay to collaborate.

0:26

That's right. What's the next growth opportun for me and my company? Right. Because we want to continue to evolve, grow and think outside the box.

0:27

Magic Johnson went from five NBA championships to building a billion dollar empire. His business education started early working with Michael Ovitz at CAA and evolved into a portfolio that now includes the Dodgers, the Commanders, LAFC and businesses across real estate, insurance, infrastructure and technology. Along the way he found his way into venture capital and into a relationship with us here at A16Z. So today we're talking with Magic about how that happened, what drew him to venture as an asset class, and how he thinks about tech investing differently from the rest of his portfolio. Let's jump in. Magic.

0:40

Hey, Chris, Good to see you, man. Good to see you.

1:22

It's a pleasure. You know, I'm glad you're able to come through today, man.

1:25

Well, thank you, man. All the great things that you and I have been doing for these years.

1:29

Years.

1:35

And now we get a chance to sit down and I think this is important for a lot of people and a lot of different reasons too. Absolutely.

1:36

Look, I think that, you know, like you said, this is a culmination, I think almost 10 years from investments to conversations, to having you come up to San Francisco talking about venture, expanding the portfolio. And we wanted really just to take the time today because you are one of the ultimate deal makers, businessmen entreprene. And that's also the same ecosystem that we have here at a 16Z. And I felt like there was no better way to have a conversation that bridged both worlds than to have you come on today.

1:43

So I appreciate you again. Thank you. Because you brought me in though. You know, I think a lot of times somebody has to pull your coattail. Somebody has to make sure that you can see deals or you can see opportunities. Yep. And I want to thank you for 10 years of making sure that I had a chance to see these great opportunities that I have a chance to invest in. So again, you being in there, being an executive, being a deal maker yourself, and then bringing in so Many different artists and athletes. Absolutely. Who now can say they're businessmen or business women because of you?

2:12

Well, I might have played a big part on the investment side in terms of getting people into Silicon Valley and getting them. And understanding the benefits of equity versus endorsement.

2:53

Exactly.

3:03

But you were the one that actually pioneered, you know, getting into business itself. And a funny story that actually inspired me, and I think that we have one tie in from the very beginning. And that's actually one of my first mentors when I first got into Silicon Valley. And that was actually Michael Ovitz. Yeah. And so I don't know if you know that, but the firm was actually built off of CAA's model and Ovitz was on the board of Mark and Ben's company. And so that's where they originally got the idea for a 16Z having a service based model. And so when I first got the job and started working at the firm, I got a chance to meet Mike. And my position was actually, it was a code word, it was called Mini Ovit. And so I was like, I don't. Ben was like, we can't call you Mini Ovitz. So we gotta. And this is never. No one knows about this. So it's, it's. So it's like we gotta figure out a very specific strategy. And the funny story is that he told me, he was like, look, Chris, first sitting down. And I came from the entertainment industry as well too. And so I needed a gap in order to understand how to, to think about things. And he was like, you need to first order business. I need you to have a breakfast, lunch and dinner meeting every single day for a year and then come back to me and let me know what you learned. And I was like, this is the craziest idea that I've ever. Like, why are you telling me this? But then after going through that journey and understanding how to build a network and understanding how he thought about things was really important. But I say that because he also first talked to you when you were thinking about getting into the game and sitting down, having that same conversation. So I don't know if you could just go. Because obviously he's always on to something. He knows how to pick the talent.

3:03

That's right.

4:40

Just to share that story with everybody, I think that'd be super fun.

4:40

Yeah. I told Dr. Jerry Buss, the owner of the Lakers, that I wanted to become a businessman. He became my first mentor. But then he told me, listen, you need to meet a guy named Michael Owens, the King Deal Maker.

4:44

Of course, of course.

5:00

In Los Angeles and in the country. Right. And so I said, okay. So I reached out to Michael Ovitz and I said, hey, I would like to take a meeting with you because I want to become a businessman after my playing career is over. And he said, all right, come on in. So, Chris, I get there and I think the meeting was around 2 o'. Clock. Of course, I'm early for everything. So I got there about one, and I'm sitting in the lobby. It's three o', clock, it's four o'. Clock, and now finally, it's five. So the assistant come out and get me. And I go into his office and he shakes my hand. And the first thing he says, you know, I don't know about representing you. Athletes, they spend more money than they make. I don't know if you're serious. I don't know if you have what it takes to become businessman. I represent everybody in Hollywood. I got all the producers, the directors, the actors, actresses, the writers. He said, you know what? Nice meeting you. And he threw me out.

5:01

You're like, whoa, whoa, whoa, whoa, whoa. What?

6:05

I came here for him.

6:07

Exactly. I thought I was gonna get something done. I had a pen in my pocket. Yeah, yeah, yeah.

6:08

And so a couple weeks later, he calls back and he says, I checked you out, and Dr. Buss told me that you were serious. And he says, okay, come back. So I came back and he had a stack of magazines, and he said, here, you read these and I'm gonna give you a test. Yep. And if you pass the test after reading all these magazines, then I think about representing you. So of course I went back and read that same day, I read. All right. And then whenever he called me a couple weeks later, I went back, he did the test, I passed the test. And he said, I see you're serious about becoming a businessman. So he took me all around town meeting everybody. We met for lunch a lot. He loved meeting at his favorite restaurant. And this is. He taught me so much. Not just about business. Yes. The art of deal making. And also making sure you have a long and big Rolodex.

6:13

Yep.

7:17

And you might not need the people today, but you may need them tomorrow. And so, so what he did, I remember we go to his favorite restaurant. That's when Morton's was the place to eat. And he had the table. He had the one table, the table in the middle. So he says, watch what happens when I sit down.

7:18

Okay?

7:37

So he sits down, we sit down, and after two minutes, everybody Came and kissed the ring. They came over to him. Hey, Michael. Da da da. And so as he was talking to him, he would always introduce me to him.

7:39

Yep.

