PIXAR REANIMATED A FADING LEGEND
Exec reveals how Steve Jobs made ‘Toy Story’ – and vice-versa
GIVEN how Apple creator Steve Jobs was close to deified upon his 2011 passing, it’s hard to envision that during his life, a technology company might not have wanted his input — especially a company he owned.
But that was exactly the situation Jobs found himself in during the early days of Pixar, when the groundbreaking animation company was still searching for direction.
In a new book, “To Pixar and Beyond” (Houghton Mifflin Harcourt), author Lawrence Levy, whom Jobs hired to help Pixar find its way, tells how both the company and the man overcame long odds to become the icons they’re regarded as today.
When Levy, then CFO of a desktop publishing company, heard from Jobs in November 1994, Jobs was already a legend, but one on the downswing. He had left Apple after a nasty power battle in 1985, and the computer company he then formed, NeXT, went nowhere commercially. At the time, Jobs was looking like “yesterday’s news.”
Levy assumed Jobs was calling to discuss NeXT, but the topic instead was Pixar, which Levy was unfamiliar with. Jobs had acquired Pixar from George Lucas eight years prior, in the hopes of creating “a high-end imaging computer and accompanying software,” but had little to show for it. At the time, the company and Jobs were thought of so poorly that, Levy says, “When I told friends and colleagues that I was meeting Steve Jobs about Pixar, the most common response was, ‘Why would you want to do that?’ ”
WHEN they met, Jobs explained that, having developed this technology, the company was now using it to create its first feature film in a deal with Disney. They had completed only a few minutes of it, but Jobs told Levy, “You’ve never seen anything like it.” He also mentioned his hopes for taking the company public.
Visiting the company at Jobs’ request, Levy was impressed with the film, but quickly developed concerns.
For one, Jobs had funded the company out of his own pocket via personal checks, almost $50 million worth.
Levy also discovered that the company’s dip into animation was initially intended as simply a method for showcasingg its imaginggg technology.gy Once that collapsed, animation was a leftover that Jobs was unenthusiastic about, agreeing to the film enterprise only because of the Disney deal.
“Pixar felt like a company that had meandered from here to there,” Levy writes, mentioning that its financial situation was “dire.”
“It had no cash, no reserves, and it depended for its funds on the whim of a person whose reputation for volatility was legendary.”
Still, when Levy saw the clip from the film they were working on — “Toy Story” — he was mesmerized, seeing clear potential. Jobs offered him the position of executive vice president and CFO, and he accepted.
When Levy began there, however, one of the first things he learned was how little regard Pixar’s employees had for Jobs.
“Pixar and Steve have a long history. Not a good one. You don’t know it yet, but Pixar lives in fear of Steve,” a company vice president explained to him.
“Steve doesn’t get Pixar . . . [He’s] the guy who owns us, but he’s never been one of us. People worry that if he gets too close, he’ll ruin Pixar and destroy our culture.”
Jobs had also angered Pixar employees by reneging on a promise of stock options, which were making Silicon Valley technology workers big money at the time. The animosity was intense — so much so that one employee’s reaction to Levy about Jobs was simply: “Keep that man away from me.”
LEVY clearly had his work cut out for him. As he refined the company’s strategy, jettisoning several unproductive lines of business, he and Jobs grew close. They would talk on the phone several times a day and anytime day or night. Living five minutes apart, they also chatted on tranquil walks through their Palo Alto, Calif., neighborhood.
“For a person who had the means to go anywhere, Steve seemed most content in his own neighborhood,” Levy writes. “We would stop every now and again to admire one of the grand old oak trees or the features of an old house, or Steve might question the style of a new one.”
As Jobs began pressuring Levy to devise a plan to take Pixar public as soon as possible, Levy couldn’t see a path to profitability for the company, much less a Nasdaq listing. The odds of finishing “Toy Story” on time were looking long, and Levy realized that neither he nor JJobs understood the enter- tainment business.
Given their inexperience in this area, Jobs could still be star-struck. He and Levy met with Disney President Joe Roth in Roth’s office, and watched him take a call from Robert Redford. After the meeting, business thoughts were out the window, as Levy and Jobs marveled over being in the same room as Redford’s voice.
