Joel Pilger on Produced With

Ask Joel Pilger how a creative studio founder cashes out and the answer arrives without varnish. "I mean, to be super honest, it doesn't really work." That is not speculation. Pilger ran Impossible Pictures out of Denver for 20 years, grew it to 25 staff plus a couple hundred crew and freelancers, and reached the ending founders daydream about: stock options, an acquiring company, a three-year earn out. Then he called it a show and walked away.

Impossible was an Emmy-winning, multi-million-dollar operation, and Discovery, Ford, IBM, National Geographic and Starbucks all hired it. Pilger exited in 2014, and the 11 years since have gone into the thing his peers kept asking him for: help with the business side. He now runs Forum, a network of 150 studio and production company founders that includes BIEN, Deep Sky, Sarofsky, Method N Madness and Secret Powers.

His start was unlikely. Pilger freelanced in Atlanta as an industrial designer, using animation to visualise products, until he pitched the Charlotte Hornets on a show opener in the mid-nineties and won it, a job he reckons would be worth around $50,000 today. Working at that level then meant a Silicon Graphics workstation at $50,000 and a software licence at another $50,000, partly funded by money borrowed from his dad.

Bail, buyout, or bequeath: how studio founders actually exit

Creative founders do get out. What almost never happens is the acquisition story with a giant cheque at the end, the "tech darling way" in Pilger's phrase, which he called "so incredibly rare in this space." Everybody exits; only the shape differs, and he sorted the shapes into three: bail, buyout, or bequeath.

A bail means taking money out as you go and eventually handing the keys back to the landlord. The buyout is the conventional acquisition, the uncommon one. A bequeath hands ownership to the team or to a successor.

His own was a bail, decided by where he had let the value accumulate. Pilger ran Impossible so that he made a lot of the money as he went along rather than keeping the value inside the business. An exit is the residue of years of decisions about whether profit leaves the company or stays in it, which means the decision gets made long before anyone talks about selling.

The 1-7-1 journey: what happens when a maker starts a business

The path in is almost always the same, Pilger said. A creative goes freelance, then finds that bigger jobs need a bigger promise: a brand and a studio name a client can hire for a real budget. Seven years went into working in the business, and around year seven he flipped to working on it, growing from one or two people to 25 over the following five to seven years.

He named the pattern the 1-7-1 journey. You arrive having mastered one thing, the craft, and then have to add seven: creative, production, sales, finance, marketing, operations and entrepreneurial instinct. Only once those can be delegated do you get back to the one thing you love, which may not be the one you left. The seven are the price of the studio name, and the shape only closes once other people can carry them.

Pilger expected to come full circle as the brilliant creative, and did not. He had hired animators and creative directors better than he was. What he came back to was sales, and sales turned out to be what he actually loved.

How to price creative work without selling hours

Pilger is staunchly against charging for time, and points to Jonathan Stark and the ditching hourly argument for the reasoning. What he sells instead is a solution to a problem at a fixed price, "easily five figures, definitely six, sometimes even seven figures." There is no rate card. That is an enormous promise, he said, and the delivery risk sits with the studio.

Sales is the word that makes creatives flinch, so he translates it: what if sales were simply building relationships and sharing your expertise? Three sources feed it, outbound, inbound and repeat business, and outbound is his favourite, because it is the only one that pushes you in a direction you chose.

Inbound sounds like the dream, but work arriving through your website means reacting to whatever the market brings. Repeat business looks like the holy grail and hides a trap. You keep growing and your clients do not, so if today's roster is C-level and you want A-level, that transition is coming regardless. It is not optional, and it arrives whether or not the studio has planned for it.

Why the best idea does not win a seven-figure pitch

After a few dozen pitches, Pilger stopped believing the best idea wins. A great idea is table stakes, because the world is oversupplied with good ideas and badly undersupplied with execution. Ideas are not the scarce thing. He calls a pitch an audition instead.

As deal size climbs, risk starts to matter more than the creative. One network invested what he recalled as roughly $1.2 million with Impossible to rebrand itself. It wanted great creative, and it wanted something closer to bulletproof even more. What carries a pitch at that size is execution, track record and in-person effort, because those are the things that buy the risk down.

The Discovery Velocity pitch shows what that bought. It ran 70 or 80 pages, and Impossible presented it in person at Discovery, which no other bidder did. Four-foot-by-eight-foot boards blanketed a conference room, and fabricated merchandise let decision makers see the brand on a whiskey bottle, a cigar case, a phone. The boards stayed up in Discovery's halls for about three years. There were losing years as well, and he learned to derail the RFP process rather than play by it.

Commodities, services, expertise, authorship: where AI actually sits

At the bottom of Pilger's value pyramid sit commodities: time, office space, computers, warm bodies. Combine a few of those and you get a service such as editorial. Services combine into an expertise such as a commercial production company, and expertises combine into authorship, or intellectual property.

Climbing it moves you from being paid for effort to being paid for outcomes, and your output from projects to problems to property. He credited the word ephemeralization to Buck's creative director, quoting Buckminster Fuller: doing more and more with less and less until eventually you can do everything with nothing.

Impossible capitalised on the analog-to-digital shift and invested a couple of million in high-end hardware. Then After Effects and Cinema 4D arrived, and the next generation ate their lunch. The advantage had lasted exactly as long as the hardware was scarce. He did not defend his cost base; he told his team to learn the tools.

So he refuses to sell AI. Going all in on it as the product is the race to the bottom, because AI will become another commodity that everyone combines, and the commodity layer is where price collapses. His test is a question: how much AI content have you seen that's made you cry? His own answer was zero.

Competitors as allies, and why equal partnerships create messes

The advice that started it was small: work with someone outside your own city. In that same year seven, a friend pushed Pilger to collaborate outside his bubble and suggested a DP in Reykjavik over the local guy in Denver. The habit turned into a network among his own competitors: flying into New York, he would ask other studio founders for coffee, and found them overwhelmingly open to it. That network became one of the most valuable assets in his career.

Pilger admitted taking business partners early out of weakness, and argued that most founders enter them from fear of stepping up to lead. The equal split is the most fatal version.

When he brought a partner into Impossible in year seven or eight, he structured it so that he always held controlling interest. That was not out of any love of control. It was so somebody could make the call. Nobody runs a business forever, he said, and everything is a season.

Key takeaways

• Decide every year whether profit leaves the company or stays in it, because that sets which exit you get: bail, buyout, or bequeath. Pilger took money out as he went, and his own was a bail.
• Expect to leave the craft for years, and to come back to a different one. The 1-7-1 journey adds seven jobs to the one you mastered, and what he returned to was sales, which turned out to be what he actually loved.
• Sell a fixed-price solution, not hours. Pilger works with no rate card and prices at "easily five figures, definitely six, sometimes even seven figures." The delivery risk moves onto the studio.
• Treat the pitch as an audition, and win it on execution, track record and in-person effort. Impossible presented at Discovery in person when no other bidder did, with 70 or 80 pages and four-foot-by-eight-foot boards that hung there about three years.
• Never sell AI as the product, because it becomes one more commodity everyone combines. A couple of million in high-end hardware stopped being an advantage the moment After Effects and Cinema 4D arrived, and one question does the testing: "How much AI content have you seen that's made you cry?"
• Never take an equal partner. Pilger took partners early out of weakness, by his own admission, and structured Impossible so he always held controlling interest, not out of love of control but so somebody could make the call.