Pixar History Revisited - A Corrective
This text was written by Alvy Ray Smith on his webpage (alvyray.com). Here Alvy Ray Smith presents the story of Pixar and explains how Steve Job contributed to the company.
Apparently for marketing purposes, the history of Pixar has been misrepresented for years (and still is - on its website, for example). The intent seems to have been to make it appear that Steve Jobs was the creative genius behind all aspects of Pixar, that it was a single, clear vision of his that he founded and funded without stint through thick and thin, putting the people together, forming the relationship with Disney, and even naming the company. The following six myths, which have been repeated hundreds of times in the press, cut to the heart of the matter. I step through each one carefully, citing source documents as evidence of the arguments made against each myth:
Myth 1. Steve Jobs bought Pixar from Lucasfilm
Myth 2. Steve Jobs co-founded Pixar
Myth 3. The movies were Steve Jobs's vision
Myth 4. Steve Jobs named Pixar
Myth 5. Steve Jobs ran Pixar
Myth 6. Steve Jobs's investment saved Pixar
A summary of the history revisited is this: The "group now known as Pixar" came together in about 1975 on Long Island and had the original vision then to make the first completely digital movie. They changed their name several times (NYIT, Lucasfilm, Pixar) but held to the vision through three wealthy patrons (Alexander Schure, George Lucas, Steve Jobs). They spent the years from 1975 to 1986 learning animation from masters, hired their first animator and made their first animation with him, and established a strong relationship with Disney by digitizing its cel animation process. Then in 1986, Steve Jobs came on the scene, providing the investment money so that they could form Pixar as a spinout corporation from Lucasfilm. While waiting for Moore's Law to drop the price of computing a movie into a reasonable range (1986-1991) they manufactured high-performance graphics equipment AND did short animations, winning an Academy Award. In 1991 Disney finally approached Pixar to make the first movie, Toy Story. Steve Jobs stepped in to run Pixar (Ed Catmull had run it from 1986-1994, and from 1974-1994 taking the pre-Pixar history into account) at the completion of Toy Story in late 1994. Jobs took the company public, a spectacular business move for a company with almost no income, and negotiated movie deals with Disney, and the purchase of Pixar by Disney, and became a billionaire from Pixar. In short, the look and feel and vision of Pixar all came from inside and predated Jobs by at least a decade. Steve Jobs was a crucially important money man for the company, and later a business dealmaker of the first order for it. He was responsible for the look and feel and vision of Apple, but not of Pixar. The marketing message seems to have been crafted to make it seem that what was true for Apple was also true for Pixar - one genius fits all - but that was not the case as the details make clear. The actual story is still an amazing one for Steve Jobs, without ignoring credits for the dozens of people who actually created and implemented Pixar's vision.
A history (written by an historian, not a journalist [1]) of Pixar already exists, which has the story right: The Pixar Touch, by David Price. Also excellent is Droidmaker, by Michael Rubin. The recent biography, Steve Jobs, by Walter Isaacson, while written by a journalist, does a fairly good job, surprisingly, of getting the story right, with a few major exceptions. Its biggest error is underplaying the role of Ed Catmull in the running and inspiration of Pixar, from its earliest days on Long Island until today.
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[1] Historians inspect the record for factuality. Journalists almost never do. They instead interview the players, who often contradict one another and have agendas, leaving the journalist the job of guessing what might have been the truth. The written record, if inspected, can actually decide these issues in many cases.
Pixar Myth No. 1: Steve Jobs Bought Pixar from Lucasfilm
No, he didn't. See the founding documents. Not even close. A new spinout corporation from Lucasfilm, called Pixar, was capitalized with $10 million from Steve Jobs. Pixar paid $5 million of this to Lucasfilm for exclusive rights to the technology developed by the team while at Lucasfilm (exclusive except that Lucasfilm could continue to use it too). That was not a "buy" of Pixar. It was a "buy" of technology rights, and it was a "buy" by Pixar not Steve. The other $5 million was used to actually run the new company. Steve Jobs was the investor, pure and simple. Again, see the founding documents. Ed Catmull and Alvy Ray Smith were the management of Pixar. Steve owned 70% of the new company, the management and employees the other 30%. Ed, Alvy, and Steve were the board of the corporation. Again, this was not a "buy" by any stretch of the definition. The implication of "buy" is to "own and run." The implication of "invest" is to own an interest in and let managers (ultimately responsible to the board) run. Pixar was of the second type. Use of the term "buy" is a marketing ploy to make it seem that Steve was the single inspired genius who had all the ideas of Pixar and made it work. That's not how it worked. Not even close.
