David Senra - Ed Catmull, Co-founder of Pixar

Episode Date: June 14, 2026

Ed Catmull is the co-founder of Pixar and the former president of Disney Animation. He grew up in 1950s Utah wanting to animate for Disney. Convinced he couldn't draw well enough, he studied physics and computer science at the University of Utah instead, landing in one of the great talent incubators in computing history. In 1972, he animated his own left hand—one of the first 3D computer renderings ever made. Since childhood he had carried a single ambition: to make the first feature film animated entirely by computer. Reaching it took more than 20 years. George Lucas hired Catmull in 1979 to build a computer division at Lucasfilm. When Lucas needed cash, Steve Jobs bought that division in 1986 for $5 million and spun it out as Pixar. For years it sold imaging computers and lost money while Catmull and John Lasseter made short films to keep the dream alive. Jobs sank roughly $50 million of his own money into it. In 1995, Pixar released Toy Story, the first feature animated entirely by computer, and went public days later. Finding Nemo, The Incredibles, WALL-E, and Up followed. Disney bought Pixar in 2006 for $7.4 billion and put Catmull in charge of both studios; he revived a faltering Disney Animation with films like Frozen. Catmull cared about the conditions that let creative work survive its own fragility. Every original idea, he argues, starts out ugly and broken, and management exists to protect it long enough to get good. At Pixar that meant the Braintrust: a room where directors got blunt feedback with no authority attached and the conversation stayed on the problem, never on who was right. He laid it all out in Creativity, Inc. Show notes: https://www.davidsenra.com/episode/ed-catmull Chapters (00:00:00) Most Companies Are Full Of Shit (00:04:28) The Brain Trust Mechanism (00:10:13) Why Steve Jobs Was Banned From The Braintrust (00:17:48) Your Job Is To Manage The Dynamics (00:23:27) Betting The Company On Toy Story (00:24:35) Engineering Eisner's Worst Nightmare (00:36:51) Bob Iger's Crappy Hand (00:38:44) Why Disney Never Asked What Pixar Was Doing (00:43:48) Take The Hard Problem (00:44:38) The Director Can't Lose The Team (00:48:48) Quality Is The Best Business Plan (00:52:32) What Walt Disney Taught Him (00:59:25) George Lucas And The Motion Blur Problem (01:08:48) Now What's The Point Of My Life (01:13:31) How Much Of This Was Me (01:16:10) George Lucas Wanted The Whole Industry Healthy (01:25:11) Refusing To Let Anyone Feel Second Class (01:32:38) The Truck In The Building Learn more about your ad choices. Visit megaphone.fm/adchoices

Right before we started recording, you said that you had some Steve Job stories and that you wanted to add something to it. What were you going to say? Well, this is a result of just thinking a lot about the last many years and a lot of its reflection, but also trying to understand the nature of change and the process that you have of trying to come to an understanding 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 truth and getting insight out there.

Every company says they do that. Most of them are full of shit. All right. What they've got are people around them are telling them what the leader wants to hear. And the leader thinks they're hearing what they want to hear, that they've got this really insightful group. But it's not really about,

diving deep. There's an overlay of the politics and where I am and 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 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 inside. And I would say the 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 he went public,

until 10 years later when we were acquired by Disney. In that 10-year period, Steve fired two members of the board of directors at 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 made great progress. 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. he and I disagree a lot.

We didn't argue. We disagreed, and we'd have a long, week-long discussions about something. And in the end, about the third time I would realize he was right, and about a third of the time, he would realize I was right. But the other third of the time, I just did what I wanted. and he was fine to that because we 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 get down one layer. You get 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 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. But what are these mechanisms you're saying to 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 healthy brain trust meeting because you've got people working on a film. So what are the dynamics when 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.

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.

So if you're aware of that, then you can actually 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 not 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, as a small group who were already all that way. And it's 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, it was like four of them. Okay.

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 mean, Anders Stanton and I recognize, I think most clearly, was that we had an outside force that was a corrective. An outside force? An outside force. Okay.

