a16z Podcast: New Upstarts in an Old Industry

When Michael Ovitz co-founded the Hollywood talent agency Creative Artists Agency (CAA), he turned a number of the entertainment industry’s well-entrenched traditions on their head. The origin story of a16z (not coincidentally!) is not that dissimilar. So in this episode of the a16z Podcast, Ovitz and a16z co-founder Ben Horowitz talk with Hanne Tidnam about Ovitz’ just-released book, Who is Michael Ovitz? — and about how CAA transformed the power equation in Hollywood.

The conversation covers everything from the history of the entertainment business — the days of vaudeville and the Jack Warners and William Foxes and Jurassic Parks — to what strategies guided the differentiation of the new kids on the block. There’s lessons for other founders here, too, about culture, negotiation, and more.

Transcript:

Hi and welcome to the a16z podcast. I’m Hanne, and I’m here today with Michael Ovitz, co-founder of the Creative Artists Agency, and our own Ben Horowitz, co-founder of Andreessen Horowitz. In this episode, we start by talking about the founding story of both CAA and a16z, and how exactly both firms went about redefining a traditional business, in two different industries, as a new upstart.
We talk about the power equation in Hollywood, from the history of the entertainment business from the days of vaudeville and the Jack Warners and William Foxes to Jurassic Park, to what it looks like today and where it’s going.
And along the way, Ovitz and Horowitz share the strategies that guided them, in building a culture, negotiation and more.
Michael has published a new book just out, “Who is Michael Ovitz.”

Ben: Is that like a reference to like Keyser Soze?

Michael: How do you know?

Ben: You’re one of the few people that knows who Keyser Soze is.

Michael: I met Ben in 1999 when he and Marc asked me to go on the board of Loud Cloud. And I told a lot of stories about the entertainment business, about the…

Ben: Oh, good. The print stories, the rain man stories.

Michael: So, I have to say I wake up and they’re talking about starting their own business and possibly using some of those principles, and I was in a state of shock that they actually listened to the stories.

Ben: CAA was really an impossible thing, in that if you looked at the agency business, it had been around since vaudeville, and the firms were well established. And if you’re a new actress and you’re picking an agency, are you gonna go with the one who like repped Betty Davis and, Gretta Garbo and all the greats, or are you gonna go with some new start? What is the differentiation? Like, how could you possibly pull that off?

And the fact that he was able to create by far, the most successful talent agency in the world 15 years after starting, 75 years after vaudeville, is an impossible business story. We come from tech where like, okay, you can turn something over because the technology changes, but this was not a technology story. It was one of organizational design culture, and things that turned out we’d use in venture capital.

Hanne: I thought what was really interesting is that you were fundamentally reconceiving the idea of the agent, what it should be. But in some ways you were returning to an old fashioned idea of what an agent was.

Michael: Yeah, I think that’s really well said. We tried to ride a line between going back to the tradition of service, but couple it with the concept of putting the talent back in the driver’s seat because they’d been taken out of the driver’s seat. The ability to get product made in the business, or to realize dreams, was in the hands of the buyers. And when we started, there was a very large barrier to entry in the media business. Anything that you would read, or see, or hear was controlled by under 25 companies around the world.

You had four television networks in the United States. You had seven motion picture studios that had all of the distribution, and without that you couldn’t get your movie in a theater. You had five publishing houses in New York that did books. You had about five record companies, and then a scattered number of companies in Europe that had television networks but not a lot.

So, basically, if you were an artist, you had a giant barrier to entry. It’s the opposite of today, which is so fascinating to me that today, and Ben and I talk about this all the time, you could get almost, look you can get this podcast on.

Ben: It’s very popular.

Michael: And you can get people to listen to it. In the days when we started, that was impossible. If we wanted to get something like this out into the hands of the consumer, there was no way to do it.

Hanne: Incredibly powerful, very few gate keepers.

