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WOODY
Oh, Buzz, you’ve had a big fall. You must not be thinking clearly.
BUZZ
No, Woody, for the first time I am thinking clearly.
(looking at himself)
You were right all along. I’m not a Space Ranger.
I’m just a toy. A stupid little insignificant toy.
WOODY
Whoa, hey—wait a minute. Being a toy is a lot better than being a Space Ranger.
BUZZ
Yeah, right.
WOODY
No, it is. Look, over in that house is a kid who thinks you are the greatest, and it’s not because you’re a Space Ranger, pal, it’s because you’re a toy! You are his toy.
(from Toy Story)
A few months after that 1991 interview with Bill and Steve, I moved to Tokyo with my family to be Fortune’s Asia bureau chief. Part of the reason I jumped at the Tokyo assignment was that the computer industry in the early 1990s had grown a bit dull now that Microsoft and Intel, collectively known as Wintel, had basically won the personal computer wars. Innovation seemed at a standstill, and the future seemed to be merely a game of cutting costs and optimizing the various PC clones that were being offered by the likes of Dell, Gateway, Compaq, and HP. Apple had pretty much fallen into irrelevancy.
By the time I returned to Silicon Valley three years later, however, much had changed. Bill Clinton had unseated George H. W. Bush as president, after a single term. Bill Gates’s net worth had surpassed $10 billion, and he had edged out Warren Buffett to become the richest man in the world, according to Forbes magazine. John Sculley had been fired from Apple (but the company was still irrelevant). And, the computing world was starting to get interesting again. Netscape Communications had released beta versions of the first commercial Internet browser, which it would eventually call Navigator, and the terms World Wide Web and dot-com and URL were creeping into the vernacular. The Internet was clearly something that could change everything in computing, and that was a good thing for a technology and business journalist.
In July 1994, I emailed Steve to tell him that Fortune had moved my family and me back from Tokyo, and that I’d call on him sometime to catch up, once I had leased an office and gotten settled in. A few weeks later the phone rang in our new home, on a Saturday morning when I was there alone refinishing the wood floors.
“Hi, Brent, this is Steve,” he said, in the singsongy, laid-back, California-cool voice he often used on the phone, so pseudo-cheery that it almost sounded like a recording. Then he fell back into character. “So you’re back. What happened? Did Fortune get embarrassed when they put John Sculley on the cover as a savior the very same week he got fired?” He cackled. Here we go again, I thought. He’s interviewing me.
“You should come over,” he said. “We can take a walk or something.” I said I had to finish what I was doing, but that I could get over to the house in an hour or so. “Okay,” he said, and promptly hung up.
When I arrived at his home, Steve was fussing around in the kitchen, wearing his usual summertime garb: threadbare cutoffs with the white front-pocket linings sticking out of worn-through areas, and a faded, long-sleeved NeXT T-shirt. (He hadn’t yet started wearing the black mock turtlenecks custom-made by Issey Miyake.) His feet were bare, of course. A big, luxurious Japanese chow was lounging quietly under an expansive, rustic worktable in the middle of the room. The dog clearly had noticed me, but he wasn’t very interested.
“I guess he isn’t a watchdog,” I said, hoping to get Steve’s attention. Steve turned around, and for one of but a handful of times in dozens of meetings and encounters over the years, engaged in a few minutes of small talk. Enough to let me know that the dog was really old, that Laurene was pregnant again, and that she and Reed weren’t around.
“I wanted to tell you that I’m feeling really good about Pixar’s first animated film,” he said as he hooked a stool with his foot and pulled it underneath him. Then he motioned for me to sit down. “It’s called Toy Story and it will be another year before it’s finished. I’m not exaggerating when I say that it’ll be unlike anything anybody has ever seen before. Disney is considering making it the big holiday release next year.”
