NEW YORK, NY.- Kenny G opened a meeting with a saxophone serenade. Paula Abdul judged an American Idol-style talent contest. “Hamilton” cast members performed. Lance Bass was there, hanging out. And when Vanilla Ice sang his 1990 hit “Ice Ice Baby,” flanked by 10-foot sparklers, he pulled Sugar Ray frontman Mark McGrath onstage.
This was Cameopalooza 2021, a company retreat celebrating the meteoric rise of Cameo, an app and website where regular people could buy personalized videos from minor celebrities for as little as $1. Attendees feasted on seafood towers and fondue fountains at an upscale restaurant on the Chicago waterfront and partied into the night at a Hilton penthouse suite, where Jack Harlow, a TikTok-famous rapper, performed a private show.
Three hundred Cameo employees danced, took videos and basked in their good fortune to be a part of the Cameo “Fameo” — the company’s nickname for its employees and community of celebrities. They were on a rocket ship powered by D-list celebrities and pandemic loneliness.
The company was preparing to expand in every direction: crypto art, live events, merchandise, international; its co-founder and CEO, Steven Galanis, now 35, was expert at straddling the line between business and pleasure. A former collegiate party promoter, he shared the lifestyle of Cameo’s celebrity talent, jet setting between parties, sporting events and luxury homes in Miami, Los Angeles, and Chicago. Cameo had just raised $100 million on the audacious ambition to pioneer the “connection economy,” landing a $1 billion “unicorn” valuation just a few years into its existence.
Now fueled by money from venture capitalists including SoftBank, the investor that powered so many of the previous decade’s frothiest startups, Cameo could be so much more than just a quirky, semi-ironic video greetings business.
An Idea Takes Shape
Company lore traces Cameo’s roots to a 2016 conversation between Galanis, then an account manager at LinkedIn, and his friend Martin Blencowe, an NFL agent. Blencowe had asked Cassius Marsh, a former Seattle Seahawks linebacker, to record a congratulatory video for a friend who had just had a baby. As Blencowe described the friend’s thrilled reaction, an idea took shape.
Galanis, a 2010 Duke University graduate, recruited a fellow alumnus and software engineer, Devon Townsend, to build it. In the spring of 2017, the website BookCameo.com launched with a tweet from Marsh, promising videos for about $20; Tori Spelling and niche Vine personalities such as Evan Breen joined later that year. (Blencowe, 37, and Townsend, 33, who are also co-founders, still work at the company.)
For Galanis, Cameo, based in his hometown, Chicago, felt like the company the trio was destined to build. He and Blencowe were fresh from a short-lived production career. Townsend had been a star on Vine, a short-lived, short-form video app.
“We lived in this world,” Galanis said. “We didn’t build this business by accident.”
To grow in the early days, Cameo started recruiting anyone with a shred of fame to its platform, taking a 25% cut of videos that cost fans as much as $3,000. People could describe the message they wanted their celeb of choice to send: a birthday wish, a pep talk, a roast.
Cameo worked best for people who were “more famous than they are rich,” Galanis would say. And by the 2010s, there were plenty of those people. The old star system of movies and network shows had been displaced by YouTube channels and viral moments and the rise of reality TV. Nostalgia was rampant; obsessive fandoms had become a badge of honor. Cameo capitalized on it all, allowing fans to connect directly with celebrities who didn’t seem that Olympian in the first place.
Brian Baumgartner, best known as Kevin from “The Office,” was the company’s top earner as of January 2022, according to an internal dashboard viewed by The New York Times, with more than $3 million in sales since joining. He was followed by Gilbert Gottfried (now deceased), Brett Favre, Sonja Morgan of the “The Real Housewives of New York City,” Kevin O’Leary of “Shark Tank” and Chris Harrison of “The Bachelor.” Each of the five showed lifetime sales of more than $1 million.
By 2019, powered by word-of-mouth, Cameo had grown to 100 employees and raised $50 million from top venture firms.
It added celebrity investors such as Snoop Dogg and Bethenny Frankel of “Real Housewives.” Frankel said in an interview that she refused to offer her video services unless she could buy shares. Becoming an investor made it easier to explain her presence on the platform alongside what her publicist once referred to as “Z-list talent,” she said.
Things had already been going well, but Cameo was supercharged by the pandemic, when both celebs and customers were bored and seeking connection. Galanis likened Cameo’s 2020 growth — a more-than-fourfold increase in revenue to $100 million — to getting an invincibility star while playing Mario Kart.
Employees were awed by a huge spike in Mother’s Day sales, the first big pandemic gift-giving holiday, and glowing press rolled in. “Cameo Was Made for the Coronavirus,” New York magazine declared.
To capture the moment, the company hatched a costly marketing stunt as it neared the sale of its millionth Cameo that spring: sending a celebrity and a fan to space via Virgin Galactic, underscoring Cameo’s moonshot ambitions, according to three former employees and an internal memo. The company wanted to ignite “Willy Wonka’s Golden Ticket type hysteria” around it, per the memo.
