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Cameo CEO Steven Galanis on building the first non-advertising driven social media company

Limited Partner Episode

January 5, 2020
January 5, 2020

Steven Galanis, cofounder and CEO of the red-hot Chicago startup Cameo, joins us to discuss how they've turned selling personalized celebrity shoutouts online into both a massive business and the most interesting new social media phenomenon to hit the West since TikTok. We hope you have as much fun listening as we did recording this one!

You can listen by becoming an Acquired Limited Partner, and all new subscribers get a 7-day free trial.

We finally did it. After five years and over 100 episodes, we decided to formalize the answer to Acquired’s most frequently asked question: “what are the best acquisitions of all time?” Here it is: The Acquired Top Ten. You can listen to the full episode (above, which includes honorable mentions), or read our quick blog post below.

Note: we ranked the list by our estimate of absolute dollar return to the acquirer. We could have used ROI multiple or annualized return, but we decided the ultimate yardstick of success should be the absolute dollar amount added to the parent company’s enterprise value. Afterall, you can’t eat IRR! For more on our methodology, please see the notes at the end of this post. And for all our trademark Acquired editorial and discussion tune in to the full episode above!

10. Marvel

Purchase Price: $4.2 billion, 2009

Estimated Current Contribution to Market Cap: $20.5 billion

Absolute Dollar Return: $16.3 billion

Back in 2009, Marvel Studios was recently formed, most of its movie rights were leased out, and the prevailing wisdom was that Marvel was just some old comic book IP company that only nerds cared about. Since then, Marvel Cinematic Universe films have grossed $22.5b in total box office receipts (including the single biggest movie of all-time), for an average of $2.2b annually. Disney earns about two dollars in parks and merchandise revenue for every one dollar earned from films (discussed on our Disney, Plus episode). Therefore we estimate Marvel generates about $6.75b in annual revenue for Disney, or nearly 10% of all the company’s revenue. Not bad for a set of nerdy comic book franchises…

Marvel
Season 1, Episode 26
LP Show
1/5/2016
January 5, 2020

9. Google Maps (Where2, Keyhole, ZipDash)

Total Purchase Price: $70 million (estimated), 2004

Estimated Current Contribution to Market Cap: $16.9 billion

Absolute Dollar Return: $16.8 billion

Morgan Stanley estimated that Google Maps generated $2.95b in revenue in 2019. Although that’s small compared to Google’s overall revenue of $160b+, it still accounts for over $16b in market cap by our calculations. Ironically the majority of Maps’ usage (and presumably revenue) comes from mobile, which grew out of by far the smallest of the 3 acquisitions, ZipDash. Tiny yet mighty!

Google Maps
Season 5, Episode 3
LP Show
8/28/2019
January 5, 2020

8. ESPN

Total Purchase Price: $188 million (by ABC), 1984

Estimated Current Contribution to Market Cap: $31.2 billion

Absolute Dollar Return: $31.0 billion

ABC’s 1984 acquisition of ESPN is heavyweight champion and still undisputed G.O.A.T. of media acquisitions.With an estimated $10.3B in 2018 revenue, ESPN’s value has compounded annually within ABC/Disney at >15% for an astounding THIRTY-FIVE YEARS. Single-handedly responsible for one of the greatest business model innovations in history with the advent of cable carriage fees, ESPN proves Albert Einstein’s famous statement that “Compound interest is the eighth wonder of the world.”

ESPN
Season 4, Episode 1
LP Show
1/28/2019
January 5, 2020

7. PayPal

Total Purchase Price: $1.5 billion, 2002

Value Realized at Spinoff: $47.1 billion

Absolute Dollar Return: $45.6 billion

Who would have thought facilitating payments for Beanie Baby trades could be so lucrative? The only acquisition on our list whose value we can precisely measure, eBay spun off PayPal into a stand-alone public company in July 2015. Its value at the time? A cool 31x what eBay paid in 2002.

PayPal
Season 1, Episode 11
LP Show
5/8/2016
January 5, 2020

6. Booking.com

Total Purchase Price: $135 million, 2005

Estimated Current Contribution to Market Cap: $49.9 billion

Absolute Dollar Return: $49.8 billion

Remember the Priceline Negotiator? Boy did he get himself a screaming deal on this one. This purchase might have ranked even higher if Booking Holdings’ stock (Priceline even renamed the whole company after this acquisition!) weren’t down ~20% due to COVID-19 fears when we did the analysis. We also took a conservative approach, using only the (massive) $10.8b in annual revenue from the company’s “Agency Revenues” segment as Booking.com’s contribution — there is likely more revenue in other segments that’s also attributable to Booking.com, though we can’t be sure how much.

Booking.com (with Jetsetter & Room 77 CEO Drew Patterson)
Season 1, Episode 41
LP Show
6/25/2017
January 5, 2020

5. NeXT

Total Purchase Price: $429 million, 1997

Estimated Current Contribution to Market Cap: $63.0 billion

Absolute Dollar Return: $62.6 billion

How do you put a value on Steve Jobs? Turns out we didn’t have to! NeXTSTEP, NeXT’s operating system, underpins all of Apple’s modern operating systems today: MacOS, iOS, WatchOS, and beyond. Literally every dollar of Apple’s $260b in annual revenue comes from NeXT roots, and from Steve wiping the product slate clean upon his return. With the acquisition being necessary but not sufficient to create Apple’s $1.4 trillion market cap today, we conservatively attributed 5% of Apple to this purchase.

NeXT
Season 1, Episode 23
LP Show
10/23/2016
January 5, 2020

4. Android

Total Purchase Price: $50 million, 2005

Estimated Current Contribution to Market Cap: $72 billion

Absolute Dollar Return: $72 billion

Speaking of operating system acquisitions, NeXT was great, but on a pure value basis Android beats it. We took Google Play Store revenues (where Google’s 30% cut is worth about $7.7b) and added the dollar amount we estimate Google saves in Traffic Acquisition Costs by owning default search on Android ($4.8b), to reach an estimated annual revenue contribution to Google of $12.5b from the diminutive robot OS. Android also takes the award for largest ROI multiple: >1400x. Yep, you can’t eat IRR, but that’s a figure VCs only dream of.

Android
Season 1, Episode 20
LP Show
9/16/2016
January 5, 2020

3. YouTube

Total Purchase Price: $1.65 billion, 2006

Estimated Current Contribution to Market Cap: $86.2 billion

Absolute Dollar Return: $84.5 billion

We admit it, we screwed up on our first episode covering YouTube: there’s no way this deal was a “C”.  With Google recently reporting YouTube revenues for the first time ($15b — almost 10% of Google’s revenue!), it’s clear this acquisition was a juggernaut. It’s past-time for an Acquired revisit.

That said, while YouTube as the world’s second-highest-traffic search engine (second-only to their parent company!) grosses $15b, much of that revenue (over 50%?) gets paid out to creators, and YouTube’s hosting and bandwidth costs are significant. But we’ll leave the debate over the division’s profitability to the podcast.

YouTube
Season 1, Episode 7
LP Show
2/3/2016
January 5, 2020

2. DoubleClick

Total Purchase Price: $3.1 billion, 2007

Estimated Current Contribution to Market Cap: $126.4 billion

Absolute Dollar Return: $123.3 billion

A dark horse rides into second place! The only acquisition on this list not-yet covered on Acquired (to be remedied very soon), this deal was far, far more important than most people realize. Effectively extending Google’s advertising reach from just its own properties to the entire internet, DoubleClick and its associated products generated over $20b in revenue within Google last year. Given what we now know about the nature of competition in internet advertising services, it’s unlikely governments and antitrust authorities would allow another deal like this again, much like #1 on our list...