Over the course of about five years (while waiting for the price of computing movies to drop sufficiently via Moore's Law), Pixar ran out of money several times. Each time Steve, to avoid the perception (and reality) of failure after having been ousted from Apple, put more capital into the company in exchange for more of the equity owned by the employees. Eventually, by about 1991, he owned 100% of Pixar at a total investment of $50 million. This was still not a "buy" by any definition, unless the several restructurings where the employees lost equity are interpreted as a buy from the employees of Pixar (not from Lucasfilm). About 1994 Steve became CEO of Pixar and owned it all by then. THEN it could be said truthfully that he "owned and ran" Pixar, but that was eight years after Lucasfilm. Ed Catmull was, for nearly all of that eight years, the head of Pixar's management; he ran Pixar, Alvy departing in 1991 to found and run another company.
The myth is partly Pixar's own causing. The original Pixar news release says "Steven P. Jobs and Pixar employees buy Pixar." This is already wrong, and it got worse because journalists quickly dropped the "and the employees" part of the headline. (Drop the "Steven P. Jobs and" part of the headline to see how strangely it is worded.) The opening statement of that press release said, "Pixar, the computer graphics division of Lucasfilm Ltd., announced today that it has been acquired by Steven P. Jobs and the employees of Pixar." An early headline from 8 Feb. 1986 (Pixar was born 3 Feb. 1986) from the Los Angeles Times is "Jobs Acquires Lucasfilm's Graphics Unit." In the opening paragraph it states that "Lucasfilm Ltd. has sold its computer graphics division to Steven P. Jobs, co-founder and former chairman of Apple Computer, and the division's employees." The "employees" part of that statement is easy to miss and nearly always has been. In fact, as stated the entire statement is incorrect. There continued to be a computer graphics division at Lucasfilm after Pixar's spinout, and as already mentioned the purchase was of technology rights. The Wall Street Journal of 10 Feb. 1986 has it almost right in an item titled "Jobs Buys Majority Stake in Former Lucasfilm Unit," which states, "Steven P. Jobs, former chairman and co-founder of Apple Computer Inc., said he bought a controlling interest in Pixar, formerly the graphics computer division of closely held Lucasfilm Ltd., San Rafael, Calif." The San Francisco Chronicle of 8 Feb. 1986 reports it almost exactly the same way. Variety of 11 Feb. 1986 has it most closely in an item titled "Lucasfilm Ltd. Spins Off the Last Segment Of Its Computer Division," which states, "Lucasfilm Ltd. has spun off the last remaining segment of its computer division, selling a majority interest in its Pixar computer graphics division to former Apple Computer Chief Steven P. Jobs for an undisclosed sum."
Here's an accurate statement of the truth that avoids the ambiguous term "buy": Steve Jobs capitalized Pixar, a spinout corporation from Lucasfilm's computer graphics division, with $10m of which Pixar immediately paid $5m to Lucasfilm for an exclusive right to the technology it had developed at Lucasfilm. Jobs took 70% ownership of the corporation in exchange for his cash investment and the employees 30% for their intellectual investment. Jobs, by right of his majority ownership became chairman of the board. Ed Catmull and Alvy Ray Smith, the second two largest and equal shareholders, were the other two members of the board. Ed, President, and Alvy, Vice President (later Executive Vice President), were the management.[1]
[1] See organization chart of Pixar, dated 31 Dec 1986. Ed and Alvy manage roughly half of the company each.
Pixar Myth No. 2: Steve Jobs Co-Founded Pixar
No, he didn't. See the founding documents. Ed Catmull and Alvy Ray Smith were the Co-Founders of Pixar. They also took 38 founding employees with them from Lucasfilm in the spinout of Pixar. The spinout was capitalized by Steve Jobs, but it is not the practice in Silicon Valley to include the investors as founders [1], and Steve was not even close to being the first investor considered by the Co-Founders. Steve was a great, even spectacular, money man for Pixar, but the company was not his idea. See also Pixar Myth No. 5: Steve Jobs Ran Pixar for several examples of documents listing Ed and Alvy as the two co-founders.
