How Two High School Club Promoters Who Hated Each Other Built a Multi-Million Dollar Nightlife Empire
For anyone that loves partying at the hottest venues in any major city in the world, chances are you’ve most likely frequented a place owned by Jason Strauss and Noah Tepperberg. This dynamic duo are the founders of Strategic Hospitality Group, the company that owns some of the most popular nightlife venues and restaurants to date, including Marquee, TAO, and LAVO. These venues collectively made close to $200 million in revenue in 2012 just for their Las Vegas locations alone. Their awards and recognitions include being honored by the Harvard Business School through a published case study on their work, as well as being named two of the 50 Most Powerful People in EDM by In The Mix in 2013.
But all these accomplishments didn’t come without lots of hard work, dues being paid, and differences set aside. Although they are best friends today, Noah emphasized that they didn’t start out as friends when they started promoting clubs back in high school.
“When we started we were actually competitors, we weren’t friends, we didn’t hang out… But over time as our business grew we became best friends so I think it’s actually quite different. It’s not like we were friends and we decided to do business together. We were totally not friends. We decided to go into business because it made sense and through running a successful business, we became great friends.”
It wasn’t until 1993 when the two graduated high school that they decided it made sense to partner up. Although they both went to different colleges (Jason went to Boston University and Noah went to University of Miami), they both made it work and started climbing the nightlife food chain.
“…night life [back then] was very different than it is now. There was no social media. There were no cell phones even at that time. Everything was very much hand to hand, handing out flyers, making calls…I’ve always referred to it as ‘pack the clubs with your hands.’ You couldn’t send emails to a mass of people at that time. But by the time we graduated school in ’97, we were full scale club promoters, having multiple clubs, multiple nights a week in multiple cities like New York, Boston, and Miami.”
It’s no secret that there are a lot of negative connotations around being a club promoter. However, based on who they are today, they’ve obviously made something of themselves. While many would stop at club promoter, Jason and Noah decided to start an events management and marketing business right after college. After a successful stint there, they opened up their first club in the Hamptons outside of New York in 1999 when they were both in their mid 20’s. Two years later, they opened up their second club, Suite 16, in New York. Their big break didn’t come until early 2000, when they met and partnered with Marc Packer and Rich Wolf, the founders of TAO restaurant and nightclub. From then on, a series of successful restaurants and nightlife venues slowly emerged all over the world, which many upscale partygoers would recognized today. By the time they built the first TAO and Marquee, Noah was 27 and Jason was 28.
While many of us in this generation are constantly bombarded by the media with stories of people launching startups and exiting at billions of dollars in a couple years, Jason and Noah’s story offers a sobering reality to the classic notion that there are no shortcuts; busting your ass is the best way for success and you have to take the climb to the top one step at a time.
We recently had the pleasure of catching up with both Jason Strauss and Noah Tepperberg in Vegas during EDC weekend. Here, we discuss how to pick your business partners, how they consistently keep up with and form new trends, and why solid company culture is at the heart of every successful business.
You both have been partners since 1992. That’s 22 years of starting multiple successful businesses together; many marriages in this day and age don’t even last that long. What’s the partnership dynamic like between you two?
Noah: “First of all, I’d say our interests have always been aligned. We’ve been equal partners on everything since day one. Second of all, we’re best friends, so we have a unique relationship, but I think the most important thing is that our partnership started so young. In an industry that was like an unpaved road, and because we sort of paved it together, this is something we’re very proud of and we just share this passion for what we do. We started as like a child prodigy of something and we’ve grown it into a business like it’s never been done. You develop a bond, that’s what we have. We really don’t fight, we don’t always agree on things, but we find a way to. He and I are very different in our approaches to everything and that also helps. We have this sort of yin and yang thing going on, but as a team we tend to make the right decisions and what we know we learn from them.”
What are the different strengths that you both have that really help in this partnership?
