Since its birth during the 1970s in New York City, hip-hop has gathered polarized views as an artistic movement. While mainstream audiences often linked the hip-hop genre to violence and gang wars, especially during the 1990s, black artists saw it as a way to climb up the socioeconomic ladder without using the conventional tools. However, the stigma did not remain indefinitely.
As of today, rap music has achieved such a critical and commercial success that its main figures are now able to “compete” with other types of entertainers in terms of financial status. Consequently, mainstream rap music has lately focused on materialism, with artists displaying their ostentatious wealth through their music.
Rap started to lose its image of the ‘ugly duckling’ in the music industry very recently, but some entrepreneurs oversaw the overcoming change of wave in the business and took it as a promising opportunity. While rappers (or emcees) are able to earn a more than decent living thanks to their art, that is just the tip of the iceberg. In the background, business moguls in the industry are dealing with an astronomical amount of money, considering where the position of rap music was just a few years ago.
The three richest rap moguls (Sean “Diddy” Combs, Jay Z and Dr. Dre) have a combined net worth of $1.4 billion, according to Forbes. When the majority of rap artists usually content themselves with the royalties brought by their music, these three have used their musical careers in order to support even greater and more profitable business ventures.
Entertainers’ careers usually have a relatively short life span. Whether they are professional athletes or successful musicians, they will actually get paid only for a certain amount of years. After their careers are over, they have to find another source of income. And knowing that it is hard to find another job out of that field once they have entered it (considering they would even want to), they have to be very smart with their finances while at the top of their game. Most musicians hire agents for that purpose, but that is rarely a great success.
“If you want something done well, do it yourself,” says the proverb. Someone like Jay Z understands that saying. As a rapper, he reached mainstream success in the mid-nineties thanks to two critically acclaimed albums, which were released by a label he co-created. However, aware of the importance of having a diversified collection of assets, he knew he had to expand his activities and create a more permanent source of income. And that is a very important thing to do in business. Individuals are, by definition, risk averse, and the most effective way to decrease risk is to diversify.
To all the basketball fans reading this, think of two players: one is extremely good at scoring points but almost useless when it comes to giving assists or taking rebounds, whereas the other player is average in those three sectors. If they face a very good defense during their next game (risk), hence limiting their scoring, the second player can always help his team by giving assists and taking rebounds; on the other hand, the player who does not have a “diversified” set of skills will deliver a terrible performance.
“I’m not a businessman; I’m a business, man!”
Jay Z took advantage of his success to build an empire, establishing himself as one of the most successful moguls in the music industry. Aware of the significance of his name, he decided to use this brand power to strengthen his business. In 2008, he founded his own entertainment company named Roc Nation.
He signed promising artists under his record label, many of which became very successful. Between the end of June and early July, four albums were recorded as the best sales in the United States; all of them were distributed by Jay Z’s label.
Success happens outside of your comfort zone. Finding new challenges stimulates you and forces you to work harder and better. Most entertainers rarely step out of their comfort zone. That is a wise choice as long as they are at the top of their game; however that will not last forever. There will always be someone who can do your job better than you. Find other trades that do not necessarily concern your primary occupation. When most entertainers see their careers as a bed on which they can rest for eternity, Jay Z saw his music career as a springboard to reach even higher objectives.
Through his Roc Nation entertainment firm, he is now playing on many fronts. He is the CEO of the clothing manufacturer Rocawear, a $650 million company. For many years, he has owned a small fraction of the Nets, an NBA team. Earlier this year, he sold his stake just so that he could focus on his latest business venture: Roc Nation Sports, a sports management firm. Many people (most of them being current sports agents) criticized this operation, claiming that Jay Z did not have the experience to manage sportsmen’s careers. However, a few months within the birth of the firm, he has already managed to sign NBA superstar Kevin Durant.
And that is not the end of it.
What have we learned from Jay Z’s successful career? Entrepreneurship is not something you will learn in a book or during a class, or else we would all be successful businessmen. Jay Z is a man who could have easily gone the wrong way: a former drug dealer brought up in a poor area of Brooklyn who does not even hold a high school degree. Today, he is sitting on a fortune estimated at $475 million, married to superstar Beyonce (hence forming one of the richest couples in the world), listed in Time’s “100 Most Influential People In The World.”
What more? Jay is a personal friend of Barack Obama. Miracle? Luck? Underachievers would like to think so. Jay Z used simple recipes that business books may tell you about but cannot teach you. He created his own success, and so should you.
Top Photo Credit: WENN