Supported by Greenhaven Road Capital, finding value off the beaten path.
Creative Artists Agency succeeded for all the normal reasons; they worked hard to deliver a product people valued. Their culture fit their strategy and they grew during a ‘bull market’ for movies. Specifically…
RON MEYER: I made myself available twenty-four hours a day, seven days a week—and this was before cell phones, e-mails, and texts. I never took a vacation where I wasn’t reachable. I didn’t love anybody more than my family, but I did give more attention to my clients.
Marcus Lemonis noted this too, “To be a business owner it’s not a glamorous job. It requires you to make a lot of personal sacrifices. If you want to meet a business owner with a great home life and a great life balance — they’re probably bs-ing you a little bit.”
People with good balance understand their tradeoffs. People with poor balance don’t know there are tradeoffs to be made.
SANDY CLIMAN: The entertainment industry is full of complex characters who have tremendously strong qualities as well as humongous flaws. For me, the goal has always been to study good qualities in order to learn what to do, and equally important, to study negative qualities to learn what not to do.
Inversion, said Charlie Munger, is “unbelievably useful.” Sam Hinkie suggested inverting the hiring question, instead of asking if they should work for you, ask if you should work for them. Stewart Butterfield said he learned a lot at Yahoo, some of which was what not to do.
The most persuasive ideas are the ones we – think we – come up with on our own. Jocko Willink calls this the ‘indirect approach’ and it was common at CAA.
PAULA WAGNER: I said, “I think it should be Tom Cruise,” and everybody went, “Whaaaaaaaaat?” Except Mike. He looked at me and said, “You do, do you? Hmm . . . interesting.” Then Dustin wanted to meet with Tom, so I said to Tom, “I have this crazy idea.” Others will probably say Tom was their idea and it probably “was,” because the art of agenting is to let clients have the great idea.
Phil Jackson wrote, “One thing I’ve learned as a coach is that you can’t force your will on people. If you want them to act differently, you need to inspire them to change themselves.” At CAA this wasn’t infrequent and led to some interesting what-ifs, like if it wasn’t Cruise and Hoffman in Rain Man. Another was that Bad Boys was written for Jon Lovitz and Dana Carvey.
Mohnish Pabrai asked a group of college students if they were willing to read 10Ks instead of seeing a new movie over the weekend. If they were, he said, they might end up as good investors. Michael Ovitz had a similar conversation with Magic Johnson.
MAGIC JOHNSON: Then he asked me, “Do you read the newspaper every day?” I said, “Yes.” He said, “What section do you read first?” I told him the sports section, and he said, “Wrong answer. It’s gotta be the business section.” He said, “This is what I’m going to do. I’m going to test you to see if you really want to be a businessman, I’m going to give you all of these business journals to read, and after you do, we’ll discuss them. Then I’ll know whether I want to represent you or not.” So he gave me a hard homework assignment, I came back and he asked me questions, and I answered them. After that, he decided to represent me.
Josh Wolfe told Shane Parrish, “On Sundays when my peers were watching American football I would be reading and learning something.” When Tyler Cowen was asked how many hours a day he devotes to reading and writing he replied, “All of them.”
JIM COULTER: One of the challenges in the investment business is what I’ll call uncommon wisdom. Common wisdom is what people think about a situation; it’s usually not that valuable because it’s something everybody sees. What is valuable is if you find uncommon wisdom, which is where you see something that the rest of the world sees one way and you see a different way.
Something about today will be different tomorrow and the rewards go to the people who dance to that delta.
Another reason CAA succeed was the culture. In 2014 Ron Meyer said, “I always think it’s about people first. You have to have the right people in place and if you have the right people in place you have to have the right culture in place and that means making it a place people want to come to work.”
Bill Belichick agrees that culture starts with hiring the right types of people, “A big part is the selection process. If you select people that aren’t going to be able to adjust to the culture you’re going to be swimming upstream.” Richard Lovett recalled this interview with Meyer.
“Look, here’s what’s going to happen. You are going to be dying to go out with a girl. You’ve been after her and trying to convince her to go out with you, and she’s going to finally agree to go out with you. Then ten minutes before you leave for the date, I’m going to call you and tell you you’ve got to pick up a script for me or do something else, and you’re going to have to call her and cancel the date. That’s this job.”
In the podcast tour for his book, The Messy Marketplace, Brent Beshore said his company looks for ongoing concerns, not hustles where “if that person gets hit by a bus, I mean the entire company implodes within a short period of time.”
BILL HABER: For any agent, the minute you become more important than your client, your company is finished, because an agent is never himself or herself—there’s no such thing as Ron Meyer; there is only Farrah Fawcett. The minute it becomes Ron Meyer and not Farrah Fawcett, it’s not a company anymore. The nature of the agency business is you represent other people. It is never about you.
Cash flow, marketing, branding, sales, culture, communications, strategy, and more. It takes a lot to run a successful business. CAA did that and did it well. Thanks for reading.