First, Ed and Alvy met almost every venture capitalist in Silicon Valley.[2] Their deal was not a typical VC deal, so none of those firms agreed to capitalize the proposed company. Then they tried to find a strategic corporate partner. They approached (with the help of Lucasfilm management) several firms for partnership.[3] All but two of them faded away, after first interest. Ross Perot's EDS branch of General Motors teamed up with Philips of the Netherlands to strike a deal with them (and with Lucasfilm), for over $25 million. This deal almost succeeded after months of negotiations.[4] It fell apart when Ross Perot told the GM board they were a bunch of fools (for buying Hughes Tools). From that moment on, any deal that involved GM and EDS was impossible. That included Pixar funding. But the point is that Ross Perot was almost a potential funder of Pixar before Steve Jobs. (But neither he nor GM/EDS nor Philips would have been listed as co-founders of the new company.) Steve passed a low-ball number by Lucasfilm about the same time but it was substantially lower than the GM/EDS amount, so Lucasfilm blew him off.[5] After the failure of the GM/EDS and Philips deal, Ed and Alvy approached Steve and suggested he make his move then, as Lucasfilm was getting desperate and might listen to the lower number.[6] He did, and they did. So Steve became the VC, but definitely not a Co-Founder, of Pixar.
Among the founding employees, 38 of them in addition to Ed and Alvy (see the complete list at the founding documents), there was John Lasseter. Although fundamental to the success of Pixar, and a spectacularly talented artist, he was not a Co-Founder either. On the list of the founding employees is everybody in the computer graphics group at Lucasfilm, including the hardware and software engineers, the technicians, the secretaries, the receptionist, and John Lasseter. If John Lasseter is to be listed a co-founder then so must the other 37 persons in addition to Ed and Alvy.
Alvy notified Ed in a formal letter mailed 23 Aug 2004 that he was aware of and unhappy with the omission of his name as the other co-founder of Pixar, and with the complete omission of his name from the Pixar website. He termed it a lie. Ed's response was that it was just marketing and that he, Ed, was worried that he too wouldn't receive credit for Pixar. Alvy's rejoinder was to scoff at the notion that Ed would be left out. No action was taken by Pixar to correct the matter, nor has been as of 10 Feb. 2016.[7]
The first time that Steve Jobs was listed as "founder" was in the prospectus of the company issued at the time of its public offering, 29 Nov 1995, when the company was almost 10 years old.[8] Up until that time the co-founders were always listed as Ed and Alvy only.[9]
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[1] For example, a startup very familiar to Ed and Alvy was Silicon Graphics, founded by their friend and colleague at NYIT, Jim Clark. Jim cofounded SGI with at least eight others. The Mayfield Fund venture capital group capitalized the startup, but was not therefore considered a cofounder. Similarly, Sergey Brin and Larry Page cofounded Google. Andy Bechtolsheim, who gave them their first money, is not listed as cofounder of Google. Alvy's second company, Altamira Software Corp. was cofounded by himself and two others. The seed funding was by Autodesk Inc., but Autodesk was never listed as cofounder of the company. The notion is clear: although the money is there (has to be there) at the beginning, it's just the money, not the idea.
[2] A document titled "Potential Investors III," dated 21 June 1985, in Alvy's possession lists 36 venture capital and investment banking firms approached.
[3] A document titled "Potential Investors I," dated 21 June 1985, in Alvy's possession lists 10 corporations, or groups of corporations, that had stated interest at that date, including GM ("Head of CAD/CAM visited 6/20. Very positive.") and Philips ("Technical people from Holland will come next week.").
[4] A document titled "Agreement in Principle," dated 7 Nov. 1985, in Alvy's possession is a signed agreement between Lucasfilm, Pixar, Electronic Data Systems (GM/EDS), and North American Philips Corp. The investors would own 70% and the employees 30%. The investors would pay Lucasfilm $11.5m for the technology and the new company $14m for preferred stock, giving the new company a valuation of $20m. If the cost of the technology is figured into the cash invested, then the valuation was $36.43m.
