Jason Stein and Alyson Warshaw, who built Laundry Service and Cycle Media into award-winning, digital-forward creative shops, earning accolades along the way as among the most innovative in the ad and media worlds, are announcing the details of their next act today: Stein’s.
No, it’s not a delicatessen. Or as the picture on the website depicts, an old-world department store.
Stein’s is a hybrid of a venture-capital firm, private equity, and a family office, with a focus predominantly on investing in emerging companies that can benefit from Stein’s expertise in using the modern tools of brand, media, and technology to grow their businesses. “This is what I’ve been doing for 10 years,” says Jason Stein, who mysteriously revealed that something called Stein’s would be his next venture when he and Warshaw left the companies he’d founded last July. After doing significant work for everyone from Nike to Beats by Dre and then landing a deal with ESPN to help the sport media giant connect on social media, now they’ll have meaningful ownership stakes in the companies they’re building.
Along with the company unveiling, Stein’s is also announcing three investments: the cult mens’ fashion brand Ovadia & Sons, favored by the likes of Jay-Z and Kendrick Lamar; Front Office Sports, which is a growing digital trade publication for the sports business; and Transmit.Live, a live streaming technology platform that works with brands such as the NFL. (Stein says he has closed several other deals and is in talks with a dozen more companies.)
It is not an accident that the first three Stein’s companies both defy easy characterization and neatly fit into the pillars that Stein and his portfolio companies believe are the building blocks for success these days.
“To be a consumer brand today, you need to be able to speak three languages: retail, tech, and media,” says Neal Kusnetz, president of Ovadia & Sons, who met Stein in the course of taking this job this past summer. “Jason has a clear point of view on the future, and he’s an experienced CEO who knows what it takes to build a business.” When asked what he expects Stein’s to do for Ovadia, Kusnetz says, “Most brands are challenged to tell their own story, and retail is increasingly being driven by content. Stein’s is on the cutting edge, if not the bleeding edge, of digital content and marketing.”
Whereas Kusnetz is an experienced fashion executive who built menswear brand Robert Graham over 15 years, Adam White of Front Office is 24 and this is the only real job he’s ever had. He sees Stein as a mentor. The two met on Twitter and became friends texting about sneakers and the like before becoming partners. “[Stein’s] is looking for good businesses and isn’t chasing growth at all costs,” White says. “He wants us to grow smartly.” Front Office will now move from Miami to New York, hire its first full-time staff, expand into events, and build out franchises like its Rising 25 list of emerging sports business execs. “He’s setting me up for success.”
Stein’s is part of an emerging trend in the investment world of proven winners entering the field with boutique firms that combine operational expertise with something that can’t quite be contained by the traditional definitions of venture capital (growth above all), private equity (cash flow above all), or a holding company. This past summer, three media veterans–including Betsy Morgan, former head of both Huffington Post and Blaze Media–formed Magnet Companies to pursue investments in consumer brands. Then there’s Chamath Palihapitiya, whose Social Capital is committed to solving knotty societal problems over a long time horizon (his unconventional approach has led to a number of departures at his firm).
All of these folks see new opportunity in bringing a measure of what’s worked for Warren Buffett and Berkshire Hathaway to realms where they have the kind of passion that Buffett has for Dairy Queen and Coca-Cola.
“Media and product are converging,” Stein says. “We’re building the infrastructure of the future.”