When Can A Celebrity-Led Brand Work with Denise Lambertson from Constellation Capital and LMS

0:00the most valuable lessons I took away. um number one is resourcefulness i mean madonna i don't think she would be uh i don't think she would fight me on this uh she she's not somebody that is willing to hear no you find a way you just figure out how to make things happen and that is that resourcefulness has as a skill set has served me so well throughout my life and my career and just like believing that i could find a way um And that was really instilled in me in that time. The second is I built an incredible network. And this was, you know, again, first job. So I didn't really know the value of a network.

0:42I didn't really understand what I was building when I was building. I was just trying to be like a nice, helpful person and like be friendly and, you know, kind of be a great representation of her out in the world. But, you know, as her assistant, kind of most people went through me. And so I got to know a lot of really, really high profile people that I would know for many years. I got to understand incredible designers and creatives and just built an incredible network. And I think the third thing is I really, I was so interested in how she evaluated deals and opportunities and what she said no to and what she said yes to.

1:28And so that understanding how a celebrity, how somebody in music, how somebody so high profile, who's got just tons of incredible opportunities, what their kind of decision tree looks like and what's important to them. that is, it turns out, a very, very specific skill that I learned and was able to take away. And I think has served me well in my career since then. Hello, I'm your host, Mike Gelb, and this is a Consumer VC podcast, where we discuss the intersection of venture capital and consumer innovation. If you're enjoying the show and want the full experience, subscribe to my newsletter at theconsumervc.com.

2:13You'll receive new episodes straight to your inbox and a weekly recap of all the consumer deals that are happening, all the fundraisers, M &A transactions, bankruptcies. All content and episodes are for informational and entertainment purposes only and is not investment advice. Our guest today is Denise Lamberton, who is a managing partner of Constellation Capital and the chairwoman and founder of LMS. LMS was one of the first influencer marketing agencies. They were kind of there even before influencer was a thing and when it became a thing. And we discussed how it came to be the relationship between, you know, celebrity talent and consumer.

2:58And then also why she ended up focusing on emerging brands. We actually didn't really get into the Constellation Capital VC investing side for this episode. We'll have to do that another time. But I'm really excited about this one because we really focus on that kind of relationship between talent and brand and how she seems it in terms of what the right partnership is and how it can and also can't work or might not work. Without further ado, here's Denise.

3:37Denise, thank you so much for joining me here today. How are you? Hey, Mike, I'm good. Thank you so much for having me. It's an absolute pleasure. I really appreciate you taking the time. So I want to start off very early in your career. How did you become the assistant for Madonna? And also, what kind of attracted you to the music biz from the very beginning? So what attracted me to music is I come from a music business family. Um, my dad is in the music merchandising industry from the San Francisco Bay area in the, uh, starting in the sixties and seventies, like kind of at the beginning of it all.

4:10So the music industry was in my blood. Um, and I, you know, went to school for marketing, got out of college, thought I was going to go work for my dad's company, uh, and just figured that would be my path, which was, you know, cool. It was, you know, t-shirts and concerts, et cetera. And, you know, he was always in some sort of transaction, either selling his company or buying it back. And for, you know, whatever, whatever transaction that was at the time, he couldn't put another family member on, on the books. And so he said to me, why don't you go, I'm going to help you get an internship, go work over here with my former employee at Maverick Records in their branding department.

5:01And when I'm through this transaction, I'm going to bring you back over. So that's how I got into the music industry. And I always knew I was going to be in the music industry. But I just I thought my path was going to be totally different. I went to be an intern at Maverick Films, which was, you know, Maverick is a company that was owned by Madonna in the late 90s and into the 2000s. And she had a record label, Maverick Records, and she also had a film department, Maverick Films. And I was in the product placement department as an intern at Maverick Films. And we were, you know, the big, big movie that we worked on when I was there, I think with like Material Girls with the Duff sisters and getting Maybelline in as a partner.

5:51Right. Because I think one of them worked in, you know, worked for a makeup brand. And so that was how I started out. But, you know, honestly, that department of Maverick Films ended up getting dissolved kind of quickly when I was there. Um, and it just so happened that Madonna's manager, um, her office was on the same floor and it was in the front of the building. And, um, I was an intern, so I was very inexpensive and I was very, um, very driven and very ambitious. And when, you know, when this other opportunity went away, uh, her manager pulled me into, to the management company and to the management team.

