Building Pixar, Working With Steve Jobs, and Cultivating Creativity | Ed Catmull

Key Takeaway

When leading a team, people with power or perceived power need to shut up for the first 10-15 minutes of discussions. If a person with power speaks first, they set the tone for everything that follows. Let others start the discussion, then enter it—but enter as an equal contributor, not as the authority figure. This prevents you from derailing the conversation and allows genuine ideas to surface before your influence shapes the room.

Episode Overview

Ed Catmull, co-founder of Pixar, shares insights on creative leadership, the Brain Trust process, and his unique working relationship with Steve Jobs. The conversation explores how Pixar built mechanisms to surface truth, managed board dynamics, navigated Disney contract negotiations, and created an environment where honest feedback could flourish despite power dynamics and ego.

Full Transcript

Transcript of Building Pixar, Working With Steve Jobs, and Cultivating Creativity | Ed Catmull from David Senra. Auto-generated from episode audio; may contain minor errors.

Right before we started recording, you said that you had some Steve Jobs stories and that you wanted to add something to it. What were you going to say? say? say? Well, this is a result of just thinking a lot about the last many years and a lot of it reflection, but also trying to understand the nature of change and the process that you have of trying to come to an understanding or or gain insight. In the book, I talked a lot about the brain trust. The brain trust is such a mechanism.

Different companies have different ways of trying to arrive at at truth and getting um insight out there. Every company says they do that. Most of them are full of [ __ ] All right. They what they've got are people around them who are telling them what the leader wants to hear. and the leader thinks because they're hearing what they want to hear that they he got this really insightful group. Um, but it's not really about diving deep. It's it there's an overlay of the politics and where I am, what's my career and so forth.

All of which gets in the way. In the case of the brain trust, we worked out a way for people to be honest with each other and feel comfortable about it and and we thought a lot about how to do that and what the personal dynamics are, what the psychology is that might get in the way and how we address it. But Steve had a very different approach in order to get insight and I would say that others do too. So it's just like the different ways of doing it.

But he did understand what he was trying to do. He did understand at an intuitive level there's no upside in being wrong. As soon as he understood something, he would change quickly. But here's the thing that most people don't know about. And that is that Pixar was a public company for 10 years, starting in 95 when we went public until 10 years later when we were acquired by Disney. Disney. Disney. In that 10-year period, Steve fired two members of the board of directors of Pixar. Pixar.

Pixar. The reason he fired them was that they never disagreed. And he said, "If they don't disagree with me, then they aren't bringing any value to the company." That's an unusual way of thinking. And he really believed that. Our board meetings were lively, they were loud, and they were thrilling. And you know, we we made great progress. Uh, and they were arenas of disagreement. And these were people on the rest of the people of the board had very strong opinions, did not agree. And Steve loved that.

And I would say a lot of executives probably say they want that, but Steve really meant it. uh he and I disagreed a lot. We didn't argue, we disagreed and we'd we'd have uh long weekl long discussions about something something something and in the end about the third time I would realize he was right and about a third time a third of the time uh uh he would realize I was right. But the other third of the time uh I just did what I wanted. uh and he was fine with that because we had discussed it.

The whole point is how do you get to the inside? How do you get how do you surface things? Because it's hard to get underneath things. I would say that a lot of people like to go down one layer. You one layer and you form a decision. Can't do that. You got to keep peeling away the layers to figure out what's really underneath it. And it's a shortcut to make a decision quickly based upon a little bit of information. And getting at underlying factors uh is inherently a long-term strategy and it's a difficult one and it's timely and you need different mechanisms within an organization in order to get to better insight.

What are some of these mechanisms? Because Steve has famously said, and I've heard a few other people say about this, that he learned more about the art of management from you than anybody else that he ever met. Boy, didn't tell me that. I would say we were just completely different. different. different. But what are these mechanisms you're saying to like get to these other levels that you used? Well, one of them is the discussion is always about the topic. It isn't about who's right. So for me, the example would be in a a healthy brain trust meeting because you've got people working on a film.

So what are the dynamics when you you come together as a group in order to discuss something and you're discussing something that has problems? Just the nature of all these films is it may be a great idea underneath it, but it's not jelling or it's not working right. the creative team presenting it know that it doesn't work, but it also means they're vulnerable. They feel vulnerable and they're presenting it to their colleagues and people who are very successful. successful. successful. So if you're aware of that, then you can actually uh give them space in order to listen because that's what we really want is for them to listen.

But there are other dynamics that are going on. There are people in the room who may be new to the room and they may want to demonstrate that they're capable of contributing. So if they put out an idea and it doesn't work, then they may feel like they've embarrassed themselves or they haven't shown themselves worthy, they're now thinking about their relationship to it rather than about the problem. So that's a psychological thing that happens in the group. I throw out an idea. Is it accepted or rejected?

That becomes a personal thing. Well, how do you manage that? How do you avoid people not saying an idea like letting potential embarrassment stop them from sharing an idea? Well, the original group started off uh as as a small group who were already all all that way. That is what and this starting on Toy Story. They'd had these intense discussions and it was really about solving the problem. So they didn't have any fear of embarrassment. No, there's like four of them. Okay. Okay. Okay. But then so they're working together on the same thing and their very nature is they're working on the problem.

When we started, we had that group that worked together. But we also had something else that I think Ander Stanton and I recognize, I think, most clearly was that we had an outside force that was a a corrective. a corrective. a corrective. An outside force. Okay. because our contract with was with Disney. And so the person who was in charge of Disney animation at the time was Tom Schemacher, who later moved back to Broadway to be over theatrical there. But he would come in as a person who had a vest a vested interest in our success and he would tell us what he thought and often he would disagree with what we had.

So it was good to have someone come in. It's like a different perspective in case you get caught on a little loop because you're building this thing in your head. It's kind of fragile and sometimes you need somebody to say, "Well, that's not working." and jar you from that fragile thing that's in your head. He would only see it once in a while and we valued that. Bug's Life is the next film and then Toy Story 2 was as the next one. Uh uh the first one was, you know, just obviously was the first like that was getting going, but we were getting our our legs under us as we figured all of this out.

We also had a group of people who were consciously trying to figure out the process. It was just everything about it, not just the movie, but how we worked with each other. other. other. Um, but as we were getting better at this and starting to rise and by this time we're a public company distributing through Disney, Disney is starting to go downhill downhill downhill and we are aware that uh Tom Schumacher was going to leave because he was going to New York which meant we were going to lose our outside force.

Andrew Camp with the idea that this group that we had, we would call the brain trust and that as we uh elevated other people to become directors, we would bring in others or the the writers or or certain experienced people into a room as a small group to solve the problems, but the brain trust would then see somebody else's film and act as an outside forks. That was the idea. So, other directors looking at another director's film and giving feedback. Yes. Now, uh it was to replace what Tom Schumarker was doing.

It didn't work. The problem was they weren't outside. They're in the building. They're all the time and they're always know what's going on. Uh so the notion of them being on the outside isn't isn't true. However, what we discovered was they had this immense capability of giving ideas to each other and helping each other, which wasn't the same thing. And it's a subtle difference to have this outside force. Instead, it was this problem solving group. So, the brain trust was a was a way of running a certain kind of meeting uh for every screening of a film or occasionally at an offsite.

It wasn't that we we ran every meeting because they have different dynamics. It was a particular thing that took place after a screening and everybody learned how this worked. We had to get another outside force and the outside force was Steve Jobs because you banned him from being part of the brain trust. Correct. Yes. Yes. Yes. Why? Because he would not be an outside force. force. force. In other words, as a he he's now on the board and he sees it uh once per screening. So, he doesn't see it very often.

often. often. And now he would he would come into this meeting and uh he's he's fresh. Um he hasn't seen anything since the last one. He would usually call me the morning of. I was in my little gym, my in my home there working out and I get a call in the morning. I could count on it. And he'd say, "How's it going, Ed?" And I'd say, "Uh, I think we've got problems." Okay, nice to know. I'll see you later. I would never tell him what to think.

