And you don’t stop ... rappers as entrepreneurs

By Geoff Williams

updated 8:23 p.m. ET July 3, 2007

Diddy. Warren Buffett. Jay-Z. Bill Gates. You don't normally think of rap artists like Diddy and Jay-Z in the same league as legendary entrepreneurs like Buffett and Gates, but you should.

After all, Shawn "Jay-Z" Carter may be famous for being a rapper, but he also is part owner of the New Jersey Nets, started The 40/40 Club — a restaurant and lounge with locations across the globe — and owns Roc-A-Fella Records and clothing company Rocawear, among other ventures. Curtis Jackson, better known as 50 Cent, is worth a whole lot more than two bits. Some business and rap observers estimate he may be worth close to $1 billion, not because of his music hits, which are substantive, but because in 2004, he invested in Glaceau, the company that produces and distributes Vitaminwater and Smartwater. It was just purchased for $4.1 billion by Coca-Cola, and some have speculated that 50's 10 percent stake in the company will translate to $401 million. Suddenly, it becomes clear: Gates who?

And it's not just big-name rappers capitalizing on the power of branding. Lesser-known hip hop artists are building their own diversified empires, as well. So just what can entrepreneurs learn from the rap game?

Take advantage of opportunities. Checliss Rice, known as Big C, is a success today, but it hasn't always been that way. Big C, 33, is a former rapper based in Memphis, Tennessee and president of Game Time Athletics, which manages rappers, including Frasier Boy, who wrote the Oscar-winning song, "It's Hard Out Here for a Pimp." His company also has a clothing line that includes athletic shoes. He won't divulge his revenues, but he employs seven people and has an office in downtown Memphis, as well as a branch office with a warehouse. In other words, he's doing well.

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But that wasn't the case when Big C was in his 20s, working as a manager at Pizza Hut or even later when he was flipping houses, but barely staying afloat. The only reason he was able to start an independent record label was because a friend had some recording equipment — and Big C knew how to rap.

The public, however, wasn't lining up to buy his albums. But when his own music didn't take him anywhere, Big C began working on a couple tours with hip hop and R&B artists, like Bow Wow and Mario. "I was learning everything I could," says Big C, "and I noticed that everyone was making a lot more money off of merchandising than the music."

That merchandise included clothing, such as jackets selling for $300. Big C began wondering why he couldn't find a seamstress, buy some fabric and custom-make jerseys. He made a $450 profit from the first two jerseys he sold. "I was off to the races," he says. He began posting fliers at music studios and radio stations, and when a manager for Snoop Dogg ordered four jerseys the next week, Big C knew he was on to something. Within two months, he was making $5,000 to $6,000 a month.

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