$100M Without Paid Ads - Steven Galanis

0:00Welcome to the Proven Podcast, where it does not matter what you think, only what you can prove. Everyone says you need massive marketing budgets to scale fast. Steven Galanis proves you just need the right idea. The co-founder and CEO of Cameo scaled from zero to$100 million in revenue in four years without spending a single dollar on marketing. The show starts now. All right, everybody. Welcome back. I'm excited for today's call. This is an individual who has done things that I don't think anyone else I know has possibly done. We'll get into it. Thank you so much for joining. Thanks for having me.

0:30So you've done things, and for the audience that don't know who you are, give a quick debrief on who you are, what you've done. I'm always been blown away by it. I'm so happy to have you on. Tell us a little bit about you. Hi, my name is Steven Galanis and I'm the co-founder and CEO of Cameo. Cameo is the world's largest marketplace where you can book first lives video messages from tens of thousands of the most exciting names in pop culture. It's amazing how you've gotten these people as well. Because there's people I grew up as a huge fan of that I was like, God, I want to give a happy birthday from him.

1:02One of them was a pitcher. and a major league ball player. And I was like, I just want to get a happy birthday from him. So the idea that you actually made that happen before we get any farther, thank you for making that dream happen for me. I really appreciate that. Getting that little birthday wish from him was huge for me. Okay, so you created something that most people haven't. The idea that to execute this on a lot of the businesses and a lot of things you do executes on ways that most people only dream of. What are some of the things that you've run into as you've created the success with Cameo that has radically changed your environment?

1:32Well, I think there's a number of those, but I think it really starts with a few things. Number one, it's really important that as a founder, you're building in a space that you want to work in in a really long time. and when I was pretty early in my career found a cameo I ended up meeting this founder in Chicago who had sold his company for a billion dollars and was kind of one of the tech luminaries here and he introduced me to a framework that I love telling founders about and it's called Ikigai and the it's a Japanese philosophy and basically imagine a Venn diagram but instead of two circles there's four.

2:12And the idea is that, you know, to really be the best in the world at something, you have to be at the intersection 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, you know, when I think about cameo and, and, you know, kind of the ups and downs and, you know, the things that get you through, you know, eight years of building something, and, you know, hopefully I can work on it another 80 years. Like, I love what I do. You know, being at that EQ guy point, it kind of gives you perpetual energy. It almost is like Iron Man's heart. And, you know, one thing I see so often is people kind of, you know, founders kind of jumping to the next top thing.

2:51And just in the last eight years, I think about the venture hype cycles that I've seen happen when we were raising money for Cameo at the beginning. If you weren't doing a micro mobility startup, you know, you weren't getting fun. This is like the bird in lime craze days. And then it was AR VR and then there was blockchain and then the creator economy got super hot, like right after, you know, companies like us and OnlyFans, you know, really exploded. And then, you know, everybody was building creator economies and it was web three, like the tide came in so hard on the creator economy and everyone was building a web three business.

3:27And, you know, today, a lot of the founders that were building web three businesses or the investors that had, you know, Web3 on their LinkedIn profile or their Twitter bio, suddenly they're all doing AI right now, right? So I've seen that and it very rarely is sustainable. And I think oftentimes, you know, that's just one of those things like finding your Iki guy point. And, you know, I thought your intro here was pretty interesting, right? You're talking about there's this picture that you loved. And that's where, like, I think of all those four buckets, you're building something that the world actually needs is the one that I think gets ignored too much, right?

4:06Like when there is one of these VC hype cycles, you know, it's, it's all about like, what's going to get funded. That's how a lot of fund founders think, but ultimately it always comes down to product market fit. Are you building something the world actually needs? So finding that product market fit along with the Iki guide to something that you love is very hard for people. There's a bunch of people like, I like to sit on the beach and want to become a shore erosion technician, just watch the ocean go in and out. That's not going to make you money. Or someone says, Hey, you know what? I really love making sandals in the Philippines.

4:38I'm like, well, that's probably not going to hit your six, seven, eight figure goals. How do you find the balance? How does someone find that thing that they love? If they don't know what they love, how do they get to that point? Well, I think, I think it comes back to like, what are you doing in your spare time? Like when nobody's watching, like, what are the things that you're doing? And, you know, I think about my career pre-starting Cameo, you know, avid sports fan. While I was an options trader, my first job out of college, I started a movie production company, right? So, you know, since kindergarten, my nickname has been the mayor.

