🎬Movie Pass🎬
this happens to Black founders often
💖Motivation Meows💖
Hello, and welcome back to another edition of The Black Cat.
To read what you missed this week in Good Black News, click here. Otherwise, this week we will be talking about HBO’s latest documentary, Movie Pass.
This month, I’m reading: Private Equity by Carrie Sun
This weekend, I can’t stop listening to: Genesis by Raye
💢From the Chatterbox💢
Let’s talk Movie Pass. I’m sick this week so I will try to write what I can with my limited capacity.
First, I want to say — and this perhaps could be my fault — that I never realized Movie Pass was a Black-founded company. I would often see stories about it, nod my head, and then move on with my day.
After watching the Movie Pass documentary, though, I went back to the original investigation done by Business Insider and I couldn’t find the word “Black” anywhere. My first thought was how this oversight speaks to the diversity within business and tech journalism because after watching the documentary, I was left wondering how the reporters at Insider were able to tell the story of this company and its co-founders Stacy Spikes and Hamet Watt without mentioning race. The racial elements of this story have since changed my perception of what happened. Suddenly, everything started to make much more sense.
I will not spoil anything for those who haven’t seen Movie Pass. But a high-level overview is that it tells the story of two Black founders, Spikes and Watt, who are pushed out of their company by greedy white men. Spikes created Movie Pass and then later brought Watt in to help him build out the business. It took Spikes ten years to build Movie Pass and only one year for those white men to destroy it.
This happens often to Black founders. Money is so hard to come by that when Black founders find investors willing to back them, they often must make sacrifices to accept the money — this includes even committing to predatory terms. I’ve read a lot of stories about Black founders who gave up so much equity in their companies — or agreed to terms that adjusted the board so dramatically that they lost power, gaining only the ability to be ousted at any moment. Giving up power is another way Black founders are set up to fail, and many of them do not realize they’ve given it up until it is too late. But often, giving up that much power is the only way to get the little bit of money that comes their way. I think often of the fact that Mark Zuckerberg has his company structured in a way that he can never be ousted. The power always remains his.
The idea was that Movie Pass needed something — or someone — who could signal to investors that the product was viable. This meant bringing in a white man, who would attract other white men. Spikes brought in one investor (whose name I think was Chris), who then brought in another white man, Mitch, who then brought in another white man, Ted. Ted soon became the largest shareholder in Movie Pass and everything spirals from there. It’s a very sad realization that a signal of success defaults to white men — that even with Ted and Mitch’s spotty pass as leaders, they would be seen as still more viable and safe to back than two Black founders with decades of experience in the industry. That is this permanent second-class citizenry I always talk about, a racial caste system that Black Americans never truly leave.
Soon, nearly the entire board of Movie Pass was filled with white men. When Mitch first came in, he put Spikes on a sort of probation, telling him that he would see how he performed and if his work was good enough only then would the company keep him. He treated Spikes like he was some Boy. It became clear that Spikes was set up to fail after Mitch came in as CEO. Mitch never believed Spikes was worthy or capable of standing on equal ground.
After some questionable business decisions made by Mitch, Spikes, no longer in charge, began to worry about the company’s reputation. Mitch ultimately fired him and, as expected, Mitch and Ted became the faces of Movie Pass. One of the most harrowing parts about Spikes’ ousting was that he and Watt had shares in the company with a 12-month lock-up, meaning they couldn’t sell shares in the company until 12 months after they had left Movie Pass. They had to watch the hijacked train speed aimlessly along the tracks.
It came to a point where Spikes said during his time at the company, Movie Pass was losing $200,000 a month. When Mitch was in charge, that number skyrocketed to $30 million a month. It was almost offensive, the carelessness with which Mitch and Ted moved, knowing and taking for granted that there would always be a light at the end of the tunnel. Losing $30 million a month is a lot of money. When white founders lose that much money, it’s seen as part of the game (hello, Adam Neumann). These instances are seen as learning moments to help build a track record because, well, startups are a risky business. But this ideology is never shared — and this understanding is never felt — beyond the white men it seeks to suit. Nobody makes excuses for non-white, non-male founders. Everyone else gets one shot at success, and if that swing doesn’t produce a home run, it’s back to the dugout where you are forced to sit and watch the white men play the game. By the time Mitch and Ted were done with Movie Pass, Spikes and Watt’s $80 million stock in the company was worth pennies and they had no chance to sell because Mitch and Ted destroyed the company within the 12-month lock-up period. Ted was still able to raise millions for his next venture, even after collapsing Movie Pass. I don’t need to analyze much here, because the facts speak for themselves.
There is an insidiousness to this story seen when looked at through a racial lens. Two white men just taking this Black company and putting it on for show, only to send it crashing toward flames. Then you hear that Spikes just wanted to get more people into movies, that he had spent his career just trying, especially, to give more opportunities to Black and brown film lovers. I truly believe that Mitch and Ted were just careless, but if someone also told me they were also hateful I think I would believe that too.
I also thought about the media’s role in this — how Mitch and Ted were interviewed by so many big outlets and no one knew they had ousted the two Black founders. No one asked enough questions. No one probably thought to. Perhaps they didn’t know how. I’m glad, though, that Mitch and Ted were able to be the face of Movie Pass’ fall, and that the buck was not passed back to Spikes to reap what those two men sowed.
Today, Movie Pass is home with Spikes. He bought it back and said last year was a profitable one for the company. He also wrote a book called “Black Founder: The Hidden Power of Being an Outsider,” and has now been making the media rounds.
Mitch and Ted meanwhile, well, if you know you know, right? I encourage everyone to watch the documentary. There is a lot to take away and observe, and many details that are worth noting. One moment I think about often is when Watt said that when you enter a board room, you never truly know if someone is being passive-aggressive toward you because they don’t like the fact that you are trying to disrupt an industry, or they don’t like it that you are Black, or they don’t like the fact that you are Black trying to disrupt an industry. There is a constant paranoia that comes with being Black in America that permeates every level and every move we make. Most times, we never know the answer, we can only hear the dog whistles. And sometimes even then we have to stay in place. No matter how loud the sounds get.
💫Kitty Talk💫
Here are some interesting articles I’ve read since we last met: