Trapital - The infamous split

Hip-hop's misguided perception of Jay Z's success and Damon Dash's struggles has influenced how the next generation of artists approach business.

Originally published January 25, 2019

Last week, Soulja Boy was on a mission. The “Crank Dat” rapper was eager to prove why he—not Tyga—had the biggest comeback of 2018. Soulja started several new business ventures and had to let the world know about them. But when he came through Complex’s Everyday Struggle, host Nadeska Alexis tried to clown him by asking repeatedly, “Why do you have so many businesses?” Soulja Boy eventually fired back, “why DON’T you have so many businesses?!” The 29-year-old rapper got similar questions from The Breakfast Club. Unfortunately, the questions are not surprising. Hip-hop’s brash business figures often face more scrutiny.Conversely, rap’s cool, calm, and collective leaders get celebrated more easily. For some, the difference in treatment is rooted in stereotypes: loud black folks are “aggressive” and “intimidating.” But it’s also reinforced by the culture’s archetypes of success.

Jay Z is the industry’s mogul. He’s the soon-to-be billionaire. His approach to business is replicated and praised more than anyone. Meanwhile, Jay’s once friend and business partner Damon Dash is his foil. The former Roc-a-Fella Records CEO is loud, confident, and outspoken. Ever since the Roc-a-Fella dynasty split in 2004, Dame has gotten the short end of the stick. His public setbacks and financial struggles were publicized. The overwhelming narrative is that Jay “won” and Dame “lost.” For some, it nullifies Dame’s philosophy on business.

It’s an easy, but lazy, place to land. Dame still had his victories, and the Kingdom Come rapper has taken a few Ls. When success is oversimplified, nuance is lost and smart lessons are ignored. Conforming to a single mantra of leadership is a dangerous pattern for an entire industry to follow.

Survivorship bias strikes again

Other industries celebrate leaders with similar management styles to Dash. For decades, Steve Jobs has been tech’s quintessential icon. Apple’s former CEO, like Dash, was known for being a jerk. Both publicly berated employees for not meeting their standards. Both strived for excellence at all costs. And both performed for the cameras.

As WIRED wrote in 2012, “There’s businesspeople who have taken the life of Steve Jobs as a license to be more aggressive as visionaries, as competitors, and above all, bosses." We see aspects of Jobs in Mark Zuckerberg, Jeff Bezos, and Elon Musk. Box CEO Aaron Levie has been public about his adoration for Jobs.

But the same would never happen for Dash. If J. Cole ever publicly said, “I’ve been following Damon Dash’s principles to build Dreamville into an empire,” he would end up on Donkey of the Day.

It’s another example of survivorship bias. Since Jay is rap’s most successful figure, his approach—like Jobs’ in tech—is heralded. Each Jay Z interview is content for listicles of “lessons learned.” His influence is well-documented.

The elevation of Jay (and ignorance toward Dame) was further emphasized by Kanye West. In 2004, Ye was signed to Roc-a-Fella Records when Jay and Dame split. Each artist had to make a choice. Cam’Ron chose Dame, but Kanye stuck with Jay Z. Yeezy shared why in a 2013 interview:

“The problem was with Dame his truth was more accurate and more closer to what mine was, but his technique was harsh for me as a young kid and stuff. I felt like a little bit more pressure. And Jay Z was a nice guy. And also I felt like I had that truth that Dame has in him. We the same. Me and [Cam’Ron'], me and Dame, we the same. But I wanted to learn this technique that Jay got of actually being likable. Jay Z know how to move in a room full of vultures.”

This quote is ironic given Kanye’s actions over the past two years, but it’s still important. Kanye self-identified as being more similar to Dame and still sided with Jay. Considering the heights Kanye reached alongside Jay Z, it was difficult for Dame to get much love.

But neglecting Dame is a missed opportunity for several reasons. First, leaders with career ups-and-downs have better insights than those who just rose to the top. On NPR’s How I Built This podcast, the best lessons come from those who navigated financial hardships and dilemmas. Second, Dame clearly contributed to Jay Z’s success back in the Roc-a-Fella days. Both figures should be studied to understand how Hov gained his wealth. Third, and related, Dame’s approach may resonate with someone who wants a future in business but doesn’t want to become the next Jay Z.

WANT MORE TRAPITAL? BECOME A MEMBER

Enjoying Trapital? Become a member to get the full experience. Refer 1 person to the Trapital email list, you'll get 1 free month of membership.