Because our contracts was with Disney. And so the person who was in charge of Disney animation at time was Tom Schumacher, who later moved back to Broadway to be over theatrical there. but he would come in as a person who had 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. Bugs Life is the next film, and then Toy Story 2 as the next one. The first one was, you know, just obviously it was the first, like, that was getting going, but we were getting our legs under us as we figured all of this out. We also had to be 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. 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. And we are aware that Tom Schumacher

was going to leave because he was going to New York, which meant we were going to lose our outside forest. Ender camped with the idea that this group, that we had, we would call the brain trust, and that as we elevated other people to become directors, we would bring in others or the writers or certain experienced people into a room

was a small group to solve the problems, but the brain trust would then see somebody else's film and act as an outside force. That was the idea. So other directors looking at another director's film and giving feedback? Yes. Now, it was to replace what Tom Schumacher 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 always know what's going on. So the notion of them being on the outside 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 way of running a certain kind of meeting for every screening of a film or occasionally at an off-site. It wasn't that 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 forest was Steve Jobs.

Because you banned him from being part of the brain trust, correct? Yes. Why? Because he would not be an outside forest. In other words, he's now on the board and he sees it once per screening. So he doesn't see it very often. And now he would come into this meeting and he's fresh.

He hasn't seen anything since the last one. He would usually call me the morning of. I was in my little gym 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, 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 was 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 there are problems in there, that there is a need for someone to come in and say something strongly. But at that point, it had to be from him.

Because 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. No, it was... Actually, people... They would talk back with them. I mean, was there a little bit of fear?

And it was obviously so well known that some people, a lot of people nervous. I mean, there are people nervous about me too, just because of 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's another reason why you 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, needed to shut the hell up for the first 10 to 15 minutes. And he couldn't do that? It wasn't that. The logic of that is that if a person with power speaks, they tend to set the tone for the rest of the 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, 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. It worked great. It was an interesting phenomenon because Steve would come in to the meeting, the brain trust meeting, it wasn't a 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 subset 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 show or people hadn't seen it before. So there'd be some audience there. But really, at the end of it, the board of directors would come together with the filmmakers. And each would give their comments. And Steve would give his comments.

He was extremely articulate, and he would give his 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. However, I'm in every one of these meetings. there was nothing that Steve ever said that had not been said by 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 somebody really well, then you can also learn how to disregard what they say. Like they're saying the sort of thing they might be expecting to say, and you disregard it or you don't hear it. Well, Steve, it wasn't.

impossible to do that. He was sore, clear, and articulate that saying the same thing would actually break through in ways that he wouldn't hear from the others. And there are a couple examples of them where I can't actually tell the story because of the people involved. But people, sometimes people were, felt betrayed because their colleagues hadn't told them about the problem before. But they had. I was there. 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, the director hears that. And now it's like a new revelation, even though it's been all along. That's the reality of people with strong opinions, of the dynamics. And I honestly, my job there, well, it's fun to give a note, my job was to look at the dynamics. 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 they 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, they're almost never. I've never heard anybody, a CEO, describe their job as your job is to observe and manage the dynamics. What do you mean by that? Well, in the case of, let's say the brain trust, just as an example, is that in general, it works pretty well. Everyone's fine to go off the rails. If you go off the rails, then, you know, you have to figure out

why went out 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've 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 smaller group where they're 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 of 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 always back on the problem.

And it's described in like in sports as flow or 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 all this working right, that this is what our products are based on, 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, how do they work together? And sometimes board of directors are there, and the CEO just wants sort of protection from them doing it.

They want to craft everything that goes to the board of directors. It's not the way Steve worked. What is the way he did it? Well, it was just like, we knew what the problems where we'd come in, you'd have these people with very strong opinions. Well, we had the number one attorney from, Southern Valley with Larry Sincini at the time. Apart from who was on the board,

how did Steve manage the board differently than other CEOs? We had a few of the critical issues out of the company. We were a production-only company. All of our films were marketed through Disney. And 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 is going,

what the relationship is, how do we make it strong or where is it threatened? And at the time, through a lot of this time, Michael Eisner was the CEO, and the CEO of Disney, Michael Eisner, did not get along well with Steve. Steve hated him. The real reason for that, well, there were two things there. One of them was that Michael testified before Congress about ripping, because there were some testimony about it with audio. What's a ripping?

Copying video onto, you know, if you got an audio on a CD or something like that and you transfer it on your computer. So there are these, it's a name for copying something. Okay. But it sounds like ripping off. So there's a, which is unfortunate use of the term. So Michael Eisner was testifying against that knowing what the term actually meant. So it was upsetting to Steve.

