2014-03-07

Co.Labs

The Taboo Things You Do Could Be Your Ticket To Success

How a concoction of reckless youthfulness, fear of failure, and unrelenting passion turned Carrot Creative from a basement startup to a Vice subsidiary.



If you ask Mike Germano why he started Carrot Creative, he'll tell you, straight up, it was because he didn't want a college internship that sucked.

Almost nine years later, Carrot's resume boasts clients like Rolex, Red Bull, and Disney, and is receiving list accolades from Inc. and the Agency Post, and was bought by Vice at the end of 2013. After years slogging their way through the early Internet's wild west and working off of hunches, the digital agency could be the literal stand-in for the chorus of "Started From the Bottom." It started in a basement. And now they're here.

Invent Your Own Internship

Chris Petescia, left, and Mike Germano on the first day of Carrot's existence.

Seniors at Quinnipiac University were required to complete an internship to graduate, as Germano was in 2005. The problem was the options for someone interested in the nascent web were pretty abominable.

"I had built better websites than these places all around Connecticut," says Germano, who with his high school friend Chris Petescia were the duo behind them. So when Petescia was also required to do a branding case study as a student at the Rochester Institute of Technology, he and Germano found loopholes in the university system to do exactly the class project they wanted to do, which was start Carrot Creative.

In the early days, beer money was diverted for proper expenses of their business operating out of a New Haven basement and taxes paid to the state of Connecticut. They acted as each other's professional advisors. They were armed with a belief that social media and the web were going places, whatever that meant at the time. If they had been found out, they probably definitely wouldn't have graduated.

"I thought if I got caught, my teachers would be impressed," says Germano. "My dean found out three years later, and he was like, 'Nice. If we had found that out, you would have been expelled.' When you see a vision of the future that you want, you are blinded by consequences because it doesn't fucking matter."

But they pulled off the guise.

Land Your First Client By Insulting Them

If you ask Germano how he got Carrot Creative's first client, he'll tell you, straight up: "I conned some doctor for 880 bucks."

He needed a checkup from a general practitioner, one with an over-inflated ego and a BMW. When Germano prodded his doctor about his website, comparing it to an '88 Accord, and said he could make one better—the best, even—the doctor asked how much.

Back in 2005, having a presence on the World Wide Web at all seemed like a feat. (For context: This was around the time Tila Tequila hit her peak popularity on MySpace, Facebook was barely a year old, and at least another year would pass before Twitter saw light.)

The fact that they had a website, the facade listing Germano's home address and phone number, seemed legitimate enough for their early, local clients. They relied on what existed of social media with their nil marketing budget. To both kill open time at the end of a day and appear more professional (read: older), Petescia designed bubbly vector busts on chartreuse backdrops to hide their true appearances.

"I didn't realize that we were just building an unbelievable marketing case study for our company," says Germano. "Afterwards, people would come in and ask like, 'When am I getting my avatar?' And we'd be like, 'Why do you want an avatar? You look older?' A way to hide our age became a big part of our brand. We were just having fun."

Germano's avatar

As good as Petescia and Germano were at swimming through murky water wearing too many hats and holding the torch of innovation, they were having trouble getting paid. So Germano, amid a Twin Peaks marathon, created a fake assistant with the scariest name he could think of: Audrey Strauss. Instead of Mike asking a client to please pay them for their work and receiving a soft no, he'd have Audrey remind them their payment was 30 days past due, which was Germano from a different Gmail account.

"If we got caught for that, people would be like, 'You're a bunch of scam artists.' We weren't—we were solving a need. As silly as that sounds, we were completely justifying making up a fake person because we had to email people and get them to pay us. You did whatever it took."

Bold? Yes. Stupid? Probably. Sounds like a company fit for New York City.

Moving To New York

It was time to move to Brooklyn when they told a client that, yes, in fact, they were based in New York. They were still operating in Connecticut. Responding to a sublet offer, a wide-eyed Germano took the 5 a.m. train to the city, expecting the lessor to be there at 8. He fell asleep waiting. "At 9 o'clock, this older woman shows up, and here's this kid drooling on the floor," Germano says. "And I'm saying, 'We're going to be the greatest company in the world, and you gotta give us your office.'"

Not only did she take a risk on giving Carrot the small space, which barely had enough money for the $5,000 security deposit, she gifted tables and chairs that were otherwise unaffordable. It's the kind of precarious situation every responsible adult, business professional, financial advisor, parent, or risk-averse person reads about and feels tremendous anxiety pangs over.

"What youth allows you to do is realize the ramifications of the risks you take when you fail don't seem that bad," says Germano. "If you were 35 years old, and I'm saying 'Would you like to bet all the money you have on a job that could possibly fail?' You'd be like 'absolutely not.' It just wouldn't seem right."

