From Startup to Billion-Dollar Success: Steve Galanis Founder of Cameo | S2 Ep: 59

0:05Hey, everyone. Welcome back to Founder Story. Today, we have a special guest, Stephen Galanis. I'm sure you've heard of it and you can see his shirt. He is the co-founder and CEO of Cameo. I know I've used it many times and I've always wondered, what is the story? How do you build a billion dollar company? How do you get all these celebrities and people to do something for you if maybe you're not a celebrity? I want to dig into all these things, Stephen. But before we get into all the meat and potatoes, can you explain what was that spark that made you want to say, I want to be an entrepreneur?

0:39First off, thanks for having me. Look, I am one that definitely believes that entrepreneurs are born, not made. In fact, when we started Cameo, there's a personality test we used to make everyone take called 16personalities.com. And in that, one of the archetype personalities is actually entrepreneur. And about 3 % of people actually are born with kind of the capabilities to be an entrepreneur. Now, that said, I think people can become more entrepreneurial by being entrepreneurs. And I was very fortunate to grow up in a family of entrepreneurs. My grandfather and my uncle ran one of the oldest wedding studios in Chicago.

1:23My uncle was a movie producer on my mom's side. So I grew up sitting at the dinner table, hearing them talk about deals, hearing them talk about a wedding that didn't go their way, hearing about the trades that were going on. The Wall Street Journal was always on the table. CNBC was always on TV. And I think when you grow up around that, it's intoxicating, it's exciting. And there's really no question. I think if you were to talk to any of my teachers from kindergarten all the way through college, nobody's surprised that I became an entrepreneur. I almost think that maybe sometimes this can, like you said, push people to be one, but maybe it can even push people to not want to be one because we know there's a lot of ups and downs.

2:06And I think as a young, you know, in a young age, you might say, wow, you know what? I don't want to be a part of that. Let me just get a job. Let me be comfortable. But what was there another drive in you that said, you know what? This is what I want to do. Look, I think that's certainly true. And I have, you know, a brother and many family members that wouldn't want to touch being an entrepreneur with a 10-foot pole. And that's totally cool. You know, everybody should do the thing that fills them up and gives them passion. It's really too hard to do, you know, this if you don't, if it isn't, you know, kind of your ikigai point, the intersection of what do you love to do?

2:45What does the world need? What are you great at? And what can you get paid for? And, you know, one thing I will say is when you are an entrepreneur, oftentimes you become a square peg in a round hole when you're trying to work in, you know, not as an entrepreneur. And in my journey, I had a business in college that was my first taste of entrepreneurship is really successful. And then I always knew I was going to be an entrepreneur, but it really took me, you know, kind of seven, eight years to have my big idea along with my co-founders. And ultimately, you know, that put me as a square peg in a round hole, you know, in a variety of other jobs, whether it was, you know, options trading or doing real estate or, you know, really at the end of my career before starting Cameo, you know, going to LinkedIn and being in sales.

3:33So I had some great formative professional experiences. But I think if you were to talk to anybody that worked with me at that point, it was really clear that at some point I was going to be doing my own thing. And when you have that mindset, a lot of times it might be hard to really be the best employee you possibly can be. So, yeah. So you talk a lot about ikigai and the importance that's been in your life. Can you explain more about that? Yeah, there was an entrepreneur in Chicago, I remember really early on. His name is Jay and he had sold his company Fieldglass for over a billion dollars.

4:08It was one of the top exits, you know, all time in Chicago. You know, a lot of people built billion dollar companies, not many have actually exited for over a billion. And I remember Jay coming to speak to a group of entrepreneurs at a Chicago Ventures, you know, Founders Day, basically, CEO Summit. And I remember him talking about this concept of Ikigai. And one thing he said at the time was like, look, doing what we do is too hard to do if it's not, you know, really your Ikigai point. And your Ikigai is a Japanese philosophy. And basically, if you were to think of a Venn diagram with two circles, an Ikigai diagram has four.

4:51And it's the intersection point of what do you love to do? What does the world need? What are you great at? And what can you get paid for? And if you're actually in that Ikigai point, it kind of almost gives you perpetual energy. It's like Iron Man's heart, right? And it allows you to just keep pushing through, you know, no matter what obstacles you face or no matter what, you know, trials or tribulations kind of pop up your way. And it's something I've thought a lot about both through the good times of Cameo and the bad times, because just like any journey, like we've had our ups, you know, highs of highs.

