✍🏼 CAA and the future of talent, creative projects, and partnership
✍🏼 CAA and the future of talent, creative projects, and partnership
As we continue into the future of the tech-enabled creator economy, what can we learn from talent agencies? I think the future of talent partnership looks more like coaching than sales or dealmaking
My people! Hello.
Happy Monday to the 36 of us. We’re up from 20 last time, which makes me hilariously disproportionately excited to see. I’m so glad you’re here.
I crushed an Acquired podcast episode on CAA with Michael Ovitz on a flight the other day (then an a16z interview) after hearing an conversation with Ari Emmanuel (shoutout Charlie for the rec) and becoming fascinated by the talent business.
Talent agencies are essentially a more human version of VCs. They invest in people and projects, but in service of shaping culture and creativity, instead of solving day-to-day pain points.
Talent agencies are all about people, on both sides. VCs are too, to some degree, but the fact that talent (from an idealistic lens) is all about creators and creativity, a world that is more intuitive, emotional, and even ephemeral than the world of pain points, TAMs, pitch decks, and MVPs that startups live is what fascinates me.
I believe it should always be about people.
That I’m so intrigued by this world tells me that there are some things of interest here as it relates to how to build and foster more connection and more humanity in our world of life and work (the point of this whole project).
So, this is an exploration of what we can learn from this world about connection, creative projects, and partnership.
Yes, I am aware that, as is (apparently pretty accurately) depicted in Entourage, the day-to-day can be miserably unglamorous, but so is that of startups and VCs, so stay with me on this.
I’m clearly obsessed with connection.
I’m fascinated by creatives and how they shape culture.
And I love learning about the businesses and organizations that build these worlds.
I think there’s such exciting potential for all to align. This is what I want to build. So this is what I listen to, read, think, and learn about.
Here, I try to do that.
I also wanted to call out that at the bottom, I’m throwing some of the most interesting and exciting things I’ve devoured recently, so if my droning on bores you to tears, at least scroll to the bottom to check out some of those links before you ✌🏼 out.
Hope you enjoy, and if if you do, I’d be grateful if you shared this with a few people you think would also enjoy it.
Let’s see where we can go with it.
Cheers,
Devin
CAA and the future of talent, creative projects, and partnership
People and partnership
I think Michael Ovitz got it right.
One of the founders of CAA (Creative Artists Agency), he knew that in our world, humans need stories.
Humans want the feeling of being alive. Stories are the mechanism we use to convey this bodily feeling to others.
Stories are human things - emotional, intuitive, relational. Stories are creative, and come from people.
If businesses are tactical and come from strategizing organizations, stories are emergent, human, and come from people.
Ovitz and four other guys from William Morris (the OG and main player at the time) were fed up with the old school ways - an unwillingness to evolve and move into the future of culture and the next generation of younger talent, and the individualistic and impersonal machine of the eat-what-you-kill world where agents were territorial over their clients.
They saw that the world wasn’t just about owning clients. Ovitz and team built a new way, based on partnership, to support the creators building the future of storytelling.
The story of Ovitz’s partnership with Michael Crichton is really illustrative of this human tilt.
They had a deep connection, based on mutual admiration and respect. There was a purity in the relationship - mutual value, a connection that would have existed irrespective of any commercial partnership. Character. Integrity.
Ovitz and Crichton spoke daily, had lunch weekly for years, including through multi-year patches of no material, where technically, the relationship and time spent was adding no value to CAA, and in fact even costing them time and energy that could’ve been spent elsewhere. The foundation of the partnership was built on connection, not economics and potential.
Ben Gilbert (Acquired): I mean you represented Michael, and for years he's sitting there with writer's block. You just get in lunch with them every week coaxing him along, trying to figure out what that next big thing is. Even though he's your client and you're spending all this time and attention, the agency business model is to get 10% of what actors, directors, writers are creating. If he's not creating anything, you're spending a ton of time with him as obviously a client, friend, and as your belief in his future that sort of made this all possible.
Michael Ovitz (CAA): There is zero chance that I would've let that guy down, none.
I knew he was having a tough time. It was my job to be there for him. Not a discussable issue, not a choice, not an option. I had to be there. I will tell you, I tried some hokey things to get stimulated. I brought him other people's ideas. Sometimes I bring him an idea so bad to try to get a chuckle out of him where he'd look at it and say, what are you thinking? I said, well, I'm thinking that maybe you'll think this is so bad that you could do something just a little bit better.