WHEN PEOPLE LIST the many industries that Steve is said to have revolutionized, they often include the movies, since Pixar brought a whole new art form to the big screen. I’m not of that mind. John Lasseter and Ed Catmull are the men who brought 3-D computer graphics to the movies, and revived the art of animated storytelling.
That said, Steve did play a critical role in Pixar’s success. His influence was constrained, because Catmull and Lasseter were the ones shaping Pixar, not he. But that constraint, ironically, freed him up to do what only he could do best, and he did it brilliantly.
Just as significant for the trajectory of his life is what he learned by watching Lasseter, Catmull, and their incredibly talented employees cobble together their magic. At Pixar, especially when the company started down the path of actually making movies, Steve started absorbing an approach to management that helped make him much more effective when he returned to Apple in 1997. These are the years where his negotiating style gained new subtlety—without losing its ballsy brashness. This is when he first started understanding the meaning of teamwork as something that’s far more complicated than simply rallying small groups—without losing his capacity to lead and inspire. And this is where he started to develop patience—without losing any of his memorable, and motivating, edge.
Steve was certainly lucky that things went this way for him at Pixar, a sideline outfit that he bought on something of a whim, that succeeded in a business he didn’t intend for it to pursue, and that made him far wealthier than the company that was his life’s true work. Ed Catmull has thought a lot about the role luck plays at a great company, and how businesspeople manage that luck. It’s all in the preparedness, he says, and in creating a culture that can adapt to the unexpected. “These things are always going to happen. What separates you is your response,” he says. Steve responded well, and that’s in part because of his greatest piece of luck: getting to work with Lasseter and Catmull. In many ways, his response to the principles he gleaned from them would be a catalyst for his later success at Apple.
JOHN LASSETER HAD a love-hate relationship with Disney. As a teenager, he worked at Disneyland, and after graduating from the California Institute of the Arts, he landed a job as an animator there. While he loved the privilege of working with some of the great animators from the company’s historic past, he chafed under the company’s rigid management. “Leadership squished us,” he remembers. “They fired me, basically.”
Hence Lasseter’s ultimatum when Disney’s Peter Schneider tried for a third time to lure him back to Burbank: the only way that he would ever work with Disney again was for Disney to make a movie with Pixar. To his everlasting credit, Schneider took him seriously, and summoned Catmull to his offices in Burbank. He told Catmull that he thought it was time for Pixar to make its own movie, for Disney. Catmull suggested that all Pixar was really ready for was a half-hour television special. Schneider scoffed: if Pixar could deliver thirty minutes of great entertainment, it could deliver seventy-five minutes. Catmull gulped, and then agreed.
Now it was up to Steve to negotiate a deal with Jeffrey Katzenberg, Disney’s powerful head of animation. Dickering with Disney would offer a real acid test of both his negotiating skills and his self-discipline. Both Katzenberg and Jobs knew that Disney was the power player at the bargaining table. The storied studio was in the midst of a glorious run. Starting in 1989, Katzenberg’s team would deliver one hit after another for five years running: The Little Mermaid, Beauty and the Beast, Aladdin, The Nightmare Before Christmas (based on a story by another animator who had gotten away, Tim Burton), and The Lion King. So as much as Katzenberg admired Lasseter’s chops and regretted that he would not return to Disney, he knew that his company could survive perfectly well without a Pixar movie.
Lasseter, Catmull, and everyone else at Pixar, on the other hand, fully realized that making a movie for Disney was probably their only chance to survive as a company. The negotiations were their last stand, and their fate was in the hands of Steve. Catmull and Lasseter were very comfortable with this. For years, Steve had been the point man on Pixar’s negotiations. “He was tough,” remembers Lasseter. “He’d walk into the room and say, ‘Which one of you has the authority to buy our computers?’ If they said no one, he would just dismiss them. ‘I only want to negotiate with someone who can make the deal,’ he’d say, and leave. We always said that Steve would take a hand grenade, toss it into the room, and then walk in. He’d get everyone’s attention right away.’ ”
But putting Katzenberg and Jobs in the same room held potential for catastrophe. Both men had powerful egos, and both were accustomed to getting their way. Katzenberg believed he’d be the next president of Disney, and took full responsibility for the successes of his animators. Smart, overbearing, difficult to work for, and yet somehow likable, Katzenberg also shared Steve’s certainty and faith in his own opinions. When he walked into the first negotiating session with Pixar, in a conference room near his office, he plopped a basket full of Disney baby toys in front of Steve, who’d recently been at Laurene’s side for the birth of Reed. It was a gift, but it was also a clear sign of who held the keys to the vault.