6:29and then from there the that manager moved on and the Madonna's current assistant got promoted as beer manager and I got pulled up into the assistant role and it honestly was like a series of happy accidents it all happened so fast I look back now and I was like how on earth did I feel like a little bit of um uh like I just kind of stumbled my way into that you know without a lot of intention or planning. I was just like, okay, here I am now. Um, and you know, I was with Madonna for six years, um, you know, three world tours. Uh, I got to live in London when, for a few years when she was there, which was, you know, life changing for somebody in their, um, in their twenties and just, you know, had a front row seat, no pun intended to like one of the biggest and, best brand architects and creatives of all time.

7:30So it was outrageously hard work, but incredibly, incredibly interesting. As you look back to that period and working, you know, six years for Madonna, what were some of your biggest learnings from that experience? It's something I've thought about a lot over the years is, you know, there's the real didactic, tactical, you know, I can run a photo shoot. I can, you know, put together a music video. I understand publishing and rights and all these. But really the most valuable lessons I took away, number one is resourcefulness. I mean, Madonna, I don't think she would be, I don't think she would fight me on this.

8:14she's not somebody that is willing to hear no. You find a way. You just figure out how to make things happen. And that resourcefulness as a skill set has served me so well throughout my life and my career. And just like believing that I could find a way. And that was really instilled in me in that time. The second is I built an incredible network. And this was, again, again, first job. So I didn't really know the value of a network. I didn't really understand what I was building when I was building. I was just trying to be like a nice, helpful person and like, um, be friendly and, you know, kind of be a great representation of her out in the world.

8:55But, you know, as, as her assistant, kind of most, most people went through me. And so I got to know a lot of really, really, um, high profile people that I would, you know, know for for many years I got to understand you know like incredible designers and uh creatives and just like I built an incredible network um and I think the third thing is I really I was so interested in how she evaluated deals and opportunities and what she said no to and what she said yes to. And so that understanding how a celebrity, how somebody in music, how somebody so high profile, who's got just tons of incredible opportunities, what their kind of decision tree looks like and what's important to them.

9:50That is, it turns out a very, very specific skill that I learned and was able to take away. And I think, um, has, has served me well in my career since then. No, that makes a lot of sense because, you know, I mean, someone like Madonna, they're probably getting, she's probably getting thrown, you know, tons and tons of opportunities every day. And so it's what, what is she actually, you know, kind of leaning into and saying, Oh, wow, this actually might be interesting versus, you know, the 99 % that she's, you know, saying know to. So I'd imagine that that was probably pretty, pretty helpful. So you, you, so you built this whole network, I guess, and the underpinnings of this is, is, is the music business.

10:32Why did you decide to leave the music biz after, after six years? Well, unlike a traditional organization, when you work in a kind of hybrid family environment and, you know, business environment, there's not like a traditional growth path. Like, you know, there's not like somebody has to leave or, you know, retire or whatever. And there's really, you just kind of wait until that happens. And I, I looked at, you know, the team that she had around her and they were incredible. Her publicist had been with her for such a long time. I adored her. Her manager was fantastic. And I was And I also didn't really see myself in either of those positions.

11:18And I really struggled to figure out where I could go from there. And I got to a point where I was like, if I stay, I'll continue to do incredible things, have incredible experiences. But I'll be a career assistant. And, or, you know, is seven years going to look better than six years is eight? Like, I don't think so. Right. And so I need to make a decision now that I'm going to, you know, move on and, and like kind of figure out where my next thing is to be, or else I could be very much stuck in. And I didn't want to stay as an executive assistant. That wasn't, you know, I really, you know, I really enjoy business and I knew that I wanted to be in some form of business.

12:04So, uh, you know, and, and as a part of that reflection, when I was contemplating leaving, I was kind of like, well, where, I know I'm not going to stay here with her, but where, like, where in the music industry do I get excited? Like, what have I enjoyed about this, you know, with her so far? Well, you know, I didn't, I didn't like love the music part. I loved the brand stuff. I loved, you know, I loved the partnerships that she did. I love watching her creative process. I loved watching it all come to life. It was like, it was always very driven to the, to the product and brand side. And that was, you know, a little bit at the beginning of the crossover, meaning, you know, if you think about the timeline of celebrities and brands, even legacy brands, and, you know, for many years, especially music, you know, celebrities didn't do brand deals in the US.