All right, that was part of the relationship. Steve is smart enough that I could say there's a problem or that I think there's something but I was not going to tell him how to think or I might say I think it's going pretty well. Nice to know. We'll see you later today. That was it. What do you think was the purpose of that phone call? He knew because I'm in the middle of this that if if there's if there are problems in there in there in there that uh that there is a need for someone to come in and say something strongly and and but he but at that point it was it had to be from him cuz it couldn't be to him, right?

Were people afraid in Pixar to share like harsh feedback or like fight with Steve? No. No, not with Steve. you know it was uh uh actually people they they they would talk back with him. I mean was there a little bit of fear and he was obviously you know so well known that some people a lot of people nervous it was I mean there are people are nervous about me too just because the position that's just a reality is when you're a position of either power or perceived power that people react to you in a different way and it's critical to be aware that that phenomenon takes place because nobody will tell you that they wouldn't admit it but it happens.

So if you're aware of it, then you can just sort of be a little more tuned in. There was another reason why he didn't go to the brain trust meetings is that in order to get the dynamics right that the people with power, either real or perceived power, need to shut the hell up for the first 10 to 15 minutes. And he couldn't do that. It wasn't that the the logic of that is that if a person with power speaks, they tend to set the tone for the rest of the discussion.

discussion. discussion. So you don't want them to speak at the beginning. You want the discussion to start and then you enter the discussion, but in this case, they're entering as filmmakers with the others and it doesn't derail the discussion. Steve had such a powerful voice that it didn't matter when he spoke. He was going to have this extremely strong effect on the dynamics of the room and he understood that. So it was the reason he didn't come. I said you basically the dynamics don't work if you're in the room and that we need you for this.

And he understood that and that's the way it worked and it worked great. It was an interesting phenomenon because uh Steve would would would come into the meeting the the brain trust or excuse me it wasn't brain trust meeting now it's the meeting of the board of directors that's when he would see it the whole board of directors would see it in the theater with a certain with a subset of the of the company we didn't have the whole company seat all at once it was always trying to make sure there were some fresh ship or people hadn't seen it before.

Um so we there'd be some audience there but really the at the end of it the board of directors would come together with the filmmakers filmmakers filmmakers and each would give their comments and Steve would give his comments. He was extremely articulate extremely articulate extremely articulate and uh he would give us notes and most of the directors would say at some point that Steve gave them notes and he saw things in the films that nobody else saw that they'd never heard before. before. before. However, I'm in every one of these meetings.

meetings. meetings. There was nothing that Steve ever said that had not been said by some of the somebody else before in one of those meetings. Now, what's the difference? What's happening there? Explain that. Well, part of it is that when you know something that somebody really well, then you can also learn how to disregard what they say. Like they're saying sort of thing they might be expected to say and you you you disregard it or you don't hear it. Well, Steve, it wasn't possible to do that.

He was so clear and articulate that saying the same thing would actually break through in ways that uh you wouldn't hear from the others. And there are a couple examples of them where I can't I I can't actually tell the story because of the the people involved, but people sometimes people were uh felt betrayed betrayed betrayed because their colleagues hadn't told them about the problem before. But they had, as I say, I was there and and I heard all this and they all felt like they were not being listened to.

And then Steve came and all of a sudden, you know, um the the director hears that and now it's like new a new revelation even though it's been all along. along. along. That's the reality of people with strong opinions of the dynamics. And I honestly my job there while well while it's fun to give note my job was to look at the dynamics and and I will tell you that in general this worked very well. Everybody figured this out that this is how it works and it was great and they loved it and even though there were apprehension they wanted the notes and they engaged correctly with it.

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That is ramp.com. You're running the company. Steve's there almost never. What I've never heard anybody a CEO describe their job as your job is to observe and manage the the dynamics. What do you mean by that? Well, like in in in the case of let's say the the brain trust just as as an example is that in general it works pretty well. Uh every once in a while you go off the rails. to go off the rails and then you know you have to figure out why I went off the rails.

What got in the way? And then usually you have to reconvene with a smaller group because the dynamics as we all know are different when you got a small group. If things are going well, you like a bigger group because you're training other people to feel comfortable in this way of working. But if the problem is really serious when you go to a small group where they're sort of past that stuff and they can focus on the problem. So occasionally it's off the rails. Usually works very well and once or twice per uh film then magic happens.

By magic I mean that ego has left the room. You have these intense discussions and somebody can say something and it doesn't work and they're not thinking about my idea wasn't there. They're they're always back on the problem and you it's you know described in like in sports as flow or in areas like that as flow but it's like a group getting into that state and that's the ideal place to get. this is so important to get this all this working right that this is what our product's based upon is this group of people working well together.

So paying attention to the dynamics of those rooms is the job. They're the ones that are making the movies. I'm not making the movie. I'm just trying to make sure they work well together. From the point of view of directing a company, you know, like a board of directors is how do they work together? And and sometimes board of directors are there and the the CEO just wants sort of protection from them doing it. So he wants to craft everything that goes to the board of directors.

It's not the way Steve worked. Steve worked. Steve worked. What is the way he did it? Well, it was just like we knew what the problems were. We come in, you'd have these these these people with with very strong opinions. Well, we had the number one attorney from from from uh Silicon Valley was Larry Sinci at the time. time. time. Apart from who was on the board, how is it how did Steve manage the board differently than other CEOs? You know, we had a a few of the critical issues of the company.

Uh we were a productionon company. Uh we all of our films were marketed through Disney. So um and then there was a limited time span in our contract with Disney. So there are a number of things we have to do to figure out where the company's going, what the relationship is, how do we make it strong or where is it threatened and and uh at the time through a lot of this time um Michael Eisner was the CEO and the and and the CEO of Disney Michael Eisner did not get along well with with Steve.

Steve hated him. The real reason for that well there were two things there. One of them was that um Michael testified before Congress about ripping because there was some testimony about it with audio. Yeah. What's ripping? What's ripping? What's ripping? Copying video on under, you know, if if you got a audio on a CD or something like that and you transfer over onto your computer. So there are these it's a it's a it's a name for copying something. something. something. Okay. but it sounds like ripping off.

So there's a which is unfortunate use of the term. the term. the term. Um so Michael Eisner was testifying against without knowing what the term actually meant. actually meant. actually meant. So it it was upsetting to Steve. Why was that upsetting to Steve? Well, it's it's a congressional thing about uh the technology and how it's being used. only now Congress is is getting misinformation. But the other one was that our contract with Disney and the initial contract was to make three movies three movies three movies and at the time it was signed um Disney perceived that Pixar was going to produce boutique films.

their word, much as they would consider a Nightmare Before Christmas, a stop motion animated film to be boutique and therefore not bring in that much money at the box office. office. office. That's right. In other words, they were going to spend a lot on it and um they thought, well, it those that short film wouldn't scale up to be featurelength film. I mean, you couldn't really watch that computer graphic stuff for that long of a period of time, but it's like stop motion. It's a little quirky.

quirky. quirky. So, that's what they went into the first deal with thinking, you know, limited potential here, not knowing that Toy Story is going to come out, win all these awards, and be the highest grossing film of the year. That's right. So, that was a a leap because it was quite it was unlike the things that they've been doing. So, Steve thought Eisner gave him a bad deal. Well, deal. Well, deal. Well, it's not a very good deal. So Steve walked away feeling like it's [clears throat] one of the worst deals he's ever struck.

This is where he comes to you with the saying, "We're going to you guys essentially bet the company on Toy Story. You were dire financial straits. We're going to bet everything on Toy Story and the same week the Toy Story uh is going to be released in theaters, we're going to IPO." Yes. Yes. Yes. Is that correct? Yes. Yes. Yes. What was your response when he first came and talked to you about this idea? Well, I I mean I thought it was crazy. Um Um Um I I you know I learned a lot in this process process process because he he was right.

