Recent years have seen a merging of parts of the country that never before seemed to go together well: New York, Los Angeles and San Francisco. The result? An up-and-coming generation of executives and innovators who combine East Coast drive, Silicon Valley optimism and LA creativity. Changing the way we travel, listen to music, watch television and read, these 12 men and women are at the forefront of that movement. Here’s how—and why—they’re changing our world.
ERIC ANDERSON, Cofounder, Space Adventures – ecanderson.com
The Big Idea ? Anderson has long wanted to travel to space, but never understood “why you would have to be a government employee to go.” So in 1998, the aerospace engineer began developing the first private space tourism company, Space Adventures. At the time, the conventional wisdom regarding space tourism was that anyone who wanted to do it would have to build his own ship and make it affordable for the average citizen. “But I thought, instead of trying to innovate in terms of vehicles, lets innovate in terms of the market,” Anderson says. “The wealthy have to help pave the way.” Anderson launched Space Adventures using Russian spacecraft and marketing to the ultra high net worth. Space Adventures is the only company to have sent private citizens into space.
How It Works ? For $50 million, space enthusiasts can travel aboard Russian Soyuz spacecraft to the International Space Station for up to two weeks. “The International Space Station represents 16 countries, so I had to spend years getting the approval of this global group to be able to take private citizens there,” Anderson says. Space Adventures also offers a lunar mission to circumnavigate the moon (for $300 million), but no civilian has taken that journey—yet.
Impact ? An entire industry has been born around Space Adventures since its launch in the late ’90s, and includes heavyweights like Richard Branson’s Virgin Galactic and Elon Musk’s SpaceX. “It is amazing to see what has developed,” says Anderson. Anderson himself has established two other space-related endeavors, Planetary Resources and Planetary Power. Planetary Resources aims to “open up and capitalize on the resources of space” by mining asteroids, while Planetary Power is focused on harnessing solar energy. “Being able to use the resources of space is critical to the long-term prosperity and future of humanity,” Anderson says.
Philosophy ? “If we really want to progress as a species, we need to not constrain ourselves to the Earth,” says Anderson.
JASON BLUM, Founder and CEO, Blumhouse Productions –blumhouse.com
The Big Idea ? After working for Harvey Weinstein for five years, Blum founded his own production company, Blumhouse, in 2000. The firm’s first project was horror film Paranormal Activity, which cost just $15,000 to make and earned nearly $200 million—making it the most profitable “micro-budget” film of all time. “Paranormal Activity captured a lot of what I was trying to do in my career—make movies independently, so we could take risks, and then release them through the power of the studio,”
How It Works ? Blumhouse specializes in horror films made on small budgets, including the franchises Insidious, Oculus and The Purge. “Quality horror movies can be made on these budgets,” says Blum. He gets veteran directors to work for him by offering them final cut, and keeps budgets down by paying talent very little up front (in exchange for a piece of the profits), shooting locally and quickly (often in under a month), and using inexpensive techniques such as night-vision footage. But the key to the model is to make the films independently, then—after gauging test audiences’ reactions—“release them through studios who can generate interest in movies in an unmatched way,” says Blum. If the films bomb in test screenings, the movies go straight to DVD and iTunes.
Impact ? While there will always be a place for tent-poles like Transformers and X-Men, Hollywood studios have attempted to imitate Blum’s cost-saving ways. Paramount, for example, took a page from Blum’s playbook in 2012 with The Devil Inside (budget $1 million, gross $53 million).
Philosophy ? “Innovation comes from empowering creative people—and giving them the freedom to do what they do best,” says Blum.
MEGAN ELLISON, Founder, Annapurna Pictures –annapurnapics.com
The Big Idea ? The daughter of Oracle chief Larry Ellison, Megan introduced herself to Hollywood in 2007 with Silicon Valley-sized ambition and pockets. Using her family fortune, the then 21-year-old investor put money behind films like Waking Madison, Main Street and Catch .44—none of which performed particularly well critically or commercially. But in 2011, after reportedly receiving more money from her father and forming a partnership with Creative Artists Agency, she launched production company Annapurna Pictures to create the kind of smart, adult movies that the studios are no longer making. There followed in quick succession Killing Them Softly, The Master, Zero Dark Thirty, American Hustle and Her—among others.
