How to Build Your Business like a BILLIONAIRE | Robert Johnson's Tips in 12 Minutes

He was the first African American billionaire. He's a businessman, media magnate, philanthropist, and investor. He's worth over half a billion dollars. He's Robert Johnson, and here are his top 10 rules for success.

Fundamental connection to doing business is basically relationships. You know, people really, if you really think about it, People want to do business with people they like. I mean, every now and then you'll do a deal with the devil, but you don't really like the devil, but you'll do it sometime. But you'd really much rather do business with somebody you like, somebody who shares your values, somebody who you know is committed to the same objectives you are, somebody who's willing to work as hard as you are. And when you find those people, those are the people you want to bring under your tent to be part of your business objective. And you've got to do that by, you know, sort of presenting yourself in a way that people clearly understand that you are committed to creating value. Business people want to create value. It doesn't mean they don't want to have fun. It doesn't mean that they don't want to be involved in other kinds of things. But if you can say— go to someone and convince them that I can help you create value, and by your ability to articulate that and to communicate it and to give people the impression that you will work as hard as they will to create that value, you're gonna find people wanting to come to you. And so for me, it's sort of been like that throughout my whole career is being able to say to people and talk to people in a way that convinces them that I am going to do everything I can to help make what they want to achieve a success, and by extension, I'm going to be a success. When I started BET, the guy who invested in BET is a guy named John Malone. He was at that time the operator of the third largest cable company in Denver, Colorado, and he kept investing money into BET without taking additional equity. And as BET became a big success, You know, I ended up with about 75% of the company. He ended up with about 25% of the company. And one day I asked him, I said, "John, John, you put over half a million dollars in BET on the startup. You put it in as debt. You didn't put it in as equity, which would have given him greater ownership." I said, "Why'd you do it that way?" And he said, "Bob, I always knew you would work harder for yourself than you would for me." And it was that kind of commitment. So if you can convey to people that you're willing to work hard for them and for yourself, you got a business partner. You're connecting the dots. One of the key components of growing a business is getting the necessary capital to grow. So if you start off where you own 100%, but you need more capital to grow the business, you may have to sell off 20%, 30%, depending on how you look at the business needs. Don't fear that. Don't be afraid about the notion that you might fall below 51% and therefore not be minority-owned because being minority-owned is the culture you set, is the focus you set. It's the service you make to serve the minority community and it's your commitment to do what you can do best within the minority community. Keep in mind, if you go back to JPMorgan Chase, Jamie Dimon probably owns less than 0.05% of Chase. He's the CEO. He's the CEO, but no one will ever question whether or not he is in charge of Chase, but he's brought in capital as a publicly traded company to grow that business. Whether you get money from outside investors or whether you get money from friends or family, don't be afraid to take on capital. Sell shares or restructure debt or trade preferred or common, whatever it is because the notion is you want to be in charge of a growth company if that's what you want to be, a company that can go to scale, a company that compete and you need capital to grow. So don't, if you want to stay above 51% by all means if you can do it and don't sell your equity off, do it, but if you have to, because you got a great strategic partner that could bring something to the table and they want to be an equity player and you end up with 50 or less than 50, you're still the CEO, you're still setting the vision for the company, you are achieving what you set out to do and I think that's very important to understand because we can't get to scale without growth capital. I may not be smart but I'm not stupid so I got the check first and then I said, John, I've never started a business. What advice can you give me? So I had a check by then. He said, Bob, get your revenues up, keep your costs down. That was my 501 business school class. And ever since that time, every business I start, revenues up, costs down. That's what I do. Big business is where you can get your revenues up, keep your costs down. And if you can find a recurring income stream like a cable company called BET, The guys pay you, the cable operators pay you for the programming, the advertisers pay you to advertise within the programming, and the record companies give you the videos free. You'd have to be pretty dumb to lose money on a business like that. So the key to building relationships and so-called connecting the dots is make your friends