Frankly, the agency, to their credit, went around telling everyone that Crichton was working on an original, and by the way, that was unequivocally untrue. He was working on nothing. I mean he could barely get out of bed in the morning. He was really wiped out. He felt he'd just spent all his creative currency. My job was to just back him up, and stimulate him into thinking that he could do it again.
And what is it that Crichton went on to create next? Jurassic Park. The franchise went on to gross several billion dollars. All built on this shared foundation of partnership.
A simple lesson we can take away - do business with people you value and connect with, and don’t do business with people for whom that’s not the case. Repeat.
It doesn’t guarantee success (nothing does), but the opposite approach certainly doesn’t either.
Uncertain and unquantifiable, but connected. Partnership
Truth
Partnership is more than support. A critical component of true partnership is the pursuit of truth - even when it’s challenging or uncomfortable.
Support without truth is passive - an aimless push forward. In some ways, support without truth isn’t much different than going it alone. It may not even be fair to call it partnership. You may get a comforting word of encouragement every now and then, but does it really fuel your path towards what you hope to accomplish? Air surrounding a ship doesn’t do much help unless it stirs itself into a gust of wind to fill your sails.
Truth is the movement, the friction, that creates the energy in a partnership that is harnessed by the sails and propels you further down the journey to your shared destination.
And yes, it is friction. A mutual commitment to pursuing truth means, just about necessarily, that discomfort is going to cross your path. Commitment to pursuing truth means doing so even when it’s challenging to speak it. But any real progress requires overcoming stress and discomfort along the way.
So long as the commitment is true, and shared, the partnership emerges on the other side of the discomfort more robust, and further along the journey towards the shared mission.
Anything worthwhile is on the other side of struggle, anyway. Partnerships that commit to truth are those incremental instances of discomfort that make it tougher in the short term, but propel you further in the long term than you could’ve made it alone.
Michael Ovitz (CAA): 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.
Ben Horowitz (a16z): So, do you tell people the truth not what they wanna hear? That’s like one of the cultural tenets of the firm.
Challenging, but true. Partnership
Team
CAA re-thought how the industry built and maintained partnership internally as well. They realized, as good organizations do, that true partnership internally magnifies the impact of their work.
They underpaid agents in guaranteed salary, but overpaid on performance at year-end. I love this approach - it’s one I’ve believed in for a while.
Michael Ovitz (CAA): We were different for one solid basic reason, which is that we basically worked as a team. If the two of you were clients of ours, you didn't have one agent. What we resented at William Morris is that one agent coveted one client, and you couldn't go anywhere with that.
We went ahead and put teams on people. We had some clients that burned through 3, 4, 5 agents, but they never left us. As a matter of fact, in a 25-year period, I think we lost under five or six clients. We never lost clients because we had teams of people on them that they could relate to.
David Rosenthal (Acquired): Obviously, you all were young, aggressive, and willing to think differently. But why was the competition so weak?
Michael: I don't think they were weak. I think they were very comfortable in the old shoes. They like the one-on-one, they coveted representation, their meal ticket was their individual clients. At CAA, your meal ticket was how well the whole company did. If the company didn't do well as a group, every individual suffered.
Risk-on, but but committed. Partnership.
Alignment and innovation
Building a foundation of connected partnership doesn’t mean business, strategy, and tactics aren’t considered. They are.
Agencies typically get a 10% share of any deal they secure for their clients. Fully aligned.
CAA was no different in their economics than the rest of their peers - they got 10% like everyone else.
What they did do differently was re-think and re-orient the way they structured the deals they orchestrated for their clients. They worked to invert the negotiating power in favor of talent, instead of distribution (studios).
Historically, talent was, paradoxically, a commodity.
Prior to CAA’s upending, studios were the ones that were the kingmakers. They held the IP for new projects (e.g., rights to a movie script), and therefore were the ones with the hot, limited supply of roles for talent to occupy (e.g., actors, directors, producers, etc.). Any individual talent/agent pair was in competition with all other talent/agent pairs for a finite set of roles in any given project. They were on their back foot, with little leverage, and as such, the studios walked away with attractive economics.
CAA, with a focus on their clients, started playing offense.
Instead of sitting back and letting the studios orchestrate the launch of a new project, and with it, control and power over the process and players, CAA started “packaging” projects themselves. They’d take an idea from a writer, refine it, and pair it with the necessary people to execute on the project - director, actors, producers, etc.
