Michael Ovitz, Co-founder of CAA

30:43He's like, go ahead. I'm assuming, you know, I pick up the book, probably covered in notes. Nothing. Completely empty. Maybe like one or two notes in pencil in the margin. And when I realized, it's like, my God, imagine what his brain was like, his mind was like when he was 45 or 65, and that is who you're competing against. I thought about that yesterday because obviously you understood and read about your work ethic. We've talked about it. But then to also see it, even, you know, you're six decades into your career. And I was like, oh, there's like different levels to this. It's like a fundamental difference between like reading about something and then observing it.

31:19So I want to tie this together. Like I wasn't expecting you on your competitive drive. When you jumped into the agent business in the very beginning, was it obvious that you were just going to be able to outwork everybody else around you? Was it obvious to you at that time? It's obvious to me, but no one else. Everyone said we were going to fail. One of my closest friends I worked with at William Morris said something to me I have not forgotten since he said it to me in 1974. It's something I will never forget. And it turned out to be such a fantastic stimulant for me to this day. We were sitting together.

31:56We were having a coffee. he said to me, so good that you're starting this business. In a year, you'll be looking for a job. I said, really? And what makes you think that? He said, oh, you're going to fail. I said, really? He said, yes. You can't make it. There's almost 200 agencies out there. You're not going to compete with the big ones. Second incident, within six months of that, a leading TV literary agency run by the best friend of one of our guys. We met with the thought of merging, which would give us what we needed, which were writers because they're the font of packaging, right? In the meeting, and I told you this story before, so I want to say it fast and not repeat it in detail.

32:52the four partners of that agency said, you know, we'll never represent any movie stars. And I looked at them. I said, why do you say that? He said, you'll never get them. I said, we're going to have all of them. And he said, you're just so arrogant. I said, I'm not arrogant at all, actually. I just know I'm going to outwork every one of them. Every time we signed a movie star, which was once a week, We took out a full red page ad in Variety. This is when there was no computers. People actually read. And took out every Friday. Every time we signed a movie star, I took that ad, tore it, put it in an envelope to those four guys.

33:36And I did it for the next 10 years. Now, competition, love it. Monopoly, absolutely love it. There's no room for competition. I love Peter Thiel's Monopoly lectures at Stanford. He's spot on. He says competition is for losers. It is for losers because you're competing with yourself, basically. That's how I view it. I'm not competing with anybody else. It's why I keep my calls to a minimum, my Zooms to a minimum, my meals to a minimum of time devoted. When someone says to me, I have to take an hour of Zoom, I kind of laugh at them. I said, what law is there on the planet that says a Zoom has to be an hour?

34:20I said, frankly, if you get free Zoom, they cut you off in 45 minutes. I said, so what rule is it that has to be an hour? Oh, I don't know. I do them in 20 minutes. I just don't believe it. If we're in the middle of a critical diligence item or somebody's trying to explain something really complicated, okay, I get that. The concept, for example, of hour meetings. Let's just fill the hour, even if we have nothing to say. I don't want any small talk. It's not social time. I'd love to hear about your kids, but I'd like to hear that over dinner or lunch. I'm not interested. Let's get down to what we're doing.

35:00What are we doing? We're trying to build a business. We're trying to market that business. And we're trying to blow out the competition as fast, as cleanly, as simply, and as brutally as we can. Because the idea is to keep it going until they can't see straight. And to do it any other way makes no sense to me. Now, by the way, there are people that have done it without that thesis. But it's not a thesis I subscribe to. There are people that have done it without this ruthless competitive drive, you mean? And yeah, they've, by the way, and I'm excluding creative people because creative people have a hard and a soft side.

35:42They have a much harder side than people tend to imagine or think. But they have a very soft side because they're very sensitive. It's that sensitivity and perceptual ability tied together that creates images or words. But they also have a very hard side. I've watched Marty Scorsese take Harvey Weinstein a part in a room like he was a toothpick over a movie that he was doing where Harvey was giving him the dumbest notes imaginable. Imagine thinking you could be in a position to give Scorsese notes on a movie. Well, that's the whole point, isn't it? Listen, I've been in rooms with mega filmmakers, because we had all of them.