Why was that upsetting to Steve? Well, it's a congressional thing about the technology and how it's, being used. Right now, Congress is getting misinformation. But the other one was that our contract with Disney, an initial contract, was to make three movies. And at the time it was signed, Disney perceived that Pixar's 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. That's right. In other words, they were going to spend a lot on it. And they thought, well,

that short film wouldn't scale up to be feature-length film. I mean, you couldn't really watch the computer graphics stuff for that long other period of time. But it's like stop motion, it's a little quirky. So that's what they went into the first deal with, thinking the 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 league, because it was quite, it was unlike the things that they've been doing. So Steve thought Eisner gave him a bad deal. Well, it's not a very good deal. So Steve walked away feeling like is 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 a dire financial straits. We're going to bet everything on Toy Story, and the same week, the Toy Story is going to be released in theaters, we're going to IPO. Yes. Is that correct?

Yes. What was your response when he first came and talked to you about this idea? Well, I mean, I thought it was crazy. You know, I learned a lot in this process. He was right. But he had a logic, 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 we will have created Michael Eisenher's Worst Nightmare, a competitor.

Which, in part by Disney, funded their own competitor. Yes. And he said, and Michael cannot let that happen. So Michael 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. You know, at Apple and at next, and often overshoot. But he recognized it because he's very smart. And so what he said at the time was that if we renegotiate, then we have to come in as equal 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 fine. So we negotiated a new deal, and the new deal was now a five-fisher deal, but sequels didn't count. So if we made a sequel, and the idea was there'd be. be a sequel to Toy Story. Why would sequels be excluded? Disney wanted as much as they could,

and that was their way of differentiated between an original film and one that was presumably easier to make. So that was the assumption. The second is that Disney had been selling sequels on VHS at the time. Until that time, the only theatrical sequel that Disney had ever made, was to Rescuers Down Under. It was for the original Rescuers Down Under was a sequel. Did that movie do well? Because 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. It was using the paint system that we had developed under contract for Disney. So this is part of our relationship is we wrote this software it was used on the rescuers down under the whole thing it looked great

the reviewers said it looked great better than looking through the acetate the story was only so-so didn't do all that well wasn't noticed but they then had the confidence to really go all out on their next film

which was Beauty and the Beast that went I'm familiar with Yeah, using the same software. Beauty and the Beast came out in 1991, a pivotal year, which we should come back to in a minute. But in 91, Beauty and the Beast came out. It also had some 3D graphics in it, but largely it was the painting of the cells

with the CAPS system, which was written by Pixar under the contract. Disney had some people who were working on that system also. And they got an Academy Award for it, for what it. But the film itself was a sequel, the actual 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 a logical rationale for it. At this point, 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 building a company, and everybody has a belief about the quality that we shoot for, because we released Toy Story, we were proud of it.

Now we're working on Bugs Live, and we're trying to make it even better in every way that we can. And now we start another film, which is supposed to be lesser, because it's going to direct a video. Yeah, because Disney, originally, Toy Story 2 was going to, Disney wanted you to just

forgo theaters and release a direct-to-video. Yeah, that was the plan. It 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 at 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, the whole thing to know was it was the first animated, successful film of any kind ever. Yeah, for sequel. Basically, it changed the thing. Now, of course, It's common for there to be theatrical releases or theatrical sequels.

But at the time, it was sort of a breakthrough. It changed everybody's mind because it never happened before. So the issue now came with Toy Story 3, because Toy Story 3 would be a sequel. And Steve said to Michael, says, Michael, we're a public company. our investors are expecting that we're coming to the end of the contract. And it is no longer true that this is just a sort of second-class 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, and 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 the amount of effort and energy they put into the characters almost like your child.

It's like saying, now somebody else is raising my child. Yeah. And they're going to do a terrible job. They're not going to do a better job than John Lasseter and Ed Catmull and the talent that you have at Pixar. It put in that strain between them. Now, our relationship with the studio and with marketing was very good. So that was between Stephen. Did it strain your relationship?

Like, how did it change the way you viewed Michael Eisner? Because I know Steve's fist off, but aren't you as well? Oh, yeah, yeah. Okay. No, no, I was not 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. 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, I've been reading the book.

