#381 I Had Dinner With Michael Ovitz
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Something that Michael Ovitz had in common with people like Steve Jobs and Jeff Bezos is the belief that you must find and work with extraordinary people. Even when Ovitz was a young man, he starts his company, he has no money, he makes a list of people that he eventually wanted to work with. And it was the best of the best. And even though at the time it felt like a pipe dream, he actually makes that list into a reality.

And the importance of working with the very best people, there's actually a great observation about this from Steve Jobs. And he says that the key observation was that I noticed that the dynamic range between what an average person could accomplish and what the best person could accomplish was 50 to 1 or 100 to 1.

So given that, you're well advised to build a team that pursues the A-plus players. That's exactly what Steve Jobs did. That's exactly what Michael Ovitz did. And it is exactly what Ramp did. Ramp has the most talented technical team in their industry. Becoming an engineer at Ramp is nearly impossible. In the last 12 months, they hired only 0.23%.

of the people that applied. So that means when your business is using Ramp, you now have access to top tier technical talent and some of the best AI engineers on the planet working on your behalf 24 seven to automate and improve all of your business's financial operations. Ramp invests heavily in creating new innovative products. In fact, I just sat down with the founder and a friend of mine who's the one of the co-founders and the CEO of Ramp named Eric.

And he told me that 54% of their payroll is now dedicated to R&D. So the longer they use Ramp, the more efficient your company becomes. That's very important because as Sam Walton astutely pointed out in his autobiography, he wrote, you can make a lot of different mistakes to still recover if you run an efficient operation, or you can be brilliant and go out of business if you're too inefficient. Ramp helps you run an efficient organization. Ovitz knows that Ramp built a team of A-plus players because Ovitz invested in Ramp.

So from a customer's perspective, what does a team of A-plus players sound like? It sounds like this customer review that I read, which said, Ramp is like having a teammate who you never need to check in on because they have it handled.

So take the time, set up a demo of the product, and you'll see why many of the world's top founders are running their company on Ramp. You can do that by going to ramp.com. Go to ramp.com to learn how they can help your business today. That is ramp.com. Okay, so last week I flew to New York to have dinner with Mike Ovitz. We wound up having a very intense and entertaining three-hour conversation.

And I made a list of things I learned from the dinner. So I'm just going to run through some of these ideas. I guess I should back up and tell you how I actually got connected to Ovitz. We wind up, I didn't even know this, but we wind up having a very close mutual friend. I'm having breakfast with my friend, Rick, and his phone is on the table and it rings and it says Michael Ovitz. It's like, oh, wow. And so he picks it up and he's like, hey, I'm actually here with my friend, David Senra. He does this podcast you might've heard of. It's called Founders. And

There's a there's a short break. And then Ovid says, I listened to four of them yesterday. And so we wind up getting connected. And I we were planning on having a meeting and having dinner anyways. And I was like, yeah, as you might know, I do these like I had dinner episodes. I've done one with Charlie Munger and Sam Zell and Brad Jacobs and John Mackey. I think it'd be really interesting. Would you be up to doing it? And he said yes. So I flew up to see him.

The conversation was really intense. It flew by. Like I said, it was three hours. I was shocked when I got up from the table and I thought, you know, maybe we talked for an hour.

So right after dinner, I don't record any of this and I don't take notes while we're having a conversation. So I just write down some of the things that really stood out to me and then I try to expound on them. So I have just a list of about 10 ideas I want to go over with you from this dinner. And the number, the first one that's very obvious if you read his autobiography, which I'm also doing an episode on, and I think I'll just release it at the same time.

And if you spend any time with them or hear him speak in any capacity, there's this great line that I kind of use as like a guide to make sure that I'm on the right path. And it says, mediocrity is always invisible until passion shows up and exposes it. And this is very obvious if you look at his career, but he's still like this to this day.