12:59It was like, you know, and then in before the implosion of the CD business, like you did that in Asia where nobody could see. And it was like, you didn't do it right. Like that was not the way that you connected with your fans because you had, they were making so much money in the selling CDs. But when that imploded, all of a sudden, you know, the supermodel era, you know, came to a close because celebrities were now going to be on the, like going to be the models and the endorsers of these brands. And so she was really early in that. And I really kind of understood that that celebrity and brand was going to come together and it was starting to become more common and less stigmatized in the U.S.

13:39And and I felt like I really wanted to be a part of of that, of music and marketing and music and brand and how those things were going to come together. But honestly, I didn't have a ton of vocabulary for it at the time. I just kind of knew what I didn't want. And I resigned and left Madonna in the spring of 2009. I had been in a total what I call Madonna bubble. I had no idea that the global financial crisis was happening. I had no idea that there were no jobs. I was just like not paying attention because I was, you know, so enmeshed in her world. And so I, you know, I very naively thought that the whole business world was just waiting for me to leave that job and was going to be like, what, you know, what role do you want in here at Google here at, you know, um, Kellogg, whatever it was.

14:28And, uh, I, I had a bit of a rude awakening, which, which was, you know, that, um, a lot I got, I was very easy for me to get interviews and people thought what I, my background was really interesting, but it was also very broad and nobody really knew where to put me. And there weren't a lot of jobs. So, um, you know, it was, it was a real kind of identity crisis moment, um, of like, okay, gosh, what, well, I just left this great thing and I don't really know what I want and nobody really knows what to do with me. Wow. Um, so, so take me to that. I mean, first of all, when I think about celebrity and brand or like celebrities releasing products, especially on the music side i immediately just think of kiss because kiss like license everything pretty much um on their brand name and definitely monetize it from that way and um just wanted to want to show it out there i i always gravitate towards what like kiss did i thought it was just so like i mean it's i think there was like an episode they did like i think they're like even like kiss coffins or something crazy but um it's like really really really really pretty wild.

15:32So take me to like, um, the financial crisis in 2009. How'd you think then about what you wanted to do next then, since there wasn't a lot of jobs? You know, I kind of just went into like how, you know, let, let me find projects that, that will help me pay my rent basically. And, um, you know, that was shifting that mindset was a big unlock for me because there was a lot of, uh, freelance, uh, money on people's, but like, you know, that's where brands or that's where companies were willing to spend money is in like 1099. And so, uh, and, and once I opened myself up to that, I started to see what these companies found, um, valuable in my skillset, which is my relationships, my ability to connect, uh, and to like, you know, kind of bridge this gap, these two worlds that really wanted to work together, but didn't understand each other, you know, the business world and the entertainment or music or celebrity world.

16:29Right. And so my ability to, you know, kind of help these big, and I wasn't yet into startups at the time. It was, you know, these bigger blue chip brands. I, even then it's hard to imagine a time where there wasn't a pack for those companies to under, but there was, they just didn't really know how to do the kinds of partnerships that they wanted to do. And so I ended up being a consultant and, uh, and like connecting celebrities and brands. And there was a little bit of, you know, like talent wrangling at the time, uh, as well, kind of, you know, it ebbed and flowed into all sorts of different things.

17:07But, um, I, I really, I was like, okay, well, this is, this is where my very specific experience is going to, it has landed me like, cool. Talk to me a little bit about how you thought about, cause you're, you're kind of like the dealmaker, right? You're, you're bringing these two groups together. You're bringing talent together with, with the actual brands themselves. First of all, talk me through like, what were the, what were, what were the brands, these blue chip brands kind of looking for? And then also how did you match that to talent or your network and bringing these two sides together?

17:46Let me frame this in a calendar perspective. It's like now 2010, 11, 12. So you also remember social media is just starting to happen. Like you said, pre-Instagram still, Facebook has come out of the college community and has started to embrace the world. We're leaving the MySpace era, et cetera. And so So that was a very hard concept for brands like these big blue chip brands to grasp. And I found that the value a celebrity could bring on Twitter or Facebook was acknowledged, but how it was executed was really misunderstood. for instance um you know we're gonna launch this uh this contest on uh with a celebrity partner and every tweet needs to be run through legal okay well like you know that's not really the way the world works but like that was the mentality like you know any kind of um uh touch point needed to be like by the book so it was it was um you know and and then you were also in the era of like, and this was not my deal in any way.

18:55And I don't mean to like shine a spotlight onto a negative, but like, you know, the era of when like Alicia Keys did the iPhone promotion, but like sent it from a BlackBerry or vice versa. Right. And it like still said, like, so everyone was just trying to figure it out at that time, like how to integrate social media, how to go from like really traditional endorsement, media production days, PR into this new world of social. And so I, you know, I took that skill set of understanding what was important to celebrities and how they made their decisions, et cetera. And I tried to bring it, you know, into the realm of brand partnerships and then also like layer in the realities of social media.