5:14I've always been somebody that brings people together and connects them and kind of unlocks, you know, whatever experiences, whether it's in Chicago or at Duke or any of the places that I've been, you know, I like the classic guy that like opens the red velvet rope and brings people in. So I think most, if you were to go to my kindergarten teachers or my college professors or my friends from any era of my life, I don't think, you know, maybe people didn't know exactly what I was going to do, but once they found out that I was doing this, like this just made all the sense of the world, right? And it, it brought my love for social media and for fandom, um, you know, and, and, you know, It also solved a problem that maybe everybody doesn't wake up thinking about, but as somebody that went to Duke, along with one of my other co-founders, and our third co-founder was an athlete at USC, we had really good friends that played Duke basketball and won national championships.

6:10or were at USC, played on those Matt Leiner, Reggie Bush era teams. And, you know, years after selling out the Coliseum or Cameron Indoor, you know, they're basically middle school gym teachers or they're working as parapros at their old high school because, you know, the reality is unless you become like a top tier player, you're not going to make enough money to sustain yourself. And, you know, I remember right as we were starting, a documentary called Broke came out. It was a 30 for 30. And in that, it said that 85 percent NFL players go broke five years after playing their last game. And that was a staggering, staggering stat.

6:49And again, it's not the type of thing that like that that problem doesn't necessarily bother everyone. But as an athlete myself, like all of us, you know, we had our friends that were impacted by this. This is the area where college athletes couldn't get paid. So, you know, you go from selling out the Coliseum in L.A. to suddenly like, you know, not being able to make money doing anything if you didn't make the NFL or if you made it and got hurt or you made it and got cut. Right. So I think it just comes down to you have to have the passion for the problem set that you're doing. And and it's just it can't that it's it's so underrated, but it's so critical.

7:26so what and i agree with you i a former athlete i get it once it turns off you can't feed the bills you can't pay the bills on glory from like two three five years ago it just doesn't work that way you mentioned that you had multiple co-founders and that's something that as people trying to scale those relationships are dynamic and people don't understand when you have co-founders there's different type of co-founders there's silent ones there's ones that are actively involved with you there's you know ones that are operating with you how do you find that balance I've been very lucky with the people I've co-founded things with.

7:54Very, very blessed. But there's a strategy to it. I'm curious, how did you navigate that when you have multiple co-founders, multiple kitchen people in the kitchen cooking with you? How do you find that balance? There's a really smart investor that I like that I met at a Duke founder and investor forum they held on campus. His name is David Cummings. And David is a partner at Atlanta Ventures. backed a lot of, you know, the early stage companies that came out of there. And I remember hearing him talk one time and he said that in consumer, he often found that the best founding teams had these three co-founders.

8:32Now, these attributes could all be in one person, could be in two person, could be in three. But he's like, I've never seen a company that doesn't have the hacker, the hustler and the hipster. The hacker is somebody that finds a new and novel way to make things, you know, happen. And, you know, in our case, that was like, how do you go from, you know, Hollywood or NFL agents, which are the biggest gatekeepers in the world? And like, how do we cut through the agencies, cut through the noise and like go direct to talent? And, you know, it really took a hacker to go and figure that out. And in our case, it was like Instagram DM.

9:05Like we built an army of people that were DMing celebrities on Instagram and just the sheer volume and getting through. And then once they came on and liked it, we asked for referrals. Like that's how we built our business brick by brick. And today we have tens of thousands of talent on the platform, which would be bigger than all the agencies combined. Right. So that's number one. Number two, you need the hustler. The hustler is the person that can like build FOMO and hype and get people excited about it. Critical for raising the initial seed capital and getting angels excited about it. even more critical, even harder than raising capital is like, how do you get people to quit their great job to come, you know, the best people, because you really need great people to do it, to come work on your crazy idea before there's product market fit, right?

