CO-FOUNDER & CEO, SLATED
Stephan Paternot is a pioneering CEO who combines deep expertise in technology, film, and finance into one offering as the Co-Founder/CEO of Slated. In 2010, Stephan co-founded Slated, the world’s first online film finance marketplace. In 2014 he became CEO after relocating Slated to Los Angeles.As of 2018, over half of this year’s Sundance Film Festival selections and Oscar-nominated films were made by Slated members in producing, directing, and writing roles.
Stephan started two more companies that served as inspiration for Slated. He is the co-founder of PalmStar, a film production and financing company started in 2004, which has produced and financed 30+ films including HEREDITARY (2008), COLLATERAL BEAUTY (2016), and SING STREET (2016). Stephan is also the founder and general partner of the Actarus Funds. Founded in 2002, these angel funds have backed such companies as LendingClub, Indiegogo, AngelList, and Digital Currency Group. In 1994, Stephan co-founded the internet’s first community site as a Cornell undergraduate and played an important role in shaping modern social media networks. Theglobe.com became one of most trafficked sites in the world, with nearly 10% of all internet users visiting the site monthly. The company made stock market history in 1998 with a record-setting IPO and a valuation of over $1 billion. 1999 Stephan won the Ernst & Young Entrepreneur of the Year Award, and in 2001, published “A Very Public Offering,” a non-fiction business book detailing his experience at theglobe.com
Stephan is featured in the Valley of the Boom, National Geographic’s upcoming six-part limited series about the ’90s tech bubble from Director, Matthew Carnahan (House of Lies) and Executive Producer, Arianna Huffington. He is one of the three central storylines as the co-founder of theglobe.com which was the first ever social networking site – 10 years before Facebook. He’s also interviewed in the show alongside luminaries and tech titans such as Arianna and Mark Cuban.
After my first adventure building theglobe.com and living through the internet 1.0 bubble in the 90s, the next chapter of my life began in the early 2000s with tiptoeing towards a childhood passion, movies. I often saw the world through a cinematic lense growing up. Movie plot points, themes, scenes, characters and quotes, featured prominently in all aspects of my life. Watching good movies was always gripping for me, especially imagining myself as a character in each adventure. This was a growing itch I finally needed to scratch. At first, this led me to want to be an actor, learning the craft, taking lots of classes and fumbling in the dark trying to understand how this all works, but then it led me to producing a few short films, which then led to me to want to produce feature films, so in 2004, I co-founded PalmStar, a film production company, which was really the beginning of my film industry journey.
Yes, aside from Netflix that paved the way, filmmakers (and investors) are finally starting to embrace data analysis as their friend, and leveraging it to find or create better projects.
The biggest opportunity by far is migrating what has been a very traditional, offline, opaque, bespoke, gatekeeper centric, word of mouth business, and moving it into an online film industry marketplace. The biggest challenge by far is that the film industry incumbents are very comfortable with how things have always worked, and are resistant to this type of disruptive change.
It was my experience at PalmStar that best informed me about how the industry worked. Over the years we had amassed 20+ properties all in various stages of development, but quickly found ourselves hitting walls, always lacking that critical bankable actor, or director, or we’d have all the talent committed only to see production financing fall through at the last minute for reasons entirely out of our control. There was always one piece that would fall out and cause everything to stall or collapse. Momentum would build slowly, then fizzle fast, on each project, over and over again. In any given year you had no idea which horse was gonna win the race. We soon learned that this was typical of all projects in the industry. Even with material that talent and financing was chasing after, unless you were one of the six major studios, it was still incredibly slow, inefficient, opaque, with gatekeepers blocking every turn. Overly complex financial engineering to close deals, using onerous legal structures, “first-in-last-out” investor return waterfalls, always favoring last money in distributors at the expense of early equity investors, “hollywood accounting” always resulting in litigation with almost every film. Some of the smartest, best connected people in the industry often reminded me that getting any movie made is always “a miracle”, let alone making a profit on that movie. A “miracle?” that was not a term I had often heard fellow tech entrepreneurs use with successful startups, and this always struck me as odd.
Despite some successes, it became clearer and clearer after 6 years of toiling away there would have to be a better approach to filmmaking. Something that could help all production companies, accelerate the process of sourcing good material, packaging it up with talent; financing it, getting distribution, allowing filmmakers to make a living, and investors to make a return, with profits being re-invested into the industry, leading ultimately to a growing, profitable and sustainable asset class. With that, I knew it was time to put my internet hat back on and invent yet a new platform to make this happen. The next couple years I kept an eye out for every new internet business model than was coming along that might work. I had also begun focusing my tech angel investments into startups successfully reinventing online financing. I had the good fortune of being an early investor in companies like LendingClub, a peer-to-peer lending platform, then Indiegogo, one of the first ever crowdfunding platform, then SecondMarket, the online secondary market which allowed insiders from Unicorn companies like Facebook & Twitter to sell stock pre-IPO, and finally AngelList, which upended early stage equity investing in tech startups. Each of these companies successively helped crystallize how I imagined an online marketplace for the film industry might work. Shortly thereafter I co-founded Slated.
The biggest upgrade in Slated’s history is right around the corner. It should turbocharge the process of packaging up films with talent, financing and distribution.
One of the smartest decisions, was also the most counter intuitive. We decided to build an internal film finance team to do traditional film financing, by building relationships with top talent, managers, agents, an investor network etc, and manually matching projects to investors, and manually packaging them with talent etc. Just like packaging agents do! It turned out to be a huge success, not only in engaging with the industry, our users, and driving revenues, but in helping inform exactly how the platform should evolve. In the end, by slowing down and creating a, human driven sales process, we helped inspire how an automated platform could and should work at greater scale.