1. Instagram

Purchase Price: $1 billion, 2012

Estimated Current Contribution to Market Cap: $153 billion

Absolute Dollar Return: $152 billion

Source: SportsNation

When it comes to G.O.A.T. status, if ESPN is M&A’s Lebron, Insta is its MJ. No offense to ESPN/Lebron, but we’ll probably never see another acquisition that’s so unquestionably dominant across every dimension of the M&A game as Facebook’s 2012 purchase of Instagram. Reported by Bloomberg to be doing $20B of revenue annually now within Facebook (up from ~$0 just eight years ago), Instagram takes the Acquired crown by a mile. And unlike YouTube, Facebook keeps nearly all of that $20b for itself! At risk of stretching the MJ analogy too far, given the circumstances at the time of the deal — Facebook’s “missing” of mobile and existential questions surrounding its ill-fated IPO — buying Instagram was Facebook’s equivalent of Jordan’s Game 6. Whether this deal was ultimately good or bad for the world at-large is another question, but there’s no doubt Instagram goes down in history as the greatest acquisition of all-time.

Instagram
Season 1, Episode 2
LP Show
10/31/2015
January 5, 2020

The Acquired Top Ten data, in full.

Methodology and Notes:

  • In order to count for our list, acquisitions must be at least a majority stake in the target company (otherwise it’s just an investment). Naspers’ investment in Tencent and Softbank/Yahoo’s investment in Alibaba are disqualified for this reason.
  • We considered all historical acquisitions — not just technology companies — but may have overlooked some in areas that we know less well. If you have any examples you think we missed ping us on Slack or email at: acquiredfm@gmail.com
  • We used revenue multiples to estimate the current value of the acquired company, multiplying its current estimated revenue by the market cap-to-revenue multiple of the parent company’s stock. We recognize this analysis is flawed (cashflow/profit multiples are better, at least for mature companies), but given the opacity of most companies’ business unit reporting, this was the only way to apply a consistent and straightforward approach to each deal.
  • All underlying assumptions are based on public financial disclosures unless stated otherwise. If we made an assumption not disclosed by the parent company, we linked to the source of the reported assumption.
  • This ranking represents a point in time in history, March 2, 2020. It is obviously subject to change going forward from both future and past acquisition performance, as well as fluctuating stock prices.
  • We have five honorable mentions that didn’t make our Top Ten list. Tune into the full episode to hear them!

Sponsor:

  • Thanks to Silicon Valley Bank for being our banner sponsor for Acquired Season 6. You can learn more about SVB here: https://www.svb.com/next
  • Thank you as well to Wilson Sonsini - You can learn more about WSGR at: https://www.wsgr.com/

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Transcript: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

David: Welcome LPs. Today, we're doing an episode with the co-founder and CEO of a super interesting company. One that's particularly timely, given our recent main show episode on TikTok, Steven Galanis of Cameo.

Cameo is an online marketplace where fans can book personalized video shoutouts from their favorite celebrities. As I'm sure, Steven will talk about, it is the digital selfie. They have over 10,000 famous actors, athletes, and influencers on the platform, from Flavor Flav, Denise Richards, to Brett Favre, who has been very, very active on the platform

Ben: The big three.

David: Yeah. You can book right now to say anything you want on video for a price. Unless you think that this is just silly, or frivolous, or ridiculous. Guess what? It turns out, there are a lot of people out there who want this service and are willing to pay for it. Cameo is doing of millions of dollars in bookings, and earlier this year raised $50 million from Kleiner Perkins, Lightspeed, Spark, Bedrock, and others. Welcome, Steven, to the show. Thanks for joining us.

Steven: Thanks for having me.

Ben: It's funny, the first time I heard about this, my first instinct was, “Will anybody really do this on the talent side?” My second instinct was, “Wait, how was this never been done before?” It took me all of 10 minutes to flip from like, “No, come on,” to like, “It is completely obvious, how is this not in the world already?” I'm so curious to hear about your strategy of scraping it together and latering up from whoever you started with, talent-wise, to get the pretty amazing people who are on the platform today.

Steven: From our side, I would actually totally agree with your assessment. When we started the business, I had a pretty absolute conviction that there would be an insatiable customer demand for this. From the first time I saw a cameo, or what we today we call Cameo, I really believed that this would be something that basically any fan would want. The question was always, “Could we build repeatable supply?” So in our marketplace, just like any other marketplace, the concept of the chicken and the egg problem, we believe we needed to attack the supply side first for two reasons.

Number one, the thing that's cool about our supply versus the supply at Uber, Airbnb, Grubhub, DoorDash, or any of these, our supply are famous and literally can drive their own demand. In our marketplace, supply begets demand, because there are fans. There are hundreds of thousands or millions of people that follow them on Instagram, on Twitter, on TikTok, and YouTube, are the most likely people in the world to book them. We fundamentally believe that, if we could build repeatable supply, we would have an opportunity to match demand pretty endlessly.

To answer your second question, why has nobody done this before? Technologically, there were a couple of things that needed to exist before Cameo could exist. Snapchat was incredibly important (probably) to our development because prior to Snapchat, I don't think many people on earth had ever taken a selfie video before. Snapchat pioneered that format. Again, Instagram Story probably took that to the next level, but you needed the video selfie to become a thing before a Cameo could become a thing.

As we got into the business, when we started raising our friends and family round and our angel round, we actually found out that there were companies that did try to do this. The problem was they actually started with A+ list talent and the entry level price point it was really high. There was one I remember that had Dwayne Wade, maybe even Lebron on it, but the price for them were $2500.

Ben: Yes, especially together, I hear they're pretty expensive to do anything.

Steven: Yeah. We sold our first cameo, I believe it was $1. We're selling $1and $3 cameos. We always believe that if we can build liquidity in the marketplace and give people a great experience for $1 or $3, in the future, we can always scale up market, but we believe that if you start to high there’s only so many people in the world that could actually do it. For us, it was all about, how do we price these in a way that makes them affordable to anyone, but also still special, accessible, and rare.

Ben: Give us a sense of a couple of example price points today for people who are like, “Okay. You mentioned some of the celebrities earlier, David.” Steven, at the top of your head, 2–3 people that are on there today, what they cost?

Steven: Probably the most famous example, Snoop Dogg is $420. I don't know how much Snoop Dogg should be? That to me is the perfect price for Snoop Dogg. I'm a big sports guy, so for me, that was always a great thing. Lance Briggs, along with Brian Urlacher, the anchor of the Bears' defense back in the day, he's $55. I look at all the time on Cameo and I can't believe the great value for a lot of these people.

I think the Denise Richardses of the world, Charlie Sheens, most of them found their price points somewhere to $250 range. Again, for a lot of these people, they’d seen so inaccessible prior to Cameo, it's actually a great price point. We always talk to our talent and tell them, “Don't worry about what you think your time is worth. Worry about what your fans could afford.”

David: As we're researching to talk to you today, there's actually a really, really important underlying trend behind all these, which is not just technology and not just a marketplace and payments. This speaks to the timing of why this worked for you and didn't work before, is that somewhere in the last three years, the relationships that celebrities and influencers had with their audience has completely changed. I've heard you talking about this on other [...]. I want to dive into this as we go.

Before we get to double click on that theme, tell us about what you did before Cameo? You had a decently, non-traditional background for starting a company. Also, you guys are based in Chicago and you're building a big social app video company in Chicago. Tell us how all these came to be.

Steven: My entrepreneurial journey started in college at Duke. While at Duke, I happen to be the first grade of students that had my entire college career on Facebook. This was still when the network was closed.

David: 2009?

Steven: I was in 2010. I remember when I was in high school, you used to need to have a .edu address to even get on the network. I remember getting into University of Illinois and putting the deposit down just to get the email so you could join Facebook. That was a huge thing. Why is that important? While at Duke, I, along with this guy, Zach Maurides, who is now the CEO of a really successful company called Teamworks out on the East Coast, Zack and I started this Facebook group called Spark Entertainment. By the end of our four years in college, we had over 17,000 students in this Facebook group.

David: Not just Duke students?

Steven: It started with Duke, but then it got Northfield. That triangle is really close, so NC State, [...], North Carolina. It started with us throwing Wednesday night beer pong at the biggest bar on campus, Shooters.

