Michael Ovitz - Knowledge Is Power - [Invest Like the Best, EP.359]

My guest today is Michael Ovitz. Michael is the legendary talent agent and co-founder of CAA, or Creative Artists Agency. Michael started CAA in 1975 and over the next twenty years, he built it into the world’s most formidable talent agency, changing Hollywood forever. The list of stars he’s worked with is endless, from Meryl Streep to Steven Spielberg and David Letterman. Since leaving CAA, he has become an investor and adviser to many prominent firms, most notably Andreessen Horowitz, and Michael’s work ethic is unmatched. Please enjoy this great discussion with Michael Ovitz. Listen to Founders Podcast For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com). Show Notes: (00:00:00) Show Introduction (00:03:25) First Question, Michael Crichton's Impact (00:04:14) The Art of Storytelling and Creativity (00:07:20) Michael Crighton’s Writer's Block (00:09:53) The Birth of Jurassic Park (00:12:42) The Importance of Pacing in Storytelling (00:17:43) Positional Power and Influence (00:20:04) Knowledge is Power (00:22:10) The Role of Agents in the Business World (00:36:18) The Importance of Momentum in Business (00:42:35) Branding and Image (00:45:44) The Art of Spotting Talent (00:46:20) The Role of Persistence (00:51:25) Investing in People (01:00:30) Building Mystique (01:06:30) The Importance of Relationships (01:10:39) The Role of Art in the Entertainment Industry (01:17:04) Telling the Truth to Clients (01:25:28) Winning the Coca-Cola account (01:42:18) The Kindest Thing Anyone Has Done for Michael

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Patrick O'Shaughnessy?

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• 0:35Patrick O'Shaughnessy?

  Hello and welcome, everyone. I'm Patrick O'Neal and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts and you can access all our podcasts, including edited transcripts, show notes and other resources to keep learning at joincolossus.com.

• 1:00Speaker 01

  Patrick O'Neal is the CEO of Positive Sum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Sum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Positive Sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc.

• 1:29Patrick O'Shaughnessy?

  My guest today is Michael Ovitz. Michael is the legendary talent agent and co-founder of CAA or Creative Artists Agency. Michael started CAA in 1975 and over the next 20 years, he built it into the world's most formidable talent agency, changing Hollywood forever. The list of stars he's worked with is endless, from Meryl Streep to Steven Spielberg and David Letterman. His innovations, like the creation of the package, which we discuss, changed how the entertainment industry worked. Since leaving CAA, he has become an investor and advisor to many prominent investing firms, most notably Andreessen Horowitz, but also including many other household names, which we discuss in this episode. I cannot remember a conversation with more great stories.

• 2:11Patrick O'Shaughnessy?

  Michael's work ethic is unmatched and when I'm with him, I leave feeling both energized but also challenged. He has a unique way of setting and holding a standard, which I've seen firsthand. Please enjoy this great discussion with Michael Ovitz.

• 2:25Patrick O'Shaughnessy?

  When we first met, we talked a lot about Michael Crichton, who is an incredibly impactful person for me from afar. And I know for you, up close and personal, as one of your dearest friends. He had this quote, which is that if you want to be happy, forget yourself. I love this idea. Could you describe why this is a beautiful idea?

• 2:44Speaker 02

  Michael was one of the most important people that ever entered my life. His advice was always short and poignant. He loved to be a contrarian on everything. We had lunch once a week for 30 years and lunch or dinner and would talk about art. I don't know if you know this, but he wrote the definitive catalog resume on Jasper Johns.

• 3:11Patrick O'Shaughnessy?

  Wow, no, I didn't know that.

• 3:12Speaker 02

  Yeah, and you just.

• 3:13Patrick O'Shaughnessy?

  Somehow I'm not surprised of that.

• 3:14Speaker 02

  But isn't that amazing that he wrote short stories? He wrote novels, he wrote screenplays, and he wrote art critique, which is really hard to do, particularly if you write it so people can actually understand it. Because most art criticism is almost incomprehensible.

• 3:32Patrick O'Shaughnessy?

  Arcane.

• 3:32Speaker 02

  It's just, it's just difficult to understand. And he made it simple. I would go to him with issues because we were not just business partners. We were friends. I mean, I'll never forget, I went to him once along the lines of the quote that you mentioned. And his attitude was, if you can't control it, don't worry about it. And he always had these short little sayings. And one time I went to him, I said, you know, I'm very concerned that this deal I've been working on for nine months is cratering. And it was really upsetting to me because I'd put so much time and energy and I had so many company people involved in it as a team. And he looked at me, he said, well, there's always another racetrack.

• 4:17Speaker 02

  So his attitude was, look, again, you can't control it. There's nothing you can do about it. Talking to him was a treat. He always had interesting insights, but he could swivel from creative topics, which are very difficult because creativity is so misunderstood. There's so many different kinds of creativity, but there's one common denominator amongst it all, which is somebody has an idea and they try to verbalize it or write it down. And then somebody, if the creator doesn't have the money to move it forward, they have to present it to somebody.

• 4:59Speaker 02

  So somebody that's listening to it has to be able to hear the song in their head or see the story in their head or run a movie in their head that parallels the creative idea. And a kind of interesting fact to consider is that if you take a screenplay and you give it to 10 different directors, you're going to actually end up with 10 different movies. The stories will be the same, but each director is going to pick their own cast. Each director is going to pick their own cinematographer. Each director is going to pick their own production designer. Each director is going to pick the person that does the music and everyone's different.

• 5:44Speaker 02

  So the films are going to have some different looks, some different feel, different pacing. The editors are all different. Michael understood that really well.

• 5:53Patrick O'Shaughnessy?

  If you think about this notion of forgetting yourself, do you think the best way to do that in practice is just through action and not spending too much time sitting and thinking, but instead getting out in the world and doing things?

• 6:05Speaker 02

  You know, it's a very, very difficult thing to address and I'll tell you why. Michael said that as advice to other people. The one thing about Michael is he was often in his own head and didn't take his own advice. So there was a period of time where I couldn't get him to write a word for two years. It was beyond writer's block. He just didn't have anything that was interesting to him. And I used to go see him and stop by. He lived near me in West LA and I'd stop by him, you know, like every other day to see him. And for 10 minutes and I couldn't get him. I just couldn't push him over the hill. The agents were basically.

• 6:51Speaker 02

  Walking around telling people that he was buried working on a original. The word original could mean book, screenplay. It was amorphous by design. We didn't want anyone to think that he had writer's block or he couldn't work. And so we literally would tell the community on incoming requests for his work that he was working on his own thing. And on outgoing, we just talk about him like he was unavailable. But the reality was he was doing nothing but eating, sleeping and Sitting around. Sitting around and watching TV. And he just couldn't find anything that was interesting. And he was a little down in the dumps, frankly. You know, you go up and down as a creative person. And it's also a kind of lonely life because you're, you don't have anyone to interact with.

• 7:35Speaker 02

  And finally, I said, let's go to breakfast one morning. I want to get you out early and let's see if we can, what we can do. And we went to breakfast at the Bel Air Hotel that we met at like eight o'clock in the morning. And we just sat and talked for about an hour. And by the way, I didn't do that a lot because I didn't have time. Time was my enemy. And if I spent 45 minutes at breakfast, that was usually enough. I don't believe that every breakfast has to be an hour. Every lunch has to be two hours and every dinner has to be three hours. And every meeting has to be an hour. That's nonsense. They should go as long as they take to get something done or accomplished. Because in essence, that's what we're doing. But with him, it was different. I could sit and yak all day.

• 8:20Speaker 02

  And finally, I said, no, I said, you have to write. You, you just have to do something. Let's take a rejected storyline that you had in the past. And he had pitched me a story that he had in the past, which was really interesting. It had to do with volcanoes, which he did tons of research on everything. So if you watch some of his films, you're always educated at the beginning. Think that you become an expert in 20 minutes on something, but you really aren't. But he's prepping you. And he said, well, I had one idea, but I think I'm not sure about it. And I said, what's that? He said, well, what if you had three characters, not stars, just three average people?

• 9:02Speaker 02

  Two young people and a middle 30s person. And they get lost in an amusement park off the coast of South America.

• 9:13Speaker 02

  And I go, yeah, tell me more. And he said, and in that amusement park, some scientist has bred prehistoric animals. And I looked at him and I said, you can't. I said, are you sick? Are you out of your mind? I said, my son loves dinosaurs. My young son plays with toys that are dinosaurs all the time. I love dinosaurs and my dad loves dinosaurs. You just hit the entire demographic. And I said, you gotta go write this. I said, like, right now. And he left the hotel. And lo and behold, he calls me back about a week

• 9:54Speaker 02

  later. He says, I have 10 pages. And I said, great, let's just finish the book. Let's just finish the book. And I knew to read the 10 pages was irrelevant, because every Crichton idea is an education for the first quarter of the story. Like in Jurassic Park, the first

• 10:18Patrick O'Shaughnessy?

  Yeah, sure. It's interesting. I never thought about it that way, but it's so true.

• 10:21Speaker 02

  Yeah, he's kind of teaching you how to be a

• 10:23Patrick O'Shaughnessy?

  Andromeda strain was like that. So many, yeah.

• 10:26Speaker 02

  That was his trademark, which no one ever

• 10:28Patrick O'Shaughnessy?

  You realize it when you think about it, but you don't, you don't realize it.

• 10:31Speaker 02

  So I said, Michael, I know what you're doing in the first 10 pages. I want to see the whole thing. And I want to see it in the next four months. I said, you can do this. And he went seven days, seven nights. And four months later called me up, said, I want you to come get the book. And I dropped by his house. I picked up a galley. I went to the office. I went home and read it and spent all night reading it. And I couldn't stop turning the pages. And I called him at seven o'clock in the morning. And I just said, you know, you're just so full of it.

• 11:04Patrick O'Shaughnessy?

  Is there anything good ever that doesn't have that page turning quality?

• 11:07Speaker 02

  Yeah, there are certain things where they're intended to unfold slowly. Originally, when I started in the business in the 60s, European films were known to have the camera linger on characters and scenes much longer, and they had a different pace. I think they closed the distance with American films over the years. French films still did a lot of that. They're much more introspective, I think. That I think if you watch something like Terms of Endearment, for example, it's brilliantly weaved together, but it's not a fast movie. I think a lot of it depends on the subject matter. I had a client named Dick Donner, who was a brilliant director to Superman and the original Omen, and he was a fantastic man. And he used to say to me, when you're

• 11:52Speaker 02

  reading something, just think there's a clock in the upper right-hand corner of the screen. So like on Omen, every 15 minutes, some crazy thing occurred that just pulled you out of your seat. And it was like a graph that went flat and then spiked and then came down to flat. It was called pacing. And it's something that stayed with me for my whole career. Michael was an expert at the build, and then it just keeps going. And he teases you in Jurassic Park when you hear the T-Rex in the cage. With that big wall of fire, yeah.

