Today John Roa talks with Steven Galanis, the CEO of red hot startup Cameo about how he is leading through the coronavirus pandemic. For more episodes, go to roa.com/podcast, or search “The John Roa Show” on your favorite podcast station!
Listen to the episode on Apple, Spotify, iHeart, or wherever you get your podcasts.
—
John Roa: Welcome to the John Roa show, a production of iHeartRadio and Roa MediaWorks. This is Leading from Home, a special limited series where I’ll be checking in with leaders and entrepreneurs from around the country on how they’re dealing with a coronavirus pandemic.
It’s Wednesday, April 1st … 19 days since the pandemic began.
Five days ago, president Trump signed a historic $2 trillion stimulus package. The bulk of the bill is focused on keeping large corporations in business and helping individual workers who are struggling financially. But about 350 billion of that will go towards helping small businesses, categorized as companies. with under 500 employees, over the next number of months.
There are a few important aspects for entrepreneurs to be aware of. Well $350 billion sounds like a lot of money to be distributed across the country to small businesses, experts have estimated that the real amount may need to be as high as one point 5 trillion to keep small businesses going for even just a few months.
So the current package may be, unfortunately, just a drop in the bucket. As for that $350 billion, it’ll come in the form of a forgivable loan program through the small business administration or the SBA. By forgivable, that means the loans won’t have to be paid back, but this obviously comes with a lot of stipulations.
For example, the loan prevents employers from laying off any employees during that forgivable period. There’s also limits on the loan size and the level of salaries the loan will cover. There’s also numerous stories on social media about the SBA being completely overwhelmed with loan requests and their online systems crashing.
So there’s a lot to be determined about how all this is going to work in shake out. There are a series of other very helpful provisions throughout the stimulus package, including the looser net operating loss reduction rules to offset taxes, a delay on employer side payroll tax payments for social security, and a really important one, which allows independent contractors and gig workers to benefit like full time employees would.
The government’s assistance over the coming weeks and months will be a critical lifeline for many small businesses, but it’s even more critical for those leaders and entrepreneurs to consult experts before depending on the loans or making any key business decisions based on a stimulus package, to, avoid getting caught in a really bad situation because of stipulations that weren’t met or the fine print.
After the break, I’ll be speaking with Steven Galanis, the co founder and CEO of Cameo, the world’s leading marketplace where fans can book personalized video shout outs from their favorite people. Steven quit his job at LinkedIn to start Cameo in 2016 after seeing a personalized video message recorded by an NFL player congratulating a friend on the birth of his son.
Now he’s running one of the fastest growing tech companies in America, throwing off tens and tens of millions in revenue and taking in big money from prestigious venture capital firms all over the country. But Steven also used to go to a big office in Chicago and take hundreds of flights a year to run his company, which he’s now doing from a couch in Palm beach.
After the break, we’ll hear how he’s leading through the crisis, if there’ll be any longterm changes to his business because of the pandemic and what Cameo is doing to help those in need.
—
John: So what’s been going on ? I know that you guys have had a lot of kind of craziness with some really seemingly good news that you guys are thriving through this. You announced the CameoCon, et cetera. But there’s also, you know, an insane new time in the world and to leading a big company. So what’s been going on with you?
Steven: I think in times like this, the most important thing is to try to give a sense of normalcy to the team. So, we’ve been really focusing on over communicating, and in doing things that we do in real life, but just by doing them over Zoom. So, last week we hosted a couple of “Jeffersonian” style dinners for the team, which were a lot of fun.
John: So what does that mean?
Steven: You know, they’re single threaded conversations, where you get one exec plus eight employees. And basically you’re answering questions like, “how would you change the way that you were raised?” You know, if you could go back and do it all over again, and then every single person asks a question and then answers, everybody answers that question and the next one goes.
It was just a great way to get people to know each other better, outside of work. Yesterday we hosted a fireside chat with one of our board members. We’ve been trying to, you know, have the sense of normalcy as much as possible, but. you know, it’s certainly, a challenge. Coming on, you know, we three and a half weeks being fully distributed.
John Roa:Well, because you guys are in a unique, unique position that’s kind of backwards to most companies these days and so far is that your business is totally digital. You’re doing your work on apps and websites except your office and your people are all in person. You got this huge, beautiful, bad-ass office in Chicago.
