DreamWorks & the Science of Storytelling | Jeffrey Katzenberg & ChenLi Wang, WndrCo

0:00I went and tried to buy the company from Steve Jobs for 50 million dollars. He wouldn't sell it. There's$700 billion of capital investment being made in 24 months. I mean, it's an unimaginable number. Do you think the bubble's going to burst in 2026? I think there'll be a reckoning. How many unicorns have you invested into, and can you name all of them? I've lost count. My movies are only as good as their villains. Ursula, Gaston, Scar, Farquaad, Ty Lung. Like, I can go on. Is that bad storytelling or good storytelling? It's good storytelling to bad outcome.

0:41It's evil storytelling, if anybody knows of. Barry Diller, he is a restful, tough, grinding, hard, demanding person to work for. And for me, it was exhilarating. By the time I was 30 years old, he had made me head of the movie studio. Think about it in the context that today is just mind-blowing. So, this is the hot question. What happened in 2025?

1:21chen lee and jeffrey welcome to sorcery well happy to be here pumped to be here thanks for having me at your gorgeous office. Good, good. Well, our home's your home today, Molly. So let's do it. Well, we certainly made it that way walking around. Well, I want to talk about so many things today. Definitely. We need to go into the origin story of WonderCo, the state of the VC world. We're coming off of a really hot year of 2025 and going into 2026. And we'll also get some of your predictions and more on the fun strategy. So this is the hot question. What happened in 2025?

2:06All right. So I think one thing we observed is new technology just takes time to get molded and shaped into products and into experiences that actually make an impact in people's lives. I think this is really the year where we saw some really cool, oh yeah, this is different. We can definitely, AI is going to transform how we do X and Y. And it's not just people playing around with like, hey, look how this is like a show your friend over their shoulders type of moment. But really, this is a new way of doing business. It's still going to take a decade, I think, from here to fully iron out all the kinks of how companies work, how people collaborate but this is it's almost a relief that given all the excitement and hype that this is going to be a wave that we can build around for a decade to come I mean I subscribe to others that also subscribe to this view that even if you just froze model development at this moment in time there's still so much more that we need to figure out and do and productize to actually make delightful products and experiences for consumers, for businesses that were excited about where the research and everything is going.

3:26But even if that froze, there was so much to do. That's what's exciting. Yeah. I mean, I think that's it. I think we saw, you know, what were the big dreams and promises become tactical and the tactical revelations had, um, both good and bad in it. Um, and that there is real value creation, real productivity. And then, you know, I think the other side of it is, is that it, it, it, it got overheated. You know, I think that the enthusiasm and optimism, uh, got ahead of itself. and I think when we look into, you know, some of the challenges going forward, the amount of capital allocated for the hyperscalers in this and, you know, what they have to achieve in these next two to three years, it's a high bar.

4:31You know, there's$700 billion of capital investment being made in 24 months. I mean, it's a, a unimaginable number. On the other side of that is it needs to produce a result. It needs an ROI to it. And, and a, you know, and I think that's still, um, I think that's what 2026 and 2027 are going to, you know, be revealing. In the meantime, there's lots of great stuff to be done. Do you think the bubble is going to burst in 2026? I don't know whether it's a, I think rather than look at it from the sort of extreme notion of what that means for a bubble to burst, I think there'll be a reckoning here in which those that actually are producing real results and are being deployed in really effective and efficient ways that you can actually see an outcome quickly and it's real.

5:35I think some of the bigger aspirations are, you know, not going to, they're not all going to win. I mean, I think that that's the thing that, you know, this is not going to be, it's not going to be a zero-sum game, a one, you know, winner take all in it. But I also think at the same time, you know, not everybody is going to win at this. so i want to talk about some of the breakthroughs and some of the leading companies that you have been fortunate to invest into so chenly how many unicorns have you invested into and can you name all of them i've lost count i think that the special stories are the companies that we got to know the founders early, built a relationship, had that shared.

6:28You could see the vision. You could also sort of say, yeah, a lot of things need to go right and there's a little bit of a murky mind maze to go through. And then there's setbacks and there's challenges along the way. And then when they finally do break through, that's when they get all the celebrations. But we're like, remember those tough, dark moments that we were texting late at night about? it's like now you'll get through this like that's actually what's more rewarding for for me is because that you know you can only control the the inputs and the grit and we all recognize how much macro and luck and just circumstance factor into what ultimately happens uh and yeah that that that's what i think about day to day are there any companies that you're particularly excited about?

7:17I know you guys have backed Abridge, Harvey, a handful of others. So we've been fortunate working with some great founders that occurs there and Abridge, Harvey's. And those are just great examples of who would have thought multiplying matrices of numbers and predicting the next token can unlock, if you just zigzag across two years, things that are transforming how doctors do their work every day, how lawyers do their work, how lawyers and their clients do their work. I love going to startups offices and getting the vibe and culture of the place. And one of the things I do is just kind of look around and see how many screens have that right tab.