• 12:32Speaker 02

  And Steven, the Steven story is equally is interesting. Steven's one of the greatest directors in the history of the cinema. And I called him that morning, I guess I called him around 11, 12 o'clock at home. And I said, I read something last night that just blew me away. And he said, who is it? And what is it? I said, it's from Michael Crichton. I'm not going to tell you what it's about. I need you to read this tonight. You're the first and only person that I'm giving this to. I said, you don't have to tell me. Kate Capshaw, who's fantastic, who's his wife, I actually knew her before Steven did. She was an actress in the community and really well thought of. And I said, I'll call her.

• 13:15Speaker 02

  So I called Kate and I said, I need permission for Steven to read tonight instead of be with the kids. And she was great. She said, okay, sent the book over. And next morning about 7:30, my phone rings. Steven said, I'm in. I mean, he didn't say anything about I'm in. It was odd because we had no studio. We didn't have a screenplay.

• 13:38Speaker 02

  We didn't have a cast. We didn't have money. We had a book and Steven Spielberg committed to it.

• 13:44Patrick O'Shaughnessy?

  Good start.

• 13:45Speaker 02

  It was a great start. We went out and got a budget done by Frank Marshall and Kathy Kennedy. Frank was my college roommate and he was a great producer and Kathy ran Steven's company and got a budget and Steven was probably the only director that could have actually pulled this off because technology at that time wasn't our friend to make dinosaurs look so real. And we got a budget. We hired a writer. Michael took a stab with the writer and a script. We started to get a script. We knew getting financing would be a negative problem, not a positive one. Negative in that there were seven to 10 financial submissions to make, but only one would get it. So you're going to have a lot of people upset because it's

• 14:29Speaker 02

  that good. So we made a decision to go to one place, one place only, and give them a take it or leave it in 24 hours. So we went to Universal and I called the man who ran Universal, a guy named Sid Scheinberg, who worked, ran Lew Wasserman's business. And he was very close to Steven because he gave Steven a start in the business with a Universal television movie called Duel. And they were very good friends. And I said, Sid, I've got good news and bad news for you. He said, what's the good news? And I said, the good news is we've got a Michael Crichton book. Steven Spielberg's going to direct it. It's ready to go. We've got a screenplay. We've got a budget and we'd like to offer it to

• 15:13Speaker 02

  you first. You got a day to think about it. Frankly, I don't think there's much to think about, but I'm not running your company. And we want a very unique deal on this where we're partners with the studio. And we also are going to want to add.

• 15:32Speaker 02

  Schindler's List to the deal.

• 15:34Patrick O'Shaughnessy?

  Wow, interesting.

• 15:35Speaker 02

  So you're gonna have to do Schindler's List. And he says, okay. And he said, is there anything else? I said, well, Schindler's List is gonna have to be shot in black and white. And I thought he was gonna come through the phone. Because if you did it in those days, there were video cassettes. You couldn't sell a video cassette in black and white. There was no audience for it. But Sid said, okay. And he said, so, okay, what's the bad news? I said, we own it and you don't. He said, okay, let's do a deal. And we did a deal in 24 hours.

• 16:04Patrick O'Shaughnessy?

  How many stories like that, of that level of incredible characters and how it all came together? Do you think you were a part of over the years? It's a high bar.

• 16:13Speaker 02

  Luckily for me, probably more than we have time for. I may have been the luckiest person to work in the film business and television and books and music, because I caught the tail end of the golden years in those businesses.

• 16:32Patrick O'Shaughnessy?

  If I think about what defined that era for you and your success, we'll talk about all the aspects, the packaging, the stars, the era, et cetera. This idea of scale just comes up over and over and over again. I want to talk about it in the context of investing, too. Why was scale and speed and the speed to get that scale so critical to the story of CAA's success? And it seems like lots of your successes.

• 16:56Speaker 02

  I'm a firm believer that scale is critical. And I have a lot of friends that disagree with me. And there's no right or wrong answer. There's no right or wrong answer. You look at two successful companies in the investment world. They were, both of which I worked with and are phenomenal and run by really brilliant guys. If you look at Josh Kushner, who you've had on this podcast, and you look at Mark Andreessen and Ben Horowitz, they've both been crazy successful and won. And I've worked with both sides. One didn't want to scale big at the beginning, which was Josh. And he runs a very large AUM with a very small lean staff.

• 17:40Speaker 02

  And Mark and Ben wanted to build an institutional scale, which differentiated them from every other VC. As a matter of fact, the minute they opened their door, they wanted to scale because they wanted to be different. They wanted to provide full services to the community of creators.

• 18:01Speaker 02

  And Josh wanted to provide service, but on a more one-on-one basis. So you could go to both places for financing and you'd get fabulous advice. But from one place, you get more singular person advice. And from another place, you'd get teams of people that would be specialists in every area. But to answer your question on the scale, I just had this discussion with someone you and I know well together. And about why scale is important versus not important. This person took the position in a meeting with me that scale is not necessary in the investing world.

• 18:42Speaker 02

  And he had some good points and there surely are a lot of investors who are solo practitioners, who are very good at it. But I said to him, scale gives you information and knowledge is power. And if you've got multiple people that communicate by the way, and that's one thing at CA that no one could beat us on. Everybody knew everything about everything because there was no politics. No one held anything back. If you positioned your associates, you shouldn't be at the company. You could position anyone you wanted, except your associates and your clients. And you did your fighting outside the firm, not inside.

• 19:22Speaker 02

  But if you have scale, the amount of information that we got in the fifth year versus the first year was geometric. It was to a hundredth power because you had all these men and women sitting around a table. They would share their previous day at eight o'clock in the morning, while other companies were still sleeping. And by nine 30, 10, everyone had every piece of information that everyone else had, which was great because we'd then go out and call everybody else's clients, whose meetings were starting at nine 30. And by 11 30, when they finished, their clients had all the information from us, which accelerated our growth curve, which was a foundation of our business,

• 20:07Speaker 02

  which was constant momentum. So to me, scale. Is information, information is knowledge, knowledge is power. And it gives you a facility to move quickly and efficiently and with authority. Because it made no sense to be able to say to someone a made up answer. Matter of fact, we had a rule that if you don't have an answer, you say to the client or to the person you're talking to, I do not have an answer to that. I will call you back. Which was antithetical to how I was trained in the business, which is always have an answer. When I was a young agent, the guy I worked for always had an answer and I used to listen in on his calls and half the time he was

• 20:48Patrick O'Shaughnessy?

  Making it up.

• 20:49Speaker 02

  Making it up, you know, and you can't do that in a business. You just can't do it. You could probably do it in the slower moving businesses like movies. Not in television or music where the businesses move, they turn on a dime. But you could probably do that in the book business and in the movie business. They move very slow.

• 21:11Patrick O'Shaughnessy?

  Why don't more CEOs or investors who are founders of their own firm? Have effectively an agent that do for them what you used to do for Hollywood talent?

• 21:22Speaker 02

  Over the years, starting when I in the early nineties, when I first traveled to the valley. Ninety-three, I called Bill Gates cold. And I asked to see him. He was fantastic and he invited me to dinner. Up at Microsoft and I went up, flew up. We had four hours with he and Steve Ballmer at a sushi bar talking about. A future that none of us really had our arms around, but we both decided that we both did things at some place, somehow. We're gonna cross and it was a couple of months later that I met a guy who I'm crazy about to this day named Nathan Mirvold, who was the number three guy, the CTO of Microsoft.

• 22:06Speaker 02

  Who looked at me one day and we were standing in a room and there was a stereo speaker in the room and a stereo setup. And he said, Michael, I just want to warn you about something and this is out of the blue. And I said, what's that Nathan? He said, see that stereo speaker? I said, yeah. He said, you know, that music that comes out of that little. Tape that's in the cassette player. I said, yeah, he's not going to need that at some point in time. I said, so where's the music going to come from? And he pointed to the sky. And it was one of those epiphany moments. I would have never thought of that. And here's a guy who's telling me that this is going to happen. And he's got what I call positional

• 22:46Speaker 02

  power, which is he has knowledge and he's in this field and he's got an idea that I better pay attention to. I was a consultant at the time for multiple record companies. I was a consultant for Warner Records. I was consultant for RCA and I was a consultant for Bertelsmann and for Sony. I went and told my story that Nathan told me to all the guys that were friends that were running these businesses. And it was interesting. The responses went from you're insane to it's good, but no one will ever replace ultimately, you know, packaged hardware, hard goods. And I said, look, I don't know, but I feel an obligation.

• 23:30Speaker 02

  Yeah, you had a message from the future. I gotta just give you this message. And it was interesting, the guys that embraced it and the guys that didn't. And some guys just went down with the ship. They just wouldn't let go. And other guys dug into it really quick. You look at someone like Lucian Grange, who's been brilliant at navigating the digital of it all. And then you look at other guys whose names I don't want to mention, who just sat on their hands and decided to go old school. Listen, a lot of studios that we worked with, we would advise them that in our travels in the valley and very few people from LA went up north and we were

• 24:15Speaker 02

  going up there a lot. We did a deal. I met Andy Grove, which was one of the highlights of my career as an agent. And Andy, as you know, was one of the founders of Intel.

• 24:29Speaker 02

  We did the Intel CA Media Lab in 93 and we took a room in our building and turned it into every piece of hardware that was transitioning to software and over the air transmissions. And the CA building had like three giant satellite domes on it. And we were on the corner of Wilshire and Santa Monica and people thought like it looked like a spaceship. And Andy sent, part of the deal was we'd have two CA staff there and two Intel experts on chips and how the chips worked in the computers. And Andy, to his

• 25:08Speaker 02

  credit, at our suggestion, made a animated short of how a chip works because none of us frankly understood it. You could have explained it to me till you were blue in the face, Patrick, and I wouldn't have understood what you were talking about. And Andy did a 90 second, two minute animated about how it starts from the raw material, all the way to when it's implanted in the computer and then what it does when it's inside. And we ran that as a loop continuously. And we tried to show our clients what the future was going to look like, even though we really weren't sure. But between that and then meeting

• 25:49Speaker 02

  Andreessen and working on Ben and Mark's board and reading the white paper and meeting guys like Thiel and Reid Hoffman and just some of the smartest people, it bookended the other smart set of people I met creatively.

• 26:04Patrick O'Shaughnessy?

  Sounds like the answer is they do have agents, but the model, in your case, for example, is that you become an investor, you become an investor and they're investing business in their underlying equity. If you're investing in a founder, the model's just different. You can't get a cut of projects that happen episodically and you just want to be involved in a business instead, but the agenting still works.

