Entrepreneur: Russell Simmons
– Def Jam Records – Major record label featuring numerous rap stars.
-Phat Fashions – Fashion label including Phat Farm, which sold $615 million in 2005
-Def Comedy Jam – Television Program
-Def Poetry Jam – Television Program
-DefCon3 – Energy Soda
-Hip-Hop Summit Action Network – Promotes social and political goals
-Rush Communications – Umbrella company featuring such things as Phat Fashions, cellular phones, and financial services.
Functions as a typical business with CEO, COO, etc. Russell Simmons oversees the entire business operation and relies on those around him to make day-to-day decisions and perform small tasks. He is very hands-on with his businesses and their decisions, not hesitating to modify products or alter budgets at a moments notice.
Strengths – Street smart management with societal appeal, good at predicting future trends, trust worthy and forth coming as a company, good management and connections, very good growth.
Weaknesses – Possibly slow changing to future trends outside of hip-hop area, political and social conflicts with potential customers, may be hitting a ceiling, profit margins, exclusiveness.
Opportunities – Expanding clothing line to more stores, more social and political ventures, expanding financial division.
Threats – Competition especially in the financial sector may decrease market share, possibly hitting a ceiling as market becomes flooded with more competition, the gap, which existed when companies started, is being closed by competitors.
Nature of the businesses:
All of the businesses listed, excluding the Hip-Hop Summit Action Network, are international businesses selling and marketing their products both nationally and abroad. The companies are all privately owned by Russell Simmons, or were privately owned before Russell Simmons sold them. All of the sites are represented well on the Internet, having individual websites for the purchase of their products if applicable. The companies have a lot of competition for the most part, however they are in very broad markets, such as clothing and finance that have a very broad market. Combined value of over 300-500 million dollars.
Russell Simmons is a classic entrepreneur in every sense of the word. Coming from an average to low class family in New York City, Russell Simmons developed his own ideas and has a knack for spotting under appreciated sectors of business and exploiting them. His first opportunity came when he was very young and after witnessing his brother go to jail for drugs, Russell decided to sell fake cocaine instead of the real drug because it was legal, had a higher profit margin, and the only people he had to deal with were angry customers instead of police. Russell then witnessed hip-hop in his home city and decided to become involved, eventually starting the record label Def Jam which signed many major acts and grossed substantial amounts of capital. Russell then began diversifying the businesses in which he was involved with and sold his stake in the record company recently, although he still remains as chairman of the company. More recently, Simmons has become involved in social and political ventures specifically interested in increasing voter registration as well as financial companies looking to reduce the costs imposed on some 45 million Americans who do not have access to checking accounts or credit cards. He is still currently looking further into the financial sector for further opportunities. His knowledge of how humans interact combined with his general knowledge and his entrepreneurial eye has led to Russell’s overall success. Overall Simmons is an inspiring entrepreneur who has used his skills, honesty, and down-to-earthness to inspire others and succeed for himself.
Reflection and Comparison:
A common thread links all entrepreneurs, the drive for success. No matter what the business, where it is located, or any other specifics, there is no doubt that entrepreneurs are the driving force behind business. Many characteristics are similar between entrepreneurs. Our guest speaker gave us hands on experience in learning from an entrepreneur about just how they operate and although coming from widely different backgrounds similarities in mentality can be seen between Russell Simmons and Lynn McBrier. Both strove for success and sought to exploit an area that they saw needed attention. Innovation is another key factor in entrepreneurship. The information we learned from our guest speaker coupled with the information, which we learned in class through lectures, reading, and notes helped me to understand Russell Simmons, his businesses and their history as well as organizational and technical aspects of the businesses. Being able to ask questions to an entrepreneur helped greatly in understanding the thinking that occurs in an entrepreneurs mind.