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

Right before we started recording, you said that you had some Steve Jobs stories and that you had wanted to add something to them. What were you going to say?

This is a result of thinking a lot about the last many years. A lot of it is reflection, but also trying to understand the nature of change and the process of trying to come to an understanding or gain insight.

In the book, I talked a lot about the Braintrust. The Braintrust is such a mechanism. Different companies have different ways of trying to arrive at the truth and get insight out there. Every company says they do that. Most of them are full of shit.

What they've got are people around them who are telling them what the leader wants to hear. The leader thinks that, because they're hearing what they want to hear, they've got this really insightful group. But it's not really about diving deep. There's an overlay of the politics—where I am, what's my career, and so forth—all of which gets in the way.

In the case of the Braintrust, we worked out a way for people to be honest with each other and feel comfortable about it. We thought a lot about how to do that, 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 to getting insight, and I would say others do too. He did understand what he was trying to do. He understood, at an intuitive level, that there’s no upside in being wrong. As soon as he understood something, he would change quickly.

Here’s the thing that most people don’t know: Pixar was a public company for 10 years, starting in 1995, when we went public, until 10 years later, when we were acquired by Disney. In that 10-year period, Steve fired 2 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, loud, and thrilling. They were arenas of disagreement, and the rest of the people on the board had very strong opinions and did not agree. Steve loved that. A lot of executives probably say they want that, but Steve really meant it.

He and I disagreed a lot. We didn’t argue; we disagreed, and we’d have weeklong discussions about something. In the end, about a third of the 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 with that because we had discussed it.

The whole point is: How do you get to the insight? How do you surface things? It’s hard to get underneath things. A lot of people like to go down 1 layer. You go down the 1 layer, and you form a decision. You can’t do that. You’ve got to keep peeling away the layers to figure out what’s really underneath it.

It’s a shortcut to make a decision quickly based upon a little bit of information. Getting at underlying factors is inherently a long-term strategy, and it’s a difficult one. It’s timely, and you need different mechanisms within an organization in order to get to better insight.

What are some of these mechanisms? Steve has famously said, and I’ve heard a few other people say this, that he learned more about the art of management from you than anybody else that he ever met.

Boy, he didn’t tell me. 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?

One of them is that the discussion is always about the topic. It isn’t about who’s right. For me, the example would be a healthy Braintrust meeting, because you’ve got people working on a film.

What are the dynamics when you come together as a group in order to discuss something, and you’re discussing something that has problems? The nature of all these films is that it may be a great idea underneath it, but it’s not gelling or it’s not working right.

The creative team presenting it knows 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. If you’re aware of that, then you can actually give them space in order to listen, because 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, they may feel like they’ve embarrassed themselves or haven’t shown themselves worthy. They’re now thinking about their relationship to it rather than about the problem.

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.

How do you manage that? How do you avoid people letting potential embarrassment stop them from sharing an idea?

The original group started off as a small group who were already that way. They were 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 a forum.

Okay.

They were working together on the same thing, and their very nature was that they were working on the problem. When we started, we had that group that worked together, but we also had something else that Andrew Stanton and I recognized most clearly: We had an outside force that was a corrective.

An outside force?

An outside force.

Okay.

Our contract was with Disney, so the person who was in charge of Disney Animation at the time was Tom Schumacher, who later moved back to Broadway to oversee theatrical there.

He would come in as a person who had a vested interest in our success, and he would tell us what he thought. Often, he would disagree with what we had. It was good to have someone come in with a different perspective in case you get caught in a little loop because you’re building this thing in your head.

It’s 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.

A Bug’s Life was the next film, and then Toy Story 2. The first one was obviously the first. That was getting going, but we were getting our legs under us as we figured all of this out.

We also had a group of people who were consciously trying to figure out the process. It was everything about it—not just the movie, but how we worked with each other.

As we were getting better at this and starting to rise, and by this time we were a public company distributing through Disney, Disney was starting to go downhill. We were aware that Tom Schumacher was going to leave because he was going to New York, which meant we were going to lose our outside force.

Andrew came up with the idea that we would call this group the Braintrust, and that as we elevated other people to become directors, we would bring in others—the writers or certain experienced people—into a room.

It was a smaller group to solve the problems, but the Braintrust 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. It was to replace what Tom Schumacher was doing. It didn’t work. The problem was they weren’t outside. They were in the building all the time, and they always knew what was going on. So, the notion of them being on the outside wasn’t true.

However, what we discovered was that they had this immense capability of giving ideas to each other and helping each other, which wasn’t the same thing. It’s a subtle difference to have this outside force. Instead, it was this problem-solving group.

The Braintrust was a way of running a certain kind of meeting for every screening of a film or occasionally at an offsite. It wasn’t that we ran every meeting, because they had different dynamics. It was a particular thing that took place after a screening, and everybody learned how this worked.

We had to get another outside force, and the outside force was Steve Jobs.

Because you banned him from being part of the Braintrust, correct?

Yes.

Why?

Because he would not be an outside force. As a board member, he saw it once per screening, so he didn’t see it very often.

He would come into this meeting fresh. He hadn’t seen anything since the last one. He would usually call me the morning of. I was in my little gym at home, working out, and I’d get a call in the morning. I could count on it.

He’d say, “How’s it going, Ed?” I’d say, “Well, I think we’ve got problems.” He’d say, “Nice to know. I’ll see you later.”

I would never tell him what to think. That was part of the relationship. Steve was smart enough that I could say there was a problem or that I thought there was something, but I was not going to tell him how to think.

Or I might say, “I think it’s going pretty well.” He’d say, “Nice to know. I’ll see you later today.” That was it.

What do you think was the purpose of that phone call?

He knew that, because I was in the middle of this, if there were problems in there, there was 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 at Pixar to share harsh feedback or fight with Steve?

No, not with Steve.

Okay. No, it was, actually. People would talk back with him. I mean, was there a little bit of fear? He was obviously so well known that a lot of people were nervous. There are people who are nervous about me too, just—

Yeah.

