In part 1 of the “Gentrification of Hip-Hop” we talked about critical obstacles within the culture that prevents creators from monetizing their true value within the marketplace. The key obstacle to overcome is capital mobilization! Capital mobilization refers to the process of obtaining capital (money, human capital (labor), raw materials) and allocating said capital to places where it can be used the most effectively. The primary objective is to earn positive returns.

 
Often discussions about capital mobilization primarily highlights how to break down barriers in order to move capital. For instance, if a country has restrictions that prevents the foreign ownership of a company, those particular restrictions can be classified as a barrier.

Let us examine this further. Money, human capital (labor), raw materials and banking infrastructure must be allocated in places where it can be utilized to create wealth. Hip Hop culture is an industry NOW! And it needs to be treated as such. It is no different than the oil, diamond, media, or the sports industry… Hip Hop is an industry where its originators, pioneers, creators and architects experience a very low barrier of entry that grants them the ability to compete in the global economy. These immensely talented visionaries have forcefully created access to the global economy in combination with a unique competitive advantage, carving out an industry advancing the entire culture and economy simultaneously.
 
As Jay Z so famously quoted “I heard niggas say they made Hov, so I say make another Hov.” The brilliance of these cultural icons cannot be easily duplicated, so what’s their true worth?
 
How valuable was Steve Jobs to technology? How valuable is Bill Gates to computer science? How valuable is Jeff Bezos to online retailing? How valuable is Ralph Lauren to fashion?
 

The likes of Jay-Z, Dr Dre, P.Diddy and LeBron James have becomes economies within themselves.  With no formal training, these particular gentlemen have bypassed the main routes to success and have all reached a level of dominance within their respective fields.
 
However, let's dig a little deeper…
 
Steve Jobs’ net worth was an estimated at $10.2 billion when he passed. In 2018, Apple became the first company to cross the $1 trillion valuation mark. Bill Gates is worth an estimated 97.8 billion. In 2018, Microsoft was valued at $822.8 billion. Jeff Bezos net worth was estimated at $153.4 billion and in 2018, Amazon had a market valuation of $1 trillion.
 
Jay Z’s net worth was estimated in 2018 around $900 million. Tidal’s market value was estimated at $10 million. P. Diddy’s net worth was estimated at $810 million. Bad Boy Records was once valued at $100 million and Revolt TV in 2018 is struggling to gain market share. Dr Dre’s net worth is $830 million in 2018. Dr. Dre founded beats with Jimmy Iovine in 2008. In 2014, Dr Dre had a 25% stake in beats in which was later sold to Apple for a reportedly $3 billion, in which Dr Dre took home an estimate of approximately $500 million. Take note of the comparative trends amongst those two distinct groups of industry titans. And the trend’s applicability isn’t just limited to business professionals in music.
 
LeBron James’ net worth is $440 million. LeBron James brings a hell of a lot of financial impact to an NBA team. Not only did the Cavs see a rise in valuation from the first time he was there — going from $222 million in 2003 to $476 million by 2010 — but, then again in 2014 upon his return, taking the team valuation from $515 million in 2014 to topping $1.3 billion in 2016. Of course, that’s not all LeBron James, with the NBA receiving a ton of money from a new TV deal worth $24 billion over nine years that began during 2016 season, impacting the value of all franchises. But, because fans want to watch superstars like LeBron on a nightly basis, one can argue that he was instrumental in snagging such a deal for the league.
 

Outside of the financial impact that LeBron James can have on a franchise, on a larger scale he can impact an entire community. Just ask the city of Cleveland how one man — “the chosen one,” to paraphrase his now famous Sports Illustrated article from 2002 while in high school — can affect an entire city to thrive; even one as big as Los Angeles.
 

According to a 2017 study from the American Enterprise Institute (AEI), LeBron James brings more money to a major city than one could imagine. That’s because, per the research, James’ return to Ohio increased the number of restaurants and bars within one mile of the Cavs’ arena by 13 percent. This led to a 23.5 percent increase in employment for those establishments. In summary, here’s how the AEI described the superstar’s impact on Cleveland’s economy, per Vox:

“We find that Mr. James has a statistically and economically significant positive effect on both the number of restaurants and other eating and drinking establishments near the stadium where he is based, and on aggregate employment at those establishments… These effects are very local, in that they decay rapidly as one moves farther from the stadium.” In general, where LeBron thrives, businesses thrive.”

So what am I driving at? Generation Hip Hop has produced multi-millionaires without question. However, our formula for success is wrong. Hip-Hop has produced very rich individuals, but WE HAVE YET TO PRODUCE multi-million dollar or billion-dollar companies. Hip Hop grosses billions of dollars annually yet the percentage of wealth that flows back to the culture its less than 1%!

Steve Jobs, Bill Gates, Jeff Bezos, Ralph Lauren, Rupert Murdock, Warren Buffet etc, are examples of very successful individuals, but they also have built successful companies. That is the brilliance of capital mobilization. These heralded business men have created wealth for their shareholders, employers, cities and states. Their institutions employ hundreds of thousands of people from all walks of life. They create stock options, health benefits, 401k and most importantly employment for thousands of communities around the globe! They also provide positive returns or dividends for shareholders.

If the culture of Hip Hop is to thrive and transition into becoming a respected industry; it can no longer just rely on the formula of getting a small group of close friends wealthy and set for life. Hip Hop has to create business institutions where wealth can be harnessed, allocated and moved effectively for the use of positive returns. Now that Hip Hop has proven WE CAN BUILD VIABLE BRANDS, which is the first stage in creating wealth. We must now move to creating industries!

I will end with this quote….

“The secret to Happiness is Freedom, and the secret to Freedom is Courage!!” Earl Nightingale.