Paul Wachter: Founder of Main Street Advisors – “The Silent Force Behind Celebrity Founders”, LeBron James, Beats by Dre, & Cultural Marketing

0:10Well, thank you so much for being here, Paul.

0:30And that you're very tall. That's also okay. There's a lot of things, but it all works. It all works. You're a good guy. I appreciate it, as are you. I mean, the first time we met in Stockholm. Oh, that's right. We met in Stockholm for Stad. I forgot about that. Right. Exactly. I started learning all about all the amazing things you've accomplished. And I was so surprised because I'm so aware of a lot of the projects you've worked on, a lot of the products and a lot of the really the empires that were built but i had no idea that you were a key player in all those things and but can we just say for the record that that was the brilliant minds conference and i was actually not one of the brilliant minds i was like a plus one i wasn't actually invited to the conference i clearly wasn't brilliant enough to be there but i was there anyway i don't believe that you were probably invited because you're a brilliant mind I appreciate that.

1:26I appreciate that. I think I was there accidentally as well, even though I was a speaker. But I think you were a speaker. I wasn't there by accident. I was basically a plus one. And I can't say I'm invited back this year. I think they don't invite anyone back two years in a row because they want to keep changing. Maybe not to speak. I think they do because I know people who go every year. Okay, fine. Just to speak. Like I said, I was just there by accident. My first time in Stockholm, so it was kind of cool. It was cool. And then we ended up in Stad the next day together. Yeah. And all the dots were connected.

2:00Yeah. What I love is that although I didn't make the page based off of you, you share a lot of the values that I actually talk about on the page, often comedically, about secrecy, minding your own business, staying in your lane, focusing on your craft, not rushing. And you spend a lot of time in Stad. So honestly, it seems like in retrospect, it makes a lot of sense. Well, Stadt is actually kind of my happy place. And I've been going there since I was born. My parents, I think my family started going there right after World War II. Wow. And I would say it's almost uninterrupted, meaning my parents went every year.

2:43My brother goes every year. I go every year. my kids have gone not every year but when they were little until they were probably teenagers and it's sort of my happy place and it is a place that i can think like i feel always like i can just relax and think which is good there aren't many places like that i love that that's great i mean it's music to my ears and music to stade's ears and i'm not embarrassed to go to stade a lot of people over the years have made fun of me because oh you went to stave like came to pronounce it there's a famous scene in uh trading places yeah with the watch when he's running wow yeah so it's it is a source of uh amusement i guess and the the name i guess is doing american anyway sounds sort of funny but it really is a just a wonderful place and what's also funny is i've never been there in the winter.

3:39Only summer? Only summer. I went there once. I came up for the day. I skied on the Diablo Ray, which is the glacier there, and it was in the winter, but I never even went into Kshtat, so I just went, skied, and left. But all my trips there have been in the summer, and it's incredible. And people always used to say to me, I'm going back now, years, like, what do you do in the Alps in the summer? And I'm like, how do you not understand that? Like, there's everything. There's hiking. There's tennis. There's great food. There's great towns. And then people started going to Aspen. Oh, Aspen's so cool in the summer.

4:17I'm like, yeah, I've been trying to tell you guys this for the last 40 years. You know, anyway, it's really amazing. Around the world with your host, the Stade Guy, we welcome you back to the Stade Guy podcast, sharing stories of excellence with those in the know for those who just know. Well, for the guests and viewers who don't know your story, and many of them don't by design, you are an incredible founder of Main Street Advisors, a business that partners with a lot of the, some of the biggest names of my generation, our generation, such as LeBron James, Jimmy Iovine with Beats by Dre, Arnold, Billie Eilish, and many, many more.

5:07And I was doing my homework about you because you don't really say much about yourself. And I was learning that you started your career in a traditionally business and finance path, and you went to Wharton and went into the world of finance and then made a big switch into this world. You find yourself in many ways leading today. And I'd love to know more about that early path and those early decisions you took. Yeah, I wouldn't say I ever left a world as much as I sort of, you know, changed course moderately. And I have said about Arnold, you know, Arnold never leaves anything or anyone behind.

