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The Endless Flow of Russell Simmons

The hip-hop impresario and multimedia baron lives and breathes opportunity.

The Endless Flow of Russell Simmons

Russell Simmons pulls back his Yankees cap, zeroing in on the finer points of preppy style.

"This sweater's fly," he says, tugging at an argyle sweater vest in a harlequin of yellow, purple and melon. Then his eye falls on a more basic model. "This," he says, "could be Brooks Brothers."

And not in a good way. The hip-hop mogul is reviewing samples for one of his latest startups, a men's clothing line for Macy's called Russell Simmons Argyle Culture. In February, he debuted a second, less expensive line that's sold--to the chagrin of some fans--exclusively at Wal-Mart. The idea, Simmons says, is no less than an "initiative to dress America at every price point."

Russell Simmons' best moves
By Kristin Ladd

1978 As a sociology student at CCNY, Simmons begins promoting rap acts and managing Curtis Walker (aka Kurtis Blow).

1979 Quits school and launches Rush Productions.

1982 Signs his little brother, Joey (aka Rev. Run), and unleashes Run-DMC's monster single, "It's Like That," in 1983.

1984 Creates the Def Jam record label with producer Rick Rubin. The next year, a CBS distribution deal makes Def Jam the largest rap label in history; the roster now includes Slick Rick, Public Enemy, the Beastie Boys, EPMD, 3rd Bass and Onyx.

1991 Debuts Russell Simmons' Def Comedy Jam on HBO. Over seven seasons, it becomes a showcase for black comedy stars including Martin Lawrence, Chris Rock, Jamie Foxx, Bernie Mac, Cedric the Entertainer, D.L. Hughley, Steve Harvey and Chris Tucker.

1993 Unveils a men's clothing line, Phat Farm, which later generates a women's line, Baby Phat. Will sell both labels for $114 million in 2004

1996 Produces Eddie Murphy's comeback film, The Nutty Professor, grossing over $273 million in sales worldwide. .

1999 Before the music industry collapses, sells the last of his shares of Def Jam for $100 million to the Universal Music Group. Stays on as a titular chairman.

2001 Russell Simmons' Def Poetry Jam debuts on HBO. Becomes co-chairman of the Hip-Hop Summit Action Network, a philanthropic group focused on educational projects and social change.

2005 Teams up with Unifund Corp. to launch UniRush Financial Services and the Rush Visa card. UniRush now has revenues of more than $1 billion a year.

2008 Creates Global Grind, a hip-hop blogging site with a political edge and 40 million fans.

2008-09 Launches Argyle Culture, a men's clothing line at Macy's. Follows up with a more affordable preppy knockoff, American Classic for Wal-Mart. Envisions its future as ""huge."

Argyle is a key element in his plot for sartorial domination--but not just any argyle. Simmons, 51, has made millions by identifying woefully underserved markets--in music, film, television, jewelry, fashion and even banking--and then creating businesses precisely tailored to those needs. This time, the market is what he calls "the urban graduate," the educated member of the hip-hop generation who has a good job, and perhaps a family, and is officially too old for Rocawear or even Phat Farm, the clothing company he started and sold in 2004 for a tidy $114 million.

That brings Simmons to this studio high above Broadway at the Manhattan headquarters of the Li & Fung Group, the clothing manufacturing goliath. Like all of his ventures, American Classics is a reflection of Simmons' style and taste, and so it is Simmons himself vetting the polo shirts, V-necks, oxfords and sweater vests, with occasional commentary from his brother Joey, also known as Rev. Run of Run-DMC. As always, the idea is to carefully calibrate the brand so that it is distinct--in this case, from every other preppy brand dressing middle America. Oh, and almost everything has to retail for $15 or less.

Simmons points approvingly at the splashes of color on a teal sweater with a polo collar. "Tommy's not doing this. Ralph's not doing this."

Tommy Hilfiger and Ralph Lauren also aren't at Wal-Mart, a major retailer that's gaining market share at a time when others' are shrinking or disappearing. It looks like yet another sharp move in a career that has been full of them. But truth is, the line has been in the works for more than a year, the natural outcome of the way Simmons looks at the world and sees opportunity. Spend a day with Simmons--diving in and out of meetings, splicing in phone calls and casual conversations--and you begin to understand his broad-ranging business genius, and why the mix is ever changing.

There will always be big holes in the market, Simmons believes.

"I don't think I look for white space," he says. "I think the world is a white space. You just have to pay attention to what people need and what has not been done."

Russell Simmons wanders into that white space in his daily life, in his encounters with people, then acts on it from the 40th floor of an old office building in Manhattan's Garment District. Plaques along the hall announce his many ventures: Rush Communications--the parent company--plus Rush Entertainment, Run Athletics, Def-Jam Enterprises, Argyle Culture, even Baby Phat, the women's line he sold along with Phat Farm. There are other ventures too, notably Simmons-Lathan Productions, his TV and film company; Global Grind, his hip-hop website; UniRush Financial Services, his credit card company; and Simmons Jewelry.

No doubt, Simmons has covered a lot of ground and is widely considered the inventor of hip-hop entrepreneurialism. "The first time I heard hip-hop," he says. "I knew my life would never be the same."

