“I'm not a businessman—I'm a business, man,” goes one of Jay Z's most famous punchlines. And it's certainly true that Hov's business acumen has been a cornerstone of his public persona for many, many years, arguably dating back to the mafioso-rap days of Reasonable Doubt.
But a closer look at many of Jay's business maneuvers, particularly his endorsement deals, shows a strange pattern. Almost without exception, Jay will align himself with the company that is number two or three in the marketplace, and rarely the leader.
Once you notice this trend, you begin to see it all over the place. 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. When he wanted to increase awareness of The Blueprint 3 via a subscription-based music service, it was Rhapsody (remember them?) and not Spotify or Pandora. When he invested in a video-sharing app in 2012, it was the now-all-but-deceased Viddy, as opposed to Instagram.
Almost without exception, Jay will align himself with the company that is number two or three in the marketplace, and rarely the leader.
In fact, arguably the only leading companies Hov has joined forces with are Hewlett-Packard, who have been running neck-and-neck with Lenovo for first place in global market share in personal computers for the past several years; and Duracell.
For someone as careful and calculating as Jay Z to consistently behave like this, there must be a good reason. While we can't be certain about the motives behind Jay's moves (Hov, if you're reading this, call us), there are some huge advantages to his behavior.
Zack O'Malley Greenburg, Senior Entertainment Editor at Forbes, is the author of Empire State of Mind: How Jay-Z Went From Street Corner to Corner Office, a business biography of the rap titan. He pointed out that Jay's strategy is a win-win for both rapper and what Greenburg euphemistically refers to as “underdog brands.”
“Jay Z often does deals with underdog brands because they have more ground to gain from a connection with him,” he told Complex. “And in some cases, there may not be a deal on the table with the industry leader.”
“I don't know that he could have gotten necessarily a stake in the Knicks, or at least couldn't have done it as easily or on as favorable terms as he did with the Nets,” he continued. “I would think the same thing goes for some of the other deals when you look at it down the line. I think it speaks to the goal, which is to use his cool points and employ them to boost a brand that could use some boosting.”
Those “cool points” are often directly translatable into dollar signs. In the Nets deal, for example, he was able to turn a $1 million investment into a 135 percent return, and to garner a heavy association with the Nets and their Barclays Center arena, thereby gaining incalculable free advertising. Hov opened up the arena with a string of concerts in 2012, and continues to be associated with the venue, even though he has long since sold his stake of one-fifth of one percent.
And being associated with second-tier companies has not proven to saddle Jay with any long-term negative associations.
“Even if he associates with a second-tier brand, it doesn't tarnish his image so much as it gets people saying, 'Oh, there's Jay, he got a good deal. There he is making savvy business moves again,'” Greenburg explained. “In some ways, because of that business focus that he's always had throughout his career and that he's done a very good job of publicizing, he's seen more as a dealmaker than a sellout.”
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