Michael: Right. So, basically, we decided that we would give a unique and ultra-deep service to creative people. We coupled that with an enormous amount of guidance and career advice that was incredibly direct. We were less concerned about telling people things they didn’t wanna hear. We were actually more concerned about telling them things that they didn’t wanna hear. We thought, too long, artistic people had been given a lot of pabulum.

Hanne: Ben, when you were looking at this model, what was it that really struck you from this other industry that felt so translatable?

Ben: The whole thing. It’s actually funny. Everything that we tried from CAA worked, and…

Hanne: Everything?

Ben: All the core principles. So, the first was this concept of a network. So, you know, a firm shouldn’t be just a group of independent people who all had their own isolated networks. The network should be owned and run by the entity itself. And CAA was a breakthrough in this because you had people who were dedicated to vertical parts of the network, like publishing. And so that, of course, we did as you know our networks were different but it was the same kind of systematic network that turned the platform into a franchise.

The other thing was they took pitching the clients much more seriously, the agencies were very powerful, they didn’t have to put together like a great presentation to the clients about what they did. I think we’re for sure, the first, and maybe still the only venture capital firm that has a pitch to entrepreneurs that’s, you know, formal and professional, and involves lots of people. So that worked.

But I would say the thing that I learned the most from more were the cultural things that Michael’s talking about. So, do you tell people the truth not what they wanna hear? That’s like one of the cultural tenets of the firm. But there were many others. To take a long view or a transactional view of a relationship, that came from CAA. A lot of the idea of the platform was to have the luxury to take a long view of our relationship.

Things like, how do you treat people in the firm? Everybody here, we refer to as ‘Partner.’ That was taken from CAA. We got a lot of criticism of that early. But it worked well because we’re in the services industry and “Look, if you’re representing the firm, you are partner.”

And then, you know, the other thing was honest but respectful. So, you know, showing up on time, being ahead of the competition. They did something at CAA which is they just started their staff meeting before everybody else and that just said to the company, “You know, we’re not F-ing around. Like, we’re gonna get this done. We’re gonna be the first awake. We’re gonna be the last to sleep, and we’re gonna get all the best clients.” And that’s what they did.

Hanne: I mean, it did strike me that a lot of those big conceptual shifts were about culture. You talked about things like a focus on first impressions, a siege mentality, like, you’re with us or against us. Never bad mouth the competition, right? The sort of core things that trickle down in all kinds of ways.

But some of what you were doing was actual business model innovation also. Can we talk about what those things were that were so different for the industry?

Michael: So, I think it’s important to note, the idea was to differentiate. So, one of the things when Ben and I and Marc talked originally, was there’s several hundred VC firms that have been in existence for a long time. When we came into the agency business there were 200 franchised agencies and we were…

Hanne: New kid on the block.

Michael: This new kid on the block with nothing, no clients. How do you make a name for yourself by other than just saying, “Oh, we’re fantastic”? Which is irrelevant, because everyone thinks they’re fantastic even though they know deep down they’re not.

But the reality is that it was about differentiation, and how can you make yourself different? And we decided we were gonna create a service model that was completely different. If you’re an entrepreneur, you come here, you have access to things that you didn’t have at a lot of other places in the community, and that would include budget help, you can get marketing help, you can get PR help, you can get advice about how to operate your business. You’ve got a built-in person to get operational advice on. You’ve got extraordinary technical background, so you can get technical advice.

I view what we did very much like a pointillist painting, like the painter Seurat. If you look at a square inch of a pointillist painting, you see a bunch of dots. You look at two square inches, you see a few more dots, three, four, five, and all the sudden, maybe at six or eight square inches you start to see a picture.

So, I think what we tried to do, is look at our business like a pointillist painting, which is how many points of differentiation are there that create a full picture? Within the culture there’s all these little things. There are just all these little things. There’s no one thing, Hanne, that you can say, “My God, you guys called everybody a partner, that’s really a game changer.”

Hanne: It’s a composite, yeah.

Michael: It’s a composite of looking at a pointillist picture. On the business principle side, it was the same thing. So, this sounds ridiculous, but telling someone the truth, it seems so logically normal. It was completely abnormal in the business we were in in 1974. It didn’t exist. Knowledge was power, but people felt they had to lie to show that they had knowledge.

