Cameo: Taking celebrity to unicorn status
Highlights from ✨Hot Deal Time Machine✨⏳ -- On Clubhouse Thursdays at 8PM ET
Below are highlights from last week’s Clubhouse episode featuring Nicole Quinn, Partner at Lightspeed, on her Series A investment in Cameo.
Sign up for reminders about the show ✨Hot Deal Time Machine✨ here and listen in to hear the goPuff story this Thursday.
📈 The Pitch: a 2x2 Matrix for Celebrity
The genius behind Cameo started with a flashy and sexy…2x2 matrix? It’s true, Steve Galanis, CEO of Cameo drew out a 2x2 matrix graphing how famous a person was on one axis and a consumer’s willingness to pay on the other. What he identified was that there was a quadrant that had often been overlooked, and it wasn’t the uber-famous A-listers. Instead, he focused on a group of celebrities that were well known or suddenly famous that hit a sweet spot between fame and affordable accessibility (where an individual could splurge for a few minutes of their time, but not break the bank). And turns out this was no small group - Cameo today has more than 15K celebrities and counting.
🚀 The Big Picture: Video Shoutouts and So Much More
Don’t call Cameo a video shoutout platform. While many VCs at the Series A saw Cameo as just that, (with some chalking it up as a gimmick), Galanis had a bigger vision from the beginning. To Galanis, Cameo was about creating a new form of payment and exchange: the “ability for somebody to pay X amount, to do Y activity, with Z person.” That core principle continues today as Cameo rolls out additional products like Cameo Calls, Cameo for Business, and Fan Clubs. As Quinn describes it, Cameo is building an economy for“the future of joy.”
🤦🏼♀️ The “Oh Shit” Moment: 6X growth in 6 mos… then flatline…then back to rapid growth again
In 2019, Cameo was on a tear. They grew the business 6X in 6 months, received 6 term sheets for their Series B round, and achieved a 6X mark-up over their Series A valuation. Spark Capital and Kleiner Perkins joined the cap table - everything was on fire. Until it wasn’t. Almost immediately the company flatlined, and not just for a month or two. For many start-ups, this is a death knell. But for Quinn and the Cameo management team who had been around the business for a few cycles, they understood that there was significant seasonality in the business (driven by fewer events or gift-giving moments in the second half of the year) and the company got back to its usual rapid growth again. Quinn shared that these times of slower growth can be a great opportunity to dig deeper and understand the drivers of the business - so that when growth does pick back up you can accelerate even faster.
📸 The Celebrity Collectible: Autograph → Selfie → Cameo
Quinn noted that technology overlays on an existing and essential consumer behavior are a core thesis at Lightspeed. And fascination with celebrity has been around, as Quinn puts it, since “the Dawn of Time.” Quinn, no stranger to celebrity-led businesses with Gwyneth Paltrow’s Goop, Sophia Amoruso’s Girl Boss, and Lady Gaga’s Haus Labs noted that a big benefit of celebrity start-ups is that it is much easier and cheaper to convert a fan into a consumer than it is to acquire a new user. Quinn sees the evolution of celebrity <> culture as starting with the autograph, evolving to the selfie, and now moving on, as she is betting, to “the cameo.”
👉🏼 Up next this Thursday: we chat with GoPuff investor, Jett Fein on the delivery start-ups path from college campus to $9B.
👉🏼 ✨Hot Deal Time Machine✨⏳ is a 30-minute weekly Clubhouse show where we travel back in time to the early stages of some of today’s hottest deals. Hear from founders and investors on the original pitch and thesis…and how things actually played out, Thursdays @ 8PM ET