36:26At one time, CA representative of the top 50 grossing variety box office filmmakers, we had 46. 46. And I was upset because I didn't have all of them. There were four I couldn't get. And it really upset me. And it nodded me my whole career there. but I find it notes are good if you give them and then let somebody do what they want to do. They know better. Now on timing and other things like that, that's a different story but nobody should be giving Marty notes about the core of his film or the conceit of a character or where he's putting the camera You know, it's a joke. It really is a joke. I mean, the man's seen every movie ever made.

37:24He has an encyclopedic knowledge. And it's interesting. He's like Charlie Munger, but he's not, doesn't do that for a living. There are people that are gifted in their recall. I'm not one of those people. You just said you're not. I really have to struggle with memory that I need to keep in place for what I do. Tell me more about this hard side of some of these creative geniuses that you worked with. What do you think is driving their need to be hard? Is it just that they're disagreeable when it comes to the craft? Not at all. I think they are protecting their vision. I think filmmakers have a very clear vision of what they want to achieve.

38:13I think sometimes they lose their way, but they get it back. I had a situation with Barry Levinson and Dustin Hoffman and Tom Cruise on Rain Man where Dustin couldn't find a character in the first week. And I think Barry got very frustrated because the movie was, a lot of it was not scripted. A lot of it was done in the moment. I think that the movie benefited from this problem at the beginning because Dustin found the character. Barry had the patience to let him do it, which is hard because you're losing money every day. Everyone forgets that. And then Barry found a balance of improvisation versus script.

39:05And the movie's perfect, perfect from beginning, Dan. So bring me back to the meeting between Scorsese and Weinstein. That's why the hard side of him came out because he was protecting his vision? Well, Marty had a point of view that was right. That's why I ended that meeting pretty fast. First of all, he shouldn't have been in the editing room. It's okay for Marty's agents to be in the editing room, but not the producer, unless the producer is someone incredibly close to him where they've done multiple movies together. You've been around a lot of founders. Isn't that same instinct to protect the vision that Marty had in that situation, isn't it the exact same thing that they're doing?

39:42I think it's a common denominator of anyone who's successful. I think we're talking about all the things that make people successful in any vocation. Dedication, work ethic, intelligence, curiosity, protect the vision, Find things that give you food for the thought, for the vision. Inventory them in your head. Let them marinate because if they stay in your head, that means you're on to something. It's no different than the way I collect art. I collect art contextually, which is I see as many images as I can. My brain takes in what I like, rejects what I don't over time, and that's how I collect.

40:29So it's a foundational issue of context. And I think filmmakers do the same thing. Yeah, you've spent a bunch of time with Josh Kushner, I know, especially at the beginning of Thrive. I just spent some time with him and a large part of our discussion was really just like about his vision. And from hearing him speak and just listening to him like kind of map his thoughts out, it was like you said protecting the vision is an interesting way to think about it, the way I thought about it. I read this biography of this guy. He was an engineer. Started Harman Kardon, the high-end audio equipment. Sidney Harman?

41:02Yeah, exactly. He was a guy I knew well. Yeah, he's got a great book. I think the autobiography is called Mind Your Business. I've read it. He was an amazing man, and I'm an audiophile. And he, at one time, made the greatest speakers. They were called Infinity IRS 1Bs. and they were four towers, not two. It doesn't surprise me that he was able to build the best product in the category that he competed in. He describes his philosophy in that book, but what I'm hearing from the experience that you've had with some of these creative geniuses, some of the conversations I have with these founders, he put it the best way.

41:42He's like, the founder is the guardian of the company's soul. And I was listening to Josh speak during our conversation. I was like, oh, he's guarding the company's soul. He wants to make sure there's a soul inside of Thrive. I met Josh when he was at Harvard Business School. Jared, his brother, was a friend of mine and asked me to help him with it. Josh in Harvard Business School had a very valuable gaming company while he was in school. And Jared asked me to help him with it. Josh then is exactly the same as the Josh today. There's no difference. He's wildly smart, very loyal, low-key, thoughtful, highly intelligent, and very easy to talk to, and will hold his ground.