Noah: “Jason is a very visual guy. He’s very creative, he’s really into the aesthetics of what we do and the sort of the lighting, the sounds, the staff and the way things look. I like to spend more time on my computer sending emails, putting things in plans, charts and graphs. I’m a very numbers-driven person. So we have a good complement in that sense where he’s more of a visual guy and I’m the opposite.”
Jason: “Noah and I wear all kinds of hats in the business. We obviously have different strengths, but we both handle almost all facets. He doesn’t handle just one aspect of the business; we both have our hand in every facet. But, I think there’s three hundred things I could probably list that he’s better at that supports me (laughs). He’s just an amazingly productive person. He’s an amazingly strategic thinker, beyond anything that I can comprehend and he really sets the path of the strategic thinking and the game planning. And then we kind of execute things together. I think that’s one of his biggest strengths. He has many strengths, but that’s definitely one of them.”
What’s your philosophy when it comes to finding the perfect partner to start a business?
Jason: “I think the hardest thing is to find good partners. Noah and I have been through a few partners and side-businesses and some have worked out and some really havent. I think the biggest, most important attribute for a successful partnership is trust. It’s like an undying trust. Like I know whatever he’s doing and however he’s spending his time, it’s for all of us in the business and that he’s not taking that time to do three other things that are for himself. It’s a trust that started when we were in college, we had our first party together where it ended up being a disaster, and instead of pointing fingers at each other, we kind of stood together and took the brunt of the fallout and in that came the trust that has lasted twenty three years with each other. It’s really the trust that is what’s most important. The second thing is each partner has to have equivocal value, otherwise there’s resentment. Luckily he doesn’t think I’m slacking and he thinks I have some value (laughs), so we have a good partnership. I think those are probably the two most important things. They both have to provide value and trust.”
Club promoters are a dime a dozen, especially in this day and age where the industry is saturated with them. What was so different about you guys that separated you both from everyone else?
Noah: “…Our business model was: let’s promote our businesses and just be the promotional machine behind them and not promote ourselves. That was something that I think separated us from other people. The promoter business is complicated… We used to say “you’re always as good as your last party if you’re a promoter,” but what we did is we built up a promotions agency. We actually at the beginning were some of the very first guys to not only promote clubs, but we promoted brands. So we built up a brand marketing agency at the same time we built up the nightlife marketing agency and we’re doing things like the Maxim Super Bowl parties, the Victoria’s Secret Fashion shows and red carpet events for products… We’re talking ten plus years ago, before they were a dime a dozen, we were doing these branded red carpet events all over the country. We were flying around L.A., Chicago, Miami, San Francisco, doing parties for brands like Guinness and Smirnoff and Motorola and Tommy Hilfiger…The word promoter was really, it was really a stereotype. We had a marketing business and we marketed venues… that’s how we started with TAO, we were originally a marketing group before we became partners.
So, over the years we just treated it as more of a marketing business and we had a very interesting network of corporate clients… Our business was really a PR business and by that we meant personal relationships.”
It seems you guys really busted your asses back then.
Noah: “We worked nine to five, 9 a.m. to 5 a.m. and those are like – two sort of cliche statements that we used to use when describing what we did as young entrepreneurs. As we grew up, we built a real company. We have four thousand trained employees right now, we have three giant venues here in Las Vegas in which we have multiple outlets; LAVO nightclub and restaurant are two great spaces, TAO restaurant, TAO nightclub, TAO beach, our three Marquees, Nightclub Marquee and the Dayclub. In New York, we have ten or eleven venues.
At this point we’ve expanded our portfolio to include all the food and beverage of The Dream Downtown Hotel, which has a nightclub called PhD, a bar and lounge called Electric Room, and a new upscale Mexican restaurant called Bodega Negra; we opened this steakhouse called Arlington Club. We’ve closed and re-opened Marquee in New York, which was built back up to be a huge juggernaut. We opened a Marquee in Australia, so we actually grew our business outside of the country. As young guys we were probably the first American nightlife club groups to actually take a brand that we developed here and bring it overseas. You kind of see the other way around with most brands, but we were able to do that very successfully. The club is very popular down in Sydney and it’s about two and half years old now.