And what I would say is like, Obitz does nothing in a casual manner. And I don't either. I don't think any of the founders that you and I study or read biographies about do either. And like one of my favorite examples of this, and he was like this when he was like a young kid, he starts working in the mailroom at William Morris and he's

The extra length, I think there was like, I think in the book he says there was something like 20 other trainees, you know, he's one of 20. And out of those 20 people, there's only one that did what he did. And he noticed that, hey, there's this filing cabinet room. He says the length of a basketball court and it's lined with steel cabinets. And he calls it the hard drives of the era. You know, there's no computers back then.

no internet, no anything like that. And what he realized is like this, this, this, these filing cabinets that are the length of a basketball court, they actually hold 70 years of history on Hollywood. And he says, I viewed those files as an encyclopedia of entertainment while other trainees wanted to be told what to do and read and learn each morning at seven,

And every evening after work for 10 weeks, I made my way through every single file from A to Z. How many other trainees did that? Zero. He does this over and over again. There's a bunch of different examples. But one of my favorite stories from the book, too, was he's trying to sign this very important director and who the director at the time was being repped by this aging and really apathetic agent.

And so what Ovitz does, keep in mind, mediocrity is always invisible until passion shows up and exposes it. Maybe the director thought, hey, I've been with this agent for a while. Seems to be going well. Seems to be fine. And then you have somebody with passion that's showing up and exposing how mediocre your alternative is. And he winds up working on this director for two hours a day for two years.

before the director signs with them. And one of the smartest things that Obitz did, he's like, I made sure to get him every single script, the best scripts, before his own agent got the scripts to him. So essentially working on his behalf and showing him how important it was and showing him that I can actually, like, the difference between, you know, your apathetic agent and me is vast. So mediocrity is always invisible until passion shows up and exposes it. The second thing that popped in my mind

is don't put any ceiling on where you can push your profession. So Kobe Bryant and Michael Jordan actually shared the same trainer, this guy named Tim Grover, and he wrote two books about what it was like working very closely with them, basically spending every day with them. And there's two lines that popped in my mind after I was thinking about the conversation I had with Ovitz, and Tim Grover writes, the greats figure out what works for them regardless of what everyone else does.

And number two, everyone wanted to be like Mike. Mike did not want to be like anyone else. And so if you actually analyze how there were talent agents before, you know, Michael Ovitz was born. There's talent agents to this day. And yet,

One of the things that is most fascinating about his story is he figured out what worked for him. He didn't really care what other agents were doing. In fact, he maybe looked at what other agents were doing as what not to do or what to basically attack areas that they weren't doing. So one of the innovations he had was the decision that, hey, we're all going to service. Every single agent inside of CA is going to service the clients together. It's essentially like a giant swarm of agents where in the past,

You know, you were assigned to one person. You only worked with one person. And that caused all kind of internal conflict. And you weren't, it was just a lot better. Five people servicing you than one person, you know, wind up working out a lot better for the talent that CAA assigned. And then he didn't just stay there. It's like, oh, okay, what are we supposed to do? There's a great story where it's like most talent agents, what would they do? They would field offers, right?

They're like, okay, there's 10 offers. We have to choose between them. Maybe we negotiated a little higher salary. The case is like, no, we're not going to field opportunities. We're going to create them. And then that led to the next thing where, hey, we're going to create entire packages for the studios, which also helped him control prices and make more revenue for the agency. And then from there, he's like, what else can I do? I'm going to get into corporate M&A.

No other talent, like no other talent agency, none of his other competitors were even thinking like this. And the size and scope of his ambition, again, don't put any ceiling where you can push your profession. You know, you just pursue the opportunities and chase after them. He winds up brokering like

multiple billion dollar deals. I think one of them was like six and a half billion dollars. Again, none of his other competitors, no other agent was doing this. He doesn't stop there. He says, hey, we're going to start being marketing and advertising consultants for giant companies like Coca-Cola. And one of the things that he said at dinner is like, if you're going to do things like this, when you do new things, you will be criticized. And in that case, you'll be criticized by outsiders, by people outside of your company. Now, number

Number two, no ceiling, don't put any ceiling on where you can push your profession is also related to number three, because for number two, you're going to be criticized out by, by people outside your company. Number three is I grew up going to church, a Christian church every week for my entire childhood. And I remember one of the, one of the lessons that they would repeat over and over again is the importance of not being, they said, don't be unequally yoked.

