WEBVTT - Inside Pixar's Make-or-Break Gamble to Make Toy Story a Hit 0:00:00.360 --> 0:00:04.360 Toy Story came out in November, and I can still 0:00:04.360 --> 0:00:07.040 remember where I saw it, the Cineplex on the Upper 0:00:07.040 --> 0:00:09.840 West side of Manhattan on Broadway and eighty four. It 0:00:10.039 --> 0:00:13.360 was thrilling cinema, not only the characters and the sweet 0:00:13.480 --> 0:00:16.440 romance between the brash buzz light Year and protective Woody 0:00:16.520 --> 0:00:20.400 the Cowboy, but the awesome technical wizardry on display by 0:00:20.440 --> 0:00:27.160 a little known studio called Pixar. Twenty one years later, 0:00:27.200 --> 0:00:30.280 it's hard to imagine a time before computer animations were 0:00:30.280 --> 0:00:33.680 a thing. But before Toy Story, anything other than an 0:00:33.720 --> 0:00:38.760 animation drawn by hand was this futuristic, faraway dream. Studios 0:00:38.800 --> 0:00:41.320 didn't even have the tools to do it, either the 0:00:41.360 --> 0:00:44.720 software or the physical machines and so on. Top of 0:00:44.800 --> 0:00:48.159 developing this incredibly compelling story about the toys of a 0:00:48.200 --> 0:00:51.400 little boy called Andy, Pixar had to develop the cutting 0:00:51.479 --> 0:00:54.520 edge technology to make it all possible. But behind the scenes, 0:00:54.560 --> 0:00:57.400 as they were developing this wonderful story and the technology 0:00:57.440 --> 0:01:01.320 to tell it, Pixar was actually flirting with financial ruin. 0:01:01.840 --> 0:01:05.039 The company, owned by Apple co founder Steve Jobs, was 0:01:05.200 --> 0:01:07.399 racing against time to figure out how to make enough 0:01:07.480 --> 0:01:09.840 money to keep the lights on. Yeah, you wouldn't know 0:01:09.920 --> 0:01:13.080 it from the success that Toy Story ultimately enjoyed, But 0:01:13.160 --> 0:01:16.560 the movie was a moon shot, a gigantic all or 0:01:16.600 --> 0:01:20.800 nothing gamble on the belief that computer animated characters could 0:01:20.800 --> 0:01:23.960 be just as compelling, just as believable as the hand 0:01:24.040 --> 0:01:28.039 drawn classics from the likes of The Lion King. Pixar's 0:01:28.120 --> 0:01:42.639 very survival hinged on Toy Stories success. Hi, I'm brad 0:01:42.680 --> 0:01:46.080 Stone and I'm Paga Cary, and this week on Decrypted 0:01:46.280 --> 0:01:49.920 will take you on Pixar's roller coaster ride those crucial 0:01:49.960 --> 0:01:52.680 final months as the company rushed to finish its first 0:01:52.760 --> 0:01:56.320 feature film while simultaneously preparing for a make or break 0:01:56.480 --> 0:01:59.480 I p O Yeah, Pixar decided it would go public 0:01:59.560 --> 0:02:03.040 just nine days after the premiere of Toy Story. The 0:02:03.240 --> 0:02:05.920 entire future of the company was writing on the success 0:02:05.960 --> 0:02:09.119 of that film, and what picks are proved with Toy 0:02:09.200 --> 0:02:12.560 Story ultimately transformed not just the company, but also film 0:02:12.639 --> 0:02:15.480 history too. This year, out of the top five grossing 0:02:15.480 --> 0:02:19.920 films in all categories too were computer animations. Can you 0:02:20.000 --> 0:02:23.400 Name Them? I can? One was The Secret Life of Pets, 0:02:23.760 --> 0:02:26.600 and in the top spot was Finding Dory, a movie 0:02:26.639 --> 0:02:29.880 made by Pixar. Now. To fully understand just what was 0:02:29.919 --> 0:02:32.080 at stake for Pixar at the time, we need to 0:02:32.120 --> 0:02:34.400 go back to a nadier in the career of its 0:02:34.480 --> 0:02:37.959 Maverick owner Steve Jobs. It's a chapter of his career 0:02:38.000 --> 0:02:40.800 that sometimes gets skipped over because Steve Jobs was in 0:02:40.880 --> 0:02:46.600 between his two stints at Apple. This is the period 0:02:46.639 --> 0:02:49.640 when he started Next Computer, after he famously got fired 0:02:49.680 --> 0:02:54.239 by his own boarded Apple cast out into Silicon Valley's wilderness, 0:02:54.280 --> 0:02:58.200 and the years that followed that humiliating dismissal, but before 0:02:58.240 --> 0:03:00.720 he returned to Apple, those are the year is when 0:03:00.720 --> 0:03:03.800 Steve Jobs was the owner and CEO at Pixar, and 0:03:03.840 --> 0:03:05.560 that's one of the reasons why there was so much 0:03:05.560 --> 0:03:08.079 pressure on Toy Story to be a hit. The reputation 0:03:08.160 --> 0:03:11.920 and credibility of Jobs was actually tied into pixar of success, right, 0:03:11.960 --> 0:03:14.959 But Pixar did not have an easy relationship with Steve Jobs. 0:03:16.520 --> 0:03:20.760 I would characterize Steve jobs relationship with Pixar at that time. 0:03:20.800 --> 0:03:27.160 So this about as like an absentee landlord, so sort 0:03:27.200 --> 0:03:29.920 of the investor or the owner that never really comes 0:03:29.960 --> 0:03:35.280 to the property. That's Lawrence Levy. He's a slight wiry 0:03:35.320 --> 0:03:38.840 man with lots of tussled sandy hair. He has a cheerful, 0:03:38.920 --> 0:03:42.240 almost boyish air about him. Last month he came out 0:03:42.240 --> 0:03:44.480 with a memoir about his time at Pixar, and it's 0:03:44.520 --> 0:03:48.840 called To Pixar and Beyond. It was in that Steve 0:03:48.960 --> 0:03:52.760 Jobs personally recruited Lawrence to become the CFO of Pixar 0:03:52.840 --> 0:03:55.200 and essentially to guide the company through its I p O. 0:03:57.040 --> 0:03:59.600 After Apple, he had started Next as you know, and 0:04:00.320 --> 0:04:02.840 he was working full time at Next Computer and Pixar 0:04:02.920 --> 0:04:05.040 had been more of an investment on the side, and 0:04:05.080 --> 0:04:08.000 so there was no habit of him going there. I 0:04:08.000 --> 0:04:10.280 mean maybe he went there once a month, but I 0:04:10.320 --> 0:04:14.320 doubt even that often. Uh, And so the company was 0:04:14.440 --> 0:04:17.159 very guarded about him and had a lot of fear 0:04:17.279 --> 0:04:21.120 that this kind of very delicate, creative, homeie kind of 0:04:21.160 --> 0:04:24.919 culture that they had created would be hurt or even 0:04:24.960 --> 0:04:28.960 destroyed by the stories that they had heard about Steve. 0:04:29.640 --> 0:04:31.560 And it must have been something of a balancing act 0:04:31.600 --> 0:04:35.320 for Lawrence, lessing Pixar's creativity flourish on one hand, while 0:04:35.360 --> 0:04:38.279 building out the kind of business plan that Steve Jobs wanted. 0:04:38.880 --> 0:04:42.720 I quickly was sort of given that Moniker if you 0:04:42.760 --> 0:04:46.800 will like yours Steve's guy, and so, you know, and 0:04:46.880 --> 0:04:49.520 so there was some fear, you know, was I going 0:04:49.600 --> 0:04:53.040 to be the person that carried into Pixar all the 0:04:53.080 --> 0:04:57.200 things that they feared about Steve, And and so that 0:04:57.279 --> 0:05:00.279 began to feel It's not really what I signed up for, 0:05:00.480 --> 0:05:02.599 because well, no, I'm not carrying any of those things. 0:05:02.600 --> 0:05:05.120 I'm here to fix those things. But people didn't know 0:05:05.240 --> 0:05:07.640 what to make of it, and there was quite a 0:05:07.680 --> 0:05:10.720 bit of animosity between Steve and the employees that Pixar. 0:05:11.240 --> 0:05:13.560 One of the biggest bones of contention had to do 0:05:13.680 --> 0:05:18.200 with employee compensation. The backstory with pixel when it came 0:05:18.240 --> 0:05:22.279 to stock options was that effectively they didn't have a 0:05:22.320 --> 0:05:26.039 stock option plan. There were no stock options. And this 0:05:26.160 --> 0:05:29.360 has been something that Steve had promised its employees for 0:05:29.480 --> 0:05:34.359 quite a number of years now. Because this might not 0:05:34.440 --> 0:05:37.360 be obvious to everyone, let's explain what Lawrence means here. 0:05:37.360 --> 0:05:40.080 Why why was this so important? Right? So, for a 0:05:40.080 --> 0:05:42.200 lot of people, when they join a startup, they have 0:05:42.320 --> 0:05:44.760 to accept a lower salary than what they might get 0:05:44.760 --> 0:05:47.479 if they went to work for a big, established company. 