The Business Genius of Jay Z

I recently came across an online video of a 2013 interview conducted by Steve Forbes with renowned investor Warren Buffet and entertainer and entrepreneur, Jay Z. For reference, the video can be found at the following link: https://youtu.be/sgAOJBFPI58 . If you have the time (approximately 53 minutes) I would highly recommend viewing this. It is interesting, entertaining and insightful. As I watched, I was reminded of the business genius of not only the legendary Warren Buffett but also that of Jay Z. The parallels across these two remarkable individuals from such different worlds are fascinating. As I reflect, I realize that Jay Z has a serious mind for business and what he has accomplished is quite incredible and rivals that of any CEO. This inspired me to write about this video and express my view of Jay Z’s business genius and the business principles that he has built his success upon, from which we can all learn from.

Embrace change…early: There is a great Benjamin Franklin quote that reads “Life’s tragedy is that we get old too soon and wise too late”. I like this quote because it highlights one of the key differentiators in business success, which is timing. Simply put, timing often makes all the difference. Blockbuster Video arguably got wise but did so too late relative to Netflix and has since faded away. It’s not enough to embrace change, you have to do so quickly and early. In the end, everyone gets wise, but the successful people get wise early. Jay Z talks about this with regard to the record industry’s reaction to Napster. Napster was met with arrogance and resistance whereas Jay Z embraced its ideals early and positioned himself for a future that recognized this game changing concept. He focused on the future vs being part of history. Strong business leaders are forward looking and have an ability to anticipate “game changers” before others.

Be Authentic: Jay Z talks a lot about always staying true to himself. Throughout his career, “within all the numbers and the chaos, [he] was just searching for the truth” and didn’t get distracted by all the “shiny things”. He speaks eloquently about it being important to stay disciplined and sticking to what you know and not trying to be something you aren’t. Jay Z speaks the words about being authentic, as many before him have, but what makes him different is his discipline toward that ideal. This should be taught in every business school and leadership course out there. The media is obsessed with every new innovation or advancement and there seems to be a belief that if you aren’t part of the newest thing, you aren’t going to be successful. Smart businesses understand very clearly who they are and focus on building upon that. Sure they anticipate and embrace change but the key is that it must fit with who they are. That is the difference. One of the most undervalued skills today, is knowing when to say “No Thanks”. “The successful warrior is the average man with laser like focus” – Bruce Lee.

Nurture a strong foundation of customers: Jay Z is 45 years old in an entertainment industry ruled by youth. He is considered ancient in terms of his industry but continues to succeed and remains relevant. The way he has done this is through a remarkable ability to relate and grow with his fans. Jay Z built a loyal and core fan base in his mid twenties and focused on retaining them throughout his career. He retained them by growing with them. He related to them differently in his twenties vs in his thirties vs today, because he continued to grow and evolve alongside his most loyal fan base. This allows him a strong foundation from which to further grow as he continues to appeal to new listeners and explore new avenues. All too often businesses neglect their “core customers” because that is not where the growth projections are. These businesses chase growth and fail to recognize that their core customer base is in fact the enabler for future growth. You have to have strong roots to grow a tree.

Build a brand, not just a product: The entertainment industry is a great case study for any industry because it a brutal battlefield where there is a constant fight to stay relevant and maintain industry leadership. Trends are constantly changing, customers are extremely fickle and there is no shortage of entertainment options. To succeed in this industry is difficult to say the least. One of the greatest entertainers of all time, Walt Disney, had a simple formula to his success: “Do what you do so well and they will want to see it again and bring their friends”. Perhaps Jay Z and Walt Disney are kindred spirits because this is exactly what Jay Z does so well. He focuses on over delivering on the experience and always offering a “better package”. As a result, he has created a powerful brand vs a few products. Jay Z recognizes with great clarity that it’s the focus on the experience that creates long term brands. This led Jay Z to create his own company which allowed him the freedom and control to nurture the customer experience. Just like Steve Jobs did at Apple, he recognized that having control over the customer experience was critical to building a brand. Jay Z was successful as a recording artist but he reached mega success (approximately 500MM in net worth) by focusing on the customer experience and thus building a sustainable brand that his fans could relate to and engage with over the long term. Great businesses build brands, not just products.

In the interview, my favorite line which I’ve mentioned above is “Within all the numbers and the chaos, I was just searching for the truth”. Jay Z didn’t get lost in the “shiny things” and has built an empire by always seeking the truth. What a powerful message for business and life.