6:00He just adds. So he's still friends with his friends from Austria that are still alive and bodybuilders. But then he became a movie star and he's still friends with those people. And then he became a politician. So I'm a little bit like that. Like I don't really like to leave things behind as much as to move forward and add something. So yeah, I started out in law. Then I went into finance. And I'm still in finance. And I still, I don't practice law. But law is still a big part. You know, my clients call me up, not to be a lawyer, but they know that I understand law. And they know that I can read a contract.

6:42They know that I can understand whether something makes sense to sue or not to sue or what if someone else, you know, all those kinds of things. And finance is at the core of everything that we do at my company. And so it's just that we got into early what I would call, you know, brand building, cultural marketing, helping companies with operations, helping with marketing, helping with whatever we can help with. But, you know, I don't want to make it seem like we do everything as much as we understand what needs to be done and we help put the teams in place. And we work with people like, say, Jimmy Ivey, who's like a genius marketer, really a genius marketer.

7:27Or the guy, this guy Armand from Dave's Hot Chicken, who like we spent so little money on marketing and he just took over TikTok. You know, he's just that good. So identifying people who are good at what they do, working with them, helping them when you can help them. And then our clients, you know, having clients like some of the people you mentioned, you know, these are some of the most talented and brilliant people, you know. you know I always compare Arnold and LeBron because in a crazy way they kind of remind me of each other and they're both just so smart about so many different things so I get to learn from those people you know and like I told you before like some clients of mine don't mind if I mention them others don't really like it so I don't talk about them but there's others that are very brilliant you know and um so i just have tried to move with them to do what they need and what they need is they need me to invest money for them they need me to find interesting deals sometimes to do an endorsement deal or i've done movie deals i've done record deals i've done publishing deals, but also it's to go, oh, Billie Eilish is obsessed about scent and fragrance.

8:57So, well, you know, what, should you start a, you know, an athletic wear company for her? No, you start a fragrance company with her because she's that passionate about it. It's, it's so authentic. It's so real. She knows so much more about fragrance than I would ever know. So you follow the authenticity, you know, and that's kind of been always been our theme. It's amazing. I mean, when you're looking for these opportunities for the amazing people you work with, it sounds to me like it comes secondary to first choosing the amazing people to work with and these people that you're placing bets on often early on.

9:40And you said that they are incredible at what they do, but there are lots of people in the world who have achieved excellence in their field, but you work with very few people respectively of the amount of people you could work with. We don't really make an effort to go out and find clients. It's not, we never have. Like Arnold was my first client. We really didn't have a company then. And I was happy. I wasn't going, oh, my God, I need five more clients. But I think Jimmy and Tom Werner, I always say one was two and three. I really don't know. But they came in pretty early. But it was like, that was great.

10:20I have three clients. That's incredible. And so we've never gone outward. We never had a marketing brochure. We never had a website. I think we put a website up two years ago just because at this point we kind of should have it. Like people are like, because also there's another Main Street advisor somewhere else and people were getting confused. So this is what it is. But, you know, so we weren't outbound. But on the other hand, we were very picky inbound. Meaning if it didn't fit, then we didn't want to do it. It wasn't just about money. It wasn't just about fame. It was about trying to find people who were good people, who were, you could do more than just money stuff.

11:06You could do people who kind of add to the whole kind of gestalt of it, right? So that one client benefits from another client. So maybe LeBron attracts an investment that Arnold can invest in or Billy can invest in or whoever. And so all of those things are kind of what goes into the calculus. And I know you're going to talk to Maverick. Maverick always says that's sort of our greatest strength is we're great at picking people and betting on people. Betting on LeBron was a good bet, right? And he was there, Maverick, obviously. And he was there. And so that seems like an obvious bet now. Maybe it was an obvious bet then, but it certainly wouldn't have been obvious to everyone.

11:58Why was it obvious to you? I just was blown away by both of them. I met Maverick and LeBron together, and I was just blown away by how smart they were. They were kids, and they were, you know, one was 20, 21 was 23, I think, and they were, you know, just, it just, I just couldn't believe how thoughtful and smart and the questions they asked. And they weren't asking questions like a lot of times, especially in my business, when you're dealing with money, you know, you get a lot of the questions are kind of like, how do we know that the money is safe? and basically saying, how do we know you're not stealing the money, that kind of stuff.