But the killing of George Floyd in late May 2020 set off widespread protests days before the announcement, the former employees said, prompting Galanis to cancel the plan.
Galanis declared in the summer of 2020 that Cameo would be a “work from anywhere” company as he relocated to Miami. He had gone on a hiring spree, doubling Cameo’s staff size to 200 and recruiting a team of pricey executives whom he believed would help take the startup public.
Peak Cameo
Investors clamored to give Cameo more money, partly because in the fever dream of 2021, investors clamored to give any startup more money. Crypto, meme stocks, collectibles, real estate — all of it was going up, and there was more cash going around than tech founders knew what to do with.
Cameo’s founders had struck on a good idea at exactly the right time — something that counts as a success in the normal business world. But not for high-growth tech startups. The flood of cash from investors seeking more risk for higher returns pushed companies such as Cameo to spend more, grow faster and take bigger swings in pursuit of moonshot glory.
Few investors are more synonymous with such boom-and-bust investing than Masayoshi Son, head of the Japanese conglomerate SoftBank. Some of Son’s aggressive bets have paid off handsomely, including his investment in Chinese conglomerate Alibaba. Others crashed and burned, like WeWork.
Galanis met with Son on Zoom in February 2021. Son offered Cameo $400 million in cash — four times the company’s fundraising goal — and told Galanis to spend $100 million of it sponsoring the Tokyo Olympics, Galanis said. Instead, he stuck to Cameo’s target.
With the new $1 billion valuation, the mood at Cameo was euphoric. The company rented a Beverly Hills mansion it called the “Cameo House” for roughly $60,000 a month. Cameo was burning $5 million a month on its staff, travel, parties at the Cameo House, and expensive takeout for stars.
The company regularly highlighted its celebrity investors such as Frankel. In 2021, it added Magic Johnson to its board.
The hype extended to equity. The message to employees, especially new hires, was that, unlike their 401(k)s, their payouts could make them rich.
But the business couldn’t grow fast enough from just video messages.
Many major stars didn’t want to be on Cameo. It had a strong whiff of the D-list, and they didn’t want to be listed next to TikTok rappers or the dermatologist known as Dr. Pimple Popper.
But Cameo was hungry for any piece of them. In October 2021, the company bought Represent, a Los Angeles business that helped celebrities and influencers sell customized goods to their fans. Represent had a star-studded roster.
But Cameo’s hopes to get in with Represent’s stars died quickly. And there was a bigger problem on the horizon as the company headed into 2022: People were simply not spending as much on Cameos as they had been before.
Throwing Spaghetti at the Wall
Cameo’s unsuccessful lurches into new products and growing internal stress put new scrutiny on Galanis and his unfocused management style. (The company said Galanis’ daily responsibilities “may not have been apparent to each employee,” particularly while they worked remotely.)
Cameo kept throwing spaghetti at the wall. Perhaps inevitably, it got in on crypto, with Cameo Pass, a new product that sold crypto-backed art known as non-fungible tokens alongside access to VIP parties.
Cameo’s crypto business brought in a few million dollars in revenue before the company shut it down, one year after it launched. The price of its NFTs, which initially sold for about $630, sunk as low as $7.60. Cameo had entered the market near its peak; a May 2022 crash wiped out $300 billion in one week. In July 2022, Cameo slashed its internal valuation of its common shares by 55%, according to an internal presentation viewed by the Times.
Galanis tried to round up more cash this year, according to three people familiar with the situation, but investors were turned off by all the spending.
Today, Cameo operates as a husk of its former self. Its nearly 400 employees have shrunk to 33, plus a handful of contractors, after three rounds of layoffs. Magic Johnson, who was paid for his role, left Cameo’s board after not fulfilling obligations that included making Cameo videos, promoting the service and attending board meetings, according to two people familiar with his exit. (Cameo said he left on good terms. Johnson didn’t reply to requests for comment.) Cameo gave up its Beverly Hills mansion, and Represent stopped taking new clients.
The all-star team of executives that Galanis put together is now almost entirely gone. “I had to fire some of my best friends,” he said. “I wouldn’t wish it on anybody, but my job as CEO is to make sure this business survives and fulfills our mission and vision.”
Galanis argued that Cameo was thriving and “absolutely” still on track to become the next Disney. Cameo turned its first monthly profit in August since May 2020, he said — excluding certain costs like interest and taxes. Revenue, which had not grown year over year since June 2021, rose in September. The Hollywood strikes gave the company a boost and investors were paying attention to its cost cutting, he said.
Galanis said his ambitions for Cameo hadn’t changed through it all. “I was put on Earth to build this company,” he said. “I’ll fight for it every day.”
This article originally appeared in
The New York Times.