[5] A document titled "Potential Investors Detail," dated 21 June 1985, in Alvy's possession is about Apple's status: "Steve Jobs wants one more social call to show off manufacturing. Then would like presentation. Marketing and sales may need to be downplayed for him. 3/22/85 Alvy and Ed had dinner with Steve. He will be away for two weeks. He wants to send John Skully [sic] over. 5/1/85 Steve's office said he will contact us." Steve was fired from Apple's board on 5/25/85, so nothing came of this sniff. He subsequently met with Ed, Alvy, and their financial person Ajit Gill, at his Woodside estate and proposed that he buy the group from Lucasfilm and run it. Alvy has in his possession a slide presentation dated 4 Aug 1985, apparently Steve's presentation, showing a proposed reporting structure of the company with Steve as head, Ed as head of Marketing and Sales, and Alvy as head of Research and Development. However, Ed and Alvy rejected the notion, saying they wanted to run the company, but welcomed his money. This was when he made the low-ball offer to Lucasfilm to fund the spinout in the form Ed and Alvy wanted.
[6] From the founding documents. The investor would own 70% and the employees 30%. The investor would pay Lucasfilm $5m for the technology and the new company $5m for preferred stock, giving the new company a valuation of $7.14m. If the cost of the technology is figured into the cash invested, then the valuation was $14.28m.
[7] A copy of the letter from Alvy to Ed is in Alvy's possession. It was written on Alvy's Ars Longa letterhead, dated 23 Aug 2004.
[8] The prospectus is in Alvy's possession, dated 27 Nov 1995, p. 47: "Mr. Jobs is the founder of Pixar." On the same page is "Dr. Catmull is a co-founder of Pixar." No others are listed, including John Lasseter. The prospectus also claims that Jobs was CEO from the founding on 3 Feb. 1986, which is not true. Catmull held that position most of the time, with Chuck Kolstad holding it briefly. See the founding documents.
[9] See the last image at founding documents. This is the Pixar management in a business plan of 12 Sep 1988. It lists Steve Jobs as Chairman of the Board and co-founder of Apple and NeXT. Ed is listed as President, CEO, director, and co-founder of Pixar. Alvy is listed as Executive Vice President, director, and co-founder of Pixar. Two other business plans in Alvy's possession are dated 29 Nov 1988 and 15 Feb 1989. Both list Steve Jobs as director of Pixar and co-founder of Apple and NeXT. Ed is listed as Chairman of the Board, CTO, and co-founder of Pixar. Charles (Chuck) Kolstad is listed as President and CEO, and director. Alvy is listed as Executive Vice President, director, and co-founder of Pixar.
Pixar Myth No. 3: The Movies Were Steve Jobs's Vision
No, they weren't. The "group now known as Pixar" first had the vision to make the first digital movie in the 1970s when part of the New York Institute of Technology on Long Island. There they worked side-by-side with a traditional feature-film cel animation studio and learned their craft. Ed Catmull and Alvy Ray Smith first joined forces there in early 1975. It took 20 years to realize the vision of the first digital movie.
Ed Catmull had wanted to create animated movies since childhood and had waited for Utah's Ivan Sutherland to form a Hollywood movie company based on computer graphics. It had not happened, so Ed ended up on the NYIT campus instead. An early piece of 3D animation by Ed, made for his PhD dissertation, was reused in the movie Futureworld.
Alvy Ray Smith was an animation aficionado who had taught himself animation from Preston Blair's famous $1.50 how-to book. (Preston Blair was the animator of the dancing hippos in Fantasia.) Alvy had also taken an animation class before first joining Xerox PARC and then NYIT.[1] His first animations at each place [1974 and 1975] came from Preston Blair's book.[2] He and David DiFrancesco, who came with Alvy from Xerox PARC, were awarded a National Endowment for the Arts grant at NYIT to explore the new artistic medium of "raster graphics" and created many animations together.
Ed and Alvy, at the encouragement of a young animator, Jamie Davis, whom they had met at NYIT's cel animation studio, paid a visit to director Ralph Bakshi in Los Angeles, where Jamie had subsequently gone to work. Bakshi's animated films (Fritz the Rabbit, Heavy Traffic) were favorites of the 60s generation, but Bakshi stood up Ed and Alvy.