You’d normally do everything they’re seeing the people you’re working with. So you’ve totally had to flip that. And, and has that caused disruption? Have you seen people that are losing the ability to do their job, losing morale, kind of losing that connectivity with the team and the company?
Steven: I mean, frankly, we’ve been very positively surprised at how well the team is adjusted to going fully remote.
I think one thing that helps us is that me and my cofounders were distributed from the beginning. So there’s always been that DNA in the company with Devin and Martin being in LA and you know, me being in Chicago, most of our team works day to day with other team members that are in one of our other offices.
Chicago, LA, London, Australia, Argentina. So I think there’s a lot of, lot of good DNA for people to work distributed. But you know, it’s still a challenge, especially for a couple of our people who are balancing kids being out of school and both parents working. A lot of kids in Zoom these days, but it’s been a lot of fun.
John : Any zoom disasters?
Steven: Yeah, there’s been a couple pretty funny ones. Like our executive chat in the morning, which we do 8:00 AM every day Pacific time, and you know, my co-founder’s husband will be coming out of the shower and in his boxers in a towel or something like that. Yeah. You never know who will be on Zoom, but it’s pretty fun.
John: Yeah. There’s been so much funny content you’re seeing across social with just like these, these epic corporate Zoom failures, and so I feel like that’s going to become some kind of like trending video when this is all said and done.
Steven: Oh yeah, for sure.
John: And so, tell me about how you’re handling this from a corporate standpoint, leadership standpoint, because you’re obviously being one of the fastest growing companies in the country.
You absolutely blew up. From what I understand, three years ago, Cameo was like a dream. Two years ago it kind of got momentum and now you’re doing tens of millions of dollars in revenue. You’ve raised money from the big boys, from, from Bain, and from Kleiner Perkins. That’s a huge responsibility for you and your cofounders. How are you managing that? How are you doing that from your couch in Palm beach, and how are you keeping your head on straight, kind of through this chaos, all the uncertainty?
Steven: I think at the end of the day, almost every CEO in the country is running some variety of the following playbook:
One, share up your balance sheet, if you need to. To tighten the belt and cut costs wherever you can to avoid laying people off. Again, if your business is fortunate enough to not need to. Push out long plan projects that aren’t core to surviving through the next couple of quarters, and freezing hiring except for like absolute necessities that you need to hit your goals for the next couple of months.
I know in the opening days of this crisis, we really had no idea what this was going to do to our sales. We had a Sunday where our sales appeared to be down about 40% from where they were the week before. We had a really tough board call two or three Sunday nights ago where we were literally talking about the Armageddon situations and what would it look like?
Instead of doing the 60 million in revenue that we’re planning to book this year, we suddenly do 10 or we do 17, what are those scenarios look like? How do we make sure we extend runway, over 16 to 24 months, which is what most people are hoping to do. Because suddenly you’re walking into a totally different funding environment.
[00:09:01]If you’re a company with under six months for cash right now it’s certainly going to be tough, tough riding for you unless you’re one of the few businesses that is going to see a huge increase from something like this. And that just in the short term. But in the longer term too.
So from my side, we’ve tried to be as conservative as we could. We froze hiring right away. We cut travel over a month ago at this point. We’re a company where that is an important part of our business. You know, we cut all that. Our office in Chicago is getting purchased. So, as of May, we don’t even have any real estate obligations in the city of Chicago, which could end up being a godsend. This, you’re talking about a six figure bill every month that you can use for as long as this goes on. So, as of now, we’re really excited about the early, the early wins that we’ve had from this.
But frankly, I believe that the weakness in our business, and most consumer businesses, will actually really start in the next few weeks and going over the next couple of quarters when, I think, people are really coming to grips with being laid off or being furloughed and, you know, we’re not selling Clorox or Purell.
So at the end of the day, you know, we’re a consumer discretionary good. Just like many others. And for right now, I think it’s critically important to make sure that we’re delivering a product that can that makes people smile, laugh, and cry at a time where you can’t hug people or you can’t kiss them, or you can’t see them in real life.
But, you know, we’re certainly concerned about the strength of the consumers as we go into Q2 and Q3 this year.
John: Totally. You know, one of the interesting kind of commonalities that I’ve heard from entrepreneurs and leaders that I’ve talked to is this kind of bizarre sense of timing from when this happened and the make or break between, if this had happened two months ago, to some companies, they would have been either exponentially better or worse positions or a year ago or six months from now or whatever.