Susan Barnes has observed that Steve entered every negotiation knowing exactly what he had to get, and what his position was versus the other side. In negotiating with Lucas, he had been able to exploit Lucas’s need for cash. This time Steve went in knowing that Katzenberg had the power, and that Pixar needed a deal to survive. He kicked off the negotiations with a certain brashness, saying that he wanted Pixar to be a partner on all aspects of the revenue from the film, something no neophyte studio filmmaker would ever get. Katzenberg promptly nixed that.
The two had fundamental disagreements about the true value of Pixar. Jobs was convinced that Pixar’s technology could revolutionize the business model for animation, believing that computerizing the process would dramatically lower the cost of animating movies. He was offended by what he perceived as Disney’s old-school thinking. “They make the mistake of not appreciating technology,” he told me. “They don’t have a clue.” Katzenberg, who of course knew far more than Steve about the animation business, disagreed. “I was not interested in Pixar’s technology,” Katzenberg told me a few years later. “I was interested in Lasseter’s storytelling. Luxo the lamp had more emotion and humor in a five-minute short than most two-hour movies.” He was sanguine at best about the potential cost savings. “The idea that this technology is a new business model for animation is bullshit. Good luck with that! The artists and storytellers will want to continue to grow the technology, so this year’s technology will be obsolete in ten years.” Katzenberg was right, of course. No matter how much technology you throw at the art of making an animated movie, a good one will always be expensive. Pixar made Toy Story for around $20 million (a number that doesn’t include what Disney spent on it for promotion and distribution). Pixar’s 2013 movie, Monsters University, is rumored to have cost around $200 million, marketing included.
These kinds of personal and philosophical differences with the brass at Disney were something Steve had been unable to manage at NeXT, where his anger and resentment helped sabotage the IBM deal. “The people at the top of IBM knew nothing about computers. Nothing. Nothing,” he raged in later years, still furious. In those negotiations he had let the IBMers know his true feelings about them, one of his many blunders as he overplayed his hand. But with Katzenberg he acted more deliberately. He made his points, and held out when necessary: Katzenberg asked for the rights to all Pixar’s 3-D computing technology, and Steve refused. But he mostly acquiesced, instead of raging against the more powerful man across the table. Pixar did not get ownership of the films or their characters. And Pixar didn’t get a cut of the video revenues, because Steve didn’t yet understand the huge market for family-oriented videos. But he did get a deal—Disney would fund the production of Toy Story and have the option to fund two more movies as well. Pixar would get 12.5 percent of the box office—and a new life. At long last, the Pixar gang was going to get its chance to make a movie.
STEVE LOVED PIXAR, and he especially loved watching the team start to develop the movie that would turn into Toy Story. But he didn’t love losing money. In fact, he later admitted that he would never have purchased Pixar if he had known how much money he would spend keeping the company afloat. So in the early 1990s, both before and after getting the Disney deal, he shopped the company around, even though the few potential buyers were interested only in Pixar’s technology—not its movie-making promise. Catmull looked on as Steve negotiated with companies as varied as Hallmark, Silicon Graphics, and Microsoft, each with different ideas of how Pixar’s software could augment their own offerings. But none of the deals crystallized. In each case, Steve would not budge from an outrageous price tag that he’d put on the company. The repeated failures made Catmull wonder if he’d ever really wanted to sell. “I could see why it would happen. Some of the deals made sense. It wasn’t the dream we’d wanted, but you’re trying to keep things going,” he remembers. But nothing worked out. “Afterward, I’m thinking, What was that all about? Was he just looking for confirmation that he’d done something right?” Catmull came to think that Steve might have been subconsciously sinking each deal out of loyalty to Pixar. “He had this sense of what it means to be loyal and to give your word. As I was getting to know Steve more, I could see how this interplayed in complex ways. Not that Steve ever psychoanalyzed himself.”
