Tech

Tim Armstrong is launching a new company to bring products and experiences directly to consumers, no retailer required

Key Points
  • Former Google ads chief and AOL CEO Tim Armstrong is launching a new company.
  • It's called "the dtx company" and will invest in direct-to-consumer product companies and launch "experiences" in parts of the U.S. that are underserved.
  • The first six investments are in companies focused mostly on selling to women.
Everything you need to know about former Oath CEO Tim Armstrong's newest venture
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Everything you need to know about former Oath CEO Tim Armstrong's newest venture

After a career at Google, AOL and Verizon watching digital disrupt media and advertising, Tim Armstrong is now focusing on digital's transformation of retail.

Today he's announcing his new company, the dtx company, which stands for "direct to consumer." (The all-lower-case name is intentional.)

Its mission, Armstrong says, is to "empower consumers and companies to build direct relationships." His company will invest in start-ups in this space and work with these brands to help them scale. Additionally, dtx will launch pop-up experiences to introduce a broader range of direct-to-consumer companies to people around the country.

Armstrong's thesis is built on the explosion of direct-to-consumer retail. He says he sees the economy transforming away from a "one-way, wholesale distributor relationship," thanks to technology around social media and payments, in particular.

"The distribution structure of social, search, YouTube, and their ad formats, allow these companies to put everything in their product catalog directly in front of consumers," says Armstrong. "The payments space, though complicated now, is on the verge of getting a lot easier. And the systems getting built now are allowing companies to get real-time direct relationships built with consumers."

Investments and next steps

Today Armstrong is announcing dtx's first round of investments, which he characterizes as "direct to consumer companies that are making a core part of someone's life better. They're innovating on things like payments, customer feedback, they're innovating products, and they're run by game-changing founders."

The six companies are largely focused on female consumers and include health beverage company Dirty Lemon, manicure company OIive & June, footwear maker Margaux, bra-maker Third Love, and Argent, which makes workwear for women. One investment, Niche, is not a product company but rather offers consumers a way to compare and analyze schools and neighborhoods.

Later this year, Armstrong plans to launch "experiences" featuring a broad range of direct-to-consumer companies.

He describes the experiences, which will pop up around the country, as a cross between the Consumer Electronics Show and Coachella. In a space as large as a football field consumers will be able to experience more than 20 different brands, which until now have lived primarily online. Consumers will be able to try new fitness equipment, taste the latest food and beverages, try the latest entertainment experiences, such as virtual and augmented reality, and check out new products.

Armstrong says this "festival of the future" is designed for markets such as Memphis, which are underserved in terms of these kinds of products and experiences.

"We want to go to the places that don't have access to all the cool things happening in New York, LA and San Francisco but have growing income and interest," says Armstrong.

Armstrong is also launching another tech company, based in Santa Monica and co-founded and co-funded with Amit Kapur, which he described as a "talent platform." Kapur is the former COO of MySpace and sold his adtech start-up Gravity to AOL.

Here's the letter Armstrong is sending to friends and family to explain his new venture.

Friends & Family -

On to Cincinnati! This morning on CNBC's Squawk Box with Andrew Ross Sorkin, we will be announcing the dtx company.

When I sold my newspaper start-up in 1994 to go join the Internet revolution, it was based on a simple premise - that a two way relationship between consumers and an electronic publishing platform should be far superior to a one way analog publishing process. Although it took years to develop into what we saw in 1994, the core premise turned out to be even more powerful and bigger than we thought - and it still hasn't reached its full potential.

25 years later, the feeling is back. The world of commerce looks like the publishing industry did in 1994. Commerce is still done on one way distribution and relationship systems - and much of the process is analog. But, there is a rapidly growing industry that is turning analog commerce into a two-way, relationship based system. This industry is referred to as "Direct to Consumer" (DTC) or "The Direct-Brand Economy." DTC brands and companies are built to have a direct relationship with you, and for you to have a direct relationship with them.

Enter the dtx company, with a clear vision for the future - "direct to everything." Our mission is to empower consumers and companies to build direct relationships. We are building the infrastructure for the direct-brand economy by creating experiences, designing platforms, and investing in founders and talent. Our goal is to help great companies and great consumers find each other. Our business is model is simple. We make money by helping DTC companies grow.

Our logo was designed by one of our favorite designers in the world, Paula Scher from Pentagram, you can see her Netflix story here. Our ethos is direct. We are lowercase because our partners are UPPERCASE. Our "x" is two arrows meeting in the middle as we believe in two-way or no way. Our spirit animal is the wolf, as we believe the strength of the wolf is in the pack, and the strength of the pack is in the wolf. We also love wolf because it is "Flow" backwards and we are building a Flow State culture.

We are starting our journey surrounded by a pack of companies and founders who are leaders in the direct-brand economy and ecosystem. We have committed growth capital and strategic resources to the following companies:

· Iris Nova - Zak Normandin is reshaping the future of the $1 trillion global non-alcoholic beverage industry by building a next-generation, SMS-based CPG company Iris Nova, the parent company of DIRTY LEMON and The Drug Store.

· Niche - Luke Skurman's platform helps people find where they belong, connecting them to the schools, jobs, and neighborhoods that are right for them.

· OIive & June - Sarah Gibson Tuttle is elevating the manicure experience by growing beyond the salon, and offering a range of beautifully curated at-home manicure products

· Margaux - Alexa Buckley and Sarah Pierson's goal is simple: to democratize luxury footwear through comfort, quality, and fit.

· ThirdLove - By crafting products that are designed to fit women of all shapes and sizes, Heidi Zak and David Spector take the discomfort out of finding a bra that works.

· Argent - Sali Christeson is revolutionizing workwear by making stylish and functional clothing that enables women to shatter the glass ceiling.

We are launching operating companies in Soho NYC and Santa Monica CA. Our dtx headquarters in Soho is focused on building the experiences and platforms businesses, and supporting the investments. In Santa Monica, we are co-founding and funding a company with one of our favorite entrepreneurs, Amit Kapur, who is building a talent platform to help unlock human potential around the world. We will have more announcements to make over the course of 2019 and 2020 from both NYC and Santa Monica.

If you want to find out more about what we are doing, you can reach us at hello@thedtxcompany.com and follow us on social

Instagram: @thedtxcompany

Twitter: @thedtxcompany

Facebook: the dtx company

LinkedIn: the dtx company

Direct to you, direct from us - TA