Hanne: And what were those kinds of lies? Just, “You’re great. I can get you that…” What were the actual…?

Michael: Empty flattery. That’s not what people are interested in. People wanna know the truth. They wanna be critiqued. And They want positive criticism. They don’t want you to tear them apart without something to say that’s constructive. They want constructive, positive critique.

Hanne: In fact, you say that’s where you often started, when you were trying to sign somebody.

Michael: Well, it was easier to tell the truth. Like, the truth is a funny thing in entertainment.

Ben: It’s easier to remember, yeah.

Michael: The entertainment business is loaded with untruths. The TV business, less so, because everything was so fast. You could start a television idea and get it made into a show very quickly. But in movies, it’s years to get a movie made and released. And the amount of story changes in, not the story of the movie but the story around the story of the movie, is quite extraordinary.

We pioneered this concept of I don’t know the answer to that question, but I’m gonna get back to you.” Now, that’s no big deal, right? But that’s part of the composite. It’s part of the hundreds and thousands of points that we did to be different.

Hanne: So let’s shift gears again from culture and towards the business models. What are more of some of those ways you were really doing something new on the business model side.

Michael: In the construction of business concepts, we felt that no client should come up with an idea and go out and make it on their own, with that idea standing on its own in the marketplace. We felt that in-house, we should take that idea like a lump of clay on a table and sculpt it into a magnificent sculpture that was a composite of a lot of elements, other clients input and partnerships that gave us a full package, and really use that leverage against the buyer to be able to play the game of, “You didn’t put in any time or money to develop this. We did, so we wanna be paid a premium.”

Now, that worked really well for the creative clients. It did not make us popular.

Ben: There is some controversy around you, and a lot of it came from… prior to CAA, a top actor or actress made maybe a 10th or a 20th of what they did, or maybe even a 50th of what they did after CAA because you changed the leverage from the studio to the talent.

And that was not free, you know, and so maybe describe what it was like, how you changed it, and why they were mad.

Michael: So, I think…I don’t know that mad…it’s interesting, I used to think that, and I think it’s more we did so many things that were positive for the creative community, but we coupled it with this relentless aggressive attitude and this point of view that we had to win at all costs.

The big question for me was did we have to win at all costs? At the time, I actually thought we did. Someone asked me the other day, “Do you think you could have done it differently in the day?” And I don’t think that we could have, because we were in a cutthroat business to start with. We didn’t invent the entertainment business. It was a cutthroat…

Ben: Notoriously, yeah.

Michael: It’s notoriously cutthroat. It wasn’t a gentleman’s business. My God, if you go back to the moguls of the 30s, 40s, and 50s, the Mayors, the Thurmans, the Harry Collins, the Jack Warners of Warner Brothers, William Fox of, you know, who founded Fox Studios. These guys were tough as nails. They took no prisoners. They made us look like we were in the priesthood, frankly.

Now, to me, past is prologue. So, in studying all of this I actually thought that the toughness of those guys was good.

Hanne: Because, why?

Michael: Well, they were decisive You may not like the answers, but they give you answers. And they were doers. When Diller decided to create “The Movie of The Week” on ABC, which everyone said is a terrible idea and impossible, you can’t make a movie for 90 minutes for a million dollars, and he said, “Watch me,” and he did it, that kind of attitude impresses me. And helped me think really hard and heavy about what we would do at CAA.

It’s 45 years later, it’s still working. So something worked. Now, could we have backed off and been softer and gentler probably a bit all the way? I don’t think so.

Not in the business we’re in.

Hanne: Can you walk us through how that would play out on a daily level as you were actually making these deals?

Michael: Take a movie that you put together, let’s just take one, “Jurassic Park.” Michael Crighton said, “I’ve got this idea about something that I’ve always loved. It’s paleontology. It’s dinosaurs. But not in a prehistoric, you’re in a contemporary setting, and it’s an amusement park run amuck. No movie stars.”