12:44They didn't ask those kinds of questions. They were asking really thoughtful questions like, how do you decide what to invest in and how could you help us get into more businesses and things that were exciting and that you go, oh, these guys are smart, they're real, as opposed to just like, well, do we get monthly reports or do we get quarterly reports? And when you just go to people about money, that's what you get. If you go to institutions, you get that times 100, meaning all kinds of investigations and checking your security and this. Listen, we're dealing with people's money. So being safe is important.

13:29Being honest is important. Being secure. I'm not saying those things aren't important. But when you first meet someone and they're pounding you on those questions versus someone who's asking you things that are exciting and about the future and how you can work together and how they can grow their own brand and their own business, then you go, oh, this seems like someone for us. And it's worked pretty well.

13:56And it's really exciting when you meet someone young that you can make a bet on, obviously. And by but by the way, you know, Arnold wasn't young when I started the company, but he was, you know, I think he was probably in his late 40s. And but he's always been so young for his age. Like he was he was still at the peak of his career and, you know, did so much more afterwards. I mean, you know, became governor of California. so which at that minute i certainly would have never guessed maybe he would have i don't know but so so it it's sort of a light curation process because it's it's not really because it's not like there's 20 people in front of me and i'm picking three it's more like people set up calls they want to talk to me they ask me questions i either feel oh this is something really good and I should really you know kind of engage or I feel more like they're really famous or whatever but it doesn't necessarily mean it's a great fit.

15:06And once you find that right fit like you did with LeBron and Arnold and you say you bet on these people what does that relationship look like how does that develop from the day you meet? Well I mean obviously one might almost say Arnold bet on me as opposed to vice versa because he was really the one. I couldn't have started a business without him. But I would say it's still true because I met Arnold in 1981. He was not a famous movie star then. He was sort of a retired bodybuilder. He had done Pumping Iron, and he was well-known, obviously, but he wasn't Arnold like he is today. and he hadn't even made Conan the Barbarian, which was really his first big hit.

15:54So I was almost a similar thing. I met Arnold at a Halloween party and I started talking to him because he was wearing lederhosen. And since you know him, God of God, when I was little, sadly, my parents used to dress me in lederhosen. So I just started talking to him. Like, I didn't really know who he was and I was just talking to him And I was like, you could just feel how smart he was and how interesting. And that his body, which at that time he was sort of in peak bodybuilding condition because he had to be like that for Conan, which he was about to go off and film. You could just see that wasn't who he really was.

16:37It was part of who he was, but you could see there was so much more. And I don't think everybody saw it. And I think he, I've always said this to him, he intentionally hit it. hit it because he had this whole kind of I'm a dumb bodybuilder thing which worked for him in business because nobody realized he was smarter than everybody and so I don't know I guess that's the skill I have I'm good at seeing through the obvious into what's behind that and who the person is and with all of those like Jimmy Iovine is someone I used to play touch football with him That's how I met him. But you could just see how much there was more to him than just being, that time he was just a record producer, and he was just starting his own label.

17:25But you could just feel that there was so much more there, and I was right. He was a great businessman, great marketer, and happens to have an incredible ear. I listen to music with Jimmy. We have this thing called Vinyl Night, where we get a bunch of people together, a lot of times there's artists who come, sometimes other producers, sometimes artists, sometimes label people. And we hear, you know, people tell stories and they talk about the songs they wrote and this and that. But it's so funny because even at this point where he's been kind of out of that business for more than 10 years, he hears stuff in songs.