What Motivates A Startup

The earliest risks seem distant enough that it's okay to laugh and reminisce about how crazy things were back then. But don't think for a second it all came without heartbreak, sacrifice, and sleepless nights.

Sentimentality, pride, and passion were the positive drivers of Carrot's growth, which has doubled in size every year except for 2013. Germano and his then-girlfriend, now-wife slept on an inflatable mattress for eight months to put away money he felt was better spent on the company. They painted their old offices to save a thousand bucks on a painter ("That's another computer."). There isn't a day that's gone by since Carrot began that Germano hasn't done something productive for his company. The dark side of all this was an uncertain future staked on a debilitating fear of failure.

"I remember talking to my dad," Germano reminisces. "'Think of what you did and how far you've gone.' I was like, 'You don't get it.' It's not like I get off here. Well, shucks, that didn't work out, but I was a CEO of a digital agency. That place is hiring so let me just walk in there. No, no. I have eight years of failure. My fear is that I let down all the people who ever worked here, who ever believed in it. The fear of me failing those people…that was fucking hard. But it's what kept you going."

It's a known reality that 90% of startups fail, though Carrot flirts with the line of corporate and startup. The agency hangs out somewhere in between, which adds to their struggle of filling an odd niche, yet allows the company to be as off-the-wall as they want, eventually carving out an erudite understanding of media consumption. The company's known eccentricities and quirky genius-like charm draw in clients, like Red Bull at the end of 2011.

Tessa Barrera, the former global head of social media for Red Bull and the current head of social for the Lexis Agency based in London, became aware of Carrot's demeanor when she worked at Huge, a competitor agency also in Brooklyn. "For instance, when Huge laid off a few development resources, they put a sign in their windows, now hiring developers," Barrera said. "So I knew of them being fun."

Together, they made the Artograph, digitally connecting athletes to fans. In Barrera's eye's, they inherently got it.

"They understood how people consumed media and designed ideas and experiences around it, rather than trying to sell the fluff that most agencies do just to win a big budget. They didn't try to impart their ideas onto the brand; rather they understood the brand and found ways to translate it into consumer experiences that would be cool and the first of their kind."

There's Some Comfort In Growing Up

Petescia and Germano in Dumbo the week of the Vice acquisition

Age has been treating Carrot well. Uncalculated risk-taking doesn't happen so often anymore. Germano is 31, and has a 6-month-old to take care of now. The company announced an innovation hub in 2013 called Carrot Labs, a play area for testing out some of their extra-ambitious ideas to present as proven slam dunks to clients—ostensibly the earliest days' antithesis. It maybe douses punk cred, but is a wise choice for mitigating idea liability.

The company still leads by intuition, only with an approaching decade of experience under its belt. As cofounders of Digital Dumbo, Carrot has helped foster the digital community IRL. They've passed on old furniture to new startups vying to make it. As Germano gets older, he's taken a penchant for advising young entrepreneurs, a bit of a glimpse into an alternate universe of what Carrot could have been.

"They don't yet know what they're not supposed to know," Germano says. "And that means there's nothing blocking them from going anywhere. That's where you're pushing yourself as a person."

He specifically mentors Prolific Interactive, a mobile agency based in Dumbo as well, and One Mighty Roar, a product company based in Boston. Bobak Emamian, a cofounder of Prolific, has known Germano for years, both attending Quinnipiac.

"Prolific has always had the mentality of being young, hungry, and a true hustler in the startup community," Emamian says. "Mike has been a mentor who truly understands that outlook and has encouraged us to never lose that state of him. He keeps his team sharp and in the same mindset, no matter their size or success. That's not easy."

...But Maybe It's Best We Start Over Again

The Carrot offices on the 12th floor of a building in Dumbo. They recently relocated to the floor below

One thing Germano refuses to ever be is too comfortable. "My goal is to be as fearless as I can. I want to get afraid again, and that's what Vice is doing for me. I sold to Vice because it scared the shit out of me. And I haven't been scared in a very long time."

The union of the two companies reeks of logic; their origins share distinct parallels. Vice started as a free fanzine in Montreal, moved to Williamsburg in 1999, and flowered into a company valued at $1.4 billion. As fashionable as it's become to shit on Vice, its founders, Shane Smith, Suroosh Alvi, and Gavin McInnes have constructed the company they wanted to build from the ground up without many fucks to give, just as Germano and Co. have cut out their own path for Carrot. The energies and hunger at both companies are palpable, and neither are into following rules.

"As long as chaos is still here," Germano says, "things will be pretty cool."

[Image: Flickr user Xeusy]






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