EP 30 - David A. Steinberg | The Founder & CEO of a Billion Dollar AI Empire |

He's a great guy. I had, as I said, I had dinner with him twice last week.

In Boston when I was.

No. But I was, in fact, half my family is from there.

Okay. And uh, I used to go up there when I was a kid. You know, which was always a challenge having one, you know, set of the family that loved the Red Sox and one set of the family that loved the Yankees.

I grew up in New York City.

Well, no. I mean, but I grew up here. And then I went to school in Pennsylvania and then London and then I moved to DC. I lived in DC for 17 years. And then after I separated from my first wife, uh, I ended up moving to Miami. And so I've lived in Miami now for, you know, 14 or 15 years.

They say that entrepreneurs are always one concentric circle away from another entrepreneur. And I think a lot of that is you see the realm of possible, right? So you look at your dad and you say, 'Wow, this is an entrepreneur who can be super successful.' For me, that was my stepfather. And I was always hustling, whether it was, you know, in the winter we spent time out of the city so I could, I would go shovel driveways or rake leaves. Uh, then I started a nightclub promotion business when I was 16 years old in the Hamptons. Uh, much like Henry, who I think started his career also, you know, throwing parties and promoting parties. And that was sort of the beginning of my entrepreneurial journey. I started that company and I had gone into a bar. It was called the Polo Club back then. No relation to the current Polo Bar, but it was in West Hampton and, you know, I was 6'4, you know, 16, but we were still going out, you know, we had an ID and we were doing our thing and a bar that had been super hot the year before was totally empty, right? So, I was like, I grabbed the owner and I said, 'If I could fill this place up, could I have the cover charge and 10% of the bar?' Taught me two...

See, same thing. Well, and I did that through college. But I ended up doing this for a period of time. I found out very quickly that I had to control the door. So, I brought in my own doorman. I had to control the music. So, I brought in my own DJ. But I found out very quickly that there's no way to audit the bar. So, at the end of the night, you'd have three or 400 people spending money all night. The guy would hand me like $72. Be like, 'Here's your 10%.' So, but that was like your first entrepreneurial job or business.

Yeah, he actually paid me. For me, it was a life lesson. Locked out. I like, how do you do businesses you can actually audit? Yeah. So, I got lucky, but we ended up making more money from the events than the actual clothing. That's great. But it was a great um... It's funny you say that because we ended up doing parties at a bunch of bars out, you know, clubs in the Hamptons, bar, so on and so forth. And one of them, the Polo Bar had a big patio. So, I said to the guy, I'm going to start selling hamburgers and hot dogs. So, I brought another buddy in and he's grilling and we ended up making a lot of money. One day, my mother and my stepfather found this shoe box I had with just a bunch of cash in it because that's how you collected at the door and so on and so forth. And, you know, they thought I was into some type of illicit activity. Yeah. They didn't know what you were doing, right? Because I hadn't talked about it. You had a bunch of cash under the bed. Yeah. Exactly. It was in the closet under some clothes. But uh, you know, and my stepfather was like, 'Yeah, you're going to need to incorporate this. I don't want to get sued.' So we ended up starting a company. You know, it was like Premier Productions Incorporated.

Yeah. So he was an unbelievable entrepreneur. You know, it's funny when you look at my background. I had an incredibly diverse background. My dad was an Ivy League educated MBA who spent 37 years at what became Price Waterhouse Coopers. And my stepfather, who I joke barely finished high school, he was the ninth of nine children born into abject poverty in Brooklyn. Had started a series of, you know, sort of entrepreneurial things, you know, like a moving company and a soda company and all this stuff. And when he was running the moving company, everybody asked him, you know, what's a good store to go to? Who's a good plumber? Who's a good, you know, electrician, whatever. And he said, 'Oh, new homeowners need all this type of information.' So, we started a company called Getting to Know You, which became a very large new homeowner welcoming company. It ended up merging with Welcome Wagon.