—because of the position. That's just a reality: when you're in a position of either power or perceived power, 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, right? They wouldn't admit it, but it happens. So, if you're aware of it, then you can just be a little more tuned in.

There was another reason why he didn't go to the Braintrust meetings. In order to get the dynamics right, 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, if a person with power speaks, they tend to set the tone for the rest of the discussion. So, you don't want them to speak at the beginning. You want the discussion to start, and then you enter the discussion. In this case, they're entering as filmmakers with the others, and it doesn't derail the discussion.

Steve Jobs 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 we need you for this.” He understood that, and that's the way it worked. It worked great.

It was an interesting phenomenon because Steve Jobs would come into the meeting that was the Braintrust. Or, excuse me, it wasn't a Braintrust meeting; it was 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 see it all at once. We were always trying to make sure there were some fresh people, or people who hadn't seen it before, so there would be some audience there.

Really, at the end of it, the board of directors would come together with the filmmakers, and each would give their comments. Steve Jobs would give his comments. He was extremely articulate, and he would give his notes. Most of the directors would say at some point that Steve Jobs gave them notes and 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 Jobs ever said that had not been said by somebody else before in one of those meetings.

What's happening there?

Well, part of it is that when you know somebody really well, you can also learn how to disregard what they say. They're saying the sort of thing they might be expected to say, and you disregard it, or you don't hear it. With Steve Jobs, it wasn't possible to do that. He was so clear and articulate that saying the same thing would actually break through in ways that you wouldn't hear from the others.

There are a couple of examples of this, and I can't actually tell the story because of the people involved. Sometimes people felt betrayed because their colleagues hadn't told them about the problem before. But they had. As I say, I was there, and I heard all this. They all felt like they were not being listened to. Then Steve Jobs came, and all of a sudden, the director hears that, and now it's a new revelation, even though it had been there all along.

That's the reality of people with strong opinions and the dynamics. Honestly, my job there, while it was fun to give notes, was to look at the dynamics. I will tell you that, in general, this worked very well. Everybody figured out that this is how it works, and it was great, and they loved it. Even though there was apprehension, they wanted the notes, and they engaged correctly with it.

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You're running the company. Steve Jobs's there 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 Braintrust, in general it works pretty well. Every once in a while, you go off the rails, and then you have to figure out why it went off the rails and what got in the way. 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 with this way of working. But if the problem is really serious, you go to a smaller group, where they're sort of past that stuff and can focus on the problem. So, occasionally, it's off the rails. Usually, it works very well, and once or twice per film, 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, “My idea wasn't there.” They're always back on the problem. It's described in sports as flow, or in areas like that as flow, but it's like a group getting into that state. That's the ideal place to get.

This is so important—to get all this working right—that this is what our product is based upon: this group of people working well together. So, paying attention to the dynamics of those rooms is the job. They're the ones who 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, like a board of directors, how do they work together? Sometimes the board of directors are there, and the CEO just wants sort of protection from them, so he wants to craft everything that goes to the board of directors. It's not the way Steve Jobs worked. What was the way he did it?

Well, it was just like we knew what the problems were. We'd come in, and you'd have these people with very strong opinions. We had Larry Sonsini, the number-one attorney from Silicon Valley, with us at the time.

Apart from who was on the board, how did Steve Jobs manage the board differently than other CEOs?

We had a view of the critical issues 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 were a number of things we had to do to figure out where the company's going, what the relationship is, how do we make it strong, or where is it threatened.

At the time, through a lot of this period, Michael Eisner was the CEO of Disney, and Michael Eisner did not get along well with Steve Jobs.

Steve Jobs hated him?

The real reason for that—well, there were 2 things there. One of them was that Michael Eisner testified before Congress about ripping, because there was some testimony about it with audio.

Ripping?

Yeah.

What's ripping?

Copying audio onto a computer. If you have audio on a CD or something like that and you transfer it onto your computer, that's a name for copying something.

Okay.

But it sounds like “ripping off,” which is an unfortunate use of the term.

Why was that upsetting to Steve Jobs?

Well, it was a congressional thing about the technology and how it's being used. Only now Congress is getting misinformation. The other one was that our contract with Disney, the initial contract, was to make 3 movies. At the time it was signed, Disney perceived that Pixar was going to produce boutique films—their word—much as they would consider “The Nightmare Before Christmas,” a stop-motion animated film, to be boutique.

And therefore, not bringing 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 a feature-length film. I mean, you couldn't really watch the computer graphics stuff for that long of a period of time. It's like stop motion. It's a little quirky. So, that's what they went into the first deal thinking.

That's what they were thinking.

There's limited potential here, not knowing that “Toy Story” was going to come out, win all these awards, and be the highest-grossing film of the year.

That's right. So, that was a leap because it was quite unlike the things they'd been doing.

So, Steve Jobs thought Eisner gave him a bad deal.

Well, it's not a very good deal. So, Steve Jobs walked away feeling like it was one of the worst deals he'd ever struck.

This is where he comes to you saying, “We're going to—” So, you guys essentially bet the company on “Toy Story.” You were in dire financial straits.

We're going to bet everything on “Toy Story,” and the same week that “Toy Story” is going to be released in theaters, we're going to IPO. Is that correct?

Yes.

What was your response when he first came and talked to you about this idea?

I thought it was crazy. 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, it was going to be a big deal. After this film, we had to deliver 2 more films. But at the end of delivering the next 2 films, because we now had the experience that nobody else did, and we got those other 2 out with all the experience behind us, when we were done, we would have created Michael Eisner's worst nightmare: a competitor.

Which was funded in part by Disney. Disney funded its own competitor.

Yes. He said, “Michael cannot let that happen, so Michael will want to renegotiate the deal.” At this point, this was part of the change in Steve Jobs's life, because he would typically shoot for the moon on a lot of things at Apple and at NeXT, and often overshoot. But he recognized it because he was very smart. What he said at the time was that if we renegotiated, then we had to come in as equal partners.

Which means we needed money, which we didn't have at the time.