9:50Because if you don't have that, you're not going to be able to attract it. So you really need that hustler that can do that. And then lastly, this one's one I think gets forgotten about, but in consumer, it's so important. You need the hipster. The hipster is the person that's going to see like what's cool in the future. And, you know, oftentimes like as, as the hipsters kind of doing their thing in real time, it seems weird. It seems interesting. Like in our case, when we started Cameo, the Instagram, you know, aesthetic, the highly polished, you know, lights, camera, makeup, that was the in vogue, you know, aesthetic for video content.

10:26But one of the things that, you know, we had conviction about was to build authentic over high quality. So instead of having our celebrities come into a studio and like film the videos with the production crew, we're like the iPhone cam was cool. It's actually, it's even better. Like the zoom setup I have, it's more authentic, you know, even though I've got the great lights and the great camera, it's actually more authentic for what we sell, like the selfie style video, them walking around like, oh, what's that? Who's behind them? You know, what do they have? Like, what are they making? Like, what's that food on there?

11:01Like, that's the authenticity that really worked. And as TikTok has risen and promised that that authentic aesthetic actually ended up being the winning one. And even in our B2B business today, you know, we find that the brands prefer this content that looks like real videos that people are posting as opposed to the Madison Avenue glossy. So this is a long way of saying in my case is our co-founders had each of those attributes, right? Like, like, uh, you know, Devin is very clearly the hipster in the group. Martin was very clearly the hacker and I was very clearly the hipster or sorry, the hustler.

11:39So the nice thing about that is we never stepped on each other's toes. The division of labor was great. You know, Martin, you go get the talent, Devin, you go build a product, Steven, you go run the business. Right. And that's, that's how we've in. And I'm very blessed that eight years in, all the co-founders are still at the company. Obviously, roles have evolved as time's gone on, and we've hired great other people to come in. But I think at the end of the day, the conviction of the founders and all of us working on something that is our EQI, that we really care about, it's been critical. So I think one of the other things that's unique about you guys is the acquisition of either talent and or customers because I didn't know what cameo was until I got my first cameo until it was sent to me.

12:27So I was sitting there and you know, someone got this for me. All of a sudden it's this picture and it pops up. I'm like, Oh my God, this is, and I was freaking out and I love the authenticity because it was literally him just sitting on his couch. I was like, Oh my God, that's in his house. This is, and he's saying my name and he's doing, it was just this magical experience. And then I went from there and I started looking at all the other talent and I started looking at all the videos and all the other talent was like, Oh, what is this size? And it had this idea. That's a different approach than most people have to growing their audience.

12:55So when you're in that environment and you're taking this different approach and you're trying to convert differently, what are some of the ways that you found above and beyond that just, Hey, I'm going to buy it for it. And it'd be word of mouth. Cause you said word of mouth is so important of getting new talent in. What are some of the ways that you have seen that a success to creating this that people could use now to get more clients and get more clientele? yeah i i mean look i i think i think a lot of that had to do with the really unique a couple unique attributes of our uh particular product right and the lessons that i have they worked excellent for us and we understood them early and we really executed well against those but these lessons may not you know be true for every everybody whether you're building a marketplace or you're just trying to get your word out in a direct consumer brand but really the cameo fly wheel was simple.

13:45Our marketplace, unlike Uber or Airbnb or DoorDash, is particularly unique because our supply can beget their own demand. Everyone on Cameo is famous. They have hundreds of thousands or millions of followers on TikTok, on Instagram, on X, on whatever platform you care about. And one of the things they can do that an Uber driver can't do or an Airbnb host can't do is they can post and the people following them are probably the most likely people in the world to buy. Right. So that's a really interesting dynamic. So as we were starting with our marketplace, you know, the classic chicken and the egg, like there's no talent on nobody, there's no customers.

14:26We had absolute conviction that if we got the supply side on, then the demand side would follow. You know, one of the tactics that we did, and now this has become commonplace, commonplace but you know we were one of the first companies to not ever ask people hey don't don't like we never ask people to promote cameo we would create a link for everyone you know cameo.com slash steven would be like my profile and i would ask you to tweet that out that would go to your page and then once you're on your page you could go browse and see who else was there but we never asked people to like go to cameo.com we always asked them to go to their unique link and the value prop made a lot of sense.

