Last Updated Aug 9, 2011 1:40 PM EDT
Jay-Z grew up splitting his time between peddling cocaine and rapping in his native Brooklyn. But by the time hip hop had grown into a popular musical genre -- and a powerful economic force -- he had solidified his position as one of its pioneers.
In his book, "Empire State of Mind: How Jay-Z Went from the Street Corner to the Corner Office," author Zack O'Malley Greenburg traces Jay-Z's success at amassing wealth and influence. Thanks to both his abilities as a wordsmith and his "innate talents honed through hustling," Jay-Z now presides over several multi-million-dollar businesses.
Greenburg describes Jay-Z's story as "the American dream in its purest form, a model for any entrepreneur looking to build a commercial empire." He spoke with BNET about what entrepreneurs can learn from Jay-Z's rise.
BNET: Why write a biography of Jay-Z that focuses on business, not music?
Greenburg: Jay-Z was one of the first to really realize the potential to turn yourself into a lifestyle. People give Martha Stewart credit for creating a lifestyle brand, but Jay-Z has done the same thing, only with a different lifestyle. Jay-Z, along with Puffy and a few other major hip-hop figures, has managed to monetize celebrity in ways that popular artists in other genres haven't.
BNET: What is one of Jay-Z's most shrewd business moves?
Greenburg: Jay-Z used to shout out Iceberg Apparel in his songs, which sent sales of Iceberg products soaring. He saw that happening, so he went to the executives of the company and said, "Hey, I'm making you all this money. Why don't we formalize this with some kind of endorsement deal or equity stake?" The guys at Iceberg weren't having it, so Jay-Z and his partner Damon Dash started their own clothing line, Rocawear, which became incredibly successful. Within 10 years, Jay-Z sold it for $200 million.
BNET: What's the key to his business success?
Greenburg: First, there's the music. He wouldn't be where he is without being a talented wordsmith. But starting with Rocawear he had a template: Instead of rapping about other people's products, he could rap about his own.
He also tends to take on mentors, learn everything he can from them, and then discard them and move on to a new mentor. During his early career, you see this with Jaz-O and Damon Dash. He discarded mentors like these and kept moving on to the point where his mentors are now people like Warren Buffet and Oprah.
And Jay-Z has something that people want: coolness. That's valuable for a company like Microsoft, which has problems with coolness -- its rivals make fun of it for being nerdy. When Jay-Z put out his book, Microsoft gave him $1 million worth of marketing and formed a partnership with him. Microsoft was basically providing a valuable service for Jay-Z in exchange for being associated with his coolness. It's pretty bizarre, but wonderful for Jay-Z.
BNET: He's a hustler, which any good entrepreneur needs to know how to do.
Greenburg: One of the things that Jay-Z retained from the streets to the boardroom was the idea that he wasn't going to give anybody any discounts on anything. If a crack rock was selling for $10, you weren't going to get it for $9.95 -- even if you were his best friend. That's something that stuck with him throughout his career. He wasn't going to take any less from anybody than what he thought he was worth.
His background prepared him in another way too: When you're used to operating under the intense pressure of the streets, where anything could go wrong and your life is on the line, going into a boardroom with a bunch of guys in suits is a lot less intimidating.
Flickr photo of Jay-Z courtesy of matthew_harrison, CC 2.0