David: I've been to Shooters. It was awesome.

Steven: If you're ever there on Wednesday night, my biggest claim to fame in my college is, I started Wednesday night beer pong. I was the founder of that. That ended up building network effect business for the first time. When we had that group, we started all different types of businesses. We had a college storage business. At the end of the semester, only 8% of Duke’s students are in state so they all need to pack their [...] up and get it to the next place. We started that. We had a hotdog stand. We had a t-shirt stand. We had a DJ booking business. We had an event booking business.

I really learned that, if you could a network effect business and you could get critical mass for whatever demographic you're looking for, there are always other things that you could do to sell with that, so we built a really, really lucrative business there.

After Duke, I was an options trader. I traded on the floor of the Chicago Board of Trade for 4–5 years. While doing that, my uncle is a movie producer and in 2012, he had a bunch of big movies to come out—Lone Survivor, Rambo, and Conan. They were just back-to-back-to-back. All the guys in the pit were like, “Why are you here with us and why aren't you in LA be a movie producer?” I did what any scrappy entrepreneur does. I started raising $25,000 a pop from all the guys who are around me. We started investing in movies and television shows. While doing that, I met Martin.

Ben: How does one go about doing that? I know how you write a $25,000 check into a C Corp startup. How do you decide, “I'm going to invest in this movie.”

Steve: The thing that’s cool is, my uncle always knew that I had an interest in doing it. He called me up one day and was like, “Hey Steven, I'm producing this show called Safe, it's going to be Baywatch in 2013. Imagine Baywatch, Greg Bonann, who is the original founder of baywatch, with drones and GoPros. What would Baywatch look like in 2013?”

All the guys like the idea, so I was able to go through him. He gave me a small allocation. He's like, “If you can raise $500,000 or $250,000 I'll give you a producer credit on the show.” Within 24 hours, I was oversubscribed and we ended up taking down either $500,000 or $1 million allocation. I don't remember what it was.

The show is getting filmed at Cape Town, South Africa. I took my family down there. We got to go on set. Dolph Lundgren was like the David Hasselhoff, I got to meet Dolf and all that. It was very, very cool situation.

Anyway, I met Martin, my co-founder there. That was one important part of the story. While trading, me and Martin kept doing more of these deals and because my uncle was a producer, we had insider access to deals that nobody else could get into.

There was a lot of demand in Chicago to invest in movies because they don't see that type of deal flow. That was really interesting. That's where I learned that while Chicago doesn't necessarily have these celebrities walking around, there’s a lot of FOMO because in New York or LA, they probably have it. Fast forward, that's why we're able to do so well raising early angel and Series A money here versus going to the West Coast.

David: You guys have a huge LA presence. If you think that Cameo should be in LA, but you’re in Chicago. I'm just thinking and listening to you, the demand side of the platform, the audience, the people that are buying or requesting cameos, they live in Chicago, right? They don't live in LA.

Steven: We're close to our customers here, no question. My two co-founders are in LA. They've  always been there. I was the crazy one in Chicago by myself. Just to continue the story, I've got a really cool opportunity when a college buddy of mine reached out and said, “Hey, LinkedIn is hiring for this role. They're basically selling this product sales navigator in the finance. Chicago is going to be the next office.” I got to be the first hire in the Chicago office to sell this product  in the finance. That gave me my first—

Ben: You went from being an options trader to then going into sales. This was a sales job for LinkedIn.

Steven: For sure, yeah. I've never sold anything before. I probably had some natural sales skills, but LinkedIn gave me this opportunity to see what tech was all about, which was really fascinating.

I remember as a 21 year old when I took my first trading job, walking out on the floor of the [...] for the first time. It was like a dinosaur graveyard. There used to be 40,000 people there and all these different pits. Really, it was down to two pits. The SPX, which I traded in and the spider pit. Those are the only two pits in the [...]. We’re the only two pits in the world that were three pits that were still going.

As a 21 year old, I literally remember having the thought saying, “My dream is to be the last great options trader in Chicago.” That's such a weird thing. No one attacks like, “I want to be the last great entrepreneur.” The writing on the wall was probably there for the first day I walked in.

The more time I spend around the guys, it was so clear that everybody had a fixed mindset. It was all about, “Man, you missed the good times. You should have been here in the 90s, you should have been here in 01, you should have been here 9-11, the flash crash, all these stuff.” Everyone was talking about how everything great that has ever happened in trading was back in the day.

When I got to LinkedIn, it was amazing because everybody was talking about it like, “Look what we could become. Here's our mission, to connect the world’s professionals and make them more successful.” That was such a huge, big, ambitious thing. For me, it was really, really exciting to get to LinkedIn.

Ben: Were you there around the IPO?

Steven: I got there two years before the Microsoft transaction. I left a couple of weeks after the Microsoft purchase. My very first day on LinkedIn, Mike Gamson, who is now the CEO of a company called Relativity, but at the time was the SVP of Sales in LinkedIn, gets on stage in Chicago and all the new hires worldwide are on Zoom all across the world.

The first thing he said 9:30 AM on my first day, “Welcome to LinkedIn, two years from today, none of you will have the job we just hired you for. We know that. We support that. We literally have the profile data to prove it. Your job in the next two years is to figure out what your dream job is. Our job as a company is to make sure that you get the skills that you need to get your next job. All we ask is, when you're ready to leave for another job internally, or externally, you recruit someone better than yourself to take your place.”

David: That’s so different.

Steven: That was mind blowing to me. I never knew anything about culture. I didn't know about diversity. When I was trading, I didn't work with any woman for the first five years of my career. Suddenly, you have people like Mike Gamson and Jeff Weiner, the leaders at LinkedIn, talking about how important it was to balance out the gender bias and the upper levels in management at LinkedIn. I just wasn't ever exposed to that culture and values. These were not things that we talked about in trading. It was so amazing to have that experience at the time that I did because really LinkedIn was the formative time in my career.

David: It's crazy. All the things that come together to start Cameo. You have literally options trading, market making experience. You've got all your entrepreneurial DNA from Duke and then hustling and getting into this movies, then you've got the Chicago connection.

Steven: The best part are my co-founders. We didn't even talked about them.

David: Right. That’s why I was going to flip to you. Tell us about Martin and Devon.

Steven: I first met Martin during the movie production stuff. After a few years, when I went to LinkedIn, the deal flow dried up. He had this crazy idea, that if he became an NFL agent, he could maybe find the next Rock, by tying to find big personality guys that he can turn into action stars and put them in my uncle’s movies. The first guy he signed was this guy Cassius Marsh, who played for the Seattle Seahawks.

David: I was going to say, that's how Cassius got in his [...].

Steven: That's how we got there. For Martin, I had the guy that was in NFL agent and movie producer. He just knew talent. Devon is my other co-founder who I went to Duke with, Devon and his best friend Cody. Devon was an engineer at Microsoft, PM in Microsoft. Cody was an engineer at Apple. After two years of working in Silicon Valley and Seattle respectively, they both hated their lives, hated their jobs, quit, and then spent a year travelling the world and blew up on this thing called Vine.

David: Yeah, we talked a lot about Vine on our TikTok episode.

Steven: Yeah. Devon ended up with 960 million loops. His best friend Cody, who’s now Cody Ko, one of the biggest YouTubers on earth.

David: This is Cody Ko, this is not just any Cody.

Steven: Cody had 3.6 billion loops of Vine. Literally, my CTO and my co-founder was a Vine star. Actually, someone that was famous enough to be on Cameo, that if I had built it, I would have wanted him to be on.

David: And he’s your CTO.

Steven: He’s our CTO. Who better in the world to build this product than this team? You have the entrepreneurial marketplace DNA, you have the talent person, and you have this Vine star. If Devon was as famous as Cody Ko, then he probably would have been too famous to not care.

David: He would have been like, “I’m done writing code.”

Steven: If Martin was already a manual, he would have been too busy rapping the rock and rapping that no one ever was taking the draft, that he won’t have time to build Cameo.

