Supported by Greenhaven Road Capital, finding value off the beaten path.
Michael Ovitz says that “past is prologue” and with that idea in mind, we’ll look at his book, Who is Michael Ovitz?. We laud Ovitz for his persona of success but that’s not the character in the book. He’s contrite. He’s reflective. He longs for lost relationships.
He made a lot of money. He did loads of charity work. He empowered artists. Ben Horowitz said, “CAA was really an impossible thing.” But was it worth it?
Maybe the customary CAA red is a warning. This is what it takes and this is what you get.
That’s not to say there’s nothing to learn. One lesson is to be different. “In any multiplayer contest, you want to be the outlier.” CAA succeeded they were different and different was good. Ovitz said that client’s ideas were like clay and CAA was like the studio where it got turned into something great. “That worked really well for the creative clients, but it did not make us popular.”
CAA helped clients with everything and it was that culture of service Ben Horowitz brought to a16z. But this isn’t ‘copy and paste’. “There’s no one thing where you can say, ‘My god, you guys called everybody a partner that’s really a game changer.’ It’s a composite,” explained Ovitz.
Horowitz added, “Culture supports the strategy. You can’t come in from the outside with the culture of somebody else’s company.” Amazon can’t have Apple’s culture and Apple can’t have Amazon’s culture Horowitz said. Culture also has to fit into the time and place a group is in.
Ovitz et al. succeeded because timing matters, “We were lucky to work in a golden age of commercial film. People went to the local multiplex three times a month, piracy had yet to explode, and cable was in its infancy.”
CAA could package actors with directors and writers for studios because of the era they were in. Gary Vaynerchuk talked to Ovitz too and pointed out that creators can go straight to consumers via technology now and Ovitz agreed on how things have changed. He told Horowitz, “When we started there was a very large barrier to entry in the media business. Anything you could read, see, or hear was controlled by twenty-five companies.”
Boring Businesses. When Ovitz fled William Morris, CAA was buoyed thanks to daytime TV. It, “wasn’t glamorous, but it was lucrative.” Another revenue stream was authors. A third was syndication. CAA’s foothold was in the perceptive mud but the profitable pay dirt.
Scott Galloway recalled an investment summit where a few attendees “own(ed) media properties and the national airline, but most killed it in iron/ore smelting, insurance, and the like.” Ali Hamed told Patrick O’Shaughnessy about a Stanford Ph.D. who built an app for heavy construction equipment operators. “That’s a person who’s solving a problem that no one in Silicon Valley gives a rats ass about.” Others like Brent Beshore and Josh Wolfe find their own ‘boring’ businesses.
Ovitz became ritz, but the foundation of CAA was poured with hard, unglamorous work and reinforced with honesty. Ovitz told Horowitz “We were less concerned with telling people things they wanted to hear. We were more concerned with telling them things they didn’t want to hear.”
And wrote in the book, “When you tell someone the truth, all they can do is get upset – they can’t call you an idiot.”
Roz Hewsenian told Ted Seides something Ovitzian, to never say ‘No’ to a client. “You figure out how to give them some of what they want so that you show them you heard them, which is ninety-percent what the issue is.”
Aggressive Education. “Patton was a threatening motherfucker, and so was I.” Ovitz may have wanted a role in a buddy cop comedy but instead, he played the role of bad cop. He told Horowitz “I don’t think we could have done it differently because we were in a cutthroat business.”
He was always working. He was always learning. Assisting with M&A work he wrote, “Collaborating with Pete (Peterson) and Steve (Schwarzman) and Herb Allen beat going to Harvard Business School; they taught me how to be an investment banker.”
Then years later, “As Marc (Andreessen) and Ben (Horowitz) led me into their world, I felt like a privileged student in a graduate school of one.”
Ovitz’s aggressive growth mindset is reflected in others who have less cutthroat images. Alice Waters’s education was in the fields of France. Rich Snyder (In-N-Out) was over kitchen friers and in leadership seminars. Stewart Butterflied got his continuing education at Yahoo (and saw what not to do). Seth Klarman got his at Mutual Shares.
A great what-if that we can only ask now is ‘What-if Michael Ovitz had social media?’ Paul Newman said Ovitz was “a cross between a barracuda and Mother Teresa.” Somewhere between the pre-2018 perception of Ovitz and the post-book-tour perception is the real Michael Ovitz.
When he and CAA were humming, Rowland Perkins advised Ovitz that “you can only start fires” if you talk to journalists. So with nothing to talk about the media wrote what they wanted to be talked about.
In Ovitz’s era, he should have followed Buffett’s lead and wrote letters. Today, everyone has their own outlet for storytelling. As Seth Godin wrote, “making is insufficient.” What really matters is change and change takes making and communicating.
That’s what Ovitz did, that’s what Ovitz got.
Thanks for reading.