Reel FX is Ready For Its Close-up

Calm and tactical, Steve O’Brien leads the super-creative studio to new heights in commercial and animated-movie work.

The Free Birds turkeys 'surprise' O’Brien by wreaking havoc at the Reel FX offices. photography by Elizabeth Lavin
Entrepreneur at Heart
O’Brien, a laid-back 48-year-old, grew up on the West Coast not knowing what he wanted to do. But in stereotypical California style, he didn’t stress about it, either. “I’ve always looked at the world as a chance to explore and later on decide what to do,” he says. “Surf the world and ride the waves, so to speak.”

O’Brien entered the University of California-Irvine without declaring a major, eventually settling on economics. His first job out of college was in mortgage finance—wearing a suit and tie, working at a bank providing financing to homebuilders and investors in a red-hot housing market. He lasted barely a year before leaving to find something that better suited him. He found it in a market research firm focusing on national restaurant clients.

After about three years doing that, O’Brien decided to return to school for an MBA. He was offered scholarships to two schools: Pepperdine, overlooking the Pacific Ocean, and Southern Methodist University, smack in the heart of Dallas. Living on the beach in Malibu seemed like the better choice, he concedes now. But O’Brien wanted to experience another part of the country. Dallas, and Deep Ellum, made a good first impression.

“I met friends right away at school,” he says, recalling those first days living in a rental condo near the SMU campus with other students who would become lifelong buddies. “One of my first memories of Dallas is the second or third night I was here, we went to a place called Club Dada. Back in the day it was ‘the’ place. Edie Brickell and her band were playing. She has a huge mouth, so when she sings she is real striking. Later on, they became a big deal.”

After SMU O’Brien joined an investment bank, where he helped European companies merge with American companies to form worldwide distribution networks. It was there that he was bitten by the entrepreneurial bug. “That’s where I saw when companies sell, the owners make a lot of money. It’s a good payout,” he says. “You are not just getting a payout, but you are building a nest egg that has locked up value that you can unlock. After I saw that happen a few times, I decided I should be on that side of the table. I should be selling a company someday.”

The investment bank’s decision to relocate operations to New York gave O’Brien the push he needed. He didn’t want to leave Dallas, though, so in 1995 he partnered with two others to co-found a creative studio here where he served as president and the guy with the business acumen. The studio, called Big Hand, created interactive media, including CD ROMs and touch-screen kiosks. It merged in 1998 with Rare Medium in a deal valued at as much as $125 million. O’Brien, who stayed on through the merger, received a healthy payout, although it was in stock with lockout periods—some of which hadn’t expired when the tech bubble burst in 2001.

Not long after the merger, O’Brien approached Rare Medium’s venture-capital arm about a business idea to deliver packages via commercial airlines. The VC firm, along with big names like Hicks Muse and United Airlines, helped finance his idea, called NextJet. The company enjoyed early success but had to completely reinvent itself after the 9/11 terrorist attacks, which essentially shut down the transport of commercial packages on passenger airlines. To survive, NextJet developed logistics software for expedited deliveries which it licensed to several companies including UPS, which bought the firm’s assets in 2004.

“NextJet was just a business idea that made a lot of sense,” O’Brien says. “We were doing very well and then, when September 11 hit, we had to rethink the whole thing. It was definitely the biggest business challenge of my life.”

In the months prior to the sale, O’Brien joined the board of Reel FX at the invitation of a Reel FX investor and friend. Within a couple of months, he was named CEO.

Dale Carman, Reel FX co-founder, vividly recalls his first meeting with O’Brien. It was a casual lunch at a Mexican restaurant in the West End with the company’s other co-founder, David Needham. Chuck Peil, a founding member and vice president of business development, plus a Reel FX investor who was making the introductions, also attended.

“I think we immediately hit it off,” Carman recalls. “I could see Steve had great entrepreneurial business experience, and also an appreciation for the creative side of the business.”

Key for the founders was protecting the studio’s culture as a place where innovation could thrive with a bottom-up management approach. Carman knew the company he co-founded in his spare bedroom in Fort Worth in 1993 needed someone besides himself at the helm, in order to take it to the next level. Reel FX would soon be producing GI Joe, a direct-to-DVD film for Hasbro that was stretching resources.

“I was directing the feature, running the studio, and was creatively in charge of everything, including the direction of the company, and it was just too much to execute it with excellence,” Carman says. “You just have to go through that process of sharing your baby with somebody else, and a lot of people don’t make that transition. They can’t let go.”

“I was blessed with the vision to know that’s how we were going to achieve the vision I had for the company,” adds Carman, who now serves as executive creative director, overseeing Reel FX’s commercial division.

He had reached a level of trust that O’Brien would not only stay true to the vision, but accelerate it.