Catmull never discussed the deals with Steve in such a psychological way: “We didn’t get philosophical all that often. When we started to edge into personality and so forth, he’d just say, ‘I am who I am.’ ” So Catmull’s theory about loyalty must remain just that. But his conjecture reflects the complexity of what Steve was feeling then. He was losing way more money than he’d ever imagined, especially with things at NeXT going in the wrong direction. Yet he was far from poor: he had all the money he needed to raise a family and do the things that mattered to him. And as he watched Toy Story develop, he was starting to fall truly in love with Pixar. It was such a welcome respite from NeXT, far less intense and far less demanding.
Steve started coming up to Pixar’s offices once a week, even though he often had little to do there. Catmull managed the process of staffing up after the movie deal was done, a process that could have been disruptive, given that Pixar had just downsized dramatically when Steve sold the hardware division. But under Catmull there was no “bozo period” at Pixar.
Steve had no input on the development of the Toy Story plot. Lasseter, Andrew Stanton, Pete Docter, and Joe Ranft worked together to create the script, eventually with help from other writers, including Joss Whedon, who would go on to create the Buffy the Vampire Slayer TV series and to direct movies such as The Avengers. The team on Toy Story would turn out to be remarkably productive, and exceedingly close-knit. Stanton would direct Pixar’s second movie, A Bug’s Life, as well as Finding Nemo and Wall-E. Docter would direct Monsters, Inc. and Up, while Ranft would serve as cowriter and story chief on several pictures, until his death in a car crash in 2005. The four men became the core of what Catmull calls the Brain Trust—a collection of Pixar writers, directors, and animators who provide constructive criticism to the director of every Pixar movie. It’s a unique idea—the Brain Trust has no authority whatsoever, and the directors are only asked to listen and deeply consider the advice of its members. It became a powerful tool, helping to reshape movies like The Incredibles and Wall-E. But Steve was never a part of it. Catmull kept him out of those discussions, because he felt that Steve’s big personality would skew the proceedings.
Watching Lasseter, Stanton, Docter, and Ranft develop Toy Story, Steve was witnessing creative thinking at its best—meaning it was chock-full of failures and dead ends. He always remained encouraging. “When we screwed up,” says Catmull, “it wasn’t, ‘Oh, you guys screwed up!’ It was always, ‘What are we going to do to move forward?’ When you’re out there on the edge, some things go right and some things go wrong. If nothing’s going wrong, you’re fooling yourself. Steve believed that.” That was a bright contrast to Katzenberg, whose severe critiques kept pushing the movie in a more sarcastic direction than the team was comfortable with. In fact, things with Disney would get so difficult that after a disastrous screening one Friday late in 1993, Schneider shut down production. For three months, Lasseter and his cowriters recused themselves to draft a new version of the script. During that time Steve and Catmull ensured that the production crew stayed together and got paid. And once Toy Story swung back into production, Jobs fought for more money to accommodate the changes made necessary by the new script. His battles with Katzenberg over the budget were intense, but eventually he and Catmull were able to wheedle a bit more cash out of Disney.
“Watching our collaboration, seeing us make ourselves better by working together, I think that fueled Steve,” says Lasseter. “I think that was one of the key changes when he went back to Apple. He was more open to the talent of others, to be inspired by and challenged by that talent, but also to the idea of inspiring them to do amazing things he knew he couldn’t do himself.”