No, it was, they were selling advertisers to get access to new homeowners. And they were putting, they did this like phone book and every other page. And it was like not a phone book. It was like your address book, or like the book you'd write your numbers in before you had a phone, right? Every other page was local vendors, but he didn't put ads. He put their name and number in there like it looked like you had written it. It was really clever. Yeah. So, he was way ahead of the game. Yeah. He ended up selling that business for a lot of money to a large conglomerate.

So I was 10 when he came into my life. Although once again, weird upbringing. Uh, my mother and my stepfather raised my brother on Long Island and I lived with my father in the city. So it's sort of like my brother and I were going back and forth a lot. Uh, and then I ended up at boarding school. Uh, but you know, listen, it was sort of an interesting background to have this sort of Ivy League educated father who was a career guy and a stepfather who would say he went to school at the corner of, you know, Delancey and Clarence Street. I forget. The school of hard knocks. He figured it out. Exactly. Uh, and I think I took the best of both of them.

I did go to the Hun School.

Uh, I don't know. Well, I mean, I didn't love going to boarding school to be honest. Uh, it's a great school. Yeah. I mean, Hun's a great, great school and I've been supportive of the school and they just brought in a new headmaster who's awesome. And Jeanie who runs, she's run sort of, I don't know what they call it, but you know, interacting with former students, alumni relations or corporate relations has been just spectacular at Hun. Uh, but I didn't love school. You know, as a dyslexic kid I didn't love it. So I would say the highlight for me were sports. You know, I played three seasons, you know, football, tennis. Uh, ended up playing tennis in college.

I went to Washington and Jefferson College. Which is a small sort of really good liberal arts school right outside of Pittsburgh.

I was throwing parties.

Well, not, you couldn't throw parties in, you know, Western Pennsylvania. Like it wasn't the place you would do that. But...

No. So at that point I thought I was going to be an investment banker or a lawyer. So I thought I was going to go into that and I was throwing parties in the summer, Thanksgiving break, Christmas break. So I started taking all the people I knew in the Hamptons and I started throwing parties in the city. Because they were in the city, you know, during holidays, they were coming back from college, right? So that was really fun and I did that. But I never thought that would be like my career, nor has it been when I graduated from college. That stopped. But uh, you know, I thought I was going to work at Goldman Sachs or Morgan Stanley. The problem was they didn't agree with me when I graduated from college. Really? Yes. So I wasn't, I didn't go to Harvard, Yale, Princeton. Uh, I was not the, you know, I didn't fit the criteria those guys were looking for at that time. So I then thought I would be a lawyer and I ended up going to work on the Hill uh on the judiciary committee. I was sort of the chief intern doing like legislative correspondent work uh under uh Senator Kennedy's subcommittee. Uh, the chairman of the judiciary committee when I worked for it was a very young guy named uh named Senator Biden.

So, first of all, the work was really cool. Like, it was really interesting. Although, I figured out very quickly I wouldn't be a good government employee. Yeah. Like, that was obvious.

20. I was 20. Yeah. Graduated.

Just graduated.

Yep. Which was really fun. I lived with three other guys, one of which was my first cousin. Yeah. That's awesome. We were having a great time. And you know, but being a government employee takes a certain mindset that I didn't have. I really wanted to be an entrepreneur at that point. My family, like I was an upper middle class New York Jewish kid, right? So they wanted me to be a lawyer. Uh, and I didn't want to be a lawyer.

I didn't leave DC. I was in DC for 17 years. But when did I leave the Hill to start? When did you leave the Hill and decide I'm going to go be an entrepreneur? Yeah. So, it was a little different than that. I ended up going into the insurance business for about a year selling, you know, accidental disability insurance to self-employed people. Because back then, if you ran a business, even if you ran everything through the payroll, which of course you would do, you didn't get disability insurance as the owner. So, there were all these specialty policies around it. So, I ended up selling insurance for a year. It was funny. I called my dad to tell him, 'I'm going to delay law school a year and I'm going to go sell insurance.' Okay. What was his response? Went apoplectic. 'You're crazy. How could you do that? That's the...' And then I called my stepfather and he said, 'It'll be the best thing to ever happen to you.' And I said, 'Why?' He said, 'Because you're not used to people saying no to you, right? And you are now going to hear a lot of nos.'