And I said, “My God, everybody loves dinosaurs. Let’s try to write this.” So, he writes it. He gives it to me. I can’t put it down. It’s a page turner. We decide there is only one director that can do this. We give it to Steven Spielberg. He calls the next morning at six a.m. and says, “I’m doing this,” after reading it. That’s unheard of for a director of that stature to commit in 12 hours to a…

Hanne: I mean, to have read it that quickly, let alone…

Michael: Yeah. He gets it at six o’clock at night and calls at six the next morning and says, “I’m in.” Kathy Kennedy is the producer. She does a budget. You’ve got a writer, you don’t need movie stars, the star is the dinosaur. And you’re sitting there and no one has this except us, you talk to Spielberg, you talk to Crighton, who would you like to finance and distribute it? Because frankly, it doesn’t really matter, because it matters who’s gonna write it and direct it, and we have that.

So, they decide we should go to Universal, and for an opening salvo, you know, you call the president of the company and say, “I have good news and bad news, the good news is we’ve got Kathy Kennedy, and Steven Spielberg, and Michael Crighton, you know, with a detailed book that’s gonna be a bestseller about dinosaurs, and we’ve got a screenplay and it’s gonna cost this much money.” “So, what’s a bad news?” “Well, we own it, and you don’t.”

Now, take the six to eight other studios that don’t get that phone call. They’re not happy. Take the 30 directors, or 40 directors that didn’t get it, they’re not happy. Take the couple of hundred screenwriters that didn’t get a shot at the book, they’re not happy. Nobody’s happy.

Hanne: It reminds me, actually, when I first started as an editor and I was starting to say no to projects, there’s a lot of relationship stuff that goes sour there too. And one of my colleagues said to me, “You’re not doing your job right if people don’t not like you.”

Ben: No, then Michael, you did your job well.

Michael: I guess I did my job well. Look, this is tough to say but, you know, I wasn’t out to win a popularity contest.

This was not high school, I started at the age of 27 in a business that had been around for 75, 80 years, kind of like playing hockey and skating down the ice, and the next thing you know, someone’s stick is tripping you up and you’re falling on your face on the ice. This was a tough game.

Hanne: Let’s talk a little bit about that culture that you built, that both of you built going from start up to a mature firm. Did those fundamental principles, or those pointillist dots, did they shift? Did the colors start shifting? Did things change?

Michael: It’s a living organism. It moves on a daily basis. You have these knobs, and it’s endless, the number of knobs. There’s a knob for everybody in the business. There’s a knob for every deal. There’s a knob for every principle. There’s a knob for every service.

Hanne: How do you stay the observing part when it’s such a fluid living organism and there’s so many dials?

Michael: You sit with those knobs. I remember when we were at Loud Cloud when there were 400-plus employees and they had to take those knobs because the business model was changing.

Ben: Yeah, all the knobs.

Michael: And Ben sitting there at those knobs 24/7. And sometimes you over dial them, sometimes you under-dial them.

Ben: Yeah. And you never get them entirely right. So many people like management consultants, or even CEOs, will talk about culture as though it’s something they said they want and that was it.

Hanne: Yeah.

Ben: And that’s never it. It’s changing every day, and you have to pay attention to, as Michael said, to just sit back. And that you’re really talking about how are people behaving when you’re not looking.

Do they return their calls? How do they treat their clients? All these kinds of things emanate from the culture of the organization. You have to observe the behaviors, you’ve got to put in mechanisms, you’ve got to turn things this way or that way. And, you know, some things don’t work anymore. Some things you were wrong about. And so yeah, that’s an evolving process.

Michael: A perfect culture is a culture in constant flux and growth. Constant flux and growth.

Ben: And the culture supports the strategy, so like you can’t come in from the outside and know what the culture of somebody else’s company should be, because you don’t know which direction they’re taking it. So, like an easy example is like, Amazon’s got this culture of frugality because it’s so important to them to be the low-cost provider.