Why can't I think of the title? Disney Wars. There you go. There's a war. It's called Disney War. And it starts out. I've got the book there, yeah. Yeah, it starts out with Roy and something about a Ferrari.

They wanted to interview us, and none of us would talk with the writers of the book. 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 are perceived things. through the Disney lens of the people who were there. It wasn't bad. I mean, it's just, it was...

So, yeah, in that context, Eisner has, he's fighting multiple wars on multiple fronts because he's also got this war where Steve Jobs going on at the same time. Well, that's a personal thing. Yeah. From the point of Pixar with Disney, there isn't, yeah,

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 Trojan Story 3? Is this when Steve says, he's breaking off the, because there was a time period Pixar breaks off the negotiations with Disney completely.

Is this the same 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 which point, Steve would not have let Pixar stay with Disney. Steve, at this point, also knew that he had cancer. He was, I was very, an emotional time once in which, it's actually when he showed us the first iPhone when it was his 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 their secret lab is where they're designing it. And he told us that, you know, he didn't know how long he was going to. to live, and he lived several years after that, but 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 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, which would mean them doing the distribution. In fact, Disney is the best at marketing films and including internationally. We started those discussions, and then the war over Michael Leisner got really heated up. 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 about Bigger in the past because at the time he was like the C.O. 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 Bob. Yeah, Bob Eiger had said when he knew, the first person he called was his daughters, and the second person he called was Steve 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 needs to be confidential until that time. He said that he's been to all 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 Barker'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 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, he told Steve that. But then he said that he's been to Disney animation, and they say that they've got it almost fixed. Essentially, they've found what the problems are, and they're about back on track. And you would have called that bullshit at that time? What Bob says is he did not believe that they were nearly fixed. And you didn't believe that year?

Oh, no, I knew it wasn't. Okay. I knew it. Okay. I knew it. 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 with 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 Leiger 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. 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. 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 here's what we see is, and I will say incidentally up to this point. We're now almost 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?

Now, they're starting to go downhill. The last really big hit was Lion King. Then it started to go down from there. We're going up. and we show them the films, we take them down and, you know, get notes from them and so forth. But nobody ever asks what we're doing

or what's different. Why is it that Pixar is so different. It's very curious. So now for me, it's just, you know, observation. It's like, okay, why aren't they serious? Why aren't they asking? Then we saw the contract, the pie 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 and still nobody ever asked. You know, what's going on? What are you doing? And there are no secrets. We're not hiding anything ever. What's going on there? I have a theory.

Part of it, I think, that 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 Lassar who's got it, or John and Ed or John and Ed or Steve, some combination of theory. We don't have them, and that's the secret to their success. So we can't copy that. Now, that's just a shallow way of thinking.

The real question is, what is it that's being done that's different? Everybody's different than, 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's 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 the idea was to spend a day with us.

seeing what we were doing, how we thought about things, and what we had in 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 the first thing is like from the people at Pixar, the fact that he came alone was,

Very impressive, right? Now, a group of people coming around, so very personal. Bob loved what he saw, and then he went back and said, okay, we have to do this. 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. What did he see that day that made him arrive at that conclusion?

You saw that why we worked, the interaction, the ideas that we worked on, that we were working on, the stuff. Nile, the, and honestly, it's a way I look at any film that we're working on is when we're working on a film and you've got a group trying to solve the problems. And as I've said many times, when you start off, these films aren't done. They're beginning. They have many problems. They suck and also, I think in the book you say embrace that early work will always suck. Yeah, so basically, if that's true, then how do you measure whether or not you should keep doing it?

It sucks. Oh, let's keep on doing it. So what's your basis 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 laughing and then they're anxious, and all that together, then that's when you say, okay, we just keep going. We just, you know, keep trying to solve it. 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 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 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. 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 try to figure out how to be different in what you're doing.

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

This is one where you can 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? Because sometimes things don't go right. So we will change up. We'll change us and directors. Including on Toy Story, too.

Was it the first time you changed directors? Yes. Because the reasoning is that the one thing that the director can't do, they can't screw up in all sorts of ways, but they can't lose the team. That was our guiding line. If the team is together...

The faith, you mean the team lost faith in the director? director right so that's what then 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 gave them 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 thing. And 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 relief pitchers, and they all get credit.

