Jesse Lee of DFM.

Photographer: Shaniqwa Jarvis for Bloomberg Businessweek

LA’s New Hype King Has Cracked How Millennials Spend

From Uber to Impossible Foods, big brands are flocking to Jesse Lee’s Dub Frequency Media.

Two years ago, before Jesse Lee, the founder of the marketing and public relations agency Dub Frequency Media, aka DFM, prepared to seek outside funding for his company, he drew a Venn diagram. He put Vice Media LLC in one circle, Uber Technologies Inc. in the second, and Berkshire Hathaway Inc. in the third, showing investors a three-headed monster that could not only capture young people’s attention, but get millennials and the members of Generation Z to open their wallets. “People don’t want to purchase everything from the same brand,” Lee says. “You eat at Alma,” his company’s critically acclaimed new American restaurant, “you read Mirage,” his glossy photography magazine, “you shop on Basic Space,” his peer-to-peer shopping app, “you learn about people on Westwood Westwood,” his lifestyle news site, “but they’re all under different brands. You might just stumble into a restaurant and not realize that we own part of it.”

Lee got his money, and DFM continued to climb. The eight-year-old company, based in Los Angeles with a full time staff of 30, is projected to do $10 million in revenue this year. While its marketing and public relations arm bolsters the cool factor of established brands (Nike Inc., Calvin Klein Inc.), its editorial shop profiles Next Big Things (the cold-pressed-juice company Juice Served Here Inc., a cauliflower-crust-pizza delivery service). If a brand can’t afford DFM’s fees for orchestrating a marketing campaign ($100,000 and up), Lee might get them featured on Westwood Westwood, and—if clicks translate to customers—soon, in theory, they’ll be able to afford those six-figure fees.

“With a brand we believe in,” Lee says, “It’s almost like, ‘How do you want to make money together?’” And there’s no hand-wringing about editorial objectivity. “Quite honestly,” he says, “millennials don’t care.”

Lee, 36, works in a building called the Sparkle Factory, on a rapidly gentrifying block of downtown Los Angeles, where pawn shops operate next to organic salad slingers. The name, which scrolls in pixellated letters on a marquee outside, comes from the pink-haired jewelry maker who used to occupy it. Lee seems slightly embarrassed by it. His own office is a bare-bones affair of glass and whiteboard walls, with some business books stacked on a shelf.

DFM is his money-maker. It specializes in throwing sponsored parties with A-list guests, and it’s the key to his other businesses’ legitimacy. Kanye West, Katy Perry, Justin Bieber, and Ed Sheeran attended the Grammy Awards after-party DFM hosted with the DJ Diplo this year. (“It went ‘till 4 a.m. in Beverly Hills,” says Lee, “you can’t just pull that off.”)

Earlier this year, Victoria’s Secret hired DFM to publicize its presence at the Coachella Valley Music and Arts Festival. “Instead of doing a traditional press release,” Lee says, “we were like, ‘Let’s create moments so that the press wants to talk about it, they want to write about it.” He put three models under special contract, known as angels, in a helicopter and flew them from downtown Los Angeles to a house the brand had rented in Palm Springs, Calif., and hired cameras to shoot the trip for E! and other broadcast channels. More angels drove through the desert to the house in a Jaguar, stopping at In & Out Burger along the way, while professional photographers hired by DFM recorded the journey and parceled it out on Victoria’s Secret’s social media accounts and in the models’ personal feeds.

Born in Orange County, Calif., Lee spent his childhood in South Korea before moving to Chicago at 13. He followed skate and streetwear culture and started DJing in high school, a hobby that he continued at the University of Illinois, where he majored in political science and promoted club nights on the side. “There were several benefits,” he says: “drink for free, make hundreds of dollars, which is a ton of money when you’re 19 and your friends are getting paid $8 an hour to work at Subway.”

The novelty eventually wore off. In search of a longer-term career plan, Lee read up on his idols—P. Diddy, Russell Simmons, David Geffen—and decided to move to Los Angeles. (“I’d had enough of Chicago winters,” he says.) He arrived in April 2004 and used the internet-equipped computers in the Santa Monica Public Library to apply for internships in the music industry, eventually landing one at electro-pop label Moonshine Music.

Lee scrolls through his phone.
Photographer: Shaniqwa Jarvis for Bloomberg Businessweek

Lee’s boss at Moonshine, Matt Colon, eventually became a friend and introduced him to the then-fledgling DJ, Steve Aoki. Lee helped put Aoki on the map—the latter made $23.5 million on music sales and club gigs last year, according to Forbes—and they talk about potential business opportunities at least a few times a year. This past May, Lee had Aoki perform at a fundraiser he hosted for Los Angeles Mayor Eric Garcetti. “I've had a passion for community activism since college but was never personally involved in politics until I met Eric through Jesse,” Aoki writes via email. “I’ll always appreciate that.”

After leaving the record label, Lee worked in marketing for the urban lifestyle magazine URB and kept organizing club nights, paying Aoki and other newbies—Diplo, DJ AM, Justice—a few hundred bucks to spin. Lee wrangled sponsors to cover his costs and then some, which helped him realize that the real money wasn’t in writing about events, it was in creating events for the keyboard-bound to blog about.