Good cultural element for Amazon. You can’t put that in Apple. They’re like high designs. Steve Jobs got fired because he made the product too expensive. But that’s who they are. That’s their strategy. Their culture has got to support their strategy. That’s why you have a five billion dollar campus. Jeff Bezos will never build a five billion dollar campus because he doesn’t care what the door knob looks like.

Michael: It’s why some businesses are fantastic and are run really in a phenomenal way, and others aren’t. And the fish stinks from the head, you know? If the person who is operating the business and helping create the culture and bringing everybody together is on it 24/7, and I mean every day It never goes away out of your head.

I used to walk around do the rounds. Like doctors at a hospital. I used to go in the late morning and in the late afternoon just to show my face, to see if I saw someone knotted up in their office, or to just get a sense of how people were feeling. I did it from the time we started where we had five people to the time when I left, when we had 700 people.

Hanne: A thermometer read.

Michael: And how do you get the read? You get it by “Frame of Reference.” You see the people enough on a daily basis, and you get a sense if there’s somebody who’s got a problem. Is it fun? Absolutely not. It’s time consumptive, and to be human is to err. And to be human is to have a problem. Everyone had problems. And as someone who is like the gatherer of the culture, you’re not allowed to have a problem. You have to solve everybody else’s problem.

So, it’s not something you can do by yourself, by the way. I wanna be very clear that I did not do this by myself. I had a partner who was phenomenal at rounding this out, Ron Meyer. We would tell each other problems with individuals and then one of us would shore it up and then the other one would go in and take the temperature to see if it was shored up.

I used to wonder every day when I went home, you know, where did I make a mistake today? You know, who did I tell some bad advice to? Which executive in the company did I let down, you know? And then when you get home say the same thing about your own kids.

Ben: That is the one thing that is so dangerous when you’re CEO, you have to be in this mindset that you’re making decisions, you’re hardnosed. You have high expectations of everybody. Your standard has to be very high, or it will slip for everyone. You take that attitude home, it’s not good. That’s not the way you need to be a parent. And it’s a real challenge.

Hanne: Yeah. You talked about trying to agent your children for a while, that was…

Michael: I would come home and sometimes not flip gears.

Ben: Yeah.

Michael: Sometimes I’d come home and I didn’t downshift, and I’m talking to my kids like they’re clients, believe me. Regrettable, but unfortunately, factually accurate.

Hanne: Well, human.

Ben: Absolutely.

Hanne: Well, you even use the word agenting as a negative. The first time you used it, it really surprised me. You were talking about your grandmother, right? Brutally agenting your father.

Michael: Yeah, well, agenting…

Hanne: What do you mean by that?

Michael: Agenting is, you know, it’s manipulating. It’s pushing. It’s maneuvering. It’s trying to force your will on someone. That’s agenting. And it’s a tough word, and it’s a tough mechanism.

Hanne: It’s the dark side of that.

Michael: It’s the Darth Vader side of the business. By the way, it is not just agents that do that. Producers do it. Some people call directors light-handed, or heavy-handed, or that they work by example, or they work in different ways. Well, they agent too. You know, everyone has an act that they use, and agenting is a part of everybody’s life in the entertainment business.

Hanne: So your career has spanned an incredible evolution of the entertainment business over the last several decades. What’s your sense of what the entertainment and media landscape looks like now, and where it might be going?

Michael: The entertainment business to me is, parts of it are wildly exciting and parts of it are incredibly disappointing. It’s hard to not be excited about the dissenter mediation of streaming. It’s hard to be excited about the dissenter mediation of streaming, when it’s taking the entire culture of 100 years of history and turning it on its ear.

We had a business where with these barriers to entry that had some negative connotation and some positive connotation. People paid to go see people do big projects. Today, people go to streaming services and their viewing patterns are antithetical to history. So, for 50 years in this country people sat around a radio or a TV set for set times when things were on.

Hanne: Right.

Michael: So, on Thursday nights when “Seinfeld” was on and something culturally happened on “Seinfeld” that was significant, people…

Hanne: Right, the water cooler effect.