Oh, if you can't take no and you can't take failing, do not become an entrepreneur. Like, it's just part of the gig. I actually have rephrased the entire narrative. I no longer even believe in the word fail. I believe you either win or learn. The trick is learn quickly. If something's not working, don't keep trying to do it. Because it ain't going to work. Right. So, don't keep making the same mistake over and over again. Try a different door.

Here's what I'll tell you. Your ego is probably your single biggest enemy in life. It's not just as an entrepreneur. You know, the truth of the matter is you have to subjugate your ego to be successful in almost anything. And then, you know, I know a lot of hyper successful people. I always joke there's two types of hyper successful people. There are people who are unhappy, who believe that if they got super successful it would make them happy. And there are people who are happy that get hyper successful. And the output is the people who are unhappy, who thought making a lot of money would make them happy, are the most unhappy people I know. Because once they get there, they realize it doesn't make you happy. The people who are happy going into it are legitimately the happiest human beings I've ever met. Because listen, it's great to be successful. It's great to have the tools that money provides. But if you're miserable and you get all this money, all of a sudden you wake up, you're still very unhappy. And a lot of that comes from ego, right? Because to me, the ability to sort of put your ego aside and deal with what's in front of you very unemotionally is a really important way of doing things. Listen, I had a major client undress me inappropriately probably about a year and a half ago. And I mean really undress me, but they're a big client, so I took it. I didn't like it. It actually really hurt my feelings. Uh, but at the end of the day, even in my position today, you have to deal with that. You can't flare up. And I said, 'I understand. I don't really love the way you're communicating your problem to me, but I understand the problem, and let's think about how to fix it.' And he just couldn't get there. He just was so upset. And the funny thing is we didn't even create the problem, right? Another vendor had created it that we were using as a sub vendor on an account that he had asked us to do. The point was not that we had a problem. By the way, that client is now a much bigger client today. Because I think the guy actually ultimately felt guilty.

Of course I am. There's no... You don't get anything out of it. There's no upside. Yeah. There's no upside. When I was a kid, my dad taught me a lesson that really has stuck with me my entire life because I was dyslexic. I really was not that interested in school. And he took out, you know, back then it was a yellow legal pad, you know, the ones that were perforated and you pull off. And he'd write a line down the center and on the left side he would write what's the upside, on the right he would write what's the downside. And if there were like 10 things on the downside and two things on the upside. It's so true. That's a bad trade. It's so true. It's so true. So, I always say one of the most important things in success is having a high aptitude for risk, not blind risk and not no aptitude for risk. Meaning, understand the upside and the downside when making a decision. If the upside is you can make, so let's say you're betting a dollar. Your upside is you could make 10 cents. Your downside is you could lose the entire dollar. Is that a good trade? No, of course not. But if you bet a dollar and your upside is $10. And your downside is 75. Yeah. You take the 10. Yeah. You take the bet. That's the best trade you can make, right? Yeah. Totally. That's aptitude for risk. And it's something that, you know, it's funny. I joke I've been an entrepreneur now my entire career. I haven't had a boss since I was 21 years old. Now, I have a board of directors. We have shareholders. We have, you know, we have lots of people we report to, but I've been the founder and CEO of seven companies over the 35 years that I've been out of school. And I would say that one of the single most important attributes is sort of understanding the differences between sort of starting and where you end up. For me, I was the youngest person in the room for the first 20 years of founding companies. For the last 20 years, I've been the oldest person in any room that I walk into universally. And a lot of what I can do today, like I would tell you 20 years ago, if that client had spoken to me and treated me the way they had, I would have gotten into it. Really? Oh, without question. And that would have been a massive mistake.