7:52

Everybody that came over, he would always also make the introduction to me and Chris. About six months later, I'm meeting all these CEOs of companies through Michael. And so then here comes the Pepsi deal. Yep. When I became a franchisee of Pepsi, he put Earl Graves and I together and man, that took off. Here comes Starbucks, all these things. Because he was right in the middle of everything. And then the last thing he did, he reworked my contract to make me one of the highest paid in the NBA. But he did it. And then I said, well, how much I owe you? He said, I don't want nothing from you. Yeah, yeah. That's who Michael Ovitz is.

7:53

Exactly right, exactly.

8:38

So I wouldn't be where I am today. Michael Ovitz about everything that he did for me. Making me smarter, make me understand business, make me understand deal making. Also make sure that you go in and you ask questions and you really get the knowledge. He was big on making sure you had the knowledge. Right. Being an expert at not only deal making, but also understanding the deal, also understanding the sector, whatever you're getting involved in.

8:40

Well, I mean. Cause even on our business there's three different types. First you have to be able to see the deal and then okay, the deal that comes in. Then after that, the next stage is saying, okay, I actually want to make that investment. But the third stage is actually the most important stage which is winning the deal. And that's kind of like how you're talking about in terms of being able to identify those right opportunities and then being able to then execute and do a right deal on top of it.

9:11

Execution, Execution and more execution.

9:37

Yeah, yeah. That's interesting because I mean when you. When we look at kind of doing deals and thinking about opportunities, a lot of it really does come down to relationships. And so how do you think about your network and how that's kind of cultivated into your. The relationships and the deals that you have been. Because oftentimes in venture, it's a very long term game. You're not just thinking about just doing the deal immediately. There's a lot of steps and process that come into it and you have to give first in order to have these things happen. And so how has relationships and the EQ of the business really kind of became. It seems like that's a superpower for you that allows you to have these opportunities come your way.

9:39

Yeah. You're right. Because I build a fabulous relationship. When you think about with Ron Burkle and you Kuiper. And we did the equity deal, the private equity deal we had. We did some amazing. We bought some amazing companies. But I knew Ron for 10 years before we actually did a deal together. Yep, yep, yep. When I think about Starbucks and you know, really understanding. When you think about customer service, that's what really. It taught me everything I needed to know about customer service, you know, and so having a great partner and going into Starbucks stores and really understanding the business side of it and. And, you know, a cup only cost, you know, less than 10 cents or 15 cents at that time. Yeah. And then the sugar, the beans, and.

10:18

It all start to add up. You're like, hello.

11:24

And so your margins were incredible. Exactly. When it came to that, you know, and so I've been blessed to create not only great partnerships, but also having these people as friends as well, you know, and. And so then I just carried that on to all the other things. Mark Walters today.

11:26

Yep.

11:49

You know, Peter Gruber, you know, all these guys who I'm in business with. But Dr. Jerry Buss treated me like I was his son.

11:52

Yeah.

12:01

And I think that when I think about our relationship and him opening up the door for all these other people for me to meet them and them to become my partners. So I really look at it like, when you come into business with these people, you have to play your role and do your part as I tell them, what role do you want me to play in this partnership? So I'm gonna over deliver to you and to the company and to this partnership. So it's like a team. That's right. Yeah, that's right. And. And instead of me being the point guard and the leader like I'm normally.

12:01

Exactly. You know.

12:42

Tell me what you need now. I'm playing a. A role player in business with these men.

12:47

Yes.

12:53

And it's okay, you know, and so I am happy about that. And these partnerships have been huge and lucrative. But I learned so much from each individual, and so they taught me so much. And I was like a sponge. I wanted to get up under them and learn a lot.

12:53

I think one of the things that you can be a sponge with is not just one specific industry, but multiple different verticals. Right. So you said from food and beverage to hospitality to now the insurance business and now sports media, entertainment. There's so many different variables, but all kind of having that one consistent vehicle or mindset in terms of service and really over delivering Is important.

13:19

I think you're right. And so sometimes people want to be in one industry and I think for me, that was never my mindset. And so. And then there was nothing sexy about anything that I invested in.

13:45

Yeah, no, but that's, but that's where it is. Foreign businesses keep. That's. That's a secret. You know, everybody wants to find the hottest company.

14:02

Yes.

14:10

And sometimes that might be. It might go up and then next thing you know, it could be a trend.

14:10

You absolutely right, Chris. You're absolutely right. And it's more those that fail or like go start up and then go down. Yep. And so. But the ones that are boring and people don't know about or care about, those are the ones who are on a consistent. Making money or going up, you have growth. And so that's where I want to be. Absolutely. And so you've done a great job. And I want to say this while it's on top of my mind of teaching these entertainers and athletes long term investing, you know, it doesn't come just immediately.

14:14

Exactly. Give me, you invest into the fund, I call you back 18 months later, hey, I need this back. I gotta go out this weekend. Like, no, no, no, no, no, no, no, no, no.

14:54

It doesn't happen like that.

15:04

Yeah, hold on a second.

15:05

But thank you for that because they learned a lot from you and the deal making expertise that you have. And so, yeah, it's.

15:06

Thank you for that. I appreciate it.

15:17

No, no, it's building your network.

15:19

Like.

15:24

We talked about, your Rolodex. And then it's going to lunches and breakfasts and dinners that you probably don't want to go to, but you should be there. And. Because those places are where the deal makers are. Absolutely. Those places are where the billionaires are or the multi. Multi millionaires are. And so I learned that early on. And so when I got invited, I went and then I went early. Ovid said go early because all the richest people.

15:24

Exactly. They know about that time. Right, Exactly. They ain't trying to hang out.

15:52

No, they try to hang out. They come early and they want to leave early.

15:56

Absolutely.

16:00

And you will get that quality time with them if you go early.

16:01

See, that's a gem right there. See, early is to be on time.

16:04

That's right. That's right.

16:09

Absolutely not CP Time.

16:10

No, no, no. Oh, you don't get nothing for that.

16:12

Exactly, exactly. Exactly. No, but I think that, you know, even how we. It's a lot of the soft skills that really kind of, you know, really lead into these real investment opportunities and being in the room and having the right time. And so, like, I'm curious when, I mean, when, when we first met. We met in Silicon Valley when we were doing the skydio deal.

16:14

That's right.

