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a16z Podcast | New Upstarts in an Old Industry
23 segments available
with Michael Ovitz (@michaelovitz), Ben Horowitz (@bhorowitz), and Hanne Tidnam (@omnivorousread) When Michael Ovitz founded the Hollywood talent agency Creative Artists Agency (CAA), he turned a number of the entertainment industry's well-entrenched traditions on their head. The origin story of a16z (not coincidentally!) is not that dissimilar. So in this episode of the a16z Podcast, Ovitz and a16z co-founder Ben Horowitz talk with Hanne Tidnam about Ovitz' just-released book, Who is Michael Ovitz? -- and about how CAA transformed the power equation in Hollywood. The conversation covers everything from the history of the entertainment business -- the days of vaudeville and the Jack Warners and William Foxes and Jurassic Parks -- to what strategies guided the differentiation of the new kids on the block. There's lessons for other founders here, too, about culture, negotiation, and more.
Segments Timeline
Founding Stories: CAA and a16z
In this segment, Michael Ovitz and Ben Horowitz discuss the founding stories of Creative Artists Agency (CAA) and a16z. They explore how both firms redefined traditional business models in their respective industries, emphasizing the power dynamics in Hollywood and the evolution of the entertainment business from vaudeville to modern times.
"hi and welcome to the a 16z podcast I'm Hannah and I'm here today with Michael Ovitz co-founder of the Creative Artists Agency and our own Ben Horowitz co-founder of andreessen horowitz in this episod..."
The Impossible Business Story
Michael Ovitz reflects on the challenges of establishing CAA in a well-entrenched industry dominated by established firms. He shares insights on how he managed to create the most successful talent agency in the world, highlighting the importance of organizational design and culture in a non-technology-driven business.
"out called who is Michael Ovitz is that like a reference to Kaiser so say knows who Kaiser Soze is I met then in 1999 when he and Mark asked me to go on the board of loud cloud and I told a lot of sto..."
Empowering Talent: The Agent's Role
Ovitz discusses the transformation of the agent's role in the entertainment industry, emphasizing the need to put talent back in the driver's seat. He contrasts the barriers to entry in the media business of the past with today's landscape, where artists have more opportunities to share their work with the world.
"vaudeville is an impossible business story we come from tech we're like okay you can turn something over because the technology changes but this was not a technology story it was one of organizational..."
Deep Service and Honest Guidance
In this segment, Ovitz explains how CAA provided unique and deep service to creative individuals, focusing on honest guidance and constructive criticism. He emphasizes the importance of telling artists the truth, even when it is difficult, and how this approach fostered a culture of trust and respect.
"business anything that you would read or see or hear was controlled by under 25 companies around the world you had four television networks in the United States you had seven motion picture studios th..."
Cultural Lessons from CAA
Ben Horowitz shares the cultural lessons learned from CAA that influenced the founding of a16z. He discusses the significance of treating everyone as a partner, the importance of first impressions, and the need for a long-term view in relationships, all of which contribute to a strong organizational culture.
"service to creative people we couple that with an enormous amount of guidance and career advice that was incredibly direct we were less concerned about telling people things they didn't want to hear w..."
Differentiation in a Crowded Market
Ovitz and Horowitz discuss the challenge of differentiation in a saturated market of venture capital firms and talent agencies. They outline their strategy to create a unique service model that provides entrepreneurs with access to resources and support that set them apart from competitors.
"talking about so do you tell people the truth not what they want to hear that's like one of the cultural tenants of the firm but there were many others to take a long view or a transactional review of..."
The Power of Truth in Business
Ovitz emphasizes the importance of honesty in the entertainment industry, contrasting it with the prevalent culture of flattery. He discusses how being truthful and transparent can lead to better relationships and outcomes, and how this principle has been a cornerstone of his approach to business.
"you've got a built in person to get operational advice on you've got extraordinary technical background so you can get technical advice I view what we did very much like a pointillist painting like th..."
Innovative Business Models at CAA
Ovitz discusses the innovative business models that Creative Artists Agency (CAA) implemented, emphasizing the importance of developing client ideas into comprehensive packages. He explains how this approach shifted the leverage from studios to talent, allowing CAA to demand higher premiums for their services, which stirred controversy within the industry.
"composite it's part of the hundreds and thousands of points that we did to be different so let's shift gears again from culture and towards the business models what are more of some of those ways you ..."
The Aggressive Nature of CAA
In this segment, Ovitz reflects on the aggressive tactics employed by CAA to secure better deals for their clients. He discusses the mixed reactions from the creative community, acknowledging that while many benefited from their strategies, the aggressive approach also led to resentment among peers in the industry.
"of it came from prior to CAA a top actor or actress made maybe a tenth or twentieth of what they did or maybe even a 50th of what they did after CAA because you changed the leverage from the studio to..."
Lessons from Industry Toughness
Ovitz shares insights on the cutthroat nature of the entertainment industry, drawing parallels between past moguls and the current landscape. He emphasizes the importance of decisiveness and toughness in making bold moves, reflecting on how these traits shaped CAA's strategies and success over the years.
"actually thought we did someone asked me the other day do you think you could have done it differently in the day and I don't think that we could have because we were in a cutthroat business to start ..."
