Cameo to the Moon, and Back

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 Robert Van Winkle, better known as Vanilla Ice, sang his 1990 hit “Ice Ice Baby,” flanked by 10-foot sparklers, he pulled the 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 chief executive, 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 start-ups, Cameo could be so much more than just a quirky, semi-ironic video greetings business. Mr. Galanis and his co-founders decided to build “one of the most important, beloved consumer companies of the generation,” as Mr. Galanis declared in a 2021 interview. “Something that can be as enduring as what Walt Disney did for the last century.”

Investors and employees — encouraged with a meme stock battle cry of “LFG!”(“let’s go!” with an expletive) — believed the company’s surging growth would continue forever.

A decade of near-zero interest rates, abundant venture cash and a steady tech boom gave no indication otherwise. A company like Cameo could afford to lose money forever, as long as it kept getting bigger. And American culture produced few things with such regularity as it did new celebrities.

What could go wrong?

The Mayor

Company lore traces Cameo’s roots to a 2016 conversation between Mr. Galanis, then an account manager at LinkedIn, and his friend Martin Blencowe, an N.F.L. agent. Mr. Blencowe had asked Cassius Marsh, the former Seattle Seahawks linebacker, to record a congratulatory video for a friend who had just had a baby. As Mr. Blencowe described the friend’s thrilled reaction, an idea took shape.

Mr. 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 Mr. Marsh, promising videos for around $20; Tori Spelling and niche Vine personalities like Evan Breen joined later that year. (Mr. Blencowe, 37, and Mr. Townsend, 33, who are also co-founders, still work at the company.)

For Mr. Galanis, Cameo, based in his hometown, Chicago, felt like the company the trio was destined to build. He and Mr. Blencowe were fresh from a short-lived production career. (Mr. Galanis still highlights their IMDb credits, which include a TV show called SAF3, pronounced “safe,” about an elite rescue task force.) Mr. Townsend had been a star on Vine, the short-lived, short-form video app.

“We lived in this world,” Mr. Galanis said. “We didn’t build this business by accident.”

This article is based on interviews with Mr. Galanis and more than 30 current and former Cameo employees, investors and advisers as well as internal documents, screenshots and photographs.

Mr. Galanis sports a dark close-cropped beard and often wears either polos or Cameo-branded shirts and baseball caps. He’s a self-assured pitchman who views himself as an ultra-connector, peppering conversation with references to business leaders he admires like Elon Musk.

He pointed to a 13-year-old college newspaper profile of the events company he ran at Duke, with the headline “The Mayor of Main Street.” He said it offered “pretty important” context for why he was able to build Cameo. The article, which is topped with a photo of Mr. Galanis flashing a thumbs-up while drinking a Busch Light, describes how he made a name for himself by befriending local venues and organizing huge parties, like a beer-pong event that was viewed as innovative for taking place on a weeknight at Shooters, a spot that was normally a sweaty dance club with a cage. (He also took credit for an “April Showers” party, featuring coeds in wet T-shirts.)

To grow in the early days, Cameo started recruiting anyone with a shred of fame to its platform, taking a 25 percent 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. The resulting videos were strange and amazing to receive — Did Dennis Rodman really just tell me to have a great night?

Cameo worked best for people who were “more famous than they are rich,” Mr. 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.

Popular talent included the Soup Nazi character played by Larry Thomas on “Seinfeld” and a YouTube duo called the Game Grumps. 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.

You could get a celebrity to say just about anything on Cameo, it seemed — which, in addition to being the main part of its appeal, was an early risk to its reputation. The service hit a setback in 2018 when Mr. Favre and Soulja Boy unwittingly recorded Cameos that were laced with obscure antisemitic messages. (The platform quickly deactivated links to the videos and deleted associated accounts.)

By 2019, powered by word of mouth, Cameo had grown to 100 employees and raised $50 million from top venture firms, including Kleiner Perkins.

It added celebrity investors like Snoop Dogg and Bethenny Frankel of “Real Housewives.” Ms. 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. Mr. 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.

Stars who had previously ignored Cameo’s outreach, like the singer Akon (known for such hits as “Smack That”), signed up, along with pandemic celebrities like the cast of Netflix’s “Tiger King.” Others, like Mandy Moore, Busy Philipps and Mike Tyson, joined Cameo for a fund-raiser. Cameo was even name-checked in a special May episode of NBC’s “Parks & Recreation.” The Biden campaign partnered with the start-up for fund-raising in 2020.

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. It was “fascinating, and slightly addictive,” The New Yorker weighed in.

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, and even produced a video promoting the “space race” with Andy Dick, Lance Bass and other personalities. The trip would be “one giant leap for fankind,” they declared.

But the killing of George Floyd in late May set off widespread protests days before the announcement, the former employees said, prompting Mr. Galanis to cancel the plan.