15:03You make three times as much as we do for every sale and we take a take rate. So we're, we're completely incentivized for you to be as good as you possibly could be. And we've really worked on creating great tools that talent could share their own links out. So that's number one. Number two, our product is pretty unique in that over 80 % of them are bought for other people. So it's not you buying for yourself and watching it on your phone. It's me buying it for you and then sending it to you in a text message in a group chat, maybe posting it on your Facebook wall back in the way or tweeting it out to you or posting it on my Instagram story and tagging you in it.

15:41And then that created this phenomenon where it was getting shared. So we always say every cameo is a commercial for the next one. And one thing that we had on there, every video is watermarked. So you see this video, you're like, holy shit, how do I do that? and then you see Cameo, right? And then people watch the video, they Google Cameo, they come into our site and that's really the flywheel. So it's supply side acquisition, talent promoting, user sharing, and then the customer sharing to the recipient and then the recipient tending to share it on social, in their group chat, or just taking their phone out and being, holy shit, look what I got.

16:19There was a lot of that holy shit when I got mine. I was like, holy shit, holy shit. And then there were the other thing that happened was I literally fell down the rabbit hole. I was like, who else is on here? Who is this? Who is that? What are they doing? And it really just became this, this ran down the rabbit hole with it. People will sit there from the outside and say, okay, well, yeah, I see the end of it. Cameo just started three days ago and magically it has all these people. We make all this money and dah, dah, dah. They don't see the years of effort. They don't see the trials and the tribulations.

16:43They don't see the lessons. They don't see the hurdles. They don't see the times where you fell down. What are some of the biggest lessons that you've had as you've gone through this? And yes, you've got something that's, you know, a massive USP. when you're into this how what are some of the things you're like god i wish i could go back and talk to steven 10 years ago and say hey dude you're gonna run into this wall this is how you handle it this is what's going on how do you pivot around it yeah one of the really unique things about cameo is that we kind of found product market fit almost right away um you know we had a really disastrous launch which i can tell that story in a little bit but but shortly after that like um you know first we started just with nfl players we thought like there was this big need And then it really wasn't until we started, we, Devin, my co-founder one day was like, Hey, I think Cody, uh, his roommate, Cody Ko, who has 10 million followers on YouTube and people like Cody might do well at it.

17:34Cody tried it. He put it on a YouTube video. Like we went viral for the first time and we really found our product market fit with like ex Vine stars, TikTok, YouTube, and then reality TV became big. And, you know, while athletes still probably represent the largest number of people on the site, you know, it's maybe 14, 15 % of our total business. So we ended up finding product market fit, you know, as we expanded out. The business kind of worked right away and worked really well for the first four years. I mean, this is a business that went from zero to 100 million top line in four years with no marketing spend.

18:08There's not many businesses in the world that did that. So interestingly, our biggest problems actually happened like after massive success after we became a unicorn. And it really started when we, you know, basically, we were, we were trying to like conquer the world, not just like, you know, the core market geographically, which we did, you know, we found ourselves, you know, having Amio Japan and hiring people in the UK and Australia and all over Europe and South America. And, you know, what we also did at the same time was we were thinking about all the ways that talent could monetize and we wanted to make sure that we had an answer in every space so broadly the four ways that talent can monetize their fame on the internet they can have a subscription business so thank only fans patreon uh in 2020 we launched our answer to that called fan clubs and suddenly you know we had some of our best engineers working on you know uh basically all of the same features that you would see on OnlyFans or Patreon, you know, things like subscriptions and, you know, MassDM and all those type of products.

19:17Secondly, you know, we built a live and calls product, you know, which in during COVID, all of the, you know, meeting greets weren't happening anymore that you would see at a concert or a Comic-Con. And we felt like we could fill that in a digital way. It worked a little bit, but then when the world opened up, you know, we built great tech, but there just wasn't the same product market fit to sit online and, and, you know, talk to someone on FaceTime versus like meeting them in real life. Um, you know, so we, we kind of missed on that. Uh, third, you know, physical goods is another thing that people can sell on the internet.

19:53Uh, we bought the world's largest celebrity merch company, a company that really focused on a plus, um, you know, actors and athletes, you know, think Arnold Schwarzenegger, Matthew McConaughey. And, you know, we bought that company and we really felt like when the world opened up, uh, merch might be something that was a little easier for talent to sell. And, you know, after that, we saw some big changes in Facebook and Instagram and TikTok's algorithm, which made it a lot harder for talent to like promote their own stuff. So, you know, we would have eight years of sales data on certain people and their drops were just making less and less than they ever would, even though like, you know, they didn't become less popular.

