As Los Angeles native, I can’t help but see parallels between my home town’s industry (movies) and my adopted home’s (startups). Today’s parallel concerns the problem with having too much money.
In Hollywood, studios love to work with successful directors. When a director produces a critical and commercial smash, a studio or production company is likely to give him (or her) “carte blanche” (literally, blank check) to make any movie he wants.
The result, throughout the history of moviemaking, is almost inevitably a disaster.
Steve Spielberg followed “Jaws” and “Close Encounters of the Third Kind” with the notorious flop, “1941″.
Paul Verhoeven followed “Total Recall” and “Basic Instinct” with “Showgirls”.
And perhaps most famously, Kevin Costner followed “Dances with Wolves” with “Waterworld” (which, regrettably, I have to admit I saw in the theaters).
The reason this happens is that paradoxically, having too much money is one of the worst things that can happen to a filmmaker. Spielberg had to improvise much of “Jaws” because he didn’t have the money to fix a malfunctioning mechanical shark. With a larger budget for “1941″, he simply spent more money on effects, and more time on reshoots (to no avail).
When this happens in Silicon Valley, we call it Color.
The irony is that Hollywood has also given us a model for success–the creativity of constraint. Louis CK’s eponymous show is a critical hit, unlike his previous show, “Lucky Louie”. The difference? FX gave him a tiny budget…and complete creative control.
Other shows like “Breaking Bad” and “Mad Men” have larger but still tightly constrained budgets. “Mad Men”, for example, costs about $3 million per hour-long episode. “The Lone Ranger” cost $250 million for a 2-hour movie (and a pretty crappy one at that…which makes it Gore Verbinski and Johnny Depp’s “carte blanche” disastrous follow-up to “Pirates of the Carribbean” and “Rango”).
There are certain kinds of movies you can’t make for less than $200 million, just like there are certain kinds of startups that need $40 million before launching a product…but your chances of success are better when the studios and VCs provide a tight budget, but creative control.
(Cross-posted @ Adventures in Capitalism)