As the pandemic stretched on, employees worked tirelessly to keep up with the interest in the platform, especially Cameo’s young talent managers, who drove celebrity sign-ups through a barrage of direct messages, emails and texts to blue-check-marks and their agents. (William Shatner of “Star Trek” complained several times on Twitter about how Cameo’s employees were “relentless in hounding celebrities to death” and swore he’d never join.) Former employees recalled requirements of at least 100 “touch points” per day — one D.M. or email counted as a touch point — and 200 during the holidays, when people bought the most videos.

Staff took turns sending messages from the main Cameo Twitter account. “The fans keep asking!” they wrote to one recruit, punctuating with a money bag emoji. “You got a few min to chat Cameo?”A follow-up promised “big $ $ business deals.”

Mr. 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 from companies like LinkedIn, McDonald’s and Hulu, whom he believed would help take the start-up public. He said that a board member had advised him to channel Phil Jackson building the Chicago Bulls championship team.

Peak Cameo

Investors clamored to give Cameo more money, partly because in the fever dream of 2021, investors clamored to give any start-up 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 start-ups. The flood of cash from investors seeking more risk for higher returns pushed companies like Cameo to spend more, grow faster and take bigger swings in pursuit of moonshot glory. A handful of companies go on to become the next Facebook. But countless others blitzscale themselves off a cliff.

Few investors are more synonymous with such boom-and-bust investing than Masayoshi Son, head of the Japanese conglomerate SoftBank. Some of Mr. Son’s aggressive bets have paid off handsomely, like his investment in the Chinese conglomerate Alibaba. Others crashed and burned, like WeWork, the high-flying co-working company that’s now at risk of insolvency. Several former Cameo employees invoked WeWork when talking about their experience at Cameo.

Mr. Galanis met with Mr. Son on Zoom in February 2021. Mr. Son offered Cameo $400 million in cash — four times the company’s fund-raising goal — and told Mr. Galanis to spend $100 million of it sponsoring the Tokyo Olympics, Mr. Galanis said. Instead, he stuck to Cameo’s target. A representative for SoftBank declined to comment.

The hot new funding round, announced in March 2021 — around the time Covid vaccines rolled out widely — drew enough interest that Mr. Galanis and his co-founders sold a chunk of shares, a move that is sometimes frowned upon by investors and wasn’t disclosed to employees. Mr. Galanis said he sold less than 12 percent of his shares — which could have been worth millions of dollars at the time — and that he remains the largest individual shareholder. (The co-founders each take a salary of no more than $150,000, he said.)

Rank-and-file employees were not permitted to sell, though outside investors like Ms. Frankel were. She said she had gotten the sense that the app had peaked and sold her stake for a “seven-figure return.”

With the new $1 billion valuation, the mood at Cameo was euphoric. The company rented a Beverly Hills mansion it called the “Cameo House” with a big deck and a pool 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 from chichi spots like Sugarfish and Jon & Vinny’s.

The company regularly highlighted its celebrity investors like Ms. Frankel. In 2021, it added Earvin “Magic” Johnson to its board.

The hype extended to equity. The message to employees, especially new hires, was that unlike their 401Ks, their payouts could make them rich. Some employees donned vests on their one-year anniversary at Cameo in a nod to some shares vesting, two former staffers said.

But the business couldn’t grow fast enough from just video messages. Cameo experimented with other ways to get people to pay for interactions with talent, like live events, real-time video calls and direct messages. It created Cameo for Business to pair celebrities with corporations for ads and speaking gigs, a promising division that was often shunted to the side in favor of ventures that involved fans.

An initiative called Project Blackbeard tried to woo bigger celebrities onto Cameo with upfront cash payments and minimum guarantees. But the deals were costly — Ian Somerhalder, an actor from the teen drama “Vampire Diaries,” received a six-figure sum, according to three former employees — and the stars often left once the contracts ended. Once other celebrities and agents got wind of the advances, many began demanding similar fees. Cameo ended the project. (Mr. Somerhalder did not reply to a request for comment; Cameo noted that he had since rejoined.)

Many major stars didn’t want to be on Cameo, except for the occasional charity event. It had a strong whiff of the D-list, and they didn’t want to be listed next to a pair of TikTok rappers called the Island Boys 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, including Zayn Malik, Arnold Schwarzenegger and the cast of “Friends,” and Cameo hoped those clients might eventually start making videos.

It paid $25 million to $30 million, according to three people familiar with the deal, and took on debt for the first time to do so. The company celebrated with a “Friendsgiving” party at the Beverly Hills mansion in November, which featured dancers in gold costumes gyrating inside clear globes floating on its pool and guests like Ms. Abdul and Perez Hilton.

But Cameo’s hopes to get in with Represent’s stars died quickly.

Mr. Malik was among celebrities who refused requests to join Cameo, two former employees said — and few of Cameo’s stars, with some exceptions like the internet sensation Corn Kid, ended up experimenting with Represent. The company said joining Cameo became a “friction point” for some Represent stars. (Mr. Malik did not reply to requests for comment.)

The failed experiments were one thing, but 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.

The Tinder Swindler and NFTs

Cameo’s unsuccessful lurches into new products and growing internal stress put new scrutiny on Mr. Galanis and his unfocused management style. (The company said that Mr. Galanis’s daily responsibilities “may not have been apparent to each employee,” particularly while they worked remotely.)