Ben: Right. Timing is everything. Everyone is at the right place in there on the rise.

David: And if you had joined the CBOE a couple years ahead of time, you would have been too rich to care. You would have just been financing [...] yourself.

Steven: The thing that was fun was they always talk about product/market fit, but I really think that this team had the correct founder/market fit. There's probably 27 other teams in the world now copycatting and trying to do what we're doing. I have met all of them. The truth is, they're always missing something. They might have the product, but they don't have the talent DNA, they might have the talent DNA, but they're outsourcing the product and they're never going to be able to compete.

One of my favorite investors who I met at Duke earlier this year, talks about for founding teams and consumer, the most important thing you need in the founding team is, that you have each three of these people: the hacker, the hustler, and the hipster. If you're missing any of them, it's not going to work. Sometimes that can be your one person, sometimes two out of one, but it's so important that there's not critical overlapping skill sets. From a very early time, I let Martin take the reins on the talent side of business, I let Devon take the reins on the tech, and then I did everything in the middle, I focus on building a company.

Ben: Were you able to take advantage of the distribution from Cody, or from Devon when you were getting off the ground? Is there something that happened in getting users on the platform, or where getting the word out, where you're like, “Oh yeah. If not for that, we would not have found [...]”

David: We started actually with Cassius, not with Devon, or Cody.

Steven: Yeah, let's talk about that. It's funny, because people look today at Cameo as like, “This thing went so fast,” but it took us six month, from when we had the idea to even sell our first one. When we launched, we always had high conviction that, because there's supply, had follower and was famous, if they promoted on Twitter, on Instagram, they could drive the initial users to our platform and that's how we could get the marketplace going.

I remember the day that we launched. It was a Tuesday night, it was sometime in March of 2017. I was down in Scottsdale, Arizona, trying to get the second talent on who is a guy named Jason Kipnis that played for the [...] for the Indians, who went to my rival highschool (side note that I have kept for a long time). We were down there at dinner with Kip, like trying to convince him to get on. Devon and Martin were in the [...]

David: What's your pitch to Kip at this point in time like, “Hey man, I got this thing. You're going to make more money, or you're going to have fun.”

Steven: He's an all star. He's on top of the world at that time. I was just hoping Kip would just put his name on it and, “Hey guys, now there's an allstar just gave some credibility.” I remember being down there. Martin, Devon, and Cassius Marsh were at Devon’s apartment at Venice Beach. It was about 10 o’clock at night, we had this original video that was the one that gave us the idea. Cassius put a tweet out and he said, “For $20, I'll make a video like this for anyone you want.” It was a sample of what we now called Cameo. We were called powermove.io at that point.

David: That was the problem clearly, it was the name.

Steven: Cassius sent the Tweet out. I remember, the guys have the Google Analytics going, there’s one dot at Scottsdale and one dot in Venice Beach. We sent the Tweet out, we expected there would be this huge rush of people coming to the site. Literally, it was crickets, nobody came.

In fact, not only that nobody would come, but people started talking shit to Cassius and saying, “How cheap of you to be selling out for $20. How much is this company paying you?” He had just given us $25,000 to help build it. Now he's mad at us and it's a disaster. Martin’s only NFL client is now out money and he's so mad at him.

David: This is your Jerry Maguire moment right here.

Steven: He storms out. Martin is pissed at me and Devon, “What did you guys do?” I'm just like, “Maybe Google isn't working.” I remember, I signed off the site and the dot at Scottsdale went away. Then I signed back on and it's like, “No, not Google.”

Ben: It's not Google.

Steven: No, Google is not working. Cassius and Martin storm off. Me and Devon just have speaker phone, just trying to riff and we're like, “Maybe Tuesday night at 10:00 Pacific Time wasn’t the best time to do it, maybe we should pick a different time.” Then all of a sudden, as we're talking, this dot pops up in Renton Washington, which is where the Seahawks facility is in. Now we're like, “Okay, cool. Someone’s on the site.”

The day Cameo launched, you could imagine, today there's like 20,000 people, there's all these videos, there's reactions, there's just stuff to do. There was nothing to do on the site. The MVP was a Google form, “What's your name? Who do you want? Want do you want them to say? Put your credit card in.”

David: This dot is just staying there for probably four minutes, but it seemed like four hours.

Ben: What are you doing on the site?

Steven: I remember just being at the edge of the table looking like, “What's going to happen? What's going to happen?” All of the sudden, the dot just goes away. We were so dejected and we're like, “[...], that one person that came tonight didn't even want it. Maybe, I shouldn't have left [...] until it sold some.” It was just so clear that we screw this up.

Then my phone vibrates, then I get a DM from this guy and he’s like, “Hey, Cassius Marsh is my daughter’s favorite person in the world. She's turning 16 on Thursday. I'm trying to book him to say happy birthday to her, but the payment process is not working.” I'm like don't worry, I tell him, “Just tell me what to say, don't worry about it, we’ll get it done.” I texted it to Martin and Cassius. They don't want anything to do with me at that point. They're mad at me. We don't get the video done for another week. We missed the girl’s birthday. Finally, Martin gets Cassius to do it and he's like, “Hey Reese, it was Cassius. ” It was the worst Cameo of all time. I was so embarrassed. I didn't even want to send it to the dad, but we got it.

I remember the next week, I was down in Miami, at the Miami Open trying to get someone on, I remember DM-ing this dad and just be like, “Well, that's over, but I threw it out there into the world. Send it back.” Two hours later, I get a DM and the dad was like, “Oh my God, this was the greatest thing ever.” He sent a video of her watching it. The daughter literally started crying, she was so happy.

That, it was like, I knew the second we had the first one, I'm like, “If we can make people feel like this, as long as we could keep Cassius happy and have him make more, or whoever. If we can make one person happy like this, we can make thousands and millions and hopefully billions of people happy like that.”

David: This is what I want to talk about, the changing relationship. If I'm Cassius, or anybody, the money’s great, but I don't think it's necessarily about the $20, or $420. It's about this person, loves me and my persona so much and in 10 seconds of my time, I can make them so happy they’re crying. I now have this super deep relationship in, like I've cemented them as my fan for life. Then, they're going to talk about this, they're going to amplify me, and it just drives my own person flywheel here, right?

Steven: That was absolutely the pitch that we're trying to sell, but until we had a reaction video, we couldn't really say it. When I was getting Cassius on, we're purely talking about the economics. At the time, Cassius was making $1 million a year. I told Cassius, “If you'd take $1 million, divided by 2000 hours in the work week, divided by 60, you make $6.25 a minute getting your brain beaten in the NFL. If you are charging $20 a video, you do two of them, or three of them per minute, you can literally make 6X or 7X when you're making the NFL per minute by doing these at $20.” That Jedi mind trick math built liquidity in a gap people that start at a very low price point.

David: The irony is, he should have taken all of his NFL earnings and just put it into buying equity in Cameo.

Steven: His $25,000 grand check will hopefully do pretty well for him. But, I got to say, that started this. We started with these pro-athletes, we started with all these guys. The first people we added were not people you launched a site with. There's thousands of people on earth that could have probably build a better opening roster to us. We started just with pro-athletes. We really thought we needed to be verticalized, we need to be focus to start off. We always believed that more people could be on this. We thought that problem was uniquely that only the top athletes are able to get endorsement deals.

There was a documentary called Broke that came out from ESPN, that [...] many of you guys might have seen. In that, there was a crazy stat that said 80% of NFL players go broke five years after playing their last game. The average career is only 2½ years. These people are so famous, but then, they're not really prepared to do anything after football and it's really, really tough for them because they've got a standard of living.

Martin went to a thing and saw Aaron speak, I remember in 2016. Aaron was speaking at the University of Miami, he said that, “For the average pro-athlete, they make 92% of all their lifetime earnings before the age of 28,” which is crazy. I don't know, I'm 32 now, to think that for the rest of the next 50 years of my life, I'm going to make less money that I made. I'm going to make a tenth of what I made from the years before that, pretty crazy. We really felt that's where the pain point was.

