- The Strategy Files
- Posts
- How Billionaire Sheila Johnson Built An Empire (part one)
Sheila and Robert Johnson started BET in 1979 with a $15,000 loan.
The company was listed on the stock exchange in 1998; the couple divorced in 2002, and they sold to Viacom for 3 Billion dolls in 2003.
Today, Sheila is the founder and CEO of Salamander Hotels and Resorts, a hospitality company that owns hotels, resorts, and golf clubs. She’s also the Vice Chairman and Partner of a billion-dollar sports company that owns and operates teams in the NBA, WNBA, and NHL.
How does one person get so many wins under their belt? And how do you begin to build that kind of success?
TODAY’S STRATEGIES:
Build your network before you need it
Solve problems that people tell you need to be solved
When you recognize a gap in the market, fill it
Build products for growing markets
The late ‘70s and early ‘80s were the Wild Wild West for cable TV - the industry was new and fresh and in demand. HBO launched in 1972, but networks like MTV, ESPN, CNN, and FOX hadn’t been created yet. The late ‘70s were full of opportunity for those who recognized the shift in the way people consumed media, and were ambitious enough to do something about it.
In 1976, Robert and Sheila Johnson went to a party. Robert met a woman who was recruiting for one of the top lobbying organizations in the United States - The National Cable and Telecommunications Association. The NCTA lobbied for companies in a new market that was about to explode - cable TV.
Robert took the job.
Sometimes, a job is the best education you can get - especially when it’s in a new market that’s about to explode. Jon got a crash course in all things cable TV: how networks were ran, budgeted, and regulated. The technologies being used. But most importantly, Robert got to know the people behind the industry.
One of those people was John Malone, a board member at NCTA. John had a problem - he also was the head of TCI, and TCI needed to fill time on a local cable network in Memphis, Tennessee. Back then, 40% of the population in Memphis was Black, and the Black population in Memphis was growing.
What did Robert do when John told him about a business problem that needed solving? He got to work on solving that problem.
Many first-time founders try to solve problems that people do not have, and this is the easiest way to fail. They don’t bother talking to potential customers, so they build a solution to a problem that doesn’t exist. Instead of pivoting their product to solve a problem that people want solved, they double down, and burn themselves out trying to make a business work that was doomed from the start.
Don’t do that!
Robert proposed the idea of an entire network dedicated to the audience TCI wanted to capture. But now Robert had a problem - how do you create a proposal for a new product in a new market?
He found a similar proposal for a network with a different demographic. Copied the things he wanted to keep, and changed the things that didn’t work for his use case.
Luckily, TCI wasn’t the only cable organization looking to create programs for a Black audience. So Sheila took out a $15,000 loan, and Bob quit his job to work on the business full time.
See you soon for part two!
Best,
LaToya