Uh but he had a logic and and the logic that he gave at the time was that because we knew this was not a boutique film. This is going to be a big deal after this film. We had to deliver two more films. But at the end of delivering the next two films because now we had an experience that nobody else did and we could get those other two out with all the experience behind us that when we're done that uh we will have created Michael Eisner's worst nightmare a competitor which funded by in part by Disney funded their own competitor.

own competitor. own competitor. Yes. And he said and Michael cannot let that happen. So, Micah will want to renegotiate the deal. Now, at this point, this is part of the change in Steve's life because he would typically shoot for the moon on a lot of things. Uh, you know, at Apple and at at and at Next and some and often overshoot, but he recognized because he's very smart. And so what he said at the time was that if we renegotiate uh then we have to come in as equal partners partners partners which means we need money which we don't have at the time.

Yes. So we have to go public to do it. It was very compelling and it also turns out to have been exactly what happened. So that was that was fine. And so we negotiated a new deal and the new deal was now a now five picture deal but sequels didn't count. So if we made a sequel and the idea was there would be a sequel to Toy Story why would sequels be excluded? Disney wanted to get as much as they could and that that was their way of differentiating between an original film and one that was presumably easier to make.

So that was the assumption. the assumption. the assumption. The second is that that Disney had been selling sequels on the VHS at the time. Until that time, the only the only theatrical sequel that Disney had ever made was uh to uh Rescuers Down Under. That was for Rescuers was the original. Rescuers Down Under was a sequel. Did that movie do well? Cuz I've never even heard of it. Well, the answer is no. But it also should be noted it is the first motion picture where every frame went through the computer was using the paint system that we had developed under contract for Disney.

So this is part of a relationship is we wrote this software. It was used on rescuers down under the whole thing. It looked great. The reviewers said it looked great. better than than the looking through the acetate. But the story was only so so didn't do all that well. Wasn't noticed, but they then had the confidence to to really go all out on their next film, which was Beauty and the Beast. That one I'm familiar with. Yeah. Using the same software. Beauty and the Beast came out in 1991.

Yeah. A a pivotal year, which we should come back to in a minute. But in '91, uh Beauty and the Beast came out. It also had some 3D graphics in it, but largely it was the the painting of the of the cells with the cap system which was written by Pixar under the contract. Uh Disney had some people who were working on that system also and they got an Academy Award for what it but the film itself was a sequel the adult sequel. So Disney did not perceive of a sequel as something which was worthy of going out in the theaters.

So when they they we had the deal to make the additional films then sequels were now perceived of us not at the same level of quality or anything else as a theatrical release. So that was the logical rationale for it. At this point, we've uh uh we're now working on Bugs Life. We're already working on it. We start working on the sequel to Toy Story. And I knew we had a problem. You know, even before we started, I thought there's something about this which is wrong because we're now we're building a company and everybody has um a belief about the quality we shoot for because we released Toy Story.

We were proud of it. Now we're working on Bug's Life and we're trying to make it even better just in in every way that we can. And now we start another film which is supposed to be lesser because it's going direct to video. Yeah. Cuz Disney originally Toy Story 2 was going to Disney wanted you to just forgo theaters and release it direct to video. video. video. Yeah, that was the plan. Yeah, that was the plan. That was one of the reasons why it wouldn't count.

So, we almost immediately said, "We think it needs to be theatrical." Disney didn't push back on it all. I mean, they agreed that it should go theatrical, but it didn't change the terms of the contract. It just came out and then it turns out it was a huge success. And once it was a huge success, well, thing was it was the first uh animated uh animated uh animated uh successful film of any kind ever. Yeah. for sequel. Basically, it changed the thing. Now, now, of course, you it's common for there to be um theatrical releases or theatrical sequels.

theatrical sequels. theatrical sequels. Yeah. Yeah. Yeah. But at the time, it was sort of a breakthrough. Like, it changed everybody's mind because it never happened before. happened before. happened before. So, the issue now came with Toy Story 3 because Toy Story 3 would be a sequel. And Steve said uh to Michael says, "Michael, we're a public company. Our investors are expecting that the we're coming to the end of the contract. If and it it is no longer it's no longer true that this is just a sort of secondass sequel that this is really a first rate theatrical film and it should count." and Michael stuck with the letter of the agreement.

That's what pissed him off. It pissed off Steve. So, it was just sitting there sitting there sitting there and um the the the deal was that if we wouldn't make it, they could. So at some point a few years later they started to make their own version of it which would kill the morale on your team because they don't think of these people. This is like just the the amount of effort and energy they put into the character is almost like your child. It's like saying now somebody else is raising my child.

Yeah. Yeah. Yeah. And they're going to do a terrible job. They're not going to do a better job than John Lacader and Ed Catmill and the talent that you have at Pixar. It put in that strain between them. Now, our relationship with with the studio and with marketing was very good. So, that was between Stephen. Did it change your relationship? Like, how did did it change the way you viewed Mike Eisner? Cuz I know Steve's pissed off, but aren't you as well? Oh, yeah. Yeah. Okay.

Okay. Okay. No, no, I was I was not a a fan of his. A war was now brewing between Michael Eisner and Roy Disney, who didn't like what was going on there. And Roy was on the board of Disney. Roy was on the board but was forced off. Yeah. Yeah. Yeah. And when he was forced off, that's when this war took place because he still had a lot of shares in the company and it was very public. There was a book written about it. Yeah. Me and Rob, my partner Rob have been reading the book.

Why can't I think of the title? Disney Wars. Disney Wars. Disney Wars. Disney. There you go. There's a war about it. It's called Disney War. Yeah. Yeah. Yeah. And it starts out. You got the book there. Yeah. It starts out with Roy and something about a Ferrari. they wanted to interview us uh and none of us would talk with the writers of the book and the and the reason was it was that we didn't know how this is going to end up but we didn't know how to skirt the relationship with the other people none of us said anything so even the parts of it which are about Pixar are the things about Pixar perceived through the Disney lens of the people who were there it wasn't bad I mean it's just was so yeah in that context Eisner has he's fighting multiple wars on multiple fronts because he's also got this war with Steve Jobs going on at the same time.

time. time. Well, that that's a personal thing. Yeah. Yeah. Yeah. From from the point of view of Pixar with Disney, there isn't Yeah. Yeah. Yeah. Uh there isn't any war going on there. We're basically neutral in this. But what is your reaction to this when they make this decision for Toy Story 3? Is this when Steve says he's breaking off the Because there was a time period where Pixar breaks off the negotiations with Disney completely. Is this the same time? time? time? Well, no. What's happening is we're just getting near the end of the contract, but we're getting close to the delivering the last film.

And at at which point uh Steve would not have let Pixar um stay with Disney. Steve at this point also knew that that he had cancer. He was uh uh it was very very an emotional time once in which uh actually it's actually when he showed us the first iPhone when it was a secret and we're on this bridge between the one building and there's a bridge over that goes between another tall building next to it and and their secret lab is where they're designing it.

and he told us that uh you know he didn't know how long he was going to live um and he lived several years after that but he he wanted to make sure that his family was taken care of. He wanted to see his son graduate from high school and he wanted to make sure that Pixar was in in good shape. It was very emotional at that time. Michael Eisner was still the CEO and he would not have continued with Michael Eisner. So since we were getting into the contract he started discussions with other studios other studios other studios um which would mean you know them doing the distribution fact is Disney is the best at marketing films and had including internationally.

which started those discussions and then the war over uh Michael Eisner guy really heated up and um they they voted him out but then they went through this process of who were they going to select. Bob Iger was in that group. Steve had talked with Bob Iger in the past because at the time he was like the COO because Michael Eisner was busy fighting out this major lawsuit he was in with Disney and the board and all that and they finally made a decision once he takes the CEO role of Disney and if I remember correctly before Yeah.