7:59And it's like, wow, curves is everywhere. So yeah, it's like in a year, you know, if we're just, if I just did like a walk around in an office in 12 months, it just went from zero to a hundred practically. And that's what makes this place special. And this is not just startups here. I can go to startups all around the world in New York and London, in Stockholm. And yeah, that right tab is right there. And then by the way, you've seen, the other thing is in the upper right bar on Macs, you can see what are the icons. I used to work at Dropbox, so I'm still like hunting for, Thank God you still have Dropbox.

8:40But we're fortunate to be investors in 1Password. And that's more or less become ubiquitous. We've became investors in Granola. And that's effectively become ubiquitous in startups. And so between the right pane and the top bar, we invest in the future of work. And you're seeing the future of work on people's screens. That's pretty exciting. It's pretty exciting. Yeah. Before we go too far, because I know I'm already jumping the gun, but let's talk about the origin story. of WonderCo, you guys have such a special firm and it's something that I love. I mean, I'm from LA and so I met Anthony a couple of years ago at this point and the convergence of creativity and storytelling and venture was just so natural to me.

9:24And I thought it was like an incredible superpower and also entirely motivating and like an ambitious strategy. So can you walk me through the origin story and how you got together this team? In spring of 2026, it'd be 10 years ago that I sold DreamWorks. And, you know, I think it's safe to assume your audience probably knows more about my past than they need to, but there's one little piece of it that I think informs how we sort of got to where we did on putting WonderCo together, which is sort of a recurring theme through every chapter of my media and entertainment career was the use of technology as for storytelling as a competitive advantage.

10:15Every couple of years, there would be these new, amazing new innovations coming out of Silicon Valley. And I kept coming up here to find the latest and greatest and, uh, to then import it back into Hollywood. Steven Spielberg made Jaws. It's a great documentary 50 years ago. He built a shark, a plastic shark and dragged it behind a motorboat. And then, you know, a number of years later made Jurassic Park, which was really the first live action movie in which there were these digital creations that were, you know, mind-blowing, to say the least, and certainly a major evolutionary step in storytelling.

11:04So, and, you know, I think 1989, 1990, I saw a little short film from Pixar called Luxor, The Lamp, and I was just so mesmerized and blown away by it, I actually first tried to hire John Lasser to come back to Disney. He had been there before I was there, had left. Um, he wouldn't, uh, come. He didn't want to leave. Then I went and tried to buy the company from Steve Jobs for $50 million, which is at the point in time when he was struggling with next and actually was kind of financially stretched. Uh, he wouldn't sell it. Uh, and then made that three picture deal that turned into toy story, which turned into, you know, one of the most transformative moments in Hollywood, in storytelling, once again, powered by tech.

12:003D revolution came along as we're about to see Mr. Cameron's latest and greatest. I just, I can't wait to get to a theater to see it because he's always raising the bar super high. Anyway, so I've always been really enamored, fascinated, gravitated up here. The first Shrek movie was actually made here in Redwood Shores. We had a studio with 800 employees.

12:32And I actually got some exposure to some of the early venture capitalists, and I was always attracted to and fascinated by the fact that I felt like there was a sort of common uh uh goal that that i you know i'm a truffle hunter they are truffle hunters and many of the signals that you look for in great founders are the same signals i looked for in great storytellers and um so when i sold uh dreamworks i i wanted to have a new career i i literally wanted a third act and to start over and There are many things that are attributes, and I have some that are liabilities. And the attribute column is I know what I know, and I actually know what I don't know.

13:30And so that sent me on the pursuit and hunt to find great partners. Partnership to me is, honestly, I look at it foundationally as maybe the single most important thing I've had in every chapter of my career. and I continue to believe that today. Barry Diller, Michael Eisner, David Geff, and Stephen Spiller, these were my mentors and partners over the years. And so I set out to find the equivalent for this next chapter or next act of my life. And I found that in Sujay and Shen Li and Anthony and Jeff Nykin and our most recent one, Justin Wechsler. We just have a phenomenal partnership. And what's amazing about it is that we're all actually quite unique from one another.

14:25I don't know. I can't do. I so rely on Shen Li, you know, on the technical side of it. And then, you know, he looks to me as the storyteller in this. And, you know, Anthony, who you know and has met, has just got this incredible social meter and ability to just see over horizons and around corners that, you know, is invaluable. And then, you know, our really sort of guiding light in all of this, Sujay, is just really one of the most exceptional and talented, extraordinary people I've ever known. And so that is really sort of been the foundation of the partnership. And what's most exciting to me is, is that 10 years later, it's never, ever been stronger.