Yes, so we had to go public to do it. It was very compelling, and it also turned out to have been exactly what happened. We negotiated a new deal, and the new deal was now a 5-picture deal, but sequels didn't count. The idea was that there would be a sequel to “Toy Story.”

Why would sequels be excluded?

Disney wanted to get as much as it could, and that was its way of differentiating between an original film and one that was presumably easier to make. That was the assumption. The second thing is that Disney had been selling sequels on VHS at the time. Until then, the only theatrical sequel that Disney had ever made was “The Rescuers Down Under.”

Did that movie do well? I've never even heard of it.

The answer is no. But it should also be noted that it was the first motion picture where every frame went through a computer. It was using the paint system that we had developed under contract for Disney. This is part of our relationship: we wrote the software, and it was used on “The Rescuers Down Under”—the whole thing. It looked great. The reviewers said it looked great, better than looking through acetate. The story was only so-so. It didn't do all that well and wasn't noticed, but Disney then had the confidence to really go all out on its next film, which was “Beauty and the Beast.”

That one I'm familiar with.

Yes, using the same software. “Beauty and the Beast” came out in 1991, a pivotal year, which we should come back to in a minute. It also had some 3D graphics in it, but largely it was the painting of the cels 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.

Yeah, for a sequel.

But at the time, the film itself was a theatrical sequel, and Disney did not perceive a sequel as something worthy of going out in theaters. When we had the deal to make the additional films, sequels were perceived as not being at the same level of quality as a theatrical release. That was the logical rationale for it.

At this point, we're working on “A Bug's Life.” We're already working on it. We had started working on the sequel to “Toy Story,” and I knew we had a problem 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 “A Bug's Life,” and we're trying to make it even better in every way that we can. Then we started another film, which was supposed to be lesser because it was going direct to video.

Originally, Disney wanted you to forgo theaters and release “Toy Story 2” direct to video.

Yes, that was the plan. That was one of the reasons why it wouldn't count. We almost immediately said that we thought it needed to be theatrical. Disney didn't push back on that at all. It agreed that it should go theatrical, but it didn't change the terms of the contract. It came out, and it turned out to be a huge success.

Yeah, for a sequel.

It was the first successful animated sequel of any kind ever. Basically, it changed things. Now, of course, it's common for there to be theatrical sequels, but at the time it was a breakthrough. It changed everybody's mind because it had never happened before.

The issue then came with “Toy Story 3,” because “Toy Story 3” would be a sequel. Steve said to Michael, “Michael, we're a public company. Our investors are expecting that. We're coming to the end of the contract, and it's no longer true that this is just a second-class sequel. This is really a first-rate theatrical film, and it should count.” Michael stuck with the letter of the agreement. That's what pissed him off, and it pissed Steve off. The deal was that if we wouldn't make it, Disney could.

At some point, a few years later, Disney started to make its own version of it.

Which would kill the morale on your team, because they don't think of these people as outsiders. The amount of effort and energy they put into the characters is 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, Ed Catmull, and the talent that you have at Pixar.

Yeah. It put a strain between them. Our relationship with the studio and with marketing was very good, so that was between Steve and Eisner.

Did it strain your relationship? Did it change the way you viewed Michael Eisner? I know Steve was pissed off, but weren't you as well?

Oh, yeah.

Okay.

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.

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, my partner Rob and I have been reading the book. Why can't I think of the title?

“DisneyWar.”

There you go. There's a war about it. It's called “DisneyWar.”

You've got the book there?

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. The reason was that we didn't know how this was going to end up, but we didn't want to screw up the relationship with the other people. None of us said anything. Even the parts of it that are about Pixar are things about Pixar perceived through the Disney lens of the people who were there. It wasn't bad; it just was.

So, in that context, Eisner is fighting multiple wars on multiple fronts, because he's also got this war with Steve Jobs going on at the same time.

Well, that's a personal thing.

Yeah. From the point of view of Pixar with Disney, there isn't—

Yeah.

—any war going on there. We're basically neutral in this.

But what was your reaction when they made this decision for “Toy Story 3”? Is this when Steve said he was breaking off the negotiations? There was a period when Pixar broke off negotiations with Disney completely. Is this the same time?

No. What's happening is that we're just getting near the end of the contract. We're getting close to delivering the last film, at which point Steve would not have let Pixar stay with Disney. Steve also knew at this point that he had cancer. It was an emotional time. That's actually when he showed us the first iPhone, when it was still secret. We were on a bridge between one building and another tall building next to it, and the secret lab was where they were designing it.

He told us that he didn't know how long he was going to live. 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 Steve would not have continued with Michael Eisner. Since we were getting near the end of the contract, Steve started discussions with other studios, which would mean that they would handle the distribution. The fact is, Disney is the best at marketing films, including internationally. We started those discussions, and then the war over Michael Eisner got really heated up. They voted him out, but then they went through this process of deciding whom they were going to select. Bob Iger was in that group.

Steve had talked with Bob Iger in the past. At the time, Bob was the COO, because Michael Eisner was busy fighting a major lawsuit with Disney and the board and all that. Eventually, they made a decision.

Once he takes the CEO role at Disney—and if I remember correctly—

Iger, the night before. Yeah, Bob had said that when he knew, the first person he called was his daughters, and the second person he called was Steve Jobs.

Yes.

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 had been to all the parks, and he knew that all the new material was coming from Pixar.

There's actually an interesting story about that. I think this might have been in Bob Iger's book—maybe it was in yours, too—where he's standing next to Michael Eisner. This is before he's CEO of Disney.

It'd be in his book.

Okay. He's standing next to Michael Eisner. I think they're at Hong Kong Disneyland, and Michael says, "Let's watch the parade"—the parade that happens every day. All the characters are going by, and he realizes that every single popular character in the parade was created by Pixar, not Disney Animation. That's how he knew, "No matter what, I cannot let Pixar get away."

What happened when he called Steve was that he told Steve that he'd been to Disney Animation, and they said that they had it almost fixed. Essentially, they'd found what the problems were, and they were about back on track.