Bob Iger had said when he knew he the first person he called was his daughters and the second person he called was Steve Jobs. Jobs. Jobs. Yes. So he called Steve at his home on Sunday night and said tomorrow it's going to be announced that I'm the new CEO so this need to be confidential until that time. He said that he's been to all the the parks and he knows that all the new material is coming from Pixar. There's actually an interesting story about that where I think this might have been Bob Iger's book.

Might have been in yours too where he's standing next, this is before he's CEO of Disney. It was his book. Okay. He's standing next to Michael Eisner. I think they're at Hong Kong Disney. And Michael's like, "Let's watch the parade." You know, the parade that happens at the end of every day. And all the characters are going by. And he realizes every single character that is popular in the parade was created by Pixar and not Disney animation. And that's how he knew no matter what I cannot let Pixar get away.

What happened when he called Steve because he he told Steve that. But then he said that that he's been to Disney animation and they say that they've got it almost fixed essentially. They've they found what the problems are and they're about back on track. track. track. And you would have called that [ __ ] at that time. What Bob says is he did not believe that they were nearly fixed. And you didn't believe that either. Oh, no. I knew it wasn't. Okay. I knew they didn't have a shot at, but he knew it.

And he told Steve that he didn't know how to find anybody. And the only one the only ones he knew who knew how to run animation now was Pixar. So, can we talk? And Steve says, "Yes, as soon as you're ready." So, that was their conversation. Steve was blown away because Bob Iger starts the conversation by saying, "I've got a crappy hand. Can we talk?" And for him, it's like, "That's a show of honesty." That's unusual. Usually, you don't start a negotiation by saying, "Hey, other party, you have all the leverage here." That's right.

That's right. That's right. Bob just started out by being completely honest and Steve said, "Okay, this is somebody I can be a good partner with." And they formed a very close bond and relationship, you know, throughout the rest of Steve's life. And Bob's solution was we want to buy Pixar. Pixar. Pixar. Yes. But that's the first thing he wants to do and he talks about in the book because the board does not want it. But so, but here's what we see is uh and I will say incidentally up to this point, we're now uh almost it's 15 years since our original signing of that first contract with Disney in 1991.

That contract gave them the right to look at everything we did in all of our processes. As we started to become successful, nobody from Disney ever came and said, "What are you guys doing?" So, they're starting to go downhill. I think the last really big hit was uh uh Lion King. Then it started to go down from there. We're going up and uh we show them the films, we we take them down and and you know, get notes from them and so forth. Uh but nobody ever asked what we're doing or what's different.

Why is it that Pixar is so different? Was very curious. So now for me it's just you know observations like okay why aren't they curious why aren't they asking then we sign the the contract the pi picture contract to continue it which continues that right to see everything that we're doing now we're very successful and they're very unsuccessful unsuccessful unsuccessful and still nobody ever asks you what's going what are you doing and there no secrets we're not hiding anything ever. What's going on there? I have a theory.

Uh part of it I think that it this has to do with you go to your first conclusion and you stop thinking. In this case, they would have thought that this is the reason Pixar are successful is because they've got some combination of it's like it's John Lasser's got it or John and Ed or Steve or John and Ed or Steve some combination of the three. we don't have them and that's this the secret to their success. So we can't copy that. Now that's just a shallow way of thinking that the real question is what is it that's being done that's different?

Everybody's different and you know but what are they doing? And there was a logic behind the way we built Pixar and the culture at Pixar which is unlike anything else in the entertainment industry. There was nothing secretive about it. Nobody cared to know. Bob decided to come up as soon as you know he was made the CEO. He came up to Pixar and and uh the idea was to spend a day with us uh seeing what we were doing, how we thought about things, and what we had in the works.

the works. the works. And when he came, he walked up our walkway to the building alone. no assistant, no entourage, you know, a driver dropped him off, he camp alone, spent the whole day going around. And uh the first thing is like from the people at Pixar, the fact that he came alone alone alone was um very impressive, right? No group of people coming around, so very personal. Um Bob loved what he saw and he went back and he said okay we have to do this and and that was his first major battle with the board which he did write in book this was too big of a risk and too much money.

much money. much money. What did he see that day that made him arrive at that conclusion? You just saw the way we worked, the interaction, the ideas that we worked on that we were working on, the style, the uh and honestly it's the way I look at any film that we're working on is when we're working on a film and you've got a a group trying to solve the problems. And as I've said many times, when you start off, these films aren't done, right? They're the beginning.

They they have many problems. they suck and I'll sort sort sort I think in the book you say embrace that early work will always suck. Yeah. So, so basically if that's true then how do you measure whether or not you should keep doing it? What if it sucks or let's keep on doing it? So what's your basis for for proceeding? And for me the basis was what's the spirit of the team? because we all know it doesn't work. But if they're really working together and they're, you know, they're laughing and then they're angsting and all that together, then that's when you say, "Okay, we just keep going.

We just, you know, keep trying to solve it." I along that line, before I left, we completed 21 of the 22 films we started. So, but this is bizarre in that world. And at Disney, we completed by the time I left 10 of the 11 that we had started. So, it was just a different way of thinking about is we're going to fix the problem. And a hard problem is more likely to lead to an interesting film. Say more about that. Well, if it's easy, then you essentially it's more derivative.

Like, you know how to write a script. You know what the three-act structure is. you know, all these elements of storytelling and you put together all the pieces and you've got a story. Is it a great story? Is it emotional? Well, sometimes yes, sometimes no. But the statistics actually aren't terribly good. It's but it's fairly easy to come up with something which is mediocre. It's cheaper, too. If you take on hard things, then you need to spend more time trying to figure you have to trying to figure out how to be different in what you're doing.

So if you take on a hard problem and you and you just keep pushing at it, then the fact that it was hard is what's going to make it different. So if you're going to make a movie about a rat that wants to cook, all right, all right, all right, that's not a slam dunk. Not only that is, you know, a lot of people want to keep their project secret. secret. secret. This is one where you could tell everybody we're going to make a movie about a rat that's going to cook.

Nobody's going to copy it. But what is the measure? Cuz sometimes uh things don't go right. So, we will uh change up people. We've changed out some directors, some directors, some directors, including on Toy Story 2. Was that the first time you changed directors? Yes. Yes. Yes. Because the the uh the reasoning is that the one thing that the director can't do, they can screw up in all sorts of ways, but they can't lose the team. That was that was our guiding line. If the team is together, by faith, you mean the team's lo lost faith in the director.

In the director, right? So that's which then our our phrasing was the director can't lose the team, but we are we're doing everything we can to help them because sometimes you got new directors and sometimes these are really they're really good people. You you gave them the the the position because you believe they could do it. And even though they've they've been close to it and they've watched it, holding the mantle is a different kind of of thing. And uh it's pretty difficult. It isn't like let's say baseball where you can give credit to the starting pitcher and the middle pitchers and the elite pitchers and they all get credit.

With with directors everything sort of goes to the the the final name that's up there. The reality is everybody was contributing even that first person that was there. It's really hard on people to do that. So most of the of the behind the scenes work is to shore them up, help, provide guidance because you really want everybody to succeed. But if they lose the team, then then we have to make a change. But the result is we push things all the way through. And in the case of of I I said we completed 21 or 22 films we started.

What's the one film we didn't uh finish? Well, that one we actually did assign to another director to complete complete complete and he took a pass at it and uh and and this was Pete Doctor and Pete said, you know, uh this is, you know, we're getting this film going now. uh is such an uphill thing that there's actually an idea that I I have that's been rolling around in my head that I I think might be better and it's it takes place inside the mind of a little girl and this is inside out.

