In this video, Patrick Bet-David explains the fatal flaw in Cameo’s business model that led to a 90% drop in value. Learn from their mistakes to avoid similar pitfalls in your own business strategy.
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Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller “Your Next Five Moves” (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.
So did you hear about what happened with Cameo so here's a company Cameo goes From zero to billion dollars from 2017 To 2021 everybody's talking about it Clim of Perkins invest SoftBank invest Big Company 400 employees and then Recently article comes out this month Talking about Cameo drops 90% in Valuation from 400 employees to 33 Employees from a billion to under $100 Million everybody's wondering what the Hell happened to this company we're Going to talk about that today so if you Get value out of this video give it a Thumbs up and subscribe to the channel Let's get right into it so great idea Cameo so this guy Steven and his friends Martin and Devon are sitting there at His grandmother's funeral they're Driving apparently and he shows how a Football player sent a congratulation Video to another one of their friends Who just became a father for the first Time who was like oh my God what a great Idea look at the guy's reaction he's so Emotional let's turn this into a Business and next thing you know even a Person like me one of my friends once Time Mark Molina sends me a happy Birthday video from the great Jerry West Here it is Patrick this is Jerry West Mark asked me to help wish you a very Happy 42nd birthday these are crazy town For everyone but I'm sure that one of
Your best birthday presents was the Lakers winning another NBA championship This year getting to know Kobe irvan and James at your events must been a thrill For you and your guests let's hope the Coming year allows everyone to get back To some sort of normaly and that we all Enjoy good health and good fortune Wishing you the very best in all of your Endeavors so obviously if you watch this You may be saying oh that's pretty cool I mean birthday getting from somebody Have you ever gotone a cameo who would You want to get a cameo from I'm talking To the guys here he's talking about Margot Robbie he's talking about Angelina Jolie she's talking about Brad Pit whatever these names I'd love to get A cameo from this person wishing me a Happy birthday maybe you have one as Well but that's just one time right cuz You wish a happy birthday one time I'm Not going to want it again from Jerry West again and again and again so it's Not a beback customer model but it was So attractive to them that Magic Johnson Ends up sitting on the board of Cameo That some pretty heavy duty people got Involved that they had at one point Certain experts and users making real Legitimate money on Cameo I'm talking Like a million doll a year income we Have Brian bomgardner character from the Office was making over milliona year in
2021 so was James Buckley Gilbert Gotfried was making $450,000 on Cameo as a comedian Mike Foley wrestler 445 Kevin oer Mr Wonderful 350 as an entrepreneur Mike Rapaport $300,000 Carol Baskin was Making $150,000 in a year from Tiger King in 2021 here's some other the names that Were on Cameo by the way Caitlyn Jenner Snoop Dogg Brett far Lance Bass Tony Hawk IC te Perez Hilton now I can give You a lot of other names but here's the Key during covid when everybody's locked Down they want to talk to other people Cameo went up 400% their revenue went Above $100 million they got over 50,000 Personalities under for you to choose From in other words good things are Going on with this company and their Target became very clear they focused on Famous people who were making a lot of Money so you got a lot of big following But you don't make a lot of money you're A good person to be on Cameo that was Kind of like the angle they were taking And was working for these guys even at One point they put a party together Called Cameo paloa which was a lavish Company party celebrating their success They had Kenny G performed a saxophone Serene they had Paulo abdulah as a judge As like this kind of an American Idol Style contest Hamilton cast members
Performed even Vanilla Ice sank Ice Ice Baby bringing Mark McGrath on stage Cameo on app for personalized celebrity Video celebrated at a Chicago restaurant In a Hilton penthouse suite with 300 Employees so imagine you're at this Event 300 people they like oh my God We're going to the moon this is going to Be great and then all of a sudden they Start kind of losing focus because you Know when during Co all this free money Was being given to people everybody was Spending their money but was that really Going to stay like that forever you have To figure out where to kind of get Focused and grow your business but Things change in 2022 all of a sudden Steven galanis tweeted this on May 4th 2022 today has been a brutal day at the Office I made the painful decision to Let go of 87 beloved members of Cameo F If you're looking to hire hungry humble Smart kind curious learning machines who Love to win and you see Cameo on their Resume look no further now you got to Keep this in mind 87 employees this 25% Of their Workforce give or take you have To also think about when this was this Was May of 2022 what's going on during May of 22 interest rate Skyrocket Tech Boom cooled money got expensive Everything is not working in their favor So timing was very bad for them they had A great idea what they're trying to do