With directors, everything sort of goes to 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 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 we have to make a change. But the result is we push things all the way through. And in the case of, I said we completed 21 or 22 films they started, what's the one film we didn't finish?

He said, well, that one, we actually did assign to another director to complete. And he took a pass at it. And this was Pete Doctor. And Pete said, you know, this is, you know, we're getting this film going now. It's such an uphill thing that there's actually an idea that I have this been rolling around in my head that I think might be better. and it takes place inside the mind of a little girl. And this is inside out. Yes.

So we said, you're right. But also, you're relying on the passion. So Pete Doct, who's very well loved 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 who was completed. But that's just the process. They're no real strict rules.

We're just trying to get to the quality and we're trying to get it to work and have those teams work. I found one of my all-time favorite quotes when I was reading the book, Zero to One. The quote says, The single most powerful pattern I have noticed is that successful people find value

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that you would repeat your inside 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, although it wasn't the mantra for the rest of the studio, But it was like an implicit way. It was his one. Yeah, part of it is that my own personal belief is we never had a mission statement.

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 if you need to say, oh, well, you go back to me. state we're doing this. It actually ended up being stronger to have it so there was always sort of this questioning, are we doing the right thing and are we going the right direction? We always had that question that was going on. But in terms of quality as the best business plan, it's, you know, this is related to this great book, the man who broke capitalism about Jack Welch.

Oh, okay. Great book. Because on the, I think in the year 2000 is when it was Forbes magazine, had named him as the CEO or manager of the century. Utter disaster. People who were there, because they had this really high compound growth rate for 10 years, something like that. So people who were raised out of the system

were considered to be the very best. Whereas Gen. Electric today. Yeah. It split up into pieces. And it was completely fragile, not robust, because he gutted it of the future research. But the people that were there

were hired and considered to be valuable because they'd grown up in that system. Two of them which went on to become leaders of Boeing. applying the same principles that they learn from Jack Welch and Boeing with the consequences that we now see. So this is, the opposite of quality is the best business plan

because the reality is that quality in products, whether it's phones or movies or airplanes, the quality is very important. That is inherent in the business plan, but too many was the short-term and your growth rate. Yeah. Which is the opposite of what Lassiter Wood is preaching in that statement. That's right.

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 read about in the book, one being Albert Einstein, 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 him. 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 it's going to cost? And they have this argument. And he goes, 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 learn from Walt Disney that you think you apply to Pixar? Initially, as a kid watching that, what I'm saying is the result. Now, as an adult, what do you mean you're saying the result? In other words, I'm, I'm one. I'm one,

watching the movies and going to Disneyland as a 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 when it first started, it was the wonderful world of Disney or something like that. But when color TV became popular, they changed in the wonder world. And you were like nine years old or something like that watching in your living room. Yeah, something like that. Yeah.

Incidentally, when Disneyland opened, 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 later, 50 years later. So the other thing, of course, was Disneyland itself, which was extremely influential, and just going there and being there and knowing that all this came from the drive 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 was Roy Disney Jr. When he later was part of the hostile takeover in which Roy Disney, with the Bass Brothers, to the hustle takeover of Disney, which led to Michael Eisenberg and Jeffrey Catsonbury coming into Disney. And we got to know Roy Disney pretty well. But now, if I now think of it in terms of technology,

if I go back to Disney, Disney understood better than anybody else at that time that technology was invigorating the studio. And he was, believed it so much that also led to Disneyland. He just loved this stuff. But it's when, it was before it's blue screen matting, and then it was sodium, yellow sodium matting. He would use it in adopting sound.

Any new technology that came out, Disney embraced it. He was embracing it every single time. He's 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 partner with Xerox to build this camera? Yeah, to build a room that was a camera. Okay. So in one side of the room, there's a lens, then there's a conveyor belt going in one side, another and going at the other. So in the room itself, there's 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 carbon on it, you know, the little particles, rub it around. So now you've got a copy on there, and then it would go out, and then they'd fuse it with, well, actually, 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 it 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 the time was only 10 years old, but I walked by a room that said, ink and paint.