IN THE YEARS after marrying Laurene and starting a family, Steve developed a few especially close friendships. These weren’t relationships he talked about much, at least not in any way that was personally revealing. Steve drew a hard line with reporters about his private life—those of us who had some access to it agreed not to write about it, unless we got Steve’s permission to relate a certain anecdote. Ed Catmull and John Lasseter became two of Steve’s really close friends, part of a very small group of people he would hold near and dear till the end of his life.
“I liked him from the moment I met him,” Steve told me once about Ed. He found him an intellectual match. “Ed is a quiet guy, and you could mistake that quietness for weakness—but it’s not, it’s strength. Ed’s really thoughtful, and really, really smart. He’s used to hanging around really smart people, and when you’re around really smart people you tend to listen to them.”
Steve listened to Catmull. Though he could often come across as a know-it-all, Steve was constantly trying to learn. Trim and professorial, Ed was ten years older than Steve, making him as much of a mentor as a colleague. Ed showed him how a movie came together, explaining all the pieces and processes in a way that eventually fit together. He could dig into the technology of 3-D animation with Steve. And he could explain his managerial decisions with a sincerity, depth of feeling, and rationality that Steve respected. Ed had made it a point for years to try to hire people who he felt were smarter than he was, and the effort showed. “The collection of people at Pixar is the highest concentration of remarkable people I have ever witnessed,” Steve told me. For all that he gained from knowing Catmull, however, Steve never quite acknowledged to Ed how much he had learned from him. “The closest he got,” says Catmull, “is that he said he valued what I did, and knew it was very different from what he did.”
Theirs was a quiet, sincere friendship, enabled in great part by Catmull’s maturity. “Steve and I never argued,” he says. “We had disagreements; I won several and he won several. But even early on, when he wasn’t particularly skilled at dealing with relationships, I always felt that he was talking about a topic, not about who was right or who was wrong. For a lot of people, their egos are tied up in an idea and it gets in the way of learning. You have to separate yourself from the idea. Steve was like that.”
The two men would eventually know each other and work together for twenty-six years. Catmull says he saw enormous changes over the years, but allows that this, too, was something Steve would never acknowledge. “I look at Steve as someone who was actually always trying to change, but he didn’t express it in the same ways as others, and he didn’t communicate with people about that. He really was trying to change the world. It didn’t come across as him being personally introspective.”
Steve’s relationship with Lasseter was different, more buoyant. Their friendship really picked up once Toy Story got under way, and Lasseter’s animation division went from being an expensive indulgence to the future of the company. He and Steve were contemporaries, with growing families. “We were having babies at the same time,” says Lasseter, “so there was that.”
Early in their friendship, the fact that Steve was the boss and the wealthier of the two made him something of an older brother. One weekend in the spring of 1995, the Lasseters invited the Jobs family up to their house in Sonoma. Steve was exploring a radical idea: taking Pixar public after Toy Story’s premiere, which was scheduled for Thanksgiving. So on the first night, after the kids were asleep and Laurene had headed to bed early, Steve stayed up till four in the morning explaining stock options to John and his wife, Nancy. “I mean, I went to CalArts. I didn’t know anything about that stuff. So he gave us Business 101 about stock, how it works, why companies sell it, what’s beneficial for people, how you are then beholden to stockholders and have to do earnings reports, all that stuff. He talked about IPOs, getting ready for it, stock options. He just laid it all out.”
The next morning, Steve and John were sitting on the porch of the house, taking in the nice view—which was marred only by the sight of John’s 1984 Honda Civic, with 210,000 miles on it. “The paint was just sunburned off,” says Lasseter. “The seats were shot—I put T-shirts over them. Steve had driven up in their Jeep Cherokee. Now he knew the roads I had to drive on every day.”
“Don’t tell me that’s your car,” Steve said.
“Yeah, it is,” John told him.