• 26:24Speaker 02

  What I failed to mention in answering your question, and I apologize, is we looked from the 90s very carefully at being agents for engineers. That was the first thing we did. And we couldn't figure out a financial business model because you'd get them a job and then they'd have like a long contract and commissioning their salary.

• 26:48Speaker 02

  Didn't sound appetizing at the time for the amount of work where we made a mistake is frankly, commissioning their options.

• 26:56Patrick O'Shaughnessy?

  Right, that would have worked.

• 26:57Speaker 02

  That would have worked.

• 26:59Speaker 02

  But who the heck knew that those options were going to explode like they did. But today, I'm involved with two young guys that have a company called Human Capital. And they started a business basically representing engineers for free. And they send those engineers to companies to get them jobs. But what they've done that is brilliant is they track all the engineers. And they have recruiters at the top schools in the country. And they have the biggest database on engineers that are starting of anybody that I know. I think the two guys are brilliant.

• 27:40Speaker 02

  They've got a business that no one else has, so they're now investors, but they get an inside look from the creators.

• 27:47Patrick O'Shaughnessy?

  Can you say a little bit more about this idea of positional power? Understanding that a big part of that is knowledge. But it just seems like you've gravitated towards situations where you've not had to compete, like I said earlier, and I'm sure positional power in a frame is a really important strategy. So say as much as you can about that concept.

• 28:06Speaker 02

  Positional power is kind of a loose term I use to describe someone like Nathan Mirvold. He's a perfect example. He walks in a room and there's many dynamics to positional power. One is you really have to have some brain power or it's a nonstarter. I mean, you can't be stupid and have positional power. I guess someone once argued with me that if you were a banana country dictator, you might be able to do that. You know, you killed enough people, you might get away with it. But it's not the positional power I'm referencing. So Nathan walks in, looks like a...

• 28:44Speaker 02

  CTO, talks like a CTO, walks like a CTO, is the CTO of a company moving up a mile a minute? And when he opens his mouth, really smart stuff comes out. So that's positional power at its best because when he walks in the room, he already knows his luggage has been checked in ahead of him. And we used to use that at the agency in non tangible ways. So for example, this is going to sound today's world very stupid. But when we started in 74, we insisted that everyone wear a suit and all the women.

• 29:26Speaker 02

  We had a lot of women executives, by the way, because in those days we felt probably 60% of our staff were women. And we always felt that women actually had an edge against men being better agents. They could come into a room, man walks in a room, he's got one act. He is what he is. There's like no changing that. A woman walks in a room and she can be tough. She can be sympathetic. She can be a mother. She can be aggressive. She could get upset. She's got a toolkit that's insane. And we liked having women around, but we led by example. So all of us wore suits and the women and men dressed every day.

• 30:11Speaker 02

  And I was talking to someone about this today because we're here in New York. And I was in a suit yesterday for a meeting I had with Ally and I told him to wear a suit, which was kind of shocking to him.

• 30:21Patrick O'Shaughnessy?

  I think I've seen him outside of a black t-shirt.

• 30:23Speaker 02

  Yeah, he's had a suit on the last three days. And we were in midtown and I remember coming here and for business in the mid 60s up through the 90s. Everyone had a suit on, every woman had a very smart outfit on. And good God, I was the only guy in Milos in a. Coat and tie. As a matter of fact, the guy who was having lunch would berated me for 10 minutes. So it's a very different world today, but in those days I wanted our people that positional power. And I looked for every edge. So we did multiple things. One, we had a 10-page bibliography of what we felt they needed to read on a daily, weekly and monthly basis. Because knowledge is power. We had a dress code that we never mentioned.

• 31:08Speaker 02

  Just led by example. We had hours which we never mentioned were led by example. The partners' cars were the first in in the morning and the last to leave. We had a thesis that you'd never allow anyone to buy you a meal or let you ride on their private plane without them. You can't be bought. Small thing, but a big thing. It's a big statement. And we tried to take as much positional power advantage as we could out of non-consequential items, basically, and it worked. When you walk in a room and you're dressed properly and the people you're negotiating with are sitting there in jeans and a T-shirt or a polo shirt.

• 31:51Speaker 02

  You kind of just feel better about yourself in those days. I can't say that now because I got thrown out of the valley for wearing a blue suit to my first Andreessen Horowitz board meeting where everyone there, a friend of mine named Mike Volby looked at me, he said, are you kidding?

• 32:07Speaker 02

  And he said, what are you, what are you nuts? There was a guy in the room, one of the board members had shorts, he had Madras shorts on with a his name was Mike Homer, great guy, legend in his day. And he's sitting there in Madras shorts and a Hawaiian shirt, neither of which matched. And he looked at me and he said, I'm not even gonna say it.

• 32:28Patrick O'Shaughnessy?

  So funny. Speaking of Mark, I asked him what to talk to you about and his response was just a day in the life. And it reminded me of a conversation you and I had where you said something like for 30 plus years, you made 250 calls a day. And I want to talk about that day in the life and the volume of interaction that you had because it's very easy to say like, get scale and get information. But I want to make sure people understand like what that takes, like the amount of hard work, the pace, the stamina, the energy that goes into that. So maybe give us a little bit of that flavor of a day in the life.

• 33:03Speaker 02

  Well, Patrick, I think you just hit on all the keywords. I mean, if someone wants to build a business. To me, and I only speak for myself, everybody has their own opinion, but foundationally, momentum is critical. Building a knowledge bank is critical. Surrounding yourself with people as you recruit that can take your job is critical. Not being afraid is critical. Being on what I call a positive role is critical. No negativity. And momentum is built by action, not inaction. And that action, one creates themselves. So we didn't have internet when we started, so we didn't have email or text.

• 33:46Speaker 02

  A big thing for us in the early days was car phones, which were radio based, by the way, they weren't digitally based. You were on an open radio channel. As a matter of fact, it's one of the ways we signed a lot of clients because a couple of the agents, the more senior agents who had these radio car phones used to give up way too much information to their assistants or compatriots on an open line and we would just jot it down. Amazing. Which was like, to me, it was like crazy. We had one guy who had a phenomenal client list and I was 28 or 29 and this guy I discovered every morning drove 45 minutes to his office.

• 34:31Speaker 02

  And every morning he'd get on the phone with his assistant and one of his junior agents and he would go through problem areas. And I just sat in my car and took notes and started calling his clients. It was unbelievable. He gave me a roadmap. But basically, if you don't have energy and you don't want to make a time commitment and you want to have kind of an easier life, you shouldn't try to start a business. I don't know a founder that I've worked with anywhere that isn't driven like the snow. And if you can't keep that pace up for 20 years, and I mean that, there's no business

• 35:14Speaker 02

  I've ever seen that can get up and running in under seven to 10 years. I don't know why it's that number, but if you look around and start seeing when do businesses hit critical mass, it's seven to 10 years. And if you don't have the energy and the desire and that burning sensation in your gut.

• 35:37Speaker 02

  And the fear of failing and a desire to make it for the right reasons. And it can't just be financial, by the way. You've got to want to do something with your gains that's socially important. That's a very important item for me. Don't do it. Don't do it. Don't do it. I've been blessed with meeting really great founders and working with some of the brightest young people in our country. I think that if you don't want to put the time and effort in and you don't have a belief, if you don't believe in your idea, don't start a business. And if you can't do momentum, I did 250 calls a day, but I wasn't the only one. We all did. The whole business did.

• 36:21Speaker 02

  The company, it wouldn't have worked with just me. And that's a critical distinction to make. We had a partnership and we had 150 agents and you have to realize what that did. You had 150 agents in all different fields, had 1.200 going out, covering the community between New York and LA in all creative areas, everything. Taking that information, reporting it back into a meeting every single day, sharing it unfiltered, no cards held close to the vest, and then doing 200 to 300 calls a day, outgoing

• 37:05Speaker 02

  and incoming, that's both. And creating this momentum is not stoppable and it builds on itself to the 100th power. So if you had 200 agents, it builds to the 200th power and one can't compete with that. It's not an accident that we ended up with the best client list or the most film packages or most musical tours or most books on the New York Times bestseller list each week. It fed on itself. And you talked about competition internally. We had a very simple thesis, which was if you have a competitive actor that you are worried about.

• 37:46Speaker 02

  So if you're Dustin Hoffman, Al Pacino and Bob De Niro, you traditionally have wanted separate agents. So when we signed Dustin, a couple of years in, I asked him to help us get De Niro and Pacino. And, you know, he kind of looked at me. I said, wouldn't you rather know what they're doing rather than not? And they should know what you're doing. You're only an actor who can do, and you're brilliant, but you can only do two things a year, maybe. And probably knowing you, you're going to do one thing every three years. There's plenty to go around, but it'd be nice if you guys all worked together and all of a sudden you see he do with Pacino and De Niro and Michael Mann, all three clients of the agency.

• 38:28Speaker 02

  May have been doable without that, but probably a lot easier and a lot less friction under the same roof. So our thesis was everybody should be with us, which really irritated people because that's like unholy. But our attitude is be in the clubhouse and partake in the wonderful information and material that comes in for everybody. And if you've got everybody, you get everything. Which sounds pretty simple, and by the way, it is, but it was like no one-

• 38:58Patrick O'Shaughnessy?

  Just takes all those calls.

• 39:00Speaker 02

  It takes momentum and heat and diligence and follow-up. Follow-up is critical. You can't in any business, even if you're building chips, if you don't have follow-up, you're not going to build a business. If you don't touch base with someone after you've had a first contact. You know, I was telling Ollie at lunch the other day, meeting someone isn't enough. The first meeting is easy. Anyone can get a first meeting. It's the fifth meeting. And how you're perceived, that's critical. And if there's no consistency and follow-up, there's no building the business. And I don't care what business you're in, you've got to have follow-up.

• 39:40Patrick O'Shaughnessy?

  In addition to your follow-up rule, one of the other things that you listed in the book was never badmouthing the competition. Say more about the reasoning behind that. I like it on its face, but-

• 39:51Speaker 02

  To me, it made no sense because- I worked with a guy when I was 22 years old, when I was an agent at William Morris, a manager, a very famous guy, had a huge client list. And I'd sit on the phone with him and all he would do was bad mouth everyone around him, including his partner. It was kind of a subtle bad mouthing, you know? And I realized early on it wasn't attractive. And it also made me think he was really insecure because I said to him, I said, why is he doing this to his own partner? He should be telling me his partner's the greatest thing since the wheel and get me to deal with the guy so he doesn't have to take my calls. And his attitude was he was putting everybody down.

• 40:34Speaker 02

  So we used to say to everyone we worked with, you don't have any gain of momentum in bad mouthing somebody, you kind of look weak. We didn't let anybody bad mouth movies of other agencies, directors, because we knew we'd end up with those directors, so it would look. It would look stupid. And then also, who bad mouths somebody? It's somebody who doesn't believe in themselves and is really insecure. There's no positive gain to the equation in bad mouthing somebody. And I just don't. That's a nice way to think about it. I don't believe in it.