By taking on more of the value-add work earlier in the process, CAA retained ownership, and was then in a position to demand more from the studios. Positions flipped, CAA, now in control and possession of the scarce and desired projects, would go out and solicit bids from the studios (now reduced to a commodity), who were stuck in bidding wars against their peers, thus shifting the power (and economics) to the hands of the talent.
I think you could argue that this was the first step in this continually-unfolding process of disintermediation we still see in the world today - in media and beyond.
Initially, CAA did it strategically. Today, we increasingly see it enabled by technology. Anyone with access to a computer can spin up a YouTube channel, newsletter, podcast, etc.
The role of the middle man has been all but eliminated, to the benefit of the creators, who now hold the power.
The movement to empower creatives continues still, 50 years after CAA’s founding.
It goes to show us that a relentless and first principles-based commitment to our partners, couples with aligned incentives, can re-shape our existing systems.
More work, but innovative and strategic. Partnership.
Leverage
I’m always on the lookout for the dynamics of leverage in systems, and how it can be harnessed.
Levers are force multipliers. This is how some people can accomplish 10x, 100x, or 1,000,000x what others can. Leverage can multiply outcomes from your effort, your skill, and your judgment.
Can you lift 800 pounds? You could with an 18-foot lever.
Can you earn $50,000/year without working even 1 hour? You could with $1,000,000. (leverage from capital)
Can you get 100,000 people to read your tweet? You could with 100 retweets. (leverage from an audience)
- Eric Jorgensen
Agencies harness leverage.
Agents don’t do the creative work themselves, so by being a tastemaker and facilitating opportunity for creators, they get leverage on their work (striking commercial deals) via their portfolio of clients doing the actual creative output to produce the end product. Agents’ upfront work to orchestrate necessary components of a creative project enables a disproportionate amount of creative work to be done. Agents’ leverage is proportionate to the quality of their taste and connections.
In turn, talent doesn’t have to spend their time scouting commercial opportunity, where many are less effective. They benefit from increased opportunity “surface area” of potential channels for their work, as well as the freedom to focus on their highest leverage work - their art.
Then, other agents and the rest of the creative field benefit from the multiplicative effect of agents stirring up serendipity and opportunity for all talent, growing the pie for all parties involved. More opportunities for creators leads to new creators entering the field, which leads to more opportunities for creators. Creators benefit, of course, but the world benefits, too. We crave story, and this world supplies it.
Interestingly, unlike VCs, there’s no upfront financial investment required. The upfront capital required isn’t monetary, but instead, time and work, people and relationships, and results.
What gets really interesting in the agency business is if you’re able to add financial capital to that equation to lean into high conviction projects to get even more leverage on the core work of tastemaking and creating opportunity for creative work.
With conviction, why not apply more leverage, and amplify the possibility?
VC x talent agency is a fascinating possibility.
We’re seeing it a bit today, with funds emerging that partner with creators, of both traditional and next-generation media, but I think we’re early. I think this is the future.
More skin in the game, but aligned. Partnership.
Evolution and vertical integration
What makes this business so interesting is also what makes it challenging to scale. It’s a labor business - all about people. People, working with other people, is the business.
Success is build on quality of taste and connections - resources frustratingly challenging to scale.
Just like anything else, my guess is that this is a world characterized by dramatic power law dynamics - I’d bet that the best of the best get the vast majority of the rewards, while everyone else is left fighting over scraps.
Given this dynamic, and intense competition among the large players, I’d double down on staying as small and lean as possible. As a human business, one of taste and partnership, deep, bespoke, and high value is likely the way to go. This approach enables you to differentiate and compete in a way that simply adding scores of agents and relying on brute force and scale does not.
The other way to go would be to deepen into to the world - vertically integrate, if you will. Not more talent, but more resources and avenues for supporting the talent you do have. Agencies today like WME own a suite of resources in addition to talent agents. PR, communications, production, distribution, etc.
This approach makes the agency more valuable to talent, and simultaneously makes the talent more valuable to the agency - in theory these extra resources increase the talent’s rate of output and odds of success.
In theory, not always in practice
Of course, things are messier in practice than this ideal theoretical view of the talent world - anything interesting or lucrative ends up getting messy.
The realities of the day-to-day end up involving not-so-glamorous parts, especially as the industry evolves, competition emerges (both externally for business, and internally for career opportunity), and the machinery of the entire ecosystem solidifies.
