Rappers Are Walking Business Empires

Rappers are walking business empires

Word Count: ~3,250 words; Reading Time: ~15 minutes

In early June, Jay-Z became the world’s first ever rapper billionaire. Forbes ran a piece “Artist, Icon, Billionaire: How Jay-Z Created His $1 Billion Fortune” that was viewed ~630K times (as of early July 2019). Countless tweets and Instagram posts flooded social media feeds – “More than a Musician”; “Shawn Carter – The Businessman”, etc. What’s funny is when I set out to write this essay originally, my entire purpose was for audiences to appreciate the most successful rappers for what they were truly were – musical artists, businessmen and cultural icons. Thanks for frontrunning me, Forbes. I’ll take my royalty check in the mail…. Anyhow, this got me thinking. While people are fascinated by reading about these rappers’ vast accomplishments, it’s always isolated around two categories: (1) commercial and critical accolades or (2) monetary accomplishments. What if someone took the time to break down their careers from all angles? The problem is if you’re not a passionate music fan, you’re unlikely to read a 3,000+ word paper on hip-hop strategy. What if I flipped the script and I told you that this post is actually on business strategy and that rappers’ approach to the game is not so different from the likes of the world’s most successful companies?

For the sake of relatability, I’m going to focus on hip-hop’s biggest names over the past two decades – Jay-Z, Kanye West, and Drake. To give you a glimpse of why, take a look at Figure 1 below just to give you an idea of how all-encompassing their careers are.

 

Figure 1: All-encompassing Careers 

If you disagree, let’s talk about just music via Figure 2 and Figure 3 below.

Figure 3: Enablement of Others’ Careers

 

 

 

 

 

 

Figure 2: Career Accolades; Sources: RIAA, Billboard,
and Grammy websites 

After spending some considerable time dissecting each of their individual careers, I noticed each has built their empire in their own unique fashion. In the spirit of connecting the themes of business and hip hop, I am going to dissect their careers through the lens of widely known business strategies. Just as you can attribute particular business decisions to the success of Nike, Apple, or Netflix, you can break down the individual careers of Jay-Z, Kanye West, and Drake, respectively, in the same light. Let’s dig into comparisons and core strategies: Jay-Z and Nike (building an iconic brand), Kanye West and Apple (creative innovations that redefined their industries), and Drake and Netflix (navigating industry paradigm shifts with a focus on virality).

 

Jay-z and nike: “the icons”

• The 30-Second Story of Jay-Z: Jay-Z was brought up in the Marcy housing projects, an impoverished area in Brooklyn NY that was affiliated with drugs and crime. He resorted to selling crack cocaine in his teenage years to make money. He spent the earlier years of his career being a hype man for the well-known rapper, Big Daddy Kane. When he attempted to start his musical career, no one would sign him so he started his own independent label and sold CDs out of his car. Once he broke out after the release of his first commercial album, Reasonable Doubt, Jay-Z released 11 consecutive #1 albums and has 14 overall (the most of any artist of any genre). He’s often heralded for his storytelling ability to depict life in the ghetto and usage of wordplay to illustrate the themes of “rags-to-riches” and the American dream. Throughout the years, he’s collaborated with the most famous artists of multiple stylistic periods including Kanye West, Beyonce, Rihanna, J. Cole, Drake, etc. With the money and presence he built up, he’s launched numerous multi-million dollar ventures: a creative and athletic talent agency, entertainment companies, luxury sports bars/restaurants, clothing lines, champagne investments, and tech startups, among other forays.
• The 30-Second Story of Nike: Nike’s roots started as a distributor of Japanese Onitsuka Tiger running sneakers with employees selling shoes out of the trunks of their cars. Eventually, Nike began to create their own shoes in-house and went on to dominate the US athletic shoe market with 50%+ market share. Since then, it’s gone on to become one the top sportswear companies of all-time, specializing in apparel and athletic gear for nearly every sport with their products marketed and sold globally. Throughout the years, Nike has had impeccable decision-making in their collaborations with the top up-and-coming athletes/teams across sports and generations. The company is world renowned for its incredible brand power (the iconic “swoosh” and slogan “Just Do It”) and has leveraged its expertise in running sneakers to build a business empire that is now engaged in the design, development, manufacturing, and worldwide marketing and sales of footwear, apparel, equipment, accessories, and services across a variety of athletic and consumer verticals.