5:27We've had our lows, you know, our lows that were kind of the lows of low. So but one of the things that's kept me going, you know, day after day and try to get me pretty consistent, like you could see me on my best day or my worst day. And I'm the same. It's because I'm working on the thing that I love to do. And, you know, I would continue to do it if I if I couldn't make any if I couldn't get paid doing it, I'd still do what I do. So let's talk about some of those down moments, because I think in social media, a lot of times we only see the good. And it's hard not to be like, oh, wow, I'm doing business and I'm not making$10 million yet or a million dollars or maybe even not$100 ,000.

6:04But it seems like everyone else is driving a Lamborghini. How did you deal or handle with those, with the downs and the up and down swing as you were building up Cameo to an incredible, huge, billion-dollar company it is today? Well, first off, I never worried about what anybody else was doing. When we had the idea for Cameo, we were very convinced that this just needed to exist. And, you know, many people had tried to do what we did, but we had what I think was a pretty unique insight. And that was the Internet was creating, you know, more fame than wealth. Right. So ultimately, you were getting this new class of people on the Internet that were that were more they were more famous than rich.

6:51and that ended up being the place that we found product market fit. And I know you were, you know, there's a bunch of articles and, you know, things talking about the creator economy, but like, let's just talk about the entertainment business at large before we even talk about the creator economy. So we saw a lot of these stats last year when SAG was having it strike, the Screen Actors Guild. And one of the stats that was most striking was that 86 % of the members of the Screen Actors Guild don't make enough money to qualify for their health care and pension benefits. To qualify, you need to do like$24 ,000 a year, right?

7:31That's less than minimum wage. At any given time, 99.9 % of the Screen Actors Guild is unemployed. And that's why one of the oldest memes is the, you know, the actress or actor that's waiting tables in Los Angeles while they're waiting to get cast at something. In sports, the top 1 % of athletes make 99 % of all the endorsement revenue. ESPN had a classic documentary that was one of the reasons we started this business. It was called Broke, and in it it said that, you know, 85 % of NFL players will go broke within five years after playing their last game. You know, you see the same thing in music where the top 1 % of musicians make 95 % of all the streaming revenue.

8:13And when it comes to touring, it's even more skewed like what the Taylor Swifts make compared to like, you know, any random band that's out there trying to make it playing at dive bars. So whether you're talking about sports, whether you're talking about entertainment, we're talking about the creator economy where on YouTube, the top 3 % of creators make 97 % of all the ad revenue. do. The one thing that's really clear is that there's more famous people being made every single day, right? TikTok's creating more fame, SoundCloud's creating more fame. You know, it used to be that if you weren't signed to a label, your music didn't get out there.

8:48Now, if it's great, you can put on SoundCloud, you can put on YouTube and you can blow up, right? And you can become Chance the Rapper or Justin Bieber, who has discovered on YouTube, right? This is a new era. And in this new era where there's an exponential increasing amount of fame, but the underlying business model supporting fame are growing linearly, like ad revenue is not going up exponentially to support NFL players, for example. And if anything, like cord cutting with cable TV is making it even tougher to support the income streams that right now allow for these huge salaries to come out.

9:27When you look at the record labels or the movie studios, they don't have as much money as they used to because technologies completely disrupted their business models. So it became really clear to us that direct-to-fan monetization was going to have to be the answer. As people were getting more famous on TikTok, on Instagram, on Snapchat than they'd ever been, on Twitter, they needed to be more reliant on selling directly to their fans because the underlying business models that historically supported them, there was just no way they were going to keep up with the exponentially increasing demand.

9:58I guess you could say you're like a pioneer in fandom and you're also giving them an opportunity, like you said, to make money when most of them after retirement, unfortunately, are not going to continue making any money. Do you have any stories or is there someone that stands out who you were like, who really came to you was super excited about the fact that they could monetize their fans or create a new revenue stream when maybe they were in sports or in music and they didn't they couldn't think of another way besides what they had always known? I mean, look, there's literally, we have 60 ,000 people on the platform and almost all of them in their own way had a reason why.

10:39You know, some of my favorite stories, I think of someone like Kenny G. And, you know, he would tell me like, man, if I had, you know, five bucks for every person that's ever come up to me, you know, in the airport and want to take a selfie with me. I think about Snoop Dogg, who when he first heard about Cameo from Ice-T, ended up FaceTiming me and was like, Stephen, this is brilliant. You know, my second biggest fan base is in Brazil. This is a way for me to go to Brazil without having to go to Brazil. Let me on this so we can billionize this shit together. Like, that's the type of passion I would hear from, you know, from talent.

11:14You really are your rapper's favorite rapper or my rapper's favorite rapper. Tell me, how do these relationships, I got that from X, how do these relationships get built from you? I mean, it seems like you really built up these famous people that most people would be like, oh my gosh, I could never partner with these people. I could never create a business where I was helping these people. It seems nearly impossible. How did that start with you? It was a team effort. I think when you look back at our founding team, while none of us come from a traditional Hollywood background, like working at a talent agency or being basketball agents or something, we had...