16:38

I think it was the Series A at the time. What was that interest in. Because you were. That was almost 10 years ago. What was the interest when you were thinking about expanding your business portfolio to get into startups and to think about why Silicon Valley was an interesting opportunity to explore when nobody else was really. You were literally one of the first people that we did a co investor with. That gave me the idea to realize, oh my goodness, this is a huge opportunity, not just for our portfolio companies to have access to someone like you and your network and the relationships that you have, but also for the portfolio, portfolio companies to learn from you. And, you know, I called it like shared genius, where you have the best of both worlds really just coming together and having. And you getting a chance to talk to the CEO and how that's kind of conspired. But what was your original interest in terms of like thinking that this was actually something that you should be exploring?

16:39

Well, first of all, when you go back, so did the movie theaters with Peter Gruber and Magic Johnson theaters, Howard Schultz and I did Starbucks. 125 stores and 40 different markets. And I just told you how he taught me so much about customer service. And so I was looking for what's the next growth opportunity for me and my company. Right. Because we want to continue to evolve, grow and think outside the box. So I said, wow, all the money is going towards Silicon Valley. And so how do I get into that world? Right? And then here you come, this little old fox. Yes, hold on. This smart young man.

17:43

Let's go.

18:34

And so I just needed that foot in the door. And you provided that foot in the door for me. And also Ben as well, knowing him. And so here comes this opportunity with skydio and the drones and to be able to be a early investor.

18:35

The product wasn't even. It was still in prototype.

19:00

That's right, that's right, that's right. And so that really excited me. And I think it took me and my company to a whole nother level because that brought me into Silicon Valve. I didn't have that in Silicon Valve. Yep, yep. Now I had it everywhere else. A great track record of success, but I didn't have it there. And so that deal provided me with a track record in Silicon Valley and then opened up the doors for me. To see other opportunities that I didn't get a chance to see. And so, again, I want to thank you, thank Ben for the opportunity that I had. You two also my friends. So sometimes. But it's about timing. See, some people forget about that part of it. It's about. Sometimes it's just not your time to do that deal or have that opportunity. And it just lined up perfect with the right people being you, me, and Ben. And the timing was right when Scott Ewell was just coming out with their product, and it was a consumer product at the time. That's right.

19:02

And then, you know, with you just now making a couple of the investments into the sports teams and seeing how an autonomous drone could potentially be the future for sports and entertainment. And then when we were outside the four seasons.

20:21

That's right. That's right. And a prototype and going up.

20:32

Exactly.

20:36

But to that point, you just made. Who would ever thought now they use drones for everything?

20:37

It's crazy.

20:42

I mean, so we were way ahead of the curve.

20:43

I know, man. That's all we do.

20:45

That's what people don't understand. Yeah, we were way ahead of the curve. And now you think about every sports league, every fire department, every police department, on and on and on.

20:49

Defense contracts are now going very crazy off of it.

21:02

That's right. They all use it around the world. Yeah. Yeah.

21:05

Well, I think then for us, one of our investment strategies is simple one, but it's a tough one, which is like, good ideas that look like bad ideas, you know, and so sometimes you have to think outside the box and see around the corner when you're making these investments and. And oftentimes a good idea looks like a good idea. That means everybody can really do it. So you have to kind of find that intersection to where there's, you know, like. And what is your earned secret in terms of, like, you know, from the fact, like Adam, for example, like, he grew up just, you know, doing RC racing, and he eats, sleep and breathed this and used to work at Tesla, and so knew the opportunity around autonomy and really kind of creating that opportunity. And so, you know, that's what we look for when we're looking at founders. Like, what do you see? Cause now we opened up the box, everybody's, you know, hitting you and your team, trying to get you to invest into the next series A, the next series B. What do you look for and founders or. Or. Or the next entrepreneur that's trying to have you become their investor?

21:08

Well, I think, first of all, you're. You're Right. You know, it's. Is it something that is not in the marketplace? Can we really look at this 10 years from now that it's going to still be here? Yep. It's going to still. It has growth potential, hopefully year in and year out. And then do we have a chance to exit or sell down the line? And then the partners, I want them to make sure that these founders and these great people, they have skin in the game. They also are great and they're experts at what they do. Yep. And you know, we, we then also look at it. Can we bring added value? Right. Being Magic Johnson, all the things that we have in our toolbox can.

22:12

Absolutely.

23:14

Can we bring added value to the deal or to that founder and make that company grow or take off and fly?

23:15

One of the things that I always tell founders, because they always, you know, whenever we might either get you into a co investment or present the opportunity and they have the opportunity to sit in front of you and your team initially, they always think, okay, well, we need to get Magic and have him be the face of this or tweet this. And you know, and I think that people are now finally starting to understand that, you know, the iceberg, tip of the iceberg is Magic and Irvin the face. But the enterprise and the networks and the introductions that you can make to, whether it's the sports teams, whether it's to the insurance companies, whether it's strategic businesses. Now I think that people are really starting to understand the true value of talent. And when they're thinking about having somebody on their cap tables.

23:24

Yeah, because see, we're politically strong, we're CEO strong, and our Rolodex is huge and long and powerful. And so we know how to grow businesses. We've been doing it for a long. I've been in business over 30 years and I tell them all the time, utilize us, utilize our network, our expertise. And so then once they get into partnership with us, then they say, oh.

24:15

He didn't know exactly. Like, what did you think it's called? Magic Johnson Enterprise.

24:48

That's right. That's right. And that's what we talk about when we say the added value. Yeah, you know, you want my check. But also too, you should want everything else that we bring to the table. Because I'm used to winning. Yep, yep. I'm used to winning.

24:54

I mean, you just got another little chip champ. That's right.

25:07

That's right.

25:11

I'm sorry, I got a little. Got a little championship on my shoulder for a second.

25:12

So to that point, Chris. I don't just want to win in sports, which I have 18 championship rings. I also want to win in business. So I have a mindset of winning. And I'm going to do everything I can to make sure that deal or that partnership wins. And so that's why you'll get my whole team and everything that we have to hopefully support what you're doing.

25:17

Yep. The next generation of talent, the next generation of, whether it's athletes, entertainers that are interested in business, that are looking to invest into Silicon Valley, you know, they often, like, what. How should they think about structuring a team in today's time?

