Hip-hop’s impact on black businesses
The 50th anniversary of hip-hop coincides with the national Black business month in August, and the former has been a driver of growth and empowerment for the latter, according to leaders in the music genre’s industry.
Hip-hop is an industry with an economic impact of $16 billion and has launched Black-owned businesses in music, film, fashion, and advertising for creatives that curated the culture.
Rappers have turned into entrepreneurs, spurring growth for other Black-owned businesses, building generational wealth, and investing in the communities that nurtured them.
“Hip-hop went from being a fad to commercialized and monetized in technology, fashion, sports and business,” Detavio Samuels, CEO of REVOLT, told Yahoo Finance. “In the beginning, we weren’t owners, just brand ambassadors, not accumulating wealth from a genre and culture that we created. We’ve gone from making others rich to wealth accumulators.”
Overall, there are around 3 million Black-owned businesses in America now, generating about $206 billion in annual revenue with 36% of those led by Black women. But the road to these successes was far from easy.
The history of Black businesses in the US is rife with violence and racism.
In what was known as the Red Summers of 1917-1919, many Black-owned businesses in Washington, D.C., Chicago, St. Louis, Houston, Tulsa, and Omaha were decimated during mob violence and racial terrorism.
In the decades that followed, many Black-owned businesses closed due to racially biased eminent domain proceedings, with the government taking land in Black business districts like Bruce’s Beach in Los Angeles and Beale Street in Memphis.
Hip-hop itself was its own economic battleground. When the genre was born, recording studios — more often owned by white executives — controlled the process from radio air time, marketing, ownership interests, and rights.
But they did not control the culture, which spawned more and more businesses.
For instance, Dapper Dan and 5001 FLAVORS were favorite designers for hip-hop artists that disrupted the fashion industry. Some of 5001 FLAVORS clients include Salt-n-Pepa, Heavy D, Sean P. Diddy Combs, Dr. Dre, DMX, Tupac, The Notorious BIG, Jay-Z, Beyonce, and Blue Ivy.
“Hip-hop allowed Black creatives and artists to create brands that wouldn’t have existed without hip-hop and allowed us to engage in collective economics, supporting other Black businesses,” Sharene Wood, president and CEO of 5001 FLAVORS and Harlem Haberdashery, told Yahoo Finance. “Hip-hop opened the door to a lot of Black brands, like 5001 FLAVORS.”
What started with $600 in Wood’s college dorm room has expanded 30 years later into a family business with a retail store (Harlem Haberdashery), a bespoke spirits line (HH Bespoke Spirits), and a 501(c)(3) that gives back to the community that raised them — #TakeCareofHarlem.
Designs by 5001 FLAVORS are archived at the Smithsonian, Grammy museum, and the Rock-n-Roll Hall of Fame museum honoring hip-hop.
“People wanted to build their own economy, and Biggie said it best: ‘Never thought hip-hop would take us this far,'” Wood said. “Hip-hop creatives and the businesses that sprung from them didn’t have corporate grooming or business degrees when we started, but now Queen Latifah, LL COOL J, and Diddy are multi-hyphenates — rappers, actors, and entrepreneurs.”
Sean “Diddy” Combs went from rapper-producer to CEO of Bad Boy Entertainment, owning a fashion line, and founder and chairman of REVOLT. This year is Bad Boy Entertainment’s 35th anniversary and the 10th anniversary of REVOLT.
REVOLT originally started as music video television in response to MTV’s embrace of reality television over music videos. However, when none of the genres outside of hip-hop showed up for the platform, REVOLT decided to embrace hip-hop culture as the storytelling agent.
“The narrative others tell about hip-hop is sex, love, drugs, and materialism,” Samuels said. “REVOLT isn’t a media company, but an engine for transformative change for Black people to build generational wealth with culturally relevant information to turn financial whispers into shouts as to how Black billionaires have done it.”
This resonates with the Black community. A Pew Research study found that 58% of Black adults say supporting Black businesses, or “buying Black” is an effective strategy for moving Black people toward equality in the United States.
“Social justice and empowerment has always been part of the DNA of hip-hop culture,” Samuels said.
Financial empowerment
In another effort to empower the Black community and businesses, REVOLT partnered with Rashad Bilal and Troy Millings, founders of the viral platform Earn Your Leisure (EYL) that turned into a TV network on financial literacy, to host Assets Over Liabilities, a television series that bridges the gap between the world of finance and the hip-hop community, making financial literacy a focal point.
This season’s premiere episode is a sit-down with producer Swizz Beatz discussing his investment in Black artwork, selling his company Verzuz for $28 million, and his investment strategy for building generational wealth.
“Partnering with REVOLT to integrate hip-hop into the conversation removes stigmas and increases accessibility to financial literacy,” Rashad Bilal and Troy Millings, co-hosts and co-founders of Earn Your Leisure, said. “We’re empowering the community to break down financial walls and master their money with knowledge.”
REVOLT is using its platform to highlight Black businesses and marketplace disruptors like Assets over Liabilities and Bet on Black.
Hip-hop’s influence on Black businesses and the idea of collective economics is rooted in empowering Black communities.
“Collective economics is not just about money, it’s a social responsibility to invest in the community because you can’t just consume from the community, you need to nurture it in order for business to thrive,” Wood said. “Companies like the Fearless Fund exist because we’ve been historically underrepresented, underfunded, and systematically shut out of opportunities.”
Ronda is a personal finance senior reporter for Yahoo Finance and attorney with experience in law, insurance, education, and government.
