Wednesday, January 5, 2011
I'm Not A Businessman, I'm A Business Man!
"With education comes refinement," Jay-Z observes late one Friday afternoon. He's lounging on a couch in a studio at the Chelsea Piers Sports and Entertainment complex on the far west side of Manhattan and speaking between nibbles of a takeout salad in a plastic container and sips from a bottle of water. In his everyday speech, as in his raps, Jay-Z is inclined toward aphorisms, the compressed expression of complicated ideas, delivered with rhetorical flair. It's hard-earned wisdom, graced by a poet's touch.
He is relaxing after a typically jam-packed day that included a photo shoot, an interview, and a meeting about his potential involvement in a forthcoming video game. He celebrated his 39th birthday the night before with the staff of his Rocawear clothing line, so a mild fatigue has set in. Slender and six feet three inches tall, Jay-Z is an imposing figure, even in relative repose. He's wearing distressed jeans that hang loosely from the middle of his hips, black sneakers, and a long-sleeved black T-shirt that has replaced the pristine short-sleeved white one he wore before changing for his photo shoot. The look is studiously casual . . . until you glance at his left wrist and notice a diamond watch so thick it could pass for a weight band.
The winter sky is growing gray in the bank of windows behind him as the sun sets over the Hudson River. Jay-Z returns to the narrative of what, in the 19th century, would have been called his sentimental education, the education of his emotional life. That journey to refinement began in the rugged Marcy Projects in Brooklyn's Bedford-Stuyvesant district, and now continues in arenas and boardrooms, in posh homes and VIP hideaways, around the world.
Jay-Z feels comfortable in all of these realms. "I've never looked at myself and said that I need to be a certain way to be around a certain sort of people," he explains. "I've always wanted to stay true to myself, and I've managed to do that. People have to accept that. I collect art, and I drink wine . . . things that I like that I had never been exposed to. But I never said, 'I'm going to buy art to impress this crowd.' That's just ridiculous to me. I don't live my life like that, because how could you be happy with yourself?"
Staying true to yourself might stand as a succinct summary of Jay-Z's philosophy of success. The notion goes back to Shakespeare's "To thine own self be true," and further back than that to the Greeks. But for Jay-Z, it has an urgently contemporary meaning. Even, or perhaps, especially, in recessionary times, amid the thousands of entertainment and lifestyle choices consumers have available to them, what separates winners from losers is a commitment to a single proposition: You are the product. If people believe in you, they will believe in what you create. Jay-Z understands this and is down with it.
By selling nearly 40 million albums and building a business empire that extends far beyond music into clothing, fragrances, the New Jersey Nets, sports bars, liquor, and hotels (to name just a few of his seemingly innumerable investments), Jay-Z has transformed himself into one of the most potent brands in the world. But that brand retains its power only if people remain convinced that the product they are purchasing somehow genuinely reflects Jay-Z and his tastes. As he famously put it in one of his raps, "I'm not a businessman/I'm a business, man."
"My brands are an extension of me," he says. "They're close to me. It's not like running GM, where there's no emotional attachment." The reference is apt, given the government's ongoing potential bailout of two major automobile companies. Jay-Z notes that resonance with a pause and a chuckle. "My thing is related to who I am as a person," he says. "The clothes are an extension of me. The music is an extension of me. All my businesses are part of the culture, so I have to stay true to whatever I'm feeling at the time, whatever direction I'm heading in. And hopefully, everyone follows."
In conversation, Jay-Z's speech is slower, calmer, and more deliberate than in the propulsive, deep-voiced, and often incendiary raps that have made him a titan in the world of hip-hop, a man whose sales and staying power have elevated him above all but a handful of potential rivals. He's an engaged and animated speaker, quick to touch you in a friendly way to emphasize a point.
But as laid-back and accessible as he seems, he also exudes a calm air of confidence. He doesn't need to be aggressive or impose his will in a ham-fisted manner. Half a dozen people are floating around the studio, ready to read any sign of need or impatience on his part. He's cooperative and congenial in the way that only someone who knows he can immediately put an end to any experience that moves in an unpleasant direction can be. "Jay-Hova," he has called himself, echoing the name of the mighty, vengeful God of the Hebrew Bible. He has anointed himself the "God MC."