• Building a Brand: Building a brand involves starting out unknown, finding your target audience, and then keeping loyal fans coming back for more. This is something business and music are fully aligned on. Each new extension in music (singles, albums) or in business (products, launches) is a representation of that brand. Both Jay-Z and Nike have done this masterfully in their respective industries by building powerful, iconic brands that became the market-standard for consumers. Both began as sideshows to dominant players, established their market identity, dominated their niche for decades, and then extended their brands to other verticals. In Jay-Z’s example, he went from appearing as a guest artist on others’ tracks to establishing himself as a dominant standalone solo rap artist, demonstrating superior lyrical storytelling ability with a grandiose, ghetto bravado. This style and skill resulted in 11 straight #1 albums, culminating in one of the most prolific runs in the rap game (and still going). His dominance on the charts and within his niche has propelled his discography up there with the best artists of all times across all genres. For Nike, they became the most trusted and reliable source of high-quality running shoes for a niche that no one else was focusing on. They started as a US distributor for a leading Japanese brand, began to create their own in-house sneakers which went on to dominate their core market, became the leading sneaker brand for all athletes across various sports, and have since went on to release all types of leading athletic and consumer products.
• Collaborations with Market Leaders: Both platforms understood the importance of working with industry leaders to establish credibility in different market segments and appeal to a broader audience. In Jay-Z’s case this included working with up and coming producers (Kanye West, The Neptunes, Just Blaze), making music with the leading artists across multiple periods (Eminem, Kanye West, Drake), and signing the next wave of leading artists (Rihanna, J. Cole). For Nike, it was to build their market presence in new sporting categories by signing the premier player(s)/team(s) in emerging market segments, such as expanding from running shoes into basketball (Michael Jordan, Kobe Bryant, LeBron James), international sports (Ronaldhino, Cristiano Ronaldo, or sponsoring the Indian cricket team) and tennis (Rafael Nadal, Serena Williams), among many others.
• Business Expansion/Leveraging Success: The definition for leverage is “use (something) to maximum advantage”. Both platforms used their initial traction to build a wide-ranging book of business both within and outside their industries. They were able to crossover into new markets given their dominance in their original industries. They went from pure-play operators into diversified platforms. In Jay-Z’s case, he began as an artist at his label, rose to CEO, invested in traditional, related industries such as clothing lines and bars and then expanded his investment empire to include music, real estate, art, champagne, and entertainment, among other investments (see aforementioned Forbes link). Nike started off focused on running shoes and then moved horizontally to become the largest athletic shoe supplier for multiple sports. Thereafter, they expanded into apparel (both athletic and casual) and other athletic gear and are now recognized as a global powerhouse in the manufacturing and distribution of all types of sporting equipment and consumer apparel.

Kanye west and apple: “the innovators”

• The 30-second story of Kanye: West dropped out of college at age 20 to pursue his passion of music. West began his career producing for famous artists such as Jay-Z, Cam’Ron, Beanie Siegel, Common, and Alicia Keys, among others. Once he attempted launch his own rap career, West was ignored by multiple record companies because he didn’t carry the “gangsta image” that was prominent in hip hop until that time. Once he released his first commercial album, The College Dropout, Kanye was immediately well received for his unique style and approach to rap and production (aside: he’s arguably one of the greatest producers of all-time). Since then, West has released an abundance of successful albums that drew inspiration from categories never seen before in rap – to name a few, soul, baroque pop, electro, indie rock, synth-pop, industrial, and gospel. Each project was coupled with an equally impressive promotional marketing campaign. West’s creative vision extends beyond music and most prominently into fashion. West has collaborated with leading brands (Nike, Louis Vutton, A.P.C., Adidas, Bape, Giuseppe Zanotti, etc.) on both clothing and footwear.
• The 30-second story of Apple: A college dropout and tech geek had a vision for revolutionizing the world via the concept of a personal computer. They started working out of their garage and rapidly built one of the most successful consumer technology companies of all time. Along the way, they built up an incredible reputation for flawless design, innovative product leadership, and creative marketing campaigns. The company is credited with numerous consumer technology innovations and some of the most successful commercial technology products of all-time: Macbook, iPhone, iPad, Airpods, etc.