Realizing that the company needed relocate from NYC to LA to be closer to our customers, and I’d have to become CEO and re-build the team from scratch. Since theglobe.com I had largely been an investor in startups, and occasionally a more active partner or advisor, as was the case with Slated. My original partner and co-founder, who was the first CEO, had taken the platform as far as he could in NYC – and eventually handed me the reins to keep forging forward from LA. After 13 years of staying safely on the sidelines as an investor, much to my surprise, the post-traumatic stress I had experienced being CEO of theglobe.com had vanished. I was surprised how much my old wounds had healed, and I found myself ready, and hungry, to lead again.
Our filmmakers and investors get objective, unbiased, relevant insights on their projects and their likelihood to succeed. Immediate transparency to the strengths and weaknesses of their project, and a roadmap for how to move forward. And once the project is ready, a mechanism for much more rapidly packaging it with talent, financing and distribution.
First let’s agree on a fundamental truth. No matter what sort of leader you are, building a successful company is hard. Your odds of success are small, and getting there requires incredible tenacity by you and your team. Therefore, inspiring your team beyond just the company vision and mission, is critical, and requires active never-ending effort. And whatever techniques you use to motivate, needs to be codified into your corporate culture so that you get a multiplier effect as you grow. Over the years I’ve read many management books that put some of these practices into better words than I ever could, so I’ve borrowed liberally from them to help crystalize and codify the Slated culture.
If you are “radically candid” & truly listen, you will build stronger and more trusting relationships.
Show you care personally. Connecting emotionally: Humor and charisma make leaders likable and accessible. Credibility: Achieved through demonstrating expertise and humility. Responsibility means being ok with upsetting people. Acknowledge their frustration. Help them work past it. This will create stronger relationships. Find fault in the work, not the person. Explain why “this work isn’t good enough,” don’t critique the person. Maybe start with “you usually do extraordinary work and show great skill and instincts…but this work isn’t good enough.” People would rather work for a competent asshole than an incompetent nice boss. However, this is a false dichotomy – you can be a competent and a caring boss. End a tough feedback session with “Regardless, I‘m proud to be working with you.” Solicit criticism. And encourage it within teams. Listen intently to learn (not to debate, or deflect). “Tell them what to do, not how to do it”. If you give them enough context, they’ll figure out how to do it, and might just surprise you with their solutions. Loosen your grip, don’t tighten and micromanage. No matter how unnerving it feels. Trust your team to figure it out.
Stay centered during crises. Which is a lot easier to do if you have a solid team around you, whom you can depend on, and who trust you. Remember: “When you see only problems, you’re not seeing clearly.”
and DO NOT get distracted by your competitors. As long as you build your business from first principles, and stay focused, you’ll come out ahead.
And last but not least, as I’ve learned over decades, don’t be afraid to apologize. Admitting mistakes helps humanize you and build trust, credibility and mutual respect with your team. Rarely admitting mistakes underscores your insecurity in being wrong, and will only erode people’s trust in your self awareness, and leadership.
Low employee churn is a sign you’re doing something right.
Don’t be afraid of objective and unbiased analysis telling you the truth about your “amazing” project. Odds are it’s not as amazing as you think. And as much as you believe “truly original stories” can’t be quantified, they can. So why not find out the objective truth about your project right away, and get busy improving it?
What do you love most about Your City?
That’s easy, the climate and landscape. I love that LA was built in a desert, surrounded by hills, canyons, countless palm-trees, nature and blue sky everywhere you go.
Favorite breakfast meal & restaurant?
Eggs benedict, hash-browns, a side of brioche french toast with maple syrup, and a killer cappuccino. Sunday brunch at Soho House West Hollywood is the bomb.
What are you doing at:
6:00 AM – browsing the news on my phone, trying to get my brain working.
10:00 AM – catching up on all the Slack activity from our offshore developers who’ve been working the night shift.
12:00 PM – Favorite Power Lunch spot/meal?
Soho House west hollywood. The lunch buffet in the garden restaurant is pretty special.
7:00 PM – I’m in dad mode, feeding my 18-month old daughter, reading her bedtime stories, singing her some favorite anime theme songs from my childhood, and putting her to sleep.
11:00 PM – Nodding off in bed after watching reruns of Archer and Rick & Morty.
What drink do you need to get through the day and at the end (and how many)?
I’ve become a total coffee snob the past few years. Gotta have just the right roasted espresso beans. Always double shot, with Oatly milk frothed just right. One first thing in the morning, and a booster shot in the afternoon.
Most used App/Favorite Instagram Account?
Slack for work. Twitter for news. SpaceX, NASA, Nat Geo, ZachKing on Instagram.
What should everyone try at least once?
Acting class. You will learn about yourself from such a unique vantage point, it will blow your mind. I went to the Baron Brown School in Santa Monica, dipped my toe in with a 6-week program, got hooked and committed to their 2 year program. Life. Altering.
Where do you enjoy getting lost?
If you mean this literally… in data (nerd alert!). It’s always daunting at first, but eventually finding patterns and making sense of it is always fulfilling. If you mean this figuratively… an epic sci-fi adventure. Neal Stephenson’s Snow Crash is one of my all time favorite reads, more recently Sci-Fi channel’s The Expanse series (season 4 coming soon to Amazon Prime!).