And you would have called that bullshit at the time?

What Bob says is that he did not believe they were nearly fixed.

And you didn't believe it either?

Oh, no. I knew it. I knew they didn't have a shot at it.

Okay.

But he knew it, and he told Steve that he didn't know how to find anybody. The only people he knew who knew how to run animation now were at Pixar. "So can we talk?" And Steve said, "Yes, as soon as you're ready." So that was their conversation. Steve was blown away because Bob Iger started the conversation by saying, "I've got a crappy hand. Can we talk?" For Steve, that was a show of honesty that was 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 off by being completely honest, and Steve said, "Okay, this is somebody I can be a good partner with." They formed a very close bond and relationship throughout the rest of Steve's life.

And Bob's solution was, "We want to buy Pixar."

Yes. That's the first thing he wanted to do, and he talks about it in the book because the board did not want it. But here's what we see: 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 and all of our processes. As we started to become successful, nobody from Disney ever came and said, "What are you guys doing?"

They're starting to go downhill now. Their last really big hit was The Lion King, and then it started to go down from there. We're going up, and we show them the films. We take them down and get notes from them and so forth, but nobody ever asks what we're doing, what's different, or why it is that Pixar is so different. It was very curious.

So now, for me, it's just observations like, "Okay, why aren't they curious? Why aren't they asking?" Then we sign the 5-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 asks, "What are you doing?" There are no secrets. We're not hiding anything ever.

What's going on there?

I have a theory. Part of it, I think, this has to do with going to your first conclusion and stopping thinking. In this case, they would have thought that the reason Pixar is successful is because they've got some combination of John Lasseter's got it, or John and Ed, or John and Ed or Steve, some combination of the three. 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, 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 he was made 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. When he came, he walked up our walkway to the building alone. No assistant, no entourage; a driver dropped him off. He came up alone and spent the whole day going around.

The first thing, from the people at Pixar, was that the fact that he came alone was very impressive, right? There was no group of people coming around, so it felt very personal. Bob loved what he saw, and then he went back and said, "Okay, we have to do this." That was his first major battle with the board, which he did write about in the book. He said, "This was too big of a risk and too much money."

What did he see that day that made him arrive at that conclusion?

He saw the way we worked, the interaction, the ideas that we were working on, and the style. Honestly, the way I look at any film that we're working on is this: when we're working on a film, you've got a group trying to solve the problems. 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 all sorts of things.

I think in the book you say, "Embrace that early work will always suck."

Yeah. Basically, if that's true, then how do you measure whether or not you should keep doing it? It sucks. Well, let's keep on doing it. So what's your basis for proceeding? 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 angsting and all that together, that's when you say, "Okay, we just keep going. We just keep trying to solve it."

Along that line, before I left, we completed 21 of the 22 films we started. This is bizarre in that world. At Disney, by the time I left, we had completed 10 of the 11 that we'd started. So it was just a different way of thinking about how 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. You know how to write a script, you know what the 3-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 that's mediocre. It's cheaper, too.

If you take on hard things, then you need to spend more time trying 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. So 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, a lot of people want to keep their projects secret. This is one where you could tell everybody, "We're going to make a movie about a rat that's going to cook." Nobody's going to copy it. But what is the measure? Because sometimes things don't go right. So we will change up some people. We've changed out some directors.

Including on Toy Story 2. Was that the first time you changed directors?

Yes. The reasoning is that the one thing the director can't do—they can screw up in all sorts of ways, but they can't lose the team. That was our guiding line: if the team is together.

You mean the team's lost faith in the director.

In the director, right. Then our phrasing was, "The director can't lose the team." But we're doing everything we can to help them, because sometimes you've got new directors, and sometimes these are really good people. You gave them the position because you believe they could do it.

Even though 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 baseball, where you can give credit to the starting pitcher, 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 that everybody was contributing, even that first person who was there. It's really hard on people to do that. So most of the behind-the-scenes work is to shore them up and help provide guidance, because you really want everybody to succeed. But if they lose the team, then we have to make a change.

The result is that we push things all the way through. And, as I said, we completed 21 of the 22 films we started.

What's the one film we didn't finish?

Well, that one we actually did assign to another director to complete, and he took a pass at it. This was Pete Docter, and Pete said, "We're getting this film going now. It's such an uphill thing that there's actually an idea I have that's 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. Pete Docter, who's very well loved at Pixar, wants to tell this rather emotional film, and we say, "Okay, we're in." So the 22nd became one of the other films that was completed.

But that's just the process. There are 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.

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When you do that switchover from “Toy Story 2,” John Lasseter was put in charge of that movie, if I’m not mistaken?

Yes.

And that’s when you came up with this mantra that you would repeat inside Pixar, which I think comes directly from John Lasseter, where he said that quality is the best business plan.

I like what he says because, although it wasn’t the mantra for the rest of the studio, it was an implicit one.

It was his one.

Yeah. Part of it is that my own personal belief is that we never had a mission statement. The reason for not having a mission statement—and I don’t want to generalize to everybody else—is that a mission statement is an answer when typically we should always be asking questions: “What are we doing?” If you immediately say, “Oh, well,” and go back to the mission statement—“We’re doing this”—it actually ended up being stronger to have it so that there was always this questioning: “Are we doing the right thing, and are we going in the right direction?” We always had that question going on.

But in terms of “quality is the best business plan,” this is related to this great book, “The Man Who Broke Capitalism,” about Jack Welch.

Oh, okay. Great book.

And I think in 2000, Fortune magazine named him 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—were considered to be the very best because they had been raised under that system, whereas General Electric today—

Yeah.

—is split up into pieces. It was completely fragile, not robust, because he gutted it of future research. But the people who were there were hired and considered valuable because they had grown up in that system. Two of them went on to become leaders of Boeing, applying the same principles they learned from Jack Welch at Boeing, with the consequences that we now see.

The opposite of “quality is the best business plan” is that the reality is quality in products—whether they’re phones, movies, or airplanes—is very important. That’s inherently part of the business plan. But for too many companies, it was the short-term annual growth rate.