42:33But what makes him fantastic is he'll yield his position if you can talk him out of it. I love people that hold their ground until you prove them wrong. Yeah, I would say since you just made, you kind of like connected this whole theme of this conversation we're having right now. It's like we're really just talking about the traits of people that are successful regardless of the domain they choose to operate in. And that's something that reoccurs in all these biographies. It's like, I don't care if the idea is not mine. I just want to win. And so if you can push back on me and say, no, David, you're wrong about XYZ, which has happened several times, like especially with my approach to podcasting over the years.

43:08I'm like, it might take me a while, but then I'll eventually flip. And I think you see that common, I think of like Steve Jobs. I just finished rereading Make Something Wonderful, which is this book put out by his widow. It's an excellent book, but there's a ton of examples in that case where it's just like he had thought X and he was really adamant about thought X. And then he would test this. They said it's something like, what did dolphins have, like echolocation? He would throw out an idea and sometimes he didn't even believe in that idea, but he would throw it out and just because he wanted a reaction back.

43:41And then the information comes back to almost like sonar, like whatever dolphins have. And then he'd think about it for a little bit and then he'd wind up changing his mind. I consulted for years for him on Pixar when he first had the idea. And it was some of the best times I ever had because he's whip smart, unbelievable memory, totally unstoppable with an idea and could take completely intrinsic positions on things. And actually you could talk him out of it. if he agreed. The best trait any businessman can have. When I ran CAA, I had a very simple thesis. I'll take ideas from anybody. No idea is stupid because a bad idea may stimulate a good idea.

44:30And I want to hear from young people. I'm not interested so much in the opinions on new things from the older people, but from the older people, I want their wisdom to be spread all over it. We had a setup where every 90 days we'd put 200 people in a circle with their chairs tied to each other, and everybody had 30 seconds to pitch an ID, and you couldn't pass. We had a mailroom guy pitch an ID about cable. We promoted him on the spot to Asia. On the spot. It was that good. Explain this 200 chairs tied together. What I came up with was this concept for meetings, and we did it at all our retreats, where everyone sat in a circle or an oval.

45:16As we grew, it went from a circle to an oval because the geometry didn't work. And we made everybody's chairs touch. There was no way out of the circle or oval. That was done intentionally. And if you wanted to get out, you had to push your chair back, and you could see the hole as big as it could be. we would meet in with that as a foundation that everyone was participating. And I ran it and I would sit there and I'd call people that didn't say anything. And it coaxed them to say things. Some people were upset, but everyone came around in the end, thank you for pushing me out of my hole. And people need to learn how to communicate in groups.

46:00But the people that run those groups have to learn how to listen. and learn how to get ideas from people. And so you literally developed a mechanism where every single person in the company down to the people working in the mailroom could pitch an idea directly to the founder. To everyone that was a senior executive in the company, we were all there. Everybody was there. The whole concept was we want to hear from people. I started the first meeting with saying, no idea is too dumb. I want to hear everything. Over my career, some of the greatest ideas I've ever had or stolen or appropriated have been from other people.

46:43And as you know, I'm a mega Picasso fan of all my art. The guy appropriated everything. One of his most famous sculptures of bullhorns, which is handlebars from a bicycle that he saw with a seat welded together. Didn't he have that quote that Steve Jobs would repeat, that good artists copy, great artists steal? I think that's Picasso, right? I don't know, but it sounds about right. But Steve, for example, had a vision about computerized animation that Disney didn't share. They were wrong. He was right. That's it. You know? It's Barry Diller's famous line, which I will never forget and still use all the time.

47:27He competed to buy CBS, I think, or Paramount. I don't remember which one, but Sumner, Redstone got both of them somehow. And when Barry was asked by the press for, you know, what did he think he lost? He looked at them and he said, he won, we lost, next case. Which is like, says it all to me. It was so brilliant. He won, we lost, next case. He's right, six words. You can't look back. I am so upset when friends of mine that try to do deals that I consult on, and they make a mistake or they lose it, and then they dwell on it. It's dumb. It's not going to change. So what are you looking back for?

48:16I don't like to look backwards. I think you have to always look forward. There are people who totally disagree with me, but I'm a forward-looking person. If I've made a mistake, God only knows, I think one of the reasons founders talk to me is that I can tell them things they're going to do wrong because I've done it all. I've made every mistake in business you can make. I've had some wins, too, but I've made a lot of mistakes. My goal is to use that to prevent my young people from making further mistakes because they're all going to be the same. It's unbelievably valuable if they can learn from other people's experiences.

