Everything I Know About Business I Learned From E-40
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Everything I Know About Business I Learned From E-40

For 35 years, the Bay Area legend has been…

For 20 years, I’ve been speaking to and consulting for today’s biggest brands. Yet, I’d gladly give up my spot at any business conference if it meant getting to hear Earl Stevens — E-40 himself — give the audience his own words of wisdom. For 35 years, the music industry vet and independent publishing icon has arguably been one of the sharpest commercial tacticians we have. Virtually everything I know about business I learned from 40 Water, whose song catalog (rife with hints on how to replicate his success) reads like something straight out of Napoleon Hill.

Since 1986, the Malcolm Gladwell of macking hasn’t just gone from slinging self-released tapes out of his trunk in Vallejo to dropping platinum albums on major labels and guesting alongside a who’s who of rap royalty. He’s also consistently reinvented himself for generation after generation of listeners while launching entrepreneurial ventures from restaurant franchises to alcohol brands — and virtually writing the roadmap for modern-day indie success along the way. Luckily for entrepreneurs looking to follow in Charlie Hustle’s footsteps, E-40 Fonzarelli has never been shy about breaking down the blueprint for DIY accomplishment or sharing the gift of game.

When it came time to part ways after gold and platinum albums, 40 rode off into the sunset with the audience he’d helped build, as well as the publicity that these partners had helped generate — all of which helped to sell more of his own self-made product.

Below, you’ll find five of the most important business principles I’ve gleaned from the prolific spitter’s music, a few of which can often be found shouted out in a single song. For instance, 1996’s “Rapper’s Ball” changed everything I thought about business — and put my career on the fast track as well.

Lesson #1: Differentiate yourself at first glimpse

“I got the gift of gab, I’m off the choo-choo track/I want the fetti, fuck the fame, y’all can have that” (“Earl, That’s Yo’ Life”)

In a crowded market full of audiences with shrinking attention spans, it’s essential to grab people’s attention and stand out at a glance. Say what you will about E-40, but he and his singular delivery are impossible to forget — he’s got a seemingly endless list of nicknames and even more of his own original vernacular (trust me, we ain’t flamboastin’). Heavier than most MCs, rhyming denser verses, and prone to countless Yay Area-isms, Earl is a walking, talking contradiction to countless carbon-copy rap stars and radio-friendly lyricists. That uniqueness is exactly what’s made him so memorable — and so able to captivate a dedicated fan base and maintain a presence for nearly four decades.

What’s more, between so many modern acts embracing their inner weirdo lately and producers stepping out from behind the boards to drop signature tags on tracks, you can see just how much the music business has begun to take these branding lessons to heart.

My real-world version: Following Earl’s reminder to go against the grain, I dropped documentary series Video Games are Dead while the industry was booming, and chunked up guides to successfully navigating business chaos right as the Covid-19 pandemic hit. The net effect: Over 1 billion views generated in a handful of years; thousands of dollars in free publicity provided by major media outlets; and dozens of partnerships with major household brands, all for zero advertising budget.

Lesson #2: Work with people, not for them

“I got a proposition legal, not like the others/Let’s put our bread together, and build like the Toll Brothers/The banks denying modifications, foreclosures/Short sales, let’s turn our money over/Invest in a couple of condos, real estate, elevate/A couple of years from now you gonna be thanking me, let’s celebrate” (“Sell Everything”)

As rapper Logic recently explained, “a standard record deal is a trap.” Most major-label artists — whose lavish recording advances must be repaid, and who ultimately receive pennies on the dollar from most product sales — make money via touring and merchandise rather than music. They also have limited say on the shape of their projects, how well these offerings are marketed, and the image that they’re ultimately allowed to present to the public. But E-40, who started Sick Wid’ It Records more than three decades ago to publish his first EP, Let’s Slide, has always made a point to self-fund, and thus control his own destiny.

By recognizing the importance of remaining indie and controlling your own brand, he made more money per album than many of his more widely known peers, allowing him to better handle expenses and offset business risks. He also enjoyed greater negotiating power as a result, allowing him to broker more favorable deals with labels like Warner and Jive, who only served to build more hype around him. When it came time to part ways after gold and platinum albums, 40 rode off into the sunset with the audience he’d helped build, as well as the publicity that these partners had helped generate — all of which helped to sell more of his own self-made product. As a result, E-40 is still eating well long after many of his top-selling tracks vanished from the Billboard charts.

My real-world version: Following Earl’s model, I spent years independently selling thousands of self-published books out of a spare bedroom. As a result, I was able to parlay a proven track record into receiving multiple offers from major publishing labels and eventually signed with a Penguin Random House imprint for the book Make Change Work For You.