“You drive to and from Pixar on these roads in that car?” Steve said. Lasseter sheepishly nodded. “Okay. No, no, no, no. No, that just won’t do.”
“Steve,” said Lasseter, “I’ve got to be honest, I can’t afford a new car right now. We just bought this house and it’s far more than we can afford. I just can’t do it now.”
“I think what he was thinking,” Lasseter told me, “was, ‘Oh my God, I bet the farm on this guy, and he’s driving that crap car … if a truck hits him—dink!—he’ll be dead.’ ”
“Okay,” Steve said, “we’ll figure something out.”
When Lasseter got his next paycheck, it contained a small bonus. “You have to use this to buy a new car,” Steve told him. “It has to be safe, and I have to approve it.” John and Nancy picked out a Volvo, and Steve approved.
Lasseter is one of the world’s great storytellers, and Steve loved this side of him. The director approached the construction of movies with the same kind of craftsmanship that Steve applied when building a new piece of hardware. Both men loved the fit and finish. Once, during the production of A Bug’s Life, John and Andrew Stanton told me about the research involved in creating the “bug’s-eye view” of the world. After fitting arthroscopic lenses to video cameras, the team went to all different kinds of landscapes and pushed the snakelike lenses along the ground to see what the world looked like from an ant’s perspective. One thing they realized was that most grass is translucent, casting a greenish hue as the light comes through. Since you can emphasize whatever you want with animation, Stanton and his crew gave their bug’s world an exaggerated glow.
This kind of attention to detail fascinated Steve. He loved the narrative and visual mosaics that Lasseter was able to assemble for each Pixar movie, and over the years he came to admire the way the animators outdid themselves with each and every film. He and Lasseter paired a child’s curiosity with an obsessive attention to detail. At Pixar, Steve was seeing how the two could be combined into the slow, successful, and patient development of a work of art that would live long beyond its creators.
A few weeks before Pixar’s IPO, Steve took Lasseter to an early dinner at one of his favorite Japanese restaurants, Kyo-ya, in San Francisco’s Palace Hotel. “Afterwards, we were standing outside out on the curb, talking for the longest time,” remembers Lasseter. “We had to have been there at least an hour, just talking about stuff. I was telling him I was nervous, that I was kind of scared of the IPO. I wished that we could wait for the second movie. And he did that thing, where he kind of looks off, and he said, ‘You know, when we make a computer at Apple, what’s its life span? About three years? At five years, it’s a doorstop. But if you do your job right, what you create can last forever.’ ”
BY LATE 1994, Steve stopped shopping the company around. He didn’t want to give up control of what was clearly going to become a very interesting enterprise with the release of Toy Story. But he didn’t really understand just how big things could get until he attended a press conference for Disney’s new animated film, Pocahontas, in New York City on February 1, 1995. It wasn’t just any old press conference; it was held in a huge tent in Central Park, where Mayor Rudy Giuliani and Disney CEO Michael Eisner announced that the June 10 premiere of Pocahontas would occur right there—in the park, free, for up to one hundred thousand people. And the premiere was just the appetizer—Disney’s marketing campaign for the hand-drawn Pocahontas would add up to more than $100 million.
Steve eyes grew really big. He appreciated a masterful product launch, and his own introductions paled against this one. That’s when he got serious about cooking up an audacious plan for an initial public offering of Pixar stock. His goal was to raise enough money for the company to fund its own movie productions, thus enabling it to become a full partner to Disney, rather than a mere contractor.