Then, I remember Devon, we had our daily video chat. Devon is like, “Cody and people like Cody might do good on this.” Cody, for those of you who don't know, Cody Ko his real name, who had 3 million YouTube followers. We're like, “Okay cool. Sure, yeah. Let's try Cody and see what happens.”

Devon and Cody, I remember we’re driving from Calvary, where Cody’s from, to Cody’s cabin in Montana. They're doing this long drive. They decided to put Devon on for $1 and Cody on for $3. Devon and Cody were talking about how they have so many DMs on Instagram from all these people that asked for this, “Hey, my little sister loves you. Can you wish her a happy birthday.” What they started doing, they said, “Hey I'm on this new thing, for $1 I'll wish you happy birthday. For $3, I'll make fun of your friend.” They kept opening their DMs and doing it. Then people would be like, “That's the best dollar I've ever spent. It's the best $3 I've ever spent.”

Ben: [...] taking this existing behavior and productizing it.

Steven: Exactly. Then, we started thinking, “Okay, Cameo is a way to monetize your DMs.” That was the second pitch that we would talk about early. I remember, Cody put a Cameo that we had booked for him from Thaddeus Lewis, who was one of my college roommates, who was a career backup NFL player.

Basically, Devon is a blond and Cody is a brunet, they made this YouTube video where Devon and Cody were going to switch hair colors. Cody was scared to go blond. We booked Thad Lewis to pump Cody up to look like a blond. He played it in his video, at the end he was like, “If you want something like this, I'm on it. Come to this site.” That's the first time the site really blew up.

Ben: Did that have the same problem that you had originally with Cassius, where people thought, “Hey, you're selling out. I can't believe you're asking me for money for this. This seemed stupid. This seemed petty.” Has that gone away?

Steven: I think, at least for Cody, the influencer culture is literally about selling. I wouldn't say it's literally about selling out, but fans of influencers are always buying whatever they're selling like their new merch line, their phone cases, their meet and greets, all that stuff. And Patreon by this point has already been established.

For digital creators, fans were already used to supporting their people because the economics that YouTube screwed up. The top 3% of creators make 97% of all the money on the platform. Even the last study I saw about this (this is third party data), the last I've seen, even among the people that are making money, the median earnings on YouTube, even that top 3% is $16,000–$17,000.

David: It's such a power loss.

Steven: They're making all of their money basically by doing brand deals, by doing other stuff, by selling merch, and by doing meet and greets. Fans are just used to supporting them. Even for athletes, they sign autographs, they do shows, people paid it, this isn't free. We're not taking a new behavior, we're just enablings something that was impossible and making it possible.

David: Were you guys influenced by what was going on in China, as you were starting all these and building all these? Or is it parallel innovations? I'm referring to what we talked about on the TikTok episode was going on in [...] and then ultimately TikTok doing all these live sharing platforms in China where direct monetization is the business model. 

Steven: We had no idea what was going on in China. We weren’t influenced by it. To be honest, we don't even really pay attention to what's going on there that much. Outside of when we've had investor meetings, series B, series A, some firms that have deep expertise of what's going on over there will talk about the parallels, but we're focused on what's in front of us.

We see this, we know in this market, in entertainment and celebrities. If you were in the US, you're going to win the whole world. At the end of the day, we're not very distracted by other stuff that's there. Now that we've made some hires like, Stefan our CMO and Head of the International, ran global marketing at TikTok, he literally knows exactly—

David: That's so funny, that's the same approach that Musical.ly before TikTok took was, “Hey, if we win US, we're going to win the world because US drives the culture.”

Steven: Totally. We saw that. Stefan was employed at 16 in Musical.ly. He knew what that took. He watched that evolve. He knew that if he won the African-American culture and the rappers were on it, that became a cool thing, and you're going to win the US.

We’re following a very similar playbook on ours. There were two big trends that we recognize way before anybody else, at least in the real talent business. Because the platforms like YouTube, TikTok, Vine before it, and Instagram, there are more famous people being manufactured every single day. People today are more famous than they've ever been.

I remember even thinking like Zion Williamson. When he came in to Duke, he had 2.1 million followers on Instagram before he played his first game. One of my best friends started for the New York Knicks and was a captain there. Before he started at Duke, one national championship, played on the Knicks as a starter and he had 47,000 followers. People are more famous now than they have ever been. There's more famous people being manufactured every day.

The market, especially the big agencies, they really underprice the power of these influencers because the whole culture is changing. Five years ago, Will Smith is the highest paid actor in Hollywood, but have never been on TikTok, or never been on YouTube. 

David: Now he’s all over TikTok.

Steven: And now he's on it because the demands of fans are changing. They need accessibility. You can't be in your ivory tower or behind the red velvet rope in this town anymore. This is why the people that are most in-demand at our platform, it wasn’t Justin Beiber, Beyonce, or Kanye, or Jay Z. 

David Dobrik who’s a vlogger that you guys may or may not know, was the one we knew about two years ago, that was getting requested more than anyone we didn't have. People would talk to me about Lebron and [...]. We had the data who people are searching for. Steph Curry was the most searched for athlete in the world. He was only number 30. If I showed you the list of the people ahead of him, I bet you couldn't tell me who ⅔ of them were. That was very eye-opening for us.

Ben: It's the same way that Amazon purportedly does private label products. They have the data on what people are searching for, so they know what products to make. Similarly, you're like, “Yeah, I don't have to buy into this one person making a hot list and choosing what the price is to come speak at your event. We have the data.”

Steven: The thing is, even traditional Hollywood, in many cases still don't get it. I had an A+ list actors representative reach out to me about three months ago, after our Series B. He's like, “My client loves Cameo. He's obsessed with it. He’d like to become the official spokesperson. All he's going to need is 20% of the common.”

David: We don't need a spokesperson. We are the spokes person.

Steven: He’s like, “For 20% of the common, he will be the spokesperson.” I'm looking at what Cameo’s worth right now, I'm like, “Dude, there’s no [...] way.” Not only that, he wasn’t even willing to come on the platform. I'm like, “We've never given anybody equity. We've never paid anyone to be on it. We've never paid anybody to promote. We're not going to change it for you. We've gotten 20,000 other people to agree to this. Yes, you would kill it on here, but if you're not even going to be on, why are we even talking right now?”

 David: That just illustrates the whole world not getting it.

Steven: But it's not strange because ultimately, if you look at what's working in consumers, especially in the fashion space, even in apparel, it's so hard to build a D2C brand today that's pairing up with Kylie. Kim literally makes something, become a billion dollar business overnight. I think the direct-to-consumers celebrity-based model, which Nicole Quinn at Lightspeed, who let her series A and is on my board, is probably the best in the world at doing right now, between Sophia, Girlboss, Haus Labs, and Lady Gaga’s new thing.

On this company, it's so hard to build an organic following that was a brand, but pairing with a celebrity is so important. Our big thing at Cameo is that, basically, we are a marketplace of 20,000 different direct-to-consumer brands, but they're all the talent are just selling themselves.

Ben: This is a really important thing. Right now, they're just selling themselves, but I'm pretty sure D2C and influencer are skating toward the same things. These influencers are brands in the same way that these single products companies are brands. They're both trying to build a new challenger brand that displaces the incumbent. Whether they're selling themselves, their time, their availability, or whether they're selling you a consumer packaged goods, we're going to start to see these things really merge and like we've already seen with Glossier and Goop, the things that have the hero founder behind them, whether they're famous for the company, or famous before the company. That is an enormous case of [...].

David: I’m sure Emily Weiss would [...] on Cameo, if she were on.

Steven: Now, we're getting more CEOs. [...] on [...] from Foursquare. Founders and CEOs are getting on because if I'm a seed-level founder, or I'm just getting started and hearing in from Alexis, we have a lot of VCs on. You can go to book any of our VC investors. I make them join Cameo.

