A hip-hop star's MySpace dreams

Business 2.0 columnist John Heilemann talks with music impresario Damon Dash about his new social networking venture and why he'd rather be Bill Gates than Steve Jobs.

By John Heilemann, Business 2.0 Magazine columnist

(Business 2.0 Magazine) -- The New York office of Damon Dash isn't your typical high-tech startup CEO's spread. The space is vast and the ceiling is vaulted. Painted on the wall is a giant red handgun bearing the inscription "Crime Fighter." In the corner is an antique barber's chair -- in which the man himself is seated, getting his head shaved.

"My barber says it's the best chair he's ever seen," Dash reports. "I took it off a Rockefeller yacht."

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GUNNING FOR MYSPACE: Damon Dash has an unabashedly capitalist motivation for getting into the social networking business: money.
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The Harlem-born, 36-year-old Dash, who rose to prominence in the 1990s as the hip-hop impresario behind the likes of Jay-Z and Kanye West, has always had a thing about Rockefeller. His first company was Roc-A-Fella Records; his second was the B-boy apparel house Rocawear. He co-founded both of them with his pals Jay-Z and Kareem "Biggs" Burke.

But after Dash and Jay-Z split up in 2005, Dash was reportedly left with a net worth of $50 million and not a piece of either Roc. Since then he has undertaken a variety of entrepreneurial activities, from fashion to filmmaking. And now he's suddenly thrown himself into the realm of social networking.

Dash's new Web venture is BlockSavvy, a site aimed at what he dubs the "urban-lifestyle demographic." When I ask what motivated this endeavor, Dash answers bluntly, "Money." When I ask him to elaborate, he turns to Burke, who explains, "After MySpace sold for $580 million, we said, damn, we gotta get us some of that."

Such comments, of course, may seem a sign that the Web 2.0 bubble has peaked, that the greater fools are rushing in. But Dash and Burke are clearly no fools. And whether BlockSavvy succeeds or not, its approach suggests much about what direction social networking is headed.

The real driving force behind BlockSavvy, in fact, isn't either Dash or Burke. It's a young Web designer, Kwame DeCuir, who was Dash's technical consultant on his BET reality show Ultimate Hustler. Trained in computer science at the University of Texas at Austin, DeCuir was likewise struck by the success of MySpace -- especially since, as he says, "I wasn't too impressed with their technology, and they had no real business model." So he set out to create something better and persuaded Dash and Burke to back him.

What DeCuir and his team built, as he describes it, is a site that offers all the social-networking basics -- profiles, content sharing, blogging -- in a rich-media environment segmented at the moment into three "neighborhoods" appealing to different groups. Once users choose where to "live," they can set up 3-D-rendered, photorealistic rooms and trick them out with virtual branded products.

These they purchase with "SavvyDollars" earned by spending time interacting with the site. They can also use their virtual bucks to bid in auctions for real-world items such as iPods and Nintendo Wiis.

The virtual economy is central to the site's business model. Through what DeCuir calls an "invest-and-reward program," advertisers pay to erect virtual storefronts selling cybergoods. They offer users SavvyDollars to participate and then monitor their behavior.

Indeed, to DeCuir's way of thinking, the most valuable thing BlockSavvy offers advertisers -- along with the ability to interact with some hard-to-reach demographics -- is reams of qualitative data about the whims of its users.

It's far too early to know how well any of this will work. BlockSavvy went live in November and has just 10,000 invitation-only members, though the company has lined up some impressive advertisers, including AT&T (Charts, Fortune 500) and Toyota (Charts).

What's beyond doubt is that marketers are craving more immersive and interactive ways to communicate with young consumers online. Around the world an emerging array of new social networks, from Cyworld in South Korea to Webkinz in Canada, hint at a future in which MySpace may soon look rather antiquated. And let's not forget Second Life, the virtual world with which BlockSavvy also shares certain attributes.

By now you might be thinking, OK, but what does Dash bring to this party? Certainly not a deep understanding of, or even interest in, the online world.

"Not at all," he answers when I ask whether he's spent time on MySpace. "I'm a grown-ass man. I'm not a Web kind of guy. I'm not a TV guy, or a videogame guy. I'm not an anything guy where I have to sit still for very long."

What Dash does bring to the party is his money (though he and Burke have put less than $1 million into BlockSavvy so far), his network of connections in the worlds of music and fashion, and, most important, his imprimatur.

"In the urban demographic, people know that if it's a Damon Dash product, there's a certain quality," he says. "But I'm not a celebrity. I don't believe that having my name on something is going to make it sell. I believe that having my name on something is going to make me sell it."

It would be easy to dismiss Dash as some kind of a digital dilettante. But he strikes me as a kind of venture capitalist -- one who dispenses with the mumbo jumbo that tech VCs ritually spit out to make themselves sound noble. In Dash, you have a guy whose main gifts are a nose for talent and an eye for a market opportunity. He's got an appetite for risk and a thirst for the big score.

"The bigger the stakes, the bigger the reward," he says. "If you make $10, it's easy to put that s--t back on the street. But a real hustler makes $20 million and puts $18 million back on the street. And that's me. I just always feel like if I don't, I'm gonna miss out on making $100 million."

The VCs on Sand Hill Road might not put it quite so starkly, but their sentiments are identical. And something similar can be said about the underlying motivation that keeps all of them in the game. "Once I flip this for a bunch of money," Dash says, "I'll be validated in technology. People will have to notice me."

So, given a choice, who would Dash rather be: Bill Gates or Steve Jobs? "Which one got more money?" Dash shoots back. Gates has more money, but Jobs is cooler. "Yeah, but if I was Bill Gates, Bill Gates would be cooler," Dash says. "Definitely."

John Heilemann wrote "Pride Before the Fall." His next book is "The Valley." He lives in Brooklyn. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.