How It Works ? Ellison doesn’t give interviews, but clearly believes that Hollywood studios have abandoned sophisticated dramas and period pieces. Annapurna fills the vacuum by selecting daring movies from ambitious directors and screenwriters—and Ellison’s financial resources allow her to buy the best.
Impact ? Defying the conventional wisdom that only blockbusters can make money, Ellison’s movies have grossed more than $635 million at the box office. On the critical front, they have been nominated for 25 Academy Awards, winning two—a remarkable achievement for a novice producer.
Philosophy ? “She’s like a Medici,” one independent film distributor says. “Her primary motivation seems to be backing films and filmmakers who might not exist without funding from someone whose primary motive is not profit.”
DANIEL EK, Founder and CEO, Spotify – spotify.com
The Big Idea ? When music downloading site Napster was shut down in 2001, then 18-yearold Ek, a programming whiz in Sweden, started to wonder: What is the middle ground between free-but-illegal music and the pay-persong model of iTunes? His solution was Spotify, a music service whose subscribers pay a monthly fee ($9.99 in the U.S.) for ad-free access to millions of songs (nonpaying users get commercials). Spotify debuted in Europe in 2009, made its way to the U.S. in 2011 and is now available in 57 countries.
How It Works ? Spotify lets its users access more than 20 million songs, less than iTunes’ 26 million but vastly more than Pandora’s 1 million. Ek built this library by painstakingly cultivating relationships with record labels, which receive payouts per stream for access to their catalogs.
Impact ? Streaming music services grew from accounting for 3 percent of music industry revenues in 2007 to 21 percent in 2013, with paid subscription services seeing revenues jump 57 percent. Their impact is probably the reason why sales of downloaded music are in decline, and Apple recently purchased Beats Music. Amazon has also jumped into the streaming waters, offering a free service for its Amazon Prime members.
Philosophy ? “I just keep asking dumb questions,” Ek told MIT Technology Review.
ROB FISHMAN, Cofounder , Niche – niche.co
The Big Idea ? While working in social media at the Huffington Post and BuzzFeed, Fishman began noticing personalities on Instagram and Vine gaining huge followings. So he and several partners started discussing a platform that would both serve as “a LinkedIn for social-media creators” and work as an advertising-talent agency hybrid, linking brands with social-media celebs. Niche came online in November 2013.
How It Works ? Nearly 3,000 social media creators use Niche for analytics, ways to engage with their fans and community opportunities. Brands and agencies work with Niche to partner with creators in their demographic, create campaigns and monitor their reach. “In the same way you advertise on television or in print, we are trying to provide that same structure on social media,” says Fishman.
Impact ? Niche has connected brands such as Gap Kids, American Eagle and Warner Brothers with social-media stars. “Brands are really starting to spend more and more on these channels,” says Fishman. Niche has already seen budgets well into the six figures, with some nearing seven figures. “We are part of the movement of getting brands to engage more directly with their consumers through social media,” Fishman says.
Philosophy ? “We innovate around naturally occurring phenomenon” Fishman says.
BRIAN GOLDSMITH & ADAM KAUFMAN, President, CEO, Junction –jct.com
The Big Idea ? In the fall of 2012, Goldsmith, a producer for CBS Evening News, was talking with friend and former Goldman Sachs banker Kaufman about new business opportunities. They both agreed that, thanks to the recently passed JOBS Act, crowdfunding was likely to boom, and decided to apply the concept to a traditionally insular industry: entertainment. After forming partnerships with independent film studios such as Worldview Entertainment and Silver Reel Entertainment, and getting funding from investors such as Steve Wynn and Dave Morin, they launched Junction Investments in March as a place for HNW investors to put money into films.
How It Works ? Junction lets accredited investors (those who either earn at least $200,000 a year or have a net worth of more than $1 million) invest in already fully funded films.