But it was challengeing season for them Right and at the same time when this Happens sometimes as an operator you Become desperate like oh my God we got a Billion dollar company we can't lose This and you're Rewritten about all over The place celebrities all the stuff That's going on to you how are we going To maintain this so they get involved With a couple different things they Start venturing into nfds and other Areas that did not generate expected Results adding to the challenges they Started this Cameo crypto business they Made a few million dollars in Revenue Out one point but they had to shut down Because the NFD was originally sold for $630 sank to $760 and again this time when he fires The 87 employees this is when the market Crash wiped 300 billion dollar in one Week all of this happens at the same Time so imagine what the board is Probably telling them from the clein of Perkins the soft Bank hey we got to Figure something out this is not working Out the way we're going right now and That's exactly what a board would tell The operator then fast forward in July Cameo slashed its internal valuation of Its common shares by 55% and unfortunately because they Handpick the people that go on Cameo you Will be judged on who you let in versus
It's an open platform it's a social Media company coming in and become an Expert or an influencer people pay for Good for you they handpicked who would Come in and a couple people they picked Pissed a lot of people off with one of Them being Simon Lviv which was the Tinder swindler I don't know if you Remember this guy the convicted fraud Store they brought him in and he started Doing Cameo and they started promoting Him and Cameo policy allows felons Including those incarcerated to use the App unless they are under us sanctions Which by the way there's a lot of people On YouTube that create content that are Former criminals there's a lot of people On Instagram Twitter Linked In A lot of These places but they're not handpicked It's an open social media platform they Can open up an account for them they Were proven the people that would be Those personalities and this continues They started doing something with Billy McFarland the fire Festival guy and Martinelli who was the Pharma guy there Was a documentary I think done on him The fact that he was overcharging people For some medicine that he could have Sold for nothing he was also in Cameo And then simultaneously they bring Trump Jr on and when they do Alysa Milano's Like I'm not going to do this I'm Leaving Cameo and then later on when
Hollywood went on a strike she got back On came cuz she needed to make money Anyways they even had some stuff that They did with Tate and he's like listen I'm for fre freedom of speech why are You guys doing this to me right the Market did not like some of the Decisions these guys made and by the way Even if you look at data right now this Report came out the fact in the month of November they had roughly 9 million People visiting their website then it Drops to 4.52 then it drops to 5.15 I Don't know what the numbers look like For February or even March but obviously It's declining compared to the kind of Traffic they used to get before and in The first four years I think they did 2 Million paid videos on Cameo so it's not Like it's not something that there was Interest for there was interest for they Lose for Focus kind of bad timing took a Hit had to drop off but uh I have Certain thoughts here when it comes down To Cameo so I think it's fair to say That Cameo had a good idea I mean the People of SoftBank or clein of Perkins Are not going to give $50 million or $100 million if they didn't think this Thing had legs right however there's a Few things you got to look at with a Business model like this we never ever Know what company is going to be the Friend store the Myspace or the Facebook
What does that mean first somebody Introduces something like why would I Pay to get a happy birthday that's kind Of dumb I'd never do that why would I Post my pictures on a website called Friendster I'm not going to to post my Pictures that's why I have an album Myspace why would I post oh I would and I would play a song but uh it didn't Work and then boom Justin timberl ends Up buying it I think for like 25 million Bucks Facebook boom trillion dollar oh Wow I would do something like this and It turns into all these other things That's not their fault all it means is Somebody else gets to watch so for Example Zuckerberg and winkl brothers Had the ability to watch mistakes made By Myspace and friend said let's do it This way right unfortunate thing about Being the first one that comes out many Times in the market is the third that Makes it happen so the other part they Have to look at with Cameo is they had a Niche which was the birthday happy Birthday from XYZ I got the birthday From Jerry West but you know what I Would have liked from Jerry West how do You become a great executive give me Five keys for being a great executive Tell me one of the hardest recruits you Ever made how did you do it what did you Say who was a decision maker how do I Become a good leader what is the key to