48:52I think that's, you know, one of the things I get most out of our conversations. I also like that you are unapologetically extreme. You don't hide the fact that you are an extreme personality that you were when you were younger. You start to this day, you just threaten to jump out of the chair and I think throttle me is the word that you used. I was trying to be polite. That's really polite. But I did say I'm too old to do it. That's fine. I wouldn't even fight back. That's fine. I have too much respect for you. Tell me about this deal that we can talk about. I know you have a few deals going on, a few or not.

49:18One I can't talk about. Yeah, exactly. So tell me about the one that you can talk about. Well, it's public. I can say that Bill Ackman and I have been friends for 33 years, had a discussion about his position in universal music. We were kicking it around. He was a large shareholder, was on the board. I like Lucian Grange a lot because he's a talent guy. And my thesis about all these companies, if you don't have someone that understands talent running the company, because you can always get an operator, if you don't have someone who understands talent, that company is going to die. And Lucian's really good, but Lucian's growing the company geometrically every year, signing every artist, publishing's great, and the stock keeps going down.

50:05And it crept down to like, you know, 10 points under the IPO price. And I said to Bill, let's take it private. And he loved the idea. And a number of things occurred. I told him we couldn't do it unless it was friendly because Bill has done both. Bill's very smart. I mean, really smart and very direct, which is what I like about him. Because as you know, I like, I love your opinions because you tell me what you think. And we did some diligence, met with Lucian to see if he'd be interested if we did do something. Gave him a 41 ,000-foot overview. Made it very clear that a condition proceeding to the deal would be his running the show.

50:56We would support it. I would become chair and support him, and particularly in the tech and AI area, which he's very attuned to but could use some help. You know, in his job, there's not enough hours in the day. There just aren't. You think about the amount of time he has to spend internally, externally with talent in studios. It's just endless. It's an impossible job. It's like so difficult, and he does it brilliantly. And we sent the letter. We did it publicly, so there's no secret. There's nothing nefarious. No one's going behind anybody's back. Put the money terms right on the table. We're very well financed.

51:40Made a very handsome deal offer, and we're waiting for an answer. Deal is how the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade, and one thing they all have in common is they understand that recruiting and hiring the very best talent is your most important priority. A players recognize other A players, which is why top companies like Ramp, Shopify, Eleven Labs, Uber, and DoorDash all use Deal. Many of the top founders I know have personally invested in Deal after using their product. And what they discovered is that Deal is the best company in the world at building infrastructure for global hiring.

52:16Deal will help your business hire, pay, and manage any worker anywhere in the world so you can retain the best talent anywhere and spend the rest of your time focusing on what you do best, delivering value to your customers. The founder of Eleven Labs has a great description of the value Deal can give your company. He said, we built Eleven Labs to break down language and communication barriers. With Deal enabling us to hire and support exceptional talent anywhere, we can accelerate our innovation and bring more voices, stories, and ideas to every corner of the world. Deal is trusted by over 40 ,000 businesses.

52:50Learn how they can help your business today by going to deal.com forward slash Senra. That is deal.com forward slash Senra. So we talked about the opportunity cost of your time and picking which project to dedicate your attention to, your resources to. Why did you choose to do this? I think music is a critical component going forward in the new internet era, particularly with AI. We've seen it, what's going on with Suno and Udio, where they're taking IP that other people own, even 10 seconds of it, and constructing custom-made songs. Music is never going away. I think the advent of Daniel X Spotify, which he developed in a garage in Sweden, in Stockholm, is a game changer.

53:42And I think that music's at the foundation of so many things that are digitally based from games to movies, television, AI, all of the image capturing that's done. Don't you find it fascinating that on TikTok, Instagram, and YouTube, almost everything you see, someone chooses music to go behind it? It's part of our culture worldwide. not it's not country by country there's a common denominator of British and American music around the world and it's a door opener it's a it's something everyone can hear and relate to even if they don't speak the same language so I love the idea I love the Bill's financing capability I love Lucian's management and talent expertise, and I like the fact that I grew up in that business.

