00:03:20 · Scott Kupor, David Senra
So, you know, basic stuff like we had to hire finance people, for example, so that like I wasn't doing stupid things like capital calls for people from my Gmail account. But then we always had this theory, right, which has panned out, which was how do we build a services component to the business, right? So how do we basically create a system where we can take everything that like an entrepreneur might need and develop kind of concepts of like networks and relationships around that. So talent networks, you know, business development networks. So a lot of the early days was hiring people who were domain experts in those areas so that we could actually start to build this team. And, you know, we went from three of us to probably close to 100 in the first year. And today I think we have like 700 people or something in the firm. So it's been a... It's evolved over time for sure. [00:03:59] S0: Was Michael Ovitz around a16z at this time?
00:04:03 · Scott Kupor
[00:04:03] S1: He was. Yeah. So Michael had been on our board actually at Loudcloud and Opsware. So that's how obviously Marc and Ben knew him, but that's also how I got to know him. And yes, he was very, very influential as you probably know, and I'm sure Marc told the story just about like the founding of the firm. And so he was very helpful. So I would call on him a lot and be like, look, know, this is what we're thinking about doing. And he would kind of recount to me how they did things at CAA, but essentially what they did, which is what kind of, you know, a lot of what CAA was built on was kind of disaggregate the job of what back then was the agent, right? And then we basically did the same thing for what was the general partner job, right? So in the old days, and we actually pitched this in our first LP meeting, we were basically trying to institutionalize John Doerr. And so for your listeners who may not remember John Doerr, he was, you know, one of the very, very famous founders of Kleiner Perkins. And you go to John and he knew every salesperson, he knew every CFO, he knew every political stuff. So John was like this ultimate Uber connector for entrepreneurs. And our basic idea was, look, could we basically institutionalize that and not have every GP have to learn all those things, but could we basically effectively disaggregate that from the GP job and hire professionals who could do talent networks, could do political networks, who could do sales and marketing, all the other things that ultimately, like, came to be the platform for a 16 c.
00:05:16 · David Senra, Scott Kupor
[00:05:16] S0: Was this around Michael Ovitz's idea of this phalanx? Where it's like if you... Before that, it's like you were his... You might... Like, he's he's your agent, but really it's like, you know, you have all of CAA and you should just tap into every single resource. [00:05:29] S1: Yeah. So his his theory and, I know you're friends with him. You've had him [00:05:33] S0: on on I haven't dare with him tonight.
00:05:34 · Scott Kupor
[00:05:34] S1: Okay. A matter of fact. Tell Michael I said hello. I haven't seen him in a while, but but look, he'll tell the story much better, but my recollection of the story is look, they they started CAA in, I think 1975, and the whole industry was was... Which was very similar to how the venture capital industry was, you had an agent, right? So you're Robert Redford, right? And you have an agent and that agent comes to you and says, great, I'm gonna help you do this, right? I'm gonna help you get movie deals, I'm gonna help you get book deals, radio, whatever the whatever the stuff is, which was great, but the model was basically a one to one model, which was your agent to actor. What Michael did in CAA was they said, look, we're gonna basically maintain the relationship context between agent and actor, But when you would go, like, show up for a pitch at CAA in, like, 1990 where I think they had, like, 90% market share, they would sit around a table and Michael would introduce you as Robert Redford and say, look, meet my colleague who does nothing other than radio deals. Here's my expert in radio deals. Here's my expert in international. Here's my expert in books. So you had this whole idea that you were surrounded. Yeah, phalanx maybe is the right way to think about it. You have this whole firm as opposed to an individual who's responsible for your career. And we basically took the same model to the VC world. Right? The VC world was a lot like that was you had a one to one relationship with John Doerr, who was fantastic at what he did. The problem with that inherently was number one, it just wasn't scalable. You know, at some point, John has so many board seats that you time out from a GP perspective because you can only take so many board seats on. And then two was, you had to get everybody to invest in all that same amount of relationship development work across all these domains. And that might have worked in the days John Doerr did it when basically we invested in enterprise software companies that was essentially the domain of VC, but if you believe, you know, which I do, you know, Marc's software, you know, ate the world or seen the world, as the domains grew, like the expertise needed just continued to grow.
00:07:18 · Scott Kupor
So the fundamental theory that Marc and Ben had was, let's hire GPs who are functional domain experts in the particular areas of investing they want, and then let's surround them with this failings of somebody who all they do all day long is manage CFO relationships or CEO relationships or VPs of engineering, somebody who all they do does government relations or business development or other stuff like that. So again, like our pitch to an entrepreneur when they came in, we used to do this thing, we call it the reverse pitch actually, where an entrepreneur would pitch us and then we would bring the team in and we would do the reverse pitch to them to say, hey, look, if you work with Andreessen Horowitz, not only do you get me Ben Horowitz as your board member, but you get this entire table of people whose job it is day in and day out to figure out how do we institutionalize a set of relationships and networks that'll make you successful. So that was like the key application of like what Ovitz did to, you know, how Marc and Ben adopted it to the VC world.
00:08:08 · David Senra
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