Winning you've gone to the final so many Times or you won once what was the Difference are you okay with that are You able to work with I want to know Certain things and I want to go back and Forth I don't want to just have it one Time I'm will going to pay second third Fourth fifth time so when it comes down To this technology a happy birthday is a One night stand but people nowadays Don't want just a one night stand they Want a relationship and maybe even a Marriage what I mean by that is is the Fact that I want to ask you a question Then have a follow-up question then a Follow-up question and a follow-up Question I'm willing to pay for it but I Don't want it to be something where it's A oneoff a business wins when customers Keep coming back it's called be back Type of customers and they don't have That with Cameo and and by the way AI is Like w you know what if you can you know Now do Ai and Pat they're making your Voice and I can ask any questions and This AI has all your books and what if I Can ask you know any expert any Questions and it's the AI voice Responding it's not personalized right I Want her to be personalized not just Something that's an AI responding it's a Machine I don't have a relationship There is no engagement there is no it's Not authentic to me right I want to hear
From you whoever that person may be and Last but not least they could have Created an open platform instead of you Have to prove everybody that they come In because when you do then you have to Explain yourself why did you let that Person in why did you let this person Instead no this is social media side Everybody can come in and create an Account and if others want to pay for it It is what it is and this leads me to Why we started the app man let me Explain 8 years ago I'm talking to my Lawyer we have a 7-minute call he builds Me for 30 minutes I call him I say why Do you build me for 30 minutes he says That's how it works I said nope you can Roll up the minutes to 10 minutes maybe 15 minutes I'm not paying you for 30 Minutes he says listen that's how it Works I said what do you charge by the Minute he says no lawyer charges by the Minute so what do we do I said one day I'm going to start a company where I get To pay people by the minute hence do you Have a minute to connect let's man and We start the app man and we launch it We've had a few hundred, downloads but Here's the key the other part for me was When on Instagram or on LinkedIn I would Find myself going back and forth with Somebody 20 30 40 messages I'm like I've Spent at least four hours for this guy Here why am I doing all these messages
I'm Consulting this guy you ought to pay For this and on man we have an 85% to 90% ratio of people getting back to you Why because you're paying for it and It's an where I get to ask experts I Want to know how to raise money they're On there I want to talk to lawyer They're on there I want to talk to Doctor they're on there I want to talk To psychologist they're on there I want To know somebody that built a business That exited for a billion dollars They're on there I want to know how Money manage your prospect clients They're on there I want to know how you Raise your kids they're on there I'm About to make some bad decisions in my Life I want to talk to a man that's Going to give me a little bit of advice Almost like a father figure or an uncle Or an older brother they're on man and In many cases when I'm getting messages It'll follow up with a second message Third fourth fifth 6th 7th we have a few People that have conected with 20 plus Times because they're dealing with I'm About to hire this guy should I do this Or not boom here's what my concern is my Wife and I are talking about balance What do you think here's what I'm going Through now the guy that I gave the Offer left to another company what did I Do wrong boom it is a constant Relationship and engagement rather than
Being a one night stand and by the way If you're watching this you're an Influencer any other place at man we pay 820 you get 80 manette keeps 20 so Having said that if you having you Downloaded the app if you got questions For me my QR code is Right Here download The app ask me any questions you want we Can go back and forth but forget about Just connecting with me go find other People that's on man and man with them See what the experience is like and if You're an expert all you have to do we Don't discriminate if you feel you have Enough of an audience and your expertise Can change people's lives start a man Account as an expert share other people On what you're doing let them start Paying for your advice and if the Experience is great they'll give you a Five star but you'll also be held Accountable for giving the right kind of Feedback to other people as well well Because if they're going to pay you you May as well give your best you got value Out of this video give it a thumbs up And subscribe to the channel if you Haven't yet downloaded the app man click On the QR code order the link download The app start manting today take care Everybody bye-bye Bye-bye