Yeah, which is the opposite of what Lasseter 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 even been the highest-cost producers.

I want to pick your brain about the 2 childhood heroes you write about in the book, one being Albert Einstein and the other being Walt Disney. I’ve read everything I can get my hands on about Walt Disney. I find him fascinating. He and his brother would fight over this because his brother was supposed to be in charge of the money, and Walt was the innovator. Roy would say, “How much is this going to cost?” They would have this argument, and Walt would say, “We’re innovating. I’ll tell you when I’m done. I don’t know what the cost is. I’ll figure it out at the end. I’m not trying to make the lowest-cost product. I’m trying to make the best.”

So what are some of the things that you learned from Walt Disney that you think you applied to Pixar?

Initially, as a kid watching that, what I’m seeing is the result. Now, as an adult who’s—

What do you mean, you’re seeing the result?

In other words, I’m 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 was talking about building Disney, the first Disneyland? It was “The Wonderful World—”

I think it was “The Wonderful World of Color” because when it first started, it was “The Wonderful World of Disney” or something like that. When color television became popular, they changed it to “The Wonderful World of Color.”

And you were like 9 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. She was at Disneyland on opening day, and she was also there for the 50th anniversary, 50 years later.

The other thing, of course, was Disneyland itself, which was extremely influential in terms of going there, being there, and knowing that all of this came from Walt’s drive and his way of thinking.

I’ve thought a lot about this since because his brother was Roy Disney, and Roy Disney had a son, Roy E. Disney, who later was part of the hostile takeover in which Roy Disney, with the Bass brothers, took over Disney. That led to Michael Eisner and Jeffrey Katzenberg coming into Disney. We got to know Roy Disney pretty well.

But if I now think of it in terms of technology, Disney understood better than anybody else at that time that technology was invigorating the studio, and he believed it so much that it also led to Disneyland. He just loved this stuff. There was blue-screen matting, then sodium-vapor matting. He would use it, and then he adopted sound.

Any new technology that came out, Disney embraced it every single time.

He was embracing it.

He was one of the first people on the frontier.

When the Xerox machine came out, they worked with Xerox and built a room that was a Xerox camera. I was in that room when I was in college. There was a lens in the wall with a platen on the other side, where the light was, and people could put the cels on it.

Wait, Disney partnered with Xerox to build this camera?

Yeah, to build a room that was a camera. On one side of the room, there was a lens, then there was a conveyor belt going in one side and another one going out the other. In the room itself, there was a red light, and you had these zinc plates, or something like that, with carbon that would go on them.

The plates would come in on the conveyor belt. They were clean, they would be put up, and then they would snap the photograph and put this carbon—the little particles—on it and rub it around. Now you had a copy on there, and then it would go out. They would apply acetate to it and transfer the carbon onto it. So now they had a Xerox copy on the acetate, which could then go off and later get painted.

Interestingly enough, when I later became president of Disney, I walked by a room there in their building that had only been built 10 years earlier. I walked by a room that said “Ink and Paint,” so I stuck my head in and said, “We still have an Ink and Paint department?”

She said, “Yes.”

I said, “Can I see it?”

It turned out that all those people reported to me. I was just there; I didn’t even know about this. So we went over, and 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, they were still making films, but the quality was starting to go down. They were moving off in other directions.

The thing that, in my opinion, actually kept Disney together and kept it from being broken up was the theme parks themselves. They’re such a unique phenomenon. It isn’t like filmmaking.

Roy, when he came in—because he was part of the rescue of Disney and the hostile takeover—was the one who said, “We need to bring some technology into the studio because we’re staid.” He was the one who initiated contact with us at Pixar.

There’s an interesting story in your book where you tried to bring some technology into Disney when you were in graduate school.

I was in graduate school, so 1973.

And the people running Disney Animation were these Nine Old Men. I think there were only a few left at that point.

Yeah. I went into the office of Ollie Johnston and Frank Thomas. They were still working at the time.

They did not have technology in their DNA.

Well, no. Actually, it turns out that wasn’t true. I might have assumed that at the time, but they weren’t the ones we were talking about doing any sort of deal with.

All that the University of Utah wanted was for me to go there as an exchange, and they’d send an animator to Utah. Disney 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 the book because I love the fact that you’re mission-oriented. We should back up, I guess, for people who haven’t read your book.

You knew you wanted to be an animator. You’re sitting there watching this when you’re 9 years old, and you see—I think it was Donald Duck—come alive, or whatever. Then you realize, “Oh, shit. I don’t have the technical skills to be an animator.” You also loved technology.

Then you had this idea, this mission: “I’m going to combine my 2 loves, and my mission is going to be to make the first feature-length computer-animated film.” But you were obsessed with Disney. You went to Disney, and they offered you a job, but it was in conflict with your mission. I think the book says you didn’t think twice—you turned them down immediately. Correct?

It wasn’t going in the right direction. Nobody in the industry thought technology was critical. They didn’t. They had cameras, and they used certain things there, but it was 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 the optical process—

Industrial Light & Magic.

George’s company.

Yes.

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. They started down in LA, and they figured out how to get what he wanted.

One of the things they were able to solve is a subtle thing that most people aren’t really aware of. It has to do with motion blur. It turns out that with film, Thomas Edison 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 as much film.

It had a consequence for the eye, though. If something was in perfect focus and you were tracking it—let’s say a broomstick was moving in front of the camera—it would be flash, flash, frame moves, flash, flash. But your eye is tracking this broomstick across the camera. So it’s a flash on the back of your eyeball, your eyeball moves, and then it’s the next flash in a different place. The edge doubles up.

The reason you didn’t see this with live-action films is that everything moves in the direction that it’s moving because the camera is 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, and everything works fine.

It doesn’t work with animation, stop-frame animation, or Ray Harryhausen’s stop-motion animation in these movies because of this artifact.

What’s the experience of the person viewing this? Do they become nauseous?

No. You just happen to notice that the edges double up.