And I think they meant just in relationships in general, but I specifically remember saying like, you know, make sure you're not, you don't marry people outside of the faith that have different, you know, beliefs in you. And the advice from Ovitz is like, you need to make sure that you're picking partners that have the same ambition as you. And so when I think about that, I think of don't be unequally yoked. And when you're, when you have no ceiling on where you're going to push your profession, you're going to be criticized by outsiders because you're doing new things.

But if you have picked partners that don't have the same ambition levels of you and you try to do new things, like all the things I just listed, you're actually also going to be criticized by insiders, which are people inside your company, your co-founders. I mean, it's going to lead to a lot of conflict. And, you know, there's all kinds of stories in this autobiography, which I'll go over in the episode I make on it. It's a huge part of the story. And he says this will manifest. He was saying at dinner, like the way this is manifest is like your partners will call it a distraction. And.

You know, if you believe in it, like it's it's not it's probably not that it's a distraction. It's just they're not thinking as big as you are. And you might find yourself he didn't use this word, but unequally yoked is the way I think about it. When we talked about, you know, the issues with co-founders and how to maybe avoid all this and really like what he learned from this.

What I found that was remarkable, because I know now he has new partners and he's scaling other companies and he's and I know his partner. I asked, like, how are you able to trust? Because two of his partners that screwed him over were like two of his best friends, too. And so I asked him, like, how do you trust partners after being fucked over?

And I thought his answer was because, you know, I keep people at arm's length. I have a hard time trusting other people. That may be a detriment. And he had a great perspective on this. He's like, you know, three people screwed me over my life. He's like, but it's three out of a thousand. And he's not going to let three out of a thousand people.

you know, foreclose any future opportunity and being able to partner with people that aren't going to screw them over. I thought that was really interesting. Number four, read biographies, know everything about the history of your industry. There's a line, this is tied to a line that Ovid said to me where he says, only founders understand founders.

So the first thing that popped to my mind is on page 179 of his autobiography, he talks about that Lou, he modeled himself after Lou Wasserman. There's a biography on Lou I have, I think it's called like the last mogul or the last tycoon or the last thing. He was like the last Hollywood mogul. And I asked Ovis at dinner, I was like, do you still like think Lou Wasserman was the best? And he said, yes.

And one of the benefits of reading biographies is obviously like, Ovis started doing this, you know, he starts working when he's like nine years old. By the time he's high school, he's like voraciously reading biographies of men that did great things. And, you know, he read the Carnegie and the Rockefeller and all these people. He read all the biographies of all the people in Hollywood that came before him.

And I think the important thing is what he's saying is like only founders understand founders. And so as you understand these life stories, as you listen to this podcast, you read biographies yourself, like you'll just realize like, oh, that's just like another me. And we're going through the exact same thing. He actually gave me advice too. He's like, you should really lean into the more unknown founders because, you know, he had read about the Vanderbilts and the Rockefellers and the Carnegies and the Fords, but he thought it was an edge thing.

to introduce people to other incredible founders that very few people have heard of before. So like Daniel Ludwig, the invisible billionaire, Chung Ju Young, which is the craziest autobiography I've ever read in my life. Sam Zemuri, Estee Lauder, another example. Like even if you know the company name,

Very few people probably thought, oh, I should see if that person has built this massive company. I wonder if they have an autobiography or a biography about them. And then even less people would actually go and read it. So again, read biographies, know everything about the history of your industry. Number five, have a profound sense of belief. And as you'll understand, the world is also malleable. So there's a reason this is number five and read biographies is number four, because you learn this if you read a bunch of biographies.

And this is one of the things I most admire about Ovitz. There's a lot of things. I love the fact that this guy never gives up and he's still pushing himself. He's in his late 70s and he's got tons of energy and he's working really hard. But he has got a great line in his autobiography where he says, nothing in Hollywood is anything until it's something. And the only way to make it something is with a profound display of belief. If you keep insisting that a shifting set of possibilities is a movie, it eventually becomes one.

So Mark Andreessen, who actually modeled his venture firm, Andreessen Horowitz, on what Ovitz did at CAA, had a very similar line. And this is the way he describes what I feel is the same exact phenomenon.