Stories from the agency mailrooms of the Hollywood entertainment world echo those of the investment banking analyst of NYC finance. Agency mailroom clerks are the investment banking analysts of Hollywood.
The agency world, perhaps inevitably, has ended up very ego-driven. We are human after all, and in a business where the people are the business, it’s not too surprising that those in high demand can end up feeling holier-than-thou.
There’s ego everywhere, but founders and investors (talent and agent equivalents in the startup ecosystem) are only valuable insofar as they’re able to lead a business to objective success.
The vessel of success in this case is a business, inherently separate from the identity of any person. In the talent business, there’s no separation between a person, their identity, and the associated success itself.
Now, to be fair, there are certain businesses where an identity is deeply intertwined - think Apple and Steve Jobs. But I’d argue that these instances exhibit more dynamics of the talent world than the business world.
So much of the company’s success can be tied up in a person, their identity, and their abilities, that it can’t be handled like just any other company. Just as (if not more) importantly than managing the business, the founder also has to be managed. This can be full of challenges, and makes things more complex.
When our identities become intertwined with external narratives of value and success, and separation between our internal and external perspectives of value collapses, it’s harder and harder to keep any distinction in our own minds.
This is by no means a challenge of the talent world alone, but it is a world that uniquely and dramatically exposes the challenge.
It’s important to note that just because things get messier in practice, it doesn’t discredit the essence and value of principles of partnership, truth, alignment, etc. I bring up the messiness simply to acknowledge reality, and as a reminder that we can still look behind the noise to learn from the signal underneath.
VCs: talent agencies for startups
The whole time I’ve been learning about the talent agencies of Hollywood, I can’t help but see parallels with the world of venture capitalists and startups.
There are differences, sure. It’s not all about the founder - it’s really about the company. It’s about more than the relationships - investing money is a key component of the partnership. It’s not solely a creative project - there’s often hard science, engineering, or operational systems at the company’s core.
But at the end of the day, VCs are the talent agencies for startups, with more financial leverage.
I don’t think it’s a coincidence that we see similar approaches being taken by both VCs and talent agencies - vertically integrating, going deeper into helping companies beyond advice and capital, adding talent, PR, marketing, and other specific expertise.
Like in talent, this expertise in theory makes the VC more valuable to startups, and simultaneously makes the startups more valuable to VCs.
Hell, Michael Ovitz even started playing the startup game. Marc Andreessen and Ben Horowitz brought Ovitz on to their board of Opsware back in 1999, and Ovitz then went on to start a venture capital fund, Broad Beach Ventures, in 2010.
Where is the world going?
So, what’s next?
The beauty of a world in constant, and accelerating, change, is that new opportunities emerge, inspired by past players. Just look at VC - an industry that truly blossomed after the talent business, and has taken inspiration directly from its leaders.
We have a new generation of creators. As media modernizes and decentralizes, we’re seeing an entirely new class of talent. YouTubers, podcasters, online writers - all opportunities that didn’t exist even 30 years ago.
There are new economic models of partnership. In a tech-enabled permissionless world, the value (and therefore power) of legacy distribution channels (networks, publishers, etc.) is falling dramatically, and that of the creators is rising. We’re seeing the economic landscape shift in parallel - creators are increasingly able to capture greater value in the form of equity ownership in the projects they’re partnering with, beyond simply earning a fee on a time or project basis. Some are even starting businesses themselves, taking on the role of founder in addition to creator, and capturing even more value.
There are new technologies aligning value with connection in culture. Until recently, we were either creators or consumers. As a consumer, the only value we used to get from discovering a new artist or product early was (maybe) culture cachet, and only with people who shared your similar interests. Web3 is changing the game by blurring the line between creator and consumer, enabling us to align ownership with contribution. With Web3 infrastructure, we can reward participation and contribution in projects with ownership - deepening connection and alignment between a project and its constituents, by granting economic value and incentive to participants. We’ve enabled users to become owners - a revolutionary shift that I believe will change the game.
Imagine that by being one of Instagram’s early users, you ended up earning an ownership stake that grew in value as the company did, and got paid for your ownership when it sold to Facebook.
Or, because you bought a piece from a brand’s first clothing drop, you were rewarded ownership in their brand that grew in value commensurate with that of of the brand that you could sell at any time.
In both cases, by being a tastemaker and early supporter of a project, you contributed to its success.
In the past, you’d have nothing to show for it besides saying that you were there first. In a Web3 world, you earn real economic value for your taste.