25:43

You just said it. You just said it. What they fail to realize is structuring a team. Just what you just said, because that's so important. See, you're great at what you do.

25:59

Yeah.

26:12

Basketball player, football player, singing, being an entertainer. But you're not great at business. So you have to get a team that is great at business, that you control, that is a part of your entire enterprise that can help you achieve your goals in business. And Michael Ovis always pointed that out to me. Get people who are smarter than yourself, get the right people and always pay them and then let them do their thing. And he was absolutely right. So I'm telling all of them out there, you gotta get a team of people who can help you that while you're on the stage singing, they're conducting business.

26:13

Exactly.

26:58

Right.

26:59

Exactly.

26:59

They're making deals for you. And remember, these are not people you gonna hang out with.

27:00

And nor do you need them in.

27:05

That's right. Cause if they're in the club.

27:07

Exactly. Then who's signing that check? Exactly.

27:09

They spending your check, they spending your money. So to that point, I've always looked for when we're in the infrastructure. Okay, let's get some experts in infrastructure. On and on and on. So that's what you got to do. So I would tell them that. That's be the first thing I tell them. Make sure you get a great team around you. And also those can tell you no. See, they're not used to somebody telling them no.

27:13

Yeah, yeah. No, they don't even know that words don't even. That's not even a vocabulary. They'd be like, no, no, no, no.

27:43

You can't do that. Or, no, you can't write that check. Or your friends are bringing you deals that make no sense. No, don't invest. You know, and so that's important as well.

27:52

Yeah. I'm curious, when you think about deals I mean, especially, you know, when it comes to venture capital. No. 1B. And we have that. It's called the Babe Ruth effect, where I have the highest number of strikeouts. But you also have the highest number of home runs. Right. And so you gotta swing for the fences for every deal. But there's some deals that you might miss. And within any venture capital firm, you've missed a deal. And just, that's just the nature of the beast in the industry. Do you have one in your. That you can remember where you either looked at the opportunity wrong or you missed the deal, or that one just either got away, you know, just, just because you got 30, 30, 32 years plus in the business, you know, if you were striking a thousand, then, then, you know, I'm just curious, kind of if you can. And what did you learn from that?

28:03

Yeah, Chris, there's always deals that, you know, you wish that you had a. Wrote the check.

28:54

Yeah.

29:03

And you didn't. Or deals that, you know, you heard about too late between the Ubers and all the deals like that that you say you had an opportunity, but you just didn't pull the plug. I mean, you didn't pull the string to write the check. Right?

29:03

Yeah.

29:26

And then you have a deal like Nike when I was young and they wanted to sign me, but give me stock. Why did I meet you? Why did I meet you by 40 something years ago?

29:26

Hey, well, you gotta call my mom and call my dad. I would've loved to negotiate that one.

29:39

Exactly. Phil Knight said, I don't care have the money they have, but I got stock. And, and they just ran the analytics. If I had a deal, did that deal in 1979, it'd be over a billion dollars. So that's the one that you talking about, one that got away.

29:45

Man, I'm.

30:03

Sure that's the one.

30:04

Michael owes you a 100 billion favors. Oh, man.

30:05

So again, you know, there's deals that, that you always will think back and say, man, I wish I had did that deal. But at the same time, I'm not a guy who goes backwards a lot. I move forward. I'm always constantly moving forward. What I have is what I'm supposed to have.

30:11

Yep, yep, yep.

30:31

And. And so I'm not. The great thing is being 66 now. I'm not the same young guy I was then. So I can see deals different today.

30:32

Yep, yep.

30:42

And better. And I have a team of people vet those situations where I didn't before. So.

30:43

So, yeah.

30:48

So things have improved. I've gotten better. And so again, what you don't have, you don't have.

30:49

Yeah, but, but you learn, you learn and you won't make that mistake again.

30:56

That's right. That's right.

30:59

I think one of the things that, I mean, but you learned this extremely quickly was the, the power of equity versus just, you know, writing a check and getting endorsements. And so have you seen that continue to, to change in terms of people outside of the industry that are now starting to look at equity based deals versus, you know, instead of just trying to get traditional endorsements or.

31:00

I think you're seeing it now across the board and you're seeing it. Well, look at it from actors. Yeah. You know, all these actors now are doing equity deals and still taking the money. Right. You see that.

31:25

Creating their own brands.

31:40

That's right. Creating their own brand and making a lot of money. And then you see the same thing happen, happening with the athletes and just everyday people too, you know. And so yeah, it's changed a lot. Where before you were brought up and you were coming up and you supposed to say get the most money, get the check, get the check. And well, things have changed now and I think there's a lot of people who, who were able to help people understand that's not the way to go. Yeah. And so now you're seeing some of.

31:41

The.

32:23

Most high profile people, celebrities now owning, like you said, their own brands, their own companies.

32:25

And I mean we see it on our end when people are wanting to invest into the next big companies and understanding now that, you know, it's not, hey, I'd love to work with you, you should write me a check. It's like, I'd love to work with you. Here's you some money so I could get on the captain.

32:32

That's right. And I think that's what's really changed.

32:48

Yeah.

32:52

Before athletes had been sit back, be like, I'm not gonna write no check. You know, I know, give me, give me, give me. And you were like. And they, you know, they was like, no.

32:52

But also the founders doesn't happen like that. It's two totally different worlds. We're in Silicon Valley. People, you know, they don't, it's a Series C or a series A company. They don't even have a marketing budget like that. So. But it's like, well, we do have stock.

33:02

Right.

33:15

You know, and then wonder how that could play out over the years.

33:15

Know everybody changed, right? Yeah. So let's try to make it happen and. But hey celebrity, hey athlete, hey, you gotta be driven by the equity now and sometimes the equity and you gotta write a check for sure. Be a part of that as well. Absolutely. But they're willing now. They're more educated I think today, but because of people like yourself who, who are their age and can help them understand and teach them how the game is played today versus yesterday when I came around. Right.

