Hip-hop’s powerhouse label deserves praise for executing on a tremendous opportunity.

The Top Dawg Entertainment roster (from left): Isaiah Rashad, SZA, Kendrick Lamar, SchoolBoy Q, Jay Rock, Ab Soul (viaĀ Dominique Nwoko)
Hereās an example fromĀ RevoltĀ in June 2018:
Not to throw any shade, but unlike [Maybach Music Group] who have consistently been thriving on a mid-major level, Dreamville who have been patiently waiting for their artists to pop, or even OVO which rides on the coattails of R&B, TDE has prospered past all thoughts of potential and competition.
They have become 2018’s Golden State Warriors in the sense that the entire label’s talent is seamlessly in every conversation as to who, and which label, owns the throne. It’s almost unfair.Ā
Top Dawg and his team deserve credit, but discounting MMG, Dreamville, and OVO because of current success does not pinpoint the factors that make TDE different. Hereās a similar take fromĀ DJBoothĀ in June 2017:
I hope labels on the rise are taking note of this slow and steady approach, realizing thatĀ TDEās success comes not from isolated creation but through building a family unit that grows together. ⦠[Top Dawg] didnāt get lucky with Kendrick Lamar or any of his artists, he just believed they could be great and gave them the best opportunity to become what he envisioned.Ā
Sure, labels should take note, but following TDEās methods to a tee will not ensure the same success. The likelihood of TDE or any other labelās artists breaking out and having concurrent success is more chance than the industry wants to admit. The better story, and where TDE truly shines, is how well it has executed on opportunities once its artists are successful.
TDE is following in the footsteps of Roc Nationāa lasting company that can make moves after its current artists stop making music.
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Survivorship bias in hip-hop
In 2006, Brooklyn rapper Papoose was gettingĀ all the mixtape hype. Hip-hop fansāespecially from the tri-state areaāclaimed he was the next āking of New Yorkā. Flipmode Entertainment, home to Busta Rhymes, won the prize and secured Papoose to a $1.5 million deal under the labelās parent company, Jive Records. The deal was seen as a breath of fresh air for Flipmode, which despite its handful of artists, had only seen Busta Rhymes achieve sustained success.
Despite the hard work put in by Papoose and his hype man DJ Kay Slay, things didnāt pan out. Jive and Papoose ended their deal in 2007 because of ācreative differencesā. By 2011, Jive Records had folded into RCA, and Flipmode had reincarnated to Conglomerate, a smaller independent label currently run by Busta. And today, Papoose is most well-known because of his wife, fellow New York rapper, Remy Ma.
In hip-hop, there have been many more failures than successes. But we are more likely to hear about Kendrick and TDE than Papoose and Flipmode. And because we often donāt hear about those that fail, itās harder to compare the level of effort and strategic moves made. ThisĀ survivorship biasĀ creates a tendency to look at successes more than failures, and make false conclusions about how a record label like TDE became successful.
Because thereās only been a handful of noteworthy hip-hop record labels, this bias also leads to lazy comparisons and false equivalencies. In 2013,Ā GQ wrote a controversial featureĀ on Kendrick Lamar and TDE, comparing the label and Top Dawg to the infamous Death Row Records and its CEO Suge Knight. Hereās an excerpt:
“Twenty minutes later, Anthony ‘Top Dawg’ Tiffith, basically TDE’s Suge Knight, asked if I had had a fun day. I said that I had and that I was surprised by their discipline. ‘You guys seem so calm,’ I said.”
The only things that Suge Knight has in common with Top Dawg are that both labels were based in the Los Angeles area and feature high profile rappers of their time. A better comparison is a CEO that has management or A&R (artists & repertoire: talent scouting and artist development) principles aligned with TDEās current strategy. Instead, Top Dawg still gets compared to a label-head who onceĀ made an employee drink urine.
Itās easy to make loose comparisons and highlight hard work alone as the reason for success. Itās harder to dig deeper and identify the true reasons behind that success.
Relying on homerun hits
The coverage on TDEās collective success picked up in June 2017 when SZA droppedĀ Ctrlāwhich almost never happened. Just seven months beforeĀ Ctrl,Ā SZA nearly quit music, citing frustrations after nearly five years of working closely with TDE.