Okay. And they called it strobing, and it’s distracting.

What they did at ILM, which was used for “Star Wars” as the first film, was move these little cameras. They had motion control of the camera against a blue screen, a layered green-screen background, and then they would capture the motion blur and maintain that blur as they went through these different phases of transfer through internegatives and negatives and so forth.

It was very difficult. That’s why these guys were the masters of doing this, because the photochemical process that was being developed at Technicolor is a nonlinear process, so it’s hard to maintain the quality of these blurred edges. But they did it.

From George’s point of view, they were using computers, and they were really good at the optics. They were very successful. People were watching these movies, and they didn’t have the artificial things that you typically see with special effects of this sort. That was their beginning.

George could then look at that and say, “I brought in these really smart guys, and there’s a lot that’s happening in the outside world.” George is not a technologist. He knew that things were changing rapidly and that it was probably going to happen with audio and video. He knew enough about it to know that it was changing quickly, so he went out 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 were inspired by Walt Disney. You worked for Steve Jobs for 26 consecutive years, I think longer than almost anybody else.

Yeah.

But you also met a young George Lucas. This is after the first “Star Wars,” when you went to interview with him?

That’s right. He was still working on “The 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. In the interview process, before you get to George, the first question in the interview is, “Who else should we be talking to?”

I want to bring this up because, let’s say there were half a dozen other people going for the job, just like you. You were the only one who started listing all these names, and you found out later that the rest of them were essentially threatened by competition or maybe insecure—whatever the case was—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 to constantly share knowledge is something that happened in grad school, and you seem to perpetuate that throughout your entire career, correct?

Yes. There was a succession of insights for me, just at a personal level. One of them was in grad school.

As I was graduating, I could look back—and did—and just say that this was a fantastic 4 years. I loved my time, and I loved the people. I loved the way the professors worked. I loved the support and the environment. It was invigorating.

We all had different interests, and then I said to myself, “This is the kind of experience I want to have for the rest of my life.” That became one of the foundational things for me: that way of working is a great way of working. We accomplished a lot.

I went to New York Tech, and I had a bunch of theories about how to manage. 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’d never managed anything in my life, and I boxed myself into a corner.

At the same time, I recognized there was something about the position I was in: some of the newer people were treating me a little bit differently, even though I didn’t feel I was different. 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 liked the idea of being in charge, but I didn’t want to do the hard part of managing. 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.

We also published everything, and part of this was the realization that the people we wanted were the people who wanted to be part of a bigger community. At this time, the computer graphics community, called SIGGRAPH, was just starting, and people wanted to be able to publish.

Publishing everything meant that we could draw in the best people, because Long Island was not a place where computer graphics people were going. It was not a hotbed of computer science at the time.

So you basically wanted to use the culture and your approach as a way of getting the best people together, and that worked very well. Part of it, when George was out looking, was that we were already doing a lot of things that he wanted to build this group up.

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 and say, “Well, about half of my theories were right, and half were a crock. So now I’m going—”

In managing.

I guess we should give some context, because I’ve read your book 3 times. I’ve been a massive fan of you. I was making episodes on my first podcast, “Founders,” like a decade ago, about your book. I think it’s essential reading for anybody trying to build any kind of organization.

But the book starts with you explaining this multidecade journey. You had just achieved what you thought was going to be your life’s work: 20 years of making mistakes and trying to maneuver and get into a position where you could actually build the world’s first computer-animated film.

Then you were shocked—which I think is super important, especially reading the first chapter. Read the whole book, but it wasn’t depression. I don’t know what you would call it, but it was almost like, “I achieved what I worked for 2 decades to achieve. I got it, and now what?”

You may be thrilled for a little bit, but then you’re kind of like, “What’s the point of my life? What am I going to do now?”

Yeah. What’s the next thing?

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. This is what I love about the opening of the book, where it’s like, “Yeah, but I’ve been around.”

You were observing Silicon Valley too. All these people would start a company, it would do really well, and the founder would wind up on the cover of Fortune magazine saying, “These are the new titans.” Then they would do something obviously stupid, and they would essentially expand and pop like a bubble.

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, there's one other thing I should comment on about when I went to Lucasfilm. In realizing that about half my theories were wrong, I realized that ratio would probably continue at Lucasfilm and probably for the rest of my life.

And the reason I think this is important is that I said this to somebody at Disney, an executive there. I said that the ratio of being half right and half wrong would continue for the rest of my life. 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 I'm wrong half the time, I catch it earlier. I spend less time on the wrong decision, so it looks like the ratio is different. But the reality is, I'm just wrong half the time.

I think it's important to think that way. It allows you to say, “Okay, maybe this is one of those times.” I would rather catch it sooner rather than later. That was important for me going forward.

Moving forward, when Toy Story came out, it had been this clear focal point. It was almost like a North Star. 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 had to do with the technology.

When Toy Story came out and it was a big success, we read all these reviews, and almost all of them spent only 1 or 2 sentences saying it was done on the computer. The rest were about the movie. What I loved and felt proud about was that the technical people felt like their big success was that people weren't talking about the technology. The implicit North Star was quality—the long-term goal of making a good film. That was the real North Star, and I didn't fully realize that at the time.

It was more like we achieved the goal, and then I had to figure out what the next goal was while still running the company, because now we're a public company and we're working on the next film. But it isn't as if you want to go into a rinse-and-repeat cycle. The question is, what is it that we're doing here? In that case, what is the culture that we're building that's sustainable, 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 something in me that said, “Since I started down this path a long time ago, how much of this was me?” I wrestled with that for a year.

What does that mean? How much of this was you?

In other words, since I started on this path, we wouldn't have gotten on this path if I hadn't 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. I knew it was a selfish question to ask, but I couldn't help but think about it.

I bring this up because some companies are successful, and then the person who leads them actually believes it's all due to them.

Did Steve?

No. I think some people think he did, and that was interesting, but no, he didn't. He was very clear about it. We talked about this. Like any project, when you work on something, there are a lot of people around who are working on it and helping. They were all part of it.