0:05:47.560 --> 0:05:50.040 So to make up for that, startups usually give their 0:05:50.040 --> 0:05:53.000 employees the option to buy stock in the company at 0:05:53.080 --> 0:05:56.240 some point in the future at a previously agreed upon 0:05:56.520 --> 0:05:58.960 lower price, and if the company gets acquired for a 0:05:58.960 --> 0:06:02.320 lot of money or goes public, those employees stock suddenly 0:06:02.360 --> 0:06:06.360 gets very, very valuable. It's every startup employees dream. And 0:06:06.400 --> 0:06:09.400 without these stock options granted to employees and I p 0:06:09.560 --> 0:06:12.720 O would really only be a financial benefit to the owner, 0:06:12.960 --> 0:06:15.640 you know, in this case Steve Jobs and maybe a 0:06:15.680 --> 0:06:19.719 couple of other executives with special contracts. It wasn't something 0:06:19.760 --> 0:06:22.960 that would bring shared wealth to the entire company, and 0:06:23.040 --> 0:06:25.840 Pixar at this point had a hundred and forty employees. 0:06:27.920 --> 0:06:31.919 There was an enormous amount of pent up frustration over that, 0:06:32.160 --> 0:06:35.919 because especially at Pixarur, where many of the founding employees 0:06:35.960 --> 0:06:38.000 have been there for years, you know, really giving it 0:06:38.040 --> 0:06:40.240 the best years of their life in terms of their 0:06:40.520 --> 0:06:44.480 technological and engineering and creative capabilities. But they didn't have 0:06:44.680 --> 0:06:48.360 that currency that would reward them one day for taking 0:06:48.360 --> 0:06:52.800 those risks. And as we just heard Lawrence Levy say, 0:06:52.880 --> 0:06:55.840 it really was years of hard work. Pixar had been 0:06:55.880 --> 0:06:59.440 around as an independent company since ninety six when Jobs 0:06:59.480 --> 0:07:02.400 bought it for Lucasfilm and It took Pixar's team of 0:07:02.440 --> 0:07:06.280 animators about four years to make Toy Story, so I 0:07:06.320 --> 0:07:08.880 guess creating a stock options plan was right at the 0:07:08.920 --> 0:07:10.840 top of Lawrence's to do list. But for the I 0:07:10.920 --> 0:07:13.160 p O to go well and for Pixar's employees to 0:07:13.160 --> 0:07:15.800 get the reward they wanted, Toy Story had to be 0:07:15.880 --> 0:07:19.360 a hit, and not just like a few media mentions. 0:07:19.680 --> 0:07:22.920 They needed to be as successful as the biggest mega 0:07:23.000 --> 0:07:25.559 hits of all time, like up there with The Lion 0:07:25.680 --> 0:07:28.720 King and Beauty and the Beast. And that's partly because 0:07:28.720 --> 0:07:32.760 computer animation was and remains such an arduous process. It 0:07:32.840 --> 0:07:35.440 takes hours and hours just to create a few seconds 0:07:35.440 --> 0:07:38.160 of film. Think about all the salaries Pixar had to 0:07:38.200 --> 0:07:40.760 pay to keep so many employees working on a single 0:07:40.840 --> 0:07:43.680 film for years, and on top of that, the software 0:07:43.680 --> 0:07:46.480 and creating the computers needed to actually make the frames 0:07:46.680 --> 0:07:48.920 that all together would make up the movie right, and 0:07:48.960 --> 0:07:51.880 Pixar had to invent pretty much all of that process 0:07:51.880 --> 0:07:55.640 from scratch, making things even more expensive, like they couldn't 0:07:55.680 --> 0:07:58.280 just buy it off the shelf. And this was all 0:07:58.320 --> 0:08:01.960 an experiment. It was something letely unproven because nobody had 0:08:02.000 --> 0:08:08.680 ever seen a computer animated movie before, So you know, 0:08:08.680 --> 0:08:12.320 there were questions like, will the public tolerate ninety minutes 0:08:12.320 --> 0:08:14.760 of computer animation? Right, They've never seen that before, and 0:08:14.800 --> 0:08:17.720 so would that be something that people enjoyed. At the 0:08:17.760 --> 0:08:21.400 center of Pixar's creative team was John Lasseter. He directed 0:08:21.440 --> 0:08:25.280 Toy Story and has overseen all of Pixar's subsequent films. Today, 0:08:25.320 --> 0:08:29.080 he's the Chief Creative Officer of Pixar Animation Studios, Walt 0:08:29.120 --> 0:08:33.960 Disney Animation Studios, and Disney Tune Studios. Meanwhile, Andrew Stanton 0:08:34.080 --> 0:08:36.880 and Pete Doctor were the writers on Toy Story. But 0:08:36.960 --> 0:08:40.800 although the team was exceptionally creative, Pixar had