19:44And that just, like put me in a position just like a just like really unique position frankly and um you know it it looking back I didn't I yet had not yet introduced the world of startup but like it was um there's not a ton of passion from the individual employee at a at a like you know blue chip company or that's rare right it's and so um that that I think was really the missing piece is there was like this, this wasn't passion or excitement that was driving either side. It was still very kind of transactional. Got it. And, and, and also these, these were just kind of like your, um, your traditional endorsements.

20:29There was no kind of like equity involved or like that kind of piece. It was okay. We're going to sign you up. We're going to pay you X amount. We're going to do, uh, this, that, and the other commercial or post or what have you. And, and you kind of get paid for that, but there's no actually like attachment to the brand, right? No, but it's funny you mentioned that because in the background of me being in New York and starting to work on these deals, the timeline was right after Vitamin Water got acquired by Coca-Cola and the massive 50 cent legend of like his equity stake and how much that was like making, that was tidal waves through the celebrity community.

21:10Oh my gosh, equity. Oh my gosh, this deal. Oh my God, I want to deal like this. And that really, that deal, which, you know, again, I had nothing to do with, was in the background, was just, it was so, it was such a point of inflection for the entertainment community, especially those that were early adopters to, you know, just like in general to business, et cetera, that they, I would be bringing this, you know, my network blue chip, you know, endorsement, transactional things. And they'd be like, okay, that sounds great. I'll do that. But like, do you know any brands like vitamin water? Could I, I would really like to do something with equity.

21:48Like Denise, can you go help me find my vitamin water? And that is, was literally how I was like, okay, well, cool. What's a startup? Like, what does this mean? How would I find one? And I started to look around in New York and I was like, oh, you know, I just downloaded Uber for the first time, like, you know, a blueprint juice cleanse like that. That's a new thing. Like I started to recognize, you know, the difference between a startup and like I just had never been exposed that I didn't. And, you know, Warby Parker is another example of one where I was like, OK. And so I just at that point, I was like, well, you know, this is what my network is looking for.

22:27Like, you know, kind of like, let me go see, see if I can find a brand to consult for. That's a startup that would want something like this. And, you know, through through a series of happy accidents, I fell into a consulting arrangement with Guilt Group, kind of right at the height of the daily deals craze. Right. And Mike, I will never forget the feeling of walking into the Guilt Group office and And like, just immediately understanding the difference between that environment and the, you know, the legacy. Blue chip. I mean, young people everywhere, like moving, walking around with laptops, a ping pong table in the corner, like, you know, just excitement, you know, beer Fridays, like all of the things.

23:13And I was like, okay, this is fun. These people like are having fun with their job. And this is a cool company. Like, I want to be here. Like this is where I would rather spend my time. So I understand, like, you know, I think I understand how a celebrity would be like excited about this environment and this passion. The celebrities are not my clients. They're just my network. I, when I stopped working for Madonna, I really did not want to represent individual talent. I was like, I can, you know, I want to be, I want to be agnostic to like the who and just find the right person. And I like, you know, so it would just feedback.

23:57Like I'd go to somebody and on behalf, I was working for the brand and I would go to somebody and they'd go, I really like this, but hey, Denise, do you know any startups? That was really, and that is, you know, kind of differentiated me from the agent world and the management world, right? You're a consultant. You're not actually like an agent. Yeah. And I'm not taking commission out of anyone. You know, I'm getting paid by the brand. So it made me a very appealing person. Like my calls would get answered because I was just opportunities. I was like, what about this one? What about this one? As opposed to, you know, like, hey, can you, I need to make my percentage on this.

24:33So, you know, in the beginning, that was a really, that, um, that really helped me build relationships too, is that, uh, that I was always bringing opportunities. How did you approach like, like the deal-making process from like this perspective when it comes to equity versus, you know, like a traditional maybe transaction, um, dollar value transaction and that you're probably not budgeted. Yeah, exactly. Exactly. So, um, I just, I, my perspective with startups was, um, uh, I was really inexpensive and I, I wanted to make a little bit of, um, a little bit of like a retainer or a project feed to keep my lights on.