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, Steve, or Andrew. But they typically wouldn't know who the technical people were, who were absolutely critical to doing this. They were all necessary.

The important thing 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?” Really, I never was. None of this would have happened without a lot of things coming together, and the notion of separating or trying to figure that out wasn't good for me. It wasn't good for my soul.

I've seen people do this. Somebody made a short film once and, at the end, left because what he said was that he wanted to see if he could do it without the safety net. He viewed the Braintrust as his safety net. It's not a safety net. These were your colleagues trying to do things.

So, what are you saying? “How much can I do on my own?” It's not the right question. It's “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 his interest in technology—not for technology's sake. He's a very practical person, I think, is the way you describe him in the book. 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 had a very strong sense that he wanted 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. You're in your early 30s, you're developing technology, and the world's greatest filmmakers are dropping in and seeing what you guys are making. Spielberg shows up, and Scorsese shows up at this time. Is that what you mean? He's trying to contribute not only to what he's doing, but to his friends and even people that he doesn't know?

Part of it was that 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 share our graphics techniques or audio techniques, 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 landscape. If you've got a movie out in the theaters, then you would actually like all the other films not to be there because you want everybody to come to yours. But if you don't have a film out there, then you want people to enjoy going to the movies. People 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 you really want everybody else to do well too. It isn't cutthroat. It isn't like real estate, with realtors or car salesmen. It's a very different kind of structure and mindset, as it is with a lot of companies.

It's more positive-sum. I remember there's this great biography of George Lucas written by Brian Jay Jones that I've read a few times. They talked about how, way before they did Star Wars or Steven Spielberg did Jaws, they were friends.

Yeah.

They shared and collaborated. They'd watch each other's movies. They'd do these brainstorms—they didn't call it a Braintrust, but it was kind of similar to what you're saying. They'd screen a movie before it came out, and they'd say, “This is shit,” or, “This is great.”

I think George talks about this, where they were riding around together. I think Spielberg was in his car the day that Star Wars came out, and they went to have lunch. They said, “Why are all these people here? There's a line around the block.” They didn't even know what was happening. All these people were in line to watch Star Wars.

Then, after that, George was with Spielberg, if I remember correctly, on the day that Jaws came out, and they were both celebrating each other's success. If you go watch Star Wars today and Jaws tomorrow, no one loses in that situation.

That's right. For George, having a healthy industry is very important. Because of his experience with others, he didn't think about 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 that makes this 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 from the act of traveling. He used analogies like a prairie wagon going across the country, and when you actually arrive there, you don't live in the prairie wagon anymore.

All of this—

You're doing something different.

Thank you for reminding me of that. One of my favorite parts of the book is you talking about how he speaks in a folksy manner, almost like Yoda. He was talking about building a business too, and I think it applies to filmmaking. We start on this journey, we get in this wagon, and we're going to go across the country. We get to the end, and the composition of the team is going to be different: some people died along the way, some people quit, whatever.

But even then, once they get to the destination, there are some people who 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.

And that's the way he did it. 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 to Pixar, the creator of Pixar—was called Graphics Group. It was inside George's company. He went through a divorce, which put him in a different financial position. That caused him, and I think his accountants and attorneys, to look around at what he could sell and what assets he could sell. Graphics Group was one of them, which you were running at the time, correct?

Yes.

Okay. Would that have happened if George had never gotten divorced?

We probably would have ended up as part of ILM.

Would you have left? Because that’s still separate from your goal of making a computer-animated movie.

George was actually wanting to go down the process of merging us in there, but I had a meeting with him and told him that what I wanted to do was get to the point where we could make, within Lucasfilm, an animated film. I didn’t say “as a separate group.”

And what was his response?

He didn’t say anything at the time, but the president of the company said the next day, “George doesn’t want to make an animated film, so we’re going to look to sell you.”

A lot of people don’t know—and this is in a couple of Steve’s biographies—that Steve checked out Graphics Group, I think even before you guys were up for sale, right? He was still at Apple at this time.

Yes.

Okay. Then I think maybe a year or two passes—whatever the timeframe is—and he finds out it could be for sale. You guys have this enthusiastic meeting where he’s just like, “You’re the best in the business. I have to do this.” And then he kind of ghosted, as the kids would call it, right? You’re like, “Why didn’t we hear from this guy? We had this crazy meeting. He was super passionate. We didn’t hear a peep for 2 months.” Then you find out it’s because that exact same time was when Steve got kicked out of Apple.

Yes. The person who brought him up for that enthusiastic meeting was Alan Kay, because Alan Kay worked there. When Alan came up in the car, Steve was still young and had not developed the skills he developed later. He went through an arc in his life, and this was early in that arc.

The characterization of him, especially in his last few biographies and after he died, was that he was a jerk, an asshole, and a tyrant. You tell a much more complete story about how much he changed from the Steve you met at 30 to the person you worked with for the next quarter century.

The problem was that when the authorized biography was written, Isaacson, who is a very good writer, interviewed all these people. What people didn’t understand, and what Isaacson didn’t know, was that the years from 1991 to 1995 were when Steve made this major transformation.

As I mentioned, in 1991, he got married. His son, Reed, was born. We signed the contract with Disney. “Terminator 2” came out.

Why did that matter?

It mattered for the film industry. The film industry from 1991 to 1995 went through a major transformation. Steve went through a major transformation. Pixar went through a major transformation, and the whole industry did.

It was as if, in 1991, all these events happened: We signed the contract, “Beauty and the Beast” came out, “Terminator 2” came out, Steve changed, and so forth. In 1993, “Jurassic Park” came out, and the dinosaurs made with CG were so electrifying that everybody recognized that everything was changing. The world was changing.

In 1995, “Toy Story” came out, the first computer-animated film. It was a huge success, and we went public. All this stuff sort of fell into place during that period of time, and now we were in a different world.

At that point, I had some personal questions to answer as we transformed the company from one trying to figure out how to do it at all to one trying to figure out how to do it in a sustainable and ongoing creative way.