33:18

And I think one of the reasons, and you kind of talked about it around creating that halo effect is that when we make these investments now. And I think that before it used to just be on one or Wall Street Journal or TechCrunch. Now when someone makes an investment or the new companies are being built in Silicon Valley, they go across mainstream media from Com Complex to Essence Magazine to, you know, all on social media like Boardroom. You know, there's whole entities now that are being created that are really expressing the business of investing. And I think that it's. And now people are, it's in their conscious mind and they're thinking about the next generation of those companies.

33:55

Yeah. And that's what's so cool about 2025.

34:38

Yeah.

34:43

Right. And so, so I look at Steph Curry, you look at LeBron, the companies that they have built off the court. Right. Snoop, Dr. Dre, on and on and on, Kevin Durant, I mean these guys are just doing, they owning teams now while they're still playing.

34:44

Crazy, crazy.

35:08

So it's just beautiful. And, and you see Tom Brady and on and on and on. You know, the Manning brothers. So you see all these former athletes and current athletes and again there's so many others who are just taking advantage of their brand and star power, but turning it into a successful company. Absolutely.

35:10

Yeah. And I mean you were literally the first one, I mean like you said, is that, you know, people were saying why are you even interested in business? And now fast forward 25 years like that, the, the cool thing to do is have, you know, a company that, that you can actually go and invest into and you can build your own brands. And I think that with, you know, even like when we think about the world of crypto and AI.

35:36

Right.

36:02

You know, you can.

36:02

We.

36:03

One of our thesis is that at one point one person will be able to build a billion dollar business with the tools that are, that are available right now. You know, being able to use, use prompt engineering to actually create a business plan or think about different strategies and all those things. And so I'm curious, where do you see kind of the evolution of what these next generation of technologies coming? I mean, everyone talks about what's going on with AI. I mean, we're very big believers in the future of blockchain technologies. How are you seeing those worlds kind of develop and what you have going on? And if you have a specific thesis.

36:04

Well, technology, it just keeps going and growing. I mean, I mean man, you and I way back investing in technology and still investing today in technology. And like you said, AI now it's going to blow people's mind. It's already blowing our mind where we are today with it. But it's only going to get better. So I think everybody's now have changed and said, okay, I'm moving money from over here invested in than this to invest in AI. And I say to everybody and you gotta get in early. So to a lot of today's young successful people, look who else is investing. When you look at a deal and that's gonna tell you everything you need to know, right?

36:41

I'll tell you. I mean I can't tell you the amount of time someone's reached out to me, been like, oh, hey, should I do this? Should I? And I'm like, well, who's leading the deal? And then they' like they don't have a lead yet. I'm like, well then you're the lead.

37:38

Duh.

37:53

And they're like, oh, that's a good point.

37:55

And you don't want to be that, you know. And so for me, I always look at who is the lead also who else is investing. And then I say, okay, they got a track record of success. They've already vetted this deal frontwards and backwards. Yep. And if they wrote a check, I'm writing my check 100%.

37:58

Also, the industry is super important and I think, you know, you've recently had an opportunity to, to join the cap table on Alchemy Health and also with Function Health.

38:19

That's right.

38:32

Which actually just announced their series B today. You know, you're developing an amazing portfolio in the intersections of AI bio and, and where the future of innovation is going from there. How do you think about that in terms of just that specific sectors especially. And now people are the next big companies are all coming and saying, okay, well I see Magic has invested in these businesses. I think that this is the next big one. Yeah.

38:32

Because you take alchemy and building pharmacies in places that they don't have pharmacies. And we were just at a conference in D.C. and we made a multiple deals just in D.C. they told me.

39:00

They said thank you. So you know, and they're doing Amazing.

39:16

They're doing an amazing job. And heavy demand for pharmacies. A lot of them are. All the big boys are closing a lot of their pharmacies and drugstores and now.

39:21

But they're still in need, especially in specific areas that aren't in the mainstream ecosystem.

39:36

Well, that's the, the key. Yeah. Right. Yeah. Rural America. Yep. Right. The inner cities. Yep. There's plenty of opportunities for ALAB to take advantage. And they are. Yeah. And these cities are courting them. Right.

39:41

They need it.

39:55

They need it. That's how I look at it. If the sector, if there's demand and heavy demand, just like you look at AI, it's heavy demand for it across every industry. It's going to help everybody. Right. Lawyer, your, your, your, your cost. You're going to be more efficient. You're going to be faster.

39:55

Yep, yep. And you got it. You literally have the world's information just right there on your finger. That's right. Ready to help, you know, build you the next product.

40:15

Exactly.

40:23

Code the next company.

40:24

Faster, quicker. Yep. Less money.

40:25

Yeah, that sounds like a win to me.

40:28

And you make more money. Exactly. So again, you know, I want to make sure, you know, companies are on the cutting edge and are doing things we've never seen before or there's a huge demand like alchemy. There's a huge demand and man, it's almost. You can't miss. Right.

40:31

Well, you see, I mean, the funny thing is, is that you've seen it before.

40:52

You think about the theaters.

40:56

Yeah, the theaters.

40:57

I was talking about all the things that, that we did. There was heavy demand for it in the inner cities, but nobody was going in there building them. So it was supply and demand. Right. So we met that and man, everything just hit a home run and so. And then we just kept that business thesis going. And then here come companies came in and said, oh, wow, that's a huge marketplace. Minorities do have a lot of spending power. Right. And right now we're well. But over a trillion, about $1.4 trillion spending power between African Americans and Latinos is a couple trillion.

40:58

100%.

41:42

Exactly. And so nobody was going after their disposable income. So that's why I built my business in those communities. And to your point, so I will continue to look there, but because now my company is more global and we're doing bigger, bigger deals. And that's sometime a problem that you and I have our friends.

41:43

Right.

42:07

And people that we know who are great people, who are celebrities and stuff, you know, they Bring you deals and they too small and they don't understand I've outgrown those deals.

42:08

You know, like, what's that? What did you say? You said, like the same amount of time I'm gonna work on this.

42:19

Small. That's right. For a small deal, I could be working on a big deal.

42:24

Yep.