20:34So, you know, that was another roadblock we ran into. And then, you know, lastly, the B2B side, you know, people can get brand deals and we had Cameo for Business and that team started rapidly, rapidly expanding, you know, CMOs and CEOs that used our product as consumers or during COVID, you know, buying them for all hands or, you know, how many team meetings had Cameos in them during COVID. All of a sudden, they're now trying to use it for their marketing content, you know, this is a really exciting thing. But suddenly, what happened to us was, you know, we went from a team of 100 to about 400, 437.

21:09But our best people were focused on all different things. And what often happens in startups is that people forget that if you optimize your core business by 5%, 10%, it's almost always better than building the next thing. And, you know, we we were certainly guilty and I was guilty for signing off on this stuff. of, you know, chasing the shiny new object. And part of that is we found product market fit, you know, so quickly with what we did. And now we had a better team than we ever had. And, you know, we let that loose and we just got, we overextended ourselves. And, you know, now looking back on it, you know, I think about all the money that we spend and all the, you know, great efforts that we put in.

21:51And ultimately, if the team that I had hired was all working on, you know, the one thing, right? And just continue to make that better and better and better. What could those compounding gains have been? So, you know, I would say that for me, you know, if I were to come back and look at myself in 2020 or 2021, it would be to really resist like chasing the shiny object and continuing to embrace the grind of just making your great core business as good as you possibly can be. So you talked about, you know, your team went from really, really small. all of a sudden when, you know, a hundred people, I always skyrocketed up to 400.

22:29And I don't care how much training you've had. I don't care how much, you know, theoretical, academic level training, walking in and having to lead that level of unit, leading that group takes a special set of skills. And you have to advance your skills on that on a high level. What are some of the things that you've learned to create a culture, to lead these individuals who are, as you said, attracting the best of us, that they're willing to leave their business, their current jobs to come work with you. How have you learned how to lead those individuals? It took a lot of coaching. I was really fortunate throughout that era to be working with a CEO coach named Bing Gordon.

23:04and Bing's kind of a legend in the valley, one of the founders of Electronic Arts, 30-year GP of Kleiner Perkins, you know, had served on the board of Amazon from like seed stage all the way until probably 22, you know, was I think chairman of Zynga and, you know, so influential in Duolingo and, you know, so many of the great consumer companies of the last, you know, 30 years. And Bing introduced me to a framework that has become my like core operating framework as a CEO and something that I like to teach every founder that I talk about when they hit a certain scale. And he has this concept of forever OKRs.

23:45If you're familiar with the OKR philosophy, this is a philosophy that the guys at Kleiner very famously, people like John Doerr, rolled out to Google and LinkedIn and so many of the legendary tech companies of the last 20, 30 years. And, you know, OKR stands for objective key results. So, you know, basically what it would say is like you have some large objective and it might say, you know, I want to grow my talent base, you know, and then the key result would be specific, measurable and time bound. So I want to, you know, go from 1100 talent to, you know, 1500 talent by November 1st. Right. So like having some, you know, specific goal.

24:29So Bing's idea in his experience watching so many great CEOs, whether it's Mark Pincus or Jeff Bezos or Daniel Eck or any of these great CEOs that he'd worked with and mentored, he basically distilled what made them great. What separated the top 10 % from the rest was really people that could nail these five very specific things. and the idea of Forever OKR is as a CEO, or let's use a head of sales as an example. The Forever OKR of a sales leader is beat plant, right? You don't know what the number is going to be today. You know, it might be 2 billion today and 5 billion next year, but it's always beat plant.

25:14As a CMO, your Forever OKR is, you know, build a legendary brand for your employees and customers. Like no matter what the product is, like that's what you want to do as a CMO. As a CEO, in Bing's experience, he felt that there were five things on the forever OKR front that every CEO should be thinking about. And really, at scale, every other job that's not these five things are stuff that other people could do. So the first of these forever OKRs is product market fit, something we've spent a lot of this call talking about. Find it. And when you find it, continue to make sure you don't lose it.