Tim Armstrong, the veteran tech CEO, is launching a new company on Thursday (Feb. 7) dubbed dtx, which will focus on direct-to-consumer (DTC) products.
According to a report in CNBC, citing Armstrong, “dtx” stands for “direct to consumer.” The company will focus on building a direct relationship between consumers and the products they consume. The company will invest in startups that help brands grow their businesses, in part via the data they amass. It also plans to open pop-up retail locations that will showcase direct-to-consumer companies, getting them in front of more consumers.
In the interview with CNBC, Armstrong said the economy is moving away from one that relies on wholesale distributors to one that is direct-to-consumer, made possible by technology, social media and digital payments.
“The distribution structure of social, search, YouTube and their ad formats allow these companies to put everything in their product catalog directly in front of consumers,” Armstrong said. “The payments space, though complicated now, is on the verge of getting a lot easier. And the systems getting built now are allowing companies to get real-time, direct relationships built with consumers.”
In conjunction with announcing the launch of the company, Armstrong said dtx is making its first round of investments in DTC companies that are trying to improve people's lives. Those include Dirty Lemon, which makes a health drink; Olive & June, which is a manicure company; Margaux, the footwear company; Third Love, which makes bras; and Argent, which designs women’s workwear. Outside of the product category, dtx invested in Niche, which helps people compare and contrast neighborhoods and school districts.
The executive noted in the report that so-called experiences, which will feature several direct-to-consumer companies, will roll out later in 2019, likening the idea to the Consumer Electronics Show and Coachella. “We want to go to the places that don’t have access to all the cool things happening in New York, LA and San Francisco, but have growing income and interest,” Armstrong told CNBC.