Crafting Blockbusters: The Jurassic Park Case
Ovitz narrates the behind-the-scenes process of developing 'Jurassic Park,' detailing how the idea evolved from Michael Crichton's concept to a blockbuster film. He highlights the strategic partnerships and quick decision-making that led to securing top talent like Steven Spielberg, showcasing CAA's role in shaping major cinematic successes.
"now could we have backed off and been softer and gentler probably a bit all the way I don't think so not in the business rent can you walk us through what that looked like how it would play out on a d..."
Navigating Relationships in a Tough Industry
In this segment, Ovitz discusses the challenges of maintaining relationships in the competitive entertainment industry. He reflects on the necessity of making tough decisions that may not always be popular, emphasizing that success often comes at the cost of personal relationships and popularity.
"so they decide we should go to Universal for an opening salvo you know you call the president of the company and say I got good news and bad news the good news is we've got Cathy Kennedy and Steven Sp..."
Evolving Culture in a Dynamic Business
Ovitz and Horowitz explore the fluid nature of company culture, likening it to a living organism that requires constant attention and adjustment. They discuss how cultural elements must align with business strategies, using examples from successful companies like Amazon to illustrate how culture can drive operational success.
"the ice this was a tough game let's talk a little bit about that culture that you built that both of you built going from start-up to amateur firm did those fundamental principles or those pointillist..."
The Burden of Leadership
Ovitz discusses the burdens that come with leadership, including the pressure to solve others' problems while managing personal challenges. He emphasizes the importance of collaboration with partners and the need for a supportive network to navigate the complexities of running a successful organization.
"the head you know if the person who's operating the business and helping create the culture and bringing everybody together is on it 24/7 and I mean every day that never goes away out of your head I u..."
The Transition from CEO to Parent
In this candid moment, Ovitz reflects on the difficulties of transitioning from a high-pressure CEO role to being a parent. He shares personal anecdotes about the challenges of not bringing work-related attitudes home and the importance of adjusting one's mindset when interacting with family.
"yourself by the way I want to be very clear that I did not do this by myself I had a partner who was phenomenal at rounding this out rom Meyer we would tell each other problems with individuals and th..."
The Dark Side of 'Agenting'
Ovitz explores the negative connotations of 'agenting' in the entertainment industry, discussing how manipulation and pressure can affect relationships. He highlights the complexities of the business, where various roles, including directors and producers, can exhibit agent-like behaviors.
"well you even use the word agent inge as a negative the first time you use it it really surprised me you were talking about your grandmother right Ruta Lee agent Inge your father yeah what do you mean..."
The Evolution of Entertainment
In this segment, Ovitz reflects on the dramatic changes in the entertainment industry, particularly the impact of streaming on traditional viewing habits. He laments the loss of cultural moments that once brought audiences together and discusses the challenges of nurturing new talent in a rapidly evolving landscape.
"business so your career has spanned an incredible evolution of the entertainment business over the last several decades what's your sense of what the entertainment and media landscape looks like now a..."
The Future of Movie Stars
Ovitz discusses the challenges of building new movie stars in today's entertainment landscape, where fewer films are being produced. He contrasts the past methods of nurturing talent with the current trend of event movies and sequels, expressing concern over the future of star development.
"things on social media as they see them but everything's disjointed so how do you think that will change if you had to look forward five years the power equation you know that you guys really changed ..."
The Writer's Renaissance
Ovitz highlights the current opportunities for writers and creatives in the entertainment industry, noting the influx of funding and new distribution methods. He expresses optimism about the future of creativity, despite the uncertainties surrounding the industry's evolution.
"do you know it's interesting because music is following a similar curve where yeah it's it's much harder to build a great artist than it used to be you know with a series of albums that everybody know..."
Negotiation Essentials
Ovitz introduces the topic of negotiation, emphasizing its complexity in both entertainment and business. He hints at key principles for successful negotiations, setting the stage for a deeper discussion on strategies and tactics in future segments.
"there I don't know a clue let's talk a little bit about negotiation because that's obviously such a big thread through both industries you talk about incredibly complex negotiations from you know sign..."
Fluidity in Valuation
Ovitz elaborates on the concept of value in negotiations, explaining how it is often fluid and subject to agreement between parties. He recounts his experiences learning from mentors about the complexities of determining worth in deals. This segment highlights the importance of adaptability and emotional intelligence in successful negotiations.
"everything is different saying that you have to know where you want to end up when you go in is the same for everything but that's not the art of putting the deal together they're two separate things ..."
Lessons from the Deal-Making Process
Ovitz shares a memorable experience from his time as CEO, discussing the importance of artificial deadlines and the need to be aggressive in negotiations. He reflects on the mindset required to successfully close deals and the lack of a one-size-fits-all recipe for success. This segment underscores the strategic thinking necessary in high-stakes negotiations.
"agreeing on value all the time right a value is always like a femoral shifting thing that we just agree on except when you sit in a room and the other side vehemently disagrees with you and then you g..."
Cultural Insights Across Industries
In this concluding segment, Ovitz compares the cultural attitudes towards mistakes in Hollywood and Silicon Valley. He notes that tech entrepreneurs are more open to discussing failures and learning from them, unlike their counterparts in entertainment. This segment highlights the cultural shifts in how industries approach success and failure, offering valuable lessons for entrepreneurs.
"deal done and I was like okay I've just been thinking you have to believe you can figure it out you have to convince yourself and then convinced the other side I was thinking I was on my heels and lik..."