And Mark wrote, the world is a very malleable place. If you know what you want and you go for it with maximum energy and drive and passion, the world will often reconfigure itself around you much more quickly and easily than you would think. And so Ovitz doesn't see things as they are now. He sees what they could be. And then he proceeds to make that idea into a reality. And then number six, when you speak to him, I got the feeling that he just thought that there was unlimited opportunity in the world.

And surprisingly enough, I think something he learned earlier, and I think still applies to this day, is like there's a lot of opportunity that's just hiding in plain sight. And I think you have some level of like self-confidence when you're able to pick something up that off the ground, like people kind of like threw away or didn't do anything with, and you turn it into something that's insanely valuable. And I think that's related to number two, which is, you know, just don't put a ceiling on. There's really no ceiling where you can push your profession.

So, you know, there's a ton of examples in the book, but like he turned Shogun into this massive miniseries. I think it's the second most watched miniseries of all time. And that opportunity was sitting inside of another agency and the other agency wasn't doing anything with it for years. He finds another script for this movie called Tootsie. Again, six years it was considered dead. This is impossible. This isn't an opportunity. Wends up making, makes a couple hundred million dollars in profit.

Rain Man, which is one of my favorite movies. I watched it, I don't even know how many times when I was a kid. Same thing. Other people couldn't get it done. Other people said, no one's going to watch this movie about this autistic guy. Makes well over $400 million. There's always opportunity hiding in plain sight and there's unlimited opportunity in the world. And I feel like this has been coming up a lot if you look at the past few episodes. Like think about Leon Hess, right? Literally builds, the Hess family just sold the business for $53 billion. Right?

How does that business start? That starts with Leon Hess.

who realizes, hey, you're throwing out a bunch of this oil because you think it's not valuable. I'm going to start my empire with the stuff that you're throwing away, just like Sam Zimuri did the exact same thing with in his banana trade, right? You're throwing out the ripes. You're throwing in the trash. I see that. I don't see it as trash. I see it as opportunity hiding in plain sight. Jerry Jones, Dallas Cowboys, he paid $140 million for. They're worth $10 billion today. 75 people turned down the opportunity to buy the Cowboys before Jerry Jones did.

If you are capable of thinking for yourself, if you have profound self-belief, there's always opportunity hiding in plain sight. Number seven, by endurance we conquer. One of my favorite, it's probably my favorite line in the entire book.

And I don't remember what the context of the discussion we were having at dinner, but we did talk about this and we both look at this the exact same way. But this line says he stopped because it was hard. It required discipline, dedication and hours and hours of time. Everyone stopped. I didn't stop.

That's related to one of my all time favorite observations and quotes by Steve Jobs, where he says, Steve said, I'm convinced that about half of what separates the successful entrepreneurs from the unsuccessful ones is pure perseverance. Unless you have a lot of passion about this, you're not going to survive. You're going to give up. And I actually think it's related. He was talking about the difference between like his mentality and maybe some of the younger people that work in their company today.

Where they don't understand like how they just haven't gone through life enough. So, you know, it's really hard to understand until you go through yourself, like just how difficult and how much adversity you're going to have to constantly push through. And like what Steve just said.

Listen, you're going to have to deal with all kinds of crap. And most of you are just going to wash out. I think in that trainee program that Ovid started as a young man, I think 80% of the trainees that all start in the mailroom that are trying to be talent agents, from the time they start in the mailroom to the time they actually become an agent, like 80% wash out. One of the things I think that he can, that the young people that work with him today can benefit from is one, they see how fast talent

he wants to move and how fast he wants to push. And there was an example where, you know, he asked for something and maybe it was on like a Thursday night and it's still not there on Sunday. And the person's like, oh, I'll get in a few days. And he's like, when I said, when I asked you on Thursday night, I expected to have it on Friday morning. And this person was shocked at the pace that Ovitz wanted to move at. In fact, one of my favorite stories is in Herb Kelleher, his biography. Herb Kelleher was the founder of Southwest Airlines, the most successful airline in history.