Impact ? The film industry generated $522 billion in revenue in 2013, and seven of the nine best picture Academy Award nominees in 2014 were independently financed films. Junction hopes to unlock both the profits and the prizes to a larger pool of investors.
Philosophy ? “We didn’t invent these kinds of deals—all we’ve done is take advantage of some very recent changes in federal securities law to take these opportunities online,” Kaufman has said.
MEREDITH KOPIT LEVIEN, Creator, T Brand Studio, the New York Times – nytimes.com
The Big Idea ? Nearly five years ago, while the chief revenue officer at Forbes Media, Kopit Levien began working with native advertising, or “the basic idea that brands could be storytellers on the same platforms as editorial storytellers,” to pick up where banner ads fell short. That experience led the New York Times to tap her to lead its own native advertising initiative last summer. “We built T Brand Studio as an entirely separate entity for creating branded content,” Kopit Levien says.
How It Works ? T Brand Studio has hired its own writers and editors from places such as Businessweek and the Huffington Post to create custom content. The goal is for T Brand Studio’s work to read less like a sales pitch and more like, well, a New York Times piece. “A lot of the work done in T Brand Studio is to find the plot that is relevant and authentic for the brand—but not about the brand,” she says.
Impact ? Since its first paid post in January with Dell, T Brand Studio has created content for companies including Intel, Goldman Sachs and Vacheron Constantin. But a 1,500-word piece created for Netflix called “Women Inmates” received the most positive attention and drew comparisons to the Pulitzer Prize-winning New York Times piece, “Snow Fall.” The Times also broke a three-ear streak of ad sales declines in the first quarter of 2014, when its native content launched.
Philosophy ? “The only thing that we are sure scales anymore is ‘great,’” Kopit Levien says. “We need great creative work and brave thinkers who are willing to say innovation can happen,” Sarandos told the Hollywood Reporter .
TED SARANDO, Chief content officer, Netflix – netflix.com
The Big Idea ? In 2011, Sarandos had a two-headed problem: The DVD market was declining and top programming for Netflix to stream was becoming harder to obtain. Both trends threatened the site’s business model. So Sarandos decided to gamble and enter the original-content business. His first purchase, Lilyhammer, debuted with little fanfare in February 2012. But it was Sarandos’ second purchase, $100 million for two seasons of House of Cards—a show that hadn’t even shot a pilot—that helped transform Netflix from an endangered DVD service to TV’s greatest threat.
How It Works ? “What we try to do is find the perfect show for an audience,” Sarandos told the Hollywood Reporter. “I don’t just want to get them hooked—I want to get them strung out.” Netflix tests its content with audiences who are asked to rate a show on a scale of one to five stars. If the show performs well, Netflix moves forward, ultimately releasing an entire season at once. Its roster of original content now also includes Orange is the New Black and Hemlock Grove.
Impact ? In the first quarter of 2013, when House of Cards premiered, Netflix added more than 2 million subscribers, sending the company’s stock price soaring. While Sarandos has essentially created the “binge-watching” phenomenon, Netflix’s move into original content has also rattled the ad world, ramped up the pressure on traditional TV networks and premium cable channels, and fueled a surge in content creation.
Philosophy ? “I believe there is a bigger business in customer satisfaction than managing business satisfaction.”
ALEX SARNOFF, CEO, Control VR – controlvr.com
The Big Idea ? Virtual reality allows users to interact with an “alternate, digitally created reality of their choosing,” explains Sarnoff, a former William Morris assistant. Prior to Control VR, only one piece of that equation—seeing the 3D environment—was available thanks to headsets like those made by Oculus Rift (acquired for $2 billion by Facebook in March). But since just looking around gets old, Control VR developed one of the first technologies that allows users to move and interact with that virtual reality. “With the exception of Control VR, there are no solutions that allow a user to experience and see his own body in the virtual environment,” Sarnoff says.
How It Works ? Control VR developed a pair of gloves containing tiny sensors that “capture” the wearer’s movements in real time and translate them into the 3D environment.