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13:29And then it really was about retention and referrals after that. So So two of us, me and Devin, went to Duke. And one thing that's really cool about Devin is in addition to being our technical co-founder and CTO, early CTO, Devin was one of the early stars on Vine. So he'd had over a billion loops on Vine. and many of his best friends ended up not just being big on Vine, but one Cody Ko has millions of followers on YouTube and is one of the biggest YouTubers on the planet at this point. So having a CTO and had a product that actually is a creator and understands the plight and understands that he had a billion loops on Vine, but never made a dollar from it, that made this problem really passionate to him.

14:19Our other co-founder, Martin, went to USC. He was an athlete there. He ended up walking onto those Matt Liner, Reggie Bush era, great USC teams. And he had teammates that went from selling out the Coliseum to suddenly like a year later, they're not in the NFL and they can't make money doing anything. And again, keep in mind when I was at Duke and Devin was at Duke and Martin was at USC, this was pre-NIL. You know, one of my best friends who won a national championship for Duke basketball. I remember six months after winning a national championship, he called me and he asked if I could Western Union him$300, right?

14:57So this was a problem that was really personal to us. And because we went to the schools we went to, we did the sports and the activities that we did, it gave us a great Rolodex. So when we started the business, we were able to get a lot of our friends and family to come on the platform first. And then once they were on and they liked it, they told their friends. What's something besides business success? What is something like personal success or something that happened after starting this company on a personal note that has really stood out for you as something that you, you know, a memory that you want to cherish?

15:30I mean, there's literally like an exponential amount of them. But one of my favorite moments, you know, probably happened in 2020. Super Bowl 2020 was my dad's 70th birthday. And I decided to bring him to Super Bowl. And he got to like spend a week with me at Super Bowl. And, you know, people will often say that something is their Super Bowl, like a big time at work. Super Bowl is literally our Super Bowl because all of our talent are there. We're running around seeing everyone in person. And I just remember bringing my dad and my mom around Miami. And, you know, so many of my dad's heroes, they're coming up to him and they're thanking him for having me because I'm putting money in their pocket.

16:13I remember Isaiah Thomas, the, you know, Hall of Fame basketball player. You know, we were at the NFL PA party and Isaiah goes to my dad, look around, all these guys work for your son. Right. And it was just like moments like that. or, you know, my dad's all-time favorite, even though we're Bears fans, my dad's all-time favorite quarterback is Brett Favre. And, you know, Brett, on the day that he got inducted to the NFL 100 greatest players of all time team, you know, spent that morning having breakfast with my dad and my mom. And, you know, those are the moments that you really treasure. Another fun one happened at Super Bowl the next year during COVID.

16:48This was the, you know, Super Bowl in Tampa Bay. Only one quarter of the seats were allowed to be sold we were in a box with you know mike tyson and snoop dog and shack and you know and it's just it's those are the pinch me moments and yeah i just remember like how happy my dad was like being able to meet all these people and and how proud he was that's incredible like to be among all these people all these legends do you ever get nervous who would make you nervous if there's anyone that you could be in a room with that would make you nervous? Who would that be? I don't know. I think it would probably be, you know, maybe Michael Jordan.

17:26You know, I know his sons pretty well. I've met MJ before, but, you know, growing up in Chicago in the 90s, like that's probably the guy. But at this point, I mean, so many people that were my heroes or people I watched or people I listened to their music, I've gotten to know. kind of the more you're around that, the more normalized it's been. But to be honest, I've never been that person that was a, I love like my sports teams, but I've never gone like Gaga over. I'm not the person that's going to like go and ask for a selfie or, or go get their autograph. That's just not me. But you know, I'm just probably the top of that list, I guess.

18:08Well, I can imagine with the Superbowl in LA, that's going to be a good one. That's I'm sorry, not Super Bowl, the Olympics in LA in 2028, that's going to be an incredible time for you, I would imagine. How do you feel with the Olympics leveraging Snoop Dogg or maybe even leveraging other creators coming up? How do you see these big brands, these big media companies or media events that are going to be leveraging creators in the future? Again, I think every brand is looking for distribution and creators are certainly like a way to get to cut through the noise. Otherwise, you know, you have to go through paid channels.

18:50Instagram and TikTok have certainly made organic sales harder than ever before. And even when creators are posting, depending on the algorithm, there's only a small fracture of their followers that are actually going to see whatever they post. So brands are excited about creators. We have a B2B business called Cameo for Business that's been growing a ton since we started it. And I think, again, those trends are only going to continue. Yeah, I've used the Cameo for Business genius. So what else do you see in the future for Cameo? Look, the core idea for Cameo was always for X amount of money, you know, you should be able as a fan to pay to do Y activity with Z person you love or admire.