So I stuck my head in and they said, we still have an ink and paint department? And she said, yes. And I said, can I see it? It turns out all those reports to me. I just didn't even know about this. Sue went over. The same room was 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 were still making films, but the quality's starting to go down. moving off in other directions. The thing that actually, in my opinion, they kept Disney together from being broken up

was the theme parks itself. That's such a unique phenomenon. It isn't like the filmmaking. Roy, when he came in because he's part of the rescue of Disney is this hostile takeover, he's the one who said, we need to bring some technology

into the studio. because we're state. He's 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? I was in graduate school.

So in 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. Yeah, I went in the office of Olli Johnston and Frank Thomas. They're still working at the time. They did not have technology in their DNA. Well, no, actually, 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, and you sort of deal with. All of Utah wanted was, I was going to go there as an exchange, and they'd send an animator 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 mission-oriented. So, you know, we should back up. I guess there's context of the people that have a bridge a book.

You knew you wanted to be an animator. You're sitting there watching this when you're like nine years old and you see that, I think it was Donald Duck come to live or whatever. Then you realize, oh shit, I'm not, like I don't have the technical skills 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 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.

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. 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?

That's right. He got this group together, 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, but this is a subtle thing that most people aren't really where, 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 consequence with the eye in that if something was in perfect focus and you're tracking it,

like, let's say, a broomstick is going to move in front of the camera, then it's flash, flash, frame moves, flash, flash, but your eye is tracking this broomstick across the camera. So it's flash on your back of your eyeball. Your eyeball moves, and it's flash in a 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 stop motion animation and these movies because of this artifact. What's the experience of the person viewing?

Does they become nauseous? No, it's just like, You just happen to notice that the edges double up. Okay. And they called it strobing, and it's distracting. So what they did at ILM, which was used for Star Wars, as the first film, was they would move these little cameras because they had motion control of the camera against a blue screen,

or 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 through internegatives and negatives and so forth. And it was very difficult. That's why these guys were like the masters of doing this

because the photochemical process is that being developed at Technicolor is a nonlinear process. So it's hard to maintain the quality. of these broad 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 things that you see typically with special effects 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 technology. He knew that things were changing rapidly, and that it's probably going to happen with audio and with video, and you know it's enough about it, 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 have a very unique experience because you're inspired by Walt Disney, you worked with Steve's doing, You work for Steve Jobs longer consecutive for like 26 consecutive years, I think longer and almost anywhere else. But you also meet a young George Lucas. This is after the first Star Wars when you go to interview with him? That's right. He's still working on Empire Strikes Back. You're both in your early 30s.

Yeah. You did something very different. They're recruiting these technologists, right? You're one of them. And 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 were not as free-flowing with information, which is something that you maintained throughout your entire career. They wanted the job. It was a plum job. But this instinct, I want to just focus on your time on what you learned from George Lucas, but this instinct that to constantly share knowledge is something that happens.

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. One of them was at grad school as I was graduating. I can look back and did 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 in the environment. It was invigorating. We all had different interests. And it was like, 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. It's 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 what I found as I got into it was that some of my theories were a complete crock. I didn't know what I was doing. I never managed anything in my life. So, and I boxed myself under a corner. At the same time, I also recognized there was something about the position that was in 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 that was going on, which I found interesting. Because when I went there, 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 published everything, 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. And this time, the computer graphics community called Sigraph was just starting, and they wanted to be able to publish. So publishing everything meant that we could draw in the best people, because Long Island was not. not a place the computer graphics people were going. Yeah. It was not a hotbed of computer science at the time. So you basically want to use the culture that your approach as a way of getting the best

people together. And that worked very well. Part of it when George was outlooking is that we were already doing a lot of things that he wanted to build this group up. So I was hired. to go to Lucasfilm. But that was also a point of reflection for me because I could look back on my time at New York Tech

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dot com forward slash senra that is deal.com forward slash senra i guess we should give some context like i've read your book three times i've been a massive fan of you i've been making episodes on my first podcast founders like a decade ago about your book like i think it's central reading for anybody trying to build any kind of organization but the book starts with you explaining this you know multi-decade you had just achieved what you thought was going to be your life's work 20 years of you know making mistakes and and trying to maneuver and get into a position where you you can actually build, make the world's first computer animated film. And then you were shocked, which I think is super important, especially reading the first chapter.

I mean, 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 things.