Making the decision about the details for an IPO, of course, was a task for Steve to handle rather than Catmull or Lasseter. He recently had hired a new CFO by the name of Lawrence Levy, a sharp Silicon Valley attorney with a background in patent law. Right away, he and Levy spent weeks studying the ins and outs of film finance and accounting to get a better sense of how studios really make their money. As part of their “homework” they flew down to Hollywood to quiz other executives at other studios about movie budgets and distribution deals. They immediately learned that Pixar was, at least at that point, a long shot for a successful IPO. Its financial performance to date was pretty dismal—it had accumulated losses of $50 million over the years, while generating little revenue. Its potential revenue stream seemed limited and risky. Pixar was largely dependent on one company, Disney, which was the sole licensee of CAPS technology and which would return to Pixar a mere 12.5 percent of box-office revenues of any movies they might make and market together. Moreover, Pixar seemed to move at a snail’s pace, having already spent nearly four years on a movie that still wasn’t finished. The movie business itself was notoriously unpredictable. And finally, the company relied on the creative ideas of a very few people, like Lasseter and Stanton, who had good reputations but no significant track record.
Steve had his own misgivings about Toy Story’s commercial potential, mainly based upon what he was hearing from Disney’s marketers. “Disney came to do a big presentation to us about the marketing,” remembers Lasseter. “They told us they had a big promotional plan with Sears. Steve looks around the room and goes, ‘Has anybody in this room been into a Sears lately? Anybody.’ No one raises a hand. ‘Then why are we making a deal with Sears? Why are we not going for products we like? Can’t we be doing a deal with Rolex? Sony high-end audio equipment?’ And their answer was basically, ‘Um, um, this is what we do!’ He poked holes in every one of their ideas. He was just so logical. Why associate ourselves with products we can’t stand?” (In the end, the most prominent sponsor would turn out to be Burger King.)
As long as Pixar had not filed with the SEC for an IPO, Steve was free to do what he could to drum up excitement about Pixar in the business press. Still, I was surprised one Saturday morning in May when the phone rang in my home and it was Steve. He asked if I wanted to come over, but this time with Greta and Fernanda, my two daughters, who were then just ten and nine years old. “I’m watching Reed this morning,” he told me, “and I’ve got something cool to show them.”
When we arrived, three-year-old Reed Jobs greeted us at the kitchen door, wrapped in blue and red silk scarves and screeching, “I’m a witch!!!” Reed fluttered around while Steve got the kids some juice and made bowls of popcorn. Then he and I followed the three kids into the den, where Steve popped a VHS cassette into the player. After a bunch of crude storyboards, all of a sudden a full-color early version of Toy Story burst onto the screen and a sound track kicked in. I had seen storyboards lining the walls at Pixar, but no actual animation at that point. It was truly spectacular and completely unlike anything I’d seen on a screen before. The three kids sat rapt on the floor in front of the TV. They watched the whole thing, even though only about half of it was fully completed, with the rest filled in by line drawings or semi-complete renderings.
When it was over, Steve told me that the Pixar board of directors hadn’t even seen this much of the movie. I took that with a grain of salt. (Lasseter later told me that Steve showed it to everyone: “He was impossible!” Steve’s friend Larry Ellison, the billionaire founder of Oracle, said he saw eleven different versions.) Steve quickly turned from me to the kids. He was busy conducting market research, Steve Jobs–style. “Whaddya think?” he asked the girls. “Is it as good as Pocahontas?” Greta and Fernanda nodded vigorously. “Well, then, is it as good as The Lion King?” Fernanda pondered for a beat, then replied, “I won’t be able to make up my mind until I see Toy Story five or six more times.”
Steve loved the answer.
ON AUGUST 9, Steve got lucky again, when a little company called Netscape Communications went public. Netscape’s product, the first popular Internet browser, was a revolutionary thing, but there was no obvious way for the company to turn it into a big moneymaker. No matter—the public’s enthusiasm for technology and this new darling called the Internet was about to soar. Netscape shares were offered at $28, and closed the day at $58.25, giving the new company a valuation of $2.9 billion.