Under Herb's leadership, they wound up being profitable for something like 40 straight years. And so I want to read this excerpt from Herb Kelleher's biography, which I think is absolutely excellent. It says, Herb Kelleher illustrates the speed with which Southwest moves by telling a story about Don Valentine, the former, that's a funny...

That gives you an indication of where we're going here, right? The former VP of marketing. Valentine had just joined Southwest from Dr. Pepper when the marketing group met in January to discuss a new television campaign. Valentine was ready with his timeline for producing the spots. Okay, you just came over, come over from Dr. Pepper. You're now at Southwest. You're going to give a presentation to the founder.

the founder of Southwest. We have a great idea here, okay? This is what we're going to do. This is the timeline. It's in January, okay? So we're in January. I'm going to have the script ready in March. We're going to do the script approval in April. We're going to cast the commercial in June, and we're going to shoot it in September. When Valentine finished, Kelleher said, Don, I hate to tell you, but we're talking about next Wednesday.

So again, a lot of people just don't know how fast you can move. And as the leader of your company, you should really be pushing the pace and showing what's possible. Number eight, this was very, very interesting. And I wrote very few things down. I tried to go into these conversations, obviously, I'm prepared because I read about them and everything else. But I don't have like a list of things I want to talk about. But this was one of the things I want to talk about. So

There was this young guy who Ovitz admired. In fact, I think he started a talent agency even like a younger age than Ovitz did. I think this guy was like 23 and Ovitz was like 27. They wound up building a relationship. His name's Ted. And...

In the book, it talks about giving him advice and seeing how much Ovitz is pushing. And he said, I have a piece of advice and knowing you, you're not going to take it, but here it is. I could have worked 10% less and it wouldn't have made a difference in my professional success, but it would have been a lot happier. Ted was absolutely right on both accounts. It was great advice and I didn't take it.

I see now that it could have worked as much as 20% less and it wouldn't have cost me. And it wouldn't have cost me. If I worked even 10% less across 30 years, that's three extra whole years of life that I would have enjoyed. So this is one thing I did ask him at dinner. I was like, do you still believe that? Because, you know, he pushes the pace. Ovitz is still working an unbelievable amount of hours.

But what he told me was fascinating. He's like, yes, but not on the rise. You know, I think I forgot the number he told me, but I think within the first 10 years of CAA, 10 years after the founding of the company, they had like something like 75% market share of, you know, his industry. And so he's like, then you could work, you know, 10% less and I should have worked 10% less. You might not be able to do that, especially as, you know, they were completely under financed.

There's no venture capital. They literally had no money. They were taking second loans out on their houses, for God's sake. They had no furniture. So he was under intense financial pressure right from day one. But this is the advice he would give now, is work 10% less. And really, I think what is stated there by Ted's advice and then Ovid's also agreeing with that advice is really important to optimize for the long term. Most of

The profits in a business is very far out, you know, decade, two decades in the future. Think about the money that Microsoft makes today compared to what they made in 1990. Apple is the same way. Oracle, Walmart, you know, these things can compound for a long time. If all the value's out in the future, the advice is like, make sure you're not optimizing for growth at the expense of durability. You want your company to be around. You want to still be doing what you're doing 20 years from now, 30 years from now, 40 years from now. Some of the best entrepreneurs, I told you before, that I meet,

are in their 70s and they've been running their business for 45 years. And if you see, it doesn't even look like a company. It looks like they have their own world. It's incredible. And all the profits are in the future. So I think what the advice here is, again, you really need to optimize for the long term. And if that means you push back, you cut back 10%, but you're still there, you know, two decades in the future, then it's obviously a trade that you want to make. Number nine,

This is very fascinating because he repeats this over and over again. Surround yourself with people who will tell you the truth. He said, I cannot stand yes men. And it will happen because, you know, Obitz was in a glamorous business and then he did not like the publicity. It's mentioned over and over again in the book. It causes problems with his partners. It caused problems with his clientele because his clientele, you know, they're obsessed with fame and they want to be the ones getting the attention. This happens with

any kind of success, whether it's in the show business or even in just a regular commercial business, you're going to have people, because it's in their best interest, they're going to say, they're not going to tell you the truth. The close friend that me and Ovid share, Rick, Ovid's told me that he's fiercely loyal to him because he says Rick tells him the truth.

that he is direct and truthful and he's not trying and he understands like he's not telling me bad things to be needlessly critical or to try to hurt my feelings or anything like that. He's telling him because we're friends and your friends tell you the truth.