15:21It's like we have found, you know, the sort of core of what makes us special and unique and how we complement one another and work with one another. And most of all, it's just fun to be here. Sorcery is brought to you by Brex, the financial stack trusted by more than 30 ,000 companies, including one in three venture-backed startups in the U.S. Nearly 40 % of startups fail because they run out of cash. Brex is literally built to help founders avoid that. Unlike traditional banks that let your money sit idle, chipping away at it with fees, Brex is designed to help you spend smarter and move faster.

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16:42That's why companies like NVIDIA, Anthropic, Salesforce and Gemini partner with Turing. Turing builds realistic reinforcement learning environments and data systems based on real operational traces. The kind of infrastructure frontier labs need to train superintelligence. Visit turing.com slash S-O-U-R-C-E-R-Y. So what was it like going through all those chapters, all those years, evolving the practice and the firm and strategy? Yeah, what probably is less known is that Wunderco started as an investment holding company. And when we got together in 2016, Sujay and I, after leaving Dropbox, We read about John Malone, who comes from Jeffrey's World, Cable Cowboy.

17:31We read about the outsiders and some of the, over the last 50 to 100 years, companies that have been good stewards of capital and built great generational businesses. And that informed a lot of how we thought about starting something new in 2016 also when we looked at our skill sets we had just i mean jeffrey spent his entire career founding and building scaling companies sujai and i joined drop boss when it was about a 20 25 startup when we left it was 2 000 plus people we had deep conviction that there was something to be done with all the talented folks that we had hired and seen them grow and scale and that we could do it again in different contexts and different situations.

18:25That's led to us building companies in consumer security, in other areas that we can talk about. And it was really that operating, operating building-centric mentality that was probably the guiding light to this day of how we operate. Now we have different strategies, different ways of how we work with companies and founders. So what evolved fairly quickly in our strategy, which as Chen Lee said, we started as a holdco. And we really wanted to do two things. We wanted to build companies, things that we would start ourselves or we would buy something that had maybe gone sideways and we saw an opportunity around.

19:09or literally just looking at market mapping big ideas that could change the world. We always start from a place of as big as we can possibly imagine and dream and then look for, is there a solution to that problem? And if there is, great. Can we find a way in? Can we find someone to invest in? And if not, let's just start it ourselves. And so we've started eight companies since 2018. The holding company next year will probably be$400 million of free cash flow, extremely profitable and growing really, really nicely, which is kind of an amazing thing. Along the way, we started to see, as we were building, that there were some great investment opportunities, venture opportunities.

20:13And so the very first one was 1Password. We actually looked at 1Password to make it a part of our cybersecurity, consumer cybersecurity portfolio. It was a great, would have been an incredible bolt-on. The problem was it was too far along and too big for us to do it. But what was clear is it was a terrific investment opportunity. And that really sort of was the catalyst for us to say, okay, let's do this in a sort of – pay an homage here to really three firms that I would say are probably most analogous to – what we're doing today and what we continue to aspire to. So Founders Fund, you know, they built those companies.

21:07They, Peter Thiel and those guys, they started, you know, PayPal, they started Palantir. Like they've, they're builders. They're also world-class investors and they do both of those things. And there's actually, um, great synergies that come from, from doing that. Uh, Next one that came along to do their version of it. So each one is driven very much by the uniqueness of the people and the personalities. It was Andreessen Horowitz. Where Mark and Ben, again, phenomenal founders, you know, built incredible companies, came together. And sort of at the outset, we're doing that same thing. But having that founder's mentality.

21:50And the guy who is then the next one up and is about four or five, six years, I guess, ahead of us right now is Josh Kushner today. He's just, you know, crushing it. I mean, he's just really, you know, we look at that and just great admiration for, you know, what he has done and continues to do. And, you know, our ambition is we're at bat. We're the next ones up to bat to follow in that tradition. Now, we won't be the same as any of those three, but we're certainly, that's the kind of lane that we find ourselves in today. When you think about building these companies, what's the process? Find a big idea.

22:33I mean, the latest one that we're doing, which is really sort of in its kind of in its baby stage, is the whole thing around longevity. You know, for as long as man has been around, he's been in pursuit of, you know, the fountain of youth. Everybody wants to be healthier longer. and uh so it's a perfect example where we looked at the the world and and and everything that is going on in that in that marketplace today um and actually saw a pretty uh compelling gap um and um 95 of what's going on around it today is snake oil sales um you know driven by you know um with people trying to sell supplements and new treatments and processes that are really not driven by actual science.

