Episode Summary: "$100M Without Paid Ads" on the I Am Charles Schwartz Show

Introduction to Steven Galanis and Cameo

In this episode of the I Am Charles Schwartz Show, host Charles Schwartz sits down with Steven Galanis, the visionary co-founder and CEO of Cameo. Steven shares his remarkable journey from an options trader to building Cameo into the world's largest marketplace for personalized video messages from celebrities. The discussion delves into the strategies and frameworks that propelled Cameo to generate $100 million in revenue without any paid advertising.

Building Cameo Without Paid Ads

Steven attributes Cameo’s success to a unique combination of strategic team building and a deep understanding of product market fit. Central to his approach is the Hacker, Hustler, Hipster framework, inspired by David Cummings of Atlanta Ventures.

• Hacker: Focuses on innovative problem-solving. “We built an army of people that were DMing celebrities on Instagram and just the sheer volume and getting through,” Steven explains (08:59).

• Hustler: Drives growth and creates demand. Steven emphasizes the importance of a hustler in generating hype and attracting top talent, stating, “You really need that hustler that can do that,” (08:59).

• Hipster: Ensures the product stays authentic and resonates with the audience. “We had conviction about building authentic over high quality,” Steven notes (08:59).

This triad allowed Cameo to seamlessly divide responsibilities among co-founders, leading to efficient execution and sustained growth without relying on traditional marketing channels.

Leadership and the 5 Forever OKRs

A pivotal moment in Steven’s leadership journey was his collaboration with CEO coach Bing Gordon, who introduced him to the concept of Forever OKRs (Objectives and Key Results). These are enduring goals that guide a company's strategic direction regardless of market fluctuations.

Steven outlines Cameo’s five Forever OKRs:

1. Product Market Fit: “If you don't have product market fit, all of the rest of the things don't matter,” he asserts (23:48).

2. Build a World-Class Executive Team: Emphasizing the importance of hiring top-tier executives who can execute the company's vision independently.

3. Mission, Vision, Values: Ensuring every team member understands and embodies the company's core mission and values.

4. Employee Engagement: Measuring and fostering an environment where employees are motivated and engaged, often using metrics like Employee NPS.

5. Keep the Lights On: Focusing on sustainable operations, including fundraising and budgeting to maintain company stability.

Steven shares a notable quote, “Product market fit needs to be," highlighting its paramount importance over other business strategies (23:48).

Navigating Growth and Challenges

Cameo’s rapid ascent to a unicorn status was marked by significant challenges, especially during periods of hypergrowth and market downturns. Steven recounts a “disastrous launch” early on but swiftly found product market fit through strategic targeting of influencers like YouTube stars and TikTok personalities (17:56).

However, expansion brought its own set of hurdles:

• Overextension: Diversifying into areas like subscriptions, live calls, and merchandise led to operational strain. Steven reflects, “We got, we overextended ourselves,” (17:56) and acknowledges the mistake of chasing shiny objects instead of refining the core business.

• Market Shifts: Changes in social media algorithms adversely affected talent promotion, forcing Cameo to pivot and reassess their strategies.

During the COVID-19 pandemic, Cameo faced a 50% revenue drop as consumer spending shifted away from personalized messages to other sectors. Steven details the tough decisions to streamline operations, reduce headcount, and refocus on the core business, resulting in a leaner, more resilient organization (37:23).

Company Culture and Executive Team Building

A robust company culture was instrumental in navigating Cameo through turbulent times. Steven emphasizes:

• World-Class Executives: Hiring top talent from industry leaders like McDonald's, Uber, and LinkedIn to build a strong executive team capable of executing the company’s vision (28:12).

• Mission Alignment: “Our mission is to create the most personalized and authentic fan experiences on earth,” Steven states, ensuring that every employee is aligned with this vision (28:12).

• Employee Engagement: Regularly measuring employee satisfaction and fostering an environment where employees are encouraged to recommend Cameo as an employer boosts retention and attracts top talent (28:12).

Steven shares a strategy from Bing Gordon: evaluating the executive team with a scoring system to maintain a high-performance standard, aiming for an average score above 4.25 out of 5 (28:12).

Lessons Learned and Advice for Founders

Steven offers invaluable lessons for aspiring entrepreneurs:

1. Prioritize Product Market Fit: “Product market fit needs to be," he reiterates, emphasizing that without it, other efforts are futile (23:48).

2. Resist the Hype Cycle: Avoid chasing trends and instead focus on what the market truly needs.

3. Maintain Operational Focus: During growth phases, ensure that resources are allocated to strengthening the core business rather than diversifying prematurely.

4. Leadership Development: Invest in building and maintaining a world-class executive team that can drive the company forward independently.

Future of Cameo and Leadership Insights

Looking ahead, Steven is optimistic about Cameo’s trajectory. After a strategic recapitalization to adjust the company’s valuation, Cameo is poised to 10x its valuation before doubling its headcount again. This shift emphasizes quality over quantity in hiring, ensuring that every new team member aligns with the company’s high standards and strategic goals (41:15).

Steven reflects on the importance of maintaining a high bar for new hires, stating, “We can do this with the people that we have here,” highlighting the focus on maximizing the potential of existing talent (44:35).

Personal Habits and Routines of Steven

Balancing the demands of leading a high-growth company, Steven shares his personal routines that keep him grounded and energized:

• Morning Pilates and Cold Plunge: “I go and do Pilates every morning and then follow that up with a cold plunge,” Steven explains (45:34). This regimen helps him maintain physical and mental resilience.

• Consistent Sleep Schedule: Despite experimenting with sleep technologies, Steven adheres to his natural sleep cycle, going to bed at 2 AM and waking up at 6 AM (45:34).

These habits not only enhance his personal well-being but also enable him to make clear, strategic decisions for Cameo.

Conclusion

Steven Galanis's insights offer a blueprint for entrepreneurs aiming to build successful startups without relying on traditional paid advertising. Emphasizing product market fit, strategic team building, and resilient leadership, Steven demonstrates how Cameo achieved unprecedented growth and navigated significant challenges. Aspiring founders can draw valuable lessons from his experience, particularly the importance of maintaining focus on core business objectives and fostering a strong company culture.

Notable Quotes:

• “If you don't have product market fit, all of the rest of the things don't matter.” — Steven Galanis (23:48)

• “We never stepped on each other's toes. The division of labor was great.” — Steven Galanis (08:59)

• “Every Cameo is a commercial for the next one.” — Steven Galanis (17:13)

Connect with Steven Galanis

For those interested in learning more or connecting with Steven, he is most active on Instagram and can be reached via his handle @Mr.312. While he isn’t highly active on LinkedIn or X, following him on Instagram provides insights into his professional journey and Cameo’s ongoing developments.

Actionable Takeaways:

1. Implement the Hacker, Hustler, Hipster Framework: Ensure your founding team encompasses these three roles to balance innovation, growth, and product authenticity.

2. Adopt Forever OKRs: Focus on enduring objectives that guide your company's strategic direction and empower your executive team.

3. Prioritize Product Market Fit: Continuously validate that your product meets a real market need before scaling or diversifying.

4. Build a World-Class Executive Team: Invest in top-tier leaders who can execute the company’s vision and attract further talent.

5. Maintain a Strong Company Culture: Align your team with your mission, vision, and values to foster engagement and retention.

By integrating these strategies, entrepreneurs can navigate the complexities of building a successful, scalable business without solely relying on paid advertising.

For more actionable insights from Steven Galanis and other industry leaders, download the free action guide featured in this episode at CharlesSchwartz.com.