Lil Yachty: A Capitalist Entrepreneur Plagued by Market Overvaluation

In March of 2016, Miles Parks McCollum, better known by his stage name Lil Yachty, released his debut eponymous mixtape, Lil Boat. After two hit songs on the album and a handful of famous features on other artists’ songs, Lil Yachty exploded onto the hip-hop scene.

How can an artist with mediocre album sales and constant criticism be so successful?

Since achieving success, Yachty has appeared in high profile marketing campaigns for brands ranging from Sprite to Nautica, a departure from products typically promoted by hip-hop artists which elevated his fame even further. Yachty has exemplified personal entrepreneurship by taking every chance available to promote himself and his image. However, his dramatic and seemingly overnight skyrocket to fame set an artificially high value for his brand that his solo music career has not been able to match.

The Definition of a Superstar

In May 2017, Yachty released his debut album, Teenage Emotions, to mixed reviews. He sold 46,000 units in the first week, a surprisingly low number for this perceived level of popularity. In a discussion on Everyday Struggle, a web show on the music/culture site Complex, Lil Yachty received criticism for his album sales from rapper Joe Budden, who claimed that his numbers proved he wasn’t a megastar.

This prompted a response from Pierre Thomas, the CEO of Yachty’s label Quality Control. In a comment on an Instagram post that has since been deleted, Thomas dismissed Budden’s comment, claiming that Lil Yachty had made $13 million in 16 months, which clearly proved his superstardom. But how can an artist who faces mediocre album sales and constant criticism be so successful?

It's Not All About the Music: A New Approach to Hip-Hop

Lil Yachty’s largest hurdle, his mediocre music career, is also the foundation of his fame.

In a certain sense, Joe Budden may be right. When it comes to album sales and the popularity of the music itself, Yachty is certainly not a leader of the genre. However, the “Lil Yachty” character extends far beyond the music. The nautical rapper may have gained initial attention from his music but his brand exploded through his appearances in multiple marketing campaigns for a wide range of companies, most notably Sprite and Nautica. I had personally only heard two of his songs until I went to my local movie theater and saw his Sprite ad. Afterward, I listened to more of his music.

Yachty isn’t the first rapper to gain exposure through these means. Many artists have ventured into advertising and have even started their own clothing lines. But what sets him apart from others is how massive his personal brand became relative to his music. While most music artists are known primarily for their music, Lil Yachty’s image far outshines his musical prowess.

Addressing his fans on Instagram, Yachty explained his album’s low sales and openly admits that his brand “blew up bigger than [his] music.” The rap industry criticized him, saying that his music suffered because he is just TOO famous. This may not initially seem like an issue, but low-quality music may eventually lead to his downfall.

An Overvalued Brand

Lil Yachty’s largest hurdle, his mediocre music career, is also the foundation of his fame. Had his vast popularity been fueled by his modeling/marketing career he would face far fewer issues with maintaining his status. But since he continues to use the primary title of “rapper,” his reputation will always be closely linked to the popularity of the music he is producing.

With the lukewarm reception of his latest album, the “Lil Yachty” brand now resembles a young company realizing it has been highly overvalued. And this hasn’t been lost on market participants who are asking very valid questions: “Why doesn’t this rapper’s music reflect his fame? If his music isn’t good, why is he even popular in the first place?”

Socialism and other attempts at central planning destroy the creativity of the individual.

The expectations for his brand now must be adjusted, both by his listeners and his sponsors. Because hip-hop is the root of his fame, Yachty may face hard times, but all entrepreneurs face failure on the road to success.  

However, if he allows his foundation to crumble by focusing on pursuits built on his music, his entire brand could fall apart. But if he proves himself worthy of the hype surrounding his name, he will continue to be successful.

The Knowledge Problem 

Lil Yachty’s downfall also serves as a perfect example of the limits of human knowledge. His brand’s overvaluation is a direct result of actors in the market having and setting expectations that he could not meet. This is the case for any overvaluation, but Yachty’s experience places an emphasis on the source of all uncertainty in any market: humanity.

His largest challenge is the limit of his creativity, which is inextricably linked to our existence as humans experiencing life and emotions in our own unique ways. Creativity and humanity cannot be quantified regardless of how hard we try, which will lead to mistakes being made and money being invested in brands that may turn out to be empty. It’s a simple reality of existing as unique individuals.

This has an even larger implication. If individual businesses cannot perfectly discern the potential of a single person, how can a centralized authority even begin to attempt to do so? When modern economists discuss Hayek’s classic concept of the “Knowledge Problem” they often only address the technical aspect.

Information is dispersed so widely that it’s impossible for a single individual or group to know everything required to plan an economy. But human individuality is just as important to this concept. Socialism and other attempts at central planning destroy creativity and the individual for this very reason: it’s entirely immeasurable and unpredictable at any level.

Uncertainty will exist for as long as we remain human. Humanity benefits far more from artists like Lil Yachty achieving a possibly short-lived fame than attempted central planning. I’d much rather be disappointed with my music because my expectations were too high than living a life without music’s creative expression.