really only 0:08:40.840 --> 0:08:44.560 ever made short movies and commercials before this. Okay, so 0:08:44.640 --> 0:08:47.400 let's walk through the actual process of making a computer 0:08:47.480 --> 0:08:54.760 animated movie. Well, I guess like most films, it starts 0:08:54.800 --> 0:08:58.160 with developing the main characters. So in Toy Story, that's 0:08:58.160 --> 0:09:02.920 Woody and Buzz light Year. So you draw a character 0:09:03.559 --> 0:09:05.960 and then you make a clay model of it. So 0:09:06.120 --> 0:09:09.320 you take these brilliant artists and they make these unbelievable 0:09:09.640 --> 0:09:15.079 clay models of the characters, and then someone comes along 0:09:15.120 --> 0:09:17.200 and they draw a whole bunch of dots on that 0:09:17.360 --> 0:09:21.800 clay model, and then someone else uses those dots in 0:09:21.960 --> 0:09:26.000 order to create a digital version of that model. Now 0:09:26.040 --> 0:09:29.360 it's worth noting that these digital dot drawings that Lawrence 0:09:29.400 --> 0:09:31.840 is talking about at this stage, they do not look 0:09:31.880 --> 0:09:35.480 like a real character like Woody or like nothing recognizable. 0:09:37.559 --> 0:09:40.200 Its actually a grid. It's just it's like a just 0:09:40.280 --> 0:09:44.120 a grid of dots and squares and shapes. Then within 0:09:44.240 --> 0:09:47.120 that computer model, a whole bunch of things need to happen. 0:09:47.240 --> 0:09:49.720 So first of all, that computer model has to get 0:09:49.760 --> 0:09:52.880 what they call articulation points, which are places where you 0:09:52.880 --> 0:09:55.000 can move it. So how do you move the eyes 0:09:55.040 --> 0:09:59.880 and the mouth and all of those aspects. Pixar's animators 0:10:00.000 --> 0:10:02.880 and a lot of time thinking about how and where 0:10:02.960 --> 0:10:06.200 you can move which muscles on face, arms, legs, all 0:10:06.280 --> 0:10:09.920 to create the perception of realness. I spoke to one animator, 0:10:10.080 --> 0:10:13.600 Sean Krauss. He's still with Pixar and most recently he 0:10:13.679 --> 0:10:17.240 was the supervising animator on Inside Out and Caused Three. 0:10:17.480 --> 0:10:20.240 But his very first movie was Toy Story, and he 0:10:20.280 --> 0:10:23.000 remembers the kinds of questions the animators we're having to 0:10:23.040 --> 0:10:29.439 ask themselves. They were analyzing how do faces really work? 0:10:29.559 --> 0:10:33.280 You know, what drives the muscle structures? How what are 0:10:33.280 --> 0:10:35.840 the basic shapes that go into an expression? You know, 0:10:35.880 --> 0:10:39.120 the question was always is it easier to animate on 0:10:39.160 --> 0:10:43.320 the computer? And it depends. Things that are are rigid, 0:10:43.440 --> 0:10:47.480 like cars, can be easier because that's very difficult to 0:10:47.559 --> 0:10:50.880 draw by hand, But things that are organic tend to 0:10:50.920 --> 0:10:55.720 be more difficult to manipulate and make feel organic with 0:10:55.800 --> 0:10:59.480 the computer. That's one reason why Toy Story is about toys, 0:10:59.520 --> 0:11:02.400 and why that original movie you never really saw much 0:11:02.440 --> 0:11:05.240 of the human characters at the time. It was too 0:11:05.280 --> 0:11:08.480 difficult to animate an entire movie in which every character 0:11:08.640 --> 0:11:11.839 was human. And another thing that I learned about animation, 0:11:12.080 --> 0:11:15.040 it's not just human characters that are really hard to develop. 0:11:15.280 --> 0:11:18.480 The whole natural world is difficult too, So that's why 0:11:18.520 --> 0:11:22.000 most of the movie happens inside Andy's bedroom. It's because 0:11:22.000 --> 0:11:24.679 the sky is another one of those things. It's just 0:11:24.840 --> 0:11:28.080 really hard to make it look real, so we don't 0:11:28.120 --> 0:11:31.080 think of it when we watched the film. But outdoor 0:11:31.120 --> 0:11:34.440 scenes are really complicated compared to indoor scenes. So to 0:11:34.480 --> 0:11:37.600 make an indoor scene, you basically need to create a box, 0:11:37.960 --> 0:11:40.120 which would be the equivalent of a room and make 0:11:40.160 --> 0:11:42.320 it look like a room. But for an outdoor scene, 0:11:42.320 --> 0:11:44.880 you need sky, and you need trees, and the trees 0:11:44.960 --> 0:11:47.000 need to have leaves, and if you're going to have 0:11:47.040 --> 0:11:50.640 a street, the street has to have cars. So that 0:11:50.760 --> 0:11:53.440 final scene of the movie, when Andy's driving away from 0:11:53.440 --> 0:11:56.360 his old home, that was one of the hardest things 0:11:56.360 --> 0:11:59.520 to pull off in the whole movie. At the same time, 0:11:59.520 --> 0:12:03.440 computer animation made new things possible, things that couldn't really 0:12:03.480 --> 0:12:08.720 be achieved with hand drawn animation. His Shorn again, for instance, subtlety, 0:12:09.080 --> 0:12:12.320 just simple things like I darts gave a layer of 0:12:12.320 --> 0:12:14.880 subtlety that you that were very difficult to get with 0:12:15.200 --> 0:12:18.000 traditional animation. With traditional animation, if you were going to 0:12:18.080 --> 0:12:21.880 do something subtle because of the inherent uh, you know, 0:12:22.559 --> 0:12:26.320 wiggliness of a hand drawn line versus the perfection of 0:12:26.320 --> 0:12:30.280 a computer you could get these little micro movements that 0:12:30.440 --> 0:12:33.640 just exploded off the screen for the first time, and 0:12:33.720 --> 0:12:36.679 Pixar's animators were having to discover these tricks as they 0:12:36.679 --> 0:12:42.840 went along. Pis Are basically invented the software in order 0:12:42.880 --> 0:12:45.440 to do that, and so that was one of its 0:12:45.480 --> 0:12:50.240 incredible contributions is that it literally invented its own system 0:12:50.360 --> 0:12:53.040 for dealing with that kind of complexity on a computer, 0:12:53.200 --> 0:13:01.760 which has never been done before at that time. And 0:13:01.840 --> 0:13:05.280 it wasn't just the software. Pixar had to build actual 0:13:05.520 --> 0:13:10.320 machines too, for everything from rendering the scenes to transferring 0:13:10.360 --> 0:13:14.000 the digital images onto a physical reel of film. So 0:13:14.040 --> 0:13:15.720 I remember why. It was just kind of a little 0:13:15.800 --> 0:13:17.320 room and in the middle of the room, it's kind 0:13:17.320 --> 0:13:20.280 of a dark room, and there's this big slab metallic table, 0:13:20.360 --> 0:13:23.679 and there's this odd looking microscope device sort of sitting 0:13:23.720 --> 0:13:26.400 on top of it. And I remember talking to the 0:13:26.480 --> 0:13:29.599 person running that, David Francisco, and I'm like what, I 0:13:30.000 --> 0:13:32.400 kind of even figure out what this is, and he said, well, 0:13:32.679 --> 0:13:35.920 we have to transfer these digital images to film. Eventually, 0:13:36.000 --> 0:13:39.800 that's what goes to a movie theater is film. Now, 0:13:39.840 --> 0:13:43.800 throughout this whole process, Disney Studio Exacts and it's beancounters 0:13:44.080 --> 0:13:48.360 were lurking in the background, watching closely. After all, Disney 0:13:48.400 --> 0:13:52.040 was paying for toy stories production costs, and Pixar's relationship 0:13:52.120 --> 0:13:59.040 with Disney was complicated. We were this tiny little company 0:13:59.120 --> 0:14:02.880 with no race sources whatsoever. Disney had been king of 0:14:02.920 --> 0:14:06.480 the animation hill for two generations and the feeling was 0:14:06.520 --> 0:14:10.679 that if they got their capability and computer animation up 0:14:10.720 --> 0:14:14.120 and running, they could just swat Pixar off the map, 0:14:14.200 --> 0:14:19.520 you know, like an elephant to a fly. So Lawrence 0:14:19.560 --> 0:14:22.120 spent the first few weeks at Pixar trying to understand 0:14:22.200 --> 0:14:26.040 the different parts of the company's business, and he wanted 0:14:26.080 --> 0:14:28.640 to figure out how Pixar was actually going to make 0:14:28.720 --> 0:14:31.640 money from the films that they made. He wanted to 0:14:31.680 --> 0:14:33.920 build out an attractive business plan that he could show 0:14:34.000 --> 0:14:36.880 potential investors, and at the center of that was this 0:14:36.960 --> 0:14:41.080 cryptic contract that Pixar had signed with Disney several years 0:14:41.120 --> 0:14:44.800 before Lawrence even joined the company. So Lawrence he flew 0:14:44.800 --> 0:14:47.800 out to Los Angeles to meet with Pixar's entertainment lawyer. 