42:28

And we gotta put our efforts in those big deals. But there's nothing wrong. And so everybody has to start somewhere. And they have to understand that. Don't think that you have to start where I AM or where LeBron is or Steph or whoever it is. It's okay to start small and grow your business.

42:29

Exactly.

42:48

Grow your company. But for me, you can't get mad at me because I said, hey, my deal's gotta be here. Because again, that's where my company, my brand is. And thus the calls that I'm getting today, where yesterday I was getting the other calls, but not today. All these big deals, they call me and say, hey, we want you to be a part of. That's how I got into the sports team.

42:48

Exactly. I remember when I went to your annual conference down in Laguna, you had your whole team around and you just were just pointing out, look at my portfolio. This is the portfolio. This is the value billions.

43:14

That's right.

43:28

And then so you emphasize, like, we're going to keep growing this. We're going to need exponential value. And so you're going to have, have to, you know, swing for the fences and think bigger continuously.

43:28

Yeah. Because, Chris, we. Look, let's just break down. When we bought the Dodgers 2.2 billion, where everybody said that was we overpaid. Right. And today, this is not from me. This is from Forbes and all the companies. Now it's 8 billion.

43:40

Yep, yep.

44:00

Right, right. So.

44:01

So.

44:03

Billion.

44:04

Yeah.

44:05

Dr. Bus bought the Lakers for $65 million. They just sold for $10 billion.

44:06

Lake show, baby.

44:15

You know, the Commanders, two years old now.

44:17

Great.

44:22

Six billion. Now they just said we are closer to 8 billion. And now that the new stadium, that's going to go even up higher that we're building today. So, sports. I know we always talk about it. Why do I invest? Well, it's easy because the valuations are so high and nobody's ever going to stop watching sports in America. That's where we get away.

44:22

Exactly.

44:46

That's our release.

44:46

Exactly.

44:47

That's our get away from our everyday work. Life is to watch sports. And that's why it's always going to be these teams. The valuations of these teams will continue to Skyrocket because of that.

44:48

The sparks.

45:01

Yeah.

45:02

I mean, you did that deal super early before people. The WNBA wave even really took off like that.

45:02

And we were losing money.

45:11

Exactly. So why did you decide to hold on that?

45:12

Well, because, first of all, we thought that someday it would change. And we wasn't losing a lot of money, but we were losing money. But stuff that we could. Okay.

45:15

Yeah.

45:26

Yeah, it's okay. We're comfortable with the loss. And we didn't know it was going to turn around like this.

45:26

Yeah, no, exactly.

45:34

From now, the team is worth like $300 million and growing. Right.

45:36

Crazy.

45:40

But we only paid a few million for the team, and now it's where it is. But give a lot of the players a lot of credit. Give of college basketball. Women's college basketball took off. And then that fan base came in to the WNBA and started watching that as well. So, no, we're still blown away about the growth of the WNBA and where it's going. Soccer in America, same thing. Lafc.

45:41

Let'S go.

46:16

Valuation over were a billion dollars. I think with one, two, man, it just keeps growing. The nwsl, the women's soccer league, same thing. It's just skyrocketing now. They all have great TV contracts. The WNB, that's the reason why. Because they have great TV contracts.

46:17

100%.

46:37

And so it's just amazing. So that's why I invested in sports teams.

46:37

And they're growing.

46:44

More than growing and growing and growing. And then streaming came in. All those companies really allowed these leads to grow because they all want sports content.

46:44

Yep. So much. Even like what happened with YouTube a couple weeks ago, YouTube TV, when they shut off ESPN for a couple weeks in Disney, and everybody was like, no, hold on a second. We got to get this deal.

46:57

Right.

47:07

Because that's how important it is.

47:08

That's right. And. And young people get everything on their phones.

47:10

Oh, yeah. You know how many times we be eating dinner and then, like, you just go out to eat and you got the game on.

47:13

They told me. A lot of people told me they were watching the World Series when my Dodgers won back to back. And they said they'd be out to dinner.

47:20

Absolutely.

47:27

And then it was. They wasn't listening to their wives or girlfriends. They were like, wait, man. And one guy told me they were at a wedding.

47:28

Yep.

47:38

And said all the guys sort of went outside. Right.

47:39

Y' all good.

47:45

Y' all go. And we going outside and watching the game on our cell phone.

47:46

Oh, man.

47:50

But that's. That's how they Consume their content is on that phone.

47:51

Well, one of. Even when you were. When you were talking about sports, when we were upstairs, one of the. You said one of the secrets to why these teams are growing and obviously with the success of the Dodgers, when you purchase them and, and the.

47:55

And.

48:08

And, you know, continuing. And now, you know, with the commanders and so many other teams is that you have to not be afraid to spend money. You got to spend money in order to make money.

48:08

That's right.

48:19

So break that down. Because, I mean, even from our portfolio, companies and founders thinking about, you know, always just conserving the cash versus going out and really putting the money to work.

48:19

Yeah, Chris, that's a great point. When we bought the Dodge, we put a couple hundred million into the fan experience, into the stadium. We had to increase the fan experience. What is every league and every team talking about today? How they'll increase the fan experience? Because then the money will come back to 100% owners. Right. And so because of that, now the Dodgers is just. We're making money that no Major League baseball team has ever made in revenues. It's been crazy, unbelievable. So. So it came back to us. And so I can tell you so many different situations that you have to invest in the team in the stadium because it won't come back in the players, because that's the number one thing. You had to put a great product out on the field. That's where we're growing the commanders. That's the next step for us. How do we get better? And so we're going to do that. We finally got our quarterback and Jaden Daniels, but we had to surround him with more weapons. We have to get better on the defensive end. So we're taking steps, but every team got to put money into the player development, players itself. And then last but not least, making sure that the fans are happy because you're asking them every year to come back. Yeah. Come back and ticket prices go up.

48:30

Absolutely. Yep.

50:01

Yep.

50:02

Yesterday's price was not today's price.

50:03

Exactly, exactly.

50:05

Exactly.

50:06

And so, and they're gonna say to us, okay, if we're gonna pay more money for our season tickets, then what are you gonna do as the owners. Yep.