“‘ Robert Redford!’ Steve exclaimed. ‘Butch Cassidy! The Sting! I wouldn’t have kept him waiting either. Wow!’ ”
But as Levy learned the business, he figured out that the resource-heavy nature of producing computer-generated films meant they would need to average a $180 million box-office take per film for Pixar to succeed. To that point, only two animated films in Disney history had even reached $150 million — “Aladdin” and “The Lion King.”
Taking this into account, Levy developed a business plan that relied heavily on a suc-
cessful IPO — which, in turn, relied on the success of “Toy Story” — that had taken on massive significance for Jobs. “There’s never been anything like it,” said Jobs. “It could be one of the hottest IPOs in the history of Silicon Valley. We’re going to make history — not just in tech but in entertainment.” Both Morgan Stanley and Goldman Sachs passed on taking the company public. But Jobs was evangelical, believing that Pixar’s IPO should be larger than Netscape’s, which ended its first day of trading worth $2 billion. As the big investment banks denied them, Jobs remained steadfast in his faith. He was intimately involved with the IPO down to minute details. When they prepared a slide show to introduce the company to investors, Jobs “paid attention to every nuance of the slides, even details that . . . were invisible to the naked eye, like font kerning — which is adjusting the space between letters — and font smoothing to make sure the curves on each font were perfect.”
IN time, they found banks to work with, and scheduled the IPO for right after the release of “Toy Story,” with the company’s future depending on the film’s immediate success. (Levy also managed to get Jobs to release stock for the company’s employees.) As the big days approached, the company believed it would go public just over its initially proposed price of $12 to $14 a share. On Saturday, Nov. 25, the day after “Toy Story” opened, they learned that the film would greatly exceed expectations, as it was on track to become the year’s biggest film (which, by year’s end, it was — ultimately earning $191 million at the box office). The IPO succeeded similarly, ending its first day at $39 a share. As trading began, one of the company’s bankers said to Jobs, “Congratulations, Steve. You’re a billionaire.” Jobs was overjoyed. As the stock hit the market,, he sneaked into another room and called Larry Ellison, founder and CEO of Oracle, and a friend. All Jobs said was, “Larry, I made it.”
The Wall Street Journal confirmed this the next day with the headline “Steve Jobs is Back in the Saddle Again, Becoming a Billionaire in Pixar IPO.”
TO help further the company’s success, Jobs supported the unprecedented decision to give Pixar’s creative team, led by John Lasseter, full creative control of all Pixar projects. He and Levy would have “no input into the content of Pixar’s films, [and] no approvals over the creative process.”
Despite his employees’ initial skepticism, Jobs had their backs in the end, and reveled in the success of Pixar’s creative team. After he and Levy renegotiated their deal with Disney to ensure equal billing, whenever the pair passed a Disney Store, they would “run in to examine the [‘Toy Story’] dolls and other merchandise from Pixar films,” and “look at the tags so we could see the Disney/Pixar logos equally displayed on the back.”
This marked the beginning of a comeback that would soar higher than anyone could have imagined. Jobs sold NeXT to Apple in February 1997 and returned to Apple himself that July, en route to making it one of the world’s most innovative and valuable companies.
But for whatever level of greatness Jobs attained, one of Levy’s most satisfying moments was watching how Jobs came to earn the respect of the people at Pixar.
Levy tells how they watched a screening of one of Pixar’s films in development, and Lasseter asked Jobs for his opinion at the end.
“Looked good to me,” Jobs said. “Though it really doesn’t matter what I think.” “It does matter,” said Lasseter. “No. You guys decide,” Jobs replied. “I trust you.”
“‘But we want to know what you think,’ John said emphatically.
“It was a small moment, one that I doubt registered with anyone,” Levy writes.
“For me, it signaled something that I had never seen before at Pixar. The creative team, the team to whom we had long ago ceded all creative responsibility, cared about what Steve thought. In the world of Pixar, there was no ggreater accolade.”