• 41:11Patrick O'Shaughnessy?

  Is there anything else that comes to mind as you think about these aspects of power and influence that were generated? Like, that's a really interesting backdoor into it because you look weak if you're bad mouthing people, which I think is totally true. Any other things like that that really defined the culture at CAA that you think are most interesting?

• 41:28Speaker 02

  I always like to say that we were a blend of American team sports, Asian philosophy, and just plain old outworking everybody else. And then I kind of put a dash of Alexander Dumas' Three Musketeers on top of it all for one and one for all. Sounds trite, sounds stupid, but in 1974, it worked because we did everything as a group. So when we started, five of us that started the place would attend every meeting and go to every event. Then there were 10 of us, then 15, then 20, then 30, 40, 50, 60.

• 42:11Speaker 02

  And like when screenings occurred in the entertainment business, which is how movies and television shows were exposed to the community, always ahead of release dates.

• 42:22Speaker 02

  We were manipulative, frankly. We knew that the screen curtain went down at seven thirty. People were seated from seven to seven fifteen, non-reserved seating, twelve hundred people in the auditorium. And we would go in groups of ten and walk down the aisle together and say hello to people. And no one thought much of it until subconsciously, there was a buzz. Oh, CA is here. And we did things that seemed ridiculously simple and thoughtless, frankly, but they were manipulative and created an image in a business that's all image. We designed

• 43:06Speaker 02

  script covers and I, as you know, love art. You've been to my house and I'm Quite the collector. Well, I'm addicted, you know, and I chose a primary color for script cover, red. And someone said, what are you doing that for? It's so not, other people had like blue, mostly white, you know. And I said, I'll tell you why it's a primary color. It is a reactive color. If you want to have fun sometime when you have nothing to do, Google the science of color. It's absolutely mesmerizing to read about the science of color and what colors stimulate subconsciously in your brain. And I said, but here's what

• 43:47Speaker 02

  it is. It's only going to stimulate one thing. People are going to see it. Okay, they said. And I said, here's what we're going to do. We printed a thousand old scripts of movies that had already been made and TV shows that already made. And we put them in script covers. And I had mailroom guys go drop them off at every doctor and dentist's office in Beverly Hills and Westwood on the coffee table. They just opened the door and dropped it and left. And all these people that were going to their doctor or their dentist, sitting amongst Time Magazine, these were the times when people read magazines, sitting amongst Time and People and Newsweek and Fortune and Businessweek. There's a CIA cover with a script in it.

• 44:31Patrick O'Shaughnessy?

  Ubiquity.

• 44:31Speaker 02

  And people, they would look at it and they, it would just register and then they'd say something to somebody or the image was in their head. It was the logo on a red background. So that's what we did.

• 44:44Patrick O'Shaughnessy?

  Incredible. I'd love to talk about talent and your reputation for being able to not only spot talent, but do so quite quickly. Obviously you said, you know, it's the capacity to work for seven, 10, 20 years. That's going to build the great big things. But if you've got 10 minutes to meet with somebody and you are looking for talent or the lack thereof, what are you doing? What are you processing? What are you looking for? What are you looking to avoid? Something that would indicate maybe they're not the kind of person you want to look for.

• 45:10Speaker 02

  Yeah, it's a good question. It's very difficult to describe it any other way than it's very much like collecting art in a strange way. Everyone asks me, how do I start collecting art? I'm mentoring three young people in San Francisco right now that want to start art collection. So I A. Sent them a bibliography of books, a list of the top galleries and 50 artists that are on the contemporary that they should look at their work. And they said, what are we doing with all this? And I said, you're looking at pictures. Why are we looking at pictures? Because if the more you look at, and you can never look at enough,

• 45:51Speaker 02

  your brain will automatically, automatically cognitively put a weight of zero to 10 on anything you look at. And you're going to remember the zeros and the tens and forget the rest. And that's all you need because you're going to build what I call frame of reference on what's good and what's bad. Cause every art show. Has in it by any artist, I don't care who they are. They've got maybe 12 to 15 pictures they've worked on for the last year and probably two of them are masterpieces, five or six or seven of them are somewhere between the best and average. And two of them should have never gone in the show. They should have been edited out of the show.

• 46:34Speaker 02

  And that's how you learn taste and what works and what doesn't. And it's not dissimilar with human beings. I don't think I could have done this perfectly at the beginning of my career, but I was lucky enough to start in the entertainment business when I was 17. And I met a lot of people and the more people you meet, the easier it is. And when you sit with someone, you get certain cues that are both social and intellectual that give you a frame of reference about drive, about emotion, about deportment, about

• 47:15Speaker 02

  looking at you when you talk to them, about different tiny, it kind of reminds me of a sarah painting, the sarah, the pointillist. If you look at a two inch square of a sarah picture, you see a bunch of points and dots. You look at a four inch square, more points and dots, eight inch square, more points and dots, 16 inch square, maybe you see a little bit of a figure. 32 inch square, ah, there's two figures sitting over there. And then as it gets bigger, the picture appears. And it pierces your eyes and the sensory perception puts all those dots together into something that's quite extraordinary. It was one of my favorite artists. It's the same thing with meeting with talent.

• 47:58Speaker 02

  And in the world I come from, you get about 10 minutes to make a decision if you have time to keep going. Because if it's not something that you think is going to work, you gotta stop it because time's your enemy in anything you do. In anything, even recreation, time is your enemy. And you can't keep going. So I taught myself and all of the people we work with taught themselves to kind of look at a lot of nonverbal cues and listen carefully to what somebody says. And you get a sense and then compare that in your cognitive scale of things, other people you've talked to. So meet with a director and

• 48:40Speaker 02

  You want to have an amazing conversation about film, talk to Martin Scorsese. If you want to use Martin Scorsese's brilliance to help you pick talent, it's a fantastic tool. Because if somebody doesn't say something that has some correlation to the way he speaks about movies, they're missing an element that they need to have greatness. Now, the ratio of right to wrong is good, but it's not flawless. You miss people sometimes. I remember early on, we made a mistake. We missed John Travolta when we were kids. I was 27 or 8.

• 49:25Speaker 02

  He was doing like Welcome Back, Cotter. And he played this character and we all thought he had one dimension. We were just wrong. We were just dead wrong. We made a mistake and you got to own up to it. I admit that all the time. He's brilliant. He's a great actor. He's played a zillion characters. I was just actually watching something he did the other night with Quentin Tarantino. And I've seen it 10 times and there's certain scenes in there that he does that just, he and Sam do these scenes together that are just absolutely brilliant. And we blew it.

• 50:01Patrick O'Shaughnessy?

  There's so much charisma of a certain type to a great entertainer that probably blends quite a bit into founders who are marshaling resources and selling people and building a narrative. Investors seem quite different as a category of people. I think through some of the greatest investors, they're kind of nothing like some of the great founders or entertainers. What patterns have you noticed or do you look for? Because you've done this quite a few times. You've worked with Mark, with Josh, as you mentioned. I know you're close with Bill Ackman. You're working with Ali Hamad now, whose name you've mentioned a few times. What are the points of pattern recognition for investors specifically, do you think, that are the same and or different than you'd be looking for in founders or entertainers?

• 50:45Speaker 02

  First of all, it's all the same, which is odd, but it's the same and it's different, if that makes any sense to you. Okay, it's different in certain categories, but it's the same underlying fundamental principles. I was once asked, when I transitioned into full-time being up in the valley, which was thanks to two guys, Mark Andreessen and Herb Allen and Laura Andreessen, who

• 51:10Speaker 02

  Stage an intervention with me in New York City on the Upper East Side 20 years ago. Well, basically, they invited me to dinner at 6:30, which is a half hour late for Herb because he, you know, he likes to eat dinner at late lunch hour. He learned that from his father, who was one of my mentors, Herb the second, who I learned the investment banking business from. And Herb the third and Mark and Laura met me for dinner. I had no idea what I was covering. Sat down and Mark just looks at me and says, well, this is an intervention. I thought he was kidding. He was not kidding. He said, you are running around New York and we all think that you're wasting your time. And he was brutally direct about it

• 51:53Speaker 02

  as only people in the digital space can be. And he said, you have to stop doing what you're doing, which is generally consulting for a lot of different businesses. I was out of the agency business. You have to move to San Francisco and you got to get into the investment area. And I said, I don't know what you guys know about investing. And they both said, it's very simple. You put talent together with money and got to be distribution. That's what we do too. And he said, that's exactly what we do for a living. And I said, well, I never looked at it that way. He was 100% right. That night I canceled everything I had the next day. And the next day I flew to San Francisco and rented an apartment and I moved

• 52:38Speaker 02

  up there three days a week and started and I was doing the exact same thing that I did before, exactly as predicted. And meeting with founders was no different than meeting with someone who wanted to be an actor, a director or a writer. And you had certain other criteria that were added to my outline of what I felt was important to judge talent and to see if it was someone I wanted to work with or invest in. My investing is a bit different than a lot of other people's. I'm probably less detailed on diligence than I am on thinking I invest in people if they've got a decent idea.

• 53:23Speaker 02

  And I feel the founder is talented and dedicated and believes in his or her idea. I will invest in them and I will invest if I don't like the idea sometimes. And many times I've done that and the company's failed. But the second idea has been amazing and I've made my money back. But it's all about the people. As a young man that I'm very fond of in San Francisco named James Proud and

• 53:53Patrick O'Shaughnessy?

  Oh, sure. We had dinner with him about talking about China.

• 53:55Speaker 02

  And I I met him. He was 20.

• 54:00Patrick O'Shaughnessy?

  Barely 20.

• 54:01Speaker 02

  Barely 20 and he looked like he was 15. And he was 20 till he opened his mouth. And the stuff that came out of it blew me away and I invested in his first business. He was a teal fellow, which to me was a very good. I take all of the points like Sarah to weigh the talent and a teal fellow is a

• 54:23Patrick O'Shaughnessy?

  It's a good point.

• 54:24Speaker 02

  It's a good point for me. It doesn't always mean it's perfect, but it's a very good point. He had a business that I thought was interesting, but I don't invest in hardware businesses. There are too many things that can go wrong with them. And sure enough, he did this business as a great product and of course it failed. He's got a business now that is so amazing and so smart and so important to the country. It's like he's on a mission. He's like on a mission from above to make this work and it's going to help the country. And he's getting support from the government, which he should. He's raised a lot of money. He's hired some of the greatest minds in the country.