23:35And that was the light bulb for us. By the way, it's not to say that there are some great people that are doing admirable work in this area, so I don't want to paint the brush of just saying that. I would just say by example, I think Peter Artia is you know uh pretty unique and um doing some great stuff we invested in a company alongside him more in the disease detection and prevention area which is very very different from longevity um and um so having seen that we realized the opportunity was to actually build something that is foundational to it is the leading research scientists around the world can you bring them together under one umbrella, gather extraordinary amounts of data shared across these different verticals because longevity is many, many different, you know, there's mental acuity, there's bone density, there's skin, there's like, there's just metabolism.

24:37There's so many different expertise in that area. And so we started Wonder Health in New York and today have 70 of the leading scientists in the world who are affiliated with us. And we are in pursuit of things that will become, we hope, we believe, we're fairly confident, big consumer opportunities. But at the outset, before we get started that, our typical process is, you know, we meet every Monday, we're on tax 24-7, is debating what are the big opportunities. and then from there being relentless. There's one where we described Jeffrey, relentless about meeting every interesting founder, scientist, practitioner in the space.

25:25Cold emails go a long way to just learn and soak it all in. And sometimes in the course of that, you'll meet an exceptional founder who might already be on the journey and those turn into investments for us. But sometimes we have a slightly unique view or it's a market that for whatever reason, because of capital, because of what's trending at the moment, doesn't get its fair share of daylight. And then that's when you have to develop the conviction to lean in and roll up your sleeves and do it yourself. And by the way, convince other people, storytelling, to come along on the journey with you because of what you see as a potential opportunity.

26:07Yeah, when I was listening through all of that, I mean, I think health is a really interesting category in particular because to your point, it's full of snake oil salespeople. And I have to ask you this, as a world-renowned storyteller, do you view that kind of storytelling that goes so viral, that's so effective, very converting, is that bad storytelling or good storytelling? It's good storytelling to bad outcome.

26:42It's evil storytelling. Listen, storytelling, which is the thing that, you know, I, um, I think I've appreciated and understood and valued, you know, my, you know, my whole career, which is storytelling is fundamental to every aspect of business. it's not just can you create a good story i.e. a movie or a television show or you know uh uh you know a tiktok video or you know those those are all great forms of storytelling um but interestingly uh for business um i don't know of a business that has been or is or can be successful without storytelling. It begins in the most basic way, which is, hey, I got an idea.

27:35I need to go find really great people, in this case, 70 of the leading research scientists in the world, to come sign on board. We had to tell them a great story. I mean, these are people who, you know, spent their lifetime dedicated in the labs, in research. Okay, well, why now? Why us? Well, you got to tell them a really good reason, and you got to do it in a really compelling way. Um, and so, you know, if you want investors to invest in your business, you actually need to be able to do a really good job of telling them a good, compelling, you know, thoughtful and appealing story if you want them to put their capital in with you.

28:15And then when you do have a product and you're ready to go talk to whether it's B2B, to enterprise or SMB or to a consumer, you got to be able to tell them what you got and how it's going to make their life more better, bigger, faster, something. Right. So storytelling is it's just fundamental to everything that we do. And I I I feel like our focus on that with our founders in particular here in the venture world has become more and more appreciated. and more and more valuable. And as the perfect example, which is, we talked about Harvey as one of the companies we're super excited about and incredibly impressed with Winston, who's the founder of it.

29:04And literally in the very first meeting, when we talked with him, he said, I need help with my storytelling. Like, I know my product crushes. I'm like, there's no ends, ifs, or buts about that. How do I get that out there into the world? And the same thing with Shiv, you know, at a bridge, you know, and, and, uh, and interestingly for him, it wasn't just the enterprise that he needs to sell his product into it's then the doctors, which is the demand side of it. He needed to do the same thing. And so those are just two very recent great examples where, you know, uh, I think the resource that WonderCo is able to bring to them is unlike anything that they can find.

29:48Listen, we all look for the cheat code. What's the thing? What's the thing that we can do? Because our money, it's the same color as everybody else's. Our green is no different from anybody else's. It's not better. It's not worse. You know, it's capital. And so, sure, that's great. But if you want to win deals, if you want to be in deals, if you want to be with the best talent out there, what else can you do for me? And I think that's what we've tried to own in on. And so, you know, when it comes to the product side, you know, Shen Li is literally in the all-star, all-star camp there in this. He's done it multiple times in it.

30:27He's held in the highest regard. And I watch with him with founders, you know, who are looking for that product roadmap and they're looking for someone who just has knowledge, experience, you know, and outcome who can, you know, really get in there and, you know, under the cover and really understand what's driving, what's, you know, what's the stickiness of it? What is the thing that is going to make it must have and must value to it? And it was just, you know, there are few people in the world like him. Some of you may not have heard this yet, but our sponsor Public just launched something called Generated Assets, and it brings AI into investing in a way I've honestly never seen before.

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