before you need them. And that means that first impression, that first interaction you have with somebody is sort of like a stamp of approval. And if you do that with someone and they like you, and then they in turn tell somebody else they like you, that's where the dots start coming. Because somebody will say, "I know Damien, good guy." So I respect the guy who told me that. So all of a sudden now, he's transferred his stamp of approval on you over to me. And that's how it happens. The one thing I think we have to do is we've got to get smart about consumption. We have got to start saving. When I went to graduate school at Princeton and I took one course in economics, and there's one term that I learned, it's called— and you guys should remember this one— it's called the marginal propensity to consume. The marginal propensity to consume is that you consume way beyond beyond your margin of wealth. And you know what they call that? Debt. We have more debt than any other group in America. Ergo, we have less savings. Without savings, you can't invest. Without investments, you can't accumulate wealth. We have got to postpone sort of what I call just unnecessary, impulsive consumption and focus on savings. And until we get to that point, we're not going to have enough wealth to invest. As most of you know, I have always been vocal about economic opportunity for African Americans. I am what you might call a serial entrepreneur. I get a vision about something that should be done usually in an area where African Americans are economically underrepresented, and I try my best to create a business solution to help address these social and economic problems. People here in the same business— I mean, if you're running the same business as somebody else, the first thing I would do is sit down and talk about, can we merge and get the scale? That's the first thing I would do. There's no way in the world if I were running a company, let's say I was in the security business, providing security to companies, and then there's another guy named Fred who had a security company and another guy named— a person named Mary who had a security company, 3 security companies all vying for the contracts. I would say, why don't we merge, get the scale, reduce our overhead costs, and go out and become the preeminent security firm in the city of Charlotte. There's no way in the world I would be competing against that. That's the first thing I would do. You have to believe in yourself. If you don't believe in yourself, if you don't believe that you can overcome obstacles, if you don't believe you have the work ethic, if you don't believe you have the inner confidence to project to other people It'll never happen because part of starting a business is not only having the vision of an idea, you've got to build around you a team of stakeholders who believe in you. People follow leaders. People invest in leaders. People support people who have a vision and are willing to and are able to articulate it and not just the ability, you know, a lot of people are good I got a good gift for Gab. It's the ability to convince people that you're gonna be part of something that's gonna be successful. You're gonna share in the success. It's gonna be beneficial to you and your family in the long run. You're gonna be respected for what you contribute. And you're gonna have an opportunity to fulfill your own dreams consistent with the dreams of the person you're working with. If you can convey that sense of confidence, that consent, that sense of leadership and focus on giving people an opportunity to grow and be successful with you, you're gonna have people, and I mean really smart people, coming to be a part of what you do. Imagine a group of people go to a restaurant and they start eating. Well, they don't have enough money to pay the bill, so when the waiter comes with the bill, they don't want to pay it. They don't want to make the sacrifice of paying, so they keep ordering. And that's what we're doing. We just keep piling on debt and keep piling on costs because we don't want to make the hard choices. And look at businesses who have, who can provide support to your business at a cost below what you're paying somebody else. And if You don't have the money for that, but it'll help you jumpstart your business. Give them equity. Trade equity for the service provided. It happens all the time. When I started BET, I needed cable distribution. Some of the cable— Time Warner at that time said, "Yeah, we'd like to be an investor, but we also want equity. We'll give you our carriage, but we want equity." That's another way to build a relationship. It doesn't take capital, just you got to be half confident, but when you provide a service, that service is going to help this business grow. You have 10% equity, whatever the trade is, it's going to help you grow.

Thank you for watching. I made this video because Frank White asked me to. So if there's a famous entrepreneur that you want me to profile next, leave it in the comments below and I'll see what I can do. I'd also love to know what you think of Robert Johnson and which of the top 10 lessons you relate to the most. Leave it below, I'm going to join in the discussion. Thank you for watching, continue to believe, and I'll see you soon.