Michael: The water cooler effect. Everybody talked about it. There is no day and date except for sports. People talk about things on social media as they see them, but everything’s disjointed.

Hanne: So, how do you think that will change, if you had to look forward five years, the power equation, you know, that you guys really changed with your model?

Michael: When I look at my old business, I am happy for the progress that’s being made. I’m sad that the traditions of the business have dissipated to this point. The idea of building a movie star now is not possible.

Hanne: What do you mean by that?

Michael: The idea of finding a 19-year-old kid named Tom Cruise and building him brick by brick with his own talent, and putting him with great directors, and letting that mature and grow, it’s hard to do right now because there are so few movies being made.

Yes, people go to see movies, but a lot of them are event movies, they’re…

Ben: Sequels.

Michael: …sequels.

Ben: Remakes.

Hanne: Yeah.

Michael: And you don’t get that, “Risky Business,” and then “Top Gun,” and then all of a sudden you throw in “Born on the Fourth of July,” which is a great actors’ piece. That way of building a career doesn’t exist anymore. It’s very hard to do.

Ben: you know, it’s interesting, because music is following a similar curve where, yeah, it’s much harder to build a great artist than it used to be, you know, with a series of albums that everybody knows. That’s becoming a more rare thing.

Hanne: To nurture a whole career.

Michael: Plus, there’s so much here today, gone tomorrow.

Ben: Yeah, that’s…

Michael: It’s really tough for an artist.

Ben: …very fast, yeah. Extremely difficult.

Hanne: So, what do you think will take its place?

Michael: I have no idea. I really don’t. We’re in the middle of the trough right now. We’re not at the beginning, we’re not at the end, we’re dead center in the middle.

Ben: Yeah.

Michael: We’ve got a big shoe to drop when Disney and Fox complete their merger and they start that streaming service. What’s gonna happen with Hulu is gonna be interesting. Amazon seems very committed, they’re not gonna be left behind. So, you’ve got behemoth businesses that are well financed getting into content, and that’s without Microsoft and Facebook and Google.

Ben: Yeah, it’s a great time to be a writer.

Michael: Oh my God, it’s a great time to be a writer. It’s a great time to be a creative person, because we went from a dearth of money to more money than anyone needs, and a new form of distribution. So, do I think it ends up good? Yeah. Do I think it ends up great? Yeah. Do I know how it gets there? I don’t have a clue.

Hanne: Let’s talk a little bit about negotiation, because that’s obviously such a big thread through both industries, you talk about incredibly complex negotiations from, you know, signing Sean Connery to IMPAY coming to design your buildings, to the MCA deal. You talk about some of the key principles. Kind of in a little offhand way, one of them was always plot out the desired end point. There was another moment in the book where you talked about the importance of reading body language during negotiations. I’d love to know what those core principles are for you for how to negotiate.

Michael: I didn’t wanna put in a bunch of principles in a row, like make a list, like, “Here’s how you negotiate.” And the reason is I believe that every single deal that one approaches is like an art form. It’s not a science. Everything has to be plotted out in its own vernacular.

So selling Universal to Matsushita Electric, or selling Columbia Pictures to Sony, or CBS Records to Sony, or MGM, you know, is bad debt, or signing Sean Connery who’s come off three bad pictures, or negotiating a new kind of deal for “Jurassic Park” where no money changes hands and it’s all about ownership. Every single situation is different, and necessitates its own architecture.

Hanne: It’s its own universe.

Michael: Everything is different. Saying that you have to know where you wanna end up when you go in is the same for everything, but that’s not the art of putting the deal together.

Hanne: They’re two separate things.

Michael: They’re separate things. Of course, one wants to know where they wanna come out. I always liked to have my end result in my mind as I was working toward it, because to me, I’m actually building a house when I negotiate. And I start with a foundation. That foundation is usually the idea or the material that I’m negotiating on, whatever it is. Whether it’s a company, a screenplay, a movie, a television show, a book, or a record, it didn’t matter what it was. There’s a foundation. And then we try to build a framework around it. And then putting the roof on is getting the right deal.