0:14:48.320 --> 0:14:51.200 I had seen that contract, but I hadn't paid that 0:14:51.280 --> 0:14:53.320 much attention to it, and I was sort of like, 0:14:53.680 --> 0:14:56.520 it's fine, and I'll figure it out later kind of thing. Uh. 0:14:56.960 --> 0:15:01.720 But it turned out that the contracts in the entertainment 0:15:01.760 --> 0:15:05.840 industry are written in this code that only people in 0:15:05.880 --> 0:15:13.080 the entertainment industry understand. So Lawrence is sitting there, this 0:15:13.160 --> 0:15:17.880 is his lawyer swanky corporate suite, and what Lawrence learned 0:15:18.400 --> 0:15:22.000 was pretty devastating. So it turns out that Pixar had 0:15:22.080 --> 0:15:25.440 signed a three film agreement. But think about this, It 0:15:25.480 --> 0:15:29.440 takes four years just to make one movie, so that's 0:15:29.480 --> 0:15:32.680 twelve years of commitment to Disney right there. And then 0:15:32.680 --> 0:15:35.720 another clause said that Pixar couldn't make any films for 0:15:35.760 --> 0:15:39.400 anyone else or even pitch an idea to another studio 0:15:39.560 --> 0:15:42.440 until after its contract with Disney had ended, and that 0:15:42.520 --> 0:15:46.680 includes ideas that Disney had looked at and rejected. And finally, 0:15:47.000 --> 0:15:50.720 with Hollywood's complex accounting systems, Pixar realized it would end 0:15:50.760 --> 0:15:53.400 up getting less than ten percent of the revenue from 0:15:53.440 --> 0:15:57.240 its movies. It just shows how little leverage Steve Jobs 0:15:57.280 --> 0:15:59.840 must have had to have been forced to sign that agreement, 0:15:59.840 --> 0:16:02.880 and in essence, Pixar needed to produce a gigantic hit 0:16:02.960 --> 0:16:05.360 to even make back a meaningful cut of the revenue, 0:16:05.600 --> 0:16:07.680 and they had to keep rolling out those mega hits 0:16:07.720 --> 0:16:12.880 for the next decade. That process of deciphering that contract 0:16:13.000 --> 0:16:16.760 was one of the most painful experiences I think I 0:16:16.920 --> 0:16:22.480 went through in business. And if you think that contract 0:16:22.560 --> 0:16:25.280 is bad enough, you have to remember that Pixar's other 0:16:25.320 --> 0:16:28.680 business units weren't making very much money at all. This 0:16:28.720 --> 0:16:31.000 is the part of Pixar that was making commercials, and 0:16:31.000 --> 0:16:34.480 it sold a software for rendering graphics called render Man. Yeah, 0:16:34.520 --> 0:16:37.400 and Pixar wasn't making enough money from those units to 0:16:37.440 --> 0:16:40.920 cover its overheads. So when Lawrence first joined Pixar, the 0:16:40.960 --> 0:16:44.840 company had to go through this monthly ordeal where Ed Catmill, 0:16:44.920 --> 0:16:47.440 one of the founders of Pixar, would have to tell 0:16:47.520 --> 0:16:50.200 Steve Jobs how much money the company needed just to 0:16:50.240 --> 0:16:52.320 make it to the end of the month, and Steve 0:16:52.400 --> 0:16:55.320 Jobs was having to write out personal checks just to 0:16:55.400 --> 0:16:58.080 keep the company afloat. So the odds are really stacked 0:16:58.080 --> 0:17:01.280 against Pixar at this point. They're in this incredibly expensive 0:17:01.320 --> 0:17:03.720 thing that they've been building up to for years, and 0:17:03.760 --> 0:17:05.640 what they're trying to do is something that no one's 0:17:05.680 --> 0:17:08.760 really ever actually accomplished before. And on top of that, 0:17:08.880 --> 0:17:12.480 to make back enough money, they needed this unproven thing 0:17:12.640 --> 0:17:15.320 to be a massive success, and they were trying to 0:17:15.440 --> 0:17:19.480 prove to wall streets skeptical investors that Pixar could be 0:17:19.520 --> 0:17:23.119 a viable, independent company worthy of their money. So, in 0:17:23.160 --> 0:17:26.040 other words, no pressure at all. The whole future of 0:17:26.040 --> 0:17:30.560 Pixar was coming down to a single