Simmons signed his first rapper, Kurtis Blow, in 1979, but it was meeting a NYU student named Rick Rubin in 1984 that really broke Simmons big time. The two began to work rock influences into rap, and their company, Def Jam, exploded behind Run-DMC (whom they packaged with Aerosmith for the MTV smash "Walk This Way") and the Beastie Boys, who represented something Simmons was confident about: Hip-hop music and culture transcend race and economic strata.

Simmons' first fashion venture, Phat Farm, wasn't an immediate hit--he estimates he lost $10 million during the first six years. But the market eventually found him, and Phat Farm's sale--along with the sale of the last of his shares in Def Jam--catapulted Simmon's net worth to more than $300 million.

All the while, though, Simmons continued to create. When he was unable to negotiate a deal to buy the rap magazine The Source, he partnered with Time Inc. to start Vibe. When that went bad, he started Oneworld. There was an Internet company, 360 Hip-Hop (founded in 2000), and an ad agency, dRush (in 1999).

Some businesses thrived, others failed. The point is, Simmons never stopped--and he still hasn't.

"As an entrepreneur myself, I can see Russell's talents very clearly--he's a visionary who knows how to get things done," says Donald Trump, a friend and mentor. "Everything he does is true to his individuality, which isn't easy."

Russell SimmonsSimmons says he simply gives an untapped market what it wants when no one else will. "No one wanted to make a movie about rap, so I had to make a movie," he says, referring to 1985's "Krush Groove," which he co-produced. "I couldn't find anyone to do fashion design with, so I had to start a fashion design company. I'm a servant to the hip-hop community. That's basically the way these entrepreneurial things become expressed. You'd be happy to work with somebody, but nobody wanted to work with you."

From there, Simmons set a paradigm that many have followed, most prominently, Sean "Puffy" Combs and Jay-Z, who branched out from music into fashion, real estate, jewelry and so on.

"He's the template," says Nelson George, hip-hop journalist, historian and a friend of Simmons since the late 1970s. "All the things we take for granted that make hip-hop a force, Russell was there and dictated a pathway."

Simmons' office is a dark, clubby space, with elaborate wood moldings, a thick Persian rug and many half-burned candles. One afternoon, Simmons sits at a huge and heavy wooden desk responding to e-mails with frantic bursts of typing as he chats with Aahmek Richards, the senior advisor for content on Global Grind, a current pet project.

Simmons envisions the site as a hub of political activism, but it is also drawing eyeballs with celebrity bloggers like Akon and T Pain, and models blogging about sex. Now Richards tells him they're close to getting Rihanna, just after the Chris Brown episode, but that her rep wants to keep the topics light. Simmons is not pleased.

"I want her to talk about freedom," he says.

"She wants to talk about her style," Richards tells him.

"She should say something inspiring--look at Ashley Dupre," he says, referring to the prostitute who brought down former New York Gov. Eliot Spitzer. She became a Global Grind contributor after Simmons met her in yoga. "She got a book deal after one blog. One blog!"

Simmons says he's willing to give anyone a platform, but he'd like the ones with influence to use the power for good.

"People want to write for us because we're positive," he says. "There's a hole here because people are so negative. I believe Global Grind can have a really strong influence in the community through our social and political sections."

His assistant buzzes. An old friend is in the lobby, waiting to show him a script. Conference calls--with Simmons Jewelry and UniRush Financial--are stacking up.

"Rappers are all progressive," he continues anyway. "All these things I care about are communities and poor people all around the world who are locked out and have no voice."

He's quick to point out that Global Grind is not a "black" site and that none of his ventures is black-specific. "Eight of the top 10 downloads listed in the New York Post this week are hip-hop," he says. "Every kid engages with hip-hop and rap music. It might be 75 percent non-black--that's the same ratio as America."

Simmons blogs on the site too. About a week after American Classics made its debut--without any trumpeting by Wal-Mart--Simmons was moved to write a post, "Breaking My Silence on American Classics & Walmart."

He held forth, denouncing Women's Wear Daily and others for describing American Classics as urban, which he wrote "seems almost to be a bad word and is certainly a confining one." His brand, he declared, speaks to a "new American culture" that is "unified, integrated and moves as one force."

The post was picked up across the hip-hop blogosphere.

Another message delivered.

As he does at the end of most days, Simmons hops into his black luxury car for the short trip to Jivamukti Yoga School, his favorite yoga studio in Manhattan. He takes calls, answers e-mails and chats with his longtime friend and driver Kenny from a plush leather throne about the size of a first-class airline seat.

Simmons says his life has taken a spiritual turn since he fell in love with yoga a decade ago, and he starts each day with meditation. Of course, there's still the New York apartment, the Hamptons house, the upscale wardrobe and this finely tuned $400,000 Maybach. ("The only hip-hop thing I got.")

Kenny opens the door and hands Simmons his yoga mat. Simmons clutches a bottle of water and heads toward the door. In 15 minutes, he will be standing on his head in a sweaty studio.

"I can't go meditate on a mountain," he says. "And I don't want to go sit on a mountain. I can't sit still that long."

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This article was originally published in the September 2009 print edition of Entrepreneur with the headline: The Endless Flow of Russell Simmons.

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