And Ovitz did this with me. He actually told me a few things that he thinks I'm doing wrong or I could be doing better. And he could be right about that and definitely would think about it. But I went and actually pulled up, I talked about this at dinner, but then after dinner, I went and was, I asked Sage, like what did history's greatest entrepreneurs say about the importance of getting unfiltered and truthful information about your business from the people that work with you? And how did they ensure that they got the best and most accurate information about the state of their business? And there's a bunch of examples

of this. One of them was in the early days of Amazon, Jeff insisted that customers could email him directly at jeff at amazon.com. And then he received unfiltered customer feedback because again, if you're just getting your information through your executives, right? They want to tell you the good news. This is what Charlie Munger and Warren Buffett warned about over and over again. And they would tell people, it's like, the good news takes care of itself. I don't even need to hear about that. Tell me the bad news and tell me it fast because we don't let bad news fester. The founder of Kinko's, Paul Orfaglia,

Same thing. He had a voicemail system where any employee could leave him a message directly. He was dyslexic, so he's not reading emails. He says, just call me. Tell me what the hell is going on on the front lines. Sam Walton, he did not want to spend time in his office. There are hilarious stories in his autobiography and his biography where Sam would not adhere to a calendar.

And so, you know, his secretary would set up like, you know, some appointment at like 7 a.m. in his office and Sam's not showing up. And like, where is he? Like, oh, he left at 5 a.m., got in his little Cessna and you flew to another Walmart door. And he's like working and asking questions from the workers on the front line. That is how he knows he's getting unfiltered, truthful information about the state of his business. Jim Casey, same thing. UPS founder. What would he do? He made his driver unfiltered.

He instructed his driver, every time we pass, these big brown trucks pull over. And he goes and he talks, introduces himself, and he talks directly, gets information directly from the people that are actually delivering the service to the customer. And finally, number 10, retirement is lame. That's a quote from Jeff Bezos who gave this interview at the Dealbook Summit a few weeks ago, and I made an episode on it.

He says retirement is lame. Ovitz would say the same thing. He is still, he talks about, he's still very driven. He feels it's very important that you need to have something that you can push forward, that you can wake up every day on. He told me that he has a bunch of friends that, you know, had sold out or retired, decided they spent all their time playing golf or gardening. And then you speak to them a year later and they just aren't as sharp. They're just not as vibrant. They're just not as alive. There's a certain kind of personality type.

you know, if you're listening to this, you're probably one of them, that you just, you need something no matter what until death. You need something to push forward, something to focus on and to improve every single day. And I think Ovitz has that trait in common with the other people that I've done in this I Had Dinner With series. So I'm thinking of Charlie Munger. He was still working until he died. Sam Zell told me to my face, I'll be doing deals till I die. He did that.

Brad Jacobs, talk to him. He's going to be working until he dies. John Mackey, same thing. Retirement is lame. Retirement is fatal. You need something to push forward and focus on and improve every single day. So before I go, I just want to review one through 10. Number one, mediocrity is always invisible until passion shows up and exposes it. Number

Number two, there is no ceiling on where you can push your profession. Number three, don't be unequally yoked. Pick partners that have the same ambition as you. Number four, read biographies, know everything about the history of your industry. Number five, have a profound sense of belief.

the world is malleable. Number six, there's always opportunity hiding in plain sight. Number seven, by endurance we conquer. Number eight, work 10% less, optimize for the long term. Number nine, surround yourself with people who will tell you the truth. And number 10, retirement is lame.

That's everything I got for you now. Hope you listen to the next episode. I'll be going through Michael's excellent autobiography, which I hope you obviously buy and read as well. And then as I go through that biography, I'll also reference other things that relate to the dinner that Michael and I had and that are in the book. That is 381 down, 1,000 go. And I'll talk to you again soon.