Really, what we did is we built a company that delivers great guest experiences, that’s one of our main pillars. Everyday no matter what happened the day before, our company’s MO is literally go in every night and just try and throw a great party and give all our guests a great experience, and that is what our business is about.”
Your business involves constantly being on top of current trends and creating new ones and resonate with the mainstream demographic, how do you guys do it?
Jason: “It’s a constant battle to stay relevant and if we don’t in our business, we won’t grow. I think the only way to answer that is by culture and the discipline of coming in every day to work. And always be with the mentality of a hustler but not behaving like a hustler; the mentality of a hustler to always just be hungry to see what’s going on, watching everything that’s happening. In the past, we just had a great network of people that were feeding us this information, now you could be on Twitter or somewhere else to get a dramatic amount of information quickly; so it’s constantly striving for that information and then processing it and then seeing how you could use it to utilize it in our business. So, I think the way we’re doing it is just by being so hungry and not letting our guard down. I think if we came in there and only punched in once a week to really see what’s going down the street or in our industry, we would’ve been dead a long time ago. I think that us punching in every day and the mentality is what keeps us relevant.”
What is the core passion for you guys in doing this? What drives you both?
Jason: “It’s really the passion of the creation. When we build a nightclub or a venue, it’s really like a movie. We’re painting this picture that’s in our mind and there’s so many moving parts, so many different members of the team, so the creation is really inspiring. But then, what’s inspiring is the culture of the company, and the people that work for us. Really, we’re big, we have 3,200 employees and to be able to provide a culture that people are happy when they come to work and they know there is growth, there is reward and there’s feedback, that’s something we hold really true to our heart and both of those things keep us driven.”
How exactly do you keep everyone happy to come to work everyday?
Jason: “Again, it goes back to a corporate culture that we created probably nine years ago. There are many components to answer that question, but the ownership is really hands on. We’re in our venues four to five times a week, minimum. I think seeing an owner in the venue active, problem-solving, delivering experience to key customers, being their mentor, everyone from a new member on one of our teams to a senior manager, I think that trickles down. I think when we continue to grow and people move up in the chain of command based on merit, they know that there’s growth and I think that’s what keeps them motivated also. There are a lot of different components, but those are two of those for you.”
What are some things that you notice that young entrepreneurs today don’t get? Do you have any advice for them?
Jason: “..Just speaking from experience, and I know this is typically not standard, but a lot of entrepreneurs get into a business and they’re operating almost like a CEO standard and they haven’t gone from the ground up. They have an idea and they want to be a president and they’re sitting there managing employees, but they’ve never been an actual employee. I think a part of Noah’s and my success was that we were busboys, we were handing out flyers, I bartended in college, we worked for other nightclub owners for years before we dared to open up our own so that we could learned from them. We led in the trenches for a long time before we had the balls to become entrepreneurs. I think too many entrepreneurs are just jumping in without having the backdrop of the experience. How can you manage a bartender if you’ve never been a bartender? How can you write an employee manual when you’ve never been the employee and make it better than what the guy is doing down the street? You lead in the trenches before you put up your flag.”
So basically, you have to pay your dues.
Jason: “Yes, pay your dues, That’s what worked for us. But I’ll caveat and say that I’ve known a lot of people who haven’t done that, but has become successful. However for us, that’s what has made us successful.”
What’s next for you guys?
Jason: “I think for us our next goal is really just to expand. We’ve built an amazing hospitality business that we’re proud of. We want to expand it and give all of our team members and our senior team members the ability to grow to bring the next generation underneath them to their level. I think that’s a goal of ours that we’ve made- to really grow the business and elevate everybody up a couple of steps and to be proud of having that all together.
I think on a positioning point, we’d like to get into the hotel business. We’ve already done food and beverage for an entire hotel like The Dream. We’re looking really to get into the owning a brand and a hotel and doing the food, beverage, and marketing. I think we’ve got the skill set and the aptitude to do that.”