18:07In songs I've heard a thousand times, he hears things that I don't hear. it's just people that have these special skills and i think all of this is right in front of all of us different people are better at seeing more than just what's in front of them you know and that's kind of the thing and that's how you know but also it's really important that people are good people and that they're honest and they're not difficult people you know all of those things are important for sure i'd love if you don't mind sharing i'd love to know more about the inception of beats by dre with jimmy ivan and how that turned into a technology honestly a legend yeah well i mean you know jimmy and dre obviously came up with the idea and um i think the faith there i mean jimmy's told the story many times dre i guess got approached by his lawyer or by someone saying do you want to do a sneaker deal and um that was a time where i think 50 cent maybe had a deal with reebok and i think uh there's somebody else what were those things um what were the what was that i forgot reebok had a i'm forgetting what it was called but anyway they had some deals with some with some rappers and some other people for sneakers i think reebok was kind of leading the charge on that at that time and so dre said you know was telling jimmy about it and jimmy famous line was sneakers let's do speakers and so they had this idea like they should do something in music because again to your first point it's more authentic like dre dre actually wears the exact same pair of sneakers every single day but meaning a new prayer of the same sneaker so but whether that would have been authentic or not speakers were obviously more authentic and then speakers morphed into headphones and they brought me in early to help set up the company and help them with the business and make the deal we had originally had a deal with a company called monster which was like an electronics company, and make the deal.

20:28And so I got involved from the very beginning. And again, you know, the marketing that Jimmy did and the marketing director was a guy named Omar Johnson. They just did, you know, they took over the Olympics in London. You know, they just did these things that were incredible. and I would say you know um we made a lot of smart business decisions along the way we did a lot of deals along the way when we needed to raise capital and different things and so when you do that well and make a lot of good decisions and you combine that with a product that's kind of selling off the shelf you know and then you have you know the the authenticity of Dre there, and the marketing brilliance of Jimmy, you're usually gonna have a good result.

21:21I think we had an extraordinary result, and I think Apple would say they were really happy with the deal, because they ended up getting Apple Music out of it, which was Beats music, and they're actually really doing well with Beats now. And they've kind of reinvigorated the brand, and they're doing well with it. so I think it was a it was great for everybody but like most overnight successes it took like eight years you know I mean seven years something like that and there were you know there's always bumps in the road and there were bumps in the road the one thing never really in that case we never had a bump in terms of the product meaning the product was always good and always sold well and i remember this so well because we launched it a moment not that unlike this the the beats first beats went into the apple store on fifth avenue the day the market crashed in 2008 well so it was kind of like this except it was almost it was even scarier because this time we You all know exactly what's going on, whereas last time, that time was kind of like, what the hell?

22:39And even though we launched right into that, it's still, when I went into the Apple store and I said, could I see the Beats? He didn't know what I was talking about. He had to go back into the storeroom and go find it because, you know, it was literally the first day. And, you know, I'm sure Apple does an amazing job of training the people there, but it takes more than 20 minutes, right? So he didn't even know yet. But still, by the end of the year, we were just selling everything. And so the product never really missed a beat, no pun intended. But still in business, there's always issues and stuff.

23:19So anyway, it was a great, I feel like it was a great team that came together and just did a great job, led obviously by Jimmy and Dre. For sure. This podcast is brought to you by Pubelle by The Stard Guy, bringing you charms hand-painted with enamel on 925 sterling silver, allowing you to express all the things you love and all the things you might question, from reaver bateaux to baggammon boards and caviar tins to paddle rackets. There is a Pubelle charm or completed set for everyone in The Know. Thank you so much for watching and enjoy the podcast. I think that there's been a massive surge of artists founded businesses and people are going down this whole path of starting their own business, myself included.

24:11Right. And that authenticity you're talking about is often lost. I think partially because of people securing the check that you're talking about naturally, but also because of the ease of being an entrepreneur, which is actually quite new. like with tools like Shopify, you can build a business that whether, whether or not it's going to be a sustainable business is a different question, but you can build a business and launch a business quicker than ever. And you can also test and learn more quickly. I'm curious how that may have changed the way you do business with a lot of your clients. Yeah, that's a, that's a really good point.

24:46I mean, well, there's a lot of things. First of all, you're right. All athletes, artists, entertainers, they all want to start businesses. I don't know if I invented it. Clearly, we were early. Planet Hollywood was one of the first ones. The restaurant? Yeah. And that was 30-something years ago. Wow. And that was Arnold, Bruce Willis, Sylvester Stallone. And that started, I think, in the late 80s. And that was really the first one of those things because they owned equity in the business. and you know you can trace the history of this and beats was obviously actually an early one also relative which sounds crazy because it wasn't that long ago but now it's like in so many alcohol brands and you know all this stuff the statistics are that like i don't know what it is but probably 95 or 98 percent of businesses don't make it if you had businesses founded by celebrities and stuff and there weren't that many, your odds would probably be higher.