Impact ? Virtual reality is not just for gamers—Sarnoff expects Control VR’s technology to
Philosophy ? “Innovation requires a community,” Sarnoff says. “No one can do things alone.”
JEFF SKOLL, Founder and chairman, Participant Media –participantmedia.com
The Big Idea ? After earning his dot-com fortune as eBay’s first full-time employee, Skoll returned to an early dream of social activism. “I was looking to leverage the power of Hollywood to influence social change,” he says. In 2004,Skoll launched Participant Media with the goal of creating films, television shows and digital content that would promote positive change on global problems.
How It Works ? “Our formula is to focus on three criteria: high-quality stories, socially relevant to an issue that affects millions of people, and commercially viable,” Skoll says. Participant also builds activism campaigns around every story to “connect audiences with action.” The company has produced more than 50 films tackling topics such as climate change (An Inconvenient Truth), pandemics (Contagion), civil rights (The Help) and education reform (Waiting for “Superman”).
Impact ? Participant has a stellar track record: 37 Academy Award nominations and north of $1 billion earned at the box office. “But we evaluate our success not just in terms of dollars, but also in the positive impact that our content creates,” says Skoll. It seems to be working. The Cove helped make dolphin hunting off the coast of Japan a national embarrassment, North Country raised awareness of the Violence Against Women Act, and A Place at the Table made the case for school meal programs and influenced the recent Farm Bill.
Philosophy ? “i’ve been very much influenced by the power of betting on good people doing good things,” skoll says.
LUCAS WILSON, Founder and CEO, Revelens – revelens.com
The Big Idea ? Wilson, a former production executive in Hollywood, never had an “aha!” moment. Instead, witnessing the emergence of tablets like the iPad and the shift from traditional television to platforms such as Netflix and Hulu got him thinking about new ways for users to interact with video online—and ways to monetizethat content. “I came up with the idea of embedding data into the video, and that led to Revelens,” Wilson says. The technology lets users access purchasing information about what they are watching without interrupting viewing time.
How It Works ? Founded in March 2013, Revelens allows viewers to tap on the screen whenever they are watching a video online and see something they like—from a pair of shoes to a car to a hotel. Tapping creates a bookmark that contains all the information about products in that particular frame, including links to where to purchase the items or experiences. Bookmarks can be accessed at any point.
Impact ? “This is not just about making money, it is about sharing information,” Wilson says. He sees the Revelens technology moving to industries such as higher education and corporate training. Additionally, Revelens will be opening up a direct consumer platform before the end of 2014. “It will allow any individual to apply the Revelens system to their own videos,” Wilson explains. IMPACT “This is not just about making money, it is about sharing information,” Wilson says.
Philosophy ? “If you’re not building something you are passionate about, that is a really good recipe for failure,” Wilson says.
SUSAN WOJCICKI, CEO, YouTube – youtube.com
The Big Idea ? YouTube, the video service launched in 2005, has seen its business transform twice since its founding. The first shift happened in December 2010, when the site inserted ads into its most-watched videos. Shift two came in early 2012, when YouTube decided to spend $100 million a year to improve content. Now, new CEO Wojcicki (Google employee number 16 and former head of advertising and commerce) is ushering in the third evolution: purchasing ad space to market YouTube’s biggest stars.
How It Works ? Wojcicki is trying to generate awareness of You- Tube’s top stars and channels through traditional ad channels. Her initiative began in April with commercials on the CW and ABC Family, billboards in New York and Chicago, and ads in Teen Vogue, Seventeen and Entertainment Weekly; two months later, YouTube launched TV ads during the World Cup.
Impact ? Wojcicki hopes to increase YouTube’s ad revenue $5.6 billion in 2013—and bring new viewers to the site. “I think the promotion does translate into more subscribers and more viewers,” she told Fortune. “It also translates into the advertisers knowing the brands and wanting to invest in them more.”
Philosophy ? Spending money on traditional advertising to promote YouTube content, Wojcicki is making