Ben: They should be the lowest price.

Steven: They're like, $5 for charity. It's like, “Hey, here's my idea,what do you think of it?” We're going to have all types of different people. There’s the Greek Orthodox Archbishop of Chicago on Cameo. He does prayers for charity. There's so many different—

Ben: You guys are like a collection plate.

Steven: You guys mentioned Cameo’s first celebrities, there are animals on, there's an Instagram famous pig named Esther that did $20,000 in bookings a couple months ago. The MIT Robotics Lab or one of the big robotics lab just put a robot on Cameo. We have our first non-living thing on Cameo. It's amazing. 

David: Wow. That's so amazing.

Ben: I'm thinking more about the value prop as you pitch the talent to come on. On a percentage basis of bookings that flow through your system, how much is driven by that talent directly and how much is the audience, that is, Cameo’s audience that ends up directed to them?

Steven: At this point, it's very, very much Cameo’s audience. It's actually funny, there's a founder that's working on a complementary business, very early stage. He's done a really good job getting Hall of Fame baseball player, like older-level players. He's got this huge names. He was just talking about the frustrations of getting them on, but these guys don't have a big social following.

He really needs to bring the demand, which was why us getting the YouTubers and the Viners early was so important because those people knew how to promote themselves. Cody might tweet and then someone would see an athlete they liked and that built the network effect. But at this point, the vast majority of bookings are now coming directly from people going to cameo.com and browsing and finding.

That’s why things like or search algorithm are becoming even more critical because today, our algorithms are mostly based not by how famous they are, but it’s how good are they making cameos. This algorithm goes basically by how many have you done, how quickly did you do them, what’s your all time completion percentage, what’s the average turnaround time, and then your customer ratings. It’s a function of that.

Our customers are coming to cameo.com and we’re trying to—

David: Your search algorithm is like Airbnb’s search algorithm or Rover’s search algorithm?

Steven: There’s good and bad to that. The bad is that people that are new to this site, unless they pop right away, they’re going to get buried by 20,000 others. But I also think our early adopters should get a reward, so for us, we’re constantly tweaking the algorithm. Now, we’ll make a tweak and then we’ll hear about it the next day because nobody ever comes to us and says, “Oh, man. This is so great. You’re new algorithm made me more money,” but if people’s bookings come down a little bit because we make a tweak, “Argh! You just killed my business.” But it’s like, “You don’t have a business unless we’re here.”

Ben: It’s so interesting. You bootstrapped it using the audience of your early influencers and you had a strategy by using influencers rather than traditional celebrities, so people that have the following, that they could directly build your platform. But now, it’s a totally different value prop and you can say, “No, no, no. This is our audience we’re bringing, not you bringing your own audience.” That's really important and it’s something that is often missed in a lot of these businesses were it’s like, “Oh well, they’ll join because of the promise of future audience.” That tends not to work.

Steven: Yesterday was our biggest ever. We did 4000 cameos yesterday. It took us a year to get to basically 1000. Back then, I remember in 2016–2017 pitching people like, “This is Instagram, but this is Instagram in 2011 or 2012. You’re going to get four likes per picture right now and then in a year you’re going to get 40 likes for picture. Then, two years you’re going to get 4000 and then—”

Ben: And in 10 years likes won’t matter at all and we’ll hunt them.

Steven: This was the same thing. I said, “You just have to believe that this is going to be a thing,” and now post the two rounds of funding that we had this past year that really put Cameo on the map. A lot of talent were really scared to join early because they weren’t sure if the platform would last. The legacy of the Lightspeed and Kleiner round the A and B for us was that finally talent could see, “Okay, this is here to stay, people are making a real money on this thing, it’s backed by some of the best investors on earth, and it’s worth putting my name on it and really try to build a following up on here.”

David: How much value is there to the platform of all of the corpus of past content that’s been created on Cameo? Obviously, because it’s requested, it’s the new stuff. I’m paying for the request, but I would imagine, especially to take an individual celebrity on Cameo, all of their past videos is what probably generates data for you guys, for where to see them in the algorithm and that sort of stuff.

Steven: The thing that’s interesting is a cameo for you or your friend is really interesting. It’s not that interesting to watch if I don’t know John and I’m watching Charlie Sheen wish John a happy birthday. It’s not the most interesting content in the world.

David: But the reaction video?

Steven: The reactions are super interesting. Some cameos are just objectively interesting. Three weeks ago, we went viral for Mark McGrath’s breaking up with some girl’s long-distance boyfriend. This got a barstool and there are hundreds of millions of views of this video. They happen and we think that the great cameos doesn’t matter who they’re for. They’re out there, so there’s a content business we will be able to build in the future.

It’ll be great for our talent because when people ask me, “Who should I book?” Michael Rapaport is the best person on the platform, in my opinion, hands down. Perez Hilton is incredible. You give them anything, they’re just going to turn this into a work of art. Because I know who those people are, I want to show people how funny their videos are and how big their personalities are. People watch that and they become a fan of them.

We talked about the value prop a little bit, too. Our value prop at Cameo, the talent is, “Look. You come on Cameo and you are getting paid to become more popular. Literally, when you do a video, that fan that got it likes you more than ever before. Statistically speaking, over 80% of them are going to get shared, so they’re going to end up all over the place. Their friends are going to see it, they’re going to see how funny you are or how great your content is or how nice you are, and literally this is positive brand multiplier effect.

Ben: That’s fascinating. You get paid to be more popular. Have you thought about the best ways to double down on amplifying the best content? Should there be a TikTok channel of best cameos that you could just flip through all day and see?

Steen: That’s right. That’s why we brought Stefan over. Stefan at TikTok is better than anyone on earth and that’s why when we want to go higher CMO, right away that's who we need. We went out and got him. It’s super exciting. You’ll see more content out of us. We’ve been messing around with a podcast because at the end of the day, we have 20,000 of the most interesting people on earth on this thing. They love doing it, they love being part of the platform. They’re all asking what’s next and what are the next things that we’re going to build here.

These people are just Cameo super fans. They got one one-time and they are obsessed with the company. They just want to see more from us. I know our social platforms have been growing a ton. We just cross 100,000 followers on Instagram last week. So many other brands will go and have fake followers and [...]. I am very anti ever doing that because the authenticity is so important.

The people following us really what we’re doing. They didn’t just jack it up so they can have a blue check mark or anything like that. If you’re seeing this, our best Cameos, we’re starting to feature them more. I really like what’s going on on our Instagram page right now. There’s massive opportunity just like TikTok did to showcase the very best content and to put them on other platforms to drive eyeball stuff.

David: That was like we said on our episode about TikTok. That was the genius of Musical.ly and TikTok was the best content won and it surface the best content. It didn’t matter who you were, it didn’t matter who you were following. You could come on as a brand new onboarded user, not have any idea what was going on, and you’re automatically seeing the newest, best, freshest stuff without any effort on your part. That’s huge.

Steven: Yeah, and we have a lot of work to do before we get there. We’re also in a different businesses as well. One of the really interesting things about cameos, if we actually decide to become a social network, we have a lot of the foundational pieces for that, but right now this is an ecommerce marketplace very much with the social components to it.

The thing that’s interesting is if you really think about what Cameo could become, out of many different things that we could come into eventually, is Cameo could become the first social network not based on an ad revenue model, which is super, super interesting. For TikTok, for YouTube, for Snap, for Instagram, for Facebook, the whole game is about getting eyeballs on, having people watching this content, and selling ads and data against it. I fundamentally believe that people are getting sick of selling data. They don’t want their data stolen. People would rather pay a premium to have bespoke content for them.

Cameo is becoming this platform where every single video is being monetized for the fans, by the fans, basically. Again, is it interesting enough that every video can be watched? Probably not, but neither is everything on Instagram or Snapchat.

David: Yeah. Mining incentive is much better. We talked about this when we’re launching the LP Show on Acquired and starting Glow. Advertising is great. There’s nothing wrong with advertising, but it is, at best, neutral to the content. It doesn’t add anything, but direct monetization actually improves the relationship between the fans and the content.