25:52But with so many, I don't know. I think you still need a good product. You still need good marketing. And by the way, not every famous person, celebrity, athlete, artist, influencer can carry a business. Even if you have the same product, let's just say you're both doing the same product, you may, for whatever reason, have a better hold on your, call it, constituency than someone who has 10 times as many followers as you. And it's very random. There are actors and athletes and artists and stuff that can sell and there are ones that can't. And I can see it and sometimes I can predict it, but you can't always predict it.

26:37And even when it's authentic, it doesn't always work. so the more of these businesses that are started and the more where you start getting everyone who has you know 100 000 followers wants to start a business it's going to get really crowded and it's going to regress to the mean that most businesses will fail yeah now marketing today is different than it was 25 years ago, right? So back then, television was incredibly important. Newspapers were important. Magazines were really important. In the social media age, it's a completely different thing. And that's changing rapidly. So just the same way that TikTok is an incredibly important way that people discover music now, whereas it wasn't 10 years ago, right?

27:30Well, you can read the data just like I can. You know, people, Gen Z is getting recommendations on TikTok. They're getting recommendations on Instagram. Marketing is becoming more about that. Now, the fact that you might go to an influencer to say, what restaurant should I go to in Stade? Or what restaurant should I go to in Paris or in New York? Is different than that influencer coming out with a line of pasta sauce and saying, you buy my pasta sauce because I told you where to eat in Paris, right? So I'm just saying it's complicated and I don't have all the answers and I'm confused by it too, meaning it's moving so fast and you need to stay young with it and stay on top of it and you need to make good decisions because like I said, there's a lot of people who are well-known or have a lot of followers or a lot of whatever that just can't sell stuff.

28:32People just don't want to buy from them. And then other people, people are dying to buy from them. And I'm sure you see those stories all the time. There's also people who do four different businesses and one of them clicks and the other three don't. There's a lot of examples of that. For sure. I think there's also the hype often dies down. I saw this thing when I was just scrolling on Instagram a couple days ago about even the businesses that do well within the first year 90 % of the ones fail out the door of course but then another 90 % fail again a year later because they can't keep that hype they can't keep the the product development maybe they're great at creating content but not necessarily good at operating a business yeah well one interesting business that um we're working on is called gin and juice which is another jimmy and dre and business i mean we've exploded out of the box but we're none of us are the kind of people to rest on your laurels right same with beats we exploded you gotta keep at it you have to keep marketing you have to keep is the product right should we change the product in any way is just you know our can is incredible so we're not going to change the can but should we come out with a new product right also we're now in in london and we're going in uk and we're going to some other places in europe do they want the same thing do they want something different we also now started a gin called still gin like still drink and it's doing really well right out of the box but you got to sustain so some of that may be people who don't have as much experience thinking oh wow we did well the first two weeks we don't need to do anything obviously anyone who's been in business long enough knows you've got to be relentless and you have to never stop you know jimmy is one of the most relentless people i've ever met in my life so he'll never stop but he knew that because he picked up Lady Gaga when she was dropped by a sister label and picked her up.

30:48And that's not a one-day job. And she's become one of the biggest stars in the world. But he knows that you can't just go, okay, go sing a song. There's marketing and working with artists and all that. and he was great at that and also always put the artist first but you have to also mark it and even today when everyone thinks like oh you just put a song on tick tock and it gets a billion streams and you you know how many people like do that and they have one song and then no one's ever now there's no one hearing them again no one's even heard of them even though they have a billion stream and so you have to be relentless and you have to keep it up and you can't think just because you did well the first month or the first year or the first whatever that it's going to go like that forever and so you just have to you know keep it up and keep the product fresh like it beats they were you know they came out with the solos which are the smaller ones and they came out with the in-ears they came out with different things you know but all good companies do that the beauty companies constantly are coming out with new products and stuff.