• 55:04Speaker 02

  He's basically trying to build chips in this country and he I met with him and I said, James, this time you've gone off the reservation. I mean, do you know how hard that is? And I listened to him and he convinced me in about 30 minutes why this mission was important, why I had to invest, why it was going to work. And his his commitment to it was second to none, I'd ever say. And it's about him. He's going to make it work.

• 55:35Patrick O'Shaughnessy?

  For someone like Ali, benefit of both knowing him, I think of him as a puzzle solver. Like, he just can't get enough puzzles to try to figure out investing equations to figure out what does someone with that ability usually need to develop to build a great franchise or a great business, since you've been a part of a number of these amazing investing franchises?

• 55:54Speaker 02

  So, a very close friend of mine lives here in New York, named Eric Lane, was at lunch with me last Monday. He's the president of Tiger. He used to be at Goldman. Fabulous guy. At lunch with me, he said he met some young guy who is incredibly smart and has a fund, and he gave him a little bit of money, and he thought I should meet him, because I love meeting young people. I mean, for me, I have no interest in spending time with anyone my age. I don't want to be around anybody my chronological age or within 10 years. And I said, great. He said, he's in his early 30s, and he's really smart. So, I met him. We both know him. And I saw something very special in this guy in 10 minutes. It

• 56:39Speaker 02

  didn't take me long. But on the other side, it was very clear to me that he'd built a really interesting business, and no one knew who he was. And he was having trouble getting in certain doors, and he had little credibility, even though he's putting up 12.5% returns for 10 years. And his deal investing analytical capability was off the charts.

• 57:06Patrick O'Shaughnessy?

  I call him all the time to turn on the engine.

• 57:08Speaker 02

  It's the engines, not 12. So, it's not like a Ferrari.

• 57:12Patrick O'Shaughnessy?

  Right, right.

• 57:13Speaker 02

  It's like five 12-cylinder engines, and he's got endless energy. And I saw a lot of things in him that I had when I was his age, as far as drive and desire and not wanting to move back to the San Fernando Valley, where I was raised. And I talked to him every single day through the summer. He absolutely ruined my summer. He just, Patrick, he ruined it. It was every day, an hour to two hours. And the more I talked, the more I respected his brain power. And I did a deep dive on his business, and it was really good. And it's a secret.

• 57:52Speaker 02

  It's a miracle he raised the kind of money he did because he had nobody vouching for him. He had nobody saying, hey, this guy's really good, no third party. And if he did, it wasn't at the right level of introduction. I started working with him about eight weeks ago and the more I work with him, the more I like what I'm doing. To me, building is the most fun. Building CAA was so much more fun than getting to the end result because once you're at the end result, you kind of feel like every day you're Wyatt Earp and you walk into town and someone's going to shoot you in the back.

• 58:31Patrick O'Shaughnessy?

  Yeah, it gets very defensive.

• 58:32Speaker 02

  It's a defensive move and I'm an offensive player. So I had long talks with him and in the last eight weeks, in his inimitable ways, man, it just sucked me into spending most of my time in restructuring his business and recruiting terrific investors and raising more money and exposing him to different people. And I watched him sit with, like I had him sit yesterday with a guy I'm crazy about named Kevin Warsh, who I have giant respect for. He's got a, what I call Andreessen teal Crichton style brain. And he works with Stan Rockenmiller, who I have great respect for.

• 59:14Speaker 02

  And I took Ali to meet him and I was proud of how Ali held his own because against Kevin, that's not an easy task. I sometimes struggle not only understand what he's saying, but you know, hold my own.

• 59:28Patrick O'Shaughnessy?

  Yeah, incredible.

• 59:29Speaker 02

  And he did a great job.

• 59:31Patrick O'Shaughnessy?

  In the spirit of the red covers on the scripts, one of the things that you read a lot about in your heyday at CAA was this sort of mystique that followed you around. And I think you even said in your book that you owned the rights to like all the photos of you. So you were this sort of like, I think the word boogeyman even came up. And I'd love to hear about the difference, if any, that you cultivated between, did you cultivate a character that created that mystique because it had benefit or not? And how did you do that? I find that quite attractive and interesting and quite fun, honestly.

• 1:00:04Speaker 02

  You have to understand that when I was working in the entertainment business, there was no Instagram and no Facebook and no reels and no TikTok and celebrities were really celebrities. I mean, I had. The privilege of representing Paul Newman and Robert Redford, Dustin Hoffman, Al Pacino, Bob De Niro and Meryl Streep and Bill Murray, one of the great.

• 1:00:30Patrick O'Shaughnessy?

  Oh, I have to have you tell that story about the hospital.

• 1:00:32Speaker 02

  Yeah, one of the great actors and comedians of our time, John Belushi and Dan Aykroyd. And it's just the list was endless of who we were lucky enough to be involved with. And they were real movie stars. When you walked into a room in a restaurant with those people, the restaurant just quieted down. You didn't know anything about them, but you saw their work on screen. So you kind of thought you knew them. I was having a drink with a friend, Scott Wapner, the other day here. And I hadn't seen him in a while and we were laughing because I said, you know, Scott, I live with you every day. So I feel like I've seen you, but you haven't seen me, but I'm watching.

• 1:01:14Speaker 02

  And that's the feeling, but that feeling wasn't allowed to occur in my day because every one of those actors had a kind of distance from the public. So I decided the best thing we could do, since we're handling confidential careers and we were going to do the opposite of what our competition did is we're not going to talk about them. I'm just not going to talk to the press and I don't want anybody taking pictures of me or my kids. I don't want to be in gossip columns. I just want to be behind it and I don't want to be in front of it. And if someone wants to write something, they can say whatever they want, but they're not going to get my cooperation.

• 1:01:56Speaker 02

  And we had a rule, which in those days you can enforce, you couldn't today. No one in the company, except for our head legal counsel, was allowed to talk to any reporter. We didn't want to give background. We didn't want to spin stories. We didn't want to be part of that. And that's what everybody else did. It kind of set us apart. And by doing that, it created a mystique around the company, like a cult kind of mystique. And it was defined intentionally, like if there was a screening, one of the mailroom guys or gals would let me in the back door. And that was after we made it, by the way, that was 10 years to get to that point. And I didn't walk in places with celebrities, no notoriety, who is that guy?

• 1:02:41Speaker 02

  It was all about getting people to wonder. That great line in Butch Cassidy and the Sundance Kid where Newman turns to Redford and the Pinkerton's are chasing them and he goes, who are those guys? It's like, so the whole idea is to get people to wag their tongues about who are those guys? How do they do what they do? Why do they do what they do? And it worked to a point. I will tell you a side story that's kind of funny as I was in an elevator with Paul Newman. We were going up to an editing bay here in San Francisco in Chelsea. It was like 20 flights up in the elevator and Paul and I had just had dinner and it's like 7:30 and in walks some woman, some elderly lady with a shopping bag and she looks at

• 1:03:24Speaker 02

  me and she looks at Paul and she looks at Paul a second time. She looks at him and she goes, Mr. McQueen, you were so good in that movie about the fire in the buildings. And Paul looks at her and doesn't skip a beat. He says, you know, someone, you ought to look at that other guy Newman. He was really good too. And the doors open and we walk out and I just couldn't stop laughing. It was about building a mystique because it's the same reason like Mark and Ben built scale. How do you differentiate? There's 100 and 200, 100 VC firms on Sand Hill Road. You start up 13 years ago and so what? Who cares if you're Mark Andreessen and Ben Horts?

• 1:04:09Speaker 02

  What have you done for me lately? And do you know how to invest? You may know how to operate a business, but do you know how to pick a business? I mean, I thought they did, but who knows? So the reality is you have to have a mystique. You have to have an act. You have to have something to put forward. It just doesn't happen by accident. If you've got a technology, that's great, but we don't all have code that is RIP that no one else has. We don't have that. You have an idea. So we tried that and it worked until it didn't. And then in retrospect, I was asked about this class I was teaching.

• 1:04:45Speaker 02

  Last year and someone asked me the same question. I said, and they said, if you started the company today, would you do that? And I said, absolutely not. I would never go near that, not with social media or any of the tools that are out there. I said, I'd probably, if I started CAA, which I don't think is possible, by the way, to start it today in this environment, I don't think it's doable. But I said, I probably would take the Warren Buffett approach and pick up the phone and talk to anybody that called me, which is a better way to do it because there's no secrets anymore. There is no secret. There is no mistake. Everything's, well, you go to Google and you can find out anything you want about anybody.

• 1:05:30Patrick O'Shaughnessy?

  Does that mean that relationship becomes the most important thing?

• 1:05:32Speaker 02

  Yeah. Relationship is the most important thing anywhere and anything, whether it's personal, professional, family. Servicing your life and your relationships is more important than anything. It's as important as your health because good relationships help you be healthy. But the idea of building a mystique today about a business, I think is almost impossible because everything's an open book. I mean, my God, we didn't have a website called the glass ceiling. When I started CAA, no one would, but we took care of our people. We were very concerned about our assistants because they made up the culture of the company too, because they were talking to people. Listen, they were talking to all the assistants of all the people we were dealing with. So if one of my assistants

• 1:06:17Speaker 02

  was talking to your assistant and your assistant gets a good feeling about it, and you happen to say to your assistant something and he or she responds to you, that response is going to have either a positive or negative connotation. So you see how it works at so many levels underneath the surface. Probably the only rule that I could see working today, which would just be me, is I would not allow anyone in the theatrical agency business to be in social media. On anything except their family. I mean, they could have a private account, but don't go posting on Instagram, anything, your opinion. Who cares what your opinion is? I mean, you may care.

• 1:06:58Speaker 02

  I marvel at people that put their opinions out there about things that have no credibility or no position or, or no intellectual capability. And they put out these emotional gut wrenching opinions. And I say to them, why?

• 1:07:13Patrick O'Shaughnessy?

  What do you think about offense in investing? One of the lovely anecdotes from the book is this idea that prior to your business, agents were really firefighters. Like they didn't know where they were going to get called. They sort of just showed up and dealt with something. It was very reactive and you made it very proactive. Like, no, we're going to go make things happen. It feels like most of investing is more firefighting where it's a deal kind of investing in private markets where deals come across your desk. They come up, a company's fundraising, you react to it, you learn quickly, you make a decision. Do you think there's more room for offense in investing where you are an activist almost that does packaging, goes and makes things happen?