Yes. So we said uh you're right but also you you relying on the passion. So um Pete Doctor who's very well-loved at at Pixar and he wants to tell this rather emotional film. He says, "Okay, we're in." So 22nd became one of the other films it was completed. But that's just the the process. There are no real strict rules. It's we're just trying to get to the quality and we're trying to get it to work and have those teams work. work. work. I found one of my all-time favorite quotes when I was reading the book 0ero to1.

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Yes. And that's when you come up with this mantra that you would repeat your in inside um Pixar which is I think comes directly from John Lester where he said that quality is the best business plan. I like what he says because it's um um um although it it it wasn't the mantra for the rest of the studio but it was like implicit. implicit. implicit. It was his one. Yeah. Part part of it is that um my own personal belief is we never had a mission statement.

Um and the reason for not having a mission statement and I don't want to generalize to everybody else but a mission statement is an answer when typically we should always be asking questions. What are we doing? And um if you if you immediately say, "Oh, well, we go back to mission state and we're doing this." Um it actually ended up being stronger to have it. So that there was always sort of this questioning, are we doing the right thing and are we going the right direction?

We always had that questioning that was going on. But in terms of qualities of business, best business plan, it's, you know, this is related to this this great book, the the man who man who man who broke capitalism broke capitalism broke capitalism about Jack Welch. Oh, okay. Oh, okay. Oh, okay. Great book. Great book. Great book. because on the um I think in the year 2000 is when it was Forbes magazine named him as the CEO or manager of the century. century. century. Utter disaster people who were there because they they had this really uh high uh uh compound growth rate for 10 years something like that.

So people who were raised on the system were considered to be the very best. Whereas General Electric today, yeah, yeah, yeah, it split up into pieces. Uh and it was completely fragile. completely fragile. completely fragile. Um not robust because he gutted it gutted the future research. But the the people that were there were hired and considerably valuable because they had grown up in that system. two of them which went on to become leaders of Boeing applying the the same principles that they learned from Jack Welsh and Boeing with the con consequences that we we now see.

So this is and the opposite of quality is the best business plan because the reality is that quality and in products in products in products whether it's phones or movies or airplanes is the quality is very important that is got inherent in the business plan but too many that was the the short-term the short-term the short-term annual growth rate. Yeah. the opposite of what Lacier Wood is preaching in that statement. That's right. Uh we were not the lowest cost producers of animated films. That's for sure.

We may have been even the highest cost. I want to pick your brain about you had two childhood heroes you write about in the book. One being Albert Einstein, the the other one being Walt Disney. I've read everything I can get my hands on on Walt Disney. I find him fascinating. And him and his brother would fight over this because you know his brother was one supposed to be charging the money and Walt was the innovator and he's just like how much is this going to cost and they have this argument and he goes uh we're innovating I'll tell you when I'm done like I don't know what the cost is like I'll figure it out at the end I'm not trying to make the lowest cost product I'm trying to make the best.

So, what are some of the things that you learned from Walt Disney that you think you apply to Pixar? Initially, as a kid watching that, what I'm seeing is the result. Now, as a as an adult who's What do you mean you're seeing the result? result? result? In other words, I'm I'm watching the movies and going to Disneyland as a as a kid kid kid and then also watching what was the show he was doing for ABC when he's talking about building Disney, the first Disneyland.

It was The Wonderful World. I think it was the wonderful world of color because that I think uh when it first started they mean it was the wonderful world of Disney or something like that but when color TV became popular changed to the wonder and you were like 9 years old or something like that watching in your living room. living room. living room. Yeah, something like that. Yeah. Yeah. Yeah. Incidentally, when Disneyland opened um my wife's father worked as a sound editor for them and so she was at Disneyland on opening day.

She was also there for the 50th anniversary anniversary anniversary uh uh later 50 years later. Um so the other thing of course was Disneyland itself which was extremely in influential just going there and being there and knowing that all this came from the drive of of uh of Walt and his way of thinking. Now, I've thought a lot about this since because his brother was Roy Disney and Roy Disney had a son who's Roy Disney Jr. going to later was part of the hostile takeover in which Roy Disney with the Bass brothers to the hostile takeover of Disney which led to Michael Eiser and Jeffrey Kassenberg coming into Disney Disney Disney and uh and we got to know Roy Disney pretty well.

But now if if I now think of in terms of technology, if I go back to to Disney, Disney understood better than anybody else at that time that that technology was invigorating the studio and he was believed it so much it also led to Disneyland. He just loved this stuff. But it's when uh well before it was blue screen matting, then it was sodium yellow sodium matting. he would use it and and adopting sound. Any new technology that came out, Disney embraced it every single time.

He was one of the first people on the frontier. So like when the Xerox machine came out, they worked with Xerox and they built a room that was a Xerox camera. So I was in that room when I was in college and there's a lens in the wall with a platinum on the other side where the lights there and people could put the cells on it. Wait, Disney partnered with Xerox to build this camera? Yeah. To build a a room that was a camera. camera. camera.

Okay. Okay. Okay. So, in one side of the room there's a lens. Then there's a conveyor belt going in one side, another going out the other. So, in the room itself, there's like like a red light and you've got these zinc plates or something like that with carbon would go on it. So, these plates would come in the conveyor belt. They're clean. they'd be put up and then they would snap the photograph and then put this um carbon on it, you know, the little um particles rub it around.

So now you've got a a copy on there and then it would go out and then they'd fuse it with with with actually they they'd apply acetate to it and transfer the carbon onto it. So now they had a Xerox copy on the acetate which then could go off and later get painted. Interestingly enough, when I later became president of Disney, I walked by a room there in their building which had only been built by that time. I was only 10 years old. But I walked by a room that said ink and paint.

So I stuck my head in and I said, "We still have an ink and paint department." And she said, "Yes." And I said, "Can I see it?" see it?" see it?" Because turns out all those reports to me. I I just there didn't even know about this. So we went over the same room is there. It was really cool. It turns out that having technology was in Walt's DNA, but it was not in the DNA of the company. At that point, you know, they're still making films, but the quality is starting to go down.

They're moving off in other directions. The thing that actually in my opinion that kept Disney together from kept from being broken up was the theme parks itself. All right. That's such a unique phenomenon. doesn't like the film making. Roy making. Roy making. Roy when uh when he when now he came in because he's part of the rescue of Disney and as this hostile takeover he's the one who said we need to bring some technology technology technology into the studio because we're state. He's the one that initiated the contact with us at Pixar.

There's an interesting story in your book where you had tried to bring some technology into Disney. What 15? I think you were in graduate school. school. school. I was in graduate school. So 1973. The people running Disney animation is like there's like these nine old men. I think there's only a few left at that point. point. point. Yeah. I went in the office of uh uh Ali Johnston and Frank Thomas. They were still working at the time. They did not have technology in their DNA. DNA.

DNA. Well, no, actually it it turns out that wasn't I might have assumed that at the time, but they weren't the ones that we were talking about doing this any sort of deal with. All all that Utah wanted was I was going to go there as an exchange and they sent an animator at to Utah. They had no interest in that. Instead, they offered me a position to work on the new Space Mountain ride at Disney World. And this is a very interesting part of because I love the fact that you're missionoriented.

So, you know, we should back up. I guess there's context for people that haven't read your book. You knew you wanted to be an animator. You're sitting there watching this when you're like 9 years old and you see that I think it was Donald Duck come come to live or whatever. Then you realize, oh [ __ ] I'm not like I don't have the technical skills to to be an animator. You also love technology. Then you have this idea, this mission that I'm going to combine my two loves and I'm actually going to make my mission is going to make the first, you know, feature length computer animated film.

Okay. But you're like obsessed with Disney, but you go to Disney, they offer you a job, but it's not it's in conflict with your mission. And you didn't I think in the book it says you didn't think twice. You turned them down immediately. Correct. It wasn't going in the right direction. Nobody in the industry thinks technology is critical. I mean, they don't they have cameras and they use certain things there, but it's more like if we can buy the product, we'll use it. We're not going to push it.