In reality, SZAās decision to stay in music should not impact TDEās ability to identify top talent, but it does in the public eye. Before her breakout, only Kendrick and ScHoolboy Q had experienced mainstream success. The labelās seven other artistsāfour of whom joined in the past two yearsāhave generated buzz among hip-hop heads, but not with mainstream fans. The label was already getting praise beforeĀ Ctrl, but SZA decision to stay cemented the perception of TDEās legacy.
The labelās journey to glory is similar to a high-profile venture capital firm. When a firm makes one or two initial homerun investments, it creates a lasting perception of prosperity over its peers. But aĀ recent study on venture capitalĀ from Harvard and Yale researchers concluded that the likelihood of āhomerun hitsā is more chance than skill. Hereās an excerpt from the study:
āOur results suggest that the early success of VC firms depends almost entirely on having been āin the right place at the right time.āā
The success metrics are similar in both fields. In venture capital, less than 10% of companies invested in become homerunsāeven for later-stage funds. And according toĀ Billboard, the ratio of commercial success to failure in the A&R business is 1 in 10 (but thatās being generous, frankly).
Kendrick has been a homerun-hitting, Pulitzer-prize winning, grand slam. SZA and Q are both Grammy-nominated homeruns that have had varying levels of success. The rest of the labelās artists are either comfortable chilling on second base, or waiting for their chance at bat.
The real achievement
It might have been a coincidence that SZAās breakout happened just two months after Kendrick releasedĀ DAMN.Ā in April 2017. But itās not a coincidence that TDE has made power moves since those albums dropped. Top Dawg wisely grasped a window of opportunity to set TDE up for the future to extend the companyās platform.
Similarly, successful venture capital firms get more opportunities once initial success is demonstrated. Hereās another takeaway from the same study:
āAlthough these early differences in performance appear to depend on being in the right place at the right time, they become self-reinforcing as entrepreneurs and others interpret them as evidence of differences in quality, giving successful VC firms preferential access to terms and in investments.ā
For TDE, that āpreferential accessā is getting to produce the soundtrack forĀ Black Panther, the ninth-highest grossing movie of all time. Since TDE has established āTDE Filmsā that soundtrack is just the first step. “We’re always working on new goals at TDE,ā Top Dawg said toĀ Billboard. āSo teaming up with Disney, Marvel Studios and theĀ Black PantherĀ film makes perfect sense.” TDE has also hired more producers on its staff to extend the type of platforms that its artists can share their stories on.
TDE has also extended to sportsĀ as other hip-hop labels have. ItĀ signed top NFL draft picksĀ to its new sports division. TDE is following in the footsteps of Roc Nationāa lasting company that can make moves after its current artists stop making music.
This summer, TDE completed a 30-city nationwide TDE Championship Tour with the entire label. In an era where most label-wide tours are reunions of older labels, its sends a strong message of how the label is positioning itself.
This is where the comparisons to other labels are most effective. Conversely, Drakeās OVO Sound had its brief moment in 2014 when the Toronto rapper told us that OVOĀ āalready had Spring 2015 poppin’.āĀ That year, PartyNextDoor, Majiid Jordan, and ILoveMakonnen were all dropping new music. OVO already had its annual festival and clothing line. The label expanded to a radio show on Beats 1, but not much more. Most of the other business moves to date, such as Drakeās Virginia Black whiskey, have come from Drake himself.
Dreamville, J. Coleās label, has worked as hard as anyone toĀ develop a loyal fanbase. The label was ready to make a move two weeks ago with the inaugural Dreamville Festival, but it was postponed because of Hurricane Florence. Additionally, a lot of the labelās external work has focused on philanthropy through the Dreamville Foundation. Even the top labels have slightly different objectives with their platforms.
Donāt be surprised if TDE already has an undisclosed deal to produce theĀ Black Panther 2Ā soundtrack. And donāt be surprised if they sign an upcoming deal to produce documentaries and other content with Netflix, Hulu, or another streaming companies. TDE shows no signs of slowing down.
Most labels donāt get this opportunity. Now that Top Dawg has claimed his stake in hip-hop, at least thereās another successful CEO for rising labels to be compared to instead of Suge Knight.
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Trapital is written by Dan Runcie: info [at] trapital.co