But he has also rapped that he "never prayed to God/I prayed to Gotti." Perhaps there is a distinction to be drawn between Jay-Z, the battle MC who to this day engages in raw exchanges with younger rappers looking to take him down, and Shawn Corey Carter, the far-sighted businessman who cofounded his own label, Roc-A-Fella Records, in 1996; who served as president and CEO of Def Jam Records from 2005 to early 2008 and helped launch the careers of Kanye West, Young Jeezy, and Rihanna; who sold his Rocawear clothing line in 2007 for $204 million, while retaining a major stake in the company; and who, following a path blazed by Madonna and U2, forged a $150 million deal last year with the concert-promotion firm Live Nation.
Last summer, Forbes ranked Jay-Z seventh on its "Celebrity 100" list of the ultrafamous and ultrapowerful. The magazine estimated his annual income at $82 million, and other sources have reported his net worth at $350 million. If that doesn't seem enviable enough, last year Jay-Z married Beyonce Knowles, one of the world's most desirable women. It is part of his attitude of ultimate cool that he never publicly talks about her.
Jay-Z moves in exclusive circles of all types. Musicians, actors, designers, politicians, captains of industry, and athletes all want to get next to him. He has developed an easygoing manner that enables him to cross these cultural boundaries in ways that make him seem accessible but still dignified, always aware of who he is. "I'm a mirror," he says. "If you're cool with me, I'm cool with you, and the exchange starts. What you see is what you reflect. If you don't like what you see, then you've done something. If I'm standoffish, that's because you are."
Occasionally, stereotypes rear their heads and uncomfortable situations arise. "It's hilarious a lot of times," he says. "You have a conversation with someone, and he's like, 'You speak so well!' I'm like, 'What do you mean? Do you understand that's an insult?'"
Growing up, however, Shawn Carter was far from the likeliest candidate for this sort of mind-boggling success. He was always recognized as bright--even today, the first word anyone who meets Jay-Z invariably uses to describe him is smart--and in the sixth grade, he tested at 12th-grade levels. But the Marcy Projects in Brooklyn were overrun by drugs and violence in the '80s. His father left the family when Carter was 11, and his mother had to raise him, his older brother, and his two older sisters. When he was 12, Carter shot his brother for stealing his jewelry. (They have since reconciled.) Carter attended high school with fellow Brooklynites the Notorious B.I.G. and Busta Rhymes, but dropped out to deal drugs in a region that extended from Brooklyn to Maryland and Virginia--as he details in his music--and to dabble in the still-nascent hip-hop game.
Along with the dealers who ran the neighborhood around the Marcy Projects, Jay-Z remembers identifying sports figures as his first models of success. "Growing up where I grew up, we looked to athletes," he recalls. "They were our first heroes. They came from the same places we came from. I mean, you can't watch TV and see someone who is successful that you can really relate to. That person isn't real, he doesn't exist. But athletes traveled the world, had these big houses, and gave their families a better life. We were like, 'Wow, that's really cool.' These guys get paid millions of dollars to play the game they love."
Around the same time that he began to identify with athletes, Carter experienced another revelation: hip-hop. He began writing nonstop in notebooks, keeping his mother and siblings awake at night as he pounded the kitchen table to create beats. He hooked up with local rapper Jaz-O, who brought him to England when he toured there. Carter recorded with Jaz-O and also with Big Daddy Kane. But despite the acknowledgment of his skills (and his growing anxiety that either violence or the law would eventually catch up with him on the streets), Carter was reluctant to give up dealing. He was rolling in a Lexus and making more money, as far as he could tell, than most rappers.
Still, he decided to take the plunge, but no record company was willing to offer him a contract. So with two partners, Carter formed Roc-A-Fella Records, and, in 1996, released his debut album, Reasonable Doubt, which established him as a major figure on the hip-hop scene. It was a heady moment, but Jay-Z barely realized it at the time. "I was naive," he recalls. "I made that album to impress my friends, so they would say, 'Oh, wow, look what you did!' It was my first album on the label that we owned. I was like, 'Okay, what happens now?'"
What happened was that Jay-Z left drug dealing behind and began to build his empire, moving steadily from "grams to Grammys" as he puts it in one song. But the process wasn't easy. The treachery of life on the streets, where he faced bullets at close range, turned out to be nothing compared with what he would encounter in the upper echelons of the music business. "I come from a world that's completely different from the music industry, and it wasn't recognizable to me at all," he says. "I come from a place where you had to keep your word, where people would stick with you no matter what. That's impossible in the music business, where if you're not hot, people are not talking to you. I just tried to be a man of my word."