number the opening 0:17:30.720 --> 0:17:34.840 weekend box office for Toy Story. The atmosphere of Pixars 0:17:34.880 --> 0:17:37.000 it tried to finish Toy Story was like pedal to 0:17:37.040 --> 0:17:39.439 the metal. There's no time for thinking, there's no we 0:17:39.520 --> 0:17:42.879 just have to go right, go, go, go right, working morning, 0:17:42.960 --> 0:17:45.080 you know, noon and night, trying to get this done. 0:17:45.160 --> 0:17:47.600 You know, I think that's true of of you know, 0:17:47.760 --> 0:17:49.920 a lot of invention, a lot of innovation. You know, 0:17:50.000 --> 0:17:51.760 if you're trying to get something done that's never been 0:17:51.760 --> 0:17:54.479 done before, you you have to have sort of just 0:17:54.520 --> 0:17:58.480 this relentless focus on trying to finish and almost put 0:17:58.560 --> 0:18:00.320 blinders on and go for it. And that was the 0:18:00.359 --> 0:18:03.240 atmosphere within the company. You know, we're just going for it. 0:18:03.760 --> 0:18:07.120 The animators were gunning so hard to finish the film 0:18:07.160 --> 0:18:09.480 that a lot of people hadn't even seen the completed 0:18:09.520 --> 0:18:12.199 movie until the moment when the lights went down at 0:18:12.200 --> 0:18:15.840 the preview. We all just were glowing and we had 0:18:15.840 --> 0:18:18.720 a great time just talking about the film, complimenting each 0:18:18.720 --> 0:18:20.640 other because it was the first time we had seen 0:18:20.680 --> 0:18:22.600 what the lighting department had done. It was the first 0:18:22.600 --> 0:18:24.720 time we had seen what the cloth you know, and 0:18:24.760 --> 0:18:28.000 shading departments had done in a big way. We've seen 0:18:28.119 --> 0:18:30.480 bits and pieces along the way, but we hadn't heard 0:18:30.480 --> 0:18:33.440 the music through the whole film yet. Meanwhile, Lawrence took 0:18:33.520 --> 0:18:36.399 his whole family to the premiere in Los Angeles and 0:18:36.480 --> 0:18:39.000 his wife Hillary. She also spoke to me, and here's 0:18:39.000 --> 0:18:44.800 how she remembers the audience reaction. I was almost holding 0:18:44.840 --> 0:18:48.520 my breath throughout the entire movie, and I remember as 0:18:48.560 --> 0:18:52.040 it closed, as it ended and the credits were coming on, 0:18:53.040 --> 0:18:57.160 this just roar of applause, and I just looked around 0:18:57.400 --> 0:19:00.119 to see if people were sort of clapping just to 0:19:00.200 --> 0:19:03.280 be nice, or if they really had some excitement in 0:19:03.320 --> 0:19:06.360 their faces. And I saw the ladder. I mean, people 0:19:06.720 --> 0:19:10.720 were just flabbergasted by what they saw on the screen. 0:19:11.040 --> 0:19:13.199 And it was pretty much at that moment that I 0:19:13.320 --> 0:19:25.240 knew that Pixar was okay, which brings us to this 0:19:25.320 --> 0:19:28.679 week's happy ending Toy. Story went on, of course, to 0:19:28.720 --> 0:19:32.199 become a blockbuster. It made twenty nine million dollars in 0:19:32.240 --> 0:19:35.679 the US on its opening weekend, and eventually it clocked 0:19:35.760 --> 0:19:40.280 up three hundred and seventy three million dollars worldwide. Pixar 0:19:40.400 --> 0:19:45.480 went public as planned on the thirty November. Pixar's stock 0:19:45.800 --> 0:19:48.800 boomed over the next decade, and Disney ended up buying 0:19:48.800 --> 0:19:51.720 it for seven point four billion dollars in two thousand 0:19:51.760 --> 0:19:54.399 and six. We should know that before the I p O. 0:19:54.560 --> 0:19:58.080 Pixar's employees got the reward to Lawrence Levy was able 0:19:58.119 --> 0:20:01.439 to convince Steve Jobs to give employee stock options. And 0:20:01.480 --> 0:20:05.080 as for Steve Jobs, he not only recovered his reputation, 0:20:05.440 --> 0:20:08.000 but it was actually Pixars I p O that made 0:20:08.080 --> 0:20:11.840 him a billionaire. His relationship with the company improved, and 0:20:11.880 --> 0:20:15.919 now Pixar's contribution to animation has really transformed the entire genre. 