32:02Well, you know, the fashion companies change every three months. And so otherwise it gets stale. So I think that's probably why that happens. Also, you have a lot of inexperienced people now starting businesses. They don't necessarily have someone like me or someone else who has that experience. And so they don't really know exactly how to follow up and what to do. Yeah. I mean, I don't have a Paul, although I'd love that. Maybe that's a great positive outcome from this podcast as well. But I've been running Shtadgai now with the intent of content creation as a priority for over six years. And I've had to be relentless in many ways, but also know when to walk away from certain projects, which is naturally a very delicate balance of I believe in this.

32:51I know it can work. I'll keep pushing on this one thing. Could be a style of video. could be a product and then other things where i give it one or two chances and i know when to walk away and i'm sure that that's a massive part of your business knowing when to okay you know what we've tried hard enough with this on on projects that may have not gone as well as you had hoped and i'd love to hear more about that if you're well we've definitely like we we spent a lot of time i don't want to name names but we have a really really interesting crazy deal that someone brought to me we bought a water source in virginia turns out it's like the purest water in america maybe in the world i don't know but it's 3 300 feet deep it's all pumps out of the ground we don't pump it it shoots out of the ground at some ridiculous rate we have like a billion liters a year of water it's crazy we know we're and i probably won't say but we sell water to other water companies but we'd also like to create our own brand and or brands because we have a billion it's a lot of water um and it's really good and we've sent it around to a lot of different people who really like it and we've tried to develop brands well we worked for eight or nine months with one big artist and just in the end it just didn't feel right it didn't feel that it didn't feel we were getting the real attention from the artist as opposed to the people around the artist it felt like there were too many problems all the time and issues and so we just abandoned it and around that same time we were working on another project with a easier going person artist so it wasn't that but we just looked at the business and went you know what it's a great idea it's a great business the margins are kind of lousy and we're like are we really going to put up all this money and spend all this time and do all this work for a business that the margins aren't that good and we we kept trying to figure out how can we get the business to be better and we couldn't so we abandoned it before we ever did it now unfortunately sometimes you you actually do start a business and it doesn't go as well as you want and that happens too but you know you have to not everything you do in any business is not every investment not every movie not every song sure everything can't be a hit right so you just have to have enough hits and um and you and you're right though when you have something we had one product that was harder and we but it wasn't it wasn't terrible the product was good and it was going fine it just wasn't going great we ended up selling it to another company and so it's fine though it was sort of one way that's one way to deal with something when it's not like a huge hit as you go okay maybe this is more valuable to someone else and you can do that um and even when you have a hit the question is how long do you own it before you sell it now some people like skims which is a huge success obviously is going to go public that's very unusual because that you have to get really big for that right but even you know if you're an influencer like and you build a company that does a hundred million dollars in sales that's pretty damn good and that's more likely to get sold.

36:34So the question is, do you want to keep owning it and trying to do it yourself and grow it to 120, 150, or do you want to sell it to someone who can help you? And I'm kind of a believer that there comes a point where, usually there comes a point where you can sell to someone who can help you and take it to the next level. But there are examples where you know you you don't do that for sure i mean with all the founders you you work with and the the talent you work with they're champions in their own respects and all these different categories of media and of life but they they all are performing at an incredibly high level and are trying over and over again what is one thing that or many things that these people have in common to you?

37:24I would say a couple of things. Like one thing is they all have a very unusual type of intelligence. I just see it over and over again. Like it's not just like the kid who was smart in math class. You know what I mean? Like there's something else going on, like a special kind of intelligence. And I've seen that a lot. And then the other thing is something I said before, which I think people underestimate, they know what's right for them better than I do or you do or anybody does. Maybe their mother knows better. But they know, instinctively know, this is right for me, this isn't right for me. Again, they're not going to bat 1 ,000.

38:13Nobody bats 1 ,000. But they're going to be right a lot more than they're wrong. And that is such a valuable thing we should all have. right what what's right for you you're sitting here you're 28 years old you've done an amazing but what should you be doing now should be doing podcasts should you be building brands should you just be doing the same thing you've been doing you know and i know you a bit and you're nothing like your character really right and i assume that's one reason you're doing the podcast is because you want people to see that you're nothing like your character but that character worked so should you keep going with that character should you create a new character these are the questions that everybody faces and so I would say the great ones especially as you get older but even when you're young know what's right for you you and I were talking about someone who I don't want to mention the name who you also know who all just knows what's right for him you know and so So that's really important.