2011 INC. 5000 RANK: 251
HEADQUARTERS: Los Angeles, CA
YEAR FOUNDED: 2006
2010 REVENUE: $15 Million
3-YEAR GROWTH: 1,274%
As an executive at agencies such as Digitas West and DDB North America—where he was chief strategy officer—Krishnan Menon was once a marketing highflier. Now he glides silently below the radar with Phenomenon, a $15 million idea-generation company based in Los Angeles that promises anonymity to its top-drawer clients and distinguished collaborators. His separate, less-demure entertainment business creates and produces TV shows.
Working for large marketing firms, I grew frustrated. Recommendations to clients had to conform to the services we offered. So if an agency specialized in digital, it would suggest a large digital campaign, even if that wasn't the best use of client dollars. At one agency, I worked with a major housewares retailer that had a large wedding-gift-registry business. They were trying to get rid of remnants of glassware and dinnerware that were being discontinued. A consulting firm had recommended they expand their outlet stores, and the retailer hired our agency to come up with a marketing strategy for that. I suggested instead they e-mail couples who lived near existing stores and had previously registered for the discontinued lines. The messages would appeal to sentiment and say this was their last chance to stock up. The client saved tens of millions of dollars and experienced an incredibly high conversion rate. I lost my job.
At Phenomenon, we elevate idea generation over execution. If a $150 e-mail works as well as a multimillion-dollar ad campaign, then great. We also don't want clients to think we're more interested in winning awards than in helping them make money. We work anonymously, so clients know we do what's creatively best for them—not for us. We have 16 clients, including a country. Their collective revenue in 2010 was $365 billion.
We don't know everything, so we bring in great thinkers to work with our teams. Award-winning writers and directors, MacArthur fellows, composers, physicists. They are attracted to particular projects that sound cool and challenging. For example, we asked a special-effects expert who has worked with Pixar to help an apparel company conceptualize virtual dressing rooms. Our experts are anonymous, too.
We create partnerships with entertainment and cultural properties, like one with the movie Sex and the City 2 that made a huge splash for an electronics client. These arrangements go way beyond product placement. To earn insider cred with Hollywood, I have another business, Phenomenon Entertainment, which comes up with ideas for television shows. We have a first-look deal with Fox Television Studios.
One show we created was America's Prom Queen, which ran on ABC Family. I got the idea from a 1972 issue of the comic book Archie and Me, in which Betty, Veronica, and Midge were all competing to be prom queen. Back in India, everything I knew about America, I learned through Archie comics. They gave me a hunger for this country. At the office, we have a room filled with 28,000 original-issue Archies and a woman who works full time acquiring collectible issues of the rest. I hope to eventually house them all in a museum in India. I owe a lot of what I've done to the sense of wonder Archie created in me.