Ed and Alvy made annual pilgrimages to Disney from the mid 1970s on. (See notes of the 1977 visit.) During one of these visits they met John Lasseter, a young animator who wasn't frightened of them - as most animators had been. Alvy and John bonded over Preston Blair's original drawings for the dancing hippos in the Disney archives, the pink elephant scene in Dumbo, and other classic bits of animation. Ed was there too. When John was fired by Disney, Ed and Alvy (at Lucasfilm) snapped him up. Alvy directed John in his first animation at Lucasfilm, The Adventures of Andre & Wally B., which served as the group's announcement to the world in 1984 that character animation with computers had arrived.
While at Lucasfilm, Ed repeatedly asked George Lucas if the graphics group could do animation, and told no. Alvy directed the graphics group in the "Genesis Demo" of Paramount's Star Trek II: The Wrath of Khan, the first use of 3D raster graphics in a successful motion picture. Then George included work from the graphics group in his next film, Return of the Jedi. These pieces revolutionized special effects in movies, but were not along the path of character animation that the group aspired to.
Disney came to Lucasfilm and negotiated a contract with its Computer Graphics Project to build CAPS, the Computer Animation Production System, which digitized Disney's classic cel animation process. Alvy created and wrote the detailed proposal for CAPS over about two years in consultation with Lem Davis at Disney and encouragement from Roy Disney, Walt's nephew. (See CAPS proposal to Disney 1985 version, and CAPS executive summary for Pixar in 1986.) Alvy negotiated this deal over many months with Disney's Bob Lambert. (See CAPS first payment and CAPS letter from Lambert.) It was very successful (it was completed at Pixar) and bound the two companies together in a mutual admiration society.
While still at Lucasfilm Alvy negotiated with a large Japanese company what both groups thought would be the first digital movie. It was to be based on Monkey, the hero of Journey to the West, a classic in Asia. After months of negotiations, and story meetings - with John Lasseter's story ideas of primary importance - Alvy ran the numbers very seriously for the first time. He discovered to his dismay that Moore's Law still had not proceeded far enough to make computation of a movie cost effective, and so backed out of the deal, just as Pixar was spinning out from Lucasfilm.
NOTE. All of the above happened in the decade leading up to and including 1986, before Steve Jobs ever came on the scene - certainly before he assumed the putative position of running the company in about 1995. Making animated movies was not his idea or his vision.
John Lasseter proceeded at Pixar to create and direct a sequence of short films, tuning the animation "chops" of Pixar. One of these, Luxo Jr., was nominated for an Academy Award. Another, Tin Toy, won Oscars for John Lasseter and Bill Reeves. (See Oscar celebratory shapshots.). This was done while Steve was on the board of Pixar but long before he assumed some of the management (in early 1995). He was aware, as a board member (chairman often), of all this of course but the pieces were not his doing in any way (other than voting the use of Pixar company money to fund them - again, a great money man for Pixar).
Pixar built hardware at first in order to pay the bills while waiting for the price of computation to drop sufficiently (from Moore's Law) to make a movie. The moment it did drop that far, Disney approached Pixar to make Toy Story. Alvy departed in late 1991 after an early fundamental meeting at Disney convinced him the movie was to become a reality and after a treatment of the movie was made.[3] That meeting was convened to induce John Lasseter to work with a company that had fired him. The meeting worked, and Ed Catmull negotiated the contract. Steve was not running Pixar for the two years or so while Toy Story was being made. Ed Catmull was.
When New York critics told Disney that Toy Story was going to be huge, then Steve Jobs assumed leadership of Pixar (but always with Ed Catmull in the Office of the President). He did a great job of negotiating movie deals with Disney, with the Pixar IPO (a piece of business genius), and the purchase of Pixar by Disney. But he was not the inspiration behind the business, nor did he have anything to do with which movies were made, or what their content was. He was not allowed in the story room. The look of Pixar comes directly from John Lasseter and the artistic talent he hired. The feel of Pixar comes from Ed and (until he departed in Sept 1991) from Alvy. Steve was a great money man, a crucial one, for Pixar, which made him a billionaire in return.
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[1] Alvy has in his possession a letter dated 19 July 1974 to Xerox PARC asking for official employment to utilize Dick Shoup's SuperPaint machine and program, which he had already been using unofficially. The letter includes this: "One of my first intuitions on seeing the machine was that it would be a fine instrument for making animated films. So I immersed myself in 'classic' animation in preparation for using the machine this way. For example, I took a course in the subject from Steve Smith, a professional animator. What deeply impressed me from this schooling was the utter drudgery of the classic approach. . . . I have made several short animated films (employing, at times, the concept of (2+1)-D painting and certainly improvisation) on the machine. . . . I propose continued development of the machine as an animation device. I believe the commercial applications are obvious: TV commercials, feature films, educational films, a home video cassette market yet to be developed."