The other thing was that we now had the next person after George Lucas with credibility in the film industry to believe that technology mattered. That was Roy E. Disney, Walt’s nephew.

The reason Disney entered into the contract with us was that Roy knew Walt had adopted new technology. He was the one who pushed for the contract with Pixar, which started that relationship.

All these things were intertwining and coming together. Each of us had a different viewpoint, but we were trying to pull all of this together to make something very different happen.

When Pixar started, with the exception of John Lasseter, everybody else was technical. When I visited a lot of companies while I was at Lucasfilm, the one thing I noticed was that there was a weird sort of first-class, second-class division.

That’s not terminology that people would use, because people wouldn’t say that they were first class, but sometimes people would say they felt like they were second class. It’s true in a lot of companies: Unless you’re in that pivotal rung of people who make the visible difference to the company, 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 animators and artists, Andrew Stanton and Pete Docter, it was extremely important that they come in and that we all be peers with one another.

That’s still true to this day. It isn’t that the technical people are in service of the filmmakers, and the filmmakers are there just to show what the technology can do. We’re all there to make really great movies, and that culture was very strong.

I believe it was strong because we worked so hard to make sure there wasn’t this distinction. It didn’t mean everybody was the same, even within the different fields, but as a group it felt like, “I’m working with world-class people in art, production, or sound.” They were all world-class.

If you feel that way about everybody, it actually changes the dynamic within the group. It was very important for us to do this, and I think we paid more attention to it. It was one of the things I don’t think any other studios understood: real relationships and this balance.

It’s too subtle. I can describe it, and everybody would nod their heads and say that’s probably what they do, but they don’t.

Say more about what they don’t understand.

If I take the entertainment industry, the actually experienced people don’t report directly to the CEO. They might have a chief technology officer, but the mindset of the people at the top isn’t the same as actually having the real expertise in that group, in that brain trust.

Instead, they’re the financial people, the “strategic people,” and so forth, but it’s not really the same thing.

So, you just removed those silos at Pixar? I don’t know if I’m understanding.

The idea was to remove the silos. I say that because there were 3 times in the history of Pixar when a group arose that felt like they were second class. We missed it, and we were looking for it.

This is really hard, and it’s very subtle. As an example, after we became successful, we brought in some young people. They heard the early stories, because in the early stories, when we were making “Toy Story,” people spent a lot of time in the building. There was a lot of clowning around, little hand-scooter races around the building, funny things like that, all sorts of gags, and so forth.

They heard those stories, but now, for somebody new in the building, what they saw—because it was a few years later—was that these people who had had a lot of fun and were pretty irreverent were now married and had kids, and at night they went home to their kids.

Regardless of what you say, the new people didn’t want to look like they were out of place with these people they respected, because those people were very successful. It didn’t matter what you said; they were emulating the behaviors they saw, and what they saw were people who were going home at night.

Meanwhile, the people who were going home at night to their families were saying to each other, “What’s wrong with these new people we’re hiring? They don’t have any sense of fun. They’re not doing what we’re doing. They’re very different.”

But they didn’t say anything. Neither group talked about the problem, so it festered for a while.

Then you finally realize, “Oh, I see. They’ve got these feelings, but they’re not saying them because it seems inappropriate.” You don’t want to stand out, and you don’t want to look bad, so you don’t say anything.

Once you realize that, the question is, “Okay, how do we get this sense of fun in there?” But a sense of fun isn’t something that you organize from the top down.

Yeah. It’s 3:00 p.m., guys. Come on. Let’s go take an hour to have fun.

I know. We do have company parties or big events. They’re organized, but the best things happen from the bottom up, or when the managers in their groups decide to do something.

In that case, what we would do is go to some people who were instigators and say, “Can you just make something happen?” They would go off and do something, but there would be nothing official from corporate. It was just telling the people who were instigators to get things to happen.

It was like a signal. When people started to do something that was irreverent or even closer to the edge, and they saw that it was okay, it freed them up to do more things like that. We had a lot of activities that were self-organized.

My understanding of what you’re saying is that these problems are very subtle. They’re hard to notice. If left unchecked, they fester, and the solutions can also be subtle.

It’s recognizing the value of signals—both the signals you’re looking for, because people aren’t saying them and you have to look for subtle signals, and the signals you give back in order to make it safe.

And it wouldn’t work if it were just a top-down edict.

If you get in front of a company meeting and say, “Okay, everybody, lighten up. Have some fun,” they’ll nod and say, “Oh, okay.” It doesn’t mean anything. They actually need genuine things.

We had a few people who did things that were a little too far out there, things that would have gotten them fired at other studios. People know that happens, and what you’re doing is saying that the tent is wide. A lot of things can happen there, and you want them to happen.

I don’t like to have a lot of rules.

If somebody violates a rule of common sense, which people do once in a while, you call them on the carpet. You tell them they 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, people worry, “What are all these rules? Who do I have to ask for permission?”

What we wanted was for people to do things without feeling they needed 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 and brought it into the building. It’s still there. I was just there a couple of weeks ago. We showed up, and all of a sudden, there was a truck in the middle of their area.

And like with their office—you talk about this in the book, how you encourage them to custom-design their workspaces—is this truck in their workspace now?

Yeah, it’s in their workspace. I hadn’t been there for a while, because once I retired, what it means is, if I go there and somebody doesn’t like something, I do not want to be a back channel. That would not be healthy. So, I would go there on occasion, but I went there maybe a week ago.

We went through the animation area, 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. They keep remodeling everything and redecorating, making it their own spaces, and that’s a sign of health. They feel like that’s part of their legacy and their heritage: to keep making that place look different.

Yeah, too many rules are going to stifle the creativity that I think is the engine of the entire company.

Yeah.

Ed, that’s a perfect place to end. I really appreciate you welcoming me into your home and taking the time to have this conversation today. I really enjoyed it.

Oh, my pleasure. I have 50 years of rabbit holes to go down.

Maybe we’ll do this again soon. Thanks for your time.

A lot of fun. Well, thank you.