The choice of Roc-A-Fella as his label's name would prove telling. On one hand, it's standard hip-hop braggadocio to establish a connection between a fledgling rapper and one of the richest and most powerful families in American history. But it also suggested the means through which Jay-Z would eventually establish his own business empire. The Rockefeller family and other 19th-century industrialists established a monopolistic hold on all aspects of the goods they produced. If you owned the mines that produced coal, for example, you also bought the railroads that transported it, the refineries that prepared it for market, and the utilities that provided its end product to the general population.
As Jay-Z's career has progressed in the past dozen years, he has sought to establish a similar hold on the lifestyle market for which his music provides the soundtrack, and in which he stands as the ideal model to emulate. Rather than providing anything as tangible as coal or oil, Jay-Z, through his myriad branded investments, manufactures a way of being that makes it at least theoretically possible to never leave the world of his products. You can enjoy his music while sporting Rocawear clothing (estimated as doing $700 million a year in business), wearing one of his fragrances, and sipping his Ace of Spades champagne. You can attend his concert and end the night at one of his 40/40 nightclubs. His videos, DVDs, and CD booklets provide free exposure for all of his products, all of which, in turn, enhance every other aspect of the Jay-Z brand.
The question then becomes how, with all this marketing and glossy brand extension, does Jay-Z maintain the credibility in the hip-hop world that made him such a marketable star in the first place? "We are excited to partner with an industry giant such as Elizabeth Arden," Jay-Z declared in the press release announcing his fragrance line, which made its debut last year. No matter how deeply you've absorbed the potency of Jay-Z's mainstream reach, that sentence still makes you do a double take. This is the man who took the film American Gangster as the inspiration for his most recent album? Jigga what?
But Jay-Z believes deeply in the aspirational power of hip-hop, the notion that the music's truest fans want to see their heroes succeed and want to emulate them. He draws a sharp distinction between hip-hop and rock 'n' roll, whose stars have often expressed disdain for business and success. "I noticed that difference early on, like if you were successful in rock 'n' roll, that was a really bad thing," Jay-Z says with a laugh. "You almost had to hide it. You had these guys selling 200 million records with dirty T-shirts on. I was like, 'Come on, man. Come on. We know you're successful.'
"Hip-hop is more about attaining wealth," he continues. "People respect success. They respect big. They don't even have to like your music. If you're big enough, people are drawn to you."
Consequently, any discussion of credibility, or keeping it real, elicits a response of disbelief from him. "That's an insecure emotion," he explains. "You make your first album, you make some money, and you feel like you still have to show face, like 'I still go to the projects.' I'm like, why? Your job is to inspire people from your neighborhood to get out. You grew up there. What makes you think it's so cool?"
Of course, Jay-Z has not been immune to those insecurities himself. In 1999, he was arrested for stabbing a record executive in a New York club, and in 2001, he was charged with possession of a loaded handgun. Against his lawyer's advice, he pleaded guilty to a misdemeanor charge in the stabbing case and was sentenced to three years' probation. The gun charge was dropped.
It's generally thought that those brushes with potential incarceration cured Jay-Z of the need to prove that he could still live the thug life. He has rapped about both of those arrests ("Put that knife in ya/Take a little bit of life from ya/Am I frightenin' ya?"), but has shown no further inclination to transform his words into deeds that would put an end to the extraordinary life he has created for himself. In fact, quite the opposite. He has been baited relentlessly by other rappers--Nas, to cite just one example, taunted "Gay-Z" for his "dick-suckin' lips"--and has responded in kind, but only in song. In real life, he has taken steps to ease those rivalries and ensure that tragedies such as the killings of Tupac Shakur and the Notorious B.I.G. never happen again.
That's because too much is at stake now, far more than money or bling. At 39, Jay-Z is old enough to think about the cultural impact that hip-hop has already had, and the critical role he has played in it. "Hip-hop has done so much for racial relations, and I don't think it's given the proper credit," he says. "It has changed America immensely. I'm going to make a very bold statement: Hip-hop has done more than any leader, politician, or anyone to improve race relations.
"I'll explain why I say that," he continues. "Racism is taught in the home. We agree on that? Well, it's very hard to teach racism to a teenager who's listening to rap music and who idolizes, say, Snoop Dogg. It's hard to say, 'That guy is less than you.' The kid is like, 'I like that guy, he's cool. How is he less than me?' That's why this generation is the least racist generation ever. You see it all the time. Go to any club. People are intermingling, hanging out, having fun, enjoying the same music. Hip-hop is not just in the Bronx anymore. It's worldwide. Everywhere you go, people are listening to hip-hop and partying together. Hip-hop has done that." He pauses, as if marveling at the idea, and then repeats it for emphasis: "Hip-hop has done that."