[2] Preston Blair's walk cycle, depicted above, was implemented by Alvy at Xerox PARC in 1974, the dancing lady animation, also shown above, was implemented by Alvy at NYIT in about 1976.
[3] Alvy has in possession a document, dated 9 Jan 1991, titled Alvy, Chuck and Ed's Itinerary Disney. It mentions also Ralph [Guggenheim], Bill [Reeves], and John [Lasseter], also Steve Jobs, Peter Schneider, and Jeffrey Katzenberg. Alvy has in his possession a document, dated 1991, titled Toy Story (working title), by John Lasseter, Andrew Stanton, and Pete Doctor. It is a 12-page treatment of the movie. (Chuck was Chuck Kolstad.)
Pixar Myth No. 4: Steve Jobs Named Pixar
No, he didn't. This one is really wild. Alvy Ray Smith named Pixar, with the agreement of the employees of Pixar, always a collegiate outfit.
Alvy took the name from the Pixar Image Computer, which he and Loren Carpenter had named. Alvy, having grown up in New Mexico, wanted to name the machine with a name like "laser," which he characterized as a noun that looked like a Spanish verb. (Spanish verbs, in the infinitive form, always end in "er," "ir," or "ar."). Alvy suggested as a first try "Pixer," a (fake) Spanish verb meaning to make pictures, and looking a lot like "laser." Loren noted that "radar" was a very high-tech sounding word, so what about "Pixar"? Alvy promptly agreed because this was an alternative Spanish verb spelling and certainly did sound more high-tech. The naming of the Pixar Image Computer happened while the group was still part of Lucasfilm and before Steve had come on the scene.
When the new company co-founded by Ed Catmull and Alvy Ray Smith needed a new name, no two people at (what would soon be) Pixar could agree, and agreement was important to them. Finally, in desperation - the incorporation papers for the new company needed a name - Alvy suggested that the company use "Pixar" since that word had already become strongly associated with the group. Everyone reluctantly(!) agreed. The stand-in name, by the way, while this was being decided, was "Gfx." The new name "Pixar, Inc." went on the founding documents, but the "Inc." was quickly dropped as unnecessary and cluttering.
Steve Jobs had nothing to do with this process at all.
Pixar Myth No. 5: Steve Jobs Ran Pixar
No, he didn't. It can be argued that he began to do so in late 1995, when Pixar was just shy of 10 years old, because he began using the titles of leadership then, when the company went public, but evidence suggests that even then it was Ed Catmull actually running the company, the same man who had done so from its earliest days on Long Island at the New York Institute of Technology in the mid 1970s.
For the first decade, to within a few days, Ed Catmull unequivocally ran Pixar from its founding in early 1986. Furthermore, Ed had run the group now known as Pixar back when it started at New York Institute of Technology on Long Island, 1974-1979, and when it was part of Lucasfilm, 1980-1986. In short Ed ran the company for 20 years without question, except for a couple of years 1988-1989 when Chuck Kolstad held the title of President. Wordplay began at the IPO of Pixar in 1995, as the following documents support.
In the prospectus issued 29 Nov 1995 in preparation for bringing the company public, Jobs claimed to have been CEO (and founder) of Pixar since its founding in 1986, but this is not true.[1] Ed Catmull as President inherently had the function of CEO of the corporation (all corporations officially have a CEO, whether the title is used or not). Ed explicitly held the title of CEO in 1987, showing that the prospectus was wrong (see below).
The proposed company, to be spun out of Lucasfilm as Pixar in 1985, listed Ed Catmull as President and CEO and Alvy Ray Smith as Vice President and Chief Technical Officer.[2] The founding documents show that this was indeed the management structure of Pixar at its founding in Feb 1986, as does an organization chart of the company in Nov 1986.[3]
In July 1987 Steve Jobs was listed in a business plan of Pixar as "Chairman of the Board," Ed Catmull as "President, Chief Executive Officer and Director," and Alvy Ray Smith as "Executive Vice President, Director."[4] So the Board consisted of Ed, Alvy, and Steve, as at the founding of the company, with Ed as CEO.