50:06

And as an owner, I mean that it really. It boils down to, you know, it's not just the team itself. Like, you're working with operations, you're working with so many different puzzles. And obviously, when you were playing, you were the captain of the team. For the founders that are thinking about building and scaling their teams, like, what Is that they should keep in mind or what would be, you know, what's your methodology of thinking when it comes to keeping a team together as you're going towards these goals?

50:17

Yeah, I think first, you know, making sure that you do invest in player development. Analytics.

50:47

Yep.

50:57

Yep. When I play no analytics today, you got to have a whole staff. Yep. Because that's how you win in the today. Right. And right.

50:58

Right hand pitcher versus left hand pitcher.

51:08

That's right.

51:10

This percentage.

51:11

That's right. In basketball, this guy shoots from the right side on threes and he makes them more than he does on the left side or force them left because he doesn't score well going. I mean on and on and on.

51:11

So.

51:26

So I never seen analytics come into. It's in every sports now.

51:27

Yeah.

51:33

Football, NFL football, basketball, baseball, baseball. Actually started analytics. Really? Of course in sports. So. So. So invest in analytics and then marketing. Because you gotta have a great marketing team to, to help you go out and, and tell your story and what you're about. That's right. Your way. What you're about. And so between that marketing PR team, you gotta have a great one. And then I would tell them identity. See, people gonna latch onto your identity. What is your identity?

51:34

Why do I even need to even be with you?

52:14

That's right. Right. What is your identity? Who are you? Players also gonna ask you that. What's the identity of the Commanders or the Lakers or the so and so and so? And then do you want to win? Because a lot of. Lot of players and a lot of fans gonna be saying, hey, Mr. Owner, do you really want to win? Exactly.

52:16

You know, Ben says it, you, you. You're either playing not to lose or you're playing to win. It's either one or the other. And that's.

52:36

And he's. And he's right. And every. Every group I'm with, you know, they're. They're playing to win. And that's why, you know, we're every team I have. But the sport sparks. And this year, now, the Commanders won't be in the playoff, but every team was in the playoff. Absolutely. And so we're playing to win.

52:44

Yeah.

53:04

And. And so the fans see that. Free agents see that.

53:04

Yep, yep, yep. Because they're like, hold on a second. I. I'm. I'm tired. I'm tired of going to Cabo.

53:10

Exactly. And I want. I want to be in the playoff. Why the Otani, you know. Yeah. Leave the Angels to come to the Dodgers.

53:17

Yep.

53:25

He had never been in the playoff and he wanted to be in the playoff. That's why he signed with the Dodgers. And he's back to back World Series champion.

53:26

Yeah, I know that was one of the best, best World Series you guys had. I was on the east coast, man. You guys had me up till 3:00 clock in the morning watching that game.

53:33

Yeah, that 18 inning game. Crazy.

53:43

But I'm, I'm, I'm locked in.

53:46

Yeah. And everybody says the same thing.

53:48

I couldn't believe it.

53:51

That series changed baseball and the MLB and for the better. And I think that we brought in fans that normally didn't watch baseball.

53:52

Absolutely.

54:01

And so again, that's what can happen sometimes when superstars play like superstars. Yep. Ohtani performed well. Guerrero from their side performed well. And on and on and on, on. They all played like superstars. That's what made it so entertaining. And the highs and the lows, that's what sports give you. Right. One minute you're up three old, the next minute they tie you and they take the lead. Exactly. I mean that series was going back and forth. So it's a beautiful thing. That's why again, we love sports and we pour so much money into sports. Right now you got companies looking for opportunities in sports. Individuals who didn't think about investing in sport, now they're looking to buy teams.

54:02

It's an ass. It's always been an asset class, but now people really see the, the, the long term real value.

54:48

And can I add this? The WNB got so many people willing to invest and own teams and bring them into markets they're not in. Exactly. NWSL got so many more people want to buy a soccer team today that wouldn't been interested in one, two, three years ago.

54:53

Exactly. I mean I think Atlanta was just, just got added recently.

55:13

That's right.

55:18

And. Cause they know that behind everything there's.

55:19

Real business that's associated and a lot of revenue streams. Absolutely, absolutely.

55:21

And I think a lot of even our companies, when we're thinking about even like the next generation of AI video. Right. And being able to be able to work with these companies and find unique ways to bridge technology and innovation. Because if you're building a business from the ground up in 2025, you're starting a brand new company, you're not going to do things the old way.

55:26

Oh, you can't.

55:49

You know, and you think about with the tools that are available now, like that means just by default you can since say instead of us having a, you know, 100 person team or we could actually do this with 10 people.

55:50

And then.

56:02

And now we have. We can still operate at 10x the speed.

56:02

That's right.

56:05

Because of where, you know, whether it's the. To, you know, from AI to using blockchain and all these different resources is really helping push innovation forward on the business side.

56:05

And that's in everything. Just think about my journey. You couldn't pay an athlete in high school, college, and now nil. Now high school players are getting paid a couple hundred thousand crazy college players getting paid millions of dollars, which I'm so happy. Happy because when I came through Michigan State and I was dating my girlfriend who is now my wife cooking, I didn't have no money to take her to. To get something to eat. Right. And they couldn't pay me because that was illegal. But today these young men and women, these, these college athletes, these high school athletes, student athletes, I should say, are getting paid a lot of money. So name and likeness is so amazing. And now you got companies.

56:17

Yeah, yeah. Building specifically for that.

57:06

That's right. That's right. So things have really changed. And this, this show right here today, this has been the best show because we've covered every. Everything. Yeah, there's nobody else on TV that can cover all the things you and I just covered. That. That's. That's amazing.

57:09

Well, I think one of the main reasons is because we're both, we both are passionate about this and we're both actually in it every single day.

57:27

That's right.

57:34

Like, we're not, you know, just on the outside reporting in. We.

57:35

We're right after.

57:38

After this, you going back to your business call? I'm running back to go to the next meeting. And we're gonna keep it going.

57:39

And our phone gonna be ringing because everybody gonna say, how can I get down with you guys?

57:45

Hey, well, listen, well, you gotta start get 10 years in the game in order to help make it happen.

57:49

Yes, exactly.