Steven: For sure. Personalization does, too. Authenticity and personalization are the secret sauce because when we were getting started, a lot of the investors are like, “You know what you need to do. You need to pay these guys an upfront guarantee, get them in a room, and record every name. “Hey John, hey Joe, hey Steve, hey Lou… and just use AI to construct...”

David: No! It would ruin the whole thing.

Steven: It’s authenticity that makes it special.

David: Yeah.

Ben: That’s cool. Steven, I want to switch gears a little bit and go into general company-building conversation. You’ve grown super fast, you’ve had two big funding rounds back-to-back, you’ve drawn talent and dollars out of the Valley to Chicago in a way that we haven’t really seen since Groupon, frankly, that the level of excitement around this company. Tons and tons of founders listen to this show, early startup employees and stuff like that. Reflecting back on mistakes you’ve made, what are some things you wish you would have done differently and how can other people apply that on their journey?

Steven: There’s so many mistakes that we’ve made, but I didn’t answer a question you answered first. I’d like to address that before I get fully into this. You asked why Chicago. For me, Chicago was home. The one thing that was really, really special and helped me avoid a lot of mistakes that I certainly would have made if I was in LA or in New York, all that stuff, in Chicago there is a state incubator, still is called 1871. It’s now ranked the number one incubator in the world.

While Devin and Martin were out in LA, trying to build this tech platform and build the talent base, I was learning how to build a tech company. Through that, I got connected with a lot of the top investors and a lot of the top CEOs in Chicago because they all mentor at this place. They all give back and through that, CEOs of other marketplace businesses.

Chicago is known for its logistics and B2B tech, but some of the best businesses that have been built here have been it’s consumer marketplace business. So, Groupon, Grubhub, [...] emerging ones like raise.com (the gift card marketplace) and SpotHero (the biggest parking marketplace). These guys became early angel investors or became advisers to me really, really early and never asked for anything. They were just there to help.

When you think of the competency of Chicago, it’s been the center of options trading and commodities trading forever. Marketplace businesses are our core. That is what people in this town do. They’ve been doing for 100+ years, so it’s not really a surprise that consumer market places would be able to spring up in Chicago really well. And there’s a wealth of talent that has worked at this.

Now, on the downside, all those guys became my mentors, friends, and really helped. A lot of them were early funders of the business. The thing that’s funny is you never want to poach talent from your friends. Now, I have all these guys at my disposal. Probably, if they weren’t investors, they weren’t mentors to be, I probably love to hire some of their top executives out. That makes it a little bit harder.

David: One of our themes on this show is that the power of incentives. Incentives are the most powerful thing in the world [...]. Those guys, of course, they want to give back, they wanted to help, but this is the most powerful thing. Now, you’re not going to poach their talent.

Steven: I remember when Matt Maloney had his first call, the CEO of Grubhub. Matt told me, “Steven, I built the biggest marketplace because this never going to come out of Chicago. You’re building a business that will be bigger than mine.” We weren’t even a seed stage company yet. He’s like, “Because you’re selling bits not atoms. At Grubhub, nobody cares in Chicago how many restaurants I have in San Francisco, so I have to build localized supply and demand in every market. Your talent is global and their fans are all over the world. If you just focus on the supply side, the demand side will come.”

He’s like, “I’ve never seen anything like this. It’s the ultimate hack to getting a marketplace off the ground. When I was building Grubhub and I had the first three pizza parlors on, if I want and add 50 the next day, then nobody would get enough business. They would all leave. Because your talent can market themselves, if they come on the platform but they don’t promote and they don’t get booked, that’s on them. It’s not on you.” That was a big lesson early.

One thing he told me was, “You know, Steven, the Chicago startup scene is littered with people that hired talent away from Grubhub or Groupon. The most important thing is that you make sure that you find the person. There’s so many people that hire their CMO that was a Director of Marketing. It’s one thing to hire people from winning teams, but you need to hire the people that were the reason why there seems to want. That was a really, really interesting lesson that he gave me.

David: You probably saw this at LinkedIn a little bit, too. When you’re at a successful company, the tide is rising. And that's great. It’s really hard to get hired at those places. Most people there are really talented and great, but it’s so hard to know from the outside, like who were the people that drove the tide rising up and who were the people that were floating on the [...].

Steven: Sometimes, it has to do with things like product/market fit. My time at LinkedIn, I was selling a product sales navigator in the thinner and SEC-regulated firms that couldn’t use the product because there was no compliance solution. You have to archive everything. If you’re a financial adviser, everything has to be archived for seven years. Half of our target market literally had no need for this.

We think venture capital is a big vertical. I remember pitching VC firms before I was a founder and say, “Look, with this you could go search every San Francisco CEO of a company under 10 people, that graduated from Stanford, went to Google or Facebook. Here’s a list of them and you can go hit them.” But now, you know it’s all referral-based. We were selling something with no product/market fit. That’s why I was probably one of the worst people that ever worked at LinkedIn.

David: And look at your now.

Ben: That was a great, “Why Chicago?” Let’s hear some other mistakes you made along the way and things you would caution other people against.

Steven: The biggest mistake we made was we over-hired at a point. Today, we just had our 23rd person has been here for one year and there’s 127-ish employees right now. There was a point where for the first two years of the company, there were some sub-10 people here and then, there were points this year where we’re hiring, it could be a Monday and there would be nine people starting.

The company expanded by 35% in a day. This was going on for six months (probably) right after a Series A, and then through our Series B. They’re always talk about hiring slow and firing fast. We got to a point where we’re hiring fast and firing slow, which really has a bad compounding effect because I truthfully believe that every time you hire somebody, the culture gets better or it gets worse, even if you’re not personally interacting with those people.

Maybe the five people on the customer service person that’s interacting with a bad manager or a bad co-worker, their experience is worse. They’re going to interact with other people in the company even when we were growing so fast. Not that our culture ever got bad, but when we were growing so fast, we weren’t able to put enough time into the people we were coming up because we believe we were in this land grab.

There’s five million people on earth that can be on this platform. All we needed to do is worry about the supply side. So, let’s hire every 22–24 year old in Chicago that has Instagram, can DM people. Let’s hire them all and let’s ramp them, but we didn’t get to put enough time in the people that joined probably from maybe the same play 40–100.

It got to a point where I wasn’t interviewing everybody anymore. People suddenly got here and they were diminishing returns on some of the talent people that we brought in. When you add the 157th real housewife, it’s not going to have the same impact as you added the 4th, because now, the marketplace is not just how many we’re adding. It’s are we filling the buckets of people that we don’t have?

We were building this strategy that was just—

David: You got to grow smart.

Steven: Yeah, it was just get everybody on and then very quickly, within probably three months, [...] economics turn upside-down. Just like if you’re running a marketing campaign because talent acquisition was actually our marketing. We don’t spend any money on marketing and paid but we were spending money to hire people to acquire supply, which was begetting its own demand.

Just like any other marketing campaign that’s not working, you ramp them down and you find a new channel to expand into. For us, that was a really critical moment. We hired all these people, our headcount was up 5X of where it was in December, and revenue was basically maybe 30% or 40% higher than it was. That’s not good enough, so let’s ramp down the talent team, let’s reallocate some resources, let’s build out a marketing team.

Now, we’re we’re a demand-constrained business versus a supply-constraint business for the first time. Now, we have way more talent on that wants to do more cameos. Now, we need to turn on digital marketing, paid, and start actually doing what every market quickly.

Our big mistake is we truly thought that our marketplace was special from every other marketplace that existed and we didn’t have to worry about demand. All we had to worry about is supply and that worked for a long time. Then, the reality caught up and it’s like, “Steven, your business model is not different than everyone that ever worked.” We have to start playing the rules that [...].

David: Yeah. [...] a new bird do a lot of marketing. That doesn’t mean they’re bad businesses. That’s just how it works at scale.