In Nov 1988 and again in Feb 1989 Steve jobs was listed in business plans of Pixar as "Director, Principal Shareholder," Ed Catmull as "Chairman of the Board," Chuck Kolstad as "President," and Alvy Ray Smith as "Executive Vice President, Director."[5] So the Board consisted of Ed, Alvy, and Steve, as at the founding of the company, with Ed as COB. The Board had moved Ed aside as President and replaced him with Chuck Kolstad, formerly VP of Manufacturing, in an attempt to bring the company's hardware business into profitability.
The formulation adopted after the IPO (going public) of Pixar was that Steve and Ed shared the "Office of the President." Since Steve was busy running Apple by then, this at least gave the appearance of his running Pixar whereas Ed Catmull actually performed the duty. It's hard not to take the story of Steve's founding, owning, and running Pixar as a pure marketing ploy to demonstrate his business prowess. Of course, his move in taking Pixar public on almost no cash was the brilliant move that proved his prowess, without any of the other shenanigans and distortions, and it made him a billionaire.
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[1] The prospectus is in Alvy's possession, dated 27 Nov 1995, p. 47: "Mr. Jobs . . . served . . . as its [Pixar's] Chairman since March 1991 and as its Chief Executive Officer since February 1986." On the same page is "from February 1986 to November 1988 he [Dr. Catmull] served as President [of Pixar]" and "from November 1988 to March 1991 he [Dr. Catmull] served as Chairman [of Pixar]."
[2] A business plan for "Pixar (A company in formation)", dated 14 May 1985, is in Alvy's possession. An earlier plan also in Alvy's possession is dated 19 Mar 1985 and states the same information.
[3] See organization chart of Pixar, dated 31 Dec 1986. Ed and Alvy manage roughly half of the company each.
[4] A business plan for Pixar, dated 6 July 1987, is in Alvy's possession. Ed and Alvy are each listed as "co-founder of the Company."
[5] Business plans for Pixar, dated 29 Nov 1988 and 15 Feb 1989, are in Alvy's possession. Ed and Alvy are each listed as "co-founder of Pixar" in both documents.
Pixar Myth No. 6: Steve Jobs's Investment Saved Pixar
No, it didn't. Jobs did not come along and pour money into a dying company and save it, as is sometimes depicted. Pixar was failing despite his money which was the only money the company had. That is, the company built from scratch with Jobs's investment was the company that was in trouble, DESPITE Job's financial involvement. It was failing as a hardware company. What saved Pixar was Disney's asking it to make a movie. That wasn't Jobs's idea at all. In fact, the idea all along (Ed and Alvy's idea) was to keep the company alive with hardware manufacturing as long as necessary to reach the next stage in Moore's Law, when computing a movie would become feasible, then make movies. Jobs invested in that initial hardware company. He ran another hardware company, Next, at this time. Hardware was what he knew, not animation.
The company ran out of money several times in the initial hardware days. Jobs poured more money in to cover the losses each time. It's sometimes construed that he did this because he saw the long-term potential of the movie business and held on to "his vision" with further investments. This wasn't the case at all, however. Jobs kept pouring money into the company so that he wouldn't have to sustain the embarrassment that his first company - after being booted from Apple - was a failure. The result is the same: His money kept the company afloat, but the idea that it was his grand vision is not right. In fact, he would have sold the company to ANYBODY for $50 million (to cover his total investment) during that pre-movie period. The company (Ed and Alvy, in particular) wrote several business plans during those years for just that purpose. They all failed to attract a buyer. Jobs would have bolted if he could have without embarrassment.
What Jobs WAS good at was seeing the grand opportunity when it appeared, and moving fast to take advantage of it. That opportunity wasn't Disney's approach in 1991 to the company to make the movie. It was when the completed movie, over three years later (late 1994), was taken to New York City and the critics went wild, saying it was going to be a smash. THEN Jobs quickly stepped forward, pushed Ed Catmull aside as apparent head of the company, and took brilliant advantage of the opportunity to take the company public, cover his investment finally, and make it appear that it had been his idea all along to do it this way. He was a marketing genius, including self-marketing.
It was Disney's money that saved Pixar. They paid for the production of Toy Story, which went on to great success for the company. Animated movies were Pixar's vision, from its earliest days at NYIT on Long Island, not Jobs's vision.