After Netscape’s IPO, Pixar didn’t seem quite so wispy a bet. Robertson, Stephens, a San Francisco investment bank, agreed to underwrite the IPO and filed a prospectus with the SEC in October. Steve decided to push his luck even further, and set the date for Pixar’s IPO on November 29, 1995, merely one week after Toy Story’s debut. If the movie had flopped, the IPO would have been a disaster, and all Steve’s efforts to get Pixar onto more secure financial footing would have been for naught.
But of course that’s not what happened. The movie is a masterpiece, a soulful, funny film of such enduring power that the American Film Institute includes it in its list of the one hundred greatest American movies. And Pixar’s IPO the following week was a blockbuster as well, raising $132 million and giving the company a market capitalization of $1.4 billion. Lasseter, Catmull, Steve, and other Pixarians gathered to follow the affair from Robertson, Stephens’s offices in downtown San Francisco. Shortly after the opening bell, when the stock was trading above the $22-per-share price that the bank had established, Catmull saw Steve pick up the phone in an office to the side. “Hello, Larry?” Steve said into the handset, once his pal Ellison was on the line. “I made it.” Steve, who owned 80 percent of the company, was a billionaire.
WHILE STEVE DID enjoy comparing notes and playing games with Ellison, who at the time was one of the very richest men in the world (and still is), money wasn’t what thrilled Steve about Pixar. What thrilled him was to once again play a part in the creation of a successful and profoundly beautiful product that employed brilliant new technology that had seemingly unlimited potential. He loved that once again he was an architect of what the world could not help but recognize as a remarkably creative enterprise. Steve hadn’t felt that way for what had seemed like eons. Not since the introduction of the Macintosh eleven years earlier.
The incredible success of Toy Story, and of Pixar in general, had a huge personal significance for Steve as well. He always wanted to make products that he both loved and found useful. That’s part of the reason that things never seemed quite so magical at NeXT; unlike Bill Gates, Steve couldn’t throw himself completely into the creation of a product that suited a particular market but that didn’t thrill him personally. The NeXT computer and the subsequent software products were admirable, and elegantly beautiful in their own ways, but they were aimed at institutions rather than people. With Toy Story, for the first time in his life, he had a hand in the creation of a product that a young family like his own could enjoy as well. Laurene was pregnant with daughter Erin, the second of their three children. Steve reveled in the fact that Toy Story was something that his kids could enjoy, and even their kids as well.
In retrospect, the fact that Toy Story was the beginning of Steve’s professional resurrection seems preposterously appropriate. Its plot established the Pixar formula: a likable character is the cause of his own downfall, often as a result of hubris; but he (or she, once Pixar finally made Brave) overcomes weakness through kindness, bravery, quick wits, invention, or some combination thereof, and thereby earns a redemption that makes him—or her—an even better and more complete toy (or bug, car, fish, princess, monster, robot, mouse, or superhero!). The hero’s downfall, incidentally, often involves some kind of exile, as in Toy Story, where Woody “accidentally” sends Buzz careening into Sid’s backyard, and then must join him to engineer a hair-raising escape from that evil child. The parallels to Steve’s own exile from Apple are obvious.
Toy Story also gave Steve back his confidence. He and I spoke several times in the months after the IPO, and I could tell he was beyond ecstatic about the way things had gone. He talked about what had happened at Pixar—and about his role in its success—with real pride. He was generous in giving large stock grants to Catmull and Lasseter, and he personally handed out bonus paychecks of an extra month’s pay to all Pixar employees in December. Sure, some of them grumbled that they hadn’t received higher stock grants. And sure, Steve claimed more credit for Pixar’s sudden success than he deserved. But even Alvy Ray Smith, the original partner of Catmull who had left after clashing with Steve, later admitted that Pixar could not have succeeded without him. “We should have failed,” Alvy told one interviewer. “But it seemed to me that Steve just would not suffer another defeat. He couldn’t sustain it.”
As happy as Steve was, however, to bask in the glory of Pixar’s success, he quickly moved on. He had another motive for engaging me in all those post-IPO conversations. He was starting to think about his old company down in Cupertino.
