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Jay-Z means business.
In the late 1990s Shawn "Jay-Z" Carter grew fond of an Italian knitwear designer by the name of Iceberg. When he started singing the brand's praises in verse, sales skyrocketed. Sensing an opportunity, he and erstwhile business partner Damon Dash approached Iceberg's management about a possible endorsement deal. They were rebuffed. So in 1999 Jay-Z and Dash started their own clothing line, Rocawear. Eight years later their company fetched $204 million from Iconix Brand Group.
Neither the birth of Rocawear nor its nine-figure sale would have occurred if it weren't for Jay-Z's sharp entrepreneurial instincts—in particular, his reluctance toward giving away advertising to products other than his own. The latter is one of Jay-Z's many business commandments that I've observed while writing a business-focused biography of the rapper over the past year, and one of the main reasons he has amassed a net worth of $450 million while serving as an inspiration to countless entrepreneurs and musicians. (Full Coverage: The Forbes Five — Hip-Hop's Wealthiest Artists )
"Jay-Z's business influence has been momentous, along with all his other great achievements in terms of music, style and mastery of his craft," says Fred "Fab 5 Freddy" Braitwaite, the artist and hip-hop pioneer who served as longtime host of Yo! MTV Raps. "He really understands how the corporate structure works."
Although the notion of giving away free advertising isn't something most people have to worry about, there are plenty of lessons from Jay-Z's business philosophy that can be applied to just about any career or entrepreneurial situation. Take for example one of his simplest but most definitive rules: Focus on the most realistic chance to make the most money at all times.
In Pictures: Jay-Z's Top Ten Business Commandments
Jay-Z has repeatedly proven his ability not just to know where the money is, but to anticipate where it will—or won't—be. This instinct first led him from dealing drugs as an adolescent to selling records as an adult. When it became clear that there were more lucrative opportunities outside of music, he moved into clothing (Rocawear) and alcohol (Armadale vodka). As the market for concert tickets heated up, he bucked convention and signed a 10-year, $150 million deal with concert promoter Live Nation just before the market tanked.
"The timing of Jay's deal couldn't have been more perfect," singer-songwriter-producer Akon told me in 2009. "Those numbers aren't going to be flying around anymore."
Another one of Jay-Z's most valuable business commandments is to identify mentors and ask plenty of questions. Talk to just about anybody who's spent time with him and they'll rave about his thirst for knowledge—a trait that has helped him gain quite a lot.
"One of the things that impressed me the most about Shawn in dealing with him was his inquisitive nature," says Bernie Resnick, a Philadephia-based entertainment lawyer who has crossed paths with Jay-Z a number of times. "When you're in a business meeting with him, his demeanor is of a calm, studious business executive rather than an artist temporarily occupying an office chair."
Another Jay-Z rule: Attack any threat to your business, but don't take it too far. He learned the second part the hard way — in 1999 Jay-z was arrested for allegedly stabbing record producer Lance Rivera for bootlegging his album, but got off with probation. He has since gone on record saying that he regretted the incident, and has stayed out of legal trouble ever since.
Though the Rivera altercation received plenty of media attention, Jay-Z has generally been able to closely manage the news leaked about him. In part, that's due to the fact that he's made a point to never publicize anything less than victory. Few people remember his Armadale vodka that quietly flopped in the mid-2000s or the Las Vegas location of his 40/40 Club that closed a few years later; instead, the attention goes to his successes.
"I think that the analogy of a top basketball player fits him best," says Brathwaite. "Think quick, score points and keep moving."
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