Well before YouTube’s launch in 2005, college roommates Nate Houghteling and Kai Hasson were experimenting with creating bare-bones comedy sketches, inspired by “Saturday Night Live’s” Lonely Island trio.
Today, despite having no formal training in advertising, they and fellow partner Zach Blume now run Portal A, a profitable and growing business that has created videos for clients including NFL star Odell Beckham, HBO, Twitter and, most significantly, Google, where Portal A has overseen all of YouTube’s “Rewind” series that recaps the most popular videos of the year.
In 2018, the agency, named for the Portola playground in Berkeley where the three played basketball growing up, brought in $20 million in revenue. Last January it sold a minority stake to production company Wheelhouse Entertainment, whose partners include Jimmy Kimmel and reality TV mogul Brent Montgomery of “Pawn Stars” fame.
Their success while working outside the traditional holding company model mirrors the ad industry’s shift toward digital and mobile over the past decade.
The agency got on YouTube early making viral hits
The team’s first brush with fame came via a series called “Huge in Asia” that documented their post-collegiate motorcycle trip through the subcontinent.
A subsequent video titled “Ghost Ride the Volvo” quickly went viral in late 2006 and served as an introduction to YouTube for many people only weeks after Google acquired the platform for $1.65 billion.
Back then, when you got a million views on a video, you went on CNN.
“Back then, when you got a million views on a video, you went on CNN,” Houghteling told Business Insider.
Publisher Lonely Planet eventually bought the rights to the “Huge in Asia” series, but at the time, monetizing this sort of work, much less collaborating with advertisers or creators, was still a new concept.
After returning from Asia, Houghteling and Hasson worked in media while Blume became a political consultant. Yet they were drawn back to the burgeoning business of digital video.
They settled in San Francisco and began to experiment with new ideas. Their next hit came in 2010 with an episodic series called “White Collar Brawlers” that starred Houghteling and Hasson as office workers who trained to become boxers after-hours. As before, the team drew attention to the work with YouTube sports and pop culture mashups like this cover of the San Francisco Giants’ onetime anthem “Don’t Stop Believin’.”
“We needed to make the best videos to get the most views,” said Houghteling when describing Portal A’s model at the time.
Portal A began to earn ad revenue from YouTube. Esquire Network eventually purchased “White Collar Brawlers,” which ran for two seasons and attracted sponsors.
Portal A built a business – and an enduring YouTube franchise – on the cheap
The US economy was in a deep recession, and Portal A benefitted as advertisers increasingly saw potential in low-budget digital videos that didn’t require traditional ad buys.
In its early days, Tres Agaves Tequila paid the trio $20,000 to travel to Mexico and film a six-part video series titled “Tequila Academy.” The success of “White Collar Brawlers” also attracted interest from Bay Area brands like Banana Republic and Benefit Cosmetics, which wanted to try their hand at the new online video game.
A mutual connection introduced them to YouTube’s internal marketing team in late 2011, which led to the first “Rewind” starring accidentally viral singer Rebecca Black.
Houghteling said the rushed, month-long production established a longstanding relationship between Portal A and Google. In addition to the increasingly controversial “Rewind,” the agency has also worked on campaigns for Google Home, Pixel, and Chromebook and internal YouTube projects.
We were three people working out of a basement who really understood this medium. It almost seems quaint now.
“We were three people working out of a basement who really understood this medium,” Houghteling said of the 2011 sessions. “It almost seems quaint now.”
Around the same time, marketing consultant Steve Woolf suggested that the trio move away from web videos in favor of a brand new phrase: YouTube creators.
Portal A collaborated with creators like comedian Ryan Higa
In one of Portal A’s first major creator-driven projects, it promoted YouTube itself with comedian Ryan Higa, who was the most popular creator from 2009 to 2011, by filming a fake trailer for a live-action version of anime classic Naruto.
The company finally moved out of Houghteling’s apartment the following year and opened its first office in San Francisco as its model evolved alongside YouTube.
At that point, the days of uploading no-budget clips and hoping they’d go viral were long gone. Portal A began working with young creators because they were “the de facto TV channels,” and brands needed their distributive power to make waves online.
Portal A eventually used this familiarity with creators as a key selling point for advertisers.
Blume said the agency has since begun finding brands to sponsor ideas for original series such as “Break the Ice,” which stars Olympic skater Adam Rippon and features frequent Smirnoff Vodka breaks, or “Life, Lived,” an Infiniti-sponsored series with NBA star Steph Curry.
Branded content distributed on YouTube remains the foundation of Portal A’s business, but Instagram now plays a role in every project. The agency has also worked extensively across TikTok, Snapchat and Twitch, with a yearlong campaign for an unnamed brand coming on the Amazon platform, and recently sold a yet-to-be-announced 10-episode series to one of the aforementioned platforms.
The agency also drew on Blume’s political roots, working on a get out the vote effort for Hillary Clinton’s presidential campaign in 2016 after a Google introduction and creating a full-length documentary on the LGBTQ rights movement called “State of Pride” last year.
Portal A is a nontraditional agency
The three friends were among the first to figure out how to turn cool videos into a business, but today they face competition from digitally oriented ad agencies like VaynerMedia and production companies such as MediaMonks and Tool.
The company, which now employs 50 across two offices, has always worked on a standalone-project basis and rarely participates in “mass cattle call RFPs” with 20 or more competitors fighting over a yearlong contract, Houghteling said.
And while holding companies have to contend with the splintering of online video as young viewers move away from broadcast TV, Portal A faces its own challenges from firms with deep celebrity ties. One of the biggest benefits of the Wheelhouse connection, Blume said, is greater access to such talent.
Portal A also has to keep proving its value by targeting consumers across multiple platforms, tracking their engagement down to the individual frame, and demonstrating business results, not just views.
It's not the Wild West anymore. You don't make a video now that just pops off around the world.
“It’s not the Wild West anymore,” Hasson said. “You don’t make a video now that just pops off around the world.”