So it sounds like you guys are in a very favorable position of having some dry powder, having a sustained company, enough leadership to kind of, you know, to cull all of this. Except, a year ago, I assume that might not have been the case. So when do you think kind of your cutoff was and how different would this would have been managing through this six months ago, a year ago, two years ago.
And at what point do you think you might not have survived kind of a shakeup like this.
Steven: Frankly, I think anytime over the last year that had happened, we would have probably been fine. We’ve been very fortunate to have raised a significant amount of money over the last 15 months. You know, we closed in $12.5 million dollars Series A in November of 18 and then about four months later we closed this $50 million Series B.
Both of those fundraisers came inbound and we were, Frankly, we had plenty of money on the balance sheet each time. So those were both opportunistic. And this really brings me back to kind of last summer when I was debating on if we should do the Series B or not. We had just raised the series a and in fact, we hadn’t even started getting into our Series A money when we had multiple term sheets for the Series B. And I remember having lunch with Jeremy Lou, a partner at Lightspeed, at Shutters in Santa Monica, and I was asking him his opinion.
He goes, “Steven, sometimes when it’s raining gold, you just need to turn the umbrella upside down. You know?” And I think some of the best advice that I could have got given that, and I think there’s a lot of founders that might’ve been way more dilution sensitive, including myself.
They kind of realize right now — hey, it’s one thing to get to diluded a little bit more, but you know, it’s a total other thing if you have a great business that just can’t weather the storm, and I think you’re going to see founders be a lot more conservative, not just with costs that they’re outlaying, but also, you know being more conservative about actually making sure their balance sheet is always 18 to 24 months worth of runway.
John: Right. On that note, how do you think this is going to affect Cameo in the future? Is this going to create any kind of longterm policy changes, management decisions, strategic changes, et cetera?
Steven: For one right now we’re actually considering, what would it look like if we just stayed distributed?
I mean, are team is really enjoying this. So for us, that’d be huge change. As you know, you’ve been at the office, and that’s such a big part of our culture. But, we’re kind of looking around, especially at some of these other companies that have, you know, had pretty big layoffs in the Bay Area and other parts of the country.
We’ve been thinking about like, hey, if suddenly we weren’t constrained to hiring talent in our home markets of Chicago and LA, how many great people could we hire, and if they were on equal footing as the people that have been in our home markets, are we a better company for that?
So that’s one. Second, I’ve found that our executive team is spending a lot more time together. I implemented a daily stand up, 10:00 AM central to 11:00 AM where my exec team meets every day. Typically we are meeting in about an hour and a half a week, and suddenly now we’re meeting six and a half hours a week.
I think that makes a really big difference and I think we’re getting a lot more on the same page. We’re really trying to take things day to day. And then third, I think that there’s some massive tailwinds, especially on the supply side for us with, for the first time in human history, every single athlete, actor, entertainer, comedian, pop culture personality, they’re all unemployed at the same time. That’s never happened before. And you know, a lot of people that had said they’d loved Cameo but couldn’t do it cause they were too busy. Like suddenly they’re not. I really think this is a, however long this goes on, this is like the gold rush for us to get on people that we’ve always thought would be great on Cameo, but maybe, weren’t giving us a shot.
John Roa: And that’s super interesting that you guys are considering staying distributed. And I’ve heard that before and this is one of those kind of weird X factors that we might see: extremely different makeups of companies from startups to large corporations in the future.
Based off this, how are you seeing your celebrities responding? You have all sorts of people from internet influencers up to, you know, global A-list celebrities to, to big athletes. How, how are they responding to all this on Cameo? Are they getting more active? Are they donating their time? What are some stories you can tell us from kind of that side of the business?
Steven: Yeah. Number one, we’re seeing a lot more do this for charity right now.. Which I think is to be expected that that tends to happen anytime there’s a global disaster, local disaster. The thing that’s most interesting is we’ve actually seen them lower their prices, so over the past three weeks, over the past two weeks, the AOV or average price per order actually dropped by 27%. And this is as talent are trying to, you know, give back to their fans and make themselves more accessible. So that’s been a pretty unexpected, but, you know, pleasantly surprising benefit. What we’re seeing is that while our average order size has gone down, they’ve more than made up for that in volume.
And, you know, frankly, we’ve had two of the best five weeks we’ve ever had. In the business over the last couple of weeks. And this week’s trending to be better than all of this.