The first person since Walt Disney to believe that technology was going to have an impact was George Lucas. Lucas. Lucas. So after Star Wars and because ILM which was the high technology at the time in terms of that optical process industrial light and magic George's company that he started because he couldn't buy the technology he wanted to apply to special effects and filmmaking. Correct. filmmaking. Correct. filmmaking. Correct. That's right. He he he got this group together that's down in LA is where they started and they figured out how to get what he wanted and one of the things they were able to solve and this is a subtle thing that most people aren't really aware of has to do with motion blur.

It turns out with film was Thomas Edison who discovered that it was easier to show every frame twice on the film before advancing it in order to overcome the flicker frequency of the eye but not use nearly so much film. But it had a a a consequence with the eye in that if something were in perfect focus and you're tracking it like let's say a a uh broomstick is going to move in front of the camera then then it's flash flash frame moves flash but your eye is tracking this broomstick across the camera.

So it you it's flash on your back of your eyeball. Your eyeball moves and they flash in different place. So the edge doubles up. The reason you didn't see this with live action films is that everything moves in the direction of that it's moving because the camera's open for a certain length of time. So you've got this natural blur. There's no sharp edge for the eye to cue on. Everything works fine. doesn't work with animation or stop frame animation or Ray Harryhausen's Harryhausen's Harryhausen's stop motion animation in these these movies because of this artifact.

What's the experience of the person viewing this? Do you become nauseous? No, it's just like you you just happen to notice that the edges double up. Okay. Okay. Okay. And they called it strobing and it's distracting. distracting. distracting. So what they did at ILM which was used for Star Wars as the first film was they they would would they would move these little cameras because they had motion control of the camera against a blue screen uh later green screen background and then they would capture the motion blur and then maintain that blur as they went through these different phases of transfer.

transfer. transfer. through inner negatives and negatives and and so forth and it was very difficult. That's why these guys were like the masters of doing this because uh the photochemical processes being developed at Technicolor is a nonlinear process. So it's hard to maintain the quality of these word edges, but they did it from George's point of view. They were using computers and they were really good at the optics and they were very successful and people were watching this movie and it didn't have these artificial artificial artificial um things that you see typically with special effects of of this sort.

That was their beginning. George could then look at that and say, "Oh, I brought in these really smart guys and there's a lot that's happening in the outside world." And George is not a technologist. technologist. technologist. He knew that things were changing rapidly and that it's probably going to happen with um audio and with video and he knows enough about know that it's changing quickly. So he went out to look to find somebody who could put this together. This is going to be the beginning of graphics group.

Yes. Which is going to be where you you you have a very unique uh experience because you were inspired by Walt Disney. You worked with Steve Jobs longer consecutive uh for like 26 consecutive years. I think longer than almost anybody else. But you also meet a young George Lucas. This is after the first Star Wars when you when you go to interview with them. That's right. He's still working on Empire Strikes Back. You're both in your early 30s. Yeah. Yeah. Yeah. You did something very different.

They're recruiting these technologists, right? You're one of them. And they're the interview process before you get to George. The first question in the interview is who else should we be talking to? And I want to bring this up because let's say there's half a dozen other people that are going for the job just like you. You were the only one that started listing off all these names and you find out later that the rest of them were essentially threatened by competition or maybe insecure whatever the case is and they didn't they were not as free flowing with information which is something that you maintained throughout your entire career.

They wanted the job a plum job. But this instinct I want to focus on your time and what you learned from George Lucas. But this instinct that to constantly share constantly share constantly share knowledge knowledge knowledge is something that happened in grad school and you seem to perpetuate that throughout your entire career. Correct. Yes. I there was a succession of insights for me just at a personal level. level. level. One of them was at grad school as I was graduating. graduating. graduating. I can look back and and did and and just say that this was a fantastic four years.

I loved my time. I loved the people. I love the way the professors worked. I loved the support and the environment. It was invigorating. We all had different interests. And it was like I I I said to myself, this is the kind of experience I want to have for the rest of my life. So that became one of the foundational things for me is that way of working is a great way of working. We accomplished a lot. and I went to New York Tech and I had a bunch of theories about how to manage and and and the uh and what I found as I got into it was that some of my theories were a complete croc.

I mean, I didn't know what I was doing. I never managed anything in my life. So, So, So, and and I boxed myself into a corner. Um uh at the same time I I also recognized there was something about the position I was that was in that that some of the newer people were treating me a little bit differently even though I didn't feel I was different. So this was an interesting psychological phenomenon was going on which I found interesting because when I went there I I didn't really want to be a manager.

I kind of liked the idea of being in charge but I didn't want to do the hard part of managing. But as we went into this and I was making mistakes and trying to correct them, I found that that part was interesting too as well as the technology was interesting. We also uh published everything. Uh and part of this was the realization that the people that we wanted were the people who wanted to be part of the bigger community. At this time the computer graphics community called Sigraph was just starting and they wanted to be able to to publish.

So publishing everything meant that we could draw in the best people cuz Long Island was not a place the computer graphics people were going. Yeah. It was not a hot bed of computer science at the time. So um you you basically want to use the culture that your approach as a way of getting the best people together and uh that worked very well. So part of it when George was out looking is we were already doing a lot of things that he wanted he wanted he wanted uh to build this this group up.

So I was hired to go to Lucas Film. Um, but that was also a point of reflection for me because I could look back on my time at uh at New York Tech and say, well, about half of my theories were right and half were a croc. So now I know in managing in managing okay okay okay deal is how the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade. And one thing they all have in common is they understand that recruiting and hiring the very best talent is your most important priority.

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Like I've read your book three times. I've been a massive fan of you. I've was making episodes on my first podcast, Founders, like a decade ago about your book. Like I think it's essential reading for anybody trying to build any kind of organization. But the book starts with you explaining this, you know, multi-deade. You had just achieved what you thought was going to be your life's work. 20 years of, you know, making mistakes and trying to maneuver and get into a position where you could actually build make the world's first computer animated film.

And then you were shocked, which I think is super important read especially reading the first chapter. I mean, you read the whole book, but not depression. I don't know what you would call it, but almost like I achieved what I worked for two decades, I got it, and now you're kind of like maybe thrilled for a little bit, but you know, now what is my what's the point of my life? What am I going to do now? Yeah. And then it takes you, I think, a while, maybe a year.

It was a year. Yeah. To figure out, oh, and you start studying all these other This is what I love the the first opening of the book where it's like, yeah, but I've been around, you know, you were working, you were observing Silicon Valley, too. It's like all these people would start a company, you do really well, the founder would wind up on the Fortune uh the cover of Fortune magazine saying these are the new titans and then they would do something obviously stupid and then they would essentially expand and pop like a bubble and you were like, I want Pixar to outlive me.

My new mission is to figure out how to build a culture where this is sustained and we don't make these mistakes. It took me a year to to wrestle that down. But before that one, there's one thing I I should comment about when I went to Lucas Film, and that was that in realizing that about half my theories were wrong, that that ratio would would probably continue at Lucasfilm and probably for the rest of my life. And uh and the reason I think this is is important is important is important is uh in fact I I said this to somebody at Disney, an executive there.

I I said that ratio would continue of half right half wrong for the rest of my life. And he said no actually you have a better record than that. But but I realized no actually I don't. I do think that if I know that I'm wrong half the time that I catch it earlier. I special I spend less time on the wrong decision. So it looks like the ratio is different. But the reality is I'm just wrong half the time. And I think it's important to think that way.

And that allows you to to say okay maybe this is one of those times I would and I would rather catch it sooner rather than later. And that was that be that was important for me going forward. Now moving forward when when Toy Story came out because it had been this clear focus point uh it was almost like a north star. Now in retrospect I have to say uh the real north star was is an implicit one which I didn't fully understand. We didn't talk about it and it has to do with the technology.