• 1:07:47Speaker 02

  I think there's room for both. I don't wait for things to cross my desk. I try to keep a scorecard on, one of the best experiences of my life is when Peter Thiel asked me to help Alex carp out with Palantir and get them into a commercial business. It's not like he asked me for my coding expertise. I didn't really understand what they were doing, frankly, but I could sell the company to a commercial client and keep them in business. And I did. Got them their first commercial gig in banking with JP Morgan. I spent 10 years with them. I keep an eye on all the Palantir engineers that leave to start up businesses because when Stefan Cohn was interviewing them, he'd take one for every 50 interviewed. And if they work

• 1:08:30Speaker 02

  there, they've got an edge. They've got some intellectual edge, but I don't believe you wait for people to send you stuff. You gotta go out and look for it. So I do both. I can't cover everything. It's one of the reasons that I'm working with Ollie is that we've got a, for the first time in years, I have. Really talented people to work with me because I can't do it as a solo practitioner. And it wasn't as much fun anyways. It was getting boring. You like to have someone to do a high five with if you happen to be lucky enough to make a right decision. But I think that being offensive in business is a key strategy in investing, no different than it's a key strategy point of being a founder. You can't be a defensive founder.

• 1:09:13Speaker 02

  You have to play offensive and you have to do that also to kind of scare away the competition a little bit. It is so competitive in the technology space. The moats are never high enough. Your competitors better think that you got a real lead on them and they're not quite sure what you have. But you better make a presentation that it's maybe a little more than you do to just keep your lead. It's important.

• 1:09:40Patrick O'Shaughnessy?

  I'd love to hear a bit more about art. You said you're addicted to it, like spotting talent, it's spotting beauty. But what about the world of art itself has taught you other things about the world or about people that you think is portable?

• 1:09:53Speaker 02

  Well, art for me is so much a part of my life because it's what I did for a living too. Because making movies and music and the clients that I represented, they're artists too, just visual artists. I once said to Marty, who I'm crazy about and have such respect for, and I said the same thing to Stephen. Let's take some single frames out of some of your setups and frame them and do an art show. We actually did one with Tim Burton because some of the frames are as good as anything I've ever seen hanging on a gallery wall, the way they're composed.

• 1:10:32Speaker 02

  Matter of fact, when Marty did Gangs of New York, I gave him the definitive book on Rembrandt because it was pictures painted. That showed how Rembrandt lit his paintings with candlelight. And the period Marty was doing, there was a ton of candle lighting and early gaslighting, which were single source flames. And Marty's such a stickler for perfection in what the period looks like. He's so good at it. His research is like a college professor. That he looked at this and it was like a light bulb went off. And that's how he lit gangs of New York when they were interior scenes and they're gorgeous.

• 1:11:15Speaker 02

  But to me, I got lucky, frankly, Patrick. I got interested in art very early. I never left the San Fernando Valley before I was 18. And when I was 18, I worked every day of my life and I worked every summer, but I took two weeks off in the middle of summer from my job and I drove across the country to kind of get a sense. This is between high school and college. I only took two weeks and I drove and I ended up in New York and one of the places that I went to, I had never been to a museum in my life and I went to the Museum of Modern Art. And I was 18 years old and I walked around and then I walked around again and then I walked around again and I stayed there for eight hours.

• 1:11:59Speaker 02

  And I was in absolute state of shock. The things that I saw and the perception of it for me, it flooded my brain. It like pixelated my brain. I just couldn't believe what I was seeing of all periods of art. And I said, I need to understand this. And I started reading about art in my spare time. When I was in college, I never went to class because I worked 60 hours a week and I went to the first class and the final. And I had someone taking notes for me at UCLA.

• 1:12:30Patrick O'Shaughnessy?

  Ever the enterprising young man.

• 1:12:32Speaker 02

  I had a job that was too good to be true. You know, I was running the tour department at 20th Century Fox. I had 75 people from my college working for me and 45 of them were attractive young women and the rest of them were my fraternity brothers. If I told you we were working, I mean, we were having a blast, right? But I did go to art class because it was at eight o'clock in the morning and I did get hooked into it and then. When I graduated college and went to work full time at William Morris, I started buying prints of artists and studying them in my spare time. And when we started CA, it turned

• 1:13:14Speaker 02

  out by a fluke that it was something all creative people were interested in. Oddly, all directors wanted, had, were influenced by some artists. I mean, I'll never forget talking to one of my clients, Stanley Kubrick, who's

• 1:13:28Patrick O'Shaughnessy?

  Visually, one of the most rich directors ever.

• 1:13:31Speaker 02

  Rich. And let's talk about a guy who talked about Hal 9000, which is Siri on steroids 60 years ago. So let's go to 2001 Space Odyssey and look at that film, which I've done 20 times and say, how did he think of that? How did he call me up 30 years ago and say to me, I want you to put something, Michael, in my contracts that no one can recreate any of the characters I've created digitally? I said, what are you talking about? What do you mean? How's that even possible?

• 1:14:03Patrick O'Shaughnessy?

  It's like Nathan Bervold again, coming from the sky.

• 1:14:05Speaker 02

  I said, how is that even possible? There's no technology for it. And he said, somebody's going to figure it out. And we did it. We put it in his contract. You couldn't recreate characters. And now we've seen with AI, it's like all anyone's doing. But he says to me one day, I was sitting with him in London at his house, having a lunch, and we're talking about putting together one of his movies. It was Eyes Wide Shut, and I was pitching Tom Cruise and Nicole to play the leads. They were clients. And we're sitting at his breakfast table, and he brings a book over and he says, you know, I love Henri Lartigue, who was a great French photographer. He's taught me so much. And then it just was very

• 1:14:46Speaker 02

  clear to me that art was so important in talking to directors. So then I said, well, how is it possible? There's only like under 10 art collectors in Hollywood. How's that possible that that could be? There's some disconnect that I must be missing something. So I went and spent months thinking about if I was making a mistake. Because to me, past this prologue, so if historically, no one is using art as a foundation for parts of their business, then maybe I'm making a giant mistake and it's taking up a lot of my time. And I just pushed through it and I said, I think I'm right. And I just kept going and I just love every second of it. It's the challenge of

• 1:15:30Speaker 02

  learning how to judge what pictures are

• 1:15:33Patrick O'Shaughnessy?

  Some of the most beautiful things I've seen over the years. So for sure.

• 1:15:36Speaker 02

  Thank you. And then I have a lot of friends that are artists. I'm mesmerized by creative people. I can't paint. I can't draw, can't sculpt, can't write. I can't shoot a picture properly with my iPhone. I am just doofless about anything creative. I can read.

• 1:15:53Patrick O'Shaughnessy?

  You can spot it.

• 1:15:53Speaker 02

  I can spot it, but probably one of the reasons I became an agent is I was talentless.

• 1:15:58Patrick O'Shaughnessy?

  You know, and You sound like Rick Rubin on 60 Minutes.

• 1:16:01Speaker 02

  I feel that way. I just have no talent.

• 1:16:05Patrick O'Shaughnessy?

  One talent I know you have is to be fearless in confrontation. What does that mean? Talk about confrontation.

• 1:16:11Speaker 02

  I think you have to tell the truth to people and it's not pleasant, frankly. And people aren't used to. When we started CAA, one of the things we decided to do was A, function as a group, the five musketeers, and B, just tell the truth, which no one did. Everyone lied to everybody. And when you're dealing with people that are performing talent, in order to be really good, they have to be a little insecure, a little narcissistic, a little bit of ego to balance the insecurity. We all have that. And but it's hard to tell people with that makeup, the truth.

• 1:16:52Speaker 02

  And no one did. Everyone would puff them up, tell them how great they were. And I found that to be, when I was a young agent at William Morris, reprehensible. How do you call A client at home that his show or his movie was fantastic when it was absolutely terrible. Why don't you give him some notes and just say, look, I'm not an expert, but here as a viewer. So I've always viewed myself from the day I started in the business as the ultimate fan. So I view myself as the fan of somebody's work and fandom means you like the good and the bad. But you can give commentary about the stuff that isn't so good.

• 1:17:35Speaker 02

  And I also view myself as a normal fan. I'm a guy who goes in, buys the popcorn, sits in the seat. I went to theaters every Friday night for 20 years into Westwood and stopped on the way home for an hour to see how the audience was reacting to clients of mine movies. I remember I went to see Last of the Mohicans and I went to see part of it. I left the agency early. I really wanted to represent Michael Mann. I think he's really brilliant. He's one of the few guys that can not only tell a story and make the pictures just stunning and realistic. And he gets great acting performances.

• 1:18:18Speaker 02

  So I went to see Last of the Mohicans and I just sat there and I didn't leave. So I was two hours late, I was an hour late for dinner. I just sat there and I, good God. And one thing came to my mind when I'm watching it is Alfred Bierstadt. Who's Alfred Bierstadt is one of the great American landscape painters of his generation. And I kept looking at this production design. I said, my God, it's like a giant Alfred Bierstadt painting. I called him from the car on the way home. I said, I have two words to say to you. And he said, three words. And he said, what's that? I said, one, Alfred, two, Bierstadt, three, brilliant. And we hooked up after that, but if I didn't know art, he did.

• 1:19:03Speaker 02

  Whether he used Bierstadt or not, it was surely some influence in the production design. So I found art to be very compelling for discussions with creative people.

• 1:19:13Patrick O'Shaughnessy?

  What is something about you that other people believe that isn't true?

• 1:19:17Speaker 02

  Well, I was incredibly controversial when I was in the agency business because I had this one for all, for one attitude, and it was win at all costs. And I made a lot of mistakes. When I think people would say that I was overzealous, that I knocked a lot of people around, I knocked people out of things, and they're probably right. I wanted to win. I wanted our clients to win, and I really felt it was important if we could do it without lying and without doing anything immoral or illegal. Our clients had to win, and we had to win. We had to be the best. And I'm a great believer in excellence. And whatever anyone does, whether they're a doctor, a lawyer, an Indian chief, or an agent, they

• 1:20:00Speaker 02

  have to be the best. I really strove to be the best. And I felt that anyone that worked in the company had to be the best and drove people really hard. Maybe in retrospect, a little too hard. Starting CA Today would be really difficult because to me, it was a lifestyle and a religious experience that you're in or out, because you couldn't work that way for other human beings without it. I did believe that you say the truth to your client. We had a big movie star. I don't want to say who. It's not important. Giant movie star. I got a call from Sherri Lansing, who was a brilliant producer and studio executive, one of the top women in our business. And she said, Michael, you got to look at this

• 1:20:45Speaker 02

  movie that you helped me put together, and you got to look at the dailies, your client, something's wrong. It was early on, and the relationship with the client was early on in our business. I don't think we were but five or six years old, and we had signed this giant movie star. And I looked at the dailies, and I go, oh, my God, they're not watchable. He looked like he was dead on the set. Called her, I said, I'm gonna take care of it. Can I do what I need to do? Can I say certain things that I don't have the authority to say? She said, like what? I said, can I tell them we'll shut down for three days? She said, yeah, I'll take insurance. She said, say what you need to say. So I went to see him and I walked into the guy's trailer and he was sitting there. He said, what's up?