John: Lastly, how are you holding up? I mean, obviously as a high performer, as a CEO, as somebody who’s had an incredible run the last three years, this has got to be a bizarre change for you to go from important meetings and celebrity interviews and all those kinds of things, to sitting on your couch in Palm Beach trying to manage a global company.
So how are you holding up? Are you feeling some stress? Are you doing all right?
Steven: You know, honestly, my days aren’t different. It’s crazy as that sounds like I’m having the same meetings and having the same conversations. But two things that I’ve really enjoyed: number one, I hadn’t cooked for myself in probably two and a half years.
Like when I say that I’m talking literally not one time, and I was a pretty good cook before this started. I’ve really rediscovered my love for that . I had a food blog back in the day called “Off the Bone” on Instagram, and I’d post all the meals when I’d cook, and you know, that’s been a lot more active.
It’s been fun. I’ve been cooking up a storm for one, because yeah, my girlfriend doesn’t eat meat, so it’s really just me. But it’s good to see that the grill skills are still there.
I was basically living on airplanes. I took over 150 flights last year. At one point I think that was average during a flight every 1.3 days, which is just insane.
And I do think that certainly after this, it’s really gonna force me to, I think I’ll travel way last after going through this. And I do think when you’re, when you’re traveling so much, it really gets you out of your routine for working out, eating right. I was taking the red eye almost weekly back from LA.
It’s really fucks with your system and at the end of the day. I think for me, I’m going to have a standard, I’m going to use on whether I get on an airplane or not, is going to be a lot higher in the future. I think it probably has been, you know, for the last few years, it’s like if there’s anywhere in the world, I can be that day to move my business forward, I’m going to go there. And I’m not saying that that’s over, but I think like this is certainly given some perspective. On, you know, on what’s important and, and what can potentially win or what maybe somebody else from my team can cover.
John: Yeah, that makes a lot of sense. And I’ve heard that a lot from folks from across the board, personally, professionally, that there’s a lot of perspective being built right now.
And that’s an amazing thing for anybody in any situation. And obviously one of the commonalities that comes out of, tragedy is a lot of kind of new thinking. So last is, CameoCon. I know that you guys are putting on something to kind of take advantage of this new virtual world that we live in. Can you give us a quick snippet on that?
Steven: We’re going to be doing the world’s first, all digital fan convention, where we’re going to be working with our talents to put on a series of keynotes and performances, comedy, standup shows, panels, Q & A. It’s going to be a lot of fun. April 16th to 18th, and while that is going on, we have not announced this, so do the first one to hear about this, but we’re going to be announcing something called CameoCares, where 100% of all bookings on the platform, for those three days of CameoCon are going to go to COVID related charities.
So we’re in a mad dash right now to get this thing organized. But we think that this could be a huge moment for Cameo to do some good in the world. And. Yeah. We’re excited to do our part to help fight this.
John: Well, that is awesome to hear. I’m really glad that you guys are stepping up to do that. Sounds like an amazing event. I will be there tuning in.
So I’ll let you get back to work. Really do appreciate the time today, Steven. Then we’ll talk to you soon, buddy. Right. Thank you.
A big thanks to my friend Stephen Galanis for being on the show today. He’s an inspirational entrepreneur who’s not only finding ways to lead through the crisis, but also to help those in need along the way.
If you’re enjoying the show, please subscribe, leave a review and share with a friend. 100% of the profits from this limited series will be donated to charities that are helping people through the coronavirus pandemic. If you’re currently leading from home or you’re an entrepreneur that wants to talk through something or get some advice, I want to hear from you.
Head over to roa.com/podcast, that’s roa.com/podcast for ways to connect with me, or hit me on social media at @johnroa. That’s @johnroa.
The John Roa Show is a production of iHeartRadio and Roa MediaWorks. For more podcasts from us, visit the iHeartRadio app, Apple Podcasts, Spotify, or any place you get your favorite shows.
I want to give a special thanks to my producers, Jordan Gass-Poore, here at the show, and Tyler Klang over at iHeartRadio. We’ll be back with you on Friday morning with a very special conversation with a good friend of mine who’s leading an NFL team from home.
In the meantime, be safe out there. .
Listen to the episode on Apple, Spotify, iHeart, or wherever you get your podcasts.
Go to roa.com/podcast for more info.