When Toy Story came out and it was a big success. We read all these reviews. Then almost all the reviews only spent one or two sentences saying it was done on the computer and the rest were about the movie. the movie. the movie. What I loved or felt proud about was that the technical people felt like that was their big success. is that is that people weren't talking about the technology. The implicit north star was the quality of the long-term goal of making a good film.

That was the real northstar. And I didn't even realize that fully at the time. It was more like we achieved the goal. And then I had to to figure out what a next goal was and and while still running the company because now we're a public company and we're working on the next film. But it isn't just like you want to go into a rinse and repeat cycle. It's like what what is it that we're doing here? In which case it's it is what is the culture that we're building that's sustainable and and is always changing and has the ability to change.

During that year I also wrestled with another problem. After the movie came out, there was that thing in me which said since I started down this path a long time ago, how much of this was me? And I wrestled with that for a year. What does that mean? How much of this? In other words, since I started on this path, you know, then it, you know, this we wouldn't have gotten on this path if I wouldn't have done this. So, how much of this our success is attributable to me?

I it's a selfish question to ask. uh which is why I didn't talk to people about it because I knew it was a selfish question to ask but I couldn't help but think about it and uh and I I bring this up because some companies that are successful then the person who leads it actually believe it's all due to them. Did Steve? Did Steve? Did Steve? No, No, No, I think some people think he did and I I was interesting there but no he didn't. who's very we talked about this who's very clear about it like any any project you know when you when you work on something there are a lot of people around that are working on it that are helping they're all part of it so I can look at people and say they were a critical part of it and many of them are wellknown so people would know about John or Steve or uh Andrew u but they typically wouldn't know who the technical people were who absolutely critical to doing this and they were all necessary.

But the important thing that that I came away with was that asking the question might have been a natural thing to ask, but trying to answer it is an act of separation. separation. separation. That's the problem with it. Because I'm trying to say, how am I separate from others? others? others? And really, I never was. It's like none of this would have happened without a lot of things coming together and the notion of separating or trying to figure that out that out that out is actually was wasn't good for it wasn't good for my soul.

I've seen people do this. We had somebody made a short film once and u at the end left because what he said was he wanted to see if he could do it without the safety net. So he viewed the brain trust as a safety net. safety net. safety net. It's that's not a safety net. These were your colleagues trying to do things. And so what are you saying? Well, how much can I do on my own? It's not the right questions. How much can I do with others?

I want to go back to George Lucas. You meet him. You're both in your early 30s at this time. Speak to like his interest in technology is not for technologies sake. He's a very practical person, I think, is the way you describe in the book. It's can this technology his his interest in this technology begins and ends with can it help me make the film that I'm trying to make. A little stronger than that. George actually has a very uh strong sense of want to contribute to the entire field.

What does that mean? He wants to affect the entire industry of film making. Of film making because you said in the book it was a really exciting place for you to work because you're in your early 30s and you're developing technology and then the world's greatest filmmakers are dropping in seeing what you guys are making. like Spielberg shows up and scorsi shows up at this time. Is that what you mean? Like he's trying to contribute to not only what he's doing but his friends and even people that he doesn't know.

Part of it was he wanted the technology for film making. That's that's true. But he also wanted to share it. So the fact that we would say this is how we're doing editing or or their graphics techniques or audio was what he wanted. He was trying to affect the industry as well as build tools for himself. Why do you think he wanted to affect the industry? That's an that's interesting. interesting. interesting. To some extent, the uh the entertainment industry is is a different kind of competitive landscape.

If you've got a movie out in the theaters, then you would actually like all the other films not to be there because you want everybody to come to yours. But if you don't have a film out there, then you want people to enjoy going to the movies. that is people that you might call your competitors are producing things that that other people enjoy. You have a vested interest in wanting the rest of the industry to be healthy. I know a few other fields like that where yes there's competition but the other is you really want everybody else to do well too.

It isn't kept throat isn't like real estate, you know, with the realtor or car salesman, you know, it's a very different kind of of of structure and and mindset or with a lot of companies. It's more positive some. I remember um there's this great biography of George Lucas written by Brian J. Jones that I've read a few times and they talked about you know a lot of them when they before they did Star Wars or or Steven did Jaws they were friends. Yeah. And they shared and collaborated.

They'd watch each other each other's movies. They would do these like brain they didn't call it brain trust was kind of similar to what you're saying they'd screen a movie before it came out and they were like this is [ __ ] or this is great and I think to the point where George talks about this where I think they were riding around together. I think Spielberg was in his car the day that Star Wars came out and I think they went to go have lunch and they're like why are all these people there's like a line around the block they didn't know what was happening.

It was all the people were in line to watch Star Wars and then after that George is with Spielberg if I remember correctly on the day that Jaws comes out and they both were celebrating like each other's success because it's like well if you go watch Star Wars today and Jaws tomorrow no one loses in that situation. That's right. So it's you for for George having a healthy industry is very important and he just because of his experience with others he didn't think about competition in the way that others might might might that's a great insight Ed I didn't pick up on the fact that he was actually developing technology that makes this entire industry stronger that's fascinating fascinating fascinating yeah and he and he would say that while we were working on it wow we're we're in a process and when we actually get there, it's it's going to be very different than the active traveling.

He was using analogies like uh prayer wagon is going across and when you actually arrive there, you don't live in the prayer wagon anymore. You're doing something different. Thank you for reminding me that. One of my favorite parts of the book is you talking about he speaks in like a folksy manner like almost like a Yoda. He was talking about building a business too and I think applies to film making is like you know we start on this journey we're getting on this wagon you know we're going to go across the country we get to the end the composition of the team is going to be some people died along the way some people quit whatever but even then once they get to the destination there's some people that just like the journey so they jump off and that's as it should be he's talking about the composition of the company and the team constantly changing which I thought was one of the best metaphors of building a business I've ever heard too and that's the way he did it so for him when we we published everything and we were engaging with others.

That's what he wanted to do. People might not know why Pixar or I guess the precursor of Pixar, the preacher of Pixar. It's called Graphics Group. It's inside of George's company. He goes through a divorce which now he's run like he's in a different financial position that causes him to look around to I think him and his accountants and attorneys look around to what he can sell, what assets he could sell for this. Graphics Group was one of them, which is you're you're running at the time.

Correct. Yes. Yes. Yes. Okay. Would that have happened if George never got divorced? We probably would have end up as part of ILM. ILM. ILM. Would you have left? Because that's still separate from your goal of doing a computer animated movie. George was actually want to go down the process of of merging this in there. But I had a meeting with him and uh I told him that what I wanted to do was to get to the point where we could make I didn't say it's a separate group where we within Luke could make an animated film.

film. film. And what's his response? He didn't say anything at the time, but the president of the company the next day said, "George doesn't want to make an animated film. So, we were going to look to sell you." A lot of people don't know, and this is in a couple biographies of Steve, is Steve checked out Graphics Group, I think even before you guys were up for sale, right? He was still at Apple at this time. Yes. Yes. Yes. Okay. Then I think maybe a year or two passes, whatever the time frame is, finds out it could be for sale.

You guys have this enthusiastic meeting where he is just like, "You're the best in the business. I have to do this." And then he kind of ghosted what the kids would call ghosted, right? And you're like, why didn't we hear from this guy? Like we had this crazy meeting. He was super passionate. We didn't hear peep for two months. And then you find out it's because at that exact same time is when Steve got kicked out of Apple. So the one who brought him up for that enthusiastic meeting was Alan K because Allen K worked for there.

And when Allan came up in the car because at that point and this this is like young Steve who you know was uh had not developed a skill to develop later. Uh you know he went through an arc in his life and this was early in the arc. The characterization of him especially in his last few bubgraphies and when he died was he was this jerk, he was this [ __ ] who was this tyrant and you tell a much more complete story about how much he changed from the Steve you met at 30 to the person that you worked with for the next quarter century.