Something else that hip-hop has done, in Jay-Z's view, is help to elect Barack Obama. "Rosa Parks sat so Martin Luther King could walk, and Martin walked so Obama could run," Jay-Z told a concert audience in the crucial swing state of Ohio shortly before the November election. "Obama is running so we all can fly, so let's fly." He recorded a get-out-the-vote message for robo calls to African-American voters during the primaries. Perhaps even more extraordinarily, after a particularly heated primary debate, Obama brushed off Hillary Clinton's attacks with a gesture of wiping lint off the shoulders of his suit, and hip observers recognized an unmistakable reference to Jay-Z's song, "Dirt Off Your Shoulder."
Jay-Z's eyes widen as he recalls that moment. "I felt like, man, what time are we living in, where a presidential nominee is making reference to a rapper?" he says. "What a beautiful place we've come to. Growing up, politics never trickled down to the areas we come from. But people from Obama's camp, and Obama himself, reached out to me and asked for my help on the campaign. We've sat and had dinner, and we've spoken on the phone. He's a very sharp guy. Very charming. Very cool.
"It's surreal," continues Jay-Z. "I couldn't imagine anything like that could happen. I didn't vote until I was an older adult. I didn't think I would ever vote, because it didn't matter who was in office. The situation never changed where we lived. Our voices weren't heard."
Jay-Z walks idly around the studio as crew members break down the set for his photo shoot. He's rapping along with a hip-hop track that's blasting in the room. When the sound system abruptly shuts off, Jay-Z continues rapping and moving to the music, like Wile E. Coyote in the moment before he looks down and realizes that he has run off the cliff. Jay-Z catches himself, looks around the room in mock surprise, and laughs. It's the sort of self-deprecating gesture he's good at, acknowledging that all eyes are on him, but humorously taking the edge off whatever intimidation factor his presence might have.
That's a quality he brings into the boardroom as well. He's far from just a figurehead or a media front man. He takes his businesses as seriously as his artistry, and he goes at both with the same level of determination. He's clear about his own views, willing to listen to others, eager to keep everybody loose and motivated, and far more interested in long-term strategy than short-term gain. Even in the current economic environment, which is challenging to say the least, he's insistent on executing his game plan rather than making changes that might not ultimately be right for his brands.
"He's smart as hell," says Neil Cole, chairman and CEO of the Iconix Brand Group, the company that bought Rocawear two years ago for more than $200 million. "He understands himself as a brand, and it's incredibly well thought out. We meet every week, and there's nothing impulsive about him. He's very consistent, and he won't settle. If something's not right, he's not going to do it for more money. He'll wait to get it right. He has a wonderful taste level about where he wants to take the brand. . .and himself."
Michael Rapino, the president and CEO of Live Nation, echoes Cole's assessment of Jay-Z. "In meeting with superstars about potential deals, there are some who spit out 'How much can I get?' and the meeting is over, because you know you're starting out on the wrong basis," he says. "When we sat down with Jay-Z, 'How much money are you going to pay me?' came up in maybe the seventh conversation. The first conversation was, 'Can we change the business together?'
"Right there, we knew we had a common agenda," continues Rapino. "It was like, 'I'm hungry. The business is changing. I'm a change agent, and I have a lot of years left.' Then the creativity flows. You don't become the best in the world at what you do, and then flip the off switch. Jay-Z wants to win. And for him it's also about the integrity of the win. He's a true partner, always looking for the win-win. He's asking, 'How do we win together?'"
Indeed, part of the refinement Jay-Z has attained entails that big-picture vision of success. It's a vision that extends beyond business and beyond music. It's about what makes your life meaningful, and it goes beyond lifestyle to a way of life. "I'm hungry for knowledge," says Jay-Z. "The whole thing is to learn every day, to get brighter and brighter. That's what this world is about. You look at someone like Gandhi, and he glowed. Martin Luther King glowed. Muhammad Ali glows. I think that's from being bright all the time, and trying to be brighter.
"That's what you should be doing your whole time on the planet," he concludes. "Then you feel like, 'My life is worth everything. And yours is too."