Weekly staff meetings featured a “Steven’s Thoughts” portion where he often discussed his weekends jet setting at Formula 1 races, the Cannes Lion festival and N.C.A.A. games. (Cameo said travel was not the primary focus of “Steven’s Thoughts.”) Sometimes he talked about Cameo’s plans to expand into the cryptocurrency business known as Web3, comparing the opportunity to Christopher Columbus’s exploration of the new world. He told some employees he was seeing a longevity doctor who had informed him that, despite being 35, he was biologically 44. (Being chief executive has taken a huge toll on his health, he said in an interview.)

The newly expanded sales team was stuck in place, circling whatever person had just gone viral on TikTok or joined the cast of “Love Island.”

In early 2022, some talent reps began seeking out convicted fraudsters like Simon Leviev, better known as Tinder Swindler from Netflix, a con artist who scammed dozens of women out of millions of dollars on dating apps. (Cameo said felons were allowed on the app, including those in jail, so long as they were not subject to U.S. sanctions.)

Mr. Galanis and other company leaders promoted the Tinder Swindler on social media and touted the money they would make from him, outraging women at the company and later prompting one executive to issue a companywide apology on Slack, according to internal messages. One employee sent a Slack message flagging Billy McFarland of Fyre Festival notoriety and the pharma villain Martin Shkreli for outreach, saying “just in case they get out of jail early, we should be on top of it.” The Information earlier reported on the internal strife.

Some celebrities left, citing the arrival of Mr. Leviev and other polarizing characters, several employees said. The actress Alyssa Milano told The Times in a text message that she left Cameo after members of the Trump family joined in mid-2021, though she recently rejoined amid the Hollywood strikes. Last year, employees also complained after Cameo executives gave Represent the task of selling merchandise for Andrew Tate, the self-declared misogynist who has since been charged with rape and human trafficking.

Mr. Galanis, for his part, said he was annoyed by the reactions, blaming Cameo’s hiring spree for bringing on employees who didn’t share what he characterized as the company’s values around free speech.

“There was actually someone at an all-hands that said, ‘I feel Cameo is gaslighting me by letting Donald Trump Jr. on because his father killed my father,” Mr. Galanis said. “Her dad had passed away from Covid. So that’s the type of just crazy activism that was happening at the company and this wasn’t just one person.”

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 nonfungible tokens alongside access to V.I.P. parties.

The crypto push seemed to reflect the personal enthusiasms of the company’s founder as much as it did any business imperatives. Around that time, Mr. Galanis showed off an NFT he’d purchased on his own. It was a cartoon picture of a monkey wearing 3-D glasses called a Bored Ape that cost him $320,000. Represent made him a pair of flip-flops bearing the image.

In March 2022, for the first time in four years, the Federal Reserve announced plans to raise interest rates, signaling that the free money chasing high-growth start-ups might be about to dry up. In May of that year, Cameo, which was still burning millions a month without the sales to show for it, laid off 87 people, or around a quarter of its staff, citing overhiring and the market downturn. The party seemed over.

Except — the parties weren’t over. A few days after the cuts, Cameo threw a celebration in Miami for its NFT holders at a Star Island mansion with a red carpet, a row of sports cars and performances from Diplo, DJ Khaled and Fabulous. Current and former employees were outraged, though Cameo said the parties were paid for by the proceeds of its NFT sales.

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 around $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, Cameo slashed its internal valuation of its common shares by 55 percent, according to an internal presentation viewed by The Times. In August 2022, hackers stole Mr. Galanis’s monkey art along with $70,000 worth of cryptocurrency.

Mr. Galanis tried to round up more cash in 2023, according to three people familiar with the situation, but investors were turned off by all the spending. A potential deal that would have let Cameo acquire a European competitor called Memmo fell through, according to two people familiar with the conversations. Memmo went bankrupt in August. Another investor, the private equity firm TPG, has had multiple conversations about investing this year but no deal is imminent, three people said.

‘Wouldn’t Wish It on Anybody’

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. Mr. 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 Mr. 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 C.E.O. is to make sure this business survives and fulfills our mission and vision.”

Cameo is wringing more money from the videos it started with, increasing its cut to 30 percent for new talent plus a new 10 percent service fee.

It also appears to be seeking out talent who might not even be considered D-list. Since 2020, more than 100,000 people had applied to sell videos on Cameo but were rejected for having small followings or unverified identities, Mr. Galanis said. Now, he said, Cameo “allows more of those people to get through.”

And it continues to seek new horizons. The company recently sponsored jerseys for a professional pickleball team that Mr. Galanis co-owns in Miami. Mr. Galanis said no funds from Cameo were used for the sponsorship.

Cameo is just one case study in the grim awakening for the start-up sector writ large, and an especially familiar tale among pandemic darlings like Zoom and Peloton that couldn’t maintain their rapid growth.

Still, Mr. 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 — but only 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.

Mr. 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.”

Susan Beachy contributed research.