Yeah. The the problem was when the authorized biography was written and Isacson who was a very good writer but he interviewed all these people what people didn't understand or and Isacson didn't know was that years of 91 to95 was when Steve made this major transformation as I mentioned in '91 he got married his son Reed was born we signed the contract uh with Disney Terminator 2 came out. Why did that matter? Well, it mattered for the film industry. The film industry in in the '95 went through a major transformation.

Steve went through a major transformation. transformation. transformation. Pixar went through this major transformation transformation transformation uh and and the whole the whole industry did. So, it was just like 91 these events happened, signed the contract, Beauty and the Beast came out, Terminator 2, Steve and and so forth. 93 Jurassic Park came out. Um, and the the the dinosaurs made with CG were so electrifying that everybody just recognized that everything the world is changing. 95 Toy Story came out, first computer graphics film, huge success and and we went public.

So boom, in this in this period of time, all this stuff sort of falls into place. And now we're in a different world. At that point in the world, that's when I've got some personal questions to to answer as we transform the company from one trying to figure out how to do it at all to how to to do it in a sustainable and an ongoing creative way. The other one was we now came up with the next person with credibility in the film industry after after George Lucas to believe technology mattered.

And this was Roy Disney Jr., Walt's nephew. The reason Disney entered into the contract with us was because Roy knew that what Walt did was he adopted new technology. He [snorts] was the one that pushed on getting the contract with with Pixar which started that relationship. So all these things are sort of intertwining and coming together and with each of us with a different viewpoint but trying to pull all this together to make something very different happen. when Pixar started that with the exception of John, everybody else was technical.

And when I visited a lot of companies while at Lucas Film, the one thing I noticed was there was a weird sort of first class, second class. It's not a terminology that people would use um because people wouldn't say that they're first class, but sometimes we will say they felt like they're second class. But it's true in a lot of companies unless you're in that sort of pivotal rung of people who have this visible make a visible difference to the company then you can have this feeling of being secondass within the company.

We were determined that we did not want this to happen to us. So as we brought in in in the other the animators and the artists Andrew Stanton and Pete Doctor then it was it was extremely important that they come in and that we were all peers with each other each other each other and that that's still true to this day is it isn't like the technical people there are in service of the filmmakers the filmmakers are there just to show off the technology is we're all on this to make really great movies and that culture was very strong I believe because we worked so hard to make sure there wasn't this distinction didn't mean everybody was the same even within the different fields but as a group I felt like oh I'm working with worldass people in art or in production or uh or in sound like they're all they're all world class and if you feel that way about everybody then it actually changed the dynamic within the group and It was very important for us to do this and I think we paid more attention to it.

There's one of the things I don't think any of the studios understood was that real relationship about or this balance. It's too subtle. I can describe it. Everybody would nod their heads that's probably what they do. But they don't say more about what they don't understand. Well, I I mean, if I take the entertainment industry, you know, the the the actually experienced people don't report directly to the CEO. They might have a chief technology officer, but the mindset of the people on the top isn't the same as actually having in that group like in that brain trust the real expertise.

understand they they they they they they're the financial, they're the quote strategic people and so forth, but it's not. not. not. So you just remove those silos in Pixar. I don't know if I'm understanding. The idea was to remove the silos. I say that because there were three times in the history of Pixar in which a group arose that felt like they were second class and we and we missed it and we were looking for it. So this is really hard and it's very subtle. as an example, after we're successful, we bring in some young people and they hear the early stories because in the early stories, uh, you know, when we're making Toy Story, people are spending a lot of time there and the in the building and there's a lot of clowning around and um, uh, these little hand scooter races around the building and, you know, you know, funny things like that, all sorts of gags and so forth.

So they hear those stories, but now for somebody they knew in the building, what they see because it's few years later is these people who had had a lot of fun and were pretty irreverent were now married and had kids and at night they went home to their kids. So regardless of what you say, they don't want to look like they're out of place with these people they respect because they're very successful. It doesn't matter what you say. They're emulating the behaviors that they see. And what they see are people who are going home at night.

at night. at night. Meanwhile, Meanwhile, Meanwhile, the people that are going home at night to their families are saying to each other, "What's wrong with these new people hiring? They don't have any sense of fun. They're not doing what we're doing. They're very they're very different." So, but they don't say anything. Neither group talks about the problem. So this like fsters for a while and you finally realize, oh, oh, I see. Um, they've got these feelings, but they're not saying them because it seems inappropriate. You don't want to sort of stand out or you don't want to look bad, so you don't say anything.

Once I realize that, then the question is, okay, how do we get this sense of fun in there? But sense of fun isn't something that you organize top down. Yeah, it's 3 p.m., guys. Come on. Let's go. Let's go take an hour to have fun. I know. says, you know, you you do have company parties or or big events. Yeah. I mean, they're organized, but the the best things happen are, you know, happen from bottom up or or the managers in their group, they decide to do something.

something. something. So, in that case, what we would do was I went to some people who were instigators and uh he said, you know, can you just sort of make something happen? and they would go off and they would do something but there would be nothing that was official from the the corporate just like to tell those people or instigators to get things to happen. So it's like a signal. So So it's like a signal. So when people start do something which is uh you know sort of irreverent or you know getting closer to the edge and but what they say is okay then it frees people up to do more things like that.

And so we had a lot of activities were just they were selforganized. So my understanding what you're saying is like these problems are very subtle. They're hard to notice. If left unchecked they fester. And the solutions can also be subtle. It's recognizing the value of signals both signals that you're looking for because they're not saying them. So you have to look for subtle signals but in order to make it safe is you have to in turn make sure there are signals given back and it wouldn't work if it's just this top down edict.

Yeah. If you get on this look what you get in front of a company meeting and say okay everybody lighten up have some fun. Okay fun. Okay fun. Okay and they'll nod okay it doesn't mean anything. They actually need genuine things. Uh, so we have we had a few people who did things which were a little too far out there that would have gotten them fired in other studios. People know that that that happens. And what you're doing is you're saying the tent is wide. A lot of things can happen there and you want them to happen.

Uh, and so I didn't I don't like to have a lot of rules. If somebody violates a rule of common sense, people do once in a while. you call them on the the carpet, you tell them you can't do it, but you don't make a rule so that nobody else makes the same mistake. Uh because as soon as you make more rules and people are worried about what are all these rules, who do I have to ask for permission? So what we wanted was that people would do things without feeling they need to ask permission for everything.

everything. everything. There was one thing, I think I mentioned this in the in the book, but um the animation group over the weekend dissembled disassembled a truck, brought it into the building. It's still there. I was just there a couple weeks ago. So, we show up all of a sudden there's a truck in the middle of the area and like with their office like their because the everybody would custom you talk about in the book you you would encourage them to custom design their workspaces. Is this in their workspace?

This truck now? Yeah, it's in their workspace. I hadn't been there for a while because once I retired um I um I um I what it means is if if I go there and somebody doesn't like something, I do not want to be a back channel. That would not be healthy. So I I I would go there on occasion, but I I went there maybe was like a week ago. We went through the animation and it was it had radically changed. uh in in terms of his design, which I thought was so damn cool because they're still doing it.

In other words, they're still redecorating. Like they keep remodeling everything and redecorating and making it their own spaces and uh and that's a sign of health. They they feel like feel like feel like that's part of their legacy and their heritage is to keep making that place look different. look different. look different. Yeah. Too many rules, you know, stifle the creativity that think that's the engine of the entire company. Yeah, Ed, that's a perfect place to end. Really appreciate you welcoming me into your home and taking the time uh to have this conversation today.

Really enjoyed it. My pleasure. I have 50 years of rabbit holes to go down. Maybe we'll do this again soon. Thanks for your time. Thought of fun. Well, thank you. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through founders.