DFM’s client roster, which scrolls across its website, reads like a stock ticker of zeitgeist brands: Impossible Foods Inc., Uber, Sweetgreen Inc., Soho House Ltd., Samsung. Big brands want only marquee artists headlining their events, but as DFM grew, Lee also wanted to continue providing a stage for nascent creative types. So last year, he launched Westwood Westwood, a content platform that runs adulatory profiles of entrepreneurs, fashion designers, artists, and chefs on the verge. According to Lee, 80 percent of Westwood Westwood’s readers are aged fromm 21 to 35; the remaining 20 percent is split between Gen X and Generation Z. The site receives 80,000 unique visits a month, almost evenly split between men and women. “We try to hone in on individuals and stories that have an iconoclast element,” Lee says. He calls up the website on his large Mac monitor, all sans serif fonts and GIFs. “It looks like it’s sort of for the cool kids, the way it’s delivered.”

Lee says he keeps the Westwood Westwood and DFM teams “pretty church and state.” But they sit a few paces from each other in the L.A. office, and scoring a profile in Westwood Westwood can be a first step to becoming a DFM client. Last July, the site posted a flowery story and an artsy video about Alex Matthews, a founder of Juice Served Here. (Excerpt: “He has what seems to be a limitless zeal for all of the things he chooses to endeavor.”) “They were doing well but not well enough that they could afford our agency’s fees,” Lee says. “But we believed in what Alex was doing, so we figured: ‘Let’s profile him and give him a platform, and then they’ll donate products for us and do small things. But if they become Jamba Juice”—he grins—“hopefully they’ll come to us.” Lee says Juice Served Here is about to “cross that point” where it can become a DFM client. “Westwood Westwood, it’s our R&D, a minor league system,” he says. “We get to develop and nurture talent and they become startups or brands or whatever.”

His other three ventures—Alma, Mirage Magazine, and Basic Space—are experiments in potentially lucrative new markets, even if the businesses themselves aren’t major money makers yet. Take Mirage: it’s sold in high-end bookstores and boutiques around the world, but Lee sinks $50,000 into it per year and waits about that long to make it back. “Having advertisers like Kenzo and Chanel, that puts us in a different room, a different situation, than if we were to come from the DFM angle,” Lee says. He calls Mirage his “expensive business card.”

Call his methods visionary or smarmy, Lee doesn’t really care, and neither do his investors. Two years ago, seeking to expand his holding company’s footprint, Lee sought the advice of a guy he used to go to underground raves with when they were wily Chicago teenagers: Jacob Pritzker, now a partner in Tao Capital Partners, which has invested in Tesla Inc., Uber, and Warby Parker.

DFM is “a more amorphous sort of concept” than those companies, says Pritzker. “It took a few meetings for all of us to fully grasp the genius behind it. But their ability to prove their understanding of the millennial generation, that was a big part of it.”

Lee
Photographer: Shaniqwa Jarvis for Bloomberg Businessweek

“We’re investing in Jesse,” he adds. “We have a lot of faith in him.”

Having merged marketing and editorial, Lee has a new mission: to get influential people to sell new goods to their fans via Basic Space. The next time Nike wants Diplo to promote a new shoe, instead of paying him $25,000 to post about it a few times on Instagram, the company can, in theory, send 500 pairs to Basic Space for Diplo to sell through his page. “He can make 50 percent of the retail value of the shoe,” Lee says. “It creates this win-win dynamic.”

The idea for the app came from his fiancée, Erica Hass, who would sell furs and Escada blazers she found in vintage shops on Etsy, only to find Instagram influencers posing in them, crowing about their impeccable taste. “If you have good taste,” says Lee, “Why shouldn’t we provide a platform for you, the true creative, and let you build your own business?”

Lee’s not the only player in the designer-resale game. RealReal Inc. and Vestiaire Collective SA maintain online malls of second-hand luxury goods; Grailed Inc. has caught on with budget-conscious menswear aficionados seeking an alternative to the hot mess of EBay Inc. But Lee is betting that the personalities on his network will have better luck slinging used products than the algorithms that power his competitors. Based on the advice of Pritzker and venture capitalists, Lee plans to spin Basic Space out of his holding company and seek additional outside investment. “I can sink a couple million into it and get nothing, or I can get $2 billion,” he says. “These two”—he points to where “DFM” and “Westwood Westwood” are scrawled on the whiteboard wall—“won’t be billion-dollar companies.”

Lee and Hass have a two-year-old and an infant. The former club kid now goes out maybe three times a month. He prefers to spend time with his family and read autobiographies about his new idols, Warren Buffett and “randoms, like the founders of Goldman Sachs and private equity shops, or Jamie Dimon,” Lee says. “Those are more interesting now than reading about another David Geffen. I know that story.”

 

Corrects spelling of Jesse Lee in the lede image, and corrects spelling of Warren Buffett in the last paragraph.