54:43My first job was in the music business, started a music division at CA that to this day is the tops. I think it's a lot of complementary factors. Whether we get it or not, I have no idea. It's frankly up to one shareholder, and that's one family that controls 28 % of the stock. What do you think would the effect of AI be on the music industry? So I talked to Jimmy Iovine about this. I still don't understand. He texted me about this like two days ago, and I'm reading through this. I still don't understand what he means, so I'll see him when he gets back. But if Universal Music Group has, I think it's the largest music category in the world, right?

55:22AI is not going anywhere. He said people are already taking and training new songs based on other people's ownership. Is the idea that, like, the record labels could do that themselves? or you're saying that's going to be a huge potential future income stream? I'm not going to say anything about it because I think it's a very difficult problem that right now is under analysis by all the music companies. Is there anything analogous that you've experienced in other forms of entertainment from the past? Oh, yeah. I was appointed to a U.S. trade delegation in 1996 by President Clinton. I was a large fundraiser for him.

55:59And I went to Beijing with 20 business people, President Bush 41, to try to get them to stop pirating video cassette movies and television shows. The Chinese? Yes. They were the largest producer of pirated tape in the world. And we went over. I spent a week there. It was a fascinating week. I got to sit with Jiang Zemin, who was the prime minister. the chairman of the party and the—I guess they don't call him the prime minister, he was the chairman— Zhu Rongzi, who was the brilliant financial former mayor of Shanghai, who did all the financial architecture for what you're now seeing, of getting China into the 20th century, 21st century.

56:55And we had round and round of meetings. And President Bush was incredibly popular there because when, you know, he was ambassador to China and he was very well liked. You don't have to comment on this if you don't want to, but something just came to mind because I just had a conversation with Ed Catmull, founder of Pixar. And I would have to imagine you and Bill Ackman are doing this because you think AI could be a massive advantage and tailwind to the music industry. The reason I bring this up is because Ed was constantly, his entire career, his whole goal was to take the latest technology and apply it to storytelling and animation, right?

57:32With the stated goal. Which he did. Which he did. The stated goal of making the world's first feature-length computer animated movie, which he did with, obviously, Toy Story. We brought, I have this guy that works with me on my other practice founders. His name's Maxim. He's a young filmmaker. I flew him over from England to go to this recording with Ed Catmull because Maxim wants to make films. this is one of the best filmmakers of all time, or built one of the best companies that made the best films of all time, maybe she talked to him. And me, him and Maxim were talking before we started recording.

58:00And I asked him, I was like, how, you know, he's obviously pro AI, he's pro technologies. Like you cannot get Ed Catmull that is. It's like, just like Walt Disney, he called Walt Disney a technologist. And he's like, go through Walt Disney's career. He always embraced the latest technology in service of telling the better story or completing the project in a better way that whatever he's working on. and I go, Ed, when do you think we're going to see the first, like, just phenomenal, full-length, completely AI-generated movie? And he's just like, there's a better question that you're not asking.

58:32And I bring this up because you were best friends with Michael Crichton, and he says, there was a line of demarcation in our industry pre-Jurassic Park and post-Jurassic Park. Like, once Steven Spielberg made Jurassic Park, the entire movie industry was changed forever. and part of that was obviously the CGI of the dinosaurs. And he's like, how many minutes of CGI dinosaurs are in that movie? And I was like, I don't know. I've seen the movie a million times since I was a kid. I was like, I don't know, like 20. And I think the answer is like four minutes. And his point was like, you can even use, the technology is even powerful even if you use it for a short amount.

59:07It could be 10 seconds in a three minute song or six minutes in a two hour movie. When I put Jurassic Park together and I read the book, I said to Michael a couple of things. I said, one, it's brilliant and everyone loves dinosaurs. Two, you don't need a big star because the dinosaur is the star, which was important financially. And three, there's only one human on the planet that could realize this into a movie. And if he doesn't want to do it, we can't do it. and it was Stephen sent the book to Stephen, called me the next day, said, I'm in. I believe there's more than four minutes. What Stephen managed to do is for the times he used the dinosaurs, the biggest fear for that movie was can you make them look real?

