further inflamed their enmity. “Alvy eventually got what he needed,” said Catmull, “but he was
very stressed for a year and developed a lung infection.” In the end
it worked out well enough;
Microsoft eventually bought Smith’s company, giving him the distinction of being a founder of
one company that was sold to Jobs and another that was sold to Gates.
Ornery in the best of times, Jobs became particularly so when it
became clear that all three Pixar endeavors—hardware, software, and animated content—were
losing money. “I’d get these plans, and in the end I kept having to put in more money,” he
recalled. He would rail, but then write the check. Having been ousted at Apple and flailing at
NeXT, he couldn’t afford a third strike.
To stem the losses, he ordered a round of deep layoffs, which he executed with his typical
empathy deficiency. As Pam Kerwin put it, he had “neither the emotional nor financial runway to
be decent to people he was letting go.” Jobs insisted that the firings be done immediately, with no
severance pay. Kerwin took Jobs on a walk around the parking lot and begged that the employees
be given at least two weeks notice. “Okay,”
he shot back, “but the notice is retroactive from two
weeks ago.” Catmull was in Moscow, and Kerwin put in frantic calls to him. When he returned, he
was able to institute a meager severance plan and calm things down just a bit.
At one point the members of the Pixar animation team were trying to convince Intel to let them
make some of its commercials, and Jobs became impatient. During a meeting, in the midst of
berating an Intel marketing director, he picked up the phone and called CEO Andy Grove directly.
Grove, still playing mentor, tried to teach Jobs a lesson: He supported his Intel manager. “I stuck
by my employee,” he recalled. “Steve doesn’t like to be treated like a supplier.”
Grove also played mentor when Jobs proposed that Pixar give Intel suggestions on how to
improve the capacity of its processors to render 3-D graphics. When the engineers at Intel
accepted the offer, Jobs sent an email back saying Pixar would need to be paid for its advice. Intel’
s chief engineer replied, “We have not entered into any financial arrangement in exchange for
good ideas for our microprocessors in the past and have no intention for the future.” Jobs
forwarded
the answer to Grove, saying that he found the engineer’s response to be “extremely
arrogant, given Intel’s dismal showing in understanding computer graphics.” Grove sent Jobs a
blistering reply, saying that sharing ideas is “what friendly companies and friends do for each
other.” Grove added that he had often freely shared ideas with Jobs in the past and that Jobs
should not be so mercenary. Jobs relented. “I have many faults, but one
of them is not ingratitude,” he responded. “Therefore, I have changed my position 180
degrees—we will freely help. Thanks for the clearer perspective.”
Pixar was able to create some powerful software products aimed at average consumers, or at least
those average consumers who shared Jobs’s passion for designing things. Jobs still hoped that the
ability to make super-realistic 3-D images at home would become part of the desktop publishing
craze. Pixar’s Showplace, for example, allowed users to change the shadings on the 3-D objects
they created so that they could display them from various angles with appropriate shadows. Jobs
thought it was incredibly compelling, but most consumers were content to live without it. It was a
case where his passions misled him: The software had so many amazing features that it lacked the
simplicity Jobs usually demanded. Pixar couldn’t compete with Adobe,
which was making
software that was less sophisticated but far less complicated and expensive.
Even as Pixar’s hardware and software product lines foundered, Jobs kept protecting the
animation group. It had become for him a little island of magical artistry that gave him deep
emotional pleasure, and he was willing to nurture it and bet on it. In the spring of 1988 cash was
running so short that he convened a meeting to decree deep spending cuts across the board. When
it was over, Lasseter and his animation group were almost too afraid to ask Jobs about authorizing
some extra money for another short. Finally, they broached the topic and Jobs sat silent, looking
skeptical. It would require close to $300,000 more out of his pocket. After a few minutes, he asked
if there were any storyboards. Catmull took him down to the animation offices, and once Lasseter
started his show—displaying his boards, doing the voices, showing his passion for his product—
Jobs started to warm up.
The story was about Lasseter’s love, classic toys. It was told from the perspective of a toy one-
man
band named Tinny, who meets a baby that charms and terrorizes him. Escaping under the
couch, Tinny finds other frightened toys, but when the baby hits his head and cries, Tinny goes
back out to cheer him up.
Jobs said he would provide the money. “I believed in what John was doing,” he later said. “It
was art. He cared, and I cared. I always said yes.” His only comment at the end of Lasseter’s
presentation was, “All I ask of you, John, is to make it great.”
Tin Toy
went on to win the 1988 Academy Award for animated short films, the first computer-
generated film to do so. To celebrate, Jobs took Lasseter and his team to Greens, a vegetarian
restaurant in San Francisco. Lasseter grabbed the Oscar, which was in the center of the table, held
it aloft, and toasted Jobs by saying, “All you asked is that we make a great movie.”
The new team at Disney—Michael Eisner the CEO and Jeffrey Katzenberg in the film
division—began a quest to get Lasseter to come back. They liked
Tin Toy
,
and they thought that
something more could be done with animated stories of toys that come alive and have human
emotions. But Lasseter, grateful for Jobs’s faith in him, felt that Pixar was the only place where he
could create a new world of computer-generated animation. He told Catmull, “I can go to Disney
and be a director, or I can stay here and make history.” So Disney began talking about making a
production deal with Pixar. “Lasseter’s shorts were really breathtaking both in storytelling and in
the use of technology,” recalled Katzenberg. “I tried so hard to get him to Disney, but he was loyal
to Steve and Pixar. So if you can’t beat them, join them. We decided to look for ways we could
join up with Pixar and have them make a film about toys for us.”
By this point Jobs had poured close to $50 million of his own money into Pixar—more than
half of what he had pocketed when he cashed out of Apple—and he was still losing money at
NeXT. He was hard-nosed about it; he forced all Pixar employees to give
up their options as part
of his agreement to add another round of personal funding in 1991. But he was also a romantic in
his love for what artistry and technology could do together. His belief that ordinary consumers
would love to do 3-D modeling on Pixar software turned out to be wrong, but that was soon
replaced by an instinct that turned out to be right: that combining great art and digital technology
would transform animated films more than anything had since 1937, when Walt Disney had given
life to Snow White.
Looking back, Jobs said that, had he known more, he would have focused on animation sooner
and not worried about pushing the company’s hardware or software applications. On the other
hand, had he known the hardware and software would never be profitable, he would not have
taken over Pixar. “Life kind of snookered me into doing that, and perhaps it was for the better.”