Lesson #3: If you’re not ready to go big, go small instead

“The foundation was laid several years ago/I built a whole empire in your stereo/Got a four-leaf clover representin’ the Bay/Oakland, Frisco, Vallejo, and EPA” (“From the Ground Up”)

True, many successful business owners strive to sell massive quantities of product to large groups of customers. But often, the better route for less-monied entities is to target a smaller, more niche audience and offer something so irreplaceable that clients can’t help but be hooked.

For example, rather than compete with the world’s leading experts in search engine optimization, you might instead position yourself as the top social media marketing pro for indie artists hoping to reach SoundCloud listeners. Using a more pointed strategy like this one can take longer to scale a business — but it also allows you to meet a pressing need, stand out more readily, and build a dedicated clientele that is willing to pay a premium for your services.

Using this formula, E-40, like many regional artists in other areas of the country, wasn’t just able to grow a profitable following in the Bay Area to capitalize on the hyphy movement. He also leveraged this fan base — which provided a base level of interest and income — to test out and prototype new projects, minimize business risk, and slowly ride a wave of popularity to break through nationwide.

My real-world version: For 10 years, my strategic consulting firm worked to build buzz as consumer technology and video game industry insiders and made hundreds of TV, radio, and online/print media appearances in the process. Using the contacts that these promos helped generate, I was able to mobilize a growing audience of fans to help us parlay our expertise into new business areas. Having gained a reputation for helping companies stay one step ahead of new trends, our fans helped spread the word — and helped us quickly make the leap to aiding Fortune 500 execs in other industries who were looking for ways to successfully navigate other rapidly shifting fields as well.

Lesson #4: Diversify your income streams

“I’m a big deal, I’m a big deal, can’t be slippin’ like a transmission on a banana peel… It’s janky and it’s murkish/I make more money on accident, than a lotta ya’ll do on purpose” (“Big Deal”)

Music careers are often brief and fickle, and lasting success tends to come from routinely reinventing yourself to stay relevant while simultaneously expanding your business horizons. As E-40 has taught generations of rappers, it’s important to constantly build bridges to new opportunities and chase steady financial gains, not count on the fleeting fame or brief income that a hit single’s short stint on the charts typically provides.

According to Mr. Flamboyant, rather than count on cranking out a steady stream of #1 earworms, it’s instead better to diversify your business interests as a hedge against uncertainty and as a way to offset market downswings while simultaneously maximizing gains in more lucrative times. (Especially with even hotels now willing to fund artists and underwrite new albums.) For example, just a few areas that Earl has invested in besides running a record label and putting out a slew of solo and group projects include restaurants, nightclubs, energy drinks, startup competitions, and more. So between his eternal music industry comebacks, it’s not uncommon to see 40 doubling down on new ventures.

My real-world version: I started out as a writer — but even after freelancing for over 600 media outlets from CNN to Rolling Stone, I’ve learned there’s no such thing as a guaranteed paycheck. By learning to mix and match existing skills in new ways or expand into added areas of business opportunity, I’ve been able to extend into market research, public speaking, consulting, and other promising new business arenas.

Lesson #5: Reinvest in yourself

“Why motherfuckers can’t be broke sometimes? Sometimes it’s cool to floss/But don’t buy an eighty-five-thousand dollar car/Before you buy a house” (“Rapper’s Ball”)

E-40 doesn’t just drip (he melts). But that’s because he’s actually got genuine profits to blow on jewels, cribs, and cars — after having first built out a framework of businesses that continue to generate a range of active and passive revenue streams for himself. A smart business owner waits to buy depreciating assets like cars (which lower in value over time) until after they’ve first invested in education, professional development, new business opportunities, and other purchases that have the potential to grow in value and pay long-term dividends.

As a general rule: Pay your bills first, put some cash in savings, pad out your 401(k) next, and then — only then — take the roughly 15–25% or so of income that’s leftover and use it as play money. Better still, if you can combine your work and play as part of a new business venture, the way 40 often does, you’ll enjoy considerable cost-savings to boot.

My real-world version: I’m constantly looking for new, cost-affordable opportunities that help me gain new insights and capabilities — and leverage existing resources in original ways. For example, I recently launched BIZDEV: The International Association for Business Development and Strategic Partnerships, which allows me to bring my work to an even larger corporate audience.

Over the years, I’ve learned a thing or two about business. But compared to E-40, who’s taught multiple generations of entrepreneurs how to put themselves on the fast track to success, the difference is clear. When it comes to getting gouda, we’re all his students.