1:00:01And Stephen said he could do it, and I knew he could do it, and he did it. Everyone was scared to death that it would look like an early Godzilla movie, you know, and where it was just so obvious of what it was. Stephen integrated the CGI and the actual dinosaur parts that he made and shot. There was a head, there was, you know, a part of a body that he didn't see the whole thing. He did it brilliantly, but he got them to look really real. He researched who could do it. They tested and tested and tested and they got it done. Why do you think Steven Spielberg was the only person? Was he a singular character?

1:00:43Steven had the ability to understand the storytelling side, the casting side, and most importantly, the technical side. In those days, not everybody had that. Remember, that was in the 90s. Not everybody had the ability to use technical things. Jim Cameron did. Steven did. Not every director could do that. And so was he like a Walt Disney kind of character too, where he was, throughout his entire career, trying to embrace the latest technology that would help him build film? Stephen knew more about everything. He and Marty, Marty, Stephen, and Stanley Kubrick, to me, knew more about film, filmmaking, film history, respect for film.

1:01:33I put together a group for film preservation around Marty, and it was Marty, Stephen, Sidney Pollack, Francis Copeland, Stanley Kubrick, all clients of ours, of mine. And that's what they were into. They were real, real people about film. You know, when I go to speak at a film school these days, I get very nervous. I'm particularly nervous around my 24-year-old daughter, Minty, her friends who I'm crazy about. When they talk about old movies, it's like stops at 1990, you know. And I did a film class where I started, I didn't even introduce myself. I had two classes merged together. I was asked to do this.

1:02:18I said, who's David? Anybody here know David Lean? No hands. Anybody here know Frank Capra? Anybody here know Willie Wellman? Anybody here know Michael Curtiz? I kept going, too. Those were directors from the 40s, mostly 40s and 50s, that made some of the greatest films of all time, Lawrence of Arabia. Which Spielberg would re-watch every year when he was learning to make films, too. I still watch it. As a matter of fact, one of my best, most cherished gifts from Marty is the original, the full-length, uncut version of Lawrence of Arabia on a giant video disc that they stopped making machines for.

1:03:05I thank God still have one. Do you remember those, the big ones before the little ones? No, this is before my time. Oh, I keep forgetting you're a child. In any case, there's no respect for the foundation of the film business, in my opinion. It's really interesting as an art collector. I had dinner the other night with Cecily Brown, who's one of my favorite contemporary artists. She talks about artists of the past with great respect and unbelievable knowledge. So she pointed to an artist for me to look at when we were at dinner the other night. And she started talking about Lucian Freud, who's an amazing artist.

1:03:54This artist was influenced by Freud. She knew the whole chain. And most great art is derived from other art, you know. I have a fantastic Marc Grochan painting at my house. He's a L.A. artist, very gifted guy. There's two faces in it that are right out of African masks and Picasso's Mademoiselle d 'Avigno. You wouldn't know what you're looking at unless you had that background of all the time and effort you've put into just understanding art and all the history of art. As I said to you before, knowledge is power. So, I have a room in my house that has probably 25 African antiquities, three Picassos, all of which came out of those antiquities.

1:04:46Because 50 years before the turn of the century, between 1850 and 1900, the Catholic missionaries were tossed out of Western Africa and Nigeria, which had a whole series of regions of tribal art. And they were relinquiry figures. They were religious figures. They took them all with them when they were thrown out to Paris and Brussels. It's one of the biggest museums of African art is in Paris because they came back. In the early 1900s, when they ran out of money, they put these masks in the weekend little fairs that they had on the river on the left bank, and they sold them for four or five flanks.

1:05:25Picasso bought 50 of them. And there are pictures of his studio in Mujan with these masks everywhere. If you look at his early art, all the faces are African masks. And, you know, it's funny, Phil Knight and I tried to do a project to take, do a portable show for inner cities to show that relationship for a point of pride of where your culture, what your culture did. that some of my African art is as good as some of the European art in the same period. It's that good. Michael, what I love about our conversations is no matter what I prompt you with, you can come up with these incredible stories, and I never know the direction that we're going to go in.

1:06:06I really appreciate you taking the time and doing this again with me. I enjoy talking to you, as you know, except when I'm on the plane working. Thanks. I'll see you again soon. Okay. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. and make sure you listen to my other podcast founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through founders.