57:55

But I think that like, you know, your journey and this is why we just wanted to make sure you were the first one that we shared this with because you did it like you said. We talked about the NIL deals. You talk about all those things like the contracts were back then when you did it. And you see, you know, I think there's only 4 billion billionaire people in sports. I mean, you have LeBron, you have Jordan, you have Tiger. And then we got Mr. Magic in the building, you know, so. And Irving, like in terms. But how you did it was. Was through a ser. Was. Was not just on the sports, but all majority from business that's right. And a number of deals that led you into going, taking one thing, taking your investment in Starbucks, Flipp Dodgers just continuing to build. And so I think that as much as we love you as the hall of Fame athlete, you're a Hall of Fame entrepreneur.

57:56

Oh, thank you. Thank you. Chris, are you a risk taker? Absolutely. You see, and I think a lot of times that's what they have to ask themselves. Are you willing to take the risk from the money that I did make from Howard Schultz and Starbucks. And again, thank you, Howard. Because you. You. He made me legitimate.

58:53

Yep.

59:14

That Starbucks deal sealed the deal for me. And so. But I was a risk taker. I put up my money.

59:15

Yeah, exactly.

59:21

You know, I put up a lot of money.

59:22

You gotta pay to play.

59:23

That's right. And Dr. Buss said, I love you. He said, I love you as a son, but you gotta write a check.

59:23

That's what I'm saying. Ain't nothing free.

59:29

I said, yes, sir. And so.

59:32

But that's real.

59:35

Yeah, that's real. And think about this. And all these athletes and entertainers out there that we're talking to and of course, are the people I was in a position, see, I saved my money. So every deal that came that I had to write a check, I was ready to do that.

59:35

Exactly.

59:54

So that's what's important.

59:55

Interesting. That's a gem right there.

59:56

That's what's important. And so, while you blowing it on so many other things, remember when that deal come and you have to put equities, you had to put skin the game. You got to be ready for that.

59:58

Stay ready, so you don't got to get ready.

1:00:10

That's right. That's right. So I wanted to throw that nugget out there. And that's so, so important. And, man, my journey, you know, the best compliments I get is from all the current guys, the current hip hoppers, Rick Ross, all them common. They all say, man, we couldn't do what we're doing today. Yeah, but we can do it because of you.

1:00:11

Absolutely.

1:00:34

You showed us the way. And I said, man, that's a great compliment. I remember coming, pulled me aside, he said, man, we don't respect a lot of people, but every time I get into any concert, we talk about money, we talk about owning something. They all say, you absolutely point to you. And I say, well, thank you. And I'm just so happy that Michael and I can say, hey, now, look at KD, look at Steph, look at LeBron. It's more than them. It's so many other Draymond equal dollar. I mean, I can keep going. There's so many great businessmen out there, and women, because the WNBA, those young ladies, are doing great things.

1:00:35

100%.

1:01:14

And so I want to also shout them out. And it's been a blessing, man, to sit here with you so that we can educate and also help others who want to get into investing or Silicon Valley. Owning their own company. It's not easy.

1:01:15

Nope.

1:01:36

But it's doable. If you. If you put the time in. You got to be willing to put the time in.

1:01:37

Yeah. 100.

1:01:42

Because like you said, we're after this. You and I running. And I'm gonna be on the phone in that car.

1:01:43

Exactly.

1:01:49

Exactly. All the way back to the office doing deals. You and I was separately on phone doing deal before.

1:01:50

Exactly.

1:01:58

And that's what it takes. And then last but not least, I gotta say this.

1:01:59

Yeah.

1:02:03

Don't be afraid to partner. See, that myth, we got to get rid of that myth that you got to be the only one.

1:02:05

Yeah, yeah. It's abundance, man.

1:02:14

That's right. You and I are partners. So, see, you didn't have to bring me in.

1:02:16

You could have just said, oh, I'm good. Exactly.

1:02:20

But you brought me in. And so. And so. So I want all these young people to understand that, too.

1:02:23

It's okay to collaborate.

1:02:32

That's right. It's okay. And then do multiple deals. Keep going. Because, Chris, you're so needed in today's culture.

1:02:34

I appreciate it.

1:02:48

See, because I'm older, you're young, so they're looking at you saying, dang, I want to be like you, or, I want to partner with you. I want to teach me. See, sometimes we're afraid to say, hey, somebody say, teach me. Yeah, yeah, yeah. Right? And you know so much. And you. You've helped so many, and that's been your blessing and your purpose. Of course you're rich. You're going to be richer, but you're rich by a lot of different ways. You're rich by money, but you're rich also with your Rolodes and your knowledge and your willingness to spread that and give it to somebody. El downfall or minorities have been. Most of the rich people before us took the knowledge with them, didn't share it. Exactly. Okay. So I wanted people to know. Well, that's. This is the man. Right.

1:02:48

I appreciate. Look, well, I wouldn't be here if we didn't have the opportunity to soak up your wisdom and just the foundation that you've created. And you know, you've been my inspiration behind everything in terms of taking business and bridging these worlds together. And so I appreciate you taking the time to have this conversation. You know, you're a friend, you are always there whenever we need anything. And in return, we just want to keep on running it up.

1:03:34

That's it. That's it. Keep on winning them Rain sliding on.

1:04:03

Our face 19:20 I appreciate you, man. This was super needed.

1:04:08

Yes.

1:04:14

And I'm glad we were able to get this wisdom down.

1:04:14

Thank you.

1:04:18

You're the man.

1:04:18

Thank you. I appreciate it and so are you.

1:04:19

Oh, thank you.

1:04:21

Thanks, everybody.

1:04:22

All right, signing out but not signing off.

1:04:23

No, no.

1:04:27

Exactly. No.

1:04:29

That was amazing.

1:04:29

Yeah. Thanks for listening to this episode of the A16Z podcast. If you like this episode, be sure to like, comment, subscribe, leave us a rating, or review, and share it with your friends and family. For more episodes, go to YouTube, Apple Podcasts, and Spotify. Follow us on X16Z and subscribe to our substack at A16Z substack. Thanks again for listening and I'll see you in the next episode. As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, please including a link to our investments, please see a16z.com disclosures.

1:04:31