Negotiating is not a rote act, which is something that I learned early on from a man named Howard West, who was one of my bosses at an early age. I was 22 years old, and I watched him negotiate writers’ deals and I used to ask him, “How did you decide what a writer’s material is worth? $100, or $1,000, or $10,000? There’s no rate card for it.” And he explained to me this concept of how it’s a fluid and loose moving idea around it. That struck me.

Hanne: Well, we’re all agreeing on value all the time, right? Value is always like ephemeral shifting thing that we just agree on.

Michael: Except when you sit in a room and the other side vehemently disagrees with you, and then you’ve got to bridge the gap.

Ben: It’s such an important point, in that we can improve in the way we think about deals and how we train people in these kinds of things, but it’s dynamic, you know, you walk in, you’re dealing with a very, very complex person or entity on the other side. They have a history. They have needs. They have things they want. They have things they don’t care about. They have motivations.

Michael: And they wanna win.

Ben: And they wanna win. They wanna win in the deal. And you have to understand all those things and then plan a strategy but as soon as you get into a formula, or a set of principles, or something you can just run, then you’re not listening. And that’s death in a deal. And a lot of it is emotional like, you know, do you have the right mentality?

One of my favorite memories of being CEO, it’s the worst memory and the best memory, we were working on the deal with EDS and we had EDS and IBM both in the hunt. And, you know, we really needed the deal to finish at a certain time, but there was no reason to have it finished at that time. So, I asked Michael, can we say the deal is gonna end here even if it may not end here? And how do we think about that?”

That question just made him stop and he said, “Look, I believe in artificial deadlines. I believe in playing one against the other, and I believe that you have to do anything and everything possible short of immoral or illegal, to get the damn deal done.” And I was like, “Okay, I’ve just been thinking about this one.”

You have to believe you can figure it out. You have to convince yourself, and then convince the other side. I was thinking I was on my heels, and like you have to be on your toes to win in a deal, but there was no…and I couldn’t ask him for like, “What’s the recipe?”

You know, click this, and you’ll have a $64 million plus a $20 million a year contract. Like, that’s not how you get that.

Hanne: No recipe but kind of a constitution, or like the walls of a house. I’m hearing still like kind of core concepts of how you approach it, like visualize what you want at the end. Be aggressive. Everything has its own language, kind of its own principles.

Michael: But all the houses are different.

Ben: All the houses are different. That was that house.

Michael: Yeah.

Ben: He gave me the rules for that house.

Hanne: Yeah.

Michael: That rule may and would not have applied to about 99% of the other deals.

Hanne: You joke in your book from going from Valley to Valley. What are some of the differences between the two cultures? And some of the advice you’ve learned in Hollywood that you now find yourself sharing with tech entrepreneurs?

Michael: I will say the one common denominator is everyone is particularly interested in mistakes, because they don’t wanna make them. And we don’t see that down in LA. No one wants to know anything about mistakes. They wanna forget them and sweep…

Hanne: Oh, how interesting.

Michael: …them under the rug. You don’t see that in New York, either.

Ben: Yeah, that’s funny.

Michael: The founders up here say, “So, when you did this, what would have happened if you did that? And why did you do it that way? In retrospect, it doesn’t look like you did it the right way.” And they’re right, and they’re really, really, they want to know.

And look, they’re also interested in some of the things that were successful. They’re interested in the culture, Marc always talks about software eating the world. Our culture ate the entertainment business. It just did. And so did the Andreessen Horowitz culture.

So, it’s interesting when something works a second time. Because you say to yourself, “My God, it works.” And it worked in a different silo, a different vocation.

So, the advice is usually specific to the business. The entrepreneurs up here are really interested in the good, the bad, and the ugly, and that’s very different than other places that I travel.

Hanne: And pulling up the carpet.

Michael: They wanna know everything, and they’re not afraid to ask.

Hanne: Thank you, both, so much for joining us “A16Z Podcast.”

Michael: Thank you.