We’ve turned users into owners, taste into a monetizeable skill, and created a way for culture, as ephemeral as it can feel, to orchestrate economic value commensurate with its societal and human significance.
This technology also benefits the projects themselves. By rewarding your supporters, you align incentives and turn them into your built-in marketing force. Instead of spending money on marketing to try to acquire new supporters, your existing supporters, now with an aligned economic interest in your success, become your evangelists.
The next generation of partnership
The question that emerges - in a world where creators have ever-more freedom, control, and value, is the need for partnership in the more traditional agency model way still there?
When creators can record a video on their iPhone and publish it to billions of people on YouTube with a click of a button, the ways traditional agencies have added value in the past are much less relevant.
In a way, you could argue that the tech platforms that enable this new creator economy are the next generation talent agencies. These platforms attract creators to publish on their platform (akin to signing talent), and create opportunities to generate payment for their work, and take a 10% fee for doing so. Andrew Chen has written about the tech side of this opportunity for next generation talent.
But what about the human side?
If tech products can provide distribution, frictionless tools, and leverage at scale (and earn a commission), I believe that human partnership becomes more valuable than ever.
The potential for and scale of successful outcomes has never been greater, and therefore a partner that supports the human side of the creator journey that increases the chances of success by even a marginal amount is incredibly valuable. In fact, I would argue that it’s the most important piece in the creator’s world.
I believe as we continue to build and introduce technology to our world at an accelerating rate, human connection becomes ever more important.
Technology is a force that empowers the individual by removing middlemen. Yet at the same time that new technology creates more opportunities for individual self-publishing, it comes at the expense of collective human connection.
It’s easier than ever to put our ideas out to the world on digital platforms - but pixelated dots on a screen in the shape of words in the shape of our thoughts don’t capture our lives. They’re a diluted approximation of our humanity, of our soul.
Being human is a bodily experience. As we empower the individual with technology, we keep adding more and more digital layers between us and this bodily experience of being alive.
As Boyd Varty says:
People aren't looking for the meaning of life.
They're looking for the feeling of being alive.
People need connection more than ever - with others, and with themselves. Real connection is a bodily dialogue of shared presence, not a digital dopamine hit of follow/like/reply/retweet.
So maybe the future of talent partnership looks more like coaching than sales or dealmaking.
A true partnership that is rooted in relationship, accountability, truth, and growth.
A relationship committed to minimizing the gap between who the creator is today, and who they want to be.
It’s always been, and always will be, about people.
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Curiosities
One of my favorite TED talks of all time, Ethan Hawke on creativity. Some favorite quotes:
“Most people don’t spend a lot of time thinking about poetry. They have a life to live, and they’re not really that concerned with Alan Ginsberg’s poems, or anybody’s poems. Until their father dies. They go to a funeral. You lose a child. Somebody breaks your heart - they don’t love you anymore. And all the sudden, you’re desperate for making sense out of this life. Has anybody felt this bad before? How did they come out of this cloud? Or the inverse - something great. You meet somebody and your heart explodes, you love them so much you can’t even see straight. You’re dizzy - did anybody feel like this before? What is happening to me? And that’s not when art is a luxury, it’s sustenance. We need it.”
“Human creativity is nature manifest in us.”
“First, we have to survive, and then we have to thrive. And to thrive, to express ourselves…we have to know ourselves. What do you love? And if you get close to what you love, who you are is revealed to you, and it expands.”
“There’s a thing that worries me sometimes whenever you talk about creativity. Because it can have this feeling that it’s just nice. Or it’s warm, or it’s something pleasant. It’s not. It’s vital. It’s the way we heal each other. In singing our song, in telling our story, in inviting you to say 'hey, listen to me, and I’ll listen to you,' we’re starting a dialogue. And when you do that, this healing happens. And we come out of our corners, and we start to witness each other’s common humanity. We start to assert it. And when we do that, really good things happen.”
Patrick O’Shaughnessy on life’s work: “a lifelong quest to build something for others that expresses who you are”
Sam Harris on the Modern Wisdom podcast. This is cinematic-level production quality - it’s pretty dope. Sam is a master at painting a textured picture of the truth of experience, mindfulness, and awareness - a topic that is impossible to pin down directly. I find that when I listen to Sam speak about it, I come away with greater clarity on the truth of reality. Some favorite quotes:
Humans want to feel 1) alive and 2) like they’re making progress
I can’t explain it, but I can feel the sunset in this video