Becoming Steve Jobs

by Brent Schlender

  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 d
ismal—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 faile
d,” 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.

  Chapter 8

  Bozos, Bastards, and Keepers

  Thanks to the unlikely, dizzying success of Toy Story and the Pixar IPO, Steve was back in the limelight. He got more than his fair share of the attention, but neither Ed Catmull nor John Lasseter cared too much about that. Now that Pixar was on solid financial footing, they were both ecstatic to be developing their next movie, A Bug’s Life, without having to worry about the fate of their company. To the outside world, it seemed that Jobs had rediscovered his pixie dust. The success of Toy Story had given the myth of Steve Jobs a rather nice touch-up.

  The question now was whether Steve’s Pixar triumph was a one-shot anomaly. For a man whose name eventually would become synonymous with great American second acts, the Steve Jobs of 1996 had had remarkably little success with his own sequels. The Apple II had been followed by the Apple III and the Lisa, both of which had been failures. The Mac became a success only in the more robust versions introduced by John Sculley. His most grandiose sequel of all, NeXT, the company he’d created to be an idealized version of Apple, had proved utterly anticlimactic.

  Pixar had provided some redemption. But Steve, of course, had been on top of the world before. The question was whether he’d handle it any better than he had in the past. Would he repeat the same mistakes? Or—to put it in the language of Pixar—would he make like Woody in Toy Story and take to heart what he learned in exile? Could he temper his ego, play well with others, defeat his enemies, and emerge a true hero?