Oh, this is what I love, 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'd do really well. The founder would wind up on 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 wrestle that down. But before that one, there's one thing I should comment about when I went to Lucasfilm. And that was that in realizing that about half my theories were wrong, that ratio would probably continue at Lucasfilm and probably for the rest of my life. And the reason I think this is important is, in fact, I said this to somebody at Disney and executive there,

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 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 spend less that's time on the wrong decision. So it looks like the ratio is different.

But the reality is, I'm just wrong half the time. I think it's important to think that way. And that allows you to say, okay, maybe this is one of those times. And I would rather catch it sooner rather than later. And that was important for me going forward. Now, moving forward, when Toy Story came out, because it had been this clear focus point. It was almost like a North Star.

Now, in retrospect, I have to say, the real North Star was an implicit one which I didn't fully understand because we didn't talk about it. And it has to do with the technology. When Toy Story came out and there 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. What I loved, I felt proud about, was that the technical people felt like that was their big success, 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 North Star. And I didn't even realize that fully at the time. It was more like we achieved the goal. And then I had to figure out what a next goal was.

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 is they we're doing here? In which case, it is what is the culture that we're building, that's sustainable 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 wrestle 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 we wouldn't have gotten on this path if I wouldn't have done this. So how much of our success is attributable to me? It's a selfish question to ask, 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 to think about it. And I bring this up because some companies that are successful than the person who leads it actually believe it's all due to them. Did Steve? No. I think some people think he did,

and I was interesting there, but no, he, He was very, we talked about this, he was very clear about it. Like any project, you know when you work on saying, 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 well known.

So people would know about John or Steve or Andrew. But they typically wouldn't know who the technical people were who were absolutely critical to doing this. And they were all necessary. But the important thing 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.

That's the problem with it. Because I'm trying to say, how am I separate from others? And really, I never was. It's like none of this would have happened with that a lot of things coming together. And the notion of separating or trying to figure that out, he wasn't good for it.

I wasn't good for my soul. I've seen people do this. We had Stoney made a short film once. And at the end, the 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.

It's not a safety net. These are 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 question. 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 technology's sake. He's a very practical person, I think is the way you describe in the book. It's can this technology, 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 strong sense of wanting to contribute to the entire field. What does that mean?

He wants to affect the entire industry. Of filmmaking. Of filmmaking. 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 Scorsesey 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 filmmaking. 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 our 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 interesting. To some extent, the entertainment industry is a different kind of competitive lens. 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 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 cut through. It isn't like real estate.

You know, with the realtor's car sales. I mean, it's a very different kind of structure and mindset or with a lot of companies. It's more positive some. I remember 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, And when they were way before they did Star Wars or Steven Spielberg, did Jaws. They were friends. Yeah.

And they shared and collaborated. They'd watch each other's movies. They'd do these like brain, they didn't call it brain trust, it was kind of similar to what you're saying. They'd screen a movie before it came out and they were like, this is shit 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 even 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 the 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, for George, having a healthy industry is very important. And he just, because of his experience with others, he didn't think about it. competition in the way that others might. That's a great insight, Ed. I didn't pick up on the fact that he was actually developing technology and makes its entire industry stronger. That's fascinating.

Yeah. And he would say that while we were working on it. Wow. We're in a process and when we actually get there, it's going to be very different than the active traveling. He was using analogies like prairie wagging. It's going across. When you actually arrive there, you don't live in the prairie 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 foxy manner, almost like a Yoda. He was talking about building a business too, and I think applies to filmmaking. It's like, you know, we start on this journey. We're getting 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.

So 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 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 prehistor 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 to look around to what he can sell, what assets he could sell for this. Graphics Group is one of them, which is you're running at the time, correct?

Yes. Okay. Would that have happened if George never got divorced? We probably would have ended up as part of ILAM. Would you have left? Because that's still separate from your goal of doing a computer animated movie. George was actually wanted to go down the process of merging us in there. But I had a meeting with him.

and I told him that what I wanted to do is to get to the point where we could make. I didn't say it's a separate group where we within Luxem could make an animated film. And what's his response? He didn't say anything at the time, but the president of the company

the next day he 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 of biographies of Steve, is Steve checked out graphics group, I think even before you guys were up for sale. He was still at Apple at this time.

