How LeBron James' Agent Built His Business by Listening
Today, Paul's agency, Klutch Sports Group, "is taking on the Ivy League-educated lawyers that populate Hollywood mega agencies like Creative Artists Agency," writes Joe Drape in the Times. But 12 years ago, when Paul first met James, Paul was selling throwback jerseys out of the trunk of his car. At the time, Paul was 21 and James was 17.
It was something of a chance encounter at the Akron-Canton Airport, with both young men bound for Atlanta. James saw the Warren Moon jerseys Paul was selling and asked Paul where he got them. Paul answered, and took it one step further: He told James he could get a discount if he mentioned Paul's name to the supplier. From this initial meeting--a mixture of friendship and commerce--an enduring and lucrative business relationship was born.
There are two key takeaways for entrepreneurs in Paul's story. The first is that trust--including the trust that blossoms into friendship--is essential in lasting business relationships. That's not rocket science, but it's a "soft" lesson that sometimes gets lost in the shuffle of headline-news transactions. For example, it was obvious that the earnest friendship between Facebook cofounder and CEO Mark Zuckerberg and WhatsApp cofounder and CEO Jan Koum played a major role in Facebook's $19-billion acquisition of WhatsApp earlier this year. The two men took frequent hikes together, and negotiated the deal over a plate of chocolate-covered strawberries at Zuckerberg's house.
The second takeaway is the importance of honing your skills as a questioner and listener. Throughout Paul's story, he learned crucial lessons from the successful entrepreneurs and professionals he encountered. And the key to his extraction of those lessons was his talent for questioning and listening.
While the art of asking questions is one you can practice, the young Paul was something of a prodigy at it. "He was a cut above the other kids, and really had a strong mind," is what Ted Ginn, a longtime football coach in Glenville, Ohio, who knew Paul as an 8-year-old boy, tells Drape. "He wanted to know how things worked and asked the right questions. Little Rich was a good listener."
Here are two examples of how Paul's abilities to question, listen, and learn helped him become a better entrepreneur:
1. Mastering the throwback jersey business. You might think there's nothing complicated about selling throwback football jerseys. But Paul took it as seriously as he could. To learn more about the great football players whose jerseys he was selling, Paul frequently visited the Pro Football Hall of Fame in nearby Canton, Ohio.
He also asked plenty of business questions to Andy Hyman, the Atlanta entrepreneur who supplied Paul with the jerseys. "He was so persistent, but in a very nice way," Hyman tells Drape. "He is a really charismatic guy and has a sweet way of dealing with people."
Eventually, Paul built up enough of a relationship with Hyman that Hyman was selling him jerseys for only slightly above cost. The result? The birth of a serious entrepreneur. "The jerseys that he was buying from Hyman for $160 were flying out of his trunk for $300, and soon he had $15,000 a week in revenue," Drape reports.
2. Seeking advice from the rich and famous. As you might imagine, a partnership with James leads to encounters with plenty of legends from the business world. Rather than acting starstruck or sycophantic, Paul asked questions. Drape writes:
When he met the billionaire investor Warren Buffett, he paid attention when Buffett told him to trust his gut. From the music and film impresario David Geffen, he learned the power of organization and the need to surround yourself with the best talent available.
To be sure, the advice that Buffett and Geffen provided is, also, hardly rocket science. Nor is it entirely sage. Trusting your gut (especially when there's plenty of data available) can get you in trouble. Surrounding yourself with top talent is Business 101. The point here is less what the legends actually told Paul than the fact that he sought it out. He made a habit out of humbling himself and listening.
This habit paid off handsomely in 2006. At that point, Paul--who was in charge of James' brand, but not his basketball contracts--told James that he wanted to become an agent. James set up an apprenticeship for Paul with Leon Rose, who was James' agent at the time.
Before long, Paul was recruiting major talent to Rose's agency, including NBA starters Tristan Thompson and Eric Bledsoe. Paul listened, learned, and waited. He was patient. He did not start Klutch Sports Group until September 2012.
You can guess who the first client was.
Thompson and Bledsoe came aboard shortly thereafter. All of which provides a useful third lesson for entrepreneurs: Sometimes you have to be patient before launching your business. On paper, Klutch Sports Group is just two years old. But you could argue it's been a lifetime in the making.