Steven: Yeah, and then even there, so that was a big mistake. The other thing that’s tough is executive hires. Just because somebody did something really well somewhere else, it doesn’t mean (and this is not a millennial thing) that they were the reason why they won. They might have just been part of a winning team.

Across the board at Cameo, every day now we can attract way better talent that we could 2 years ago or a year ago for sure. The resumes that I get are insane. I’m looking at these people and it’s like I’m now hiring resumes, where before we are probably really good at hiring people and identifying people that might have a really high ceiling. Now, sometimes you get bigger people.

At LinkedIn, I saw this all the time. It’s like for people with a higher floor like, “Well, this person did really well here. They can’t possibly be bad,” and that’s a really, really tough thing because when I’m going to make a marketing higher I’m not just going to hire somebody off the street. I can go hire the CMO of TikTok. I can go and try to get that talent, but balancing that out with the people that have helped us get to that point is really important.

Another thing that we did that some people swear against and others don’t, is I started this business with a lot of my friends and family. I had to fire my brother, which was probably the most painful decision I’ve had to make. This business would not be here if not for some of my best friends and family step the game and really helping this get off the ground, but sometimes they can’t scale up with the business all the way. Those are really really, hard conversations.

I’ve been super fortunate that my co-founder, Arthur, who’s our COO was a good buddy of ours from college. I worked with him on LinkedIn, they’d been able to just scale beautifully up as the business has been going. The chances of that happening are really rare and it would suck to put all this time in developing relationships with your best friends, building a company together, and then just get into a point where somebody can’t keep up anymore. That’s really painful.

Ben: How do you think about that for yourself, scaling into the needs of the role and making sure that you were the right CEO of a one-person or a three-person business? That you are the right CEO you have a 20-person business? How do you know that you are the right CEO of 127-person business?

Steven: It starts with really identifying what your world class at then try to fire yourself from every job that you’re not and in hiring somebody better than yourself. If you were to work at Cameo, on Tuesday we do our all our hands. I talk about this, every all hands. My goal is to be the worst person that works at Cameo as quickly as possible. I want every single person that is here to be better than me. If I’m the worst person here, then the level of talent will be so incredible here that suddenly I can just focus on the things that I’m really good at right.

I’m really good at motivating people. I’m really good at articulating our vision, our mission, selling the dream, getting people excited about what we’re doing. On the things that I’m not so great at, I want to fire myself from that ASAP, I want to hire world class people to go do that, and then really finding other executives and other leaders that can balance my weaknesses out so I can just focus on my strengths.

I personally don’t believe that I’m a huge growth mindset person. I believe that for most people, their weaknesses are fundamental deficiencies, but they can be counteracted by not working on your weaknesses but quadrupling down on your strengths. That’s so critical. A lot of times, people sit there and spend so much effort and time in trying to get better at things that they suck at. You should just focus all your time on the things you’re great and try to get even more world class at that.

The other thing, too, is surrounding yourself with just incredible mentors is so critical, especially for CEOs. I’ve been very lucky to have people like Mike Gamson who is the very top of my org at LinkedIn, ended up introducing me to Jeff Weiner very early on. Jeff invested in the company, has become a huge mentor to me. Having people Mark Lawrence from SpotHero, George [...] from Ray’s, Matt Maloney from Grubhub. Constantly being able to talk to these guys and hear, “Hey, how did you do this? How did you do that?” is really critical.

David: Some of our listeners want to know, and Dan Lewis from Convoy talked about this, too, so many stories, it’s those mentors that help bring you along the way. How did you get those mentors? Did you have a strategy? Were you intentional about it? Was it an accident? Was it just that you were doing something interesting? How did that start going?

Steven: It started with Mike Gamson. When I left LinkedIn, he knew about the business. He cold call me three months later, he funded our seed on the spot, and I spent a lot of time with him. I remember when Mike invested, he said, “Steven, with my money, you get my most important resource, my most precious resource: my time. Call me anytime. Text me anytime.” He was so generous with his time. Then, he started introducing me to people like Jeff Weiner and a lot of the others that I’ve mentioned, really came through. Mike Gamson really changed my life more than anybody.

I didn’t solicit that. At LinkedIn, they talked a lot about mentorship and how important that was, but truthfully, at least as a white male at LinkedIn, they were so focused on finding mentor programs for women and people of color. Everybody except for white males had mentorship opportunity at the company. They would have the functional leadership groups and they have all these different things. As a white male, nobody was really looking to mentor me.

It was so nice as a CEO to find other people that had been there, done that, and had had people be helpful to them. This is so Chicago. The tech community here is small but very tight-knit. Everybody knows each other. Everybody wants everybody else to win because a win for one is really a win for all here. Being in Chicago really helped that.

If I was in LA, everybody there have so many vested interest in entertainment that if one person’s your mentor, then you’re their arch rival. It’s like going to go out of their way to try to kill you. For us, people are just really interested in what we’re doing and excited about me, in what I can do, and what Cameo working in Chicago could mean to this whole ecosystem. I think that was [...].

David: One last thing on it ask you or give you the opportunity to talk about before we wrap up. I’ve heard you talk about this before and in this vein is also really important. You guys left your jobs and you want full-time on Cameo, well before the idea was fully baked, you had any signal this is working. This probably also speaks a little bit to why mentors are attracted to you. You guys took a real risk. Can you talk a little bit about that?

Steven: It’s pretty funny. I have a group telegram chat with all of the guys that I worked within LinkedIn, that sat within earshot of me. When Martin and I had the idea for Cameo, I came back to the office the next day and I was telling everyone. Honestly, everyone was super excited about that. Three of the six of them now work here as executives, which is really, really cool.

LinkedIn would give Christmas through the first week of the year off to all employees, kind of like a winter break. I remember going to Nicaragua. There about eight of us from LinkedIn and we’re sitting in a hot tub on new year’s day. Will Hearn, one of the guys I worked with in another office was like, “Steven, this idea is too big.”

Up to that point on this ship, everyone was talking about, “I’m going to run marketing. I’m going to run sales. I’m going to run product.” We’re going to build this billion dollar company, [...], getting free lunch, and create benefits at LinkedIn at our spare time. None of us were going to quit our job.

I remember Will just asking me. He’s like, “Steven. This idea is too big. If somebody else builds this company, you’re still at your job at LinkedIn, and they become a billionaire, could you live with yourself?” Nobody asked me that question before and it was so clear in my mind that I would not be able to live with myself if somebody else took this idea, ran with it, and beat us. I never went back to LinkedIn.

That story I told you about Mike Gamson, his next play speech and two years from today none of you will have the job we just hired you for, my last day at LinkedIn was my exact two year anniversary of my first day. I remember writing my farewell letter—they call it the next play letter—to the team. I explained to them what I was doing. I told that story and I’m like, “Look. In this case Mike Gamson’s prophecy came true. I’m going to go pursue this dream on my exact two-year anniversary just like he said.”

That email was actually what started the chain of events that led to him investing and Jeff becoming a mentor. You talk about full circle. That’s why I’ll always say LinkedIn was the formative experience in my career.

David: That’s so awesome.

Ben: I guess before we wrap up, (1) anything else that you want to leave listeners with that we didn’t talk about, and (2) where can our listeners find you on the Internet, or follow you, or…

David: Book you on Cameo.

Steven: Yeah, book me on Cameo. On Twitter I’m @Mr312, Chicago’s area code. So follow me on Twitter…

Ben: Nice, and a good beer.

Steven: And a good beer. I’m really, really active on LinkedIn, so that’s always a good place to find me. cameo.com is where you should be booking your cameos. We’re subject to the Apple tax on iOS because they call this a digital good. Do not buy cameos in our app until I tell you differently, because they’re 42% more expensive than they are on the web. So, cameo.com not Cameo app if you want to buy cameos. That’s where you should go.

David: Love it.

Ben: Steven, thank you so much.

Steven: Great. Thank you guys for having me.

Ben: Yeah. Have a good one.

David: Thanks for coming on.


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