25:14But I wanted to also be incentivized along with the talent that I brought in and take a piece of equity. I was like, you know, but I didn't really have any idea what I was doing Mike at all. Like I was just like, okay, everyone wants equities. I want equity too. Like no, um, no concept of what that, what that was, what that meant. And, um, what I did, I had to teach it to myself. I had to learn it myself, which meant a lot of YouTube, a lot of research. And also just, uh, you know, I would, I'd start working for these, with these brands and I would ask the founder or whoever was in charge from the brand side to join me on these calls and explain the opportunity to the talent representation that I brought in.

25:58And I would listen to how they would talk about, you know, exit strategies and cap tables and liquidation preference. And I would just, you know, school of YouTube. I'd be like, okay, well, what did this, you know, what did you say? Like, it's funny, I still have a bunch of those notes. And I look back now and I'm like, God, I really, you know, I was just like, I just was trying hard not to sound stupid. So I would like take what I learned, I heard, and then just, you know, figure it out and test run it a little bit like, okay. But I got kind of lucky in the beginning, because I could have done some really good deals that were structured poorly.

26:37And the, you know, that that wasn't the case, the brands I work was working with in the beginning had a lot of integrity, and they weren't trying to do bad deals with celebrity, you know what I mean? So, uh, but, but that was just pure luck. Cause I really did not know in the beginning how something should be structured. I went at it from a marketer's point of view. Um, I was, you know, and that's really how I got into healthy or like, you know, consumer products, uh, good for you, good for the world products, which is where the majority of my business and investments are now. Um, it, you know, it's just like, how would the celebrity merchandise this relationship in their life in a way that's really authentic, which is, you know, kind of a buzzword now, but it, you know, but that was, uh, you know, like, it's really easy for an athlete to, you know, to believe that an athlete is going to be on a juice cleanse if they're like, you know, if the thing is inflammation or it's like really easy, you know, to believe that like, you know, somebody who's training to be in the next Marvel movie is going to care a lot about like the supplements that, you know, right like as opposed to uh you know i just downloaded this app and you know for like a lot of stuff that was going on before um consumer products was in tech so that was kind of the like you know um justin bieber like a you know participating in like apps that you download like that were trying to compete with a facebook i can't remember the name like the one oh yes um I remember that.

28:07Or something like that. And that's so hard to talk about how you're going to use that as a celebrity. Like, you can't connect. I think Shots, is that right? Foursquare was one. And I actually have no idea if Justin Bieber invested in Foursquare. But, like, it was those, it was, like, that group of celebrity and, like, those kinds of apps and deals. And it just, the marketing narrative didn't make sense. And that, to me, was always where I started. Like, does this make sense? because I have felt that traditional advertising has become like, you know, at that point, especially I've just really like not believable.

28:45Like, I don't believe that Sarah Jessica Parker colors her hair with Garnier Nutrisse for $9.99. I just don't. Like, no, like Garnier Nutrisse is a great product. Sarah Jessica Parker is a wonderful person. But like, that is not like, that doesn't make sense to me. Like what would make sense, right? Like those were the, that's how I was approaching, you know, finding the right person and unlocking these narratives. Then from there we would go to, well, how are we going to tell this story, which are, you know, deliverables, right? And then it becomes, okay, well, what is the potential value of those deliverables?

29:24What would it be in cash if that person was going to be paid their market rate today? And therefore what should it be in, right? Right. And so it was like, it was kind of just even that linear. It's just starting there and kind of step by step by step, getting to getting to a structure. I'd love to dive into a bit more about the structure because I think it's so, so fascinating and so interesting. And I really appreciate also your Sarah Jessica Parker example there, too, in terms of what actually is authentic versus maybe what's what doesn't appear to be authentic. Um, who actually knows if she actually used, use their products or not, but it just doesn't seem probably that, that she does it when you're meeting with the brands, like what types of questions are you asking in terms of, um, and what typically, um, obviously they're, you know, looking for, um, you know, distribution and what have you.

30:16And, um, and, and obviously, uh, uh, to, you know, uh, scale and growth and what have you and kind of relying on or, you know, leveraging talent in order to achieve maybe part of those goals. But what are some of the questions that you're kind of asking them in terms of just making sure that like they're the right, that someone in your network, that this person may be a right fit for them? I developed a real methodology that, you know, looking back on is like a form of diligence, but again, didn't know, didn't have the, you know, the vocabulary, the business acumen to look at it that way. But, you know, I, and I have, I had a really strong sense early on, like, I don't represent the celebrity, but you know, and I, and I saw this on, I don't know if it was your Twitter or your LinkedIn, but like your, your net worth is your network or your network is your network, right?