0:20:16.320 --> 0:20:20.040 It's really incredible Pia to reflect on how important to 0:20:20.200 --> 0:20:23.280 really the history of cinema that this formative time and 0:20:23.320 --> 0:20:25.760 Pixar's history was. I mean, if you look at almost 0:20:25.760 --> 0:20:28.400 all animated movies these days have an element of commuter 0:20:28.440 --> 0:20:31.160 or animation, and those early employees of Pixar have kind 0:20:31.160 --> 0:20:34.240 of gone to populate the entire film industry right. And 0:20:34.400 --> 0:20:37.200 it's been a while since a fully hand drawn animation 0:20:37.480 --> 0:20:39.639 was released by checked in with Disney about it, and 0:20:39.760 --> 0:20:42.240 their last feature film was Winnie the Pooh back in 0:20:43.560 --> 0:20:45.720 Can I tell you I've tried to introduce my kids 0:20:45.760 --> 0:20:47.840 to too great movies, and we've sort of made our 0:20:47.880 --> 0:20:51.080 way through the whole Pixar uber and there's some of 0:20:51.080 --> 0:20:54.280 my favorite movies. I mean, we just watched Wally and 0:20:54.400 --> 0:20:57.320 Inside Out. I mean, it's like a truly remarkable body 0:20:57.320 --> 0:21:00.320 of work. Well, the most recent animated film I was 0:21:00.320 --> 0:21:04.000 was was Frozen, and it really struck me how incredibly 0:21:04.000 --> 0:21:07.600 farther technology has come. You know, that movie has humans 0:21:07.760 --> 0:21:11.240 as all their main characters. It's got these beautiful, dramatic landscapes. 0:21:11.280 --> 0:21:14.359 And when I rewatched Toy Story when I was writing 0:21:14.400 --> 0:21:17.800 up this podcast, it struck me that, you know, it's 0:21:17.840 --> 0:21:20.040 come a really long way towards then they're they're no 0:21:20.119 --> 0:21:23.040 longer trying to hide the faces of the humans. I wonder. 0:21:23.080 --> 0:21:25.000 I mean, the other part of this seminal moment and 0:21:25.080 --> 0:21:27.919 Pixar history is the I p O did. Did the 0:21:27.920 --> 0:21:33.160 initial public offering elevate the status of animators in Hollywood? 0:21:33.200 --> 0:21:36.280 You think, are they now seen Morris technology workers? Well, 0:21:36.320 --> 0:21:38.320 I mean, Lawrence goes into this a bit in his book, 0:21:38.520 --> 0:21:41.240 and it's interesting that Pixar was operating in this kind 0:21:41.240 --> 0:21:44.359 of gray zone. It wasn't totally Silicon Valley, but it 0:21:44.560 --> 0:21:48.840 certainly wasn't completely Hollywood either, and um, it was a 0:21:48.840 --> 0:21:51.160 real process to try and figure out whether Pixar should 0:21:51.160 --> 0:21:54.399 be treated like an animation or an entertainment company. And 0:21:54.440 --> 0:21:57.560 I think eventually, yes, it most certainly did. It's uh, 0:21:57.960 --> 0:22:00.359 there are lines in all the books now saying that 0:22:00.400 --> 0:22:02.440 Pixar was kind of an exception to the rule as 0:22:02.480 --> 0:22:05.040 far as entertainment. I p o s go. Well, thanks Pierre, 0:22:05.040 --> 0:22:07.680 You've inspired me to go back and rewatch the original 0:22:07.720 --> 0:22:14.439 toy story. And that's it for this week's Decrypted. Thanks 0:22:14.440 --> 0:22:16.800 for listening, and tell us what do you remember about 0:22:16.840 --> 0:22:19.280 that first time you saw a toy story. You can 0:22:19.280 --> 0:22:22.520 find me on Twitter at at brad Stone and I'm 0:22:22.560 --> 0:22:25.480 at Pa Gatkari, or you can email Pa at p 0:22:25.960 --> 0:22:29.840 g A d k A r I at Bloomberg dot net. 0:22:30.320 --> 0:22:33.280 You can find Decrypted on iTunes or wherever you get 0:22:33.280 --> 0:22:36.320 your podcasts, and be sure to subscribe and leave us 0:22:36.320 --> 0:22:39.600 a rating and a review. It helps more listeners discover 0:22:39.720 --> 0:22:42.399 the show. And one quick note before we let you go. 0:22:42.920 --> 0:22:46.520 In our previous episode about school forty two, a study 0:22:46.520 --> 0:22:50.280 session organizer that we identified as Mason Young, his name 0:22:50.320 --> 0:22:53.959 is actually Kane York. This episode was produced by Aki 0:22:54.040 --> 0:22:58.000 Ito Magnus Hendrickson and Liz Smith, with help from Emily A. Buso. 0:22:58.480 --> 0:23:01.800 Alec McCabe is the head of Lumberg Podcast. We'll see 0:23:01.800 --> 0:23:11.159 you next week. H