19:36So, you know, we think that if you build the world's largest Rolodex of talent, you know, there should be kind of an unlimited amount of businesses that could be built off of that. in the tough times or in the really great... In the times where people were probably over-exuberant in our business or even myself was overly exuberant, we probably tried to do too many things. And our core business is a great one and it's a magical product. And we've sold millions of cameos and there's billions of people out there. So I think there's a ton of room in our core market to continue to do what we do and do it all over the world.

20:15And, you know, sometimes we have to, we have to like make sure that we don't get too distracted by, you know, chasing, you know, chasing, you know, the rainbows that and the pot of gold at the end of the rainbows that are beyond the horizon. And if we just focus on, you know, making our core product better, like, you know, how long it takes to get a video, like we should, that's about 36 hours today. Like, how do we get that to zero? How do we get making a cameo as close to getting, doing a Giphy? when I think about price. We'd rather sell a million$1 cameos than$1 million cameo. So if we can continue to figure out ways to get the price down and get the time to completion down as well, I think we're building a really great business here.

21:00Hey, I have the problem. I chase way too many rabbits and I never catch any. So I can relate to that. It's hard not to. I'm curious on how you look at global expansion. I'm a huge proponent of going global. I think there's just so many people that want a lot of different products and services that they may not be able to get today. How do you guys look at that in terms of what markets you're going to go into? Or when you go into a market, if it's working, then you double down. I have a very different answer on this today than I probably did if you interviewed me three to five years ago. If you win the U.S.

21:35in a business like ours, you win the world. So I think like kind of any effort spent going outside of your, you know, the place where you have your core, you know, your core market, especially if you're in the U.S. and it's a big enough market, like the U.S. consumer market's pretty big. U.S. entertainment market's pretty big. So if you're in the U.S., like it's aspirational, right? If you're a Bollywood star, like you aspire to go to Hollywood and you aspire to touch your fans in the United States. So I think ultimately we've been at our best when we've been really focused and disciplined on staying within our lane.

22:11And that doesn't mean, you know, expanding to India or Korea or Japan or any of these markets isn't appealing. It certainly is. And I've spent a lot of money and hired a lot of people to help go build that stuff out. But ultimately, like we have seen the ROI repeatedly been doubling down at home. Oh, I love that perspective. So thank you for sharing that. if somebody out there is like they want to build something like what you've done, is there one or two things that you would tell them that you wish you knew? I think it's really important first to understand in a marketplace business what's going to be the critical side to get first, supplier demand.

22:51In our market, it was really important that we acquired supply side first, because in our marketplace, supply can uniquely get their own demand. And that was kind of the growth equation for us. We get talent on, they would come, they'd promote on Instagram or Twitter that they were on Cameo. Their users would become our customers for free. And that's how our flywheel started. Very oftentimes, I see entrepreneurs trying to do both at the same time to solve the chicken and the egg. And that rarely works. The other thing I'll mention too, and this is something we still wrestle with at Cameo, and it's probably the thing preventing us so far from becoming a$10 billion business or more.

23:32Retention is just absolutely critical. It's always harder to acquire a new customer than it is to get a really happy person to come back and use you again and again and again. And focusing on retention. And this isn't things I didn't know. we just weren't able to, you know, really execute it. And our market is so new and so big that it's easy to just keep going and finding new folks year after year. But ultimately, you know, building, really making sure that you've got great retention, it's super important at scale, because otherwise you get to a point when you're 100 million revenue business or something like that, where it just gets so hard to fill the bucket up every month.

24:15Oh, yeah, I can imagine. I mean, you know, when you're starting off small, your budgets and then as you grow, I mean, your budgets become giant. I've heard so many people now complain about acquiring customers. It just sometimes it's more expensive to acquire a customer than the revenue you have coming in. And then they're looking at lifetime value, but who knows if they'll even stick. There's so much complexities now. And I mean, the markets are so competitive. But thank you for sharing that. If people want to get in touch with you, they want to learn more information. What can they do? Yeah, follow me on Twitter at Mr312 or on LinkedIn.

24:51I'm probably most active on LinkedIn. Steven, thank you so much for joining us today on Founder Story, sharing all your knowledge, getting to over a billion-dollar company, soon a$10 billion company. I can't wait to have you back at that moment. But this has been really great. So much knowledge shared. And thank you for all the impact that you do. And I'm super stoked, man. You're coming back at$10 billion. Please. But Stephen, seriously, I really appreciate you being on today.