• 1:21:29Speaker 02

  Cause for me to make a trip to the set unannounced was a highly unusual. He was at the lot at Paramount and I said, look, I just looked at Dailies and I said, I feel like something's going on I don't know about. I wanna help. What can I do? He said, what's going on? And I said, you don't look good. He said, what do you mean I don't look good? I said, you look tired and your eyes are half closed and I don't think we should let those takes be used. He said, get out of here. I said, get out of here. He said, I don't need an agent like you. I didn't know what to do, so I just walked out and got in my car. I spent 20 minutes driving back to the office, trying to think how I was gonna tell the agents

• 1:22:14Speaker 02

  that I had just lost a flagship client. It would have been a disaster for us because we were on a momentum roll. We used to announce a movie star signing a week with red ads. And it just put the competition away because they never knew what they, Thursday nights were bad nights for our competition. Cause Fridays that we rolled out these ads, every Friday. I got all. 50 weeks a year. So I get back to my office and the phone ringing, it's the client. Please come back. Drive back 20 minutes. I walk in, he doesn't say anything to me, except I can't sleep. I said, well, it's a pretty simple thing to fix.

• 1:22:55Speaker 02

  I said, hang out, I'm gonna, and I called an internist at UCLA, cause I was involved with the hospital. And I said, I got a client who's got a sleeping issue. I need something. That's strong enough to put him to sleep and light enough where he's not going to be hungover. And the guy said, this is what I recommend. Put him on the phone with me. I did. We got him a prescription. He said, what are you going to do? I said, you're going to go out to your house at the beach and do nothing for five days. This was a Wednesday, Tuesday. I said, we're going to shut the movie down Wednesday, Thursday, Friday. He thought I was like, God, that I could do that. I had already pretty clear that part of being a great agent is presenting that you can do the impossible. So I had already cleared that we could shut down and get insurance.

• 1:23:38Speaker 02

  And I got him a prescription of the sleeping pills, had it picked up for him. Had a car and driver take him to the beach and he came back Monday and the movie turned out to be fantastic. And he stayed with me for 20 years. So when you say, is it better to tell the truth or to lie to somebody? If I would have walked in and said, boy, your dailies look great. He would have thought I was out of my mind because he knew they didn't look great. But he was so upset that someone told him because no one had ever told him. Our point of view was it's just easier to tell people the truth.

• 1:24:12Patrick O'Shaughnessy?

  One of the things that I think a lot about these days is if you're lucky enough, like I think I am, you were to fall into something that you really, really deeply love doing. It becomes all consuming in an interesting way and it crowds out everything and anything else if you let it. How did you balance all of that with your family, with your friends, with your kids, with life at large? When the thing you were doing, the feedback loops were so tight, it was so energizing. You were building something and working on something.

• 1:24:44Speaker 02

  I did it with mixed success. Family was very important to me, but I didn't start a family till we'd been in business for close to 10 years or eight years. So I got the hard part behind me. The minute we had our first kid, and I have four now, the minute we had the first child.

• 1:25:05Speaker 02

  I changed my hours of operation around their schedules. So when they slept, I worked. When they ate, I ate. And I did a lot of coming home at six thirty and leaving at seven thirty. I never didn't have a dinner. I would try to get home at least two nights a week. Weekends, I always worked from home. I used to work in the office on Saturday. And work at home on Sunday. I worked both days of the weekend. I mean, for 20 years, I worked seven days, seven nights. But when I had the kids, we took off Saturday and Sunday night. But we also made it clear when we went to people's houses

• 1:25:50Speaker 02

  that if we couldn't bring the kid, we weren't coming. When we sort of pioneered this thing of bringing a basket with a kid in it, putting it on the table because we didn't want to leave the kid at home. And then as we had more kids, it became easier because we could adjust schedules. I tried like crazy to be a good father. It's really hard when you're in a service business. Sometimes I used to, when the kids had athletic games at three thirty in the afternoon, my office was 10 minutes from their school max. And I would go with two cell phones and an assistant and stand on the sidelines, being on the phone, watching them. At least I was there. Was I as engaged as I would have liked to have been, probably not?

• 1:26:35Speaker 02

  Did they realize that? I don't know, probably. The hours I spent trying to be a good father, I thought I did the best I could do. Was I a father that was around 24/7? No. I always still work really hard to not travel on weekends. I used to have to go to Japan almost once a month for a period of years. I made very clever trips that left Sunday late afternoon. So I had a weekend at home. I worked really hard to do six day weeks in a five day week. So when I was very young as an agent, I bought a very inexpensive small airplane, didn't tell anybody about it, and gave me the ability to.

• 1:27:21Speaker 02

  Work Monday, Tuesday, Wednesday at the agency and be involved in all the meetings that we had. And then Wednesday at five, I could run to the airport, get to New York by one, go to sleep, get up, do a breakfast, meetings, lunch, dinner, and then leave for LA at nine, get home at 11:30, and then be in the office Thursday morning. And it's like, no one.

• 1:27:46Patrick O'Shaughnessy?

  No one knew.

• 1:27:47Speaker 02

  No one knew, but no one could figure out.

• 1:27:50Patrick O'Shaughnessy?

  How you were doing it.

• 1:27:51Speaker 02

  How I was doing it. Well, I did it for $75,000 down and $600,000 mortgage and didn't tell anybody because at that time Warner Brothers was passing out airplanes to people as benefits. When I started in the business, the big gift was when the studio gave a client a car. Everybody got that. Everybody got a car. It's like if you did a good job on something, you got a car. That moved when Steve Ross was at Warner Brothers, you got a plane ride. And then as agents, we were under the gun because every client said, get us a free plane ride. And it became a big negotiating point. If anyone knew we were running a plane,

• 1:28:31Speaker 02

  including internally, it would have bankrupt us. Funny thing is, I had a small plane. You couldn't stand up and it had no bathroom. And it couldn't make it all the way to New York. You'd had a stop on the way back to New York, it could make it, but back from there, it couldn't. I did a lot of urinating in bottles. But it was important, like, we could do two sets in a day and not have to sleep in a hotel, which, so if someone was working in Colorado, it's tough to get a scheduled flight to. So we could go LA to Colorado, then Colorado to Iowa to cover a movie, and then back to Los Angeles, all

• 1:29:12Speaker 02

  in 24 hours. I didn't sleep a lot, but I also didn't do that on weekends, so I could be with the kids. It was much easier when all three kids were in school. That I will tell you.

• 1:29:24Patrick O'Shaughnessy?

  I hope your work ethic comes back. I feel like it took a pause for a while and you're starting to see shades of it again.

• 1:29:30Speaker 02

  I don't know. A lot of the businesses that I was consulting for, the uniform complaint is the generational hire.

• 1:29:39Speaker 02

  Of what the expectations are of work ethic. And I can't speak to what this generation thinks. I can only speak to my generation. It's not for me to decide what it's like today. Cause I wouldn't want to build a business in today's environment. I don't want someone working with me that isn't on the program. Because at the end of the day, we spent more hours during the day with each other than we did with our significant others. So it's gotta be pleasant and it's gotta be fun and it's gotta be challenging and it's gotta be energizing. You gotta every minute learn something different that makes you a better human being.

• 1:30:24Speaker 02

  And it sharpens your brain like sharpening a knife on a stone. Because if you don't have a sharp brain, you can't do anything. And the only thing that gives you a sharp brain is pushing through difficult situations and education. And how do you get educated? You get in the middle of a lot of complex situations and you learn. My son once asked me, Dad, how did you learn how to be an investment banker? Because we did investment and we did advertising. We did a lot of stuff that no one had ever done before. And I said, I didn't learn it. I said, I learned it on the job. Many times Herb Allen would say to me when we were selling an entertainment company to another company and we did six of them.

• 1:31:10Speaker 02

  He would say to me, this is not the way to do this. This is how you have to think about this. Cause I came at it with a naive point of view. I didn't go to business school, but I learned what you only had to tell me once. And I figured out how to never make that mistake again. I didn't have formal education. Advertising was easier when we got asked to bid for the Coca-Cola account. I had a really interesting idea, frankly, that came to me after looking at all of their work. And it was very clear to me that we could deliver on it because we had our repository of creative talent. By the way, thus the name Creative Artists. That's why we use that name. That wasn't

• 1:31:51Speaker 02

  an accident. And when I was at Sun Valley at the Allen and Company Conference, this is so long ago, and I'm sitting with Roberto Goizetta and Don Q, may they rest in peace, who were running the company as Dynamic Duo. And Roberto's sitting at coffee with me with Herb and saying they're concerned about case sales. And I'm saying, well, you kind of should be because this Michael Jackson commercial that Pepsi's doing is just permeating everything culturally. And he said, yeah, we're not doing anything that's current or contemporary, was how he phrased it. And I said, look, we can do something for you, but it's going

• 1:32:31Speaker 02

  to take enormous corporate guts to do it. Because if we do it, it's going to be pushing the edge. So he said, come to Atlanta and meet with our 12 worldwide department heads and pitch your idea and we'll give you a very fast answer. I said, okay. So I took, they sent a plane for us. It was so cool. They sent a big plane. You could stand up in and out of the bathroom. Enough to pee in a bottle. Yeah, out of the bathroom. And I chose eight agents from the business, including one of my partners, Bill Haber, who's a brilliant guy. And I chose agents from music, from movies, from television that all represented the breadth and depth of what we had. Briefed everybody, we looked at every commercial they had done for the last 30 years. We looked

• 1:33:16Speaker 02

  at all their print work, all their merchandising. We really educated ourselves. And to make a long story short, we went in and spent eight hours with their department. They had flown in from all over the world. So it's not like they weren't serious. We listened to what their needs were and we said, we got it. We'll be back to you in 14 days. And they said, okay. And we came back in 14 days and said, you do seven commercials a year for the world, all. And you put those commercials on every single program, whether it's late night, prime time, daytime, sports. They're all the same and they're all different demographics. So how can you do that? And they said, well, we don't know. We've never been told not to do that.

• 1:33:57Speaker 02

  And we sat down and we created a hundred plus ideas for commercials. And we went in and we took 30 of them. And we pitched the following idea was very simple. We think you should do your commercials like a relay race. So we should do Thanksgiving commercial that's family. We should do a Christmas commercial. It's about the holiday. That was a polar bears we created and we should do Valentine's Day as love. We should do Easter as family. We should do the summer as refreshment and heat in the beach. Thanksgiving is family and we should do 30 to 35 commercials a year.

• 1:34:43Speaker 02

  And they should hand off to each other over the course of the year. And they said, how can you produce 35? We have trouble with seven. We can't afford it. I said, we'll do 35 for the price you do seven. He said, we have 360 account executives at McCann Erickson. I said, good, we have me, Bill Haber, Shelley Hockren, Lynn Fink and two people from the mailroom. And they said, it's not possible. I said, well, you just saw 35 ideas, 30 ideas. And what I had done is I gave our mailroom assistant. And by the way, we called him a partner. We called everyone in the company a partner. There were no titles at all. He was equal to me. And I gave him $2,000 in cash. I said, go to Brentonos, which was down the street from our office.