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 it 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 Kay. Because Alan Kay worked there, and when Alan came up in the car, because at that point, this is like young Steve, who, you know, was, had not developed a skill to develop later. 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 biographies, and when he died was he was this jerk, he was this asshole, he was this tyrant. And you tell a much more complete story about how much he changed from, to Steve you met at 30 to the person that you worked with for the next quarter century. Yeah, and the problem was when the authorized biography was written, and Isaacson, who was a very good writer, but he interviewed all these people. What people didn't understand, and Ixington didn't know,

was that years of 91 to 95 was when Steve made this major transformation. So I mentioned in 91, he got married, his son, Reed was born, we signed the contract, with Disney, Terminator 2 came out. Why did that matter? Well, it mattered for the film industry. The film industry in the 91 and the 95 went through a major transformation.

Steve went through a major transformation. Pixar went through this major transformation, and 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 so forth. 93 Jurassic Park came out and 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 answer as we transform the company from one trying to figure how to do it at all to how 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 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 was the one that pushed on getting the contract 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 Lucasfilm, 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, because people wouldn't say that their 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 second class within the company. We were determined that we did not want this to happen to us.

So as we brought in the other, the animators and the artists who Anders Stanton and Pete Doctor, then it was extremely important that they come in and that we were all peers with each other. And that's a much 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 up 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.

Demi Nivari was the same, even within the different fields. But as a group, I felt like, oh, I'm working with world-class people in art or in production or in sound. Like, they're all world-class. And if you feel that way about everybody, then it actually changed the dynamic within the group. And it's 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 this balance. It's too subtle. I can describe it every would nod their heads. That's what they do, but they don't. Say more about what they don't understand. Well, I mean, if I take the entertainment industry, you know, the actually experienced people don't report directly with 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. Instead, they're the financial, they're the quote strategic people and so forth. But it's not really... So you just remove 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 and which a group arose that felt like they were second class 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 that, you know, when we're making toy story, people spending a lot of, time there in the building and there's a lot of clowning around and 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 you hear those stories but now for somebody new in the building what they see because it's a few years later is these people who had a lot of fun and were pretty irreverent we're now married and had kids in 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 where these people they respect because they're very successful. It doesn't matter what you say. They're emulating the behaviors that they see. What they see are people who are going home tonight. 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 different. But they don't say anything. Neither group talks about the problem. So this is like Febster's for a while. And he finally realized, oh, I see. They've got these feelings, but they're not saying them

because it seems inappropriate. You don't want to sort of stand out. You don't want to look bad, so you don't say anything. Once I realized 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, down. Yeah, it's 3 p.m. guys.

Come on. Let's go take an hour to have fun. I know. It says, you know, we do have company parties or big events. Yeah, I mean, they're organized, but the best things happen are, you know, happen from bottom up or the managers in their group. They decided to do something. So in that case, what we would do is, I mean, I went to some people who were instigators.

and, you know, if 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 corporate, it's just like to tell those people who are instigators to get things to happen. So it's like a signal. So when people start to do something which is, you know, sort of irreverent or, you know, even closer to the edge,

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 that were just, they were self-organized. So my understanding what you're saying is like, these problems are very subtle. They're hard to notice. If left uncheck, they fester.

And the solutions can also be subtle. It's recognizing the value of signals, both the signals that you're looking for, because they're not saying them. So you have to look for subtle signals. but in order for 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 are you in front of a company meeting and say, okay, everybody, lighten up, have some fun. Okay. And they'll not say, oh, okay, it doesn't mean anything. They actually need genuine things. So we have 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 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. And so 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 carpet, you tell them you can't do it, but you don't make a rule so that nobody else makes the same mistake. Because as soon as you make more rules, some 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. There was one thing, I think I mentioned this in the book, but the animation group over a weekend, disassembled a truck, brought it into the building, building, it's still there. I was just there a couple of weeks ago. So we show up all of a sudden,

there's a truck in the middle of their area. And like with their office, like they're, because everybody would custom, and you talk about in the book, 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, I, what it means is if I go there, somebody doesn't like something, I do not want to be a back channel. That would not be healthy. So I would go there on occasion, but I went there, maybe it was like a week ago. We went through the animation, and it had radically changed in terms of its 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 that's a sign of help. They feel like that's part of their legacy and their heritage is to keep making that place look different. Yeah, too many rules are going to stifle the creativity, I 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 to have this conversation today. I 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.