Oh, no. This was a customer. Oh, yeah. This is one of our largest customers. Is the customer always right? Uh, no. But you always have to be deferential. Yeah. You have to kind of understand that he's the guy paying you. No. Yeah. But this was an anomaly. I hadn't been treated this way by a customer in quite some time. Honestly, I don't interact with a lot of our customers at this point. We're a pretty big organization. Uh, but they were a big customer and I knew him personally. Uh, but the point is not the incident. We were talking about ego, right? So that's what I'm trying to get to, right? The point is I had to swallow my ego. I was running a multi-billion dollar company at the time with, you know, a couple of thousand employees. This is, you know, a couple years ago. We're now bigger than that and we have over 3,000 employees. But the... Yeah. Which I can't wait to get into all. No, but the point is even in that position when a client gets really upset, you know, you got to keep it together. You got to listen and uh, you know, it's sort of you got to be able to subjugate your ego when you're starting out. You have to do it even more. Very humbling. You know what I mean? Yeah. Exactly. Because we don't know anything when we're starting out, right? Exactly. You know, I started my first company. I was 21 years old. And you know, sort of it was a journey.

So I went into the wireless business in 1991. I founded, you know, arguably four companies in the wireless space. Sterling Cellular, Sterling Communications, Sterling Wireless. Obviously, I had great naming capabilities. Yeah. And then the fourth was called Infonic, which was sort of a bit of a juggernaut. It was the number one company on the Inc. 500 in 2004 and was the second largest tech IPO that year. So, was that the first company you took public? Yes. Okay. Yeah. And that one didn't go as well as I would have liked. We got caught up in the debt crisis of 2008. And a private equity firm bought it. And that private equity firm after I had left it restructured it uh and ended up selling it to Walmart for a lot of money. It's, if you ever see the Talk More ads from Walmart. Yeah. That was my original... Walmart's one of our favorite customers. Well, of course it is. Right. You said that they buy your shelving. But my point is, if you ever see the Talk More ads, that was originally my company. They've pivoted it since then, but that was what Infonic was when they bought it. Got it. And then after that, do you start Zeta Global? Yeah. So, the board terminated me at Infonic. It was the first time I'd ever been fired. Uh, so that was a humbling experience. Yeah. What was it like getting fired from your own company? Oh, it sucked. Yeah. I remember one of my close friends at the time and trusted board members said he wanted to have coffee with me. And by the way, fired me. They made me chairman, right? They made another guy CEO, right? They didn't actually fire me, but it felt that way, right? Yeah. Something you built. Yeah. And then the guy we had brought in as CEO turned out to be a really bad guy and did a bunch of stuff. But you know, once again, it doesn't matter. What matters is that I went from running this big public company to sitting in an office with three people figuring out what I was going to do next. And I had just gotten a letter from the private equity firm that had bought my last company that said the day before you went public, you signed an exclusive agreement that you could never go into the wireless business again for the rest of your life effectively. Okay. And if you try to go into the wireless business, we're going to enforce this. Yeah. And I was like, okay. You know, I was going through a divorce at the time, too, which was complex. Uh, and you know, my ex-wife is amazing. She and I are now very, very friendly. And my wife and I are very good friends with her and her husband. We actually just did, my son graduated last week and he graduated, you know, cum laude, Phi Beta Kappa, captain of the rugby team of an elite school. That's awesome. He obviously takes after my ex-wife. But the reality is I was sitting there, what do I do next? And we had a subsidiary called Wirefly which had been sort of our direct to consumer...

Platform, and we needed like 17 different vendors to run our marketing. We needed data providers, we needed activation entities, we needed CRM services, we needed consulting firms. And I was like, I think we can put everything a marketer needs into one user interface and one reporting infrastructure. And so remember, if you're running 17 different companies, each of those companies has their own SG&A, right? They have their own corporate expense. So by putting it all together, I was like, we could do this much cheaper.