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Lesson #3: Make Sure You Are Not Missing the Market

Article Overview: Johnson opened up his first movie theatre in the Los Angeles inner-city area of Baldwin Hills. It was an area notorious for being home to the Bloods and Crips gangs, and everybody around him kept telling Johnson he was crazy.

Lesson #3: Make Sure You Are Not Missing the Market

Johnson opened up his first movie theatre in the Los Angeles inner-city area of Baldwin Hills. It was an area notorious for being home to the Bloods and Crips gangs, and everybody around him kept telling Johnson he was crazy.
“It's like playing basketball,” says Johnson. “You come down the court looking at the defense and set up your play.”
“Approximately 32%-35% of the movie audience is minority, but we have [no theaters] in our neighborhoods,” says Johnson. “We have to drive 30-40 minutes to get to a theater. So it seemed like a natural.”

Johnson did his homework and found that in that particular neighbourhood, per-household income was nearly $50,000. “So you’re sitting there with almost 2 million people in a four-to-five-mile radius,” he says. “The math was easy.”
Johnson knew he had found a market that the rest of the business world was missing out on. Still, he knew that was for a reason. So, instead of taking a pass on the market, he decided to work with it.
He started by inviting all of the leaders of both gangs together for a meeting. “I told them that this is going to be your theater, and your mother, your sister and your daughter will come here,” says Johnson. “This has to be a neutral zone. No gang colors, no hats, no graffiti.”
As a result, the theatre has had no gang violence to date. Several gang members even got jobs during the theatre’s construction, and stayed on to work for the building company afterwards.
Johnson has developed a reputation for involving communities from the very beginning. He will regularly sit down with under-served regions and ask residents what is missing, what they would like to see. “In everything I do, I want to make sure people see it like it’s theirs,” he says. “It’s there, they have a piece of it, and they feel good about it.” Because of that involvement, communities have proven to be more than happy to embrace Johnson’s companies.
Johnson says he faced another similar hurdle when approaching Starbucks CEO Howard Schultz with a proposition of partnership. “I laid my plan out to him,” says Johnson. “I told him Starbucks could boom in the urban community and said minorities are driving 40 minutes right now to get to a Starbucks. So you know if you put one right here they're going to come. He was like, `How do you know that?' And I told him because my theaters are in the same situation.”

“They knew they were missing a market,” says Johnson. “African-Americans make up more than 30 percent of all the movie-going business. So it wasn't like African-Americans weren't going to the movies; they always have. It's just that there were no theaters in our neighborhoods, and Sony recognized that. It's the same thing with Starbucks. We'd drive anywhere to get a cup of Starbucks, but now we have it in our own communities, and that's why our [company's] numbers have been so high. [Corporations] just didn't know how to go about [breaking into the market].”

Still, Johnson wants people to understand that what he has been doing is not about charity. “Business is business - you have to understand that and have that attitude,” he says. “If it were just about charity, the business side wouldn't last long. But if you understand you're building this Starbucks or these theaters because of business and you can also give back to the community, then I think it becomes a win-win situation for everybody.”

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Article Tags: baldwin hills, bloods and crips gangs, business world, gang colors, gang members, gang violence, graffiti, hats, homework, household income, hurdle, inner city area, mile radius, movie theatre, neighbourhood, neutral zone, playing basketball, reputation, starbucks, theaters



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