The Talent Agency: From Hollywood To Silicon Valley

May 9th, 2014

The Exploitation of Creative Talent

In 1939, at the height of her career, Shirley Temple lost the lead in The Wizard of Oz to Judy Garland because her employer, Twentieth Century-Fox, refused to loan her to MGM. She found herself in this unfortunate situation because, in the early days of Hollywood, actors signed a contract with one single studio, and were locked into working with that studio for years.

These contracts kept the market for acting talent illiquid, artificially keeping actors’ wages down, even when they emerged as stars and generated millions for their employers.* And, as with The Wizard of Oz, these contracts enabled studios to block competitors from employing their contracted actors, even if it was in the talent’s best interest.

Sound familiar? This is exactly what we’re seeing in Silicon Valley today: with their anti-poaching handshake deals, the large tech companies have been colluding for years to keep the market for tech talent illiquid.

Silicon Valley is the creative industry of the 21st century. Like Hollywood before it, the technology industry is experiencing growing pains as the market for talent matures. In both cases, we have demand that greatly outstrips the supply of talent, we have a small group of highly-talented individuals generating the vast majority of wealth, and we have unscrupulous corporations exploiting those talented individuals.

How did actors break this pattern and eventually earn appropriate compensation and recognition for their work?

The exploitation ended when the studio system gave way to the agency system. It was only when actors became free agents that the market for their talents could truly become liquid, which in turn led to a readjustment in compensation, commensurate with demand.

This transition to the agency system — to a true marketplace for talent — was enabled by the emergence of talent agents. Generally speaking, the most highly creative and talented individuals are not interested in (or good at) the business side of their craft, which leaves them vulnerable to exploitation. However, when the creative talent joins forces with agents and managers — business-savvy individuals whose interests are aligned with the talent — they finally earn what they deserve.

I have seen this first-hand, having served as a manager in the entertainment industry for the past 20 years. (My cofounder Rishon and I represented numerous talented artists, including John Mayer, Citizen Cope, Martin Sexton, and Vanessa Carlton.) It is abundantly clear to me that the technology industry will follow the same trajectory as the movie and music industries.

Programmers are the new stars, and I have pivoted my career to make sure they are treated as such. Our new agency, 10x Management, applies the model of a Hollywood talent agency to Silicon Valley. We scout the most talented programmers and other technology professionals, and represent them in their business dealings, protecting them from exploitation and ensuring that their pay is in line with the value they create.

The tech giants may have managed to settle the anti-poaching class action suit (for a paltry sum), but, if the history of the entertainment industry is any indication, the battle for a true marketplace for technology talent has just begun.

* In fact, Shirley Temple’s success single-handedly brought Fox back from the brink of bankruptcy.