• 1:35:28Speaker 02

  And I said, go buy every big art book you can get your hands on. So he did, and he came back with satchels of art books. You know, at those days they cost 20 bucks. And we went through these art books, all of us, one after the other, tearing pages out for inspiration and put them in a war room around the room. Oh God, that's genius. And we looked at them all.

• 1:35:52Speaker 02

  And we got commercialized. Like, one of the pictures was Magritte with the bowler hats raining. I don't know if you've ever seen it.

• 1:35:59Patrick O'Shaughnessy?

  Yeah, I know exactly what you're talking about.

• 1:36:00Speaker 02

  So we said, God, let's rain Coca-Cola bottles. So we did a commercial. We called the Magritte commercial where Coca-Cola bottles were raining out of the sky. And we came up with this idea of putting a button on the end of every commercial, but making every commercial a small movie. So it had nothing to do with anything else. It was a non sequitur. The only thing it had to do with Coca-Cola was the end, the button, and said, always Coca-Cola. We called Quincy Jones, who was a close friend and was brilliant, brilliant music guy, always ahead of his time. I said, Quincy, I need two of the best songwriters you ever seen that no one's ever heard of. He said, for what? I said, we're going to rewrite

• 1:36:41Speaker 02

  the Coca-Cola jingle. He said, wow, that is so cool. I mean, he didn't skip a beat. He sent us two guys, two young guys. They rewrote it, but they did it in six different rhythms. They did a city rhythm, an urban rhythm, country and western rhythm, classical rhythm, a European rhythm. They did them all for the sites. Then we went to all our clients who everyone criticized this for and said, you're going to lose all these clients if you put them in commercials. I said, we're going to pay them double their rate. And they get to do this between movies. If they don't want to do it, no one's forcing them to do it. They were lined up around the block to do it because they could go pick up a couple hundred grand for working three days. So we had movie directors doing commercials,

• 1:37:26Speaker 02

  and they did it, and they got paid, and they loved it. And we delivered 35 commercials for the price of seven. We had six people working on the account. And we went, they asked us, because they had a 40-year relationship with McCann, to do what's called a shootout, and to put ourselves up against McCann. And I said, great, I'm happy to do it. They thought we wouldn't do it because we were promised the account, and I didn't care. I was so confident about our product. And we took thirty five commercials. We did storyboards on everyone. We did what's called a Ripamatic on some of them. We had the polar bears we created, had them all drawn out. There

• 1:38:06Speaker 02

  were six of us doing this and we went down a day early. We went and looked at the room. We did it entertainment style. We looked at the room. We changed the seating around. I bought everybody Armani suits, including Shelley Hockren. We all had blues Armani suits because we had an in with Armani because we put Sean Connery and Kevin Costner.

• 1:38:27Patrick O'Shaughnessy?

  Of course you did.

• 1:38:28Speaker 02

  Into Untouchables and we got Armani to do the clothes. So we had an in at Armani and he tailored all these great clothes for us. And we went into Atlanta the day before. We had a leisurely dinner, nice bottle of wine, went to sleep. Everybody got up in the morning, went to the gym, showed up at the room at fifteen to eleven for an eleven o'clock meeting with the CEO, COO, CFO, CTO and CMO of the Coca-Cola Company, which was big. And there's no McCann Erickson. We're sitting there very patiently. Our suits were pressed, by the way. We looked amazing. By the way, we looked great. We were confident.

• 1:39:13Speaker 02

  We had all our stuff set up. At five after eleven, in walks thirty five people wrinkled and crinkled from New York City, from McCann, who had taken a flight at seven AM out of Kennedy to get to Atlanta. So they had to get up at five for four to get to the airport. They looked like they were going to die and there was no energy. And then the bottom line is they flipped a coin and we won and they said, you want to go first or second? They thought we'd go second because that's the way you usually do this. I said, no, we're going first because I knew if we went first, that would set a pace they couldn't follow. And Len Fink went up and Shelley and they started to present. Bill Haver and I introduced

• 1:39:55Speaker 02

  everything. They went up. We had one thing where a talking dog was the lead character and Len got down on all fours barking, you know, and we showed them polar bears, which they couldn't believe that we could do animation for the price because all we did is outsource, which no one knew what that meant in those days. And we finished and I'll never forget as long as I live, the head of McCann was there and he was sitting to my left. My team was on my right, his team was on his left. And he wrote a handwritten note to the person sitting next to him and he stupidly let me read it and said, we're screwed. And his person got up to present and we felt horrible for her.

• 1:40:37Speaker 02

  She stopped after one commercial and got the account. It was $600 million a year account. We ended up doing for them 500 commercials and we made the cover of Time Magazine. We made a lot of enemies on Madison Avenue. We, we did a lot of firsts.

• 1:41:00Patrick O'Shaughnessy?

  It's amazing that, as I thought about our conversation and made mental notes and written down notes, that we barely covered any of it. Your career and life reminds me of the Churchill quote that my friend David Senna always mentions, which is always more audacity. I literally could go for five more hours. I have to say that because it's a testament to how many more stories and ideas there are. Fortunately, I have to wrap it. I always ask the same traditional closing question of everyone I talk to. What is the kindest thing that anyone's ever done for you?

• 1:41:27Speaker 02

  I've had a lot of kind things done for me by people, both family and friends. But if you want to talk about a crossover professional and personal, there are three situations that come to mind that are crossover professional, personal, because my whole life was-

• 1:41:42Patrick O'Shaughnessy?

  Was a crossover.

• 1:41:43Speaker 02

  Was a crossover. Frankly, I lived my profession and so did my family, by the way. They were very instrumental in any success I was lucky enough to achieve because they were a support base. And I think three things, I'll give them to you, not in any order quickly. One, I worked for three years to get a movie made called Rain Man that everyone passed on. And it was something that Dustin Hoffman was my first major client. And I had a huge loyalty to him, still do. He's a close friend. My kids grew up with his kids. He was the motor. He wanted to do that character. No one wanted to do it.

• 1:42:25Speaker 02

  We put Tom Cruise into it, which we got criticized for because everyone said they don't look like each other. They can't be brothers. But what they didn't realize is that autistic kids don't necessarily look like their siblings. And then we went through four directors. We started with Marty Brest, great director, did Beverly Hills Cop. He couldn't do it. We actually started with Barry Levinson, and then he got offered Good Morning Vietnam. We had to put him in it. So he pulled out. Marty Brest came in. He couldn't do it. Gave it to Steven Spielberg. He couldn't do it. He just couldn't find an answer for it.

• 1:43:05Speaker 02

  Gave it to Sidney Pollack. This was taking months, each one. This is over a three-year period. Gave it to Sidney Pollack. He couldn't figure out how to end it. By the time we went through Sidney, Barry had finished Good Morning Vietnam. And we were in Aspen together at a film event. And I said, you know, Barry, we ought to revisit Rain Man. And Dustin happened to be up there, and the three of us went and had coffee. So Barry rereads at meets with Dustin, comes to see me the next day and says, you know, I think I've figured out how to do this. Because no one could figure it out. And I said, what's that? He said, there is no third act. Everyone's looking for a concluding third act. The guy's autistic. It's not going to change.

• 1:43:48Speaker 02

  And it just a light bulb went off in my head. That's why he's Barry Levinson and I'm not. Because he figured that out. And sure enough, we did the movie. There was a huge New York Times article that said that I was an idiot and all the clients were going to fire me. It was a stupid idea and it was going to be a disaster. And the movie came out. Open to six and a half million dollars, which was about a quarter of what I hit open to at the time. Another article in the paper saying that I was an idiot. I pushed this picture together. It was a package. It was gonna fail. For the next 50 weeks, it did six million dollars a weekend and won six Academy Awards. And I got thanked by everybody that was in the movie at the Academy Awards in the most

• 1:44:32Speaker 02

  sincere, uh, giving, no ego way imaginable. I just was very touched. The second thing that happened to me was simple. It's a couple of sentences. I was sitting with my family on Christmas Eve. We were in Aspen, Colorado. It was the only time of year I could relax because between the 24th and the 30th, nothing happened. And the phone rings, it's nine o'clock at night and wasn't a cell phone, it was the hard line. And I get on the phone and it's Dave Letterman. And for him, it's 11 o'clock at night. He said, I'm just sitting here, sorry to bother your Christmas Eve. I just wanted to thank you.

• 1:45:14Speaker 02

  He said, you really, really came through for me. I was really, had a problem at NBC and they owned me and they gave the show to somebody else and it was my dream. And I have my own show now on CBS. And he went on for 10 minutes. And it's funny, I just had dinner with him a few months ago. I can't tell you how touched I was that he would take the time at that night just to say that. He didn't have to do that. I got paid for it. And the third time, one of my all time favorite human beings on the planet to this day is Bill Murray. He's not only the most talented dramatic actor and comedy actor, he's one of the great human beings you'll ever meet, and he's smart as hell.

• 1:45:58Speaker 02

  And no one really quite gets how well-rounded he is. My first son was very young and he was like, God, he probably was six, seven years old. And he had some medical issues and I found a specialist at Yale that could help with the issue and I took him to Yale. That city, Yale's, and it's really dark and dank and the hotels stinks and the only good food is this famous pizza place. And it's like, we were really lonely. I was particularly, and it was really bad spending eight hours a day at Yale with the Child Study Center. And I'm sitting in the room the second they were there and the door knocks. And the guy says, room service.

• 1:46:43Speaker 02

  I said, I didn't order room service. Go away. He says, room service. Open the door. So I opened the door. It's Bill Murray with his son, who is the age of my son, with his son Homer. And Bill said, what are you doing? I said, I told you I had to take a couple of days off. He said, okay. Great. He shut the door, sat down, the boys played with each other and he just spent two days there with me for no reason other than that he's Bill Murray and he's an amazing man. So for him, those kinds of people I have soft spots for, you know?

• 1:47:16Patrick O'Shaughnessy?

  I think it's an absolutely awesome. I was kind of hoping that you would close with that story just because it's a recognizable name, but it's just like the act, the simplicity of it, the beauty of all these stories you've told, sort of weaving together in an act of kindness is an awesome place to close. Michael, I'd love all of our time together. I learned so much. I could go for hours. Thank you so much for your time.

• 1:47:33Speaker 02

  I'm so sorry for dragging you so far over the schedule.

• 1:47:37Patrick O'Shaughnessy?

  It's my pleasure. It's all mine.

• 1:47:39Speaker 02

  Good fun and great questions and thanks a lot.

• 1:47:43Patrick O'Shaughnessy?

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