This past week, I wrote about Jay Z's deepfakes and why its a waste of time to fight against them, and the viability of Swizz Beatz goal for a Hip-hop Founders Fund.

You can share your personal referral link here via Twitter, LinkedIn, or copy and paste the link below and send to someone who will enjoy this:

https://trapital.co?rh_ref=42ec780e

Partnership vs. ownership

The media has done a slightly better job of highlighting Jay Z’s wins and losses. Here is The Ringer’s “shot chart” for Jay:

Would anyone ever ask Jay Z, “Why are you involved with so many businesses??” Of course not.

The chart is suspect at parts, but there’s a trend to point out. Jay Z does not start companies that often. He builds partnerships, especially with “underdog brands.” Here's Complex’s rundown of Jay’s underdog history:

Jay's early-aughts sneaker deal was with Reebok, not Nike. When he teamed with a search engine for the release of Decoded, it was Microsoft's Bing, not Google. When he bought 1/15th of one percent of an NBA team in New York City, it was the Nets and not the Knicks (yes, he's from Brooklyn, but still). When he hooked up smartphone users with his new album, it was Samsung holders and not people with iPhones.

According to Forbes’ Zack O’Malley Greenburg, "Jay Z often does deals with underdog brands because they have more ground to gain from a connection with him.”

Jay Z moves like a private equity firm. He finds brands that need boosts and invests his energy. As expected, Jay’s principles have influenced the next generation to follow his lead. Drake and Kendrick Lamar’s biggest ventures come from partnerships, not their own companies. Most years, the Hip-Hop Cash Kings list is fueled by deals, mergers, and investments, not grounds-up entrepreneurship.

But not too long ago, hip-hop was an entrepreneur’s haven. When Roc-a-Fella was at its peak in the early 2000s, hip-hop consumer brands had taken off. Phat Farm, Ecko, and Sean John were everywhere. A bunch of artists launched energy drinks too. It was hip-hop’s “dot.com” era. Damon Dash was in his element. Soulja Boy would have thrived back then too.

Dame is not a partnerships guy like Jay though. He is all about ownership, building, and being “the boss.” He literally has a YouTube video called How to Be a Boss. Rocawear and Roc Films were signs of his vision. His entertainment company, Dame Dash Studios, produces original content that Dame has full ownership of. It’s not a coincidence that his style was popular at the time, but less so today. But now that Jay Z’s style is dominant, the “Soulja Boys” of the game who are similar to Dame are few and far between.

If hip-hop continues to follow Jay Z’s every move, we may lose the innovation that drove the culture in the early 2000s. But if Dame’s style was dominant, the wealth creation that’s occurred in recent years may not have happened. In a perfect world, both styles can co-exist and are supported.

Changing perception takes time

In fifteen years, we’ve seen hip-hop business shift from an ownership to a partnership model. The industry has evolved to help artists replicate what Jay has attained.

Similarly, the modern tech industry is built on the image of Steve Jobs. Each level of the ecosystem is designed to help founders take their companies from garages and basements to IPOs and lucrative exits. Unless there’s a recession, that’s not changing anytime soon.

Will the pendulum ever swing back for hip-hop? It’s hard to tell. If it does, it won’t be any time soon. Hip-hop’s reverence to Jay might be stronger than Jobs’ in tech. Jay Z is both hip-hop’s richest figure AND its greatest rapper. This compounds his influence. His lessons carry more weight than other moguls, like Diddy and Russell Simmons.

While Dame’s principles don’t get mainstream love, his mindset on black ownership resonates with a number of people. If there was a Venn diagram of folks who support Black Panther’s Killmonger and ride with Damon Dash, it would be a perfect circle.

Dash already won that group over though. In order for the overall perception to change, he, or another ownership-driven hip-hop entrepreneur, needs to attain mainstream success with a company that is built from the ground up. It’s possible, but it would be a counter-culture move at the moment.

The split between Jay and Dame is a reminder of the classic founder’s dilemma: do you want to be king or be rich? Dame is the king of his domain. He runs his own streaming platform, has his own film studio, and runs his own health network. He’s living his best life.

Jay is the rich once. Money over ownership. Even Roc Nation, the company he founded, was started as a joint venture from his 360 deal with Live Nation. Don’t be surprised if he makes another deal this year just to cross the billion mark before he turns 50.

But imagine if Dame “won” and Jay “lost.” What would the industry look like today? Would everyone try to emulate Dame and be the kings of their domain?