Business and Finance
What Jay-Z Can Teach You About Success in Business
Jay-Z is one of the most successful musical acts of our generation. With Bill Russell and Phil Jackson-like numbers — he’s had 11 Billboard #1 albums and counting — he now trails only the Beatles for most U.S. #1 albums in music history. He has sold over 50 million records worldwide and has received 13 Grammy Awards for his work.
But if you look further, past his fame and accolades as an entertainer, you may find that Jay-Z (a.k.a. Shawn Carter) is perhaps one of the most compelling American entrepreneurs of our generation. Carter is a remarkably successful music artist — he’s worth over $450 million and is on the Forbes 400. He knows music. But most importantly, he knows business: Jay-Z realizes that his music is his product, and his fans are his customers.
To a business, customers are everything. They are the lifeblood of any startup, small company or Fortune 500 corporation. If you don’t have customers, then everything else about a business’ functional areas — from product development to accounting, finance and human resources — are pointless. So needless to say, acquiring new customers is perhaps one of the most important things a business can do. This is especially true for a startup or struggling business. Take Nintendo and its “Wii” as an example.
In 2006, Nintendo, a company that once dominated the video game industry, was struggling. They could not compete with Sony’s new Playstation 3 or Microsoft’s Xbox 360 — two products that “hardcore gamers” loved for their graphics and many advanced features.
So what did Nintendo do? By introducing the Wii — which appealed to almost anyone, from 40-something adults to teenage high schoolers — they entered a segment of the video game market demographic long overlooked and left untouched. And in doing so, by 2009 Nintendo had sold 51.6 million Wii consoles, surpassing Xbox’s 31.35 million and more than doubling the 23 million in PS3 sales.
Similar business and marketing dynamics can be found in Jay-Z’s music. Before the mid 1990s and into the millennium, Rap and Hip-Hop were mostly considered niches within the music industry. But Jay-Z helped successfully re-brand the genre as “mainstream.” next page
His music appeals not only to lyrically hungry rap die-hards, but also to those who just want to hit up a club or frat party (I can’t even tell you how many times I’ve heard Jay and Kanye West’s new album, Watch the Throne, played at parties in the past month). In business terms, he engages both a faction of loyal users (his biggest fans) and the mainstream market (the rest of us). That’s hard to do. But Carter knows what sells and what doesn’t.
In one of his songs, titled “Moment of Clarity,” Jay-Z explains this understanding through rhyme and clever wordplay: “If skills sold, truth be told, I’d probably be lyrically Talib Kweli. Truthfully I wanna rhyme like Common Sense. But I did 5 mill’ and I ain’t been rhyming like Common since.” Rappers Talib Kweli and Common are often considered lyrically talented but have been unable to achieve widespread commercial success.
But as an artist, it’s one thing to produce a few hits and another to consistently stay in the mainstream spotlight. A catchy tune can only get you so far — just ask Vanilla Ice.
Jay-Z is well aware, however, that retaining his fans — his most loyal customers — can be as important as acquiring new ones. While he has many chart-topping singles that appeal to a lot of us, devoted fans often appreciate more than just the hits.
Jay-Z’s albums often have subtle messages about America’s societal ills — specifically, how an environment ridden with poverty, drugs and violence affects those who grow up in it. And perhaps because of this, for some fans, Jay-Z is more than just a rapper: he’s an artist, a storyteller or even a social activist.
It is Jay’s writing talent — his core competence — that allows these fans to see something in him that they don’t see in other rap artists. What’s more, these fans are often willing to pay a little bit more for his work — merchandise, books, t-shirts, concert tickets, the whole works. In other words, for these fans, it’s less about the music and more about the experience. He’s the Starbucks coffee to a McDonalds 99-cent latte. You pay a little bit more for it, but in return you receive, arguably, a better experience.
If you go to a Jay-Z concert, you’ll know what I mean. His concerts feature live bands, real instruments and impressive audiovisual effects. He also points out enthusiastic concertgoers and brings fans on stage, personalizing the concert experience and turning an average listener into a Jay-Z fan by the time the show’s over.
Shawn Carter thinks of music as a packaged experience, as he once said in an interview: “I just believe in giving people a better package so when they leave the concert hall, they want to come back again. A lot of [young artists] make that mistake when they’re hot. They just sell off the name and sell off the moment. We over-deliver on the experience.”
If anything, Carter’s success as a music artist and entrepreneur has proved that artists can craft songs for their creative value and make a boatload of money at the same time. They’re not mutually exclusive.
As Carter told Steve Forbes, in a joint interview with Warren Buffett: “When you’re in the studio you’re an artist, you make music, and then after you finish, you market it to the world. I don’t think anything is wrong with that. In fact, I know there’s nothing wrong with that.”
In other words: “I’m not a business man